Finance Bill

Sammy Wilson Excerpts

Tuesday 28th June 2016 Commons Chamber

Of course my party wants a competitive tax rate, but we also want a fair tax system. My understanding is that in 1999-2000, corporation tax as a percentage of total HMRC receipts was 11.67%. By 2015-16, that percentage had crashed to 8.31%—a huge drop. The Minister has referred to the efforts of this Government and the Government that immediately preceded them to rebuild the British economy, which he referred to as being fundamentally strong. It will not surprise him that I beg to differ. However, there are definitely good points.

[Sammy Wilson (East Antrim) (DUP)]

While there may have been a drop from 11.7% of total receipts to 8.3%, will the hon. Gentleman accept that other new forms of taxation, such as climate change levies and other climate taxes, have been imposed on businesses and have increased total tax revenues? The cake is bigger, so the slice of corporation tax is smaller, but the total amount is larger.

[Rob Marris]

The hon. Gentleman is quite right about the climate change levy. Changes in this Finance Bill effectively make the climate change levy just another tax, because it will no longer be used by the Government as a lever to change behaviour, which is why Labour dislikes the proposal. Business tax has probably gone up a bit overall, but what has happened in the economy, which the Minister described as fundamentally strong, is that employment is up by almost 2.5 million, and we salute that as a considerable achievement.

However, it has been bought on a sea of debt, on the drip, on the never-never. The national debt has gone up 60% in six years. We still have a huge annual deficit. Pay has stagnated for six years, and public sector pay will remain stagnant for another two or three years. Overall capital investment is markedly down. We have the biggest trade deficit in our history. Productivity is completely stalled. It is welcome that 2 million more people have jobs, which is good and the best route out of poverty, but almost every other economic indicator is poor and the Government propose to cut corporation tax.

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[David Rutley (Macclesfield) (Con)]

I want to add my support to clause 42, notwithstanding the important points made by my hon. Friend the Member for Amber Valley (Nigel Mills), who set out the need for further thinking, perhaps, in the light of the Brexit vote. I was on a different side of the debate from him—only marginally—because I thought that there were concerns about economic risk, but there are certainly opportunities ahead, as well.

We need to ensure that we are ready to explore and realise those opportunities and the Government are absolutely committed to doing that. I hope that the Opposition are as well. It seems that the hon. Member for Wolverhampton South West (Rob Marris) is indicating that. We are up for that. As a result, I am perplexed about why clause 42 is not being supported by the Opposition. Such measures were vital when the proposals were first set out, and it is now even more important to put out a clear signal that we are open for business, that we understand business, that we want business to continue to come to the UK and that we want our exporters to thrive and flourish.

The corporation tax level is an important signal and an important driver in that regard. It is noticeable that the Federation of Small Businesses stated at the time of the announcement that it saw clause 42 as an important statement of intent that will provide a boost for affected firms. Small businesses are of course the backbone of our economy, but it is clear that the clause is an important signal for bigger businesses, too. It helps to illustrate and underline that Britain is open for business.

Given the decision made by the public, which I fully respect, it will be very important that we maintain the flow and increase the levels of foreign direct investment. I thought we were exposed in that area for a period of time, and I think that that exposure is still real, but we are currently the biggest destination in Europe for foreign direct investment. We have seen the biggest increase in FDI in projects in the north-west and I want to work with the Government and whichever party is around to ensure that we continue to see that flow. I want to ensure that the success we see in the country continues and that the northern powerhouse can fulfil its full potential. Key initiatives such as the life sciences corridor in Cheshire will require clear signals to businesses in the UK and abroad that we are open and want to move further forward, which is why I will support clause 42 when we vote, as I understand we will.

[Sammy Wilson]

I want to show our support for clause 42. In fact, I think it would be a bit strange for someone from Northern Ireland to take a different stance, especially given the fact that the Northern Ireland Government have put the reduction and devolution of corporation tax at the centre of their policy for attracting investment into Northern Ireland over the next 10 to 15 years.

There are two things. First, we must ask ourselves whether we believe that a reduction in taxation on businesses acts as an incentive. As I listened to the Opposition spokesman’s opposition to this measure, it raised a query in my mind: is the reduction of other business taxes regarded as acceptable and indeed desirable by the Labour party as a means of incentivising and helping small business? For the Opposition, it seems as though the reduction in business rates, which are a form of taxation, is desirable because it helps small businesses, but that the reduction of corporation tax seems to have no effect, or the opposite effect. If we are going to have some consistency, we must ask ourselves whether the principle of reducing taxes on businesses and their profits, and the impact that that has on the amount of money they retain for investment, is an effective means of stimulating business. If it is true of one form of tax, it is true of another. That is one of the reasons why I believe that the reduction in corporation tax is an important decision.

Secondly, during my former role as a Member of the Northern Ireland Assembly and as a Minister there, one of the things that came up consistently when we spoke to investors was corporation tax. We had an especially big problem, because we were living next door to a country—we have a land border with it—that had emphasised the reduction in corporation tax. Time and again, though not exclusively—there is no point in over-egging this pudding—investors mentioned the level of corporation tax: 12.5% in the Irish Republic and 22% then in Northern Ireland. When companies looked at the headline level of taxation, they viewed the Irish Republic as a much more desirable place to invest. Of course they looked at other things—the skills base, the availability of office and factory space, the infrastructure and so on—but corporation tax was an important factor.

[Rob Marris]

May I caution the hon. Gentleman? For some of those companies—not all of them—this is a classic sob story. Corporation tax in America is roughly twice the rate that it is here. People still invest in companies in America. Corporation tax is part of an overall picture, as he says. Yes, companies should pay tax. If we followed the logic of some of the things that he has said this afternoon, we would not tax companies. That may be his position; it is not the position of Labour party.

[Sammy Wilson]

It is not the position of the Democratic Unionist party either, because there are other ways in which companies can be held responsible for their infrastructure requirements. For example, one of the forms of taxation that the Government have introduced recently is the apprenticeship levy, where companies will be held responsible. They need trained workers, and they have to make a contribution from their profits to train those workers. There are ways to target the contribution that we require companies to make. I am not saying that companies should not pay for the infrastructure from which they benefit, but we must address one of the issues that they raise when they are considering whether we are a competitive place to invest.

[David Rutley]

The hon. Gentleman is making characteristically important points. Although there has been a nod to what has gone on in the US, it is important to look at what is happening in the UK. As we have seen a reduction in corporation tax, we have seen a strong performance in foreign direct investment. Let us look at what has happened here, which has helped to move the situation further forward—and no doubt it has done so in Northern Ireland as well as the mainland.

[Sammy Wilson]

The hon. Gentleman is quite right: if we look at the record of companies in the United Kingdom as corporation tax has decreased, we see that we have experienced increasing foreign direct investment. Indeed, since the Northern Ireland Government announced that corporation tax will be reduced in, we hope, a year and a half’s time, there has been an upsurge of interest in the number of companies that wish to consider Northern Ireland as an investment proposition. We are already the second most successful region in the United Kingdom for foreign direct investment—I suppose that this bears out the Opposition spokesman’s point—because we have emphasised the other selling points that are available to us at present, but corporation tax is the additional one that will make things easier for us.

