Short Money

Robert Jenrick Excerpts

Tuesday 23rd February 2016 Commons Chamber

[John Penrose]

The allocations of money as per policy development grants are based on recommendations by the independent Electoral Commission, not on Government proposals. I would also point out that we are practicing what we preach, because in previous years the allocation of policy development grants to the Conservative party has been scaled back. We have handed some of that money back, for precisely the reasons that I described earlier about wanting to cut the cost of politics.

[Robert Jenrick (Newark) (Con)]

With a national debt of £1.5 trillion, or £24,000 for every man, woman and child in this country, and some Government Departments making heroic efforts to cut back-office functions—the Ministry of Justice is cutting 50% of its back-office functions—what possible signal does it send out to the country and to the civil servants doing those jobs when they see some political parties refusing even to engage with sensible reforms of their own funding?

[John Penrose]

I could not agree more. The general public will not understand why politicians feel that we should be a special case. They will look at and listen to this debate and ask, “Why should these guys think they are in any way deserving of better treatment than people who are on benefits and struggling with their budget? Why should they get a special deal?”

Tax Avoidance and Multinational Companies

Robert Jenrick Excerpts

Wednesday 3rd February 2016 Commons Chamber

[John McDonnell]

I know that the hon. Lady was not here at the time, so perhaps she should check my voting record throughout my 18 years in this House. I do not want to keep on repeating this. I wanted both Governments to go further, but an independent assessment has shown that the legislation introduced by the previous Labour Government will drag in 10 times more in tax than the current Government’s legislation, and even then I wanted to go further. We should at least accept the independent assessment that has been made.

[Robert Jenrick (Newark) (Con)]

rose—

[John McDonnell]

I am going to press on, because time is short.

I have written to the Competition Commissioner to request a formal investigation of this deal. There was a visible flicker of life from the Chancellor a few days ago. In the pages of Monday’s Financial Times he let it be known that he might, after all, favour country-by-country reporting for multinational corporations. Tax experts and campaigners and I have long argued that this is a vital step towards transparency, and therefore towards fair collection. By revealing in their accounts in which tax jurisdiction their revenues were earned, a proper rate of tax can be applied to multinational companies. If the Chancellor now supports country-by-country reporting, I welcome that. However, the impression was given that even without international agreement the Government would act. Is this the case, or was it just a publicity stunt that has now been dropped?

My hon. Friend the Member for Leeds West (Rachel Reeves) referred to Bermuda. On the “Andrew Marr Show” on Sunday a senior Google representative revealed that the company has £30 billion of profits resting in Bermuda, a British overseas territory. This is in order to avoid US tax rates. We now know that the Chancellor has been lobbying the EU and instructing his MPs to vote against anti-avoidance measures against Bermuda. It is a disgrace.

It was also revealed last week that Government Ministers have met Google 25 times over the past 18 months. I note that the Prime Minister himself has spoken at Google’s conference not once, but twice. If Ministers are to meet anyone, my advice is that they go and meet the trade union representatives of HMRC staff. With almost half the workforce having been laid off, and with offices having been closed across the country, it is widely known that morale is at rock-bottom, especially with the loss of highly experienced and expert staff. [Interruption.] Madam Deputy Speaker, a reference has just been made to declaring an interest. I have no interest to declare. I think that was a reference to the Public and Commercial Services Union and part of its trade union group. It does not fund the Labour party or my constituency. There is no interest to be declared.

We cannot allow the Government to go on like this. Trust and confidence in our tax system is being undermined. Every pound in tax avoided by these large corporations is a pound taken from the pockets of honest taxpayers. It is also a pound not spent on our schools, our NHS and our police. We need a real tax reform agenda, based on the principle of complete openness and transparency. First, that means, as a start, the publication of the details of this deal in full, so that we and our constituents can judge whether it is fair enough. Secondly, we need real country-by-country reporting of a company’s activities, and not just a secret exchange of information between tax authorities, but full publication so that we can all judge.

--- Later in debate ---

[Mr Gauke]

The controlled foreign companies regime was driving business out of the UK, whereas now businesses are looking to locate their headquarters in the UK, and I am pleased about that.

