1. What discussions he has had with the Home Secretary on continued participation in the European Arrest Warrant after the UK leaves the EU.
Ministers in the MOJ and the Home Office have regular discussions on key aspects of criminal justice co-operation in relation to our EU partners, including on the European arrest warrant.
I thank the Minister for that reply. The police have repeatedly underlined the importance of the European arrest warrant in fighting crime. If the price of maintaining our citizens’ security and the effective operation of other European crime-fighting mechanisms is the jurisdiction of the European Court of Justice, will the Minister put crime fighting first or let his arbitrary red line jeopardise our citizens’ security?
I am not sure that making sure the UK Supreme Court has the last word on the law of the land is some arbitrary red line. However, the Government’s position in relation to our future partnership with the EU was set out in the position paper that was published in September. It was very clear that we have an ambitious plan for co-operation on security, law enforcement and criminal justice. The right hon. Gentleman will see if he looks at it carefully—I am sure he has—that maintaining strong extradition relations will be an important part of that agenda.
Will the Minister take on board the clear recommendation from the Justice Committee’s report in the last Parliament that underpinning any practical means of criminal justice co-operation, including the European arrest warrant, should be a continuing relationship on maintaining data equivalency? Unless the data regulations are equivalent, it will not be possible for European agencies to share with us or vice versa.
I thank the Chair of the Select Committee. That is, of course, why we have taken through the Data Protection Bill. We have extradition relations—very vigorous ones—with countries all around the world, and we see no reason why we would not continue to do so with our EU friends and allies.
Given that it took countries such as Iceland and Norway 13 years to negotiate extradition arrangements with the EU, does the Minister accept that not maintaining the European arrest warrant puts people in this country at risk of seeing criminals go free and that those criminals may well include terrorist suspects?
No, because we are not in the position of Iceland. We start from the position of the European arrest warrant, with strong, intensive co-operation on extradition, and we will make sure we continue that operationally for many years to come.
Does the Minister agree that one reason people voted to leave the European Union was to make the Supreme Court the supreme court?
My hon. Friend is absolutely right. Let us also not forget the advice of the former Lord Chief Justice, Lord Thomas, who made it clear in his evidence to the independent review of extradition that there were problems with the European arrest warrant. We have legislated for extra safeguards. We are ending the jurisdiction of the European Court, but there has been no suggestion that we are dispensing altogether with vital EU extradition—except, perhaps, as a figment of some of the furtive Liberal Democrats’ imaginations.
Surely the Minister can make it clear that the Government’s priority must be continued participation in the European arrest warrant and that that must come ahead of his obsession with ending the jurisdiction of the European Court of Justice.
I welcome the hon. Gentleman’s intervention, but I gently suggest that he read the position paper on the future partnership, which was published in September, because it deals directly with the question he has just asked and makes it clear that we do want to continue vital extradition relations with our EU partners.
2. What steps his Department is taking to maintain human rights standards after the UK leaves the EU.
The United Kingdom has a long tradition of ensuring rights and liberties are protected domestically and of fulfilling its international human rights obligations. The decision to leave the European Union does not change this.
Last week, during evidence to the Brexit Committee, the Under-Secretary of State for Exiting the European Union, the hon. Member for Wycombe (Mr Baker), said of the charter of fundamental rights: “It is right that we leave behind the charter, and that we continue to rely on the Human Rights Act and the convention.” Is it now the Government’s intention to stay in the European convention on human rights and to keep the Human Rights Act after Brexit?
The European convention on human rights is separate from the European Union, so leaving the European Union does not affect our membership of the convention.
When I was in opposition, we were assured again and again by Ministers that the charter of fundamental rights would not apply in the United Kingdom. I hope that we will be able to deliver that.
The European Union (Withdrawal) Bill ensures that the source rights that underpin the EU charter of fundamental rights will continue to have effect in UK law after we leave the EU. The charter was created as a collection of all the laws that the EU had passed, and it would be wrong if, post our leaving the European Union, that charter continued to be cited in any future legal case.
Can the Minister assure us that when we leave—if we leave—the European Union, human rights will very much involve the ability to put right miscarriages of justice and that the Criminal Cases Review Commission will be strengthened rather than weakened by our leaving Europe?
I can assure the hon. Gentleman that the Government’s intention is to confirm that post our leaving the European Union—when we leave the European Union—such access to justice is available to British citizens.
When the United Kingdom leaves the European Union—[Interruption.] I speak as a remainer. When that happens, does the Minister agree that the Council of Europe will become an increasingly important interlocutor between this country and the European Union? Will he reiterate this Government’s commitment to staying in the European Court of Human Rights?
Yes, when we leave the European Union, it is important that Britain maintains a strong role in international affairs in terms of its lead on human rights. I remind the House that the original convention on human rights was written by two Britons.
3. What assessment he has made of the effectiveness of community sentences in reducing rates of reoffending.
The reoffending rate for community sentences has been coming down since 2005. The latest figures show that 34% of adults given a community order or a suspended sentence order go on to reoffend. This evidence shows that community sentences are more effective at reducing reoffending than short-term prison sentences are.
I very much welcome the figures that were published on Thursday showing that recidivism was coming down for people on community sentences. However, about a third of people on community sentences do still reoffend, so will the Secretary of State consider the “swift and certain” programmes in the United States that have had considerable effect in reducing recidivism?
I am certainly keen to learn from best practice not just in the United States but in other jurisdictions around the world. What was striking about some of last week’s figures was that they showed that offenders who underwent drug or alcohol treatment in this country showed a 33% reduction in the number of offences they committed in the following two years. That is a lesson we can learn from.
May I recommend to the Minister my proposal of deferred prosecutions, which also gets to the community responses that can reduce recidivism? That is among the recommendations I made in the review that the Government asked for.
I reiterate to the right hon. Gentleman the Government’s appreciation for the work that he put into the review. We shall be responding in detail to his recommendations, including the one that he mentioned.
But is it not the case that according to the Ministry of Justice’s own figures, there is a direct correlation between the length of a prison sentence and the likelihood of an offender reoffending? In other words, the longer that somebody spends in prison, the less likely it is that they are going to reoffend.
It is true that short-term sentences appear to have the least effect in reduced reoffending, but the comparison with them is with alternative community sentences, which are available for that similar type of crime. Those community sentences work best when they link up with services such as drug and alcohol treatment programmes sometimes provided by other authorities in the community.
I think the whole House will agree that community sentences function only when magistrates have trust in the people supervising them. Last year, thousands of community sentences were served in London alone. Will the Secretary of State therefore commit today to an urgent independent review of the performance of the London company responsible for supervising many of these community sentences in London, following the revelations in last week’s “Panorama” investigation that the London CRC—community rehabilitation company—had failed to act on 15,000 missed appointments over 16 months?
Of course, as the hon. Gentleman knows, the company responsible has denied some of the claims that were made in the “Panorama” programme. None the less, it is quite clear that missed appointments are a serious matter. We expect the London CRC, like other CRCs, to take appropriate action. I believe that in the independent inspectorate of probation we have precisely the kind of independent body that he has called for. It is currently looking again at London and we look forward to its next report.
I hear the Secretary of State’s reassurances about the delivery of community sentences by the so-called CRCs, but for us to be absolutely sure about this, I argue that we need to know the advice that the Minister has had about the failure of the CRCs. The “Panorama” documentary revealed an in-house MOJ paper warning of the risks of handing much of the supervision of community sentences to the private sector through the privatisation of probation. Will the Secretary of State make that memo public, so that we and the House can ensure that those flaws are being tackled?
I think the hon. Gentleman is referring to a document that was produced some years ago. It is important now that in addressing the underperformance of some areas of the probation service, we act on the recommendations from the independent probation inspectorate and seek, through the contractual mechanism, to drive up standards to where the public would expect them to be.
4. What assessment his Department has made of the effect of the UK leaving the EU on the legal system of each legal jurisdiction.
We recognise the distinct legal systems across the UK. We engage with our counterparts in the devolved Administrations to prepare the ground for Brexit, in terms both of achieving a smooth transition on things such as civil and judicial co-operation and of seizing the global opportunities for the UK legal sector, which contributed around £25 billion to the UK economy last year.
That being the case, what actual steps has the Department taken to ensure that Scottish legal services and the Scottish legal system are protected when the UK leaves the EU?
There is a two-part answer to that. First, in relation to the negotiations with our EU partners, we are very focused on making sure that the current co-operation continues as well and as optimally as possible. Secondly, in relation to the legal position, the EU withdrawal position will make sure that there is legal certainty for citizens across the UK.
20. The Government’s “Legal Services are GREAT” campaign, which was launched in Singapore earlier this month, focuses solely on the global promotion of the English legal system; it contains no mention of Scotland or Northern Ireland. Will the Minister see that that is rectified prior to the campaign’s domestic launch later this year?
I can tell the hon. Gentleman that we are absolutely committed to promoting every one of Scotland’s finest exports, from whisky through to its brilliant lawyers.
The Government’s EU position papers on enforcement and dispute resolution and on security, law enforcement and justice have significant implications for the Scottish legal system and for areas of law devolved to the Scottish Parliament. Yet, in advance of the publication of those papers, there was absolutely no consultation with the Scottish Government or the Scottish Law Officers. What assurance can the Minister give me that such oversight will not happen again?
I do not know about the specific drafting in the papers, but there was considerable dialogue with all the devolved Administrations on the substance underpinning the position papers and the negotiating position that the UK has taken.
Sir David Edward, a distinguished jurist and a former judge at the Court of Justice, recently gave evidence to the Scottish Parliament about these papers. He said, and I quote, that “the UK Government has overlooked the significance of the separate Scottish legal system, the Scottish judicial system and the Scottish prosecution system in relation to justice and home affairs issues such as Europol, the European Arrest Warrant, cross-border information systems and the conventions and regulations about recognition and enforcement of judgments.” Will the Minister undertake to meet me so that these oversights might be rectified?
I thank the hon. and learned Lady, but she has not actually pointed to one aspect, one paragraph or one point in the position paper that she thinks we have got wrong. We certainly accept, recognise and, indeed, embrace the huge contribution that the Scottish justice and legal systems make. In relation to the justice and home affairs strand of the negotiations, we will of course bear in mind very closely the different contours across the whole UK.
5. What progress the Government have made on the implementation of the Farmer review published on 10 August 2017.
The family is the most effective resettlement agency that we have. That is a view shared by the prisons inspectorate, the probation service and Ofsted. The time to work on those relationships is from the moment an offender is sentenced to jail. To leave it longer is to leave it too late. That is why I welcome the excellent review by Lord Farmer, and we are working to implement all his recommendations.
Figures from the Farmer review show that inmates who receive regular family visits are 39% less likely to reoffend. Will the Minister outline what steps the Government are taking to enable more family visits to happen in our prisons?
My hon. Friend is absolutely right. Reoffending rates among people who have family contact are a lot lower than those for other offenders. We are working to implement all of Lord Farmer’s review over time. I will be meeting her and a number of colleagues to discuss our progress on this later.
The Farmer review references prisoner wellbeing. At HMP Nottingham in the past two months alone, four prisoners have killed themselves and one has died of an overdose. Will Ministers say why they think this is happening, and what do they plan to do about it?
The hon. Gentleman makes a very important point. Certainly, for a lot of prisoners—whether for their mental wellbeing and issues to do with self-harm, but also violence—family contact can make a difference. There are specific issues relating to HMP Nottingham, and I am willing to write to him about those.
In Parc Prison outside Bridgend in south Wales, parent teacher evenings take place in the prison so fathers can demonstrate their ongoing responsibility to their children’s education. Will the Minister tell us if any other prisons are going to follow the excellent example set by Parc?
The former Prisons Minister makes an excellent point about good practice at Parc Prison. As he is aware, there is good practice dotted around the prison estate. We have Storybook Dads and Mums in some prisons and Our Voice in other prisons. We want to see good practice spread across the entire estate. To enable us to do that, we are devolving budgets to prison governors, and we will also hold them to account when we pilot new family and significant relationship performance measures as of next year.
6. What recent progress his Department has made on its review of legal aid reforms.
Yesterday, we laid a written ministerial statement before the House setting out the details of the review of the Legal Aid, Sentencing and Punishment of Offenders Act 2012, and publishing the post-legislative memorandum, which discharges the promise made by previous Ministers to this House. I expect the review to be completed by the summer of 2018.
I thank the Minister for his response about progress on the review of legal aid reforms, but it is disappointing that, even though the Government first announced this review nine months ago, it still will not conclude for another nine months, which is nine more months of many thousands of people not being able to afford to access our justice system. His Government’s reforms of legal aid were intended to save £350 million. In fact, legal aid has fallen by double that. Will the Minister lobby his colleague the Chancellor, so that some of those additional savings go immediately to help those who have been priced out of access to our justice system?
I thought the hon. Gentleman might at least welcome the fact that we laid out the terms of the review yesterday. I am not sure whether he has had a chance to study the post-legislative memorandum. Let us be clear about one thing: last year, we spent £1.6 billion on legal aid in England and Wales, which is a quarter of the Ministry of Justice’s budget. International comparisons are not exact, but according to the Council of Europe’s review last year, the UK spent more per capita than any other Council of Europe member.
In looking at the effect of the reduction in legal aid on access to justice, will the Minister also comment on the impact on access to justice of the closure of magistrates courts. The closure of Kendal court this summer has removed easy access to justice for hundreds of people, increasing pressure on the police, legal professionals and local families. What will he do to restore such physical access to justice?
I understand the hon. Gentleman’s concern if the court estate is situated in his constituency, but we have a £1 billion court reform programme, which is investing in updating, modernising and introducing technology. As a result, we will actually deliver more sensitive justice for victims and witnesses, but also a better bang for the taxpayer’s buck.
18. Wales has seen one of the largest drops in legal aid providers, at 29%, particularly with regard to housing. Will the Government’s belated review of their deep cuts in legal aid look specifically at the impact of this?
The terms of reference have been set out very clearly. The post-legislative memorandum is wide in scope, and the hon. Lady should feel free to submit any particular points that she wants us to consider. I am obviously not going to pre-empt or prejudice the scope of the review that we have just undertaken.