[Mr Jim Cunningham]

Coming back to something that the hon. Gentleman said earlier about the training levy, for want of a better term, employers and particularly small businesses in this country have traditionally been reluctant about that levy. What do businesses in Northern Ireland feel about the levy?

[Sammy Wilson]

Of course, all businesses will seek to emphasise the additional costs that the levy imposes on them. However, many businesses that face a shortage skills in Northern Ireland now recognise that there must be a means to ensure that we have a supply of skilled labour. Opinions differ on how to provide that supply of skilled labour and how the apprenticeship levy should be applied and used, but people now accept, given the importance of skilled labour to firms, that they have to pay for it.

[Roger Mullin]

I return to the earlier point that the hon. Gentleman was making about inward investment. Does he agree that, compared to Brexit, this measure is pretty marginal in its likely impact in encouraging inward investment? As I am sure we are both very concerned about inward investment, does he agree that we should have an urgent debate to consider the implications of the Brexit vote?

[Sammy Wilson]

I am reluctant to get involved because I know that the Chair will call me to order, but perhaps you will indulge me, Mr Howarth, and allow me to answer the point. I do not share the hon. Gentleman’s views about the detrimental impact of Brexit. Indeed, for businesses in Northern Ireland, where we have become export-oriented, it opens up the opportunity to look to those parts of the world where there are growing economies and allows us to make our own trade deals with them. I believe that Brexit will be of benefit to us and—

[The Temporary Chair (Mr George Howarth)]

Order. I understand the connection that the hon. Gentleman is making, but he is about to strain it beyond the limits.

[Sammy Wilson]

I was about to say, Mr Howarth, that the reduction in corporation tax will be an additional means by which we can capitalise on those opportunities.

[Bob Stewart (Beckenham) (Con)]

Would the hon. Gentleman like to see corporation tax in Northern Ireland at the same level as in the Republic of Ireland? Would that be possible?

[Sammy Wilson]

I have two more points that I want to make. The first is that the reduction in corporation tax in this Budget gives the Northern Ireland Government more flexibility. I hope the Minister will be able to clarify how much this reduction in corporation tax will reduce the bill for the devolution of corporation tax to the Northern Ireland Assembly. The reduction of that bill enables the Northern Ireland Government to do one of two things: either to have a lower cost for the reduction—the 12.5% —or to reduce the rate below 12.5%, accepting that there will be a hit of £280 million. If that has already been factored into the Budget, the rate of corporation tax can be reduced even further to make us more competitive.

Lastly, if the Government had decided not to go down the route of lowering the headline rate, one way of giving incentives to firms would simply be to increase the number of capital allowances or make them more complex. Although it could be argued that that would allow the Government to target particular kinds of investment, it has two impacts. First, it increases the cost of collecting tax, and, secondly, it makes it more complex for firms to have their corporation tax calculated. For small firms that is a burden. For larger firms it may not be such a burden.

I wish to quote that famous Scottish economist, Adam Smith—I am sure my friends in the Scottish National party will be glad to hear this. He set out in his principles of taxation that in the collection of taxes there should be economy, certainty and equity. I believe that having more capital allowances militates against that and makes it more costly, and firms will have less certainty about what their eventual tax bill should be. That is one of the reasons why I welcome clause 43 and some of the other clauses that reduce the number of allowances, as that simplifies the tax system and makes taxes easier to collect.

There may be only 10 companies that claim the vaccine research relief, but that requires an infrastructure to carry out the collection and a number of civil servants to be appointed to do the job. If we want to find ways of cutting the cost of collecting taxes, it makes sense to look at reliefs that may not be widely used but still absorb resources within HMRC. For these reasons, my party and I will not support the opposition to clause 42 and we will join the Government in pushing it through.

Finance Bill

Sammy Wilson Excerpts

Monday 27th June 2016 Commons Chamber

Amendment 180 deals with the impact of HMRC’s abandonment of its valuation check services for small and medium-sized enterprises. I am aware of the Minister’s earlier words of comfort and his opinion that this was not a matter of great significance because the service was poorly used. He suggested that it was of little consequence that it had been abandoned by HMRC in the past few weeks.

[Sammy Wilson (East Antrim) (DUP)]

Given the reduction in the number of people employed by HMRC, and the level of satisfaction with the service it provides, does the hon. Gentleman agree that it is understandable that many businesses turn to professionals whom they employ themselves rather than relying on HMRC?

[Roger Mullin]

I entirely agree with the hon. Gentleman, but the smallest enterprises—those employing perhaps their first or second employee and engaging in some kind of share ownership—are not in a position to pay a professional company £1,000 or £2,000 for the necessary valuation service, which was provided at no cost by HMRC. Organisations such as ProShare, which I think is based at University College London, have said that they are aware of a number of small businesses being discouraged from engaging in small-scale share ownership schemes precisely because the assistance that they were once afforded has been removed. If the demand for such services was so low, only a few people would have been needed to deliver them. The cost to the Government cannot therefore have been very great, so it seems somewhat perverse to abandon the service at a time when people are seeking to expand the number of share ownership schemes in society.

The hon. Member for Wolverhampton South West, for reasons that defy all understanding, did not think that our new clause 1 was dramatically superior to his new clause 3. No doubt he will attempt to convince the Committee of that argument later. New clause 1 proposes a review of the income tax treatment of workers providing services through intermediaries. We believe that this is particularly relevant in Scotland. The hon. Gentleman suggested earlier that the average return journey to and from work was 16.7 miles. Well, try telling that to people who live on the Isle of Skye and have to commute to places such as Fort William and Inverness. Try telling it to people who have to hop from island to island, such as the health workers who travel on ferries to service the islands and often need to stay overnight. Their situation is not remotely close to the average of 16 miles to travel to work.

A recent article in The Times Educational Supplement pointed out the proposal’s likely negative impact on the many aspects of the education sector that rely on people on particular types of contracts who do not enjoy the benefits of full-time employment. The Minister argued calmly, as he always does, that the change is a simply a matter of ensuring a level playing field. If he wanted a level playing field, he would be ensuring that workers employed through intermediaries benefit from sickness pay, holiday pay and many of the other advantages of full-time employment. They do not get those same benefits and cannot be compared with people in traditional forms of employment.

Indeed, I suspect that part of the problem is that the Government have misunderstood the needs of the modern labour market. People are no longer employed either in traditional ways or entirely self-employed in the way it is traditionally understood. Flexibilities in the labour market have developed in many ways over the past 10 or 20 years. Many such flexibilities play to and enable local economies, such as rural areas in Scotland or Northern Ireland, and specialist sectors, such as oil and gas, which need to import specialist services. These people might be based not in Scotland, but down here near London and may have to fly to provide their services. The proposal might have impacts that have not been thought through by the Government.

Oral Answers to Questions

Sammy Wilson Excerpts

Tuesday 7th June 2016 Commons Chamber

[Damian Hinds]

The national living wage makes sure that British workers who are low paid cannot be undercut by people coming from other countries. It will be of great benefit to our economy. It is also the case that as our legal minimum pay increases, we will still be within the middle range internationally.

