Multiannual Financial Framework

Thomas Docherty Excerpts

Wednesday 31st October 2012 Commons Chamber

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

I welcome the junior Minister of State and hope he will tell us where the senior Minister of State is this evening.

This has been an excellent debate and we have heard principled contributions from Members of all parties, who hold deep, long-held convictions about Europe and the direction of travel. Anyone who is aware of my view will know that I am the co-chairman of the all-party group on European reform and that I believe that Britain is better off in Europe but that the current organisation is not satisfactory.

To give an example, 1 January saw the introduction of a European-wide ban of battery eggs, for which the UK, under the previous Government, and many other countries had campaigned successfully. However, it became clear that a number of eastern and southern European nations would fail to meet the 1 January deadline. The Environment, Food and Rural Affairs Committee took evidence on the issue last year and, when we asked the European Commission what it would do if the UK chose not to allow these illegal eggs into the country, it said that it would prosecute the United Kingdom, which is an obscene and perverse position to adopt. Saying that it would prosecute a country for upholding Europe’s own laws shows that the Commission has got its priorities wrong.

The Minister discussed cutting structural funds, but I disagree. The solution, as explored by the all-party group, is that if we repatriated the structural fund powers and spent the same amount of money as we hand to Brussels, we would have hundreds of millions of pounds more to spend in Wales, Scotland, the south-west and the south-east.

[Conor Burns]

Given that the hon. Gentleman is going to vote in favour of an amendment calling for spending restraint, does he regret that his party’s Front Benchers did not follow that policy in their 13 years in government?

[Thomas Docherty]

I am surprised that the hon. Gentleman has not made it on to the Government’s Front Bench yet with that kind of devastating critique.

My hon. Friend the Member for Vauxhall (Kate Hoey) said that we will be voting alongside people whom we do not get on with or whom we do not particularly like, but I have been informed by one or two Conservative colleagues that that occasionally happens in the Government Lobbies anyway. I look forward to seeing which Lobby the hon. Gentleman enters later.

[Mr Jim Cunningham]

Does my hon. Friend agree that this is not a debate about whether we should be in or out of Europe? It is about the fact that, on the one hand, the British people have been told to tighten their belts and the Government’s borrowing has gone up, while on the other hand, the Government are leading us into a situation where there will be an increase, one way or another, in the EU budget. That is the real issue and it is not acceptable to the British people.

[Thomas Docherty]

My hon. Friend is correct. Whether people live in Coventry, Bournemouth, Tunbridge Wells, Ribble Valley, Dunfermline or Cardiff, education budgets, child care, housing budgets and defence of the realm are being cut, yet we are expected to hand more and more money to Brussels bureaucrats to spend on vanity projects that will then attack British industry and British farmers. The British public will not understand if Members of this House, who claim that they want the best for the British taxpayer and that they want to support British industry, do not vote according to their principles and their long-held consciences and allow themselves to be corralled by their Whips into voting for this coalition motion.

It is interesting that this is only the second time that we have seen a large Liberal Democrat turnout in the Chamber since the start of this parliamentary Session. The first time was when we debated House of Lords reform. That says it all about the quality of the motion. I urge hon. Members from all parties to listen to their taxpayers, British industry and their consciences and to vote for the amendment.

Finance Bill

Thomas Docherty Excerpts

Monday 2nd July 2012 Commons Chamber

[Graeme Morrice (Livingston) (Lab)]

Thank you, Mr Deputy Speaker, for giving me the opportunity to contribute to this debate in support of the Labour Opposition amendments.

I was a member of the Finance Bill Committee and attended each of the 18 sittings over the past several weeks; obviously I must have been bad in a former life. It was clear to me that the more the Bill was scrutinised in Committee, the more it was revealed that the Bill, and the Budget that it will enshrine into statute, is the omnishambles that many commentators have described it as.

Once again, the Tories are showing their true colours. It was a classic Tory Budget, with millions paying more so that millionaires can pay less. That is evidenced by the fact that, as we have heard throughout the debate, 14,000 millionaires will receive a tax cut of more than £40,000 a year, while 4.4 million pensioners will lose an average of £83 a year. It is a classic Tory Budget, but with the difference that it was possible only thanks to the support of the Liberal Democrats—the Lib Dems who continued publicly to oppose any change to the 50p rate of income tax immediately prior to the Budget statement but then voted for it; the Lib Dems who, before the last election, repeatedly stated their opposition to immediate public spending cuts, only to support a Budget reduction of more than £6 billion within two weeks of forming the coalition; and, lest we forget, the Lib Dems who promised not to raise VAT and then raised it.

The 50p rate raised about £1 billion in its first year and could have raised £3 billion a year over the lifetime of this Parliament and beyond. Its continuation could have been used to cut fuel duty, not just freeze it, as we agreed in the previous debate. Many of my constituents have written to me about that. It could have been used to reverse the Government’s damaging cuts to tax credits or help reduce the deficit. Instead, the Chancellor chose to give the richest 1% of earners a huge payout. People on middle and low incomes are already being squeezed by rising fuel, energy and food prices. Now, their tax credits and child benefit are being cut. Yet again, the Government have made the wrong choice and proved how totally out of touch they are.

The aspect of the Budget that has undoubtedly caused the most anger among my constituents is the decision to freeze the personal allowance for pensioners, which will help subsidise the Chancellor’s bumper tax cut for the rich. That was buried in the Budget’s small print, and the Government tried to make out that it was a tidying-up exercise. However, nobody was fooled by that. It was clear that it was actually a £3 billion tax raid on pensioners. No wonder that was the only aspect of the Budget that was not leaked in advance.

How will the Chancellor’s tough talk about cracking down on tax evasion and aggressive tax avoidance, which he says is “morally repugnant”, be put into action if the resources of Her Majesty’s Revenue and Customs continue to be cut? Some 10,000 jobs will go by 2015, including 240 processing posts at Pentland House in my constituency.

Labour’s five-point plan for growth offers an alternative vision. If the Government followed our advice and implemented a £2 billion tax on bank bonuses to fund 100,000 jobs for young people, we would begin to see some progress on tackling the scourge of youth unemployment. Instead, millions are left to pay for a Budget for millionaires—a classic Tory Budget, but this time supported by the discredited Liberal Democrats.

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

I should, in the interests of probity, place on record the fact that my wife works for Age Scotland. I declare that interest.

The contrast between the two sums of money that we are debating has been mentioned several times. There is the £3 billion of tax cuts for millionaires’ row, versus the £3 billion by which our pensioners will be worse off as a result of the punitive measures employed by Liberal Democrat and Conservative Members. Personal allowances for the over-65s, our golden generation, are to be cut in real terms in the coming year. As several hon. Members have mentioned, that will mean that a pensioner who turns 65 in the next year will be up to £323 a year worse off. In these hard-pressed times, with the rising cost of living, rising energy and water prices and the flatlining of their savings, they can ill afford to pay that tax. It is worth contrasting their situation with that of the people who will be the greatest beneficiaries of the Government’s decisions.

I know that many Members are fans of a popular US television programme called “The West Wing”. For hon. Members who do not own a television, let me explain that it is about a wonderful Democrat politician, whom Members of all parties might aspire to be, who is pitted against a mad, right-wing Republican Congress that pursues more and more absurd policies. Even “The West Wing” could not countenance the idea that in a time of austerity, when deficits have to be reduced, a right-wing party—or the two right-wing Government parties—would call for tax cuts for the very wealthiest. Even Speaker Haffley in “The West Wing” would not support such ludicrous so-called economics.

--- Later in debate ---

[Ian Mearns (Gateshead) (Lab)]

Would my hon. Friend care to speculate on how many of the 14,000 millionaires who will be super-beneficiaries of the measures will stop moving the mountains of cash that they currently move to avoid paying tax when the top rate is reduced from 50p to 45p? Surely if they move mountains of cash to avoid paying 50p, they will not move any less to avoid paying 45p.

[Thomas Docherty]

I suspect the best and fastest way to answer my hon. Friend’s question would be to attend the next Conservative party fundraising drinks event, where I am sure many of those millionaires will be buying the Minister a rather hearty round.

Much has been made of the quad’s all-night drinking session. I am sure they were drinking fine Scotch malts—indeed, no fine malts are made outside Scotland—but they should have spent more time looking at the detail of those two decisions. In direct contrast to the hon. Member for Dover (Charlie Elphicke), I would argue that pensioners on an income of £10,000 a year are not among the wealthiest pensioners in the country. If Conservative Members believe pensioner households struggling to get by on £10,000 are wealthy, it goes to show how staggeringly out of touch they are.

[Jacob Rees-Mogg]

I am extremely grateful to the hon. Gentleman for giving way and am enjoying his wanderings through the drinking habits of certain Members of the House, which I am not sure are directly relevant. Why is it fair that pensioners should have this benefit but not families who have a £10,000 allowance who are struggling with children? Why is it fair that the benefit should be age-related?

[Thomas Docherty]

I always give way to the hon. Gentleman, who knows more about age than anyone in the House. He needs no history lesson, but the measure goes back to the end of the second world war, and the concept of the greatest generations—those who have given a lifetime of sacrifice. It is worth noting that, just last week, we unveiled a long-overdue memorial to some of that greatest generation. I am sure he would recognise their sacrifice.

[Jacob Rees-Mogg]

The measure was introduced earlier, I believe by Winston Churchill; indeed, an hon. Member asked earlier how we could overturn what the great man had done. The wartime generation are having the benefit frozen; they are not losing it. The people who are not getting it were not born when the war was going on.

--- Later in debate ---

[Thomas Docherty]

I cannot believe the hon. Gentleman’s hearing is going. I began by saying that a cash freeze is a real-terms cut. I am sure he would agree with that.

[Jacob Rees-Mogg]

The Government’s wonderful policies are very successfully bringing down inflation; there has been a substantial fall. In addition, oil prices are coming down and there is a cut in fuel duty. That amazing combination means everything is working very well.

[Thomas Docherty]

With an intervention like that, it will not be long before the hon. Gentleman is sitting on the Front Bench speaking for the Government on Treasury matters. Perhaps I can help him on another matter, though, because several references were made to Take That. For his benefit, let me say that they are a popular beat combo who can often be found on the wireless. He might enjoy listening to them.

[Jacob Rees-Mogg]

rose—

[Mr Deputy Speaker (Mr Lindsay Hoyle)]

Order. We do not need to worry about Take That and radios for today. I think that the circus has carried on long enough.

[Thomas Docherty]

I am most grateful, Mr Deputy Speaker.

[Ian Mearns]

Would my hon. Friend care to reflect on the fact that we have just heard from the hon. Member for North East Somerset (Jacob Rees-Mogg) a celebration of stagflation?

[Thomas Docherty]

My hon. Friend is correct. This is not a time for celebration, as the cost of living continues to rise and the cost of energy and other precious commodities heads in the wrong direction. The real-terms cut faced by pensioners this year will make their lives much harder.