Has my hon. Friend seen any evidence that reductions in legal aid have reduced the cost of litigation in this country? If not, will he look into why the market is not working properly?
A good many of those issues will be examined by the review. If my hon. Friend would like to write to me with any concerns he has, I would be very happy to look at them.
Twenty months ago, the Court of Appeal ruled that the Government’s restrictions on legal aid for victims of domestic violence were unlawful. Nine months ago, Ministers told the House that they would make changes by secondary legislation that would “make it easier for victims of domestic violence to access legal aid.”—[Official Report, 25 April 2017; Vol. 624, c. 983.] Nothing has happened. Victims cannot wait another nine months, so when will the secondary legislation be brought forward?
The hon. Lady is right that it is vital to ensure that legal aid is available to victims in circumstances of domestic violence. Of course, it was granted in more than 12,000 cases last year. We have reviewed the evidence requirements again and are committed to making it easier for victims to access legal aid. I will announce the details shortly.
7. What steps the Government are taking to empower prison governors.
We have given governors greater freedom over their prison’s daily routine and timetable, staffing and family services. We intend to give governors control of areas such as education and training provision. As other current contracts expire, I will look for opportunities to devolve further powers.
There were 21 recommendations in the Farmer review and Ministers have made the welcome commitment to implement them all. What further support and incentives are being given to prison governors, as they have increased autonomy within their prisons, to ensure that that implementation happens on the ground?
The budgets have already been devolved to governors, enabling them to commission family services that are tailored to the specific needs of their prisoners. I have seen examples of that when visiting HMP Parc and HMP Bronzefield. Governors will be supported in future by new family services guidance, which will incorporate elements of Lord Farmer’s report, in the hope that they will all develop best practice.
A recent independent monitoring board report confirmed that the riot at Bedford Prison last year was caused by “chronic understaffing” and “poor systems”. Improvements have been made while the prison has operated at half capacity, but will the Minister assure me today that the same problems will not happen again once the prison is operating at full capacity?
I am sure that the hon. Gentleman will welcome the fact that we are about halfway towards recruiting the additional 2,500 prison officers that my predecessor, my right hon. Friend the Member for South West Norfolk (Elizabeth Truss), announced about a year ago. If he has particular concerns about a specific prison, I am sure that my hon. Friend the Prisons Minister will be happy to discuss them with him.
I warmly welcome the commitment of the Secretary of State and the Prisons Minister to implementing the Farmer review in full. They have acknowledged the important link between family ties and rehabilitation. Now that prison governors are being further empowered, what more can be done to ensure that that is rolled out across the whole prison estate?
One thing that has struck me since being appointed to this role in the Government is that we need to get better at ensuring that the best, most successful practices in prisons are disseminated rapidly and widely. One means of doing that is to ensure that there is additional support for individual prison governors at regional level, so that they have experienced mentors available to them—particularly for new governors. I hope that that shift will help deliver the change that my hon. Friend seeks.
Governors cite the outsourcing of facilities management, maintenance and repairs as something that undermines their ability to manage important elements within their prisons. Labour has announced a review, working with prison governors, to identify private service contracts that can be brought back in-house to save the taxpayer money and, at the same time, improve prison conditions. Will the Government also commit to review those contracts?
As I said in answer to my hon. Friend the Member for Congleton (Fiona Bruce), as existing contracts expire, we shall seek new opportunities to devolve powers to governors and to clusters of prisons. Along with Prison Service headquarters, they will then have to strike the appropriate balance between the local provisioning of services and the need to secure the best value for taxpayers’ money.
8. Whether the Government plan to respond to the findings of the European Parliament’s Committee on Petitions in December 2014 on the treatment of Cammell Laird strikers in 1984.
In Justice questions in April, I committed to looking at this case further. Having done so, however, I remain to be convinced that this is a matter for the Ministry of Justice.
Does the Minister agree that it is completely unacceptable for a British citizen representing the Cammell Laird strikers to take that issue to the EU Parliament petitions committee, for a judgment to be found in his favour and for his own Government not to even bother to respond?
The Ministry of Justice does not think it holds any documents with regard to this case. I think that the hon. Gentleman is referring to a petition brought by Edward Marnell. I would be grateful if the hon. Gentleman wrote to me to set out the issues and I will arrange for my officials to have a meeting with him.
9. What steps the Government are taking to stop the use of drones over prisons.
15. What steps the Government are taking to stop the use of drones over prisons.
Drones are a threat but also an opportunity for our prisons. Where they are a threat, we are absolutely determined to tackle the organised crime groups who use them. In terms of the opportunities, the prison service is investing in drones to proactively manage large-scale incidents as our eyes and ears to improve our intelligence and allow us to respond more effectively and swiftly.
My hon. Friend will know that technology moves ever faster, day by day. Can he assure me that HMP Guys Marsh in my constituency will have access to the relevant funds to have the technologies in place to combat the use of drones and mobile telephones?
Absolutely. Guys Marsh will benefit from the £2 million pot being used to invest in mobile phone detection technology. An additional £3 million is being invested in a national intelligence team to help to tackle serious and organised crime. This will allow us to deal with serious and organised crime in our prisons and in our communities. We will be working with the Home Office on this project to improve prison security and social reform.
In April 2017, the Police Service of Northern Ireland and the Prison Service in Northern Ireland set up a special unit to address the delivery of drugs, mobile phones and contraband into prisons using drones. Has the Minister considered setting up such a unit? Has he also considered a radio blocker that would prevent drones entering prison property?
Absolutely. As I said, we have an intelligence unit dealing with organised crime in our prisons in a very concerted way across the estate. We are doing that alongside investing in anti-drone and mobile phone detection technology. Bringing this together will mean that we are able to deal with the threat that drones pose across the prison estate and, as I said to my hon. Friend the Member for North Dorset (Simon Hoare), in the community. Organised crime is not just in the prison estate, but often in the community.
Approximately 200 kg of drugs were smuggled into the England and Wales prison estate last year. Exactly what proportion does the Minister believe was smuggled in with the use of drones, and what specific support is he giving to HMP Bristol in Horfield in my constituency to help to deal with it?
It is difficult to tell exactly what proportion was brought in by drones. We do not know how many drones are successful; we know only those that are unsuccessful. We know that drones are a very serious and emerging threat because of the load they can carry into our prisons. Dealing with drugs in prisons is not just about our counter-drone strategy, but the overall illicit economy in prisons as a whole: mobile phones, which help to facilitate it; cracking down on corruption, where it exists, in the supply chain; and working with law enforcement. There is no single way to deal with it; we are going to do all those things across the piece to crack down.
11. What assessment he has made of the effect of overcrowding and staff numbers on recent serious disturbances in prisons.
I have seen a number of incidents in prisons. Every incident in any prison has its own unique situation, which is why we always investigate incidents in prisons very thoroughly. Obviously, we hold some of the most challenging individuals in society in our prisons, so incidents do sometimes occur. Our job is to minimise the risk and manage those incidents when they happen.
The chief inspector of prisons has said that staffing levels are simply too low for a decent regime to be run. We need prison officers on the frontline, not filling in for cuts elsewhere. Under this Government, we have lost 6,000 prison officers. Will the Minister take some of the responsibility for the crisis in prisons such as the one in Walton?
Obviously, I take a keen interest in the hon. Gentleman’s local prison, where the staff complement is exactly as it should be. It is one of the 10 pathfinder prisons in which we are implementing the new offender management model. I discussed the staffing situation there with the new national chair of the Prison Officers Association, and he commended the fact that staff numbers there are at full strength, but that does not mean that there is not more to do across the estate. We are halfway to our target of 2,500, and I am confident that we will achieve that.
The chief executive of the Prison Service has stated that, because of overcrowding, the Government will not be able to proceed with planned closures, throwing the financing of their prison building plan into disarray. In the light of concerns that the Ministry of Justice will not be able to build new prisons without selling off the old—the model on which its building plan was based—will the Minister today guarantee that no new prison places will be built from private funds?
The hon. Gentleman seems to have forgotten that we have a duty to house those who are sentenced by the courts. The prison population in England and Wales is 86,000; we have a duty to provide accommodation for them to serve their sentence in. We still have a commitment to investing £1.3 billion in the prison estate to create 10,000 additional prison places during this Parliament.
The Minister will be aware that one of the main causes of overcrowding in our prisons is the very long delays in our criminal justice system and the number of prisoners on remand. I wrote to him about Cordell Austin’s very long delay on remand; he was first arrested back in May 2016 under a very large joint enterprise case, but was acquitted in August this year. He is still in prison after nearly 18 months, and his oral hearing is not due until December; originally, we were told it would be next year. Are these not the sorts of cases that need attention, and do not hearings need to be prompt?
Justice for those going through the system has to be swift. May I correct an assumption in the question? The reason why the prison population has increased in England and Wales is that more people convicted of sex-related offences are serving longer sentences. Given our duty to protect the public, it is right that when these people are convicted by the courts, they serve their time. The hon. Lady mentioned a case in her constituency and what she perceives to be the injustice there, but I would not generalise from that case and say that that is why there is overcrowding in our prisons.
12. What recent steps he has taken in response to the finding of the chief inspector of prisons that no young offender institution inspected in the last year was safe to hold juveniles.
Improving safety and reducing the risk of serious incidents of violence and self-harm in youth custody are among my highest priorities, and we are committed to reforming custodial provision.
Given that no prison is safe for children, that over a third of children in prison have diagnoses of mental health conditions and that nearly 70% of children sent to prison reoffend within a year of release, does the Minister believe that it is time to find an alternative to sending children to prison?
I recognise that the recidivism rate of 69% is unacceptable, and that is why I am bringing forward two new secure schools, one in the north-west and one in the south-east of England. We recognise that we have a problem with the environment in the youth custodial estate; I have never hidden this from the House. The mental health issues are deep-seated. We are dealing with approximately 1,000 individuals who are locked up at any one time, and they can often be quite deeply damaged; I assure the hon. Lady that I am cognisant of that.
I very much welcome the idea of the secure school in the north-west. That is the right direction of travel, but will the Minister give a guarantee to the House and to the public that staffing levels will ensure that such schools both are safe and become places where we can break any reoffending cycle?
The hon. Gentleman is fully aware that the part of the world that he used to represent as a Mayor is quite ahead in dealing with individuals more holistically. Staffing is an issue. We have brought forward a youth custody officer role, which will start in 2018, and we are bringing forward another 80 people for a course to improve the type of care that those individuals can offer. We are under no illusions about the challenges. The guidelines on how we are procuring secure schools and their staffing arrangements will be announced in the new year.
13. What steps the Government is taking to ensure successful prosecutions for child abuse.
We are taking action across the Government to bring about a step change in the response to the sexual abuse and exploitation of children, including the commencement of the roll-out of recorded pre-trial cross-examination for vulnerable witnesses in Crown courts in January 2017. Further roll-out for vulnerable witnesses, which includes child victims of sexual abuse, will continue in the autumn.
It takes tremendous courage for children to come forward in such cases. The process of giving evidence is often extremely harrowing. They deserve justice, and when that does not happen they are left deeply disillusioned with the system. It is something I have seen in my own constituency. What further steps can the Government take to ensure that justice is done? In particular, will the Minister look at the operation of the criminal injuries compensation scheme to ensure that child abuse victims are treated fairly?
It is an important point that the nature of grooming can make signs of abuse particularly challenging to detect. That is something that CICA—the Criminal Injuries Compensation Authority—has to address. That is why it has consulted with experts and charities to produce recently published new guidance to ensure every victim gets the compensation to which they are entitled.
14. What progress the Government has made on improving the safety of prison officers.
We are working to keep our brave prison officers safe by strengthening the frontline. We had 20,000 individual officers in post at the end of August. That is an increase of 1,290 since October last year and the highest level since 2013. We are also giving our prison officers the tools that they need to do their job. We have invested in 5,600 body-worn cameras across the prison estate to protect and deter assaults.
In Chelmsford Prison, the number of attacks against staff rose to more than 120 last year, but since then it has recruited more staff and installed innovative mobile phone detectors and it will soon roll out a new digital initiative; where that has been piloted, attacks on prison officers have more than halved. Will the Minister join me in welcoming that progress to put staff safety first?
I certainly welcome the progress. I would like to visit Chelmsford—I make that offer to my hon. Friend. We want to go further: she will be aware that we are supporting the private member’s Bill introduced by the hon. Member for Rhondda (Chris Bryant) on emergency workers, which will increase penalties for assaults on prison officers.
16. What progress he is making on reviewing cases of prisoners serving a sentence of imprisonment for public protection.
We are making good progress in helping IPP prisoners to progress to eventual release. We have implemented measures such as individual psychology-led case reviews, increased access to offending behaviour programmes and we are increasing places on progression regimes, with an additional three regimes planned to come online at the end of March 2018.
On 18 October, the Select Committee on Justice heard that 760 released IPP prisoners were recalled in the past year, but 60% of those were quickly re-released. Does the Minister agree with the chair of the Parole Board that the threshold for recall is too low and should be reviewed to stop the revolving door for prisoners who have already long served their minimum tariff?
I do not agree that the threshold is too low. When an IPP prisoner is recalled, it is not because they were found, for example, hiding under their mother’s bed. It is often because there is a clear causal link to the behaviour exhibited at the time of the index offence. Our duty is to keep the public safe. Where there is any signal or any cause for concern, it is right that such prisoners are recalled into custody. However, the national probation service is working on a programme to help IPPs when they are released into the community to transition into the community and to reduce the incidence of recall in a way that protects the public, but also allows IPPs to rebuild their lives.
17. What steps the Government are taking to improve the court experience for victims and witnesses.
We are investing over £1 billion to bring our courts into the 21st century, to make them more sensitive to victims and witnesses and to deliver swifter and more effective justice.
I am grateful to the Minister for that response. What can be done to ensure that the courtroom environment and the wider environment of the court building itself help to put victims and witnesses at ease, and support them through the process of giving evidence?
