Scotland’s Place in the UK
Debate between William Bain and Lindsay Hoyle(10 years, 10 months ago)
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Jonathan Edwards (Carmarthen East and Dinefwr) (PC)
As I understand the position of the Labour party in Scotland, it favours the full devolution of income tax powers to the Scottish Parliament. Yesterday, we heard a speech from the 1970s from the hon. Member for Pontypridd (Owen Smith), in the Welsh Grand Committee, in which he said that fiscal devolution was tantamount to destroying the fabric of the British state. Will the hon. Member for Glasgow North East (Mr Bain) explain to the House and the people of Scotland what exactly is Labour’s position on fiscal devolution?
Mr Deputy Speaker (Mr Lindsay Hoyle)
It might help Mr Edwards to know that he was on the list to speak, and I do not want to keep banging people down the list because they intervene. I do not want to stop debate—I do not mind interventions—but please ensure they are brief and not continual.
Mr Bain
I want to keep the focus on positivity in this debate, and I would simply point out to the hon. Member for Carmarthen East and Dinefwr (Jonathan Edwards) that the one party that was inconsistent in its approach to tax powers being devolved in the Scotland Act 2012 was the party he sits alongside on those Benches.
As a result of the Edinburgh agreement, Scotland faces a choice between two futures in the 18 September referendum: an optimistic path that builds on the strength of the devolution settlement and our common institutions, such as the Bank of England, to make our economy more productive and where ordinary people share more in the benefits of growth; and a pessimistic path implying that erecting borders is more important than bringing down barriers in terms of inequality and lack of opportunity across these islands.
Housing Benefit (Under-occupancy Penalty)
Debate between William Bain and Lindsay Hoyle(11 years, 9 months ago)
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Mr Deputy Speaker (Mr Lindsay Hoyle)
Order. I should have reduced the time limit but did not, on the off-chance that there would not be too many interventions. I warn Members that I will now have to reduce it, and if they are upset it is due to the number of interventions.
Geraint Davies
In a nutshell, the cost of reducing the tax threshold by £1,000, which gives taxpayers £6 a week, is £5 billion, 10 times what is being saved here. If someone who is very poor looses £7.50 a week through the empty bedroom tax, someone else is being given £6. Does that not illuminate the Government’s priorities: hitting the poor and letting the middle class off?
European Union (Croatian Accession and Irish Protocol) Bill
Debate between William Bain and Lindsay Hoyle(12 years, 1 month ago)
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Mr William Bain (Glasgow North East) (Lab)
It is always a pleasure to follow the hon. Member for Moray (Angus Robertson). I am sure that throughout the debate we will have a few flashpoints over our differences in interpretation of the treaties, and the lessons of the Bill.
It is a testament to how far Croatia has progressed in the past nine years since it first applied for EU membership that we are being asked to approve the Bill that will ratify its likely accession to the EU as the 28th member state on 1 July 2013. Whereas 20 years ago it was recovering from the aftermath of the conflict with Serbia, the siege of Dubrovnik and the break-up of Yugoslavia, Croatia now has exciting plans to diversify its economy and invest in energy and tourism, and is cutting its deficit to under 4% of GDP, albeit in a period of somewhat patchy economic growth.
Although members of the European Scrutiny Committee are right to point to the further progress that needs to be made on judicial reform, the elimination of corruption in state-owned companies and the detection of crime, and that more must be done to bring suspected remaining war criminals to justice, it is also fitting that we now ratify the accession treaty signed on 9 December 2011, following 18 other EU member states that have done so, or have voted to do so, since February.
In January, some two thirds of those voting in Croatia’s referendum supported its accession to the EU as a means of embedding the rule of law and democratic values, and as a route to prosperity. There are, as hon. Members have mentioned, still some outstanding issues in connection with the ratification of the accession treaty by Slovenia, which has indicated that an agreement with Croatia over debts arising from the collapse of Ljubljanska banka in the 1990s still has to be reached.