It is also worth reflecting on who will benefit from the proposals outlined by Ministers. We are talking about footballers, pop stars and “Big Brother” contestants. We talk about wealth generation and the value of people. With the greatest respect, I would argue that those three categories should not be given priority over our greatest generation. I know that the Minister is a courageous soul and, for his sins, an Ipswich Town supporter—such as that can be—but I wonder whether he truly believes that the value given by Ipswich Town players last year or this year was greater than the value given by the greatest generation in our nation. Surely, he must reflect on whether Middlesbrough, Ipswich Town, Sunderland, Leicester City or Crystal Palace players should really be prioritised over our pensioners.

[Gloria De Piero]

Did my hon. Friend notice the inconsistency of the Liberal Democrats on this matter? In January, they said it would be very wrong to reduce the 50p tax, but by March they were briefing that they were not ideologically wedded to the tax. Has this episode not demonstrated their powerlessness in government?

[Thomas Docherty]

I often think that the Business Secretary would make an excellent contestant on “Strictly Come Dancing”, such is his fleetness of foot. In fact, I am sure that tomorrow morning there will be leaflets out in Brent and elsewhere condemning and disowning this Government policy, as if Liberal Democrat votes had not yet again carried the argument, leaving Ipswich Town footballers and others better off and our greatest generation worse off. This is a poverty of policy. It is the worst example of what happens when the quad sits up drinking and it will leave the country with a dreadful hangover.

[Sheila Gilmore]

The policy on the higher tax rate is, in effect, an endorsement of tax avoidance, which worries me greatly. Some of us sat through the Finance Bill Committee and heard Government Back-Bench Members say how much they disapproved of tax avoidance, but throughout this episode we have heard people argue that because some people have taken steps to avoid tax, we should reduce it. That is highly unsatisfactory to the many people who, on pay-as-you-earn, have little ability to avoid tax. They are gobsmacked by all this.

If part of the problem was due to people forestalling, which is the technical term, in the first year of the new tax, perhaps—and this is a thought for the future too—we should have introduced it with immediate effect, as happens with some other taxes. For example, tobacco duty is generally increased on the day of a Budget, so that people do not rush out to fill their shopping bags—or whatever they do. Perhaps that would have been a way around it. I know it is not traditionally done with increases in tax rates, but if that is how people respond to these things, perhaps we should treat higher earners like we treat people we think will fill their bags with cheap booze or cigarettes, and forestall them, rather than letting them forestall the rest of us—because that is what they are doing to the communities in which they live. Unfortunately, in a year’s time, we are likely to hear Government Members saying “We told you so” even more. The reduction has been postponed for a year, but it will still happen, and a lot of people will no doubt do the same thing in reverse when it does.

It has become something of a mantra to say that no money was ever raised from the 50p rate of tax, but that is not true: £1 billion was raised, even in the year in which people were apparently forestalling. If we had let it run for somewhat longer, the situation could have been even more different. However, as the Institute for Fiscal Studies pointed out, to rush to judgment on this matter so quickly, because that suited the way in which the Government wanted to go, was not justified. We are, in effect, saying to people that it is all right to avoid tax.

I started to tell a little story earlier, and I hope that it will be seen to be relevant. I am fascinated by history, and particularly by housing, and—unusually, for me—I watched a television programme last night. It was entitled “The Secret History of Our Streets”, and last night’s episode was about Portland road, in London. It had been made long before the current debate on the Budget. A young, brash banker got up and said that the value of the property on that street had gone up even further since the taxpayers had bailed out the banks. Did we really think, he asked, that the banks were going to start lending to small businesses? No, they were going to give people like him an increase in income so that they could pay even more for those houses. He might have been one of those boastful types, but that was nevertheless an insight into the mindset of the kind of people in our community who think that tax avoidance is absolutely legitimate. There is a great deal of wealth in this country, as that example showed, and many ordinary people find this whole debate offensive and difficult to swallow.

At the other end of the tax issue, we have the question of raising the tax-free allowances. The Government keep saying how kind they are being to people on low incomes, but we should remember that once those people have had their tax allowance raised, they will get no further advantage in subsequent years because they are already out of the income tax regime. Other people, however, have gained considerable advantages from the raising of the basic tax threshold. Many people on considerably higher earnings—although not necessarily paying higher rates of tax—have gained from the measure.

It has been easy—for the Liberal Democrats in particular, as this is one of their favourite lines—to say that raising the tax threshold is all about helping the very poorest. However, the very poorest were already outside the income tax regime, and people on considerably higher earnings—particularly two-earner families without children—have benefited substantially from the raising of the threshold. We must also take into account what people on the margins who have been taken out of tax have lost. When we look at the details, we see that as a result of the measure, they could lose tax credits and, in some cases, housing benefit. Their gain is therefore very much less than has been suggested.

--- Later in debate ---

[Jacob Rees-Mogg]

The pensioners are not being robbed. The pensioners have been extraordinarily well looked after by this Government, and rightly so. I agree in many respects with the hon. Member for Dunfermline and West Fife (Thomas Docherty), who talked earlier about how important the elderly were to our society. He called them the golden generation. I thought that, out of respect to Her Majesty, we ought to call them the diamond generation, as they are all over 60.

Of course we owe a great deal to the elderly. That is why it is right that they have kept their bus passes—which they are pleased to have, although there are not many buses in North East Somerset—and their winter fuel allowances. If they are over 75, they will also retain their free television licences so they can watch the BBC free of charge. I think that many of them prefer Sky nowadays, but that is a separate issue. The Conservative party, in alliance with our Liberal Democrat friends, has looked after the pensioners.

As for the thresholds, it is absolutely right that they should be evened out. Let us consider the people who are paying tax across the country. How is it fair for those who have retired to be given an automatic tax break, rather than those who are working hard and perhaps bringing up children? They need the income just as much as the pensioners, and in some cases more. That, I think, was bold and brave of the Government, and right.

I want to begin, however, by discussing the easiest step to defend—the one that was so startlingly obvious that it is surprising that the Government did not take it earlier and go further. I am talking about the reduction in the 50p tax rate to 45p. We know well that high taxes drive out enterprise and people, and drive down tax revenues. That is not because of evil schemes of tax avoidance; it is because people simply decide that if they are not going to get paid, they will not work. They remove their labour. Our socialist friends—

[Thomas Docherty]

rose—

[Jacob Rees-Mogg]

I give way to my socialist friend.

[Thomas Docherty]

Does the hon. Gentleman really believe our society is enhanced by these pop stars and premiership footballers?

[Jacob Rees-Mogg]

It has to be said that I am not the world’s greatest expert on pop stars and footballers, but none the less I think they bring a richness to our national life that enlivens many people in my constituency, and even in Scotland. They want to watch the highest quality football being played.

This is relevant, Mr Deputy Speaker, in case you think I am going off on a tangent. I have thought that it would be a good idea to remove the limit on overseas players in cricket, because that limit has been removed in association football and it has led to our having in this country the highest quality league football, and in English cricket—

[Jacob Rees-Mogg]

Thank you, Mr Deputy Speaker, but the reduction of tax is what encourages them to be here and why they do not decide to work in other countries instead.

[Thomas Docherty]

I am pretty sure, Mr Deputy Speaker, that the England cricket team is very good and the England football team is not very good.

[Jacob Rees-Mogg]

But my concern was about Somerset county cricket club. Football teams such as Manchester United do very well through having more foreign players. Somerset, however, has yet to win the county championship, but this lower level of tax and greater freedom in employing overseas players may lead to its achieving that.

Returning to the question of the 45p tax rate, we have had a discussion about avoidance in that context, and I want to defend tax avoidance. I know this is not the most popular cause to espouse, but I do so because I believe in the rule of law, and I do not believe the rule of law is best maintained by Parliament being arbitrary in its taxation.

We have the power, through our votes this evening, to set rates of tax as we choose—to set schemes that allow people to be charged tax, or not to be charged tax, as we choose. If we in this House are too incompetent to draw up the tax law properly, is it reasonable to say to the taxpayer, “You must work out what Parliament may have wanted. This is not what is said, but Parliament may have wanted you to pay this extra amount on top”? Should we then also say that to people who put money into their individual savings accounts? Should we retrospectively say that they ought to have paid more tax on their ISA sums, or on their pension funds?

--- Later in debate ---

[Mr Gauke]

I strongly disagree, but before I turn to tax avoidance let us remember that between one third and one half of the reduction is because of less participation in the labour market. It is not because of the decline in the economy; we are talking about people moving elsewhere, people retiring earlier and people working fewer hours because it is not worth their while, in their opinion, to work as hard as they would otherwise do. Let us not forget that when someone moves from this country to Switzerland, we miss not just the difference between 45p and 50p, but everything, the whole 50p, and not just that bit above £150,000, but the first £150,000. That is the consequence of a tax rate that drives people out of the country and does not attract them here.

[Thomas Docherty]

Can the Minister tell me two premiership footballers who have left the country because of this tax rate?

[Mr Gauke]

No I cannot, but I know that, for example, the Arsenal manager remarked that the 50p rate put him at a disadvantage. Earlier, the hon. Gentleman mentioned Ipswich Town and whether its players deserved a tax cut or pensioners did, and I have to say that on last season’s performance one or two looked as if they could qualify for the age-related allowance, but that is not at the heart of my argument.

The point is that we have to be competitive, and we want to attract talent to the UK, but having a higher rate than France, Italy and Germany is not competitive.

Banking Reform

Thomas Docherty Excerpts

Thursday 14th June 2012 Commons Chamber

[Mr Hoban]

The hon. Lady makes an important point about getting the balance right, but let us not forget that the banking crisis cost this economy £140 billion between 2007 and 2009. An unstable banking sector costs the economy dear: it costs jobs, it costs tax revenues and it costs families. The important thing is to ensure that we get the banking system right, so that it is stable and promotes growth, rather than allowing banks to let loose, grow their balance sheets unconstrained and take on risks that they do not understand, which is what happened in the lead-up to the financial crisis, when the shadow Chancellor’s system of regulation was in full swing.

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

Where is the Chancellor, and at what point did he decide not to make the statement himself?

[Mr Hoban]

It has always been the case that I would make the statement today. This may come as news to the shadow Chancellor—it may be different from his experience when he was City Minister—but the Treasury is a team. We have worked together on these reforms, and it was always the intention that I would make today’s statement. The shadow Chancellor should not believe what he reads on Twitter.

Amendment of the Law

Thomas Docherty Excerpts

Thursday 22nd March 2012 Commons Chamber

[Ed Balls]

There will be a vote next week, and we will vote against the 50p change. It is the wrong tax cut at the wrong time. I have always said that no tax rate is set in stone, but how can anyone believe it is right to take tax credits from working families, child benefit from middle-income families and more tax from pensioners, but give £10,000, on average, to every top rate taxpayer in the country? If there were a general election tomorrow, our manifesto would state clearly that we would reverse it. That is the clearest answer I will give.

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

Does my right hon. Friend think it would be helpful, ahead of next week’s debate, for the Prime Minister to place in the Library a list of which members of the Government will benefit from that cut in the top rate?

[Ed Balls]

I think we should leave people’s trust funds out of this. I will come back to that in a moment, but I will not press the Government on it.

The Chancellor took a reckless gamble on jobs and the economy, the Prime Minister and the Chancellor have taken a reckless gamble on NHS reform and police cuts, and now the Chancellor is taking a reckless gamble with the fairness of our tax system by handing out massive tax cuts to legitimate taxpayers in the hope—based on no evidence—that the cuts will pay for themselves by somehow bringing all the tax avoiders back into the fold. That is a fact.