My hon. Friend is absolutely right that we need to reduce the stress and trauma experienced by victims and witnesses. We are doing a range of things. First, we are establishing model waiting rooms for victims and witnesses so that they will feel less stressed and more comfortable, meaning that they are more likely to give compelling evidence. Secondly, in the courtroom itself, we are rolling out section 28 measures for pre-recorded cross-examination to Crown courts nationally. This autumn, we will extend that to victims of sexual offences or modern slavery offences in Leeds, Liverpool and Kingston upon Thames.
19. What recent changes his Department has made to community rehabilitation company contracts.
We changed CRC contracts earlier this year to better reflect the fixed costs that they were incurring. However, payments to CRCs are still below our original forecasts.
I am grateful for that answer. Will the Lord Chancellor and Secretary of State publish how much additional resource he has given to CRC companies in total, which CRC companies have received that additional resource, and what he intends them to do with the product they have been given?
The answer to the right hon. Gentleman’s last question is that we expect them to use that money to improve the delivery of services and to match the best CRCs, such as Cumbria, which recently received a very impressive report from the inspectorate. We did not award the CRCs a specific sum, but agreed to alter the contracts in such a way that we accepted a greater proportion of their costs as fixed. The figure of £277 million that is in public circulation is an estimate of how that adjustment might increase the total contract value, but that is based on certain assumptions about volumes and payment by results, and I reiterate that payments will still be well within the forecast budget.
I think that the House has savoured the treatise from the Secretary of State, and we are deeply obliged to him I call Stephen Morgan. He is not here. Peter Kyle? Not here either. Where are these fellows? How extraordinary. Well, all is not ill with the world because the hon. Member for Banbury (Victoria Prentis) is here.
23. What steps the Government are taking to reform the youth justice system.
We outlined our plans to reform youth justice in response to Charlie Taylor’s review last December. Since then we have created a new youth custody service that is responsible for the day-to-day running of the youth estate and committed £64 million towards its reform.
The Justice Committee heard this morning that a third of people on jobseeker’s allowance have criminal records. What further steps is the Secretary of State taking to ban the box?
The Ministry of Justice is trying to set an example by banning the box and treating ex-offenders on a par with any other applicant for a job. That example is being widely followed throughout the public service, and we look to the private sector to match it, because we believe that ex-offenders can contribute a great deal to the successful work of private sector companies.
T1. If he will make a statement on his departmental responsibilities.
Since the last Justice questions, it has been my pleasure to welcome the appointment of Lord Burnett of Maldon as Lord Chief Justice of England and Wales, and the historic appointment of Baroness Hale as President of the Supreme Court of the United Kingdom. Where she leads we hope that many others will follow. I look forward to working with them both to ensure that the judiciary’s essential role at the heart our nation continues to be championed and respected Further to the comments made a few moments ago by the Under-Secretary of State for Justice, my hon. Friend the Member for Bracknell (Dr Lee), about the new guidance issued by the Criminal Injuries Compensation Authority, I can tell Members that I have asked my Department to give full consideration to wider concerns that have been expressed in the House about the rules of the compensation scheme as part of my Department’s work to develop a strategy for victims, and in the light of recommendations we expect next year from the independent inquiry into child sexual abuse.
After last week’s “Panorama” investigation into the dangerous failings of the privatisation of probation, will the Minister halt any plans to outsource night-time supervision in probation hostels?
Of course we seek to get the best value for money for the taxpayer in all our services. I understand that we are hiring people to cover some night-time shifts in probation hostels. We will ensure that we bear in mind value for the taxpayer while also protecting the public.
T5. As my hon. Friend the Minister is aware, Kirkham Prison is a category D open prison in my constituency that works to enable prisoners to make the transition to life outside. What steps are the Government are taking to support Kirkham and other prisons to rehabilitate offenders and to improve prisons’ ways of operating?
In prisons across the estate, including Kirkham, we are empowering governors by giving them control over their budgets and holding them accountable for training and education outcomes so that we enable them to deliver rehabilitation.
The family courts are full of people representing themselves. The new President of the Supreme Court, Lady Justice Hale, has described the Government’s legal aid reforms as a “false economy”. Does not the Minister agree that restoring early legal aid would not only reduce the number of cases coming to court, but save court time? Will he guarantee that the legal aid review will include an analysis of the cost to the rest of the legal aid system that has resulted from the Government’s abolition of early legal aid?
It is certainly right that we need to try to reduce the number of cases getting into the family courts in the first place, especially given that witnesses and others involved are often more traumatised by the process of going to court. The terms of reference for the legal aid review have been clearly set out, and there is wide scope for the issues that the hon. Lady mentions to be taken into account, but I will not pre-empt or prejudice what the review will look at right now.
The exceptionally high cost to businesses of commercial litigation is good for commercial lawyers—perhaps I should declare an interest—but it is not good for businesses, whether they are large or small. One answer that has recently been developed is the use of commercial litigation financing. Will my right hon. Friend the Lord Chancellor look into ethical and other concerns surrounding that, as outlined by Lord Faulks in the other place recently?
We will be happy to look into that and to take account of any representations that my hon. Friend wishes to make.
T2. Why are the Government planning to give security companies and bailiffs the power of arrest, because that will be the result of privatising the collection of court fees? A petition opposing those plans has been signed by 16,000 people because they do not believe that either 150 jobs, or the safety and finances of vulnerable people, should be put at risk.
These are not in fact new powers; they have been in use across the country for many years. They apply to arrests relating to debt and community penalty breaches, and they must follow the issue of a warrant of arrest from the criminal courts. Any use of these powers is overseen by Her Majesty’s Courts and Tribunals Service.
Following the triumph of the Conservative manifesto at the election, may I congratulate the Lord Chancellor on finding another half-baked and unpopular policy to put before the electorate: giving prisoners the vote? Will he acknowledge that nobody is taking the vote away from prisoners—they are taking it away from themselves? If voting is so important to them, perhaps they should not commit the crimes that lead to them being sent to prison in the first place. I urge him to reject this ridiculous policy, which goes down like a lead balloon with the electorate.
The Government are preparing their position ahead of the December meeting of the Committee of Ministers of the Council of Europe. We will announce any changes in our position to Parliament in the usual way.
T3. What steps are the Department taking to ensure that there is adequate funding for youth justice services in places such as Warwickshire, which has seen significant funding cuts?
We spend more than £200 million a year on youth justice and, as I outlined earlier, we are spending an additional £64 million on the custodial estate. We are conscious of the difficulties within the custodial estate, but this is about not just the estate, but the community, which is why I have commissioned a report on the value of sport to the criminal justice system, and especially young people, which will be published in the new year.
Tomorrow sees the release of Mubarek Ali, who is a serial child sexual exploitation offender in Telford. Will the Secretary of State please confirm whether all that should be done has been done to protect the public and the victims concerned?
To the best of my knowledge, that has been done. Mr Ali is, of course, being released in accordance with the law having served the term that was set out by the judge in his case for the purposes of punishment and deterrence. However, if my hon. Friend or her constituents have any concerns about the circumstances of the release and the supervision arrangements that should follow, I ask her to bring them to my attention without delay.
T4. Sixty-one per cent. of women who leave prison after a sentence of less than 12 months are reconvicted in the first year. In my recent Westminster Hall debate on women leaving prison, the Minister made various commitments about new interventions and various reviews to support women in prison and those leaving it. When will those reviews be complete? When will there be a better, fuller programme to support women in and leaving prison?
The hon. Gentleman arranged a good and well-attended debate. He is aware that I have committed to producing a women’s strategy. It will be published once all the moving cogs of government are in place, and I can promise him that it will be about how we can do more in the community to prevent locking women up.
May I invite the Minister to join me in saying to our hon. Friend the Member for Shipley (Philip Davies) that most people in prison never voted and are unlikely to vote when they come out? By making it compulsory for them to register to vote, they are far more likely to think about other people, not just themselves.
We hope that all prisoners will be fully integrated into society when they come to be released from prison and will lead a law-abiding life of constructive citizenship. As I said a few moments ago, the Government will make clear their approach at the forthcoming Committee of Ministers meeting and in an announcement to Parliament in the usual fashion.
T7. Some 54,000 women lose their jobs each year due to pregnancy and maternity discrimination. The Secretary of State may remember the chaos of the early weeks of caring for a newborn, but the time limit for bringing an employment tribunal claim is just three months, so will he look again at this issue, as recommended by the Women and Equalities Committee, the Justice Committee and the Equality and Human Rights Commission, and extend the time limit for claims related to pregnancy and maternity discrimination?
I have looked into this important and sensitive area, and I have also spoken to my right hon. Friend the Member for Basingstoke (Mrs Miller), the Chair of the Women and Equalities Committee. I urge the hon. Member for East Dunbartonshire (Jo Swinson) to send me any evidence that putting the limit back to six months would actually make a difference, because some of the considerations that apply in relation to three months would also apply to six months.
Well, what a rich vein. I call Mr Dominic Grieve.
I welcome the news that the Government are again considering prisoners’ right to vote. My right hon. Friend the Secretary of State may find that this is a matter on which public opinion and the mood in this House has shifted. It is high time that we remedied something that places us in a very small category of countries. Most countries manage to allow their prisoners to vote—certainly those sentenced to short terms of imprisonment—without the world coming to an end, and it is an important tool for both civic participation and rehabilitation.
My right hon. and learned Friend expresses a view that he has held for a long time and has been clear about, and I am sure that he will be following the debate closely. When the Government have reached a view on our approach to the Committee of Ministers meeting, we will share that with Parliament.
T8. The Government have new proposals to limit legal costs and damages recovered in clinical negligence cases. Patient groups are extremely concerned this will mean serious cases involving older people, child deaths and stillbirths will be impossible to pursue. Will the Minister meet me and those groups to hear their concerns and to sort out the proposals?
Serious and sensitive though that matter undoubtedly is, it falls in large part to the Department of Health, but either myself or the Minister of State would be happy to discuss it further with the hon. Lady.
Following my ten-minute rule Bill in March calling for the reform of family law, including a robust enforcement of child arrangements orders, opening up the family courts in care proceedings and updating our anachronistic divorce laws, what progress have the Government made on their family law review, which was announced in the summer?
I thank my hon. Friend for her proposals and the thought that she has put into them. The time taken to conclude public family law cases has nearly halved since 2011. We are still working through very real issues with the relevant Departments, including the Department for Education. On private law, we are committed to facilitating the settlement of far more family disputes so that we avoid families, vulnerable witnesses and sometimes victims having to go through the trauma of court proceedings.
T10. Following a meeting with the Courts Minister, I received a letter from him last week that described Sunderland’s court building as below what would be expected, but that is putting it mildly. The court is more than 100 years old. It is damp, has very poor accessibility, and is wholly inadequate for victims and staff alike. Will he visit Sunderland and explain to the people of Sunderland, including my hon. Friend the Member for Sunderland Central (Julie Elliott), why they do not deserve better from his Department?
The hon. Lady raises her point tenaciously. I welcome the opportunity to sit down with her and the hon. Member for Sunderland Central (Julie Elliott) to look at the issue. We will ensure that the refurbishment is carried out as soon as reasonably practical. In the long term, we want to ensure that in her constituency and across the country we have the right courts in the right places, and with the right technology and refurbishment, to ensure that they deliver the best access to justice.
The reputation of our legal system partly depends on our respect for our international obligations. In advance of the Committee of Ministers, will my right hon. Friend the Secretary of State bear in mind that respecting the judgments of the European Court of Justice is a better guide for this country’s reputation than the amateur jurisprudence of the Dog and Duck?
The rule of law is at the heart of this country’s constitutional traditions and is expressed in the oath that I and every Lord Chancellor has to take. My hon. Friend will recall that the manifesto on which he, I and other Conservative colleagues stood earlier this year committed us to remaining party to the European convention on human rights for the remainder of this Parliament.
The recently published Bach commission report highlighted a number of serious issues relating to access to justice, including representation at inquests. In the light of tragic events such as Grenfell Tower and Hillsborough, will the Minister commit to providing legal aid for inquests in all cases when the state is funding one or more of the other parties?
I thank the hon. Lady for her question on this pertinent and salient point. Legal aid remains available for inquests through the exceptional case funding scheme. Although those decisions are obviously decided independently, I reassure her that more than half the applications in relation to inquest cases in 2016-17 were granted.
Full-body scanners that detect drugs that are concealed within the person are successfully used across America. The Ministry of Justice has trialled one scanner. Has there been an evaluation, will we see more trials, and could the scanners be used on a mobile basis?
As my right hon. Friend the Secretary of State said in his party conference speech, one scanner was trialled in Wandsworth and we are looking at doing that across the entire estate. There has been an evaluation. Full-body scanners are not the only way to combat drugs and to prevent drugs from getting into prisons, as using intelligence, going after organised crime and working with law enforcement are also ways of dealing with drugs. We will use every measure possible to make sure that we stop the epidemic of drugs in our prisons and the flow of drugs into them.
The Minister will now be aware that there is a covenant on the land on the Baglan industrial park, in my constituency, where he wishes to build a prison. That covenant states that the land should not be used “other than as an industrial park”, or for “any offensive, noisy or dangerous trade business manufacture or occupation or for any purpose or in any manner which may be a nuisance to the Agency or the occupiers of neighbouring or adjacent premises.” Does he agree that the covenant is the final nail in the coffin of the Ministry’s plans to build a prison on the Baglan industrial park?
The hon. Gentleman is incredibly persistent and tenacious in fighting for his constituents. Before moving ahead with any building project, we will of course carry out all the necessary legal and local authority searches. If they turn up any objections, we will take those into account accordingly.
With a population of more than 80,000, our prisons are bursting at the seams, yet according to the Ministry of Justice’s own figures, we transferred a pathetic 110 foreign national prisoners to prison in their own country last year, and this year’s number is 56. Surely we can do better than that.
I think my hon. Friend is referring to the numbers transferred under prisoner transfer agreements. Last year, the overall number of prisoners deported from this country was a record high. We continue to work consistently with foreign Governments, and there is an inter-ministerial group that links not only the Department for International Development, the Foreign Office and the MOJ, but the Home Office, to make sure that we iron out all the issues that can be impediments to transferring prisoners to serve their sentence abroad. I assure him that this is a key focus that we will continue to pursue.