[Sammy Wilson (East Antrim) (DUP)]

Yesterday the Chancellor told the people of Northern Ireland that house prices would fall by 18% if we voted to leave the EU, even though the day before he said that housing costs would go up by 9%. He told us that 14,000 jobs would be lost in export industries, even though the exchange rate, which would help exports, was set to plummet, and made an uncanny prediction about incomes in 14 years’ time. Does the Minister not realise that the Chancellor is expending his own credibility and that of the Government, given the panic that has now set in, by trying to sell the threadbare economic case for remaining in the EU?

[Damian Hinds]

Saying that house prices would come down but housing costs would go up is not inconsistent at all, as the cost of borrowing would go up. Northern Ireland is a special case when it comes to the housing market, but in many parts of the country people might say that while it would be a good thing for house prices to come down, that should not be a result of crashing the economy and making it more difficult for people to borrow.

As for the long-term forecast, it is, of course, difficult to predict what will happen 15 years hence. What the Treasury analysis seeks to do is say, other things being equal, what will happen to the 15-year forecast whether we are in or out of the European Union, and the answer is clear: in the central scenario, GDP will be hit to the tune of £4,300 per household.

Tax Avoidance and Evasion

Sammy Wilson Excerpts

Wednesday 13th April 2016 Commons Chamber

[John McDonnell]

Let me press on a little, and I shall give way shortly.

Mossack Fonseca exploited the presence of loopholes and entire jurisdictions that favour secrecy and minimal taxation. We can expect further news over the next few weeks and months, as the investigative work continues. Yesterday the Panama headquarters of Mossack Fonseca was raided, but 10 days on since the initial leak, I believe that its UK offices in Hitchin—not far away—have not been, despite the raising of concerns by the firm’s founder about the lack of due diligence performed by the UK office in relation to a company in its charge, and a clear legal precedent for the UK authorities to intervene.

There may be more revelations to come, set to tarnish individual reputations. I put this mildly: the Prime Minister has done himself no favours over the last 10 days. A lesson for the future is that, when asked a straight question, one should answer straightforwardly and straight away. The Prime Minister could and should have come clean about his relationship with Blairmore Holdings far earlier.

[Sammy Wilson (East Antrim) (DUP)]

Perhaps the hon. Gentleman will give a straight answer to a straight question. Does he regret the support that he gave to the IRA? They are still laundering money and still avoiding taxes in Northern Ireland, and he supported their activities in the past.

[John McDonnell]

I have never given the IRA support in relation to money laundering or any other activity. Let me make it absolutely clear that wherever laundering takes place, it is illegal and should be tackled, and I shall welcome the hon. Gentleman’s future contribution to the establishment of procedures to ensure that that happens.

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[Sammy Wilson (East Antrim) (DUP)]

This debate is important for all the reasons that have been mentioned: public frustration at those who can earn money and not pay tax while the rest of the people have to pay it; the stretching of public finances at a time of austerity and the need to ensure that legitimate taxes are paid; and, of course, the concern that the ability to evade taxes and to hide sources of income leads to all kinds of corruption, including, as we have found in Northern Ireland, the ability to finance terrorism.

Let me put it on the record that however much the Leader of the Opposition and the shadow Chancellor beat their chests about the evasion of taxes, they showed friendship to and favoured the very people who used all kinds of fiscal fraud to finance murder in Northern Ireland for 30 years—and we have never heard an apology from them about it.

As the hon. Member for Glasgow South (Stewart Malcolm McDonald) said, we must approach this matter with a sense of maturity rather than a “politics of envy” approach. I know that some Opposition Members have denied it, but some contributions have demonstrated such an approach. Equally, on the Government side, there must be a willingness to listen to the genuine concerns and deal with the issues raised.

I do not believe that we can deal with this matter simply by demanding that everybody produce and publish their tax returns. Someone who is going to evade tax is hardly going to put that down on their tax return in any case. Where does this stop? If the issue is all about how the creation of policy has been influenced, what about top civil servants, who are involved in policy making? What about the heads of many public sector organisations, who are also involved in it? What of the press? We cannot have the critics of what happens in this House avoiding the publication of their own tax returns. As I say, where does it stop?

In any case, the answer does not lie in publishing tax returns. I believe that three important points have been identified. I shall not go through all of them, but the first one is that we must know who is responsible for the income of a certain business or company and be able to trace it, because the issues of accessibility and transparency are important. How do we achieve that? I think that the Government have already gone some way along the road.

Strangely enough, Labour Members believe that we should use Orders in Council against independent territories—a form of colonialism that I would have thought they would not support. [Interruption.] Opposition Members may say that is nonsense, but either we regard these places as independent territories that make their own laws, and seek to co-operate with and persuade them to do the right thing, or we impose the laws on them, which as far as I am concerned is a form of colonialism. I do not think it would work. I think the Government are right to seek to persuade those territories to come along and see the implications of allowing people to hide their identities in some of the businesses based in them.

The second important point is about tax avoidance. Many Members have talked about it today, but millions of people in the United Kingdom engage in tax avoidance and think nothing of it, because it is within the law. When a tax code can run to 22,000-plus pages, with all the allowances and other provisions in it, of course people are going to find loopholes. Unfortunately, as the hon. Member for Blaydon (Mr Anderson) said, the people best able to do that are people who have huge resources at their disposal. Many taxpayers do not have such resources, so a simpler tax system would help. Adam Smith, whose words have been cited in the Chamber today, laid down the canons of taxation, which he said were fairness, simplicity and the ability to collect taxes economically. Those are some of the principles that we should keep in mind.

Thirdly, there is the issue of enforceability. I have reservations about the direction in which the Government are going. Of course we should find efficiencies in public services, but when I see how many tax offices are closing, especially in border towns in Northern Ireland, where hundreds of years’ worth of experience in dealing with some of the worst money launderers in the United Kingdom is being lost, I ask myself whether we are really serious about taking on the tax evaders. Even when we spot them, they are not always prosecuted. HSBC has been identified as one bank that enabled many people to evade taxes—I believe that there were 7,000, and that more than 1,100 were in the United Kingdom—but there has been only one prosecution so far. It is not just a case of having the resources to enforce. It is a case of making sure that when people are caught, examples are made of them and they are punished accordingly, so that the message that goes out is, “This will not be tolerated.”

I believe that if we do not work to achieve greater transparency, an efficient tax system that does not leave loopholes and a proper method of enforcement, what is happening now will go on and on.

Budget Resolutions and Economic Situation

Sammy Wilson Excerpts

Tuesday 22nd March 2016 Commons Chamber

[John McDonnell]

I am grateful for the hon. Gentleman’s intervention and I will come back to that point in due course. I realise we are under pressure of time, Mr Speaker, so I will try to be as brief as I can.

The Chancellor’s political manoeuvring has real consequences. The drama over Budget week has clouded a further astounding revelation about his behaviour. His former Government colleague David Laws revealed at the weekend that the Chancellor pressurised senior officials to reduce their estimates of the funding needed to maintain the NHS. We discovered that the Chancellor had forced through a cut of almost half the funding—this was independently assessed—needed by the NHS. The result is that the NHS and hospital trusts around the country cannot plan. They are facing a crisis: waiting times are rising, staff are under intense pressure and morale is at rock bottom. At the start of the year, the NHS recorded its worst ever performance as services struggled to cope with demand. It is now facing its biggest funding crisis for a generation and that is putting patient care at risk.