Croatia proceeded through the 35 chapters of accession in the period of just more than five years, prior to the Commission’s making a favourable recommendation on its membership status. The political criteria required Croatia to ensure the stability of institutions guaranteeing democracy, the rule of law, human rights and respect for, and protection of, minorities. The economic criteria require the existence of a functioning market economy, as well as the capacity to cope with competitive pressure and market forces within the EU.
The acquis criterion refers to the ability to take on the obligations of membership arising from the treaties and the Union’s legislation—the acquis—including adherence to the aims of political, economic and monetary union, which would mean in due course Croatia adopting the euro as its currency, as under article 5 of the accession treaty it has no opt-out from participation in economic and monetary union. Indeed, no other accession state has had an opt-out, and no newly acceding or re-acceding member state would be likely to have one in future either.
The Commission’s monitoring report from last month found real progress being made on many fronts, although further attention had to be paid to the protection rights for LGBT people, the selection of new judges and prosecutors, and rooting out corruption in public procurement. On asylum and immigration policy, Croatia shows a good level of compatibility with the EU acquis, although further progress is required on visa requirements. As a new member state that will have to sign up in due course to the Schengen acquis, further work before entry to the Union will be required with regard to the free transit agreement with Bosnia and Herzegovina.
It is interesting to note that the record for the shortest period from application to accession in the history of the EU was Slovakia, which completed all stages within two and a half years. Croatia’s accession process, which has taken five years, compares relatively favourably with that. Of course, the example of Slovakia’s accession is a cautionary tale for all states intending to accede or re-accede that believe the process to be a mere formality. As we know from remarks by the Commission, the President of the EU Council and the FCO, that would not be the case for any state seeking accession or re-accession.
Croatia had to make speedy progress in several areas of the accession process, demonstrating the standard that the EU expects of new aspirant member states or—dare I say it?—parts of member states that decide to separate and form new entities that might seek entry to the EU. This debate is instructive, therefore, not only because of what Croatia had to do to satisfy the entry criteria or what other aspirant states, such as Serbia or Turkey, might have to do in the future, but in terms of what Scotland might have to do to become a member state if it votes for separation in 2014.
The first area where Croatia had to make significant reforms was in relation to the creation of an independent central bank. The EU Council issued a draft common position on the progress of the access negotiations with Croatia in 2009 in which it commented extensively on the advances made in the administrative capacities and remit of Croatia’s central bank, the HNB. It noted that during the financial crisis of 2008 the bank adopted prudential measures regarding reserve requirements and foreign currency liquidity requirements. In particular, it reduced the reserve requirements from 17% to 14%, decreased the foreign currency liquidity ratio from 28.5% to 20% and raised banks’ maximum allowed open foreign exchange positions. The HNB has been designated by the Council as the component supervisory authority for electronic money institutions—a vital step in ensuring financial stability, which is a prerequisite of EU entry.
The Council also accorded significant importance to the capacity of the central bank in its foreign currency liquidity requirements. Croatia has implemented regulations aligning it with the EU acquis on the new capital framework, the supervision of electronic money institutions, the winding up and reorganisation of credit institutions, the supplementary supervision of financial conglomerates and deposit guarantee schemes, and the enforcement of prudential requirements. Croatia required all this financial infrastructure before the Commission recommended that it be accepted for entry.
Let us apply the example of Croatia to the debate on other potential aspirant countries seeking accession or re-accession. Such a state, if it did not have its own central bank, would have to rely on another sovereign country’s central bank in order to harden or relax financial rules and requirements.
Mr Deputy Speaker (Mr Lindsay Hoyle)
Order. We are drifting. I have pulled up other Members for doing the same. We need to stick to the subject in hand, rather than turning to other areas of accession.
Mr Bain
It does not follow from the EU’s deliberations with Croatia that Croatia’s offering another state’s central bank would have been acceptable to the EU in order to obtain the Commission’s recommendation for approval. That has intriguing lessons for future accessions and re-accessions. That is the implication of the Bill.
Croatia, through the State Agency for Deposit Insurance and Bank Rehabilitation, can guarantee bank deposits. It made significant improvements to this scheme in anticipation of complying with EU directive 94/19/EC, which specifies that all member states must have in place a safety net for bank depositors. It cannot be a criterion, then, for future accession or re-accession countries to fail to have a system to protect bank deposits. That is the implication that comes from Croatia’s accession process and which is reflected in the Bill.