(Urgent Question): To ask the Secretary of State for Digital, Culture, Media and Sport to make a statement on gaming machines and social responsibility.
I am pleased to inform the House that this morning I published a consultation on proposals for changes to gaming machines and social responsibility measures across the gambling industry. The consultation will run for 12 weeks, during which the general public, industry and all other interested parties will be able to voice their views on the questions raised. I appreciate that some might not understand why we have to run a consultation, but this is the right process by which to proceed if we are to address this issue thoroughly and properly As hon. Members know, the Government announced a review of gaming machines and social responsibility measures in October 2016. I am grateful to all those who responded, including individual former addicts, faith groups, local authorities and the bookmakers. The objective of the review was to ensure we have the right balance between a sector that can grow and contribute to the economy and one that is socially responsible and doing all it should to protect consumers and communities Although our consultation sets out a package of measures to protect vulnerable people from harm, the main area of interest has been the stake for B2 gaming machines, known as fixed odds betting terminals. We believe that the current regulation of FOBTs is inappropriate to achieve our stated objective of protecting consumers and wider communities. We are therefore consulting on regulatory changes to the maximum stake, looking at options between £50 and £2, to reduce the potential for large losses and therefore the harmful impact on the player, their families, and the wider community We are aware that the factors that influence the extent of harm to the player are wider than one product or a limited set of parameters such as stakes and prizes, and include factors around the player, the environment and the product. We are therefore also consulting on corresponding social responsibility measures, on player protections in the online sector and on a package of measures on gambling advertising. Within this package, we want the industry, the regulator and charities to continue to drive the social responsibility agenda, to ensure that all is being done to protect players and that those in trouble can access the treatment and support they need. The consultation will close on 23 January 2018, following which the Government will consider their final proposals and make an announcement in due course.
Thank you for granting this urgent question, Mr Speaker First, I praise the Minister for the manner in which she has conducted this review. She has kept me and other Members of the House informed throughout the entire process and has shown exemplary attention to detail. It is a shame, therefore, that she does not have a completely free hand in this policy, because we think the outcome could have been very different. The Government’s response, after a year-long process of delay after delay, and hundreds of submissions from industry, local government, charities, campaigners and Church groups, among others, is deeply disappointing. Instead of taking firm and reasonable action to counter the well known problems with FOBTs, the Government have simply kicked the process further into the long grass and announced another consultation extending beyond the Budget Look at the public policy challenge the House faces: 430,000 people are addicted to gambling—up a third in three years—and a further 2 million problem gamblers are at risk of developing an addiction. Some £1.8 billion is lost on FOBTs each year—an increase of 79% over the past eight years. The gambling industry’s yield—the amount it wins in bets—has increased to £13.8 billion, up from £8.3 billion in 2009, yet it paid only £10 million for education and treatment services this year, through a voluntary levy. Worst of all, there are 450,000 children who gamble at least once a week. This situation requires action now There is an old maxim that the bookies always win, and they have won again today. Their shares are up and their lobbyists were grinning from ear to ear in their TV interviews this morning. We have consistently said to the Government that our gambling laws are no longer fit for purpose. There has been an explosion of online and digital-platform gambling that the Gambling Act 2005 could not have anticipated. We have offered to work with the Government on a cross-party basis to make our laws fit for the digital age. The report published today could have been a significant starting point for the process, because even by the most conservative estimates, the associated harms and costs of gambling addiction are believed to total more than £1 billion a year—and I bet the true figure is far higher. The impact is felt not only through the losses that gamblers accrue but through NHS and treatment costs, in our communities as families struggle and break down, and in our police forces, which deal with the resultant crime What discussions has the Minister had with the Home Office on how to measure gambling-related crime? Does she know how many people have received counselling or treatment for gambling addiction in the past 12 months, since her review has taken place? Does she know how much treatment for gambling addiction costs the NHS each year? She has said from the Dispatch Box on several occasions that the gambling industry has not done enough to fund research, education and treatment of gambling and gambling-related harm, but she has again failed to bring the industry to heel. She could have introduced a compulsory levy, and we would have supported her on that. This is a missed opportunity to settle the issue of FOBTs once and for all. Quite frankly, we expected more. The Government had a strong hand to play, but this is a busted flush.
I thank the hon. Gentleman for the kind words at the start of his speech. I am pleased to see his conversion on this issue. He was of course a Minister in the Government who passed the legislation that liberalised gambling and caused the harm that many people have suffered as a consequence of FOBTs. It is this Government who are taking action I appreciate the hon. Gentleman’s concerns about the fact that we have announced a consultation, but the fact is that in 2005 the Labour Government rushed through the Gambling Act without paying proper attention to the issues with these machines, which then led to their proliferation. FOBTs did not exist in 1997, when the Labour party came to power. It is this Government who have recognised the harm that has been caused and who are taking action. There will be a consultation; it is due process, and I expect people to contribute to that process.
I welcome the announcement of the consultation, particularly as there is now information about the effect of category B2 machines that did not exist when the Culture, Media and Sport Committee looked into the matter around five years ago. Will the Minister confirm that the Government’s position remains that any future decisions will be evidence-based?
I can confirm that to be the case. The call for evidence brought in many people’s views and made the need to take action very clear. The consultation sets out four options for the reduction in stakes, but the call for evidence makes it certain that the status quo will not be maintained.
I fear that the Government have missed yet another opportunity to tackle this problem. By announcing yet another consultation, they are attempting to kick this matter further into the long grass. The move to cut the maximum stake, while welcome, does not go far enough. In Scotland, £4 billion is spent every year on 2,000 gaming machines, and this is at a time when more people are being identified as problem or at-risk gamblers. Action is needed now. If this Parliament is unwilling to act, the Scottish Parliament is. Will the Minister start today the process of devolving all gambling powers to the Scottish Parliament?
We have already devolved a number of powers to the Scottish Parliament that it has yet to take up.
I congratulate the Minister on her announcement today. Does she not find the hypocrisy of the Opposition astonishing, given that it was the Labour Government who doubled the number of fixed odds betting terminals in shops and tried to withdraw the powers of local councils to stop betting shops being placed on high streets? Is their attitude not extraordinary at this stage?
I will be perfectly honest: I find their attitude disappointing. We have worked on this issue on a cross-party basis for a number of years. I have poured heart and soul into this consultation and feel that we have definitely taken the matter much further forward than ever before. It is this Government who are taking action on an aspect of gambling that brings great concern into our communities and affects individuals, families and society as a whole. It is this Government who are dealing with it.
I refer Members to my entry in the Register of Members’ Financial Interests and to the fact that I am co-chair of the all-party group on racing and bloodstock industries. The Minister will know that horse-racing relies heavily on the levy from bookmakers and on advertising, sponsorship and media rights. Will she assure me that she will work with the industry—with horse-racing—in the coming weeks to ensure that, while protecting those who are vulnerable to gambling addiction, which we all want to do, we protect jobs, investment and economic benefits that my constituency receives through being home to the best racecourse in the country at Haydock Park?
Horse-racing is an incredibly important sector within my portfolio, and my right hon. Friend the Minister for Digital would not let me forget that, as he has one of the largest racecourses in his constituency. We do not envisage these changes having a particularly negative impact on horse-racing—in fact, they may well encourage bookmakers and others to focus more on horse-racing.
The hon. Member for Shipley (Philip Davies) is clutching some newspaper article from which, doubtless, he wishes to quote.
May I urge the Minister not to listen to the shadow Secretary of State? He and I were both on the Select Committee that looked into these matters. and he was so interested in problem gambling that he did not even turn up to one evidence session. Perhaps if he had, he would be a bit more knowledgeable on the subject Over the summer, the Gambling Commission published its report on problem gambling. It found that the highest levels of problem gambling were in spread betting, followed by betting through a betting exchange, then playing poker in pubs or clubs, then betting online on events other than sports or horse or greyhound-racing, and only then by playing gaming machines in bookmakers. Those much higher levels of problem gambling all come with unlimited stakes and unlimited potential winnings. If the Government are so obsessed with evidence, why are they focusing so much on betting machines in bookmakers? Or are they just playing to the gallery, which most of us know this is really all about?
May I gently urge my hon. Friend to read the consultation document we published today? If he does, he will discover that this is not just about problem gamblers, but about those who may be at risk from harmful gambling. One thing we know is that there are many more people out there who are at risk of harmful gambling, of which FOBTs are just one aspect. The consultation delivers a package of measures on all areas of gambling and the risks that they may cause.
My constituency has 54 FOBTs. Some £2.5 million was lost on these machines last year and £15 million has been lost since 2008 in a deprived constituency. The recent report by the Institute for Public Policy Research and GambleAware said that it is costing the UK £1.2 billion to look after the victims of gambling—people who are addicted and have various problems. What assessment has the Minister done of the cost to the UK Government of looking after people who will continue to be affected if the £50 option is chosen, because it is still such a high stake?
I congratulate the hon. Gentleman on his work on the subject. He is a long-time campaigner on the issues of FOBTs and has done an excellent job standing up for his constituents who have become the victims of gambling addiction. Four options have been set out in the consultation paper—£50, £30, £20 and £2—and separate impact assessments have been published alongside.
I am pleased to hear the Minister speak about protecting the vulnerable from harm. The Centre for Social Justice report, “Lowering the Stake on Fixed Odds Betting Terminals” says that “the high stakes of FOBTs have compounded the social issues perpetuated by gambling.” As the Minister says, the harm of FOBTs goes way beyond addicted gamblers to affect many families and children disastrously. I implore the Minister to consider that a reduction of £50 will not resolve the issue for those people.
It is clear that we have listened to all the public concerns about the risks of high-stake gambling, which is why we have published this overall package of measures. I encourage my hon. Friend and others to make their views clear on the individual stake options as part of the consultation.
Given the danger that people who want to make large bets will be pushed online to the less regulated area, would the Government consider extending the consultation to address stakes in online equivalents such as blackjack, in which thousands of pounds can be bet on one hand and lost?
The consultation addresses online gambling, in which there has been huge growth. We have announced as part of today’s package that we expect to see stricter protections as part of the licensing conditions for online gambling operators. I hope that the hon. Lady will look at those measures and respond accordingly.
I am the other co-chair of the all-party group on racing and bloodstock industries. I also have the honour of representing the constituency that is home to Cheltenham racecourse, which I would say is the best racecourse in the world I am a little bit concerned by the Minister’s suggestion that bookmakers might be able to transfer bets to racing from FOBTs. I do not think there is any evidence that that would happen, although I very much hope that it would. I stress the importance to horse-racing of the support of bookmakers. That is not unique to the United Kingdom; it is the same across the world. When the Minister takes her decision, will she consult fully with all strands of horse-racing, so that we do not end up throwing the baby out with the bathwater?
There is no intention to damage the horse-racing sector with this consultation. I encourage my hon. Friend and other hon. Members to look at the letter that was sent to me by Paddy Power’s chief executive, who recognises that the issue has become toxic for the industry and may well be driving punters away from the shops. Members of the bookmaking industry are keen to get involved with this, and there is certainly no intention to damage horse-racing or any other sporting industry.
I thank the Minister for the consultation paper, which we will study with interest. Before she makes her final decision, will she carry out an impact assessment of whether these measures will result in job losses in betting shops across the United Kingdom? Also, there are five-and-a-half lines on television broadcasting in this document, yet everyone knows that gambling adverts are doing more damage than FOBTs.
We will assess all the evidence that we receive as part of the consultation. The impact assessment has also been published today alongside the consultation document. Advertising regulations are in place. We have announced today, as part of the package of measures, that there will be a responsible gambling campaign funded by the broadcasting industry of a scale that is larger than any Government public awareness campaign. We expect that to be prevalent within the parameters in which gambling adverts are allowed. It is a fact that people can see gambling adverts during live sporting events, and we are addressing some issues around their tone and content. I think it is fair to say that, although such adverts might be annoying, the content is not beyond what is allowed by regulation. We will keep a close eye on that situation.
Is the Minister aware that many people in the Isle of Wight would like to see the limit of FOBTs dropped as soon as possible, preferably to £2. There are 55 such machines in my constituency, and they have taken £19 million out of our economy since 2008. That money would frankly be best spent elsewhere. Will she comment on the gambling industry’s irresponsible and deeply selfish attitude? It has become addicted to the profits that these machines generate. That addiction to those profits comes from getting people—generally at the poorer end of the spectrum—addicted to this style of gambling. It is deeply troubling.
I hope that my hon. Friend and many other people across the Isle of Wight who have been affected by these machines take a look at the consultation paper and reply. This is an opportunity for the gambling industry to take a long hard look at itself and reassess what it offers the British punter. We shall see what happens over the next 12 weeks.
I recently visited the National Problem Gambling Clinic, and commend the work being done by Dr Henrietta Bowden-Jones in supporting people affected by gambling-related harm. However, this is the only such clinic in the entire United Kingdom. Does the Minister agree that more help needs to be provided for individuals and families who have been affected by problem gambling? One way of doing this would be to put a statutory levy on bookmakers, so that they contribute more than the £8 million that they currently contribute on the back of the hundreds of millions of pounds of profit that they make annually.
I agree. We certainly mention some issues around the levy in the consultation document. At the moment, bookmakers have to contribute 0.1% of their profits. If they did that, it would amount to somewhere in the region of £13 million to £14 million, but that is currently not happening across the board. We have made it very clear in the consultation that we want that to happen. If it does not happen, we will certainly consider the introduction of a mandatory levy.
I strongly welcome the consultation. Many of us remember the disastrous legislation on FOBTs under the last Labour Government, and their intention to bring forward a generation of super-casinos. I urge the Minister to look at online gambling where people can gamble repeatedly through the night on online casinos while drinking.
We are looking at the issue of online gambling. As it stands, about 10% of the adult population participate in online gambling and betting, and 5.1% of those players are problem gamblers. That compares to 11.5% of FOBT users who are problem gamblers. We are addressing both issues, but, although we have seen a growth in online gambling, we know where the current issues lie.