[Sammy Wilson (East Antrim) (DUP)]

Does not the welfare cap, and support for it, suggest that if welfare spending goes up, we will have to revisit that spending? At that stage, would the shadow Chancellor cease to support the cap, or would he support measures to keep within it?

[John McDonnell]

We support a welfare cap, and we believe we have better policies—building homes, for example, rather than spending money on housing benefit—that would enable us to meet it.

Nothing in the Budget says that the NHS can find £22 billion in savings over the next few years. The idea is pure fantasy written into the Budget. It is typical of this Chancellor to opt for spin and presentation over addressing the real problems. He needs to stop living in fantasy land and to start being honest with the public over his own numbers.

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[George Kerevan]

I utterly accept that point. This is at the core of what I am saying. The kind of business rate cuts for small companies that the Chancellor has belatedly introduced in this Budget have long been available in Scotland. What has happened to productivity in Scotland? Despite the Scottish Government’s limited drivers for economic growth, productivity in Scotland has gone up 4.4% since the recession. That is more than four times what this Chancellor has managed to deliver. In Scotland, our limited tax powers have forced us to concentrate on the supply side, and my bill of fare against the Chancellor is that he does not do that. Yes, there are lots of bits and pieces in the Budget that I welcome—particularly the move to clamp down on transfer pricing in multinational companies—but in the end, there is no strategy. The Chancellor has no strategy apart from his rendezvous with 2020 and trying to run a budget surplus.

[Sammy Wilson]

Does the hon. Gentleman accept that he is perhaps being a bit harsh? There are many supply-side measures in this Budget, including improved investment in infrastructure and the digital economy and cuts in corporation tax and business rates, all of which should help investment and therefore increase productivity.

[George Kerevan]

Indeed, and I welcome all the supply-side measures, but—[Interruption.] Wait for it! We have had five Budgets in the past 15 months. Why did those measures not appear in the last four of them? In fact, if we count today as well as last week, we have had six Budgets in that time. Why did those measures not appear before? This is not about the Treasury officials, who are bright men and women; this is about the fact that there is no strategy apart from trying to run a budget surplus in a particular year, because the Chancellor knows that if he does not deliver in 2020, what is left of his reputation after this week will be in shreds.

Budget Resolutions and Economic Situation

Sammy Wilson Excerpts

Wednesday 16th March 2016 Commons Chamber

[John Redwood]

I think that I am doing that now. The Chancellor quoted the OBR, and the one thing that I disagreed with profoundly in a very good Budget was the OBR’s forecast on what would happen with Brexit. [Laughter.] It is not funny. Labour Members might learn something if they listened. They have obviously closed their ears to any idea that an independent Britain could be rich, prosperous and free, but many of us think that we will be more rich, prosperous and free if we leave the EU.

[Sammy Wilson (East Antrim) (DUP)]

Will the right hon. Gentleman give way?

[John Redwood]

I want to develop the argument a little more. As has already been pointed out, the forecast contains very worrying figures about the balance of payments deficit. And of course, were we to leave the EU, we would immediately have £10 billion at our disposal that we would no longer have to send abroad to be spent in rich countries on the continent. That is the net amount that goes to the continent. So our balance of payments would immediately improve by £10 billion a year if we did not have to make those contributions.

To cheer up Opposition Members even more, and to get them to change their vote, I can tell them that we and they would have the pleasure of spending £10 billion a year more in our own country—[Laughter.] Why is that funny? Why should not British taxpayers who have to pay £10 billion not have the advantage of spending it on things that they want instead of it being spent on new roads in France or Spain? I think my taxpayers want it to be spent here. That £10 billion a year could more than banish the austerity that Opposition Members claim has done some damage to our country. Looking at the figures, we can see that real public spending has gone up all the time under the coalition and the Conservative Government, but not by as much as it went up under previous Governments. If we had that £10 billion back to spend in the United Kingdom, we would have a better profile on public spending and on tax reductions.

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[Sammy Wilson (East Antrim) (DUP)]

May I first welcome a number of measures in the Budget? The rise in income tax thresholds is important for those in work who wish to keep their income and spend it as they, rather than the Government, see fit. The changes for savers are also important, especially for those on lower incomes and perhaps those who are self-employed, given the incentives. I would however point out that although the Government have presented some of the changes as important, especially the lifetime ISAs and the help for low-income savers, many people will still struggle to put aside the money for such initiatives. The change in business rates is important for small businesses that are struggling, especially in town centres, as are the promises to deal with tax avoidance. However, we have heard such promises before, and, very often, nothing has come of them.

[Chris Stephens (Glasgow South West) (SNP)]

Is the hon. Gentleman not concerned, as I am, that the whole tax-avoidance strategy is rhetoric, rather than reality, given that HMRC wants to close 90% of its offices, some of which are in Northern Ireland?

[Sammy Wilson]

There has to be a connect between the promises that the Government make and the ability to deliver on them, whether through legislative changes or, indeed, through having the resources to deal with the issues.

The Northern Ireland Executive will benefit, from Barnett consequentials, to the tune of about £220 million over the comprehensive spending review period. Many people will welcome the fact that £5 million has been set aside to establish an air ambulance in Northern Ireland, for which we have called for a long time.

I want to deal with two areas. I will start where the hon. Member for Stroud (Neil Carmichael) finished, with the Chancellor’s references to the European Union. I notice that the Chancellor made fairly scant reference to it in his statement. Indeed, I think many people were probably surprised about that, given the way in which the Government have tried to drive this issue. On the other hand, I am not surprised, because what does he really have to say about retaining membership of the EU?

The Chancellor talks about struggling with the budget deficit and with the public finances, yet he is quite happy to give £10 billion a year to the EU. In the EU, the money is often so badly spent that its accounts are qualified every year. Such money goes on fraudulent activities; it disappears into black holes; it goes on vanity projects—[Interruption.] I notice that some of the most vociferous supporters of giving public funds to the EU are from the Labour party, while its Members are complaining about cuts in services for their own constituents.

The other point that the Chancellor has to address is that, although he will give £6 billion to companies in corporation tax cuts, he will, over the same period, take £7 billion more off them in environmental levies, most of which are driven by European directives. On the one hand he is giving money to businesses, and on the other, European directives ensure that he has to take it from them.

The hon. Member for Stroud got it wrong when he mentioned what the OBR has said about leaving the EU. The OBR has not been definite that certain things would happen. Indeed, its report says that leaving the EU “could usher in” uncertainty, “could have negative” impacts and

“might result in greater volatility in financial…markets”.

That is also what the Chancellor said. The ironic thing is that he had no sooner uttered his comments about threatening and slaughtering jobs, investment and everything else than, in his very next sentence, he pointed out that since the autumn statement—we have had all the uncertainty about the referendum and the fact that the United Kingdom might vote to leave the EU—the Government had

“created…150,000 more jobs than the OBR expected.”

There is all this volatility and uncertainty, yet in the face of a referendum businesses are not reflecting uncertainty or fear. Indeed, according to the Chancellor they are creating 150,000 more jobs than the OBR expected.

[Neil Carmichael]

I just wondered whether the hon. Gentleman was aware that 80% of businesses in Northern Ireland want to stay in the European Union.

