Financial Services Bill (Fourth sitting)

Stephen Flynn Excerpts

Committee stage & Committee Debate: 4th sitting: House of Commons
Thursday 19th November 2020 Public Bill Committees

[The Chair]

Stephen Flynn, could you make your way to the mic and speak right into it? That one will work, although it has Duncan Hames’s name by it.

[Stephen Flynn (Aberdeen South) (SNP)]

Q I am sure that Duncan would be overjoyed to be associated with me.

Thank you, Minister Isola, for presenting yourself before us today and for the information that you have provided. I would like to follow on from the shadow Minister’s questions about the competitive advantage that Gibraltar may or may not have. As I see it, the Bill seeks to create a level playing field, but it could be inferred that Gibraltar has a competitive advantage over our constituent parts of the United Kingdom—indeed, the home nations—given that it has abilities in relation to corporation tax and other forms of taxation that the home nations do not. How would you assess that? I appreciate that you sought to answer Mr McFadden in that regard, but do you feel that we could see a situation in which businesses will seek to take advantage of what is clearly a level playing field with a competitive advantage for yourselves?

Albert Isola: The simple answer is no, and I will tell you why. If you think about it, we have been setting our own tax rates for the past 20 years, during which we have had access to the United Kingdom market through the European Union single passporting system. I do not think that I have ever heard any discussion in the financial services environment about different tax rates in different member states of the European Union, let alone Gibraltar, having an impact. It is not as if an advantage were being created by the Bill that would endure to 1 January next year and beyond. Where we are today is where we have been for the past 10 or 15 years with different tax systems.

I do not think that you will find a company that—with the level of investment that it requires in terms of capitalisation, particularly with respect to insurance—will make a judgment call on a difference of 9% in corporate tax, assuming that it can make a profit. As I said to the shadow Minister, the information that I have from the firms that have come here is that that is very low on their list of priorities, if it is there at all. I do not see it having the impact that you suggest; if there were such an impact, it would already have happened a long time ago. As I mentioned, the firms that are in Gibraltar today have been here for a very long time, and as they have grown, so have we. Our market share has been 20% for the past year or two; it was a lot less before those businesses grew and became more successful.

[The Chair]

As there are no further questions, I thank you, Minister, for joining us remotely from Gibraltar as our final witness of the day. This is the end of our fourth and last evidence session.

The Committee will meet again, not here but in Committee Room 14, on Tuesday at 9.25 am—bright-eyed and bushy-tailed for our first sitting of line-by-line scrutiny.

Ordered, That further consideration be now adjourned. —(David Rutley.)