On Thursday, I visited a residential gambling rehabilitation centre in my constituency, which provides a 14-week programme for about half a dozen residents at any one time. It is run by the Gordon Moody Association, and demand for the service outstrips what it can offer. Will the Minister commend the vital work of the Gordon Moody Association and commit to a compulsory levy on the industry to fund such vital work?
I am happy to commend the work being done in the hon. Lady’s constituency. There is a shortage of places dealing specifically with gambling addiction. We would like to see the situation vastly improved, and we are talking to colleagues in the Department of Health to ensure that that happens. I hope the hon. Lady heard my answer to the previous question, which was that the industry should contribute more on a voluntary basis, but if it does not, we will consider a mandatory levy.
I commend to the Minister the “Victoria Derbyshire” programme this morning. At 9.15 am the hon. Member for Swansea East (Carolyn Harris) spoke, and at 10.15 am a man called Terry spoke about how, if the stakes were £2, he would not have lost everything. We ought to bring in Terry’s law. My prediction is that, on a free vote, £2 would get through and that, on a whipped vote, it would also get through.
I am grateful to my hon. Friend for that television and whipping advice. We are looking at all these issues, and the different options are there. The £2 figure is in the consultation paper, and that is something there has been great public demand for. We are going through a consultation process; everybody will be able to submit their views to it, and we will make a decision during the next year.
May I first thank the Minister for the helpful way she has worked with me as chair of the all-party group on FOBTs to get us to the point we are at now? She will be well aware of my concerns about the addiction to FOBTs and the consequences of that addiction. There is insufficient treatment for addicts and no residential treatment at all for women. There is the potential for criminal activity to feed the habit and for vandalism as a result of frustration about the habit, and there is a worrying opportunity for money laundering. Addicts also often put pressure on the benefits system because of their chaotic lives, and mental health issues often prevent them from working. Before the final decision is made, I urge the Minister to consider all those social consequences of this dreadful addiction to these dreadful machines.
May I first congratulate the hon. Lady on the work that she and many others on both sides of the House and in both Houses have done on this issue in the all-party group? Many of the issues she has raised are precisely why the Government are taking action and why we have published the consultation today. It is important to emphasise that we recognise that this is about not just the gambler—whether they are a problem gambler or a harmful gambler—but the associated consequences for their family and friends and for the communities in which they live.
Does my hon. Friend agree that bookmakers provide considerable employment, contribute to the economy and, for the vast majority of gamblers, provide a bit of enjoyment and light fun? We should not forget that.
That is why we are taking the balanced approach of making sure that we continue to support a socially responsible sector while protecting the most vulnerable in society.
In just one borough—Blaenau Gwent—nearly £1.5 million was lost to FOBTs last year, so I ask the Minister not to bow to industry pressure and to cap the top stake at £2.
I am grateful to the hon. Gentleman for his views. I encourage him to make those points, particularly as they relate to his constituency, as part of the consultation. We are looking at a whole variety of options when it comes to the stake, and I urge him and others to make their views known as part of the call for responses in the next 12 weeks.
It is so important that we have the right, strong protections in place around online gambling, particularly where young people and some of the most vulnerable people are concerned, so I welcome the Minister’s announcement today. Will she provide further details to the House about the responsible gambling advertising campaign her Department has announced today?
GambleAware, the Advertising Association, broadcasters and the gambling industry will come together to draw up a multimillion-pound, two-year responsible advertising campaign. It will have a budget of between £5 million and £7 million in each year, and it will include television ads, including around live sport, as well as ads for radio, cinema and print online.
I consider the Minister a friend, not least because we support the same football team—Tottenham Hotspur, the best in the premiership—but she will know that I have campaigned for over seven years on this issue, and in my view it was a complete mistake to introduce these machines to the high street. This is not just about a reduction in the stake, so will she say a little more about reducing the proliferation of betting shops across our country and our high streets?
Mr Speaker, I am not sure that the reference to my supporting Tottenham Hotspur endears me to you, but I thank the right hon. Gentleman for his comments. We looked at the proliferation of bookmakers in our high streets as part of our call for evidence. We concluded that local authorities do have the powers to address the issue. However, taking the whole package of measures, I am sure there will be a reduction if the stakes are reduced significantly in the future.
I call Mr Peter Bone.
Thank you, Mr Speaker, for calling another Spurs fan immediately. Your neutrality in the Chair, of course, would not prevent you from intervening. This excellent Minister is bringing forward a really sensible consultation. What worries me is that if we make the wrong decision, we may make the situation worse by driving problem gamblers out of betting shops, which are a controlled environment, and towards online gambling. The consultation is right, but we should look at that issue as part of it.
Online gambling has, in many respects, a better opportunity to protect players, because sites have all the details of players’ practices. Obviously, as part of the consultation, we are going to look at how we can protect online gamblers, but we definitely have more opportunity to do that than we do to protect somebody going in and out of different bookmakers.
The Minister will know that the scale of harm being inflicted by these appalling machines in my area prompted Newham Council to lead calls for a £2 maximum stake. We have heard fears today that, if that happens, the number of betting shops could be almost halved around the country. May I reassure the Minister that if the number of betting shops in East Ham’s high street was halved, there would still be too many? Will she please get on and introduce the £2 maximum stake as quickly as possible?
I thank the right hon. Gentleman for his question, because it gives me an opportunity to thank Newham Council for the work it has done. I have met the leader of the council as part of the call for evidence and as part of his representation of other local authorities, including my own, which has signed up to the issues around stakes. This is all part of the consultation process, and I encourage Newham and all the other local authorities to let their views be known.
Will the consultation look at the costs that fixed odds betting terminals put on the police, mental health services and the families of vulnerable gamblers—especially the children?
That is exactly what we are doing. As part of the call for evidence, a lot of those issues came through. My hon. Friend is a member of the Health Committee, which took evidence from a professor with expertise in this issue, who, sadly, related some of the facts around suicides related to gambling. It is really important that we remember that it is not just the person who is gambling who faces the consequences of harm but the families and the communities they live in. That is why we are trying to take a balanced approach and having a full, open consultation about ensuring we have a socially responsible sector that protects those most at risk of harm.
I thank the Minister for her statement. In discussions I have had with her, she has shared the concern many of us in the House have about the need to have drastic and clear changes in the management of FOBTs. My hon. Friend the Member for North Antrim (Ian Paisley) referred to online gambling, and perhaps I could urge the Minister to take more cognisance of that issue. None the less, the consultation is important, and 450,000 addicts cannot be ignored. The Minister mentioned the figure of between £2 and £50 for a stake. I urge her to make sure the stake is closer to the lower figure than the higher figure and to reduce the harmful addiction we have to gambling in this country.
I am grateful to the hon. Gentleman for his question, and I hope he and many others will respond to the consultation with their views. We are trying to ensure that we take all people’s views into account before we make a decision on what the stake is.
My constituents will be shocked by the figures the deputy Leader of the Opposition shared with the House. He said there were 430,000 problem gamblers and that the number had gone up by a third in recent years. Are those numbers that the Government recognise? What do the Government say are the causes of this? Were the Minister to limit the stakes on FOBTs to £2, how many fewer problem gamblers would there be?
The deputy Leader of the Opposition was absolutely correct—those are Government figures. There are 430,000 problem gamblers in Great Britain and a further 2 million who might be at risk. About 50,000 call the national helpline on gambling addiction every year, and about 8,000 are getting treatment—but that figure does not include those who get treatment under the NHS system. We are looking at all the areas of harm around this. It is not just about problem gamblers: it is also about those at risk of harmful gambling, and the consequences for and impact on those individuals and their families. I encourage my hon. Friend to look at the consultation and the impact assessment and come to a view on which will be the best stake, and encourage his constituents to do the same.
Given that £35 million was frittered away in one year in Glasgow on fixed odds betting terminals, I am disappointed that we are going for another consultation on this and not getting action on it. If the Government are in listening mode, may I make a plea that we do move to cutting the stake to £2, and will the Minister come to Baillieston’s Main Street, which is littered with betting terminals? People are obsessed with and actually addicted to these machines, so we can take action sooner rather than later?
We are following due process on this issue. It is really important that we do not rush measures through, because we have seen that hastily made legislation in this area can cause great impact and great harm, as with the Gambling Act 2005.
On a point of order, Mr Speaker. Have you had any indication from the Government on whether they intend coming to this House to make a statement about the British connection in the Robert Mueller investigation into Russian subversion of the American presidential election, and in particular, the apparent role of an academic, a Professor Mifsud, who met in London more than once, we understand, George Papadopolous, who has already pleaded guilty to misleading the FBI in connection with Russian help in the presidential election?
I am grateful to the right hon. Gentleman for his point of order and for his notice a few moments ago of his intention to raise it. The short answer is that I have received no indication from any Minister of an intention to come to the House to make a statement on that matter. However, not being unconscious of the indefatigability of the right hon. Gentleman, I am confident that if the matter is not brought to the House, he will try to ensure, by one means or t’other, that it is.
On a point of order, Mr Speaker. I seek the advice of the Chair on a situation that has arisen with a constituency matter. Constituents bought tickets from an organisation known as Viagogo, and then wanted a refund for those tickets. They were unsuccessful in that, and sought the advice of my office. My office has been unsuccessful in contacting the organisation, whether via email, telephone call, or even being able to find an address to write to. I seek your advice, Mr Speaker, on what can be done to encourage this organisation to respond to my constituency office in standing up for my constituents.
Whether it is incompetence or discourtesy, one knows not, but I think that most people would be interested to know, because of course it could happen to the constituent of any Member. The Minister is poised ready like a panther to pounce, and it would be a pity to disappoint the right hon. Gentleman. Let’s hear the fella.
Thank you, Mr Speaker. As the Minister responsible for this policy area, I would be very happy to meet the hon. Member for Torfaen (Nick Thomas-Symonds) and see what we could do to ensure that he gets the appropriate response to his constituents’ concerns.
Ordinarily I find that if one is sufficiently persistent and demonstrates by one’s behaviour—entirely lawfully, I hasten to add—that there is no question of one’s going away, an institution will, in the end, tend to think that it is best to respond. I have had some modest experience of these matters in the past when seeking to secure a refund for a very elderly constituent in relation, I think, to a satellite dish. In the first instance, the company thought it proper simply to ignore my representations, but I made approaches with notable and perhaps spectacular regularity, as a consequence of which, in the end—this was probably 15 years ago—my constituent was able to seek redress. I never secured anything remotely approximating an apology from the company, but in a sense that mattered not. My constituent got his refund, and I rather doubt that the company would have tried to play the same game, at any rate in relation to any of my constituents, again. If I was able to succeed, I am confident that the hon. Member for Torfaen (Nick Thomas-Symonds), with due persistence, will also be able to do so.
Ah yes, I remember it well.
I am always grateful to the hon. Member for Bolsover (Mr Skinner) for his encouragement from a sedentary position.