[Sammy Wilson]

Of course, it depends on what survey we look at. Large firms benefit from the lobbying power they have to restrict innovation and the entry of small firms into markets. Small businesses are buried under regulations and strangled by the red tape that emanates from Europe.

The Chancellor carefully avoided talking too much about our membership of the EU, because there is not a good story to tell on that in budgetary terms. I notice that, so intent is he in ensuring that attention is not drawn to it, EU transactions are included with others in chart 1 of the executive summary—he does not want to highlight the exact amount of money we pay into the EU.

The second issue I want to deal with is inequality across the United Kingdom and across sectors of the population. Growth forecasts have been reduced for a whole range of reasons. Some of those reasons are outside the control of the Chancellor, but some are not. One way to improve growth is to borrow money for infrastructure projects. I find it inconceivable that the Government talk about not letting the level of debt go up when there are good infrastructure projects that would give a good rate of return. They are quite happy for debt to go up to finance consumer spending, which has been the main driver of growth. I would rather see growth driven by spending on infrastructure projects that increase productivity and give a return that generates tax revenues in the future, rather than putting individuals in jeopardy if there happens to be an increase in interest rates.

[Greg Mulholland (Leeds North West) (LD)]

Will the hon. Gentleman give way?

[Sammy Wilson]

I will not give way, if the hon. Gentleman does not mind, because I do not think I will get an extra minute.

We know from experience that when the growth forecast goes down the regions of the United Kingdom—Northern Ireland, the north-east, the north-west and Scotland—tend to experience the greatest impact. The figures in the Budget statement show growth rates for Northern Ireland to be half of those for London. Indeed, there are only two regions of the United Kingdom that exceeded the average growth in the past four years: London and the south-east. All other areas did not experience the same rate of growth. There is a strong case for saying that infrastructure investment could help to stimulate the economy in those other areas, so I am disappointed that not more infrastructure projects were announced in the Budget.

When funding is made available for research and innovation, I hope places such as Northern Ireland will not be excluded. Belfast’s Queen’s University’s excellent research has been a driver of growth and innovation for many businesses, helping them to get into export markets.

On inequality within income groups, the Government cannot ignore the fact that we are increasingly in danger of becoming a two-nation state. At the bottom of society, there are those without hope. Even the tax cut that means some of them will pay no income tax at all will benefit me as well as lower income groups. There needs to be a greater focus on people who find themselves without the skills, hope or income they need to do the day-to-day things they are required to do.

When I see the resources being devoted to a cut in capital gains tax, as opposed to those being taken away from people who are on, and cannot escape, benefits because of disability and so on, it illustrates to me how the Government have a long way to go and much thinking to do when it comes to dealing with those who are less fortunate and at the lower income end of the spectrum. It is they who need a leg up and more resources devoted to them.

Enterprise Bill [Lords]

Sammy Wilson Excerpts

Wednesday 9th March 2016 Commons Chamber

[Mr Burrowes]

The Government have tried to deal with that concern by putting forward additional religious protections in the Bill, and my amendment would not delete those. Whether the pressures are explicit or implied, they are a factor.

The Government did have a pilot in one sense, because such a measure was road-tested during the 2012 Olympics. A specific opt-out was created so that staff could avoid working the longer Sundays if they did not wish to, and retailers claimed that they would cover only those hours when staff volunteered to work. However, I understand that 564 representatives in stores that opened for longer hours found that in over half those stores—56%—despite the right to opt out, staff came under pressure to work the extra hours. Those who asked not to work the extra hours were threatened, or punished by being refused overtime.

[Sammy Wilson (East Antrim) (DUP)]

Does the hon. Gentleman accept that over half of those who work in shops in Northern Ireland, where opt-outs are already meant to be in place, have come under pressure, and that that is why 76% of those who work in the retail trade have said that they do not want hours to be extended, purely because they know that they would be under even greater pressure if local authorities accepted the longer hours?

[Mr Burrowes]

The hon. Gentleman makes a good point. We should also consider the potential domino effect of the Government’s proposals. Another shop worker told me, “The idea that Sunday working is optional, and that this is enshrined in law, is laughable. They make you pay one way or another for objecting to working on a Sunday.”

When a policy is opposed by the small business community, by a good number of large businesses, by the majority of shop workers, and by Churches and other faith communities—the Chief Rabbi recently spoke passionately about properly respecting the special character of Sundays—we must ensure that we consider it carefully. There has already been deregulation in many forms, but there is still a special character that we can preserve. This does matter, because Sunday is still special for many people, and the Government should not chip away at that unfairly, unreasonably and without due process. We should ensure that there is a proper place for Sundays for families, businesses and workers.

This issue has come before the House on previous occasions. Mrs Thatcher’s Government were defeated by a large majority on an entire Bill in the House of Commons. I remember attending my first ever public meeting in 1986—it was my first foray into the world of politics—which was hosted by my local Member of Parliament, Michael Portillo. He appeared before a packed public meeting and completely misjudged the views of those present, many of whom had never been to a public meeting before. He saw for himself the huge concern in the community, having misjudged the strength of feeling about amending the hours of Sunday trading. Time has moved on, but there is still a strength of feeling out there—from shop workers, families, small businesses and others. That meeting was a formative political experience for me. We heard a statement from the Health Secretary earlier about learning from mistakes, and I urge the Government today not to make the same mistake again.

--- Later in debate ---

[Bill Esterson]

I am going to make some progress, because unfortunately the Minister took up so much time.

[Sammy Wilson]

Does the hon. Gentleman agree that the hon. Member for Carlisle (John Stevenson) has just made his point for him? If the people of Carlisle were to decide what happened in their area so that they could compete with Scotland, the next-door council would make exactly the same argument. The shadow Minister is exactly right: that would have the effect of ensuring that this was not localism, but a national decision.

[Bill Esterson]

I thank the hon. Gentleman for his intervention. The hon. Member for Kensington (Victoria Borwick) asked the Minister about zoning and whether London could be a single zone, but why stop at London? Why not designate England as a single zone, given that that is exactly what would happen because of the domino effect of the proposal?

EU Referendum: Timing

Sammy Wilson Excerpts

Tuesday 9th February 2016 Commons Chamber

[Sammy Wilson (East Antrim) (DUP)]

I thank my right hon. Friend the Member for Belfast North (Mr Dodds) for the way he started the debate. He set out the DUP’s case while also speaking for other parties across the devolved Administrations.

As many have said, we all come to this debate with different views. I welcome the fact that the Government have afforded the UK people a referendum, although I differ from some in my reasons for wanting it. Some want to cement even more firmly the relationship between the UK and the EU, while others, such as myself, want to break down the walls of the prison in which we have been held for the last 40-odd years. In that time, we have been robbed of our money, our fishing grounds have been violated, our farmers have been destroyed and the EU Court of Justice has run over the rights of victims while upholding those of terrorists. We want a referendum for many reasons. At least we now have one.

The Minister said that the referendum would be an exercise in democracy. If so, as many have said, its terms must reflect the views of all those taking part. Despite coming from different angles, parties across the three devolved Administrations have united in saying that 23 June is not the appropriate date, for all the reasons given. The word “respect” has been used time and again. We need respect not just for the Administrations but for the millions of UK citizens they represent, who will want to engage in this exercise in democracy on a fair basis.