Budget Leak Inquiry

Thomas Docherty Excerpts

Thursday 22nd March 2012 Commons Chamber

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

On Monday the Home Secretary came to the House and confirmed that there would be a leak inquiry into the Hillsborough media reports. Why is it that the Home Secretary has that grace, but the Minister does not?

[Mr Gauke]

Let me repeat what I said earlier. It is a long-established practice of the Treasury not to comment on whether a leak inquiry has been established or on its conduct or outcome.

Scottish Football (Tax Liabilities)

Thomas Docherty Excerpts

Wednesday 29th February 2012 Westminster Hall

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

It is a pleasure, Mr Betts, to serve under your chairmanship for the second time during this Session. I have been asked to give the apologies of some hon. Friends who are detained in the Scottish Affairs Committee and the Treasury Committee. I am sure that many of them would otherwise have been here to discuss their take on what has happened in the Scottish game in recent weeks.

Hon. Members need no reminding of the importance that football clubs play in our communities north and south of the border. I am privileged to have two senior football clubs in West Fife. Dunfermline Athletic is in my constituency, and Cowdenbeath is some 800 metres over the border in the constituency of my right hon. Friend the Member for Kirkcaldy and Cowdenbeath (Mr Brown), the former Prime Minister. I want to say a little about the role of those clubs, and clubs like them, throughout Scotland and the rest of the United Kingdom.

On Saturday, I was lucky to be taken to Cowdenbeath’s home game against Brechin City football club as the guest of a local law practice, Stenhouse Husband & Irvine. While sitting with the club’s board of directors over lunch, I was able to talk about the state of the Scottish game as a whole, and the way in which clubs operate in the lower divisions. People give up their time and money to support clubs such as Cowdenbeath and Brechin City, and I was struck that they do so not for financial gain, or the glamour, or even the company of Members of Parliament, but because of their deep affection for the clubs in their communities, their love of football, and because they want to give something back to their home towns.

On Saturday afternoon, I had the opportunity to spend some time with the chairman of Cowdenbeath football club, Donald Finlay QC. You may not be familiar with that name, Mr Betts, but he is one of Scotland’s highest profile Queen’s Counsel, a former vice-chairman of Rangers football club, twice rector of the university of St Andrews, and someone who has enjoyed a colourful and entertaining history of involvement with Scottish football. While chatting to him on Saturday afternoon, I asked him why, having been involved with Rangers during their most successful period, highlights of which included narrowly missing out on a European cup, and achieving nine league titles in a row, he provided so much time and energy to support one of the lesser lights of Scottish football. I hope that Mr Finlay does not mind me sharing his answer. He said that he was Cowdenbeath born and bred, and was always proud of his home town. He simply wanted to put back a little into the community that he loves so much.

The second thing that struck me was that clubs in the lower leagues operate with far more fiscal responsibility than some of the clubs in the top two flights of Scottish football. Perhaps it is because those involved in the running of lower league clubs are local business men and lawyers that they have a healthier respect for a balance sheet, and recognise that a club’s expenditure must not exceed its income. It is undoubtedly a source of frustration to many smaller clubs that every month they must account for every penny while the so-called big boys of Scottish football are able to rack up debts of hundreds of thousands, if not millions of pounds, with no obvious means of repayment.

Thirdly, it is worth noting that those who work behind the scenes at our smaller clubs often do so for little or no recompense, and would normally have no expectation of receiving any praise or credit. For example, on Saturday, I discovered that the tannoy announcer at Cowdenbeath FC is Mr Jim Stark, who was editor of the Central Fife Times. Behind the scenes, one of the key cogs in the functioning of a successful match day is Mr Alex Haddow, chairman of the local community council. Without the tireless support of such individuals, and hundreds of other community heroes, clubs such as Cowdenbeath and Brechin City would not function. The strength of feeling in clubs further up the Scottish leagues is equally strong, and due to the full-time nature of their clubs, arguably their roots go even deeper into their local communities.

For the sake of probity, perhaps I should declare an interest at this stage. I am not only a Dunfermline Athletic season ticket holder, but my constituency office is located within the club. Dunfermline Athletic—or the Pars—like many other clubs, has invested heavily in supporting youth and grass-roots football. Indeed, the club offers classes for children from 18 months and through primary school to introduce them to the game, and to build their confidence and interpersonal skills. Those classes, with the support of their parents, help to develop children’s motor skills, and they provide a fun and safe environment so that children can integrate and develop their characters. The emphasis is, rightly, on fun and enjoyment, but it is a crucial role, for which clubs receive no financial recompense, and fills a vital role in society—some might say the big society, which the Minister is so keen on. Beyond primary school, football clubs, like those south of the border, have successful youth academies. Dunfermline’s under-14s and under-15s recently visited the city academy in Manchester, and were able to take part in a contest against players from the likes of Manchester City.

The financial situation in Scottish football clubs in recent years has been dwarfed by their counterparts in the English leagues. I shall provide some context for the finances of Scottish football. The television sponsorship deal in Scotland is only approximately 1% of that south of the border. Outside the old firm, players’ wages in the Scottish premier league are typically only £1,000 to £3,000 a week, which is a fraction of that paid to players in the premiership, the championship, or even league one. To put it simply, the annual wage of a Dunfermline player is less than the weekly salary of a Manchester City, Chelsea, or Manchester United squad player. None the less, clubs such as Dunfermline are expected to compete with the giants of Scottish football.

The recent financial events at Rangers football club cannot be seen in isolation. Before I talk about the impact on other clubs of Rangers going into administration, it is worth recapping the saga at Ibrox. The origins of Rangers’ problems date back over two decades. In 1988, David Murray bought a majority shareholding in the club for approximately £6 million. Mr Murray invested heavily in building a team that could not only dominate the Scottish league, but compete with the best of Europe. Something that is often forgotten is that when Rangers, under Murray and Graeme Souness, were building their successful side, which would go on to win nine league titles in a row, English clubs were banned from competing in Europe, so Rangers were able to attract players from England who, to play in Europe, either had to move to Europe or travel north of the border to play for the old firm. The list of players at Rangers during the late ’80s and early ’90s was a “Who’s Who” of Bobby Robson’s England team. The names will be familiar to every English fan: Chris Woods, Terry Butcher, Trevor Sinclair, Gary Stevens, Trevor Steven, Ray Wilkins and Trevor Francis. They were great players in a great team.

Rangers were able to use their dominance and ongoing success to attract some of Europe’s best players, such as Brian Laudrup and Paul Gascoigne. Unfortunately for the club, their ambitions were never matched by their income, and in 2004 those debts peaked at a staggering £72 million. However, in the next few years, Rangers reduced their debt to some £30 million by the end of the decade, according to their annual accounts. In 2010, Mr Craig Whyte confirmed to the stock exchange that he was in talks with Rangers’ owners about a takeover. In 2011, Mr Whyte formally bought the club for a notional £1, having agreed to take on the club’s debts. He promised Rangers fans that he would be able to service those debts.

[Mr Nigel Dodds (Belfast North) (DUP)]

I congratulate the hon. Gentleman on securing this debate. He referred to the history and the debts racked up by Rangers, but does he agree that that is commonplace today? Manchester City and Chelsea have massive debts, far in excess of what Rangers ever racked up. The only difference is that they have someone to stand behind those debts. The phenomenon is not new, and sadly it has not gone away, but it is not unique to Rangers.

[Thomas Docherty]

The right hon. Gentleman is correct. What is appalling about the Rangers situation, and has come to light in recent weeks, is that Mr Whyte did not have the money to service the debt. It has now transpired that in what I would regard as a most disgraceful act, Mr Whyte and cohorts borrowed money from Ticketus on the future sale of season tickets. In effect, Rangers fans paid for Mr Whyte’s ill-fated takeover; they are the losers, and I am sure that disgraceful situation will be recognised across the House.

[Mr Gregory Campbell (East Londonderry) (DUP)]

I, too, congratulate the hon. Gentleman on securing the debate. He has raised an important issue about Craig Whyte and the apparently underhand way in which he acquired a controlling influence at Rangers football club. Does he agree that if football clubs could allow fans a greater degree of controlling influence, à la the Barcelona model or perhaps in the way alluded to earlier in respect of Cowdenbeath, it might move us away from the insidious controlling influences of multi-billionaires who appear to use football clubs as playthings?

[Thomas Docherty]

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

[Penny Mordaunt (Portsmouth North) (Con)]

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

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

[Thomas Docherty]

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

[Damian Collins (Folkestone and Hythe) (Con)]

I just want to make a few comments on this important subject. I will not claim to share other hon. Members’ expertise in Scottish football. No doubt, other hon. Members, particularly from Scotland, will speak with a great deal of insight about the situation at Glasgow Rangers football club. However, I think that the hon. Member for Dunfermline and West Fife (Thomas Docherty), in opening the debate, touched on a number of important points that are relevant to football in Scotland and in England and relate to the financial administration of the game—in particular, the football first creditors rule.

There is no doubt that, in the case of Rangers, the losers are the fans of the club and other clubs and businesses to which it owes money. They are the people who have lost out as a result of what has happened. The failure of a club of its size has an impact in destabilising the structure of the league, so in some ways everyone involved in football in Scotland is affected, whether or not they are directly employed by or associated with Rangers football club. The hon. Gentleman set that out very clearly.

I think that there is a big issue to do with the football creditors rule. The caution that I would express about it in relation to Scotland is that it has had a damaging and destabilising effect on the game in England. It cannot be right that when a club fails and goes into administration, its creditors, if they are not within football, might get a penny in the pound. We might be talking about a local business that prints the club’s programmes or a local builder who had worked on its ground. When Leeds United went into administration, the West Yorkshire ambulance service got pennies in the pound or a penny in the pound. However, footballers who are owed salaries and football clubs in different parts of the country that are owed transfer money get their money in full.

The hon. Gentleman made a very good point about ticket sales—money that is supposed to pass directly from one club to the other. He highlighted that particularly well. It is unfair to other creditors of football clubs—community businesses working alongside a club, perhaps employing fans of that club—that they lose out massively.

It would be a good thing for football if clubs had to take a stronger interest in each other’s financial performance when they entered into financial transactions with each other. A club would really have to think, when it sold a player to another football club, “Can this club afford to pay us?” At the moment, clubs know that that risk is guaranteed by the football first creditors rule, so they are more likely to sell players to clubs that cannot really afford them.

The type of discipline that I have described would be good. It might help to bring about something that is badly needed in football in England and Scotland—some deflationary pressure on players’ salaries and transfer fees. That is where the money is going. There has never been more money in football than there is today, yet there have never been so many football clubs failing financially.

[Thomas Docherty]

The hon. Gentleman has been a big champion of football reform. Does he not accept, though, that the sums of money in Scotland are very different from those in England? The reality is that two clubs in Scotland hold 90% of the revenue and, in effect, bully the other clubs in Scotland.