[Robert Jenrick]

The Minister is making a very important point about the diverted profits tax. It is important that Members on both sides of the House recognise that this extremely important development was brought in by this Government, and that it is not correct to say that Labour Members supported it, because at the time, a year ago, their position was that it was not wise to bring it in until the BEPS process was completed, which it still is not. Had we taken the advice of the then shadow Chancellor and shadow Chief Secretary, there would be no diverted profits tax, and the points made by Labour Members would be irrelevant.

[Mr Gauke]

I am grateful to my hon. Friend, who reminds the House of an important point. When we brought in the diverted profits tax, the intention was clearly to make sure that we got more money being paid in corporation tax. We want to stop companies diverting their profits out of the UK, and we are leading the way in bringing forward legislation on this.

Let me address the shadow Chancellor’s point about resources for HMRC. We have invested heavily in HMRC’s ability to strengthen its anti-evasion and compliance activity, including through extra funding and hiring professionals whose area of expertise is multinational companies. For example, contrary to the impression that he gave, the number of people working in HMRC’s large business directorate has gone up, since it was formed in 2014, from 2,000 to 2,600 people. We believe in competitive taxes—that is why we have cut our rate of corporation tax so that it is the lowest in the G7—but we also believe in making sure that those taxes are paid.

I turn to the issue of transparency raised by several hon. Members. Taxpayer confidentiality is a fundamentally important principle of our tax system, as in the tax systems of every other major economy. We hear complaints that HMRC is not disclosing full details of the settlement. HMRC is prevented by law from disclosing taxpayer information. The resolution of tax disputes, however, is subject to full external scrutiny by the independent National Audit Office, which has reviewed how tax inquiries are concluded by HMRC. In 2012, it appointed a retired High Court judge, Sir Andrew Park, to investigate HMRC’s large business settlement process. Sir Andrew concluded that all the settlements he scrutinised

“were reasonable and the overall outcome for the Exchequer was good.”

I do wish that those who are so keen to accuse HMRC and its staff of sweetheart deals were as keen to look at what happens where independent scrutiny occurs in order to see that in fact there are no sweetheart deals. HMRC introduced—

Bank of England and Financial Services Bill [Lords]

Robert Jenrick Excerpts

Monday 1st February 2016 Commons Chamber

[Robert Jenrick (Newark) (Con)]

It is a pleasure to speak in this Second Reading debate.

I was reminded this weekend in my constituency that my constituent, Thomas Smith of Newark, became the first provincial banker when he founded the very first bank outside London, in Nottingham in 1658, called Smith’s Bank. It later expanded to a branch in Newark and one in Retford in the constituency of my neighbour the hon. Member for Bassetlaw (John Mann). Several of Thomas Smith’s illustrious ancestors became Governors of the Bank of England, and so those of us who know these geeky facts about Nottinghamshire, including the hon. Gentleman, thought it was fitting that Mark Carney chose to make his first speech as Governor of the Bank of England in Nottingham, and to declare our city and county as the bellwether for the British economy.

In that speech in 2013, which I listened to, Mr Carney committed us all, and particularly the Bank of England, to using all of the tools available to the Bank to secure a sustainable economy for all parts of the country, particularly the regions of the UK. This Bill, in reasonable and modest ways, helps us to refine and improve the toolbox that is in the hands of the Governor of the Bank of England.

From knowing a few people working at the Bank of England or who have worked there in recent years, while I would say it is a good institution of which we should all be proud as members of the United Kingdom, it would be fair to say it has been somewhat inward-looking. If one were being critical, one would say its culture has been stuffy and overly theoretical, and it moves quite slowly, to say the least—although that is not always a bad thing, of course.

I think Mark Carney, as a younger, dynamic Governor, has made a real impact in tackling these cultural concerns when that was appropriate. If I could make any suggestion from my experience and those of acquaintances who have worked at the Bank, it is that it should continue to do as he has tried to do, which is recruit more people with practical experience of life in the financial services sector and the corporate world—those who have worked in banks, law firms or elsewhere, who can provide an essential counterbalance to those who are perhaps overly theoretical and not so practical. With a proper court or governing body—a board as my right hon. Friend the Member for Chichester (Mr Tyrie) rightly said it should be described—this larger and more powerful organisation, enhanced by the structural changes of this Bill, can operate in a much more modern and dynamic way than its predecessor.