There is already a view that the debate has been contaminated and that this exercise is not being conducted in the most democratic way. The Prime Minister and other Ministers who support our membership are free to wander the country, go on the airwaves and express their views, while Cabinet Ministers who hold a contrary view are bound and gagged. That does not indicate a level playing field. Hardly have the scare stories passed the Prime Minister’s lips before they are dismissed by the very people he claims will do terrible things to the UK. We were told yesterday that we would have immigrant camps on our own shores. No sooner had he said that than the French Government dismissed it.

[Gavin Robinson]

My hon. Friend is making a great contribution. Does he agree that the Government’s chief fear is that, were we to have another summer of the migrant crisis before the referendum, they could lose the vote?

[Sammy Wilson]

Several Members have said that already. The Government have tried to perpetuate these scare stories, but they do not have enough to last them until September. The danger is that there are not scare stories, but scary facts and events in the pipeline that could influence the referendum. Again that might be one reason for the decision to have an earlier referendum. The Minister rightly said that no date had been set and that he was not in the job of giving clues. It was the first time I had heard anybody in the House admit to making a clueless speech. Those were his own words. He said he would not be giving any clues about when the referendum would be held.

[John Penrose]

In my defence, I think the word has a double meaning, and I meant the other one.

[Sammy Wilson]

It does. I accept that. I was simply stating that the Minister had indicated he was going to make a clueless speech. The one thing I would say to him is that he has already ruled out certain dates, so ruling out one more day in the 670 days that remain before the last date on which the referendum could be held is not an unreasonable request, especially when there has been such unanimity among the devolved Administrations to do so. I hope that the Minister carries back the message that has come from the Chamber today.

Let me go through some of the arguments used by those who oppose the motion. The first is that using the term “rushed” is a bit over the top. I noted that the hon. Members for Pudsey (Stuart Andrew), for Macclesfield (David Rutley), for Blackpool North and Cleveleys (Paul Maynard) and for Milton Keynes South (Iain Stewart) all queried the point about the referendum being rushed. Of course the debate about our membership of the EU has been going on for some time now, but the referendum is going to be on the Prime Minister’s promised reform, and we do not yet know the terms of what he has got. Those issues will have to be addressed along with all the wider issues affecting our membership of the EU.

It is not a question of our simply having talked about the issue for a long time. The same thing could be said about what happens between one election and another. All the issues pertaining to an election are discussed over a five-year period, but the election campaign is the time when people focus most on those issues. When we talk about the referendum being rushed, we are simply asking why we should compress the debate into a short period, especially when it has implications for the devolved Administrations.

I have not heard any Member answer the point put time and again by the right hon. Member for Gordon (Alex Salmond): how this will affect Administrations that are having elections. Governments will need to be formed after the elections, but instead of getting into the full role of forming a new Government, a new Administration and a new programme for government, we will be into another period of purdah for at least six weeks—after having one of at least four weeks beforehand. That is disruptive of government, and this important point has not been addressed by any Members participating in the debate.

[Ms Ritchie]

Does the hon. Gentleman agree that there is a need, an urgency and an obligation on the Government to provide a Minister to answer that particular issue about the disruption to democracy resulting from two periods of purdah?

[Sammy Wilson]

Yes, and we have heard allegations that straw men are being put up to indicate, for example, that the electorate would be confused. However, my right hon. Friend the Member for Belfast North never claimed that. He simply made the point that conflating the election campaign with the referendum campaign was inappropriate where different nations and different issues apply. Indeed, parties will be competing with each other in the Assembly or devolved Parliament elections, but they might want to co-operate during the referendum campaign, so further confusion is introduced there, too.

[Peter Grant]

Does the hon. Gentleman appreciate that a further aspect not touched on is the fact that there will be different electorates? Thousands of people entitled to vote in the Scottish Parliament elections will be barred from voting in the EU referendum. Does he agree that, in those circumstances, having both campaigns running in parallel would be completely unacceptable?

[Sammy Wilson]

That is another important point that has not been raised before. It is one of a number of essential points that need to be considered.

Another argument I have heard is that people will get bored. When people are thinking about their long-term future and they vote, should their vote actually mean something or should they vote for people who come to this institution but then find that their views are overridden by bureaucrats in Brussels or by judges in the European Court? That, to me, is a fundamental issue. Given the impact that the European Union has had on the lives of so many people throughout the United Kingdom, I cannot imagine that they will be bored by the debate. I have addressed a few campaign meetings. I spoke at a Grassroots Out meeting not long ago, and the one thing I noticed about that audience was that they were not bored by politics in general, or by the politics of discussing the European Union. They were raring to go: they wanted to get into the campaign. I believe that this “boredom factor” is another straw man.

[Mr Jim Cunningham]

Anyone who took part in the Scottish referendum knows that this referendum will not be boring. I was involved in the 1975 referendum, and that was not boring. In fact, this referendum will generate a great deal of heat. I think that the real reason the Government are rushing it is the problem that they have with their right wing, which will try to sabotage it.

[Sammy Wilson]

I think the hon. Gentleman is right. The campaign will not be boring, and nor will the issues, because they are so fundamental to people’s lives.

Another argument that has been advanced, notably by the hon. Member for North West Durham (Pat Glass), is that the longer the campaign goes on, the more destabilising it will be for the United Kingdom and its economy. That was the Labour party’s argument for not having a referendum in the first place. It did not apply then, and it does not apply now. It was significant that the hon. Lady could not even give any examples of investors fleeing the United Kingdom or withholding investment from the United Kingdom, or of jobs moving out of the United Kingdom, simply because of the prospect of a referendum on our membership of Europe.

This is an important issue, and one that should be given full consideration. It should not be squeezed as it has been. I have not even touched on the issue of designation, but the Minister indicated that even that might be squeezed, which would cause further suspicion in people’s minds. We need to have a positive debate. The right hon. Member for Gordon spoke of the benefits of membership, and of his wish to extol them to the people. I want an opportunity to extol to the people of Northern Ireland and the rest of the United Kingdom the great life that we can have outside the EU: the great life that we can have when the chains are off our arms and off our economy, when we can decide how we can spend our own money, decide who we let into our country and who we keep out, decide what laws we want and how they are applied, and decide how we trade with other parts of the world.

That is the positive debate that I want to have, and I want it to continue throughout June, July, August and September. It will not be boring, and it will give the people of the United Kingdom, including the people of Northern Ireland, an opportunity to make their decision on the basis of the facts, not on the basis of the scare stories, and not on the basis of a compressed campaign that the Government hope can take place quickly so that only their side of the argument is heard.

Bank of England and Financial Services Bill [Lords]

Sammy Wilson Excerpts

Monday 1st February 2016 Commons Chamber

[Richard Burgon]

I thank my hon. Friend, who has extensive experience in these matters, for that. Troublingly, the people who now say there is no risk of a financial crisis ever again were the very same people in the very same sector who were saying before 2008 that everything was fine and there was no risk of disaster at the time. Sadly, how wrong they were! Despite what the bankers did to our economy and our society, about which there was entirely justified anger among the population, the Chancellor has cunningly turned the bankers’ crisis into a crisis of public spending, and has adopted a policy of spending cuts to vital services to which there seems to be no end in sight. In looking at this Bill, it appears that the Chancellor believes that he can now turn back the clock in the banking and financial sector.