[Damian Collins]

The hon. Gentleman makes a very important point. The failure of Rangers in Scotland has a much bigger market-distorting impact on Scottish football than the failure of Leeds United, Portsmouth or another large club in the English premier league would have, so it is a much more acute problem. That is an area where greater transparency on financial performance and disclosure between clubs would help. However, that is not something that the clubs should be allowed to do on their own. They require help from the governing bodies and, where necessary, from HMRC as well, so that that can be properly policed. I agree that it would be very difficult for smaller clubs in Scottish football to start calling the shots with the old firm. That is a problem, but it is one where the competitions have a role to play.

Where clubs owe money to the taxman, that is a serious matter, as it is for any other business. The hon. Gentleman made that clear in his speech. Businesses in our constituencies—we have all had such experiences in the past year or two—have problems because they are in arrears; HMRC is coming after them for the money; and they ask for help. It is a very difficult situation to be in. Businesses understand that if they owe money to the taxman, it is a serious issue, so how is it that football clubs have been allowed to build up large debts?

When Leeds United went into administration, the taxpayers of the United Kingdom lost £6 million in unpaid taxes. Why was it allowed to get to that stage and to get that bad? HMRC should intervene, but the competition organisers should be keeping an eye on the tax payments and how up to date they are for their clubs. The premier league in England has made some progress with that. It even has a system where clubs can have television money or prize money withheld from them if they owe money to the taxman. That money might go straight to the taxman. The clubs have to understand that they have to pay their bills just like any other business.

It is unfair for the clubs to subsidise spending that they cannot afford by securitising their ticket sales, selling their future gate receipts, borrowing money from their banks until they cannot borrow any more, borrowing money from the local businesses that they engage with and owe money to and borrowing money from the taxman. They cannot keep on borrowing money at every opportunity until there is none left. That has to be stopped, and the tax authorities have a big role in doing so, with the support of the competition organisers. That is one of the reasons why the Culture, Media and Sport Committee, of which I am a member, has recommended that there should be a licensing scheme for football, so that the football authorities can keep an eye on the financial performance of clubs and ensure that they are not getting into too much debt.

There is also the introduction by UEFA of the financial fair play rules. In Scotland, just as in England, there will be many clubs playing in the top division that will have a chance of qualifying for European competitions—certainly the Europa league, if not the champions league—that will want that licence. They will understand that they have to be able to balance their books in the medium term. That will be an incentive to clubs to ensure that their financial performance is better in the long run. We should be putting our own house in order, however, and the competition organisers have a big role to play in ensuring that that happens.

There is a great role for HMRC in ensuring that tax liabilities are paid. There is a role in getting rid of the football first creditors rule.

[Thomas Docherty]

The hon. Gentleman is making a compelling argument, but perhaps I could tempt him to say something about clarity of ownership as well. Part of the issue with Leeds United in particular was the uncertainty over who owned which assets. Will he speak about that?

[Damian Collins]

The hon. Gentleman pre-empts the final thing that I wanted to touch on in my remarks and the subject of my ten-minute rule Bill, which I will introduce on 13 March and which is about the ownership of clubs and assets. It is an important area and one where HMRC could be prevailed upon to help. When Leeds United failed, there was uncertainty over who took over the club’s liabilities. It was taken over by a beneficial trust and the investors in that trust were never made known. There were allegations of a relationship perhaps between FSF, which took over control of the club, and some of the club’s other creditors. That was never known, because we never knew the identity of those investors. It would help football a lot if there was transparency over the ownership of clubs and clubs’ major assets, such as training grounds and stadiums, so that we can see who controls them and where the money comes from.

There have been allegations that certain people who represent the brass plaque of the ownership of the club are not the source of finance for the real ownership of the club. I do not understand how the fit and proper person test can be applied to a club’s ownership if no one knows who that person is in the first place. We do not know who owns Coventry City, who currently play in the second tier of English football. Until last summer, we did not know who the owners of Leeds United were either. That cannot be allowed to continue. Certainly, if clubs are failing and the taxman is losing millions of pounds in revenue, businesses and local communities are losing money because the clubs owe them money and the obscurity of the clubs’ ownership causes further concern and a lack of confidence, that needs to be resolved.

The ultimate way to resolve who owns football clubs—again, HMRC may be able to help us on this—is to understand the source of the finance. People might assume ownership or the ownership might be from a fund that is registered in Nevis and operated in Switzerland. Where does the money come from? HMRC has to look at that routinely. HMRC and football clubs’ banks have to be satisfied that football clubs are not being bought or injected with cash that may have come from uncertain or dubious sources, so that needs to be followed.

I feel that HMRC should launch a retrospective investigation to determine what the source of finance was for Leeds United and who owned the club, so that if there was any uncertainty about the club’s ownership and who was involved in putting in money to take it out of administration, that might be pursued. We have a right to know what happened in that case and the tax authorities may be the only body that can pursue that.

Poor administration of football clubs creates a big debt to society, which communities around the country are paying. We should send a lesson out that we want greater transparency over ownership and greater transparency of finances between clubs and a more responsible attitude from clubs in their transactions with each other, to avoid the big impact that we feel at the time and that we see with Rangers currently of the cost of failure. That is the cost to fans, local businesses and the competitions in which they compete.

[Pete Wishart (Perth and North Perthshire) (SNP)]

I congratulate the hon. Member for Dunfermline and West Fife (Thomas Docherty) on securing this important debate. He will know that I have spent many a fine afternoon on the terraces of East End Park as a native of Dunfermline, supporting the mighty Pars. My affections have now transferred to the mighty Saintees of McDiarmid Park in Perth. I know that it is very much to the hon. Gentleman’s disappointment that almost the entire length of the Scottish premier league separates Dunfermline from St Johnstone just now.

The hon. Gentleman mentioned two other clubs in his contribution. It was a bit remiss of him, when talking about Cowdenbeath, not to give their nickname, which I am sure that you, Mr Betts, are bursting to know. They are known as the Blue Brazil, a nickname that could never be more deserved. I remember when my grandfather used to take me to watch the cup games against Cowdenbeath, being a native and resident of West Fife, where the league support was for Dunfermline. I went to Central Park to watch the cup games when Cowdenbeath were competing. That was a forlorn activity back in the 1970s, because on only a couple of occasions did Cowdenbeath manage to get past the second round. He also mentioned Brechin City, which used to be in my constituency, in north Tayside. What is notable and significant about Brechin City is that it is the only professional football ground with a beech hedge as its border. A lot of Scottish football fans liked to go along. There were the bridies at Forfar Athletic and the beech hedge at Brechin City.

Enough of my tour around the football grounds of Scotland; let us get on to business. I think that everybody here is a football fan, but where on earth are the rest of my Scottish colleagues? There is only the hon. Member for Dunfermline and West Fife. We get so few opportunities to discuss Scottish issues, particularly important Scottish issues about football. We are all proud that we represent football clubs in our constituencies. I have St Johnstone, a fantastic team doing well in the premier league, but where are my Scottish colleagues this afternoon? It is not as if they get loads and loads of Scottish business in this House. Not one of them could be bothered to turn up today to discuss the biggest crisis that is facing our national game. That is a disgrace, which says a lot about my Scottish colleagues when it comes to debating these important issues.

We have never had a crisis like this one. It is totally unprecedented and how it will end is anyone’s guess, but the nature and the face of Scottish football will probably change dynamically because of what is going on.

[Thomas Docherty]

First, some colleagues have been detained at Select Committees this afternoon. Secondly, does he agree that many colleagues are nervous about discussing what has happened with Rangers, because it is difficult to have a rational, sensible debate about the Scottish game without many of our constituents taking umbrage at us?

[Pete Wishart]

I do not know that that is true. I know that there is a bit of interest in this debate: one only has to look across the corridor from here. That does not excuse anything, however. This is important and it is unfortunate that there are not more Scottish colleagues here to debate what is probably the biggest crisis that we have seen in our game. This deserves and requires proper debate and it is unfortunate that we will not have that today, because this crisis deserves to be dealt with as sensitively as possible.

I listened carefully and closely to the remarks of the hon. Member for Dunfermline and West Fife. Where I can go along some way with him is that there is a real desire for a solution to this problem. There has to be a solution, because it is almost inconceivable to imagine Scottish football without Glasgow Rangers. They have 130 years of history and tradition. They have huge support—some 50,000 home fans go to watch Glasgow Rangers at a home game every second week in the city of Glasgow. To have that taken out of our game would have a significant and deep impact on the ability of the SPL to continue to produce a platform that will engage and encourage people and ensure their support.

It is not just about ticket receipts. When Rangers come to St Johnstone, it is the biggest weekend that we have in Perth. It is not just the inflated gate that we get by playing one of the old firm; it is also some of the activity spin-offs for Perth. It is not just about the pubs on match day. Glasgow Rangers supporters may choose to take a day either side of the game—the Friday night or the Saturday evening—so our hotels and restaurants are busy. There are also the other activities that go on within the city. To lose that would be to lose a significant amount of income and economic activity, which would be very much missed.

There is also the issue of television rights. As the hon. Member for Dunfermline and West Fife said, they involve a fraction of the sums for television rights in England, but they represent a massive income for the Scottish game. If there were no Rangers, what impact would that have on the television rights sold to ESPN, Sky and the BBC, which play a massive part in the incomes of so many other Scottish football clubs? We would also miss the drama and spectacle of old firm games, which are enjoyed and appreciated not only in Scotland and the rest of the United Kingdom, but throughout the world.

[Thomas Docherty]

Just for the sake of clarity, it might help to reiterate that if either half of the old firm is not in the SPL, the contract with the TV companies falls. It is therefore in the SPL’s interests to treat Rangers as a special case because of those knock-on effects.

[Pete Wishart]

I am glad the hon. Gentleman mentioned that. He is absolutely right that that is one possible consequence of losing Rangers. That is why we should do all we can to ensure the ongoing survival of Glasgow Rangers football club.

[Pete Wishart]

The hon. Gentleman is spot on. There is, of course, talk and speculation about what happens if Rangers are unable to come out of administration. Indeed, the Scottish press, particularly the sporting press, have a fascination with the old firm, and we read about it almost every day. However, the hon. Gentleman is right that some of the small businesses that are expecting payment from the administrators will suffer a massive loss. That is a real issue, and I am grateful to him for bringing it up.

Football is our national game. All our football clubs play an enormous part in our economic activity and make a real contribution to our communities and constituencies. The Fraser of Allander Institute estimates that the old firm’s economic importance to Glasgow and the rest of the Scottish economy amounts to £190 million. More than 3,000 full-time jobs depend on SPL football, and £200 million is spent on related commercial activities in Glasgow alone. According to the Rangers annual report, the direct economic activity generated by the club is in the region of £56 million.

Most importantly, there is also the issue of what happens to the 331 people directly employed by Rangers. They must be absolutely paramount in our considerations, and I hope some solution is found so that they can continue to serve in their jobs.

This is not, however, just about clubs’ contribution to our economy, important and significant though it is. There is also the value professional clubs have for our communities, and the hon. Member for Dunfermline and West Fife mentioned that. We can all see the infrastructure that exists and the clubs our young people are encouraged to participate in. We know that our football clubs make an immense contribution to our communities. According to the SPL’s 2011 community report, 20,000 people participate in community projects weekly, and SPL clubs spent £8 million on community activity, which is no small sum.