I was pleased to hear that Andrew Bailey had been appointed to the FCA, and others have already welcomed that. From my very limited interactions with him, and when he came to Parliament last week to address the all-party parliamentary group on corporate governance, of which I am an officer, I found him to be clever, practical, down to earth, affable, but willing to speak frankly when necessary. He clearly possesses a deep and broad knowledge of the financial services sector, all of which suggests that this has the making of a good appointment. He appears to have done a good job of taking over and improving prudential regulation at the Prudential Regulation Authority.

Having worked as a commercial lawyer, dealing routinely with the old FCA, I know that that organisation and some of its personnel were in a very poor state before these moves, and morale was extremely low. It is still a struggle to recruit and retain the best talent, as my hon. Friend the Member for Yeovil (Marcus Fysh) wisely said, when the rewards are usually, if not always, less than those on the frontline elsewhere in the financial services sector. It is essential that we give all the tools necessary to Andrew Bailey and others to enable them to recruit more talented individuals. It seems, as my hon. Friend said, a wise step in that direction to bring the PRA within the Bank of England because that is inevitably a more attractive institution to work for, be part of and have on one’s CV than any other, perhaps lesser, regulator.

Although the Bill is not revolutionary in content, it continues the work and takes a series of very sensible steps forward. Some have argued today and elsewhere in the press that we should go much further in changing the Bank of England or even re-imagining the role of a central bank in the 21st century. I would caution that the Bank has been subject to a great deal of change in recent years. Although I do not have the exact figures to hand, I imagine, for example, that a staff of around 2,000 has already increased to 3,500 or thereabouts. The challenge of integration—of building a large integrated organisation and of ensuring quality, because quality and standards are ultimately all that matter—is very great, and we should be careful not to give our regulators too much to contend with.

The formalisation of the PRA’s position as part of the Bank therefore seems sensible. It always seemed rather strange that it was merely a subsidiary of the Bank. I did note, and I am sure the Minister and the Treasury have already seen this and decided it makes sense, that whereas previous legislation had deliberately kept the supervisory role then exercised by the FSA separate from the resolution role, the new landscape brings them together. In other words, it used to be believed by the sector and by the Government that it was more appropriate that the organisation supervising a bank should be different from that tasked with resolving whatever problems or mess it got itself into. Presumably the view is that this is no longer necessary, and of course the Bank is capable of handling both sides of the coin.

The proposal in the Bill to provide the Treasury with more information seems logical. After all, whereas the Bank of England provides temporary liquidity and support to a bank in crisis, it is the Treasury and taxpayers who ultimately step in and pick up the tab. These measures are all part of the Government’s laudable efforts to ensure that banks are properly supervised and, to the extent possible, are too big to fail.

The value for money component, which many other Members have mentioned, is welcome. As the Bank becomes more powerful and significantly larger with the advent of the PRA, so it is appropriate that it is open to greater scrutiny. Questions of freedom of information and others will no doubt arise if the Bank’s powers continue to increase.

The Bank of England’s accounts have always seemed to me to be extremely difficult to understand. It always seems to make a profit. I have always been suspicious of that—as a former partner at a law firm once said to me, of course the Bank of England can print its own money!

On the wider questions of openness and governance, I would like to see a greater part of the governance of the Bank drawn from the regions of the UK, not for superficial reasons, but—rather like my opening example of the long-gone world of Thomas and Abel Smith and the Governors of the Bank of England who began their careers in Newark—so that there are experienced voices at the heart of our central bank with direct knowledge of the regional economies, particularly Scotland and Wales.

Finally, on the senior managers regime, a great deal has been said here and, clearly, agreement will not be reached across the House. The position in the Bill seems fair and workable as it continues to put the right pressure on senior managers to be named and to take direct personal responsibility. I am not interested in grandstanding. I am looking for what will have the greatest effect on our financial services sector. The vast majority of my constituents—almost all, I would venture—have never heard of this regime. What they have heard of and what they are expecting of their Member of Parliament is to ensure that there is a financial services sector that is stable, secure and resilient. I believe the Bill is the best way to deliver it.