The obvious question arises—the FCO mentioned this in a statement on Thursday—of how, if part of the EU were put into limbo, it could possibly meet the terms of such an EU directive, having no independent central bank, no machinery to guarantee bank deposits and having to rely on the central bank of another state to guarantee bank deposits. Those are all implications that come from Croatia’s accession process.
The lessons of the negotiations for any new aspirant state highlight the following issues: does it have its own financial services regulator or would it seek to continue with the current regulatory framework, which would be conducted by another state? What would be the governance arrangements for any financial services regulator? What degree of independence from Government would that have? What institution would be prepared to stand behind financial services firms with large deposits or policy holder liabilities? Indeed, how would it be possible to provide lender of last resort facilities without assuming regulatory control over financial transactions such as mortgages, insurance and even pensions? All these are issues that arise out of the Bill and the accession process that Croatia went through.
Finally, a framework to wind up failing or failed banks is required. In Croatia’s case, in chapter 9 of the 2009 common position document, the EU welcomed the alignment of Croatia’s legislation to the EU acquis with regard to bank accounts, branch accounts and the re-organisation and winding up of banks. In addition, the European Bank for Reconstruction and Development, in its 2010 to 2013 strategy for Croatia, considered the securities market regulator highly effective in pursuing complex cases. All those steps were essential in showing compliance with the EU acquis in order for Croatia’s application for membership to be accepted.
With reference to the rights of EU citizenship being conferred on Croatians joining the EU, it is appropriate that the Bill permits a phasing in of the right to work. The Minister was right to say that the UK should make use of the flexibility that allows up to seven years before full free movement rights will apply to Croatian nationals in the UK, as was the case with the accession of Bulgaria and Romania to the EU earlier.
The Opposition support future enlargement on the proper criteria. We note the applications made by Serbia, Montenegro and Turkey. Serbia was granted candidate status on 1 March this year, but has been advised by the EU that it can commence formal accession negotiations only if progress is made on the status of Kosovo and its future relations with Kosovo.
The Bill is important for Croatia’s relations with the rest of the EU and the outside world. In demonstrating that a country engaged in a bloody conflict two decades ago can emerge and be in a position to join the EU now, it shows the powerful benefits of full membership of the EU—benefits that go far beyond being a member of the European Free Trade Association. Simply being a member of that institution could render a country liable to be a net contributor to the EU budget but without any influence over how it is spent, and to be bound by the rules of the single market but with no ability to shape those rules. It was interesting that we had some figures this morning from the recent past of Scottish politics advising that a separate Scottish state should, instead of seeking EU membership, seek membership of EFTA instead—
Angus Robertson
On a point of order, Mr Deputy Speaker. Would I be right in remembering your ruling to Members of the House that the debate should be about Croatia, not Scotland?
Mr Deputy Speaker (Mr Lindsay Hoyle)
That is not a point of order, but the hon. Gentleman is absolutely correct. I have mentioned to Mr Bain that I need him to come to order on Croatia. I am sure he will do that, in the same way as other Members did who drifted when we pulled them back into order. That is where Mr Bain is now going.
Mr Bain
Indeed, that demonstrates Croatia’s wise decision to join the EU proper rather than seeking membership only of the European Free Trade Association, given the clear advantages that will accrue to its people when it becomes a full EU member state.
Furthermore, the Bill demonstrates precisely what states must do and the entry criteria with which they must comply before becoming members of the EU. I congratulate the people of Croatia on the progress they have made and welcome their entry next year. However, I also believe that it demonstrates the value of membership of the United Kingdom, the votes we have as a member of the EU Council and the ability to influence key decisions. That is a real benefit, and one that I and Opposition Members would not wish to see Scotland lose in coming years.
Scotland Bill
Debate between William Bain and Lindsay Hoyle(12 years, 7 months ago)
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Mr Deputy Speaker (Mr Lindsay Hoyle)
Order. I might be able to help. I know that Mr Bain will come straight back to the amendments and that we will not drift any further.