I beg to move, That leave be given to bring in a Bill to introduce limits on the age of tyres on buses and coaches; and for connected purposes I heard your homily, Mr Speaker, about the benefits of persistence, and I hope that the coach and bus industry has heard it too This Bill would make it unlawful to operate a public service vehicle with tyres that exceed the age of 10 years, require the annual MOT to check and record the age of the tyres, and give traffic commissioners powers of enforcement to sanction any public service vehicle operators found to be using tyres more than 10 years old Late on 10 September 2012, just over five years ago, my constituent Frances Molloy lost her 18-year-old son, Michael. He was killed when he was returning home as a passenger on a coach from Bestival, an annual music festival on the Isle of Wight. Two other people, Kerry Ogden, who was 23, and the coach driver Colin Daulby, who was 63, also lost their lives. Others were seriously injured, some in life-changing ways. The crash was caused when the front nearside tyre of the coach burst on the northbound A3, causing the vehicle to swerve out of control, mount an embankment and strike a tree The Surrey coroner, Richard Travers, found on 16 July 2013 that the crash was caused by a 19 and a half-year-old tyre that had recently been fitted to the coach. It had 40% of its tread intact and was thus being used entirely lawfully. The coroner found, on the basis of the evidence before him, that it had burst catastrophically because it had perished by reason of its age. I say again that this tyre was being lawfully used. It had no outward sign to show the perilous condition that it was in fact in. It was older than my 18-year-old constituent, Michael Molloy The Surrey coroner was so concerned about the facts as he found them that he wrote to the then Secretary of State for Transport under rule 43 of the coroners’ rules to raise: “A concern by which, in his opinion, there is a risk that future deaths could occur unless action is taken.” He went on to express his concern that: “Public Service Vehicles carrying passengers are able perfectly legally to drive on tyres that have no restriction as to their age and which, by reason of their age may be in a perilously dangerous condition which there is no realistic means of detecting” This was not the first such rule 43 letter received by the Secretary of State for Transport concerning the dangers of ageing tyres. The Gloucester coroner had written, following an inquest he conducted in July 2010, concerning the dangers of ageing tyres causing death When I discussed all this with Michael’s mother, Frances Molloy, following the inquest verdicts at that time, I found it hard to believe that the use of such a potentially dangerous old tyre was in fact lawful. The fact that it was lawful represents a lacuna in our road safety legislation. I quickly became convinced that this gap can and should be closed. I took Frances Molloy and David Price, an expert forensic accident investigator who had given evidence at Michael’s inquest, to see the right hon. Member for Derbyshire Dales (Sir Patrick McLoughlin), who was then the Transport Secretary, to ask him to ban such potentially dangerous old tyres from our roads Banning such tyres would cost the Government nothing, because the date of manufacture is printed on the side of each tyre and can be easily checked at an MOT or whenever a vehicle is stopped by the authorities. It is not as though one would have to take a sample from the tyre and test it in a laboratory. The date is printed on the side of the tyre. Such a measure would save lives, because it would remove dangerous old tyres from our roads. I believe that had such a measure been in place before the Bestival crash, the deaths that resulted from it could have been prevented I thought then, and I think now, that the case for doing this is compelling. It was disappointing, then, that the Government at the time simply produced guidance that “strongly recommends that tyres over 10 years old should not be fitted to the front axles of buses and coaches.” The guidance goes on to state: “Such tyres should be fitted only to the rear axles of vehicles as part of a twin tyre combination.” Although doing so would certainly improve safety and perhaps stop accidents of the catastrophic nature of the Bestival crash, the guidance does not exactly send a clear signal. I had hoped that, following my representations, the signal that the Government sent would be much clearer. I believe that my constituent Frances Molloy, and the campaign that she fronts, also expects more to be done. Making the use of such dangerous old tyres unlawful is the only clear signal that will have the desired effect New Ministers are now in post, so I say to the Government: can we just get on and do this? The Government will find widespread support if they back this measure. My constituent Frances Molloy has campaigned for improved tyre safety non-stop since her son Michael’s death. This summer, she launched the Tyred campaign to ban the fitting of tyres that are more than 10 years old to public service vehicles. Merseyside is clearly behind the campaign. Liverpool City Council and Mayor Anderson, Liverpool city region and Mayor Rotheram, Knowsley Metropolitan Borough Council, Sefton Metropolitan Borough Council and Wirral Metropolitan Borough Council have all passed motions backing the campaign. In September, Mayor Rotheram and Merseytravel announced that they had secured agreement from all their operators to ban old tyres from all public service vehicles operating on their network across Merseyside Across our nation, bus and coach operators such as National Express and Big Green Coach are signed up. Smaller regional operators such as Liverpool City Sights have come on board, and more councils and companies will back this effort. The change will be made area by area and company by company, but it would be so much better if the Government would simply accept that these old tyres kill and agree to ban them by supporting the proposed legislation Michael Molloy was a talented and creative young writer and musician, who was just making his way in that exciting world. His life was full of enjoyment, love, hope and promise, but it was needlessly cut short, tragically, in a totally avoidable crash. His mother Frances is heartbroken. She thought that coach travel was a safe form of public transport, but the coach to which she entrusted her son turned out to be a death trap because of a 19 and a half-year-old tyre that no one could see was going to burst as a result of the deterioration caused by its age. Let those of us who are now in this House take steps to ensure that no other family has to endure what Frances has endured. Old tyres kill, so let us get them off our coaches and buses, and let us get them off our roads. I commend the motion to the House Question put and agreed to. Ordered, That Maria Eagle, Mr George Howarth, Mrs Louise Ellman, Luciana Berger, Stephen Twigg, Ms Angela Eagle, Alison McGovern, Dan Carden, Bill Esterson, Ms Marie Rimmer, Jack Dromey and Naz Shah present the Bill Maria Eagle accordingly presented the Bill Bill read the First time; to be read a Second time on Friday 1 December, and to be printed (Bill 119). Finance Bill (Programme ) (No. 2) Motion made, and Question put forthwith (Standing Order No. 83A(7)), That the Order of 12 September 2017 (Finance Bill (Programme)) be varied as follows: (1) Paragraphs (10) and (11) of the Order shall be omitted (2) Proceedings on Consideration shall be taken in the order shown in the first column of the following Table (3) Each part of the proceedings shall (so far as not previously concluded) be brought to a conclusion at the times specified in the second column of the Table TABLE Proceedings Time for conclusion of proceedings New Clauses, new Schedules and amendments relating to deeming individuals to be domiciled in the United Kingdom or to settlements with a settlor domiciled outside the United Kingdom at any time 3.00 p.m. on the day on which the proceedings are commenced New Clauses, new Schedules and amendments relating to the tax treatment of payments or benefits received in connection with the termination of an employment or a change in the duties in, or earnings from, an employment 4.30 p.m. on that day New Clauses, new Schedules and amendments relating to digital reporting and record-keeping; remaining new Clauses, new Schedules and amendments to Clauses and Schedules; remaining proceedings on Consideration 6.00 p.m. on that day (4) Any proceedings in legislative grand committee shall (so far as not previously concluded) be brought to a conclusion at 6.00 p.m. on the day on which proceedings on Consideration are commenced. (5) Proceedings on Third Reading shall (so far as not previously concluded) be brought to a conclusion at 7.00 p.m. on the day on which proceedings on Consideration are commenced.—(Graham Stuart.) Question agreed to.
I beg to move, That the clause be read a Second time.
With this it will be convenient to consider Government amendment 17.
Proceedings on this Bill started in March, but we are now drawing to a close. The Bill’s progress was interrupted by the general election. Not much happened to it in the post-election period, but it was brought back in September, and now we are moving, to use the Minister’s phrase, towards the denouement of the debate To solve a problem, it is first important to recognise that there is a problem. I think that that sums up the debate surrounding the Government’s deemed domicile measures—the Government cannot see that there is a problem. Non-dom status is a hangover from the days of the British Empire. Non-dom tax status was introduced in 1799 to allow British colonialists with foreign property to shelter it from wartime taxes. These days, non-doms are individuals who live in the UK but claim to have a permanent home in another country. There is no statutory definition of a non-dom; the status depends on circumstantial evidence Her Majesty’s Revenue and Customs says that 121,000 individuals claimed non-domiciled taxpayer status via their self-assessment returns in 2014-15. Non-domiciled UK-resident taxpayers accounted for about 85,000 of those individuals, and the remaining 35,000 or so were non-UK residents. Famous examples of non-doms include the directors of Lloyds, HSBC and RBS, the billionaire Chelsea owner Roman Abramovich, the steel magnate Lakshmi Mittal, the media baron Viscount Rothermere, and numerous footballers. Non-doms are allowed to avoid tax on overseas investment income if that does not exceed £2,000 a year. All non-doms are required to pay income tax on their UK earnings, but they can avoid income tax and capital gains tax on assets held elsewhere as long as the amounts are not remitted to the UK. The Treasury’s proposals to reform non-dom status would mean that an individual who had been resident in the UK for 15 of the last 20 years would be considered UK-domiciled for the purposes of income tax, capital gains tax and inheritance tax.
I am listening to the hon. Gentleman’s case with interest. I am curious why, in their first 12 years in power, the last Labour Government did nothing whatsoever about non-domiciled individuals, and then reacted reluctantly only when they were humiliated and forced to take action by the then Conservative Opposition. Why is he not praising the Conservative Government for taking further action on this matter?
If it takes a Labour Government to sort out a problem after more than 200 years, we will sort out the problem On paper, this idea seems to be reasonable and sensible —in fact, even progressive—until, metaphorically speaking, someone starts to scratch away at the very thin veneer. In reality, the Government have purposefully and deliberately exempted offshore trusts, thereby undermining their own reforms, even though offshore trusts have been identified by the OECD, the European Parliament and the International Monetary Fund as among the main vehicles for tax avoidance across the globe.
Does not the hon. Gentleman think that his well-intentioned proposal might actually backfire, as it would mean that fewer rich people would come here and pay us any tax at all?
The problem is that that has been a persistent argument for years, but there does not actually appear to be any evidence to back up such an assertion I understand that HMRC is responding to EU directives on money laundering and has started the process of registering new trusts and that those already operating must provide additional information by 31 January 2018. However, HMRC has also confirmed that it will not penalise anyone as long as they register before 5 December 2017. The rules state that all trusts with UK tax liabilities must be registered, but the process is conveniently silent about trusts registered in Crown dependencies and overseas territories. The information provided to HMRC will not be made publicly available The Minister and Government Members have made much of the claim that the Conservative party has been clamping down on tax avoidance. In fact, that was considered such a priority in the general election that the Prime Minister—at her most imperious, at that stage—gave the subject a grand total of eight lines in the Conservative party manifesto. However, after seven years in power, the Government’s record is still there to see. The measures in the Bill are another example of how the Government wish to be seen to be doing something, but in fact their proposals are artificial and will amount to little while the exemption for offshore trusts remains intact.
On bearing down on tax avoidance, evasion and non-compliance, does the hon. Gentleman recognise that we have brought in £160 billion since 2010 by clamping down on avoidance? It was announced just last week that the tax gap—the difference between what we should be bringing in and what we are bringing in—is now at just 6%, which is much lower than it was in any year under the previous Labour Government.
I am pleased that the Minister raises that point because we will no doubt have another debate about it in the future. I have an interesting assertion that I shall make when we debate the tax gap, but that is for another day. I am happy to debate that subject with the Minister in due course.
Does not the hon. Gentleman agree that a tax gap that is one of the lowest in the world is something that we should celebrate while we are debating a Bill about taxation? We should be thanking the Government for making sure that the taxes we approve are collected.
This does not actually include the multinationals, but I was trying to make the point that I am happy to return to that point in another debate, if the Government so wish.
The hon. Gentleman is being extremely generous in giving way. On this very important question, does he not recognise that the tax gap is currently 6%? In 2005, under the previous Labour Government, it was about 8%. If the tax gap was 8% today, we would be bringing in £11.8 billion less in tax, which is the equivalent of the funding for every single police officer in England and Wales. The tax gap really does matter, so I think that the hon. Gentleman should address the questions that are being put to him.
The tax gap fell in every year between 2005 and 2010. The Minister brings my attention to his record, but I am bringing his attention to Labour’s record. As I have said, if we want to have a debate about the tax gap, we can do that. I am more than happy to do so, as are my colleagues, but as I have said many times, this is also about trying to look forward. We can all talk about our record—how good or bad it might have been—but let us move on and try to deal with the issues we are facing, not those we used to face.
I accept that you do not want to talk about the tax gap and want to move forward, but if you want to move forward, will you at the very least welcome the fact that we have collected more than £1 billion—
Order. I am not doing anything. It is not that I do not want to talk about this or I do not want to do that. That is simply not germane. The debate goes through the Chair, as the hon. Lady knows on her best days.
I am sorry, Mr Speaker The hon. Gentleman might not want to talk about the tax gap, but will he at the very least acknowledge that an extra £1 billion has been collected under this Government compared with under Labour? Surely he wants to take this opportunity to welcome that.
As much as I would like to debate the tax gap with the hon. Lady, I think that shows an ignorance of the issues involved in the nature of the tax gap. As far as I am concerned, I am quite happy—more than happy—to debate this issue in due course, but I am simply making the point that we must move on.
Will the hon. Gentleman give way?
I want to make a little progress, but I will come back to the hon. and learned Lady in a few moments. In the past month alone, the Government have faced a barrage of criticism from the European Union for their poor record on tackling tax avoidance. The European Parliament’s report on money laundering, tax avoidance and tax evasion has accused the Government of directly obstructing the fight against tax avoidance, while the European Commission has opened an investigation into the Government’s changes to controlled foreign company rules, which made it easier for multinational companies to shift their taxable income offshore and reduced last year’s tax take by £805 million. That goes to the heart of the point I am making about the tax gap and some of its intricacies.
The hon. Gentleman is being very generous with his time. He has made it clear that he wants to talk about the issue before us rather than others. Labour Members say in new clause 1 that they want a review after 15 months. Despite speaking for more than 10 minutes, he has not addressed that. Has Labour assessed how much a review would cost and whether it would divert resources from the Treasury?
I thank the hon. and learned Lady for that intervention. Government Members have taken up about seven minutes of the time I have been on my feet—[Interruption.] Six and a half minutes, the Minister says I am quite happy to debate these issues, but that is the point of a review. Why not have a review? It is a perfectly reasonable and legitimate proposal, given the nature of what we are considering. If there is nothing to hide, and if the Government are quite happy to be open and transparent and to tell everybody how wonderfully they are doing, let us have a review. No doubt the hon. and learned Lady will support the new clause in due course.
Forgive me for intervening again, but I do not think the hon. Gentleman heard my question: how much would the review cost?
If we had a review and identified areas of non-compliance, I suspect we would bring in far more money than that review would cost. That is why we have reviews. Again, I am sure that the hon. and learned Lady will support the new clause The Government’s opposition to any action to crack down on offshore trusts is not new. In 2013, while G8 leaders attempted to push forward new measures to deal with tax evasion, the previous Prime Minister was busy undermining them by writing personal letters to the President of the European Council, Herman Van Rompuy, begging him to stop the inclusion of offshore trusts. By contrast, the last Labour Prime Minister, Gordon Brown, to his credit, spent his last year in office attempting to get world leaders to agree to strict measures on offshore tax havens. That is all the more reason for a review, so let us have that review. I am speaking directly to our proposal. As I have said, if there is nothing to be fearful of, let us have the review Our opposition to the exemption of offshore trusts from these measures is well noted. We have been calling for the exemption’s removal since March. I called for its removal in the debate on the Ways and Means resolutions for this Bill, on Second Reading and in the Public Bill Committee, as the Minister knows, and I now call for its removal once again. I am happy to give the Minister an opportunity to reconsider, because the British public are no fools. They are more educated than ever about what an offshore trust is and what it is used for.
The hon. Gentleman is being exceptionally generous in letting us intervene so many times. To bottom out one point that came up in Committee, even though he may feel that our proposals are imperfect, does he accept that we have made more progress than any previous Government and that we are going further than before in raising fair taxes from non-doms?
I recognise any progress that anybody makes. If the Government have brought about progress, that is fine—I think it is wonderful—but I think there should be more progress. Under the stewardship of the Minister, I am convinced that we will have even more progress on this matter While the Minister might be able to use arcane rules of the House to prevent the Opposition from removing the offshore trusts exemption and introducing a public register, he cannot hide from the fact that his Government have a pretty poor record in this area. The heart of our disagreement with the Government is simple: it is about whether all UK citizens are to be treated equally in the eyes of the law and for the purposes of taxation. Throughout the passage of the Bill, it has been clear that the Government are actively content to ensure that we have a tax system that favours a wealthy few at the expense of the many The Government could act to close this tax avoidance measure. They could act to send a message to those who want to dodge taxes that the UK will not tolerate it. They could send a message to those who do not avoid their taxes that the Government are on their side. They could even send a message of support to hard-pressed public services by taking up the suggestion of the right hon. Member for West Dorset (Sir Oliver Letwin) and hypothecating any taxes raised by clamping down on the dodgers.
The hon. Gentleman has been very generous in giving way. I am a little concerned about the messages he wants to send out, but one message that we most definitely should send out is that the Government proposals will bring in an additional £1.6 billion over five years. That is money that will support all our public services for everyone.