I welcome the change which the Bill introduces to the pensions regime. Although this aspect has barely been touched on in the debate, the pensions guidance service, Pension Wise, can in future be more widely applied to those looking to take advantage of the great opportunity that was achieved in the previous Parliament to use their annuities in whichever way they see fit. We must not allow one of the great developments in pension reform and other Treasury policies from the previous Parliament to be sullied by mis-selling. One can easily imagine mistakes being made by constituents who, by their own admission, are not always as financially literate as they would wish. This could be, as wiser souls have said, the next great mis-selling scandal.

Although Citizens Advice, which was initially given the difficult task of providing support for members of the public on their pensions, is a superb organisation and I praise those in my constituency who are involved in it, any additional support that we can give through Pension Wise to ensure that our constituents make the right decisions for them at a crucial juncture in their financial lives must be welcomed.

In conclusion, the Bill contains a range of modest and reasonable proposals to further the Government’s aim to provide a stable and resilient financial services sector to secure a successful economy for the United Kingdom. I cannot for the life of me imagine why other Members would vote against it tonight.

HMRC and Google (Settlement)

Robert Jenrick Excerpts

Monday 25th January 2016 Commons Chamber

[Mr Gauke]

I appreciate the hon. Gentleman’s comments, but he should not be quite so defeatist. If he looks at what happened over the previous Parliament, he will see that HMRC’s large business team brought in £38 billion in additional tax as a consequence of their intervention. The UK has a reputation as somewhere with competitive tax rates but where taxes do have to be paid. That is a reputation that we should all seek to maintain.

[Robert Jenrick (Newark) (Con)]

Although £130 million might seem low for a business as large as Google, is not the reality that the Revenue cannot do as much to collect back-taxes as we would like it to, because they come from a significantly more lax era? This morning one tax expert described the situation under the previous Labour Government thus: “Everything was above board, and the board was set at floor level.” Under this Government, the diverted profits tax gives us the opportunity to change the landscape, but is there not a concern that letting Google off paying the diverted profits tax suggests that the Revenue will find this significantly more complex to implement than we would like? What more can we do to give the Revenue the support it needs to apply that evenly and to all?

[Mr Gauke]

We always seek to ensure that HMRC has the powers and resources it needs. For example, in the July Budget last year we announced a requirement for large tax companies to set out explicitly what their tax strategy is, and we will be legislating for that in the Finance Bill.

Oral Answers to Questions

Robert Jenrick Excerpts

Tuesday 19th January 2016 Commons Chamber

[Mr Speaker]

Robert Jenrick—I am calling you, man; don’t leave the Chamber.

[Robert Jenrick (Newark) (Con)]

Thank you, Mr Speaker. You are very kind. My superb hon. Friend and neighbour the Member for Sherwood (Mark Spencer) had already asked the question, but I will ask it again as that is not unusual in this place. My parents formed their small business in the first enterprise zone created by Margaret Thatcher in Telford in 1984. My right hon. Friend the Chancellor has carried on in that great Conservative tradition. Will he afford the same opportunities to get on in life and create jobs to my constituents and those of my hon. Friend the Member for Sherwood by backing Thoresby colliery as the next and best enterprise zone?

[Mr Osborne]

My hon. Friend has just demonstrated that he is a very smart thinker on his feet. He is always ready to stand up for the interests of his Newark constituents. As I said to our hon. Friend and his neighbour the Member for Sherwood (Mark Spencer), I would love to get the Thoresby colliery enterprise zone into a condition where we can give it the go-ahead, and I give him and my hon. Friend his neighbour my personal commitment that we will try to do that over the next year or two.

Oral Answers to Questions

Robert Jenrick Excerpts

Tuesday 1st December 2015 Commons Chamber

[Mr Osborne]

We promised to turn the British economy around and that is exactly what we have done. I know that the hon. Gentleman is out of sorts with the cultural revolution that is taking place on his Front Bench at the moment, but I just hope that in the modern Labour party they

“let a hundred flowers bloom”.

[Robert Jenrick (Newark) (Con)]

Entrepreneurs’ relief is a costly relief—and the Chancellor was right to reform it earlier this year—but it is an important way to incentivise our entrepreneurs to invest in businesses and to create jobs. Can he reassure our entrepreneurs that he remains committed to that relief and will take it forward in the years to come?