Mr Bain
I am sure that if the hon. Gentleman wishes to make that intervention again when we discuss the implementation of tax powers, Mr Deputy Speaker, you might view it in order for me to address it then.
On the specific amendments, we support the provisions that make clearer the circumstances and criteria for Scottish Ministers to make orders in relation to the conduct of Scottish parliamentary elections. Those powers will be largely devolved to the Scottish Parliament under clause 3. We also agree with amendments 7 and 8, which resolve any remaining drafting ambiguities in relation to the change in the legal name of the Scottish Executive to “the Scottish Government” in clause 15. We also have no difficulty with amendments 10 and 11, which amend clause 22 to alter the Crown Estate commissioner’s name to
“Crown Estate Commissioner with special responsibility for Scotland”
to denote the special status that one of the Crown Estate commissioners will have, should the Bill become law.
In short, then, the Opposition support the amendments.
Mr Deputy Speaker (Mr Lindsay Hoyle)
Order. The length of the hon. Lady’s intervention is stretching even my patience a little. We are not speculating about such matters; we are only discussing an amendment at this stage.
Mr Bain
Thank you, Mr Deputy Speaker. The hon. Lady tempts me to make future tax policy. However, the point she makes is that corporation tax is better levied and raised at UK level, and that is what we shall be defending in the debates on these amendments and the debates in the coming months.
The agreement between the UK Government and the Scottish Government provides that borrowing limits will be reviewed regularly, ahead of UK spending reviews by the Joint Exchequer Committee, and a consultation will be initiated on the Scottish Government being able to issue bonds. The annual reports will allow Members of this House and the Scottish Parliament both to scrutinise the detailed arrangements made by Her Majesty’s Revenue and Customs and the Scottish Government in the run-up to implementation and the first five years following the commencement of operation of the new fiscal powers, and to permit any remaining issues—such as the precise interpretation of the definition of a Scottish taxpayer, as raised by my hon. Friend the Member for Glasgow North (Ann McKechin) in Committee—to be resolved before the tax powers become active in April 2015. It is also our view that the reports will provide an opportunity to scrutinise arrangements made at Holyrood on the workings or replacement of stamp duty land tax. We welcome the new commitments on giving consideration to bond issuance by the Scottish Government, and the additional capacity that such borrowing powers will provide to the Scottish Government to make capital and infrastructure investments, which are vital for Scotland’s economic competitiveness.
The requirement to make annual reports will also show the strength of the financial powers being devolved by the Bill. The Scottish Consolidated Fund will have sufficient balance to ensure cash flow on the devolution of these new tax powers and to manage any excessive in-year volatility of tax receipts. It will also meet differences between forecast and out-turn receipts on income tax allocated to the Scottish Government at the beginning of the relevant fiscal year.
Budget Responsibility and National Audit Bill [Lords]
Debate between William Bain and Lindsay Hoyle(13 years, 10 months ago)
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Mr Deputy Speaker (Mr Lindsay Hoyle)
Order. I am trying to allow some freedom, but we are in danger of straying off Second Reading and on to a general debate about the economy. Can we please come back to the debate in hand?
Mr Bain
I am very grateful for that guidance, Mr Deputy Speaker.
To conclude my response to the hon. Gentleman, public sector net debt in 2007-08 was 36.5%, so it was lower than that which we inherited when we came to office.
The analysis of the IFS, in chapter 2 of its green budget, produces the conclusion:
“The financial crisis and associated recession have reduced revenues and, to a greater extent, increased public spending as a share of national income. Without action, there would have been an unsustainable increase in borrowing and debt. The government’s spending cuts and tax rises are forecast to be sufficient to return the UK’s public finances to a sustainable position, but the same would have been true under the fiscal consolidation plan set out by Labour in its March 2010 Budget.”
I doubt that even Government Members would label the IFS a deficit denier, so a fiscal mandate that pays insufficient attention to the impact of higher growth and employment in bringing the public finances back to stability will fail the needs of the country.
We look forward to scrutinising the Bill in Committee, to improving the operation of the OBR and perhaps, during the Bill’s proceedings, to securing the change in fiscal mandate that would improve the economic prospects of the British people.