Under this Chancellor, things are going in the wrong direction. For example, he sold off shares in the Royal Bank of Scotland at a very significant loss to the taxpayer; he appointed Angela Knight, who was head of the British Bankers Association during the financial crisis and who defended the top bankers during the crisis, to head up the Office of Tax Simplification in the Treasury; and he decided he could do without the continued services of the respected chief executive of the Financial Conduct Authority, Martin Wheatley. I am sure that he is delighted with the new appointment, as we have been told by the Minister that Mr Wheatley’s successor is fine with the abolition of the reverse burden of proof. I wonder whether Martin Wheatley, who departed prematurely, would have said the same.

The FCA’s planned public review into banking culture has now been cancelled, and its investigation into the promotion of tax evasion by HSBC has been brought to a premature conclusion. I know that we will be hearing more about the FCA in another debate this evening.

The Bank of England and Financial Services Bill was originally drafted, according to the Chancellor at a Treasury Committee meeting, to make changes to the Bank of England’s structure. One important concern is that it includes a major change to the regulation of senior bankers, undoing a key measure taken after the bankers’ crisis to change senior bankers’ conduct and to deliver transparency and accountability to financial decision making. I am talking about the presumption of responsibility—or the so-called reverse burden of proof.

We welcome the extension of the senior managers regime to senior managers across all regulated financial firms, but we do not accept the Government’s case for ending the presumption of responsibility for the top managers in banking.

The presumption of responsibility, as currently set out, applies to senior managers. It means that, to avoid being found guilty of misconduct when there has been a regulatory contravention in an area for which they are responsible, they will have to prove that they took reasonable steps to prevent that contravention. This Bill removes that onus on senior bankers. The onus is entirely reasonable, proportionate and, as bitter experience tells the British people, entirely necessary. Misconduct and misdemeanours in financial services are not merely a tale from history. In 2015, for example, the FCA had to fine firms more than £900 million. There was also a LIBOR scandal, foreign exchange fines and the mis-selling of payment protection insurance to the value of up to £33 billion.

[Sammy Wilson (East Antrim) (DUP)]

At the conclusion of her speech, the Minister indicated that by voting against the Second Reading of this Bill Members would be putting the public at risk from further bank abuses. Does the hon. Gentleman not agree that, by voting against this Bill and getting it changed so that the reverse burden of proof is put back in place, we are safeguarding against the abuses of the past?

[Richard Burgon]

I thank the hon. Gentleman for putting that necessary point so powerfully. People outside this place will be shocked to hear that, as a result of this Bill, senior bankers in the top firms will have less guards on their personal responsibility.

--- Later in debate ---

[George Kerevan (East Lothian) (SNP)]

I will try to do so, Madam Deputy Speaker.

It is always a great pleasure to follow the right hon. Member for Chichester (Mr Tyrie), who chairs the Treasury Committee. Ninety-nine times out of 100, I would bow to his wise words. Indeed, his repository of knowledge often leads me to think that he should be one of the regulators, rather than sitting on the Back Benches in Parliament. However, in this instance, it pains me that I cannot follow him or the hon. Member for Wyre Forest (Mark Garnier).

I will try to get the right hon. Member for Chichester to understand why those of us on the Opposition Benches cannot accept the Bill as it stands. Fundamentally, it is about the shift away from the reverse burden of proof. Given the backlog of distrust on the banking system and given that the reverse burden of proof was put into legislation and is just about to come into operation in March, to shift away from it now will only make the public less likely to accept what is going on and to make them fear that the banks are being let off the hook yet again. I would say to him and the Minister that it would have been much better to let the legislation run for a few years to see how it worked in practice.

The right hon. Member for Chichester gave us a very good reason for saying that, after so much legislation, it was perhaps time to pause while we made sure that it works in practice. However, his argument can be turned against him, because we are changing legislation at the last moment, after we passed it two years ago, but not implemented it. We should do that: we should see how the reverse burden of proof works. That is why I support the hon. Member for Leeds East (Richard Burgon) in opposing the Bill as it stands.

[Sammy Wilson]

Does the hon. Gentleman accept that one piece of evidence about why the reverse burden of proof would have been an effective brake on the excesses of the banks is the fact that bankers themselves are not keen on it? They knew that it would be an effective tool and were fearful of it.

[George Kerevan]

I am trying to avoid pointing the finger and drawing inferences. What I will do, in agreeing with the hon. Gentleman, is to quote the right hon. Member for Chichester. I hope he will forgive me for doing so. When the LIBOR scandal emerged in 2014, after the Banking Commission, he said:

“As time passes, the pressure for reform will weaken”—

it is, is it not?—

“The old system failed disastrously…Maintaining or resuscitating parts of the failed system, whether at the behest of bank lobbying or for the convenience of regulators, must not be permitted to happen.”

I think we are getting both: we are getting bank lobbying, but we are also getting the regulators wanting a quiet time.

The hon. Member for Wyre Forest made a reasonable point. He said that by extending the senior managers and certification regime, the Bill will place in law a very detailed duty of responsibility on senior bankers to take all reasonable steps to prevent wrongdoing. However, at the same time, it will place the onus on the regulators to prove that that responsibility was discharged. Suddenly, it gives the regulators a job—

--- Later in debate ---

[Jonathan Edwards (Carmarthen East and Dinefwr) (PC)]

Diolch, Madam Deputy Speaker.

I want to concentrate on four main themes: the issuing of Welsh-specific banknotes, the accountability of the central bank to Wales and her people, the name of the central bank, and the remit of the bank when it comes to setting interest rates.

The Bill aims to provide some flexibility in relation to who can issue sterling banknotes in Scotland and Northern Ireland. Currency issued by banks in Northern Ireland and Scotland is legal, and can be used throughout the United Kingdom. Among the many historic anomalies between Welsh nationhood and the nationhoods of our neighbours is the fact that Wales remains the only nation that is prohibited from producing its own distinctive banknotes. The Royal Mint does produce Welsh-specific coins, so my proposals raise no major issue of principle.

Like other parts of the UK, Wales was once awash with small banks covering relatively small geographical areas which were allowed to issue their own banknotes. The Bank Charter Act 1844 brought an end to Welsh banknotes, and, indeed, to provincial banknotes in England, but that did not apply to Ireland or Scotland. Four banks in Northern Ireland and three in Scotland have the authority to issue their own banknotes provided that they are backed by Bank of England notes.

Plaid Cymru is proposing today that Lloyds Banking Group, which holds the rights to the Bank of Wales brand and which is in part publicly owned—a share is, of course, owned by Welsh taxpayers—should be given the right to issue Welsh banknotes in the same way as is permitted for the three clearing banks in Scotland and the four in Northern Ireland. I believe that such an outcome would give a welcome boost to the Welsh national character, and the recognition of Wales as an equal nation and an economic entity.

In Northern Ireland, Bank of Ireland, Danske Bank—formerly known as Northern Bank—First Trust Bank and Ulster Bank notes are used to celebrate the recognition of individuals such as J.B. Dunlop, Harry Ferguson, Sir S.C Davidson and James Martin, while also celebrating architectural splendour such as that of Belfast City Hall. In Scotland, the Bank of Scotland, Clydesdale Bank and Royal Bank of Scotland are entitled to issue banknotes. They pay tribute to the fantastic bridges of their country, and recognise the contribution of people like Sir Walter Scott and Robbie Burns.