[Mr Osborne]

Of course we want entrepreneurs’ relief to be directed at entrepreneurs, and that is why we made the changes earlier this year, but during our time in office Conservative members of the Treasury team have doubled and redoubled that relief. We very much support that help for our enterprise economy.

Tax Credits

Robert Jenrick Excerpts

Tuesday 20th October 2015 Commons Chamber

[Robert Jenrick (Newark) (Con)]

Much has been said today, but I wish to concentrate on two points. First, we must accept that tax credits are a failed policy. I do not think that anyone has any credibility in this debate unless they accept that the policy is a massive failure of the previous Labour Government. Even if we are generous to Gordon Brown—and there is no reason why we should be—and we adjust for prices, this is a policy that should have cost £6 billion and has ended up costing £28 billion. No economy can afford such a bill. It is wasteful. It is a byzantine merry-go-round of recycled money that has “misdirected”—to use the jargon—at least £10 billion in fraud and error. As has been said, it has enabled many employers, including some of our largest companies, to pay their staff less in the full knowledge that the state would top up weekly incomes. In doing so, the policy has depressed wages. I know that all too well from my constituency where the toxic combination of out-of-control immigration and out-of-control welfare has meant that there has been little, if any, pressure on some of my largest employers to increase wages in the past 10 or 20 years, and it is an increase that the working people of Newark want to see and to which this Government are committed.

[Several hon. Members rose—]

[Robert Jenrick]

I will not give way, because time is pressing.

The second question we must ask is: are we willing to put this back in the box labelled “too difficult”, or is this generation of Members of Parliament willing to take the matter on? Do we want to kick this can down the road for future MPs and constituents to deal with, or do we have the guts to take it on? Of course it is not easy. No welfare reform is painless, and any boondoggles given away before general elections are, by their nature, the most difficult things to retract, as my right hon. and learned Friend the Member for Rushcliffe (Mr Clarke) has said. This matter is important, because it cuts to the core of what we are here for. Are we, as Members of Parliament, elected here to leave our children and grandchildren a state that is in worse repair, less competitive and more dependent on China? I have just been to hear the President of China speak a few moments ago. I want a country that can stand on its own in the world, pay its way and ensure that work pays, where millions of working people, including 4,000 or 5,000 of my constituents—

[Graham Jones (Hyndburn) (Lab)]

Will the hon. Gentleman give way?

[Robert Jenrick]

I will not, as time is against me.

I want a country where 4,000 or 5,000 of my own constituents are not reliant on welfare, but have the dignity of a job that pays.

Greece

Robert Jenrick Excerpts

Monday 6th July 2015 Commons Chamber

[Mr Osborne]

The hon. Lady is perfectly right to draw to the House’s attention the very difficult situation that Greek families can find themselves in at the moment. That is all the more reason why we need to find a resolution. As I have said, the British pharmaceutical companies, which are important suppliers to the Greek medical system, are continuing to make those supplies, despite the imposition of capital controls. The whole question of what should happen if Greece falls out of the eurozone is something that I think we should return to if that eventually arises. Greece is one of this country’s oldest allies and of course we will always stand by it.

[Robert Jenrick (Newark) (Con)]

The Chancellor has said that we must not underestimate the impact of these events on the UK economy. Whatever happens, the weak and stagnating economies of southern Europe, in particular, will continue to deteriorate. Looking towards the Budget and the months ahead, will my right hon. Friend use all his offices to pivot the UK economy towards growing and emerging economies elsewhere in the world, particularly as he did decisively with the UK’s leading role in the Asian Infrastructure Investment Bank?

[Mr Osborne]

My hon. Friend makes a good point. British exports are too dependent on European markets and have been badly hit by weaknesses in the European economy over the past five years. That is why we have put a huge effort into trying to expand our trade and investment in fast-growing parts of the world, such as Asia. We want to be part of the new institutions there, such as the Asian Infrastructure Investment Bank. However, some southern European economies, such as Spain’s, have shown a remarkable turnaround, because they have taken difficult decisions, reformed their economies and are now reaping the benefits.