There are also the fans in Scotland. I know the audience for SPL football has diminished, but 3.2 million people still attend SPL games each season, and a further 76 million watch them on ESPN, the BBC or Sky. Football is therefore a big business, which contributes much to our economy and our communities, and we must ensure that we respond to the current crisis with the sensitivity it deserves and requires. Scottish football is in a precarious state, and it remains a fragile product, so it can ill afford to lose one of its major protagonists.

Of course, this is not just about Rangers. Several of our clubs are teetering on the brink of financial collapse and ruin. I just wish they could all be like St Johnstone, which is run so perfectly and effectively by Geoff Brown, its chair. It never gets into debt, it always ensures it looks after its liabilities and it never has a problem with HMRC, but that is not the case with many of the clubs in the SPL. I am thinking not just about Rangers, but I will not mention the other clubs, because we all know which ones are experiencing real difficulties and pressures.

We have seen what happens when clubs cannot meet their responsibilities and liabilities. Dundee and Livingston went into administration. We have also seen one SPL club—Gretna—go to the wall in the past 10 years. It was not a particularly great example, and I doubt whether other clubs would like to replicate its business model.

These are tough times, and gates are falling. We have heard from the hon. Member for Folkestone and Hythe (Damian Collins) about the pressure of football wage inflation and how it must be brought under control. The hon. Member for Dunfermline and West Fife was of course right to mention that SPL football is totally different from the English premier league or first division, and only the wages in the old firm are similar. However, some clubs have tried to replicate what we have seen elsewhere and to buy success by buying expensive players. They have tried to compete with the old firm and they have got into all sorts of difficulties. That is probably one of the reasons why Dundee football club, in particular, experienced the difficulties that led to its going into administration. There is a demand all the time to buy more expensive players, because that is what the market dictates, and clubs are encouraged to fork out money. However, gates are falling, and there is any amount of competition from other activities for the time of constituents, who might otherwise go to watch football games.

We all accept that our football clubs must meet their financial obligations. Everybody in every business must pay their tax—it is as simple as that. They must pay it on time and they must ensure that any business plan is totally predicated on meeting their tax liabilities. However, I am sure I am not the only Member in the Chamber who will have put the case for businesses and individuals in his constituency who have got into trouble over their tax liabilities. I do not know how many letters I have sent to HMRC on behalf of small businesses and people who have got themselves into difficulties. It is absolutely right that people also make representations on behalf of Glasgow Rangers because of its significance to Scottish football and the number of jobs that depend on it, as well as its history and tradition, its success and its value to the SPL.

The club is in a mess. The hon. Gentleman mentioned the current regime, which has been a total disaster—we cannot call it anything other than that. Once Craig Whyte took over its debts, something was always going to happen. He did not have the money to ensure the club could get out of its difficulties. What he did with Ticketus was appalling, and there will now be an SFA investigation into the Ticketus deal. There will also be an investigation to see whether Craig Whyte is a fit and proper person to run a football club, and we will have to see the details. Again, it is the fans who suffer, and the people who work in the club have been the major recipients of all the bad news and all the doom and the gloom.

Right now, the administrator is responsible for running the club. In the next few days, Duff and Phelps expect to announce the first round of job losses, which will first impact on the playing staff. There are outstanding issues of payments to other clubs, and I have heard the representations from Dunfermline football club that it should be paid. The hon. Member for Dunfermline and West Fife is right that money should be paid to clubs that are owed it, and Rangers have no right whatever to retain it. However, the job losses show the real impact that going into administration has on people’s careers and jobs.

The hon. Gentleman talked about the Scottish Government’s role, and they stand ready to offer assistance to anyone affected by job losses. They have said they will do all they can to keep in contact with the administrator and to be available to provide support and assistance if there are job losses. In addition, there is the PACE—partnership action for continuing employment—programme in Glasgow, which has offered to provide any assistance it can if there are job losses. PACE has offered Duff and Phelps assistance almost daily to take things forward, and there have been several conversations to that effect. This is a developing and emerging situation, and Scottish Ministers and PACE are keeping their eye on it.

[Thomas Docherty]

Perhaps the hon. Gentleman can provide some clarity, because he speaks on sport for the Scottish National party. He will be aware of reports in this morning’s newspapers that the Scottish Government are apparently offering all the assistance they can to the Scottish open, and the assumption is that financial assistance may be forthcoming. Does the hon. Gentleman agree that if the Scottish Government are going to put money into the Scottish open, they should also see what financial assistance they can provide to the SPL?

[Pete Wishart]

The hon. Gentleman is right, and I am grateful for that assistance for the Scottish open. I am sure that he will be the first to recognise that the input that the Scottish Government have made to Scottish football is significant—the £25 million that was announced towards the national performance centre, for example, the £8 million through CashBack for Communities and the £4 million going into the refreshed youth action plan for the next four years. That shows the Scottish Government’s support for Scottish football and their commitment to ensuring that it will continue to develop in the next few years. That will be welcomed in football throughout Scotland.

I want to mention a couple of initiatives. Unfortunately there was some appalling behaviour two weeks ago at Glasgow Rangers, in the home game against Kilmarnock, which shows that there is still a massive problem with sectarian chanting. I am delighted that for the first time the Scottish Government have put in place legislation to tackle that effectively. It was not supported by the rest of the parties in the Scottish Parliament, but at last something will be done to try to get rid of that curse from the national game.

[Thomas Docherty]

I regret the fact that at the end of a good speech the hon. Gentleman is trying to bring in party politics. I went to the Dunfermline and Rangers game as a guest of the police, early in the season; the procurator fiscal was there. The PF, the clubs and the police were clear about the fact that that legislation, which no one else in the Scottish Parliament supported, was unnecessary, and unworkable.

[Pete Wishart]

It is the police who have been telling the Scottish Government that the legislation is required. We have had that debate in the Scottish Parliament, and thank goodness that behaviour will at last be challenged effectively. I welcome the fact that the SNP Scottish Government are deciding to take on the issue head on, and trying to get that appalling scourge out of the Scottish game.

There are other issues in Scottish football, but the one that we are debating is the big one—the thing that we need to get tackled and sorted out. I hope that HMRC will work sensitively with the administrator, and that we will get a solution that will ensure that it will be paid what it is owed. The main thing is that HMRC should secure the outstanding liabilities that Glasgow Rangers has towards it. Let us hope that we get a solution that will allow Glasgow Rangers to come out of administration—a solution that will mean that as much as possible will be done to retain the staff who work on its behalf; that we will have a Scottish premier league worthy of that title and enjoyed by its supporters; and that we can go on ensuring that that product can be developed, and made entertaining and exciting for people not just in Scotland but worldwide.

--- Later in debate ---

[Thomas Docherty]

While I appreciate the fact that the Minister cannot talk about the specific tax structure of Rangers, can he confirm whether UK Ministers, of whatever Department, were aware that Rangers had not paid since last May?

[Mr Gauke]

There are a couple of assumptions in the hon. Gentleman’s question. I was going to deal with those points later, but I will do so now. First, there is an assumption in his question that, as has been reported, Rangers has not paid PAYE since May. There is taxpayer confidentiality and there are limits to what can be said to Ministers, as well as what can be said publicly. All I can say is that HMRC has assured me that in cases of this kind, it gives debts very close attention at all times. I would therefore be very surprised indeed if there had been no ongoing discussions or action by HMRC to secure payment over that time period.

On the hon. Gentleman’s question about ministerial involvement—in his speech he raised the point about the involvement of Scottish Ministers as well—Ministers were kept informed of significant developments such as the timing of court proceedings, but HMRC did not seek or take advice from Ministers on how to handle matters that were entirely within HMRC’s responsibility. Equally, with regard to the Scottish Government, there were discussions. HMRC was entitled to inform the Scottish Minister, because there were issues relating to devolved powers, and it was right that the Scottish First Minister was informed. At his request, HMRC explained its general policy for customers who were having difficulties paying their tax debt, and it gave him an idea of the likely time scale of its initiating administration proceedings if tax debts were not paid. Although HMRC listened to representations that he wished to make, it neither sought nor took advice from him or other Scottish Ministers. I hope that provides some clarity.

[Thomas Docherty]

I am grateful to the Minister; he has been quite candid. He will probably be aware that the First Minister does not normally wait to be asked to give advice, so can he tell us what advice the First Minister offered without being asked?

[Mr Gauke]

I do not know what advice the Scottish First Minister provided, if indeed he provided any. I know that there were discussions informing him of the issues, as was appropriate; for example, whether there were going to be any public order issues that could be related to progress on this particular matter. There was nothing in any way improper about a discussion with the First Minister in broad terms. Similarly, I assume that the discussions with Ministers of the UK Government were not about specific tax information, but in the broadest of terms.

[Mr Gauke]

HMRC is well aware of the significance of Rangers football club and its importance in Scotland. I have no doubt that HMRC is aware of that sensitivity. I am sure the hon. Gentleman is not suggesting that Rangers should receive special treatment, but HMRC is aware of the importance of Rangers to Glasgow and to Scotland, and indeed to the UK more widely. I have no doubt about that.

I return to the issue of the support that businesses receive from HMRC, both generally and in respect of football. Of course, facing tough conditions, many businesses can stumble upon difficult times. That is why HMRC invests so much time and energy to support those businesses, whether they are start-ups or established large businesses, when they encounter difficulties.

I will focus on the support that is provided for the many thousands of businesses, large and small, through the time to pay arrangements, which allow them to spread the payment of their liabilities beyond the due date. That facility took on a more prominent role in November 2008 when the Business Payment Support Service was launched. Its purpose is to provide speedy access to quick decisions from HMRC for businesses facing short-term financial difficulties and who wish to discuss time to pay arrangements.

Many hundreds of thousands of businesses have accessed the service since its launch. The time to pay arrangements have helped hundreds of thousands of individual taxpayers and businesses suffering short-term financial difficulties. This has been particularly helpful during the past four years, given the economic challenges that the UK has faced. HMRC will continue to offer that support service where it is appropriate to do so, although I make it clear that the facility is not there to prop up an insolvent business whose existence is dependent on not paying the taxes for which it is liable. That is why HMRC will probe deeper when a business comes back repeatedly to seek time to pay. Such repeat requests can indicate a more deep-rooted financial difficulty, which can mean a time to pay arrangement is unlikely to be the appropriate outcome.

At a time when the public finances are as they are, it is crucial that businesses and individuals pay the tax that is due. That is a point that every speaker has made this afternoon. Businesses and individuals who do not pay their taxes are restricting growth and getting an unfair advantage over those who follow the rules. The Government are committed to levelling the playing field for the compliant majority. Even as HMRC puts in place services to support businesses, small and large, to realise that ambition, it also expects all businesses, be they football clubs or not, to be run effectively from a tax management point of view.

As reported in the media, it is true that in recent years some football clubs have had poor compliance records for the payment of tax liabilities. I am not talking about the payment of tax on profits; I am referring to the PAYE and national insurance that the clubs have deducted from their players and other employees and the VAT that they have charged their customers. Too often some football clubs have used those moneys, which were never theirs, to fund their business, because they have overstretched themselves in other areas. Many hon. Members will doubtless have views on why that situation has arisen, and why clubs so often apparently spend more than they can afford. I think all hon. Members will agree that it would not be right for taxpayers to fund such shortfalls.