The question that naturally rises, therefore, is this: why can we not similarly issue banknotes in Wales to recognise our historic landmarks such as Castell Carreg Cennen, in my constituency, Pont Menai and Yr Wyddfa, and our historic greats such as Owain Glyndwr, who was nominated the seventh most important person of the last millennium by The Times, David Lloyd George, the originator of the welfare state, Aneurin Bevan, the architect of the NHS, and Gwynfor Evans, the first Plaid Member of Parliament and the father of modern Wales?

[Sammy Wilson]

Does the hon. Gentleman accept that the downside of having our own banknotes in Northern Ireland is that anyone who tries to pass them on in England is looked on as some kind of conman?

[Jonathan Edwards]

I am always grateful for interventions from my great friend, who speaks with a huge knowledge of financial matters. Those notes are legal tender and a legal currency, and I think that we need to move forward. The issue was raised with me on television today. The fact is that Scottish and Northern Ireland banknotes can be legally used anywhere in the United Kingdom.

Before I was distracted, I was making the case for some people who might be pictured on Welsh banknotes. A notable case could also be made for what is arguably the most famous Welsh painting of all: “Salem”, painted by Sydney Curnow Vosper in 1908. His painting of Sian Owen aged 71 at Capel Salem, a Baptist Chapel at Pentre Gwynfryn in the north of my country, is a national icon, much as Constable’s “The Hay Wain” is in England.

Notes that are currently used in Wales recognise people including Elizabeth Fry, Charles Darwin, Adam Smith, Matthew Boulton and James Watt. Previous notes have portrayed Charles Dickens, Sir Edward Elgar, Michael Faraday, Sir John Houblon, Sir Isaac Newton, Florence Nightingale, William Shakespeare, George Stephenson, the first Duke of Wellington, and Sir Christopher Wren: all great people, but none, to my knowledge, with any direct link to my country. Many pounds from many Welsh people have contributed to the UK over many years, from the industrial revolution through to the bank bail-outs, and I deem it entirely appropriate that Wales’s contribution and standing within the sterling zone should be recognised. That would put right what appears to be a clear injustice. I pay tribute to the work of my colleague Steffan Lewis on this issue, and I look forward to seeing him take his place in the National Assembly after the elections in May.

On the issue of accountability to my country and to the other devolved Governments, I want to put forward proposals in the spirit of the so-called partnership of equals, as it was labelled by the Prime Minister and the Unionist campaign during the recent Scottish independence referendum. The British state is rapidly changing as power and responsibility flow from Westminster to the devolved countries, although the pace is perhaps not as quick as someone like me would want. It is undeniable that the UK is now a vastly different place from the one it was 20 years ago. Central to recent developments has been the increasing fiscal devolution to Scotland, Northern Ireland and even Wales. The Scotland Act 2012 fully devolves income tax, and Northern Ireland has recently been awarded full powers over corporation tax. Wales, as always, is in the slow lane, but even we will soon have an income tax sharing arrangement, if the draft Wales Bill reaches the statute book.

Measures relating to major fiscal levers are flowing from the Treasury in London to the devolved countries. This increases the political accountability of the devolved Governments to their respective electorates and, critically, incentivises those Governments to boost economic performance in order to invest in public services. The co-ordination of monetary and fiscal policy is vital in any economic policy. I understand that the central bank is politically independent, but there is obvious co-ordination between the Treasury and the central bank. Similar protocols and links need to be developed with the Welsh, Scottish and Northern Irish Exchequers. The national Parliaments should nominate a member to serve on the Monetary Policy Committee to ensure that those involved in the interest rate setting process have an understanding of economic conditions and events in Wales, Scotland and Northern Ireland. All MPC members are currently either bank staff or nominated by the Treasury. My proposal should also apply to the Financial Policy Committee and the soon-to-be-implemented Prudential Regulation Committee, which will be created by the Bill.

Political scrutiny of monetary policy remains the preserve of Westminster despite increasing fiscal decision making at devolved levels. Although we are not privy to the meetings between Treasury Ministers and the Governor and his senior team, we can safely assume that those meetings are frequent. On top of that, in regard to parliamentary scrutiny, the Governor and his team meet the Treasury Select Committee here at Westminster at least five times a year. Considering the fiscal powers that have been devolved or are in the process of being devolved, I would hope that the central bank agrees that it is in its interests to strengthen relations with the devolved Governments and Parliaments. I am not aware of any formal structures for meetings between the Governor and Ministers of the devolved Governments. In the interest of mutual respect, those structures need to be formalised.

In addition, I strongly believe that the Governor should attend a meeting of the relevant economic committee of the devolved Parliaments at least once a year. Evidence sessions of that sort would be vital in helping political parties in the devolved Administrations to formulate their own fiscal policy and would recognise the reality that fiscal and economic policy is no longer the sole preserve of Westminster when it comes to Wales, Scotland and Northern Ireland.

A further issue is the name of the central bank, currently named the Bank of England. It is a contentious issue for me as a proud Welshman that the central bank that decides monetary policy in my country is named after another country. The Bank of England was created in 1694 before the present British state was constructed. Wales was annexed in 1536, Scotland in 1707 and Ireland in 1801. The central bank was therefore created to serve a political entity that consisted only of Wales and England. If the British state is a partnership of equals, all its institutions must reflect that reality, including perhaps the most important institution underpinning its financial system: the central bank. If it would be helpful to the Minister, I have a suggestion, which is to rename the Bank of England the “Sterling Central Bank”. This would reflect the fiscal and political reality we live in, and it would show that those in this place genuinely believe in the respect agenda and a partnership of equals.

I am very interested in the emerging debate on changing the remit of the MPC in regard to setting interest rates. The MPC is specifically charged with keeping an inflation target of 2%. Other central banks such as the US Federal Reserve have a dual mandate which goes beyond price stability. In 1977, the US Congress amended the 1913 Federal Reserve Act and mandated the central bank to achieve long-term moderate interest rates and, critically, maximum employment, in addition to reaching inflation targets. As the Bill progresses, I hope to return to these themes in more detail. I would also be more than happy to support the amendments tabled by Labour and the SNP when it comes to the vote.

HMRC and Google (Settlement)

Sammy Wilson Excerpts

Monday 25th January 2016 Commons Chamber

[Mr Gauke]

Not as yet, but we wait to see future developments.

[Sammy Wilson (East Antrim) (DUP)]

At a time when the Government expect small businesses to do tax returns four times a year, does the Minister not understand that many of those small businesses will be outraged that a firm such as Google can get off with paying no tax for 10 years and then finish up with a paltry bill that includes fines and interest? At the same time, we have a refusal by the Government to show how that sum was raised. Surely, to avoid the feeling of cynicism among many taxpayers, we should at least have some transparency about how the figure was reached.

[Mr Gauke]

We are determined to ensure that all businesses pay the tax that is due. May I specifically address the hon. Gentleman’s point about quarterly returns? There will be a Westminster Hall debate on that matter in 25 minutes, and the point that I shall make is that there is no requirement for quarterly returns. Businesses should keep their information digitally and send summaries of that information on a quarterly basis. That is very, very different from quarterly returns.