Productivity

Robert Jenrick Excerpts

Wednesday 17th June 2015 Commons Chamber

[Robert Jenrick (Newark) (Con)]

I, too, congratulate the new Members on their excellent maiden speeches. May I also welcome my Nottinghamshire neighbour, the hon. Member for Nottingham East (Chris Leslie), to his role as shadow Chancellor? He is the third Nottingham man in recent times to hold the position, although of course only my right hon. and learned Friend the Member for Rushcliffe (Mr Clarke) ever got the top job. I am sure that if the hon. Gentleman needs any friendly advice on how to run a successful economy, my right hon. and learned Friend would be happy to give it.

The fact that productivity continues to grow in prominence is, as has been said throughout the debate, a recognition of the remarkable achievements in employment during the past few years—almost 9,000 new jobs have been created since 2010 in my constituency—and the fact that we now have a credible, long-term plan for the public finances, respected by the markets. We need to continue to deliver on it. It is also an acceptance by all of us that the country is running up against the limits of what can be achieved by boosting employment alone. We are well on the way to becoming a country of people in work, but the task for the next five years is addressing how we can become a country of people who are well paid.

So much has been said already, but let me address one area in particular. The truth is that the UK has never quite managed to develop an entrepreneurial culture equivalent to that in the United States. Governments do not create entrepreneurs or the businessmen and women of the future, but they can and must be the flagbearers for them. Margaret Thatcher was, undoubtedly, the outstanding champion of British enterprise of the past 30 years. We need to re-awaken the spirit of those times, albeit in contemporary language, and I am certain that the Treasury Front-Bench team will do so.

A few days ago, I had the great pleasure of going to the excellent Palace theatre in Newark to watch the play “Arcadia”, and a line in it stuck with me. It was when one character turns to another and says, “This is the greatest time to be alive, because everything we thought we knew is wrong”. We should all remember that line. With the internet upending old industries; and with the shift in power from the west to the east; new opportunities are out there, if only we and our generation can seize them with a new, spirited, entrepreneurial culture.

How might we do that? We could pivot towards the growth of those emerging markets, and away from the stagnant economies, mostly in Europe. That means new free trade agreements with China; avoiding the caricature of the Transatlantic Trade and Investment Partnership; using the Foreign and Commonwealth Office and the Commonwealth network, as we did in the previous Parliament; and not complaining, as some on the Opposition Benches do, of mercantilism in the FCO as if trade were a dirty word.

The UK should become a hub of the IT sector in Europe. It has the best universities and it has the venture capital industry; we just need the ambition to realise it. We should use our universities. The Catapult initiative that we have heard of already has been and will continue to be excellent. We should have the confidence to allow enterprise to have its rewards. Genuine wealth creators should be able to reap the benefits of their success and not be ashamed of it.

We need to be on the side of the insurgent, and not the vested interest. We need to tackle the big six and to break up BT Openreach. Generations of Treasury Ministers have had “supply side” written on their political gravestones. I am sure that the Chancellor and the Chief Secretary to the Treasury will be remembered as the entrepreneurs’ champions. There is no better epithet. We need to inspire a generation to succeed, prosper and excel, as all Conservative Governments have done in the past.

[Mr Speaker]

Order. As the House will know, the ballot for electing Chairs of Select Committees closed at 5pm. Counting has been under way since then. I had hoped that it might be possible to declare the results to the House at 7.15 pm this evening—in contrast to the arrangement five years ago—before the Adjournment. Sadly, I have to tell the House that that will not be possible. I therefore intend to announce the results after questions tomorrow morning at around 10.30 am. I am advised—and I am glad—that there will be no prior publication.

Royal Bank of Scotland

Robert Jenrick Excerpts

Thursday 11th June 2015 Commons Chamber

[Harriett Baldwin]

No, I have not read that report.

[Robert Jenrick (Newark) (Con)]

Is not the reason it is difficult to get our money back from RBS that, other than the Greek banks, no other major bank in the world is in such a parlous, unprofitable state, the root causes of which go back to the last Labour Government—a poor loan book, terrible misconduct, resulting now in catastrophic fines, and ill-judged mergers? Even if we sell the shares at a loss, would that not merely be a tragic reminder to the British public of the failure and economic incompetence of Labour?

[Harriett Baldwin]

I could not put it better myself.