However, things have begun to change. One practical way was when the previous chairman of the English football league, Lord Mawhinney, approached HMRC to explore how they—the football league authorities and HMRC—could work together to reduce the levels of tax debts in the football league.

From those initial discussions emerged a working arrangement that remains in place today. All English football league clubs consented to HMRC sharing information with the football league on their payment compliance in respect of PAYE and national insurance. Not only does any club that withholds those taxes face decisive action by HMRC, it will also encounter sanctions from the football league.

However, the issue is not always about sticks. The carrot is that eventually, all clubs will compete on an even basis. No club should benefit over another simply because it retains taxpayers’ money to fund its operation. That is an absurd proposition, with which I know hon. Members will disagree.

The decisive action taken by HMRC and collaboration with the football league authority has paid dividends. Similar arrangements are now in place with the Irish Football Association and the football conference, which is the tier immediately below the football league.

In addition, some months ago HMRC met the Scottish premier league and the Scottish football league authorities to explore whether similar arrangements could be put in place for the top four divisions of football in Scotland. Further discussions are scheduled soon on that proposal. HMRC will meet the Scottish leagues next week to monitor the payment of taxes, which addresses one of the specific points raised by the hon. Member for Dunfermline and West Fife.

[Thomas Docherty]

That was hugely informative and I am sure that it will be welcomed. If only we had heard it before now.

I have two specific questions. Will the Minister confirm that HMRC will contact all 11 other clubs to see what assistance they require as a result of the situation with Rangers? Also, can I tempt him to say a little about the potential introduction of a bond, which I know the Treasury has previously considered, to protect HMRC, so that if a club finds itself in administration, HMRC will have a guarantee that it will get some of its money back?

[Mr Gauke]

I will deal with the hon. Gentleman’s second point first, which he is absolutely right to raise. From April 2012, HMRC will be able to seek securities where PAYE is at risk. That mirrors existing powers for VAT, which are already in place. If a taxpayer does not pay the security, they will commit a criminal offence. There are, of course, safeguards to ensure that the power is not abused by HMRC—it is not to be used widely—but where there is concern about repeated failure, that is an additional tool available to HMRC. That, in itself, will have a deterrent effect, which I hope will be helpful in such circumstances.

Tax Avoidance (Public Servants)

Thomas Docherty Excerpts

Thursday 2nd February 2012 Commons Chamber

[Danny Alexander]

As I have said, I signed off the salary level for the appointment. I reduced it significantly, and reduced the expenses paid under the arrangement. As soon as the fact that there was a potential tax benefit to an individual was given to me, in the last few days, I took the action described, including writing round to Cabinet colleagues on Tuesday.

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

Given that this is the Chief Secretary to the Treasury’s third and last chance, will he now tell us which Minister or Ministers signed off the tax arrangements on this deal?

[Danny Alexander]

I can tell the hon. Gentleman what I have said already. I signed off the salary level in this case. The terms and conditions of the appointment were put forward by the Student Loans Company in the Department for Business, and came to me for approval in the usual way, given the salary level that was being proposed.

Sovereign Grant Bill

Thomas Docherty Excerpts

Thursday 14th July 2011 Commons Chamber

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

My hon. Friend has demonstrated that he has a far superior knowledge of history than perhaps any other Member of the House who was not actually there during large sections of it. Does he agree that the histories of the United States and France are histories of violent revolution, whereas we have had a period of stable evolution, apart from a dark period in the 1650s and so on, largely because we have had a constitutional monarchy?

[Tristram Hunt]

I take my hon. Friend’s point, but we should not over-emphasise our Whiggish stability over the years. We often used to think of the 18th century as the age of equipoise and stability. In fact, underneath that monarchy, all sorts of revolutionary fervour was going on. The campaign of my hon. Friend the Member for Newport West (Paul Flynn) to have the Chartists properly recognised in the House hints at a slightly different history. It is a source of great sadness to many people that, although the House was rebuilt in the 1830s and ’40s, it took until mid-1890s for the statue of Cromwell to appear outside.

For all its narrow, Eurocentric and white family structure, the royal family also has a curious internationalist sensibility, for to understand the British royal family in the 19th and 20th centuries is to understand empire and the nature of Britain in the world. As we have heard today in respect of reforming the Act of Settlement, the monarch was also monarch of imperial nations across the world, then the British Commonwealth and then the Commonwealth. That points to the unique nature of Britain: its openness and sense of citizenship, which is, again, above and beyond blood and soil. Part of the strength of monarchy is that it speaks to the multicultural, multi-faith age in which we live. There is a curious modernity about the nature of monarchy, which, again, keeps its strength going.

The real virtue of the royal family today is the soft power embodied within it. We have heard, quite rightly, detailed discussions about £35 million or £37 million costs this afternoon, but the royal family as a brand vehicle for Britishness is worth huge sums more than £35 million or £37 million. The sums regained from the world’s media focus on London during the royal wedding recently were far in excess of its cost. Although our beloved former Prime Minister, Tony Blair, used to describe Britain as a young country, it is, in fact, a very old country.

--- Later in debate ---

[Michael Ellis]

I am delighted to follow the hon. Member for Stoke-on-Trent Central (Tristram Hunt), who is clearly a royalist, and who is a founding member of the all-party parliamentary group on the Queen’s diamond jubilee, and I congratulate him on that.

It is easy to try to put a price on monarchy, as I think the hon. Gentleman was saying. Of course, to a certain extent, one has to do that, especially in such a debate as this, but the monarchy, personified so ably by our sovereign, is not bounded by monetary value; it is about honour, nobility of conduct, its historical nature, and an institution of which we can all be proud. If we look in some detail at the mischief that the Bill is trying to redress, the finances of the royal household, designed to support Her Majesty, are currently overly complex. There are no fewer than four grants, which are themselves hidebound and bureaucratic. They have a tendency to be inflexible in that if there is a depletion of one grant, there cannot be a transfer from the other grants to fill the gap. Consequently, the system clearly does not work. That, in and of itself, irrespective of one’s ideological views about monarchy as an institution, needs to be redressed.

However, it goes deeper than that, because the sums we are talking about—approximately £35 million—are, in governmental terms, de minimis. They are minuscule. I dare say that this area of expenditure is more scrutinised, deeply analysed and debated in various forums, including this House, than other areas of the public finances, where hundred of millions, or even billions, of pounds are spent, so there is no shortage of scrutiny whatsoever. It is clear that for the first time since the early 1970s Parliament is looking at a proper modernisation of the finances of the royal household and the monarchy.

[Thomas Docherty]

The hon. Gentleman refers to the level of scrutiny that the household finances receive, but this debate will last less than three hours. Does he not think that that is a flaw?

[Michael Ellis]

I think one can tell from the number of Members in the Chamber that the matter has been debated perfectly clearly.

The Crown Estate is the property of the sovereign and is in the right of the Crown. In the generations since George III’s accession in 1760, successive Governments have gone to the sovereign of the day and asked, “May we have the proceeds from the Crown Estate?” All sovereigns since, including George IV, William VI and so on, have signed away those rights. However, from a legal perspective, the fact that the application has been made and the request granted on each occasion perhaps indicates how the law would look at the matter. It seems clear to me that the revenue is surrendered to the Exchequer and that the legal implication of that act of surrender is that the revenue belongs to the Crown.

The sovereign grant is normally set as equal to 15% of the profit from the Crown Estate, as has already been alluded to. It could be argued that that is sufficient, but it is not over-generous, and no one could reasonably argue that it is disproportionate to the affairs of the Crown. If one takes the care to look at where Crown expenditure actually goes, one will see that much of it goes back to general public usage. For example, most of the communications allowance is spent on writing paper, stationery and clerical costs for responding to items of correspondence received by the royal household. With regard to entertainment costs, tens of thousands of British subjects receive hospitality at garden parties, for example, so costs are incurred in that way.

The royal palaces account for a huge part of royal expenditure. If we did not have a royal family, it is reasonably safe to assume that we would retain the palaces—one would hope that they would not be knocked down to build car parks—and consequently there would be museums that would need to be maintained, although no doubt few people would visit them. The roofs would still need to be fixed and leaks repaired, so the Exchequer would not save. When one takes the care to look at the expenditure, one will see that it is extremely modest and, as has been alluded to, extremely impressive savings have been made over the past couple of years.

The current system is inflexible, overly bureaucratic and has not been as transparent as it could have been. One cannot rationalise romance, and I take the point made by my hon. Friend the Member for North East Somerset (Jacob Rees-Mogg) and others that the institution of the monarchy is about more than just money, but one must bear in mind that although the monarchy is an emotionally unifying institution and, in my view, crucial to the success of this state, it is also susceptible to proper analysis of its finances, which is what the Bill will do. Consequently, I give it my full support.

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[Paul Flynn (Newport West) (Lab)]

It is a pleasure to follow the hon. Member for Carmarthen East and Dinefwr (Jonathan Edwards). I agree with every single word of his speech.

These are delightful occasions. I am sorry that the hon. Member for the middle ages and North East Somerset (Jacob Rees-Mogg) has left us, because he gave us another cameo performance today, although he did not give the same peroration. He would have been very much at home in the court of King Canute.

A couple of days ago, the hon. Member for Northampton North (Michael Ellis) rather optimistically sent me a letter—addressed to me by my first name, although I do not really know him in any way—requesting a contribution for the new stained glass window. I am afraid that I had to send him a rather disappointing reply. He did persuade me to put down an early-day motion drawing attention to the fact that we are already fairly well supplied with statues, pictures and paintings of royalty in this place, but very badly off in those things for a range of people, such as the Tolpuddle martyrs, the Chartists and the suffragettes, who have contributed hugely to the strength of our democracy and transformed this country into the proud modern democracy that it is now.

Whenever royalty is discussed, the House becomes infantilised. It is worth mentioning again that because of our own decisions, which go back seven centuries, we are not allowed to criticise not only the monarch, but any member of her family. When an attempt was made to have a debate on the conduct of Prince Andrew on two occasions, I and other Members were gagged in saying anything about him that was not emetic, sycophantic drivel. We must understand that in this debate and many others, we are denied the opportunity as a free Parliament to discuss the personalities and behaviour of the entire royal family—not that I want to be critical tonight.

I tried to make a point in the earlier debate about the special need for the role of the Head of State. The point of the story that I told about Mrs Thatcher is that we need someone who is above politics to act when a Prime Minister gets out of control. There was a possibility in 1990 that Margaret Thatcher could have caused a general election and that Parliament, the Cabinet and the Conservative party would not have been able to stop her. However, the Queen could have stopped her and almost certainly would have done so given the Queen’s personality and status. It is questionable whether other Prime Ministers would have had that strength of character and whether possible other monarchs would have had that strength of character. I am thinking of the Queen’s uncle and the Queen’s successor, who suffers from an incontinence of interference in matters that are way outside what a monarch should be involved in.

[Thomas Docherty]

On a point of order, Mr Deputy Speaker. Could you remind me whether it is appropriate for an hon. Member to make remarks that appear to be disparaging about a member of the royal household?