That is a starter and I am sure that much more could be brought in. Again, I am sure that in an effort to get that figure up, the hon. Lady will support the new clause. I am really pleased that she agrees with us on that matter The only message this Government want to send is one of supine support for tax dodgers. The dodgers may want to hear that message, but public sector workers who have not had a pay rise for years do not want to hear it, the people waiting months for an operation do not want to hear it, and the police and firefighters do not want to hear it. I assure Government Members that at the next general election, the public certainly will hear that message loud and clear, because Labour will be there to remind them of a Government in chaos and disarray that is beginning to have a putrefying decay about it.
I think that we all agree in this House that we need to collect substantial revenues to have decent public services and that we all condemn people who break tax law, evade taxes and commit crimes against the tax code. However, tax avoidance—the legal avoidance of taxation—is a more difficult issue Many Labour MPs trotted through the Lobbies under a Labour Government to make sure that individual savings accounts had tax advantages, and to support tax breaks for Members of Parliament who choose to save for their retirement through the pension scheme. That is a kind of tax avoidance. Is the hon. Gentleman saying that the Labour party no longer agrees with that kind of avoidance, which was recommended by previous Labour Governments in the interests of spreading saving? Is he of the view that there are certain kinds of avoidance that are perfectly reasonable, such as those undertaken by Labour MPs and others, and other types of tax avoidance that are also perfectly legal but of which he does not approve?
Does the right hon. Gentleman agree that there is a difference between an ISA and institutional, systematic avoidance and abuse of the tax system?
There is a huge difference between breaking the law and living within the law. However, where Governments of both persuasions and the coalition have put provisions into the tax code that encourage people to save or invest in a certain way to pay less tax, that surely is the will of Parliament and the will of those parties, and we cannot object if people and institutions take advantage of it. The right thing to do—as I think the Labour party is now trying to do in some ways—in respect of rich people who come to our country to undertake part of their affairs but not all of their affairs, is to ensure that we have settled on a law that we think is fair and then to enforce it. Obviously we should take a tough line were any of them to break our law, but we cannot object if they take advantage of measures that have been put into the tax code to encourage certain kinds of investing or saving behaviour, in exactly the same way that most MPs take advantage of the avoidance provisions to save through a pension scheme or an ISA The subject of this debate is whether the assets of very rich people—often productive assets that they have saved for, earned and accumulated before they came to the UK—are a suitable object of taxation if they choose to do some things in the UK in respect of which they are clearly subject to our law codes and have to pay our taxes. In the past, Labour Governments as well as Conservative Governments have taken the pragmatic view that there is an advantage in very rich entrepreneurial successful people coming to our country setting up businesses, making investments here and committing part of their capital to our country; that we will tax that fairly in exactly the same way that you or I would be taxed, Mr Speaker, if we were making such investments on a much smaller scale; and that that is fair to us as taxpayers and investors, but that it is not our business to try to tax their assets and income accumulated or earned elsewhere that they have established by other means before, which are presumably being taxed in those other countries and would normally be governed as well by some kind of double taxation arrangement or agreement I would therefore just say to Labour Members who think there is a huge crock of gold here, which for some unknown reason successive Labour, coalition and Conservative Governments have been reluctant to pluck, that maybe they did not do it in the past because there is not, and that maybe we are quite close to that point. If we go further and further encroach on the legitimate income and assets of foreigners coming here, which are asset and income not actually in this country, we might get to the point where more of them say, “I’d rather go somewhere else. Plenty of other countries around the world would actually welcome the money, investment and income I wish to spend, which is going to be taxable in that country. If they are prepared to not tax my other income and assets elsewhere, then they will have the benefit of me rather than not.” The art of taxation is finding the right balance, so the host country gets enough out of it and where there is obviously a fair imposition of tax on anything they do in that country alongside fellow residents of that country, while not deterring so many that we are no longer a great centre for people with money, investment and talent who would otherwise come here.
Does my right hon. Friend agree that we do not make these decisions in isolation? We are competing with other countries, which might also like to host very rich individuals and investors. While we in the UK are making the climate more hostile and difficult to raise more money for our public services, the opposite is true in many other countries. In the EU, Malta, Portugal and, most prominently, Italy are moving in the other direction and creating their own non-dom regimes to draw away such individuals from the United Kingdom.
My hon. Friend anticipates my next point. We live in a global world. The richer people are, the more footloose they can be, and the better the tax and legal advice they can get. Most of them want to obey the law in the country they choose to live in and the countries they choose to operate in—they usually operate in several countries not just one, which creates genuine definitional problems about where they are truly resident and where is their main centre—and they will compare all the time, on good advice, the different regimes available. It is quite obvious that in the EU there is a lot of jealousy of London and the wider UK’s success in attracting talent and investment from around the world. As my hon. Friend says, regimes are being created in to tempt people away by giving them a better deal in other European countries I was about to draw the attention of the House to hugely important debates about to be undertaken in both the Senate and the House of Representatives in the United States of America. New York and other great centres are already very attractive magnets for rich people and large-scale investors. They are suggesting that they might take their top rate of tax down from 39.6% to 35%, simplify their income tax brackets from seven to just three, and take their corporation tax rate down from a very high headline 35% to an effective rather lower rate of 20% or even lower, because they are very serious about becoming tax competitive again. They will be a lure, just as surely as some European countries on the continent are trying to be more of a lure The Opposition would be well advised to understand how global the world is, how dynamic it is, and how, to maximise tax revenue, there is a need to set ways of taxing and rates of taxation that enable people to stay and pay.
Does my right hon. Friend agree that the greatest threat to tax havens is not the blustering of the Labour party, but countries such as the United States of America reducing their tax rates so much that it does not become in any way effective to be using these kinds of places for any function and business?
That is correct. Tax havens have helped to drive down tax rates in other centres. We only have to look across to Ireland to see how attractive it can be if a mainstream country decides to take its corporation tax rate down to very low levels. Ireland attracts a lot of company-based investment. Each country has to decide where it wishes to be on that spectrum. A high enough rate is required to collect serious money, but a low enough rate is needed to not deter some of the best prospects for coming, staying and paying taxes. In the light of what America is about to do and what some of the smaller European countries are doing, this country is in danger of becoming uncompetitive on taxation.
My right hon. Friend makes a very important point: how important it is that this country does not deter people who bring in money, which in turn funds our public services. Does he agree that if we were to take the course of action urged upon us by the Labour party, we would put at risk the £9 billion of investment into our coffers brought in each year by those who are not domiciled in this country?
That is exactly the kind of sum of money I am talking about. That is a serious sum of money for our economy and it is a nice balance. All of us want to collect serious revenues. We are here because we want good-quality public services, but we also want a productive, growing and exciting economy. We need to have realistic tax rates and tax rules. All the evidence is that every time the coalition and Conservative Governments have had the courage to cut rates, they have raised more revenue. That shows that our rates have been on the high side for optimising the revenue.
Does the right hon. Gentleman accept that the Opposition probably fully understand and acknowledge the arguments he is making? The fact is that when they were in power they did not take the steps they are recommending now because they recognised the reality. It is very easy to argue that in opposition; it is a bit different in government.
I entirely agree. I pointed out at the beginning that Labour in office was probably more gentle on this group of people than the Conservative party in office has been. I think Labour came to that judgment for good reasons. Labour Members disagree with their previous Governments, but they will discover that that is the luxury of opposition and that Governments are responsible for sustaining as well as growing the revenues. It is very easy to get rid of revenue by annoying people and companies. It is far more difficult to systematically build up a good tax base by promoting economic growth.
Does my right hon. Friend agree that when the Opposition refer to non-doms as tax dodgers, they are referring not just to the super wealthy, but to many tens of thousands of individuals who come over here who do not have overseas assets on which to draw, who make a contribution to our economy and who pay all their taxes in the normal manner in this country?
Yes, it is very offensive language to call people tax dodgers. If they willingly come to our country, make a big investment in our country, spend a lot of their money in our country and pay all legal dues that this Parliament requires of them, I do not think calling them tax dodgers is wise, friendly or helpful. That is why I began my remarks by asking the hon. Member for Bootle (Peter Dowd) if he could draw a distinction between a non-dom who came here, paid all legal taxes but was, in his terms, dodging taxes on wealth legally held elsewhere, and a Labour MP who deliberately puts their savings money into an ISA or the pension fund to avoid paying tax. It seems to me that they are very comparable and I do not regard either as tax dodgers I do not think my Labour colleagues are tax dodgers because they take advantage of the savings breaks that both Conservative and Labour Governments offer UK taxpayers. Similarly, I do not regard a rich person from abroad who pays all legal dues here with no questions over their tax affairs as a tax dodger. I think they are a welcome contributor to greater growth and prosperity in our country, and we could think of a nicer way to sum them up I urge the House to resist the blandishments of the Labour party in opposition, to remember the stance of the Labour party in government, which was rather wiser, and to unite behind what I hope my colleague on the Front Bench will be saying, which is that we welcome talent, industry, enterprise and money into this country and that we want to have a fair basis for taxation that does not deter them from coming.
I start by telling the House of the sad death of my predecessor, Frank Doran, who was the MP for Aberdeen North and other Aberdeen seats during a career of about 30 years in Parliament. Mr Doran was incredibly well respected across the House. People who worked with him will remember him and will have respected his work. He was a principled man. He helped a lot of people who are now my constituents, and they often talk fondly about him. In particular, he worked incredibly hard in the aftermath of the Piper Alpha tragedy; he did a huge amount of work on that. Our thoughts are with his wife Joan, his family, and his friends and colleagues from across the House. I pass on the Scottish National party’s condolences to his family. I do not want to talk at length about offshore trusts. The SNP has consistently been critical of the situation around non-domiciled individuals and offshore trusts and of the complicated nature of the UK tax code. It is regularly said that the tax code used to be a book but now someone would need a van to cart it around. The problem with that is the potential for loopholes. In addition, the more complicated it is, the more difficult it is for people to comply and for Government agencies to ensure compliance. We have raised those issues The right hon. Member for Wokingham (John Redwood) talked about not conflating tax dodging with non-doms. I am not attempting to do that, but the more complicated the tax code is, the greater the likelihood of loopholes that people can exploit. We have concerns about that; we raised them last year in the context of the Criminal Finances Act 2017 and we will continue to raise our concerns around non-domicileds and offshore trusts more generally There are occasional suggestions from Conservative Back Benchers that we move the UK towards being some sort of tax haven, post Brexit. We completely reject that, as do some in the Conservative party.
Is the hon. Lady saying that she would not like people in Britain to enjoy lower taxes, if they were possible?
I was talking about tax havens; I think people have a good understanding of the difference between a tax haven and a country with lower taxes. It is completely reasonable to say, as individuals across the House do, that if we want excellent public services that best serve our population, we need a tax system in which people pay for those excellent public services. I am not in any way trying to dodge that; I think that we should have a tax system that ensures that we have excellent public services.
Does the hon. Lady not see the opportunity with Brexit to stop large businesses using European laws to game our tax system, and instead to get them to pay a fair share of taxes and give the hard- working people of modern Britain a tax cut?
As for the opportunity with Brexit, Scotland will be £30 billion worse off as a result of it. My city will be the worst off place in the UK outside the City of London—that is according to work done by London School of Economics and Political Science on the cost of Brexit; it is not a biased point of view. I do not see positive outcomes for the UK from Brexit. On the tax code, I want to make it clear that we reject moving towards a tax haven Britain and anything that could increase the number of loopholes. We are pleased about the Government’s anti-avoidance changes; we would like them to go further, but that will always be the case, and we will always say that to the Government. We are pleased that they are making positive moves, and pleased with some of their anti-avoidance measures. I agreed with almost everything that the shadow Minister, the hon. Member for Bootle (Peter Dowd), said about non-domiciled people and offshore trusts. We will support the Labour party if it pushes new clause 1 to a vote.
As I am sure you agree, Mr Speaker, we all love a familiar tune that we can hum or whistle along to, the bars and notes of which come effortlessly to mind, so I imagine that a warm feeling of familiarity washed over all Members when they heard the tune being played by the Labour Front Bencher, the hon. Member for Bootle (Peter Dowd). It was the familiar one about the Conservatives not taking tax seriously, being on the side of tax dodgers and so on. We have heard it so many times It is nice to see the hon. Gentleman using this gargantuan Finance Bill as a stage from which to play that tune. It brought to mind that wonderful 1970s Morecambe and Wise sketch with André Previn; I do not know whether you are familiar with it, Mr Speaker. Eric Morecambe is at the piano; discordant notes are flooding from it, and André Previn says, “Stop, stop! You’re playing all the wrong notes.” Eric Morecambe replies, “No, sweetheart; I’m playing all the right notes, but not necessarily in the right order.” That was an awful accent; I apologise. The hon. Gentleman was not playing the right notes, and definitely not in the right order. Some of the claims made by Labour Front Benchers are built on sand. Far from being on the side of tax dodgers and tax avoiders, this party in government has put measures in place that have generated an additional £160 billion of tax revenue since 2010, and the Bill will, if enacted, bring in additional billions of pounds to the Treasury, so the hon. Gentleman was singing the wrong notes Yes, moves to close the tax gap were initiated by a Labour Government—it would be churlish not to concede that—but far from preventing or rowing back on the closing of the tax gap, this Government have continued the pressure to make sure that the gap between the taxes that should be collected and the taxes that are collected continues to decrease. As a Conservative, I am proud of this Conservative Government’s role in ensuring that the people who should pay taxes do, and pay at the appropriate level My right hon. Friend the Member for Wokingham (John Redwood) was absolutely spot on when he said that it is corrosive when we start blurring the definitions of tax avoidance and tax evasion. When we talk about people who act in a financially pragmatic way, completely within the law, in the same way that we talk about conmen and criminals, it sends a massively corrosive message, at a time when the world is getting smaller, in terms of where people can base themselves and their business While it is perhaps fun for Opposition Members to vilify people who transact their business internationally and can choose where in the world to rest their head at night and to make them sound like—to be topical—a Halloween villain, that is counterproductive. Although each individual utterance will make little difference, they combine and build to create the background music of intolerance of international business and successful people that will ultimately mean their locating somewhere else. Rather than getting the tax income from them that this country deserves, a different country will generate those tax revenues. A pound—or a euro or dollar—that is taxed somewhere else in the world is a pound that cannot be used by this Government to pay for the public services that we value and the public servants who deserve our thanks and reward It may feel superficially pleasant to see an international business, an international business person or a non-domicile flee from these shores. People may say, “If they do not want to be here, let them go.” It is a nice soundbite but ultimately it is massively counterproductive to the job that we should be doing as parliamentarians and that the Government should be doing in office.