[Mr Deputy Speaker (Mr Nigel Evans)]

I have already had to remind Mr Flynn that when he is referring to the royal family, he should do so with dignity, as their status in this country behoves. I hope that he will refrain from disparaging remarks in the future.

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

I am not sure whether I have more trepidation when I follow the hon. Member for North East Somerset (Jacob Rees-Mogg) or when I follow my hon. Friend the Member for Bolsover (Mr Skinner). It is slightly ironic that we are having this debate in one of the royal palaces, and perhaps we should recognise the contribution that the royal household makes to the upkeep of some of the rather expensive parts of this building. It is probably worth reflecting on some of the more turbulent debates that the House has had with the royal family about their financing over the centuries—

Finance Bill

Thomas Docherty Excerpts

Tuesday 28th June 2011 Commons Chamber

[Mr Chope]

As so often, my hon. Friend makes a telling point, which has got Opposition Members back on their haunches as a result of that good intervention.

Let us look at the total contribution made to health spending in this country by the private sector. The hon. Member for North Durham (Mr Jones) quoted from the Institute for Fiscal Studies report that came out in 2001. It said:

“Despite the increase in use of the private sector, private spending on health care makes up only 16.3 per cent of total health spending in the UK, which is lower than in any other G7 country.”

It goes on to describe how low health spending was as a percentage of gross domestic product. I concede, and am pleased, that since then health spending as a percentage of GDP has increased, but the percentage of private contributions to health care has not increased commensurately, as it should have done.

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

That has been used as an argument against privatising the national health service, because the reason why the United States spends such a high proportion of its GDP on health care is that there is a completely free market there. The hon. Gentleman is actually making an argument for the national health service.

[Mr Chope]

I certainly support the national health service, but I do not think that the hon. Gentleman understands my point. My point is that even in very socialistic countries, such as Sweden, the other Scandinavian countries and others in Europe—quite apart from the United States—the proportion of total health spending that comes from the private sector is much higher than it is in this country. I think that it would be much better if a higher proportion of our total health spending came from the private sector and from individuals and companies.

--- Later in debate ---

[Thomas Docherty]

I should say at the outset that I have no problem at all with private health care or education. If somebody wishes to spend their money as they see fit, it is entirely a matter for them. However, we must challenge head-on the argument that has been articulately, though falsely put forward by some Government Members that people are doing their patriotic duty by not using the national health service because they are a burden on it, and that they should be rewarded for having private health care. That is simply not the case. First, private health care is a form of queue jumping. I understand the arguments behind it, but we should recognise that we are talking about people who jump to the front of the queue.

[Sir Paul Beresford]

indicated dissent.

[Thomas Docherty]

The hon. Gentleman shakes his head, but that is exactly what people with private health care do—they jump right to the front. There might be a six-month waiting time for a minor operation—I suspect that waiting times will get longer—but people who choose to have private health care go to the front of the queue and are seen within a fortnight. I have seen various television adverts for very reputable private health care companies that advocate the services that they provide. I do not think that that should be forgotten.

[Mr Kevan Jones]

Does my hon. Friend also recognise that when we had long waiting lists, the incentive that a lot of these companies used in their advertising was that people could get to the front of the queue? Is there not an argument that now that we have short waiting lists—for the time being—there is less need for private health care?

[Thomas Docherty]

My hon. Friend is entirely right. It is interesting that there are now far fewer adverts for private health care. He is right that part of the reason for that is that we have a superb national health service. Having served in the House for longer than I, he should take a great deal of credit for the fact that we have a first-class health service. The second reason why I suspect private health companies are not advertising is that thanks to the policies of the Government parties, people cannot afford to have private health care. Of course, many people are losing their jobs. I will return to that point shortly.

The other huge issue about burden is that the private health system is a burden on the national health service, because it takes doctors, nurses and other medical professionals away from it.

[Mr Chope]

indicated dissent.

[Thomas Docherty]

Now the hon. Gentleman is shaking his head. There are many highly paid consultants who split their time between their private practice, their golf course and the national health service. The time that they spend in private practice is clearly time that is not available to the national health service.

[Andrew Gwynne]

Is this not a question of priorities? If there is a pot of money to be given away, would it not be much better to spend it on health care for the many, rather than on a tax give-away for the few?

--- Later in debate ---

[Thomas Docherty]

I absolutely agree with my hon. Friend. It is fascinating that in this debate, we have seen for the first time who the real deficit deniers are in this House. I appreciate that the parliamentary resources unit, which so ably serves the Conservative Benches, is very good at putting out lines to Conservative colleagues about my hon. Friends being deficit deniers. We have seen this afternoon that the real deficit deniers are sitting on the back row of the Conservative Benches. At a time when there is a real-terms cut in NHS spending—I must correct the hon. Member for Wellingborough (Mr Bone)—because the promised increase in funding under this Conservative-led Government is lower than inflation, whether using the consumer prices index or the retail prices index, these Conservative Members propose that we should take money, which Government Front Benchers often tell us we do not have as a nation, and use it to assist with private health care. We have seen yet again today, as my hon. Friend points out, that they are the real deficit deniers. I look forward to seeing whether they have the courage to push the new clause to a Division, and I look forward to going through the No Lobby later this evening.

[Mark Reckless (Rochester and Strood) (Con)]

On that issue, there is clearly a very large deficit, which we inherited from the hon. Gentleman’s Government. On funding for this proposal, we have seen a 74% increase in our net contribution to the EU, which many Government Members would not like to see paid. The Financial Secretary to the Treasury has made very substantial savings by keeping us out of the Greek bail-out—

[Mr Deputy Speaker (Mr Lindsay Hoyle)]

Order. I do not think that we will be tempted down that route. We will stick to insurance.

[Thomas Docherty]

The hon. Member for Rochester and Strood (Mark Reckless) is always tempting. I suspect that you would rule me out of order, Mr Deputy Speaker, if I pointed out that it was this Prime Minister who went to the European Council and failed to live up to his promises. Therefore, let me move back to the substantive debate, which is being so ably chaired.

This proposal is a Trojan horse. Government Members tried hard to cover up their anti-health service rhetoric, but every now and again it seeped out in their speeches. The national health service is an institution that Labour Members are proud of. It is the greatest achievement in 100 years of the Labour movement. It has transformed our country’s health. As you know, Mr Deputy Speaker, I am doing an Open university degree in history. [Interruption.] I am asked where I find the time. I have a great wingman in my parliamentary duties. I am currently studying a module on the history of medicine from 1500 to 1930. It is fascinating to see that the pre-war health system that was available to the vast majority of people did not compare one iota to the achievement of the 1945 Labour Government. It was fascinating to hear the disdain of Government Members for the national health service. They are attempting to allow privatisation through the back door and to undermine the national health service. I look forward to hearing what the Minister has to say and whether he agrees with his own colleagues on the issue.

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[Mr Kevan Jones]

Does my hon. Friend recognise that it is the top 40% of earners who have access to private insurance? In the bottom quartile, less than 5% have it.

[Thomas Docherty]

My hon. Friend is absolutely correct, and the new clause is, yet again, all about the few, not the many. It would do nothing for the squeezed middle, the people who, thanks to the economic policies of Treasury Ministers, are finding life much harder at the moment. We should perhaps reflect on the fact that for all the passion about tax breaks on insurance, hon. Members of both Government parties did not hesitate to go through the Lobby and vote to raise VAT, which has made life much harder for many of my hon. Friend’s constituents and mine.

There are two reasons why companies have historically offered private health care. One is as an incentive to get people to come and work for them in a competitive market. As I said, thanks to policies of the Government parties, that is not particularly a problem in the current climate of job losses and rising unemployment.

The second reason is a hard-nosed business case for key employees. There is obviously a good reason why companies decide that to minimise the amount of time for which certain key employees are absent from the workplace due to illness or injury, they will provide a fast-track or—wait for it—queue-jumping approach to health care. I understand the argument for that, and it is a matter of choice, but companies have not offered private health care beyond retirement because they have no further use for that employee. That is why we tend not to see companies giving a lifetime guarantee, as they do in the United States. It is therefore a slightly false argument to say that when a company provides private health care up to the age of 65, the state needs to step in after that. It is a hard-nosed business reason.

[Mr Jones]

Is not one of the hard facts of life in the United States system, as many individuals there are seeing now, that as soon as people become unemployed, their health insurance stops? In some cases the public sector then has to pick it up. Although there may be a benefit when somebody has work, there clearly is not if they do not have work.

[Thomas Docherty]

My hon. Friend is entirely correct that that is the case for the vast majority of people. Of course, care is often continued for highly paid executives, the group of people whom Conservative Members seek to help—as I have said, the Conservatives are the party of the very few, not the many. However, he is entirely right that the vast majority of US citizens lose their private health cover in that situation. That is why Opposition Members have worked so hard to resist the attempts of the Secretary of State and his Liberal cohorts to introduce privatisation by the back door.

I am conscious that the hon. Member for Mole Valley (Sir Paul Beresford) will wish to make his closing arguments prior to dividing the House. We look forward to seeing the strength of feeling that exists, and I urge Liberal Democrat Members to stand up for the health service and stand up to their Conservative allies.

[Mr Redwood]

I should like to make it absolutely clear that this matter is not my No. 1 priority, and I do not think it is the No. 1 priority of all Conservative Members. We were elected on a manifesto that said that we were going to increase spending on the NHS in the traditional way by several billion pounds a year, and that pledge is going to be honoured.

[Thomas Docherty]

No it’s not; you’ve broken it.

[Mr Redwood]

The hon. Gentleman should read the Red Book. It clearly shows substantial cash increases in spending on health every year over the lifetime of this Parliament.

[Thomas Docherty]

The reality is that the increase in spending is lower than the increase in inflation, so it is a real-terms cut.

[Mr Redwood]

We have kept the promise to have substantial increases in cash spending. It is now very important that we get the maximum for it. We are in danger of wandering too far from the new clause, but I point out that as we are about to enter a period of wage freezes, a substantial increase in cash funding will obviously buy more health care, because the main cost is wages. I hope that the hon. Gentleman will understand that. The Government’s clear priority was to expand cancer treatments and other drugs, and to ensure that we have more high-quality care. I welcome that very much.

The second thing to understand about the new clause is that it is not a help-the-rich new clause. Opposition Members should understand that the rich are not going to be attracted by an offset on 20% tax, because they are either non-doms paying very little tax or they are paying 50% tax. They are people who self-insure, so they are not going to take out insurance policies such as we are discussing. We are not dealing with the rich, because the rich have always been able to buy the health care that they want under any type of Government. That would not change as a result of the new clause.

We are talking about a specific group of people who are coming up to retirement. Some of them will have had the benefit of company scheme insurance, and some will not have had the benefit of insurance at all. At 65, they often have an important decision to take, because several things happen. First, they lose their company health insurance, if they were receiving it. Secondly, their insurance premiums go up a lot, because they are suddenly thought to be higher risk. Thirdly, they enter the age group when they will need a lot more health care than they did in their healthy, earning years when they were executives or whatever. We are talking about whether that group of people should be able to carry on their insurance, and whether such an incentive would make any difference.

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[Mr Gauke]

It is of course important that we, as a society, do everything that we can for a woman in the circumstances that the hon. Lady describes. However, the Government also believe that the institution of marriage provides something to society that should be recognised. That is the thinking behind our policy. Of course we must help those in abusive relationships and do all we can to support them, but that does not preclude taking steps to support the institution of marriage. The Government recognise that.

[Thomas Docherty]

Like the Minister, I am a fan of the institution of marriage, but what does it say about the institution that the Government feel that they need to support it like this?

[Mr Gauke]

If the hon. Gentleman is prepared to be patient, I will set out the Government’s position.

If we are to address poverty, it is important that we address not just poverty but the causes of poverty—to coin a phrase—and ensure that work pays, and that is what our welfare reform programme is designed to do. It is also important that we take steps to ensure that the family and marriage are recognised, and that we do what we can to support stable relationships.

--- Later in debate ---

[John Hemming]

Well, here we are: the Opposition have said that they really hate the idea of having VAT at 20%, and that that is a dreadful proposal. What are they proposing instead? They are proposing a review.

[Thomas Docherty]

Can the hon. Gentleman remind me whether he agreed with his party leader when he said, during the election campaign, that a VAT rise would hit families the hardest?

[John Hemming]

My right hon. Friend the Member for Twickenham (Vince Cable) was quite clear when he said that the party did not rule out an increase in VAT, when he was asked that specific question—[Hon. Members: “Oh!”] The then Chancellor supported an increase in VAT to 19%, and the present Opposition now support a long-term VAT rate of 20%. The reason why they will not support new clause 9 is that the change it proposes is not temporary but permanent. Labour Members cannot criticise us for accepting a long-term VAT rate of 20% if they want the same long-term rate themselves. There is an argument about whether the stimulus that would, admittedly, result from a temporary cut in VAT would be in the long-term interests of the country, but it is a complex one. However, it is clear that we need to keep the deficit under control.

We have heard criticism from the Opposition today that the Office for Budget Responsibility has indicated that we might be borrowing more money than was originally forecast. The Opposition criticise us for the fact that the OBR forecasts higher borrowing. The Opposition’s solution, however, is even higher borrowing. They identify a problem and then put forward a policy proposal to make that problem worse. It is an absurd situation.

The Economy

Thomas Docherty Excerpts

Wednesday 22nd June 2011 Commons Chamber

[Ben Gummer]

I do not know what position my hon. Friend took against the 1981 Budget, but all that I can say is that that Budget, which was opposed by Labour Members, started the rebuilding of the British economy, much as we are doing now.

I was not planning to speak today, but I entered the Members’ Lobby and looked at the Opposition’s motion on the Order Paper, which is entitled, “The economy one year since the Government’s first Budget”. I thought, “That’s brave of them, to pick a fight on this, but I’ll give them a chance.” I read on and thought, “This will be amusing.” The motions says:

“That this House notes that on 22 June 2010”—

there is a preamble, and we agree with that bit, because there was an excellent Budget this time last year—and it continues:

“further notes that over the last six months”.

I thought, “Hang on a minute. I thought we were talking about after a year,” but they have chosen six months for the economic growth figures. Why six months? It is because over a year the economy has grown, has it not? Already, in the terms of their own motion, the Opposition are failing, because they have to pick a six-month figure. Do hon. Members know why they pick that period?

My hon. Friend the Member for Witham (Priti Patel) talked earlier about businesses. Her parents run a business in my constituency. She understands businesses. She understands that, with a difficult start-up, some weeks are not as good as others and that things are rocky and choppy. Not many Opposition Members have ever seen a balance sheet or a profit-and-loss account in their lives, and that is why they might not understand what she explained earlier. That is why, after a year, the economy is growing—but after six months, it was flat, because we are having a choppy recovery, as the Chancellor said.

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

Will the hon. Gentleman give way?

[Ben Gummer]

I have taken one intervention; I will not take any more.

I am afraid that the Opposition are falling down already with their motion, but let us go on to the next phrase:

“in the last month retail sales fell by 1.4 per cent.”

[Interruption.] If hon. Members listen carefully, they might find that their interventions are prefigured. Not content with six months’ worth, the Opposition have to go to the last month, but let us go back to the motion and what has happened over the past year. In the past year, retail sales have grown by 4.5%. I congratulate the Opposition on their motion, as we are seeing growth in the two key figures—GDP and retail sales—that we have considered so far.

The next thing in the Opposition’s motion is manufacturing output, which, it says, “fell by 1.5%” over the last month; but actually, over the year, it has risen by 1.3%.

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[Dr Thérèse Coffey (Suffolk Coastal) (Con)]

I always enjoy these occasions and think that it was a very good birthday present from the Opposition to allow the Government to defend their record. As my hon. Friend the Member for Witham (Priti Patel) said, the debate gives us an opportunity to remind the British public not only of the legacy we inherited, but of the positive action we have taken.

I always enjoy the contributions of the right hon. Member for Morley and Outwood (Ed Balls), which I find quite jovial occasions, although I was disappointed that he would not allow me to intervene. The only slight challenge about listening to the right hon. Gentleman, who seems to live on planet Balls or in la-la land, is that I wake up and realise that I have participated in a horror show. The hon. Member for Scunthorpe (Nic Dakin) seems to be adding to Aesop’s fables with his portrayal of a golden legacy that we apparently inherited. So what do we end up with? A second-choice shadow Chancellor asking for a second chance. Hopefully, the British public will realise that his plan B just means more boom and bust, more borrowing and potential bankruptcy. Frankly, I do not see the British public voting for that again in the near future.

The hon. Member for Pontypridd (Owen Smith) referred to a plan B and quoted the CEO of Vodafone. Normally Labour Members are not the biggest fans of Vodafone when it comes to aspects of its contribution to the economy. He will probably not be impressed by the conversation I had with the CEO, who criticised the Government for not cutting fast enough or deep enough and said that, by not making quicker progress on that, we would make a rocky road for ourselves.

The right hon. Gentleman used to cite the USA in support of his plan, but we now see the Obama Administration stepping up the pace of deficit reduction, which they need to do.

[Thomas Docherty]

I suspect that the hon. Lady was not here in May, but I certainly recall President Obama making it absolutely clear that he did not agree with the current Government’s policies on the deficit.

[Dr Coffey]

Well, perhaps he did not, but he seems to have changed his mind and is stepping up the pace of deficit reduction.

Plan C is the VAT cut that the shadow Chancellor announced, unknown to some of his shadow Cabinet colleagues, it seems. Yet again, it is another unfunded tax cut. I was not a Member the last time that happened, in 2008, but many people will remember that earlier that year the 10p tax rate was abolished, and what was the impact of that? The economy continued to contract, leading CEOs said that £12.5 billion had been wasted on that tax cut, and hon. Members may recall the Federation of Small Businesses survey, in which 97% of its members said that their earnings had not increased.

In spite of all that, the right hon. Gentleman has wheeled out the plan again, and eight times today the right hon. Member for Edinburgh South West (Mr Darling) refused to endorse it. We have been told that we need a credible plan with public and political support, but perhaps the shadow Chancellor needs to start with his Back Benchers, rather than by trying to persuade the British public.

I know brotherly love is a big feature of the Labour party, so perhaps the right hon. Gentleman will start with his brother, who I understand works for PIMCO, the world’s biggest bond fund, which has publicly stated that the UK has the best combination of fiscal and monetary policies in the G20—and so say all of us. No wonder in a Populus poll last week, only 23% of the population supported the Labour leadership in its desire to control the economy, a reduction of 10% in the past three months.

Instead, the British public have responded to the two parties on the Government side of the House, which just over a year ago came together in the national interest to form a coalition, and which with wide political support have put together a credible plan to restore fiscal sanity. Government Members have demonstrated a proactive attitude in starting to untangle red tape; in incentivising the creation of small businesses and entrepreneurs; in the significant policy of welfare reform, whereby we have been very clear that people will be better off if they work, unless they cannot; in the extra money going into apprenticeships, building on the good work—I recognise—of the former Government; and in funding infrastructure.

I was a little surprised at the contribution of the hon. Member for Middlesbrough South and East Cleveland (Tom Blenkinsop), who seemed to have forgotten the amount of money that the Government are spending on infrastructure. Indeed, we recognise that we need to do so.

Reference has been made to RDAs, but a PricewaterhouseCoopers report last year suggested that generally they have been poor value for money, and despite spending those billions, the prosperity gap has widened.

The hon. Member for Liverpool, West Derby (Stephen Twigg) referred to life in the ’80s in Liverpool, but I grew up in Liverpool and was there in the ’80s. I am going to do a lame Welsh accent, because it was a Labour council—a Labour council—that fired 30,000 employees to stave off bankruptcy—[Hon. Members: “By taxi”]—by taxi. Those people were understandably fed up with the Labour council leader, and they did not just take the ferry across the Mersey to Birkenhead; they left Liverpool. We have seen that with the reduction in the number of people living there, and in the money that is left, too. Ironically, the port of Felixstowe in my constituency benefited from the situation, but it has been a great shame, because I am very proud of where I grew up.

The Conservatives went in and put in investment.

--- Later in debate ---

[Richard Graham]

First, the hon. Lady is inaccurate, and secondly no Government Member believes that we can abolish boom and bust.

The details of the shadow Chancellor’s plan were no more successful than his goal. The golden rule on Government spending to which the hon. Lady referred was continually fudged under the previous Government, most spectacularly through the £300 billion of off-balance sheet financing—private finance initiatives—which was almost as bad as anything done by the investment banks. Does the shadow Chancellor accept the accusation by the right hon. Member for South Shields that this was a fundamentally dishonest way of measuring the golden rule? Even the right hon. Member for Kirkcaldy and Cowdenbeath has recognised that the tripartite system of regulating finance did not work. Does the shadow Chancellor accept that too?

These dry details, on things such as PFI and the tripartite system of regulation, do not resonate with our constituents, but their consequences will—the hospitals that have to cut services to patients because of the interest being paid on their PFI financing, and banks not lending enough to individuals and businesses in our constituencies because of bad decision making by themselves, inept regulation and inadequate Government oversight. The consequences of living beyond our means are the essential link between the shadow Chancellor’s policies, and our inheritance and this Government’s efforts to forge a better economic future.

We come to the crucial part of today’s motion: how are we doing, one year on? Opposition Members have piled in like a choir singing the hymn “Abide With Me”—“Gloom and despair in all around I see”. They all seem to have enormous confidence that the economy is failing, that the coalition will not plan, and that the coalition plan would not and could not work anyway, leaving them to talk down our country and their own constituencies. I wonder whether any of them are doing anything to help. Where were they, for example, when I led a debate on apprenticeships and small businesses two weeks ago? Not a single Opposition Member was there. We all need to do our bit to support business growth in our constituencies. We know today that not everything is perfect, but the evidence suggests the following facts. Unemployment is down slightly on a year ago. The savings ratio has improved and business growth—

[Thomas Docherty]

On a point of order, Mr Deputy Speaker. Could you clarify whether I could find out from Hansard whether a Member had actually turned up for their own debate?

[Mr Deputy Speaker (Mr Nigel Evans)]

That is certainly something that you could find out from Hansard, but it is not something that you can find out from me.