I am enjoying the very good speech that my hon. Friend is making. Obviously, I do not want to get into a Brexit debate. Heaven forbid that he and I fall out in some way, or even worse do our impersonations of bygone sketches, which he clearly could not remember because he was not born then, but, on a serious point, does he share my concern that we are already seeing great businesses looking at relocating as the time comes for us to leave the EU, along with individuals who do not feel welcome in our great country?
I thank my right hon. Friend for her intervention. We may not necessarily agree on the Brexit decision or on its impact on international businesses and British businesses that might be international, but it is fair for her to highlight the fact that we should do nothing that gives businesses cause for concern. It would be unfair to suggest that the decision to leave the EU has no impact on business decisions. As someone who campaigned for Brexit, I have an additional duty to prove her wrong. I know that she is of such a generous nature that, if in our dotage we are sharing a glass of wine, looking back at the events in the immediate aftermath of Brexit and I were to be proved right, she would be more than willing to concede that point. However, we have a duty to give businesses as much confidence as possible about being based in the UK. Having a tax regime that supports business and enterprise is an important part of doing that.
Does my hon. Friend agree that the Bank of England and the Treasury have a duty to talk this country up, not talk it down, and to ensure that, when they talk about investment versus disinvestment, they do not make up terrible numbers, as a continuity of “Project Fear”, when the Bank said that Brexit would mean a loss of jobs, growth and tax revenue, particularly non-domicile tax revenue? We have seen that that is not the case, with the lowest unemployment for 40 years and continued strong growth. It is wrong for the Bank to carry on saying such things, as it has today.
I will be more than happy to invite Treasury officials and Mark Carney to the end of days party that it seems I will be throwing for my hon. Friend and my right hon. Friend the Member for Broxtowe (Anna Soubry). We can sit down to discuss such things, sharing my beautifully aged claret—[Interruption.]. Or indeed some wine from the constituency of my hon. Friend the Member for Wealden (Ms Ghani), which produces some fantastic wine. We will discuss the implications for the British economy of fear-mongering.
We are debating a new clause that suggests that, within 15 months of passing the Bill, there should be another review. Fifteen months would be February 2019, a month before Brexit. Financial services companies are already having to rethink their operations to cope with Brexit. Does my hon. Friend agree that the new clause is a distraction that the sector does not need and that the sector contributes more than £70 billion in tax to the UK economy, which we want to keep?
My hon. Friend is spot on. I cannot help but think that new clause 1 is more to do with Labour Members feeling that they need to table revised clauses because they do not know what to say. A call for a review of this kind invariably occurs when people are not sure what to say Mr Speaker, you will be disheartened to hear that I am about to conclude my comments. I strongly urge Members on both sides of the House to reject the new clause. We should do everything we can to send a positive message to businesses currently in the UK, to businesses that may think about coming to the UK and to business people who are deciding where they will domicile and to pay tax. We need to let them know that the UK is open, ready to do business and welcomes business people, as long as they pay their fair share in tax and help to support the public services that we value.
I felt that, as I was going to speak this afternoon, I should listen to speeches by colleagues in the House.
Controversial.
I know that is a controversial view that many have. In particular, I listened very carefully to the speech by the hon. Member for Bootle (Peter Dowd) from the Opposition Front Bench.
Quite right.
I am. The hon. Gentleman made some interesting remarks, but I am going to pick him up on one phrase, which we should think about and bear in mind as we look not only at the implications of new clause 1 but at the Bill as a whole. He said that the British public are no fools. As I listened to him expound on that, I thought to myself, “The British public in the public gallery and the many millions undoubtedly watching the debate at this moment are no fools and will realise that this Conservative Government, since 2010, have brought in more than £160 billion-worth of anti-avoidance and tax evasion measures.” The British public are no fools. They will realise that the Conservative Government, since 2010. have reduced the tax gap—the gap between what should be collected in tax and what actually is collected—to 6.5%, the lowest that has been recorded. The British public are no fools and will see that this Government, a Conservative Government, will abolish permanent non-dom status for the first time. Those are the practical achievements that the Bill helps to build on On the precise nature of new clause 1, I can do no better than agree with my dear and honourable Friend the Member for Chelmsford (Vicky Ford), who suggested entirely accurately that the timing of such a review may cause disruption. It may be a significant disincentive and difficult from a business perspective because of the Brexit negotiations and the situation at that time. It is also important for us, whatever party we represent, to recognise that this Government are making the case for a sustainable fiscal policy that makes sense in the modern world We have heard from many Members on both sides of the House about the international context in which we operate. We are in a smaller world; we all know the impact that technology and ease of travel are having on every aspect of life. Bearing that international context in mind, things are more competitive. We cannot rest on our laurels.
On that point, would my hon. Friend care to reflect on the issue of footballers? The Labour Front-Bench team was saying that footballers often got away with things under this heading, whereas I thought many people in Britain like the idea that very talented footballers could come to our country for a limited period of time under sensible arrangements for their tax affairs. Does my hon. Friend think that is reasonable?
Not only do I agree with my right hon. Friend about footballers, but I think that most people—among the millions watching this debate, as I have said—will recognise, because they see and enjoy the top-quality premier league football in this country, the impact that top foreign players make. It is not just footballers but music stars, artists, creatives, writers, financiers, businesspeople, entrepreneurs—all of them can be such an asset to this country. Footballers are a very visible example, but we should not forget the more hidden, less public face of that. Britain is good at attracting such people, and we should continue to be good at it, and be proud of that fact in this House On the Bill, the Government are making the case for a sustainable fiscal policy, and we must bear in mind the case for the simplification of taxes. The hon. Member for Aberdeen North (Kirsty Blackman) always makes good speeches, and made the point that simplifying taxes is a good aim that we should always think about. The Minister, the Government and everybody in this House should always be thinking of ways in which we can make things simpler. We should also always be thinking about ways in which we can make things fairer, and ensure there is a genuinely level playing field for all businesses that seek to work in this country. That is not only fair from an ethical perspective, but having a level playing field is an integral part of what makes Britain a good place to do business. We should focus on both simplifying our tax code and on making it fairer.
My hon. Friend is being generous in taking interventions. He served on the Finance Bill Committee so will have seen the size of the Bill; it resembles a doorstop. Does he think that we should shrink our Finance Bills and have simpler tax laws?
Yes, I did have the huge pleasure of serving on the Finance Bill Committee and it was fascinating. The Finance Bill is undoubtedly a whopper; it is huge. There is a good case—I am sure the Minister will come to this in his remarks—for saying that we need to think more actively about ways to make measures shorter and more easily digestible for hon. Members. I say that without detracting from the substance of what the Government are doing, which I completely support.
The UK tax code is now 22,000 pages long and involves 10 million words. Does my hon. Friend agree that we need to lessen that level of complexity if we are to be globally competitive in the future?
I agree with my hon. Friend. Being in government is a complicated matter, and Rome was not built in a day. This Bill can continue the work that Treasury Ministers have already begun on how we address the difficulty involved in making things fairer and simpler, while also making sure that we have the right incentives for businesses to come to our country, and grappling with that in the context of trying to make sure that the tax code is simpler.
Does my hon. Friend agree that leaving the EU presents a great opportunity for us to take back control of our tax system and make it a lot simpler—and that, perhaps, all the EU rules are part of the reason why it has got so long and complex?
I hugely respect my hon. Friend. It is worth mentioning for the benefit of those who do not know it that he was a top tax lawyer, so he knows the value that complexity brings to tax lawyers in the City of London. On his point about the EU, I am no expert on these matters and defer to the Minister and other Members, but my view is that we must be more realistic and accept that a lot of things are of our own making; and with the advent of our leaving the EU we have the opportunity to make ourselves even better as a place to do business. I am sure that my hon. Friend and the Minister would support that.
The problem with the comments of the hon. Member for Aberdeen North (Kirsty Blackman) is that she wanted both a simpler tax code and to close loopholes. As I understand it, a great deal of its complexity and length has come from adding detailed ways of trying to close the loopholes, so there is a conflict there. Genuinely simpler tax codes have fewer taxes, which would be a great start, as would having lower rates with a common tax base. At present, however, we have too much complication, partly because of trying to close loopholes.
I accept that point. Members present appear to be reaching consensus that the Government should always be thinking of how to balance the need for fairness and simplicity with closing loopholes so that people do not take advantage of the fair laws in this country Many Members have discussed in the speeches made so far—I told you, Mr Speaker, that I was listening—the importance of businesses bringing in money to fund our public services. We all recognise that that is important; indeed, it is the reason why many, if not all, of us became Members of Parliament. However, it is also worth making the point that having a thriving economy in which individuals, on their own merit and through their own effort and time, can make the most of themselves is in and of itself a good thing. We should not always revert to thinking about business as something simply to be milked for the Exchequer; the Exchequer, the Government and Parliament should set, and are setting, a clear, simple, as-low-as-possible framework in which individuals and corporations can thrive. That is the sort of fiscal and economic policy that I support.
I thank my hon. Friend for the work he has done on the detail of this Bill. Does he agree that clauses 29 to 32 remove the loophole of permanent non-dom status, but clause 8 means that the UK can continue to benefit from the approximately £9 billion a year from overseas investments, yet if we accept the Labour amendment we put that £9 billion at risk?
My hon. Friend is expert in these matters and knows about them in immense detail, having served in the European Parliament. When both serving on the Finance Bill Committee and during this debate, I have been struck by the keenness of this Government to be fair at the same time as promoting competitiveness. Fairness and competitiveness together are what make Britain the best place in the world to do business.
It is an honour and a privilege to be speaking during the Report stage of the Finance Bill. You will know, Mr Speaker, although some Opposition Members might have forgotten, that I am the MP for Brentwood and Ongar. Today is a great day in the history of Brentwood, because “Woman’s Hour” has announced that it is the best place in the UK for women to live and work. That is something for us all to celebrate. Underpinning that achievement is the fact that Brentwood is a fantastic place to work and do business, and our sense of business acumen is itself underpinned by hard-headed pragmatism. When I bring my constituents complex pieces of legislation, including Finance Bills, they always ask me two things. They ask me whether the legislation is fair, and if they are going to get a good deal out of it. The measures that we are discussing are indeed fair, and I believe that taxpayers in my constituency will get a good deal from them.
My hon. Friend is making an excellent speech, although I would be intrigued to find out, perhaps after the debate, why Brentwood—I nearly said “of all places”, but I am sure that it is a wonderful place—was judged to be so favourable for women. But we are getting away from the Finance Bill and the important points that he is making about the economy. Does he agree that it is critical in any tax system that the balance is right? Yes, taxpayers need to pay the right and proper amount, but we know that if we start to be too onerous, people will exploit loopholes, meaning that tax revenues will begin to drop. Does he agree that it is under this Conservative Government that we have begun to get that balance absolutely right? People do not resent paying their taxes and revenues are rising because we have a good and fair system.
I could not agree more with my right hon. Friend. She can rest assured that she is always welcome in Brentwood. There will always be a place next to me in the teashop where we can sit down to discuss exactly why Brentwood is such a wonderful place for women to work, raise their families and be part of the community. My right hon. Friend is absolutely correct that we have to get the balance right if we are to maximise the tax take for the Treasury, and it is only through that tax take that we will be able to fund our world-class public services. An attempt to do anything more would undoubtedly mean that less would be available for our police services, health service and education system. Our constituents—our citizens—would then all suffer, so it is absolutely essential that we get the balance right. I do not believe that we do that if we actively discourage successful, wealthy business people from bringing their money here so that they can invest in our country. As my right hon. Friend points out, it is by getting the balance right that the Treasury, under the great guidance of my right hon. Friend the Financial Secretary and his predecessors, has managed to bring in an extra £160 billion since 2010 and to narrow the tax gap to an historically low level. That is a great achievement.
I would like to put this into perspective so that our constituents can appreciate our achievements on the tax gap. Our tax gap is 6%, but the gap is 34% in Italy. If the European Union wants to tackle any tax gaps, it should look at other European countries. The tax gap in the United States is 19%, so a 6% tax gap here represents a huge achievement by this Government.
I am grateful to my hon. Friend for bringing those figures to the House. Our extraordinarily impressive figure illustrates the achievements of successive Conservative Chancellors in their work to improve the situation that they inherited in 2010 My hon. Friend the Member for Chelmsford (Vicky Ford) raised an extremely important point about timing. Do we really want a review to kick in just as the Brexit process is reaching its climax? With all due respect to Opposition Members, I do not think that they have really thought about that This has been my first Finance Bill and I have enjoyed everything about it immensely. I have even enjoyed the speeches made by the shadow Minister, the hon. Member for Bootle (Peter Dowd). I have enjoyed his panache, his dapper dress sense and his ties, which make me feel slightly underdressed. In Committee, he enlightened us with his knowledge of Plutarch and made reference to the Beatles. I believe that he referred to Plutarch’s discussion of Pyrrhus’s victory over the Romans, which led to Pyrrhus saying, “One more such victory and we are lost.” Were new clause 1 to be agreed to, it would be a pyrrhic victory of great consequence. It would put billions of pounds of Treasury revenue at risk, which would in turn put our public services at risk. That would make my constituents very angry I know that the hon. Member for Bootle is fond of the Beatles, as am I. We have already had a comic turn from one Essex MP today. The House might recall that, once upon a time, John Lennon was asked why the Beatles were the greatest band in the world. He said it was because Paul McCartney was the greatest singer-songwriter in the world and because George Harrison was the greatest guitarist in the world. The interviewer said, “What about Ringo? Isn’t he the greatest drummer in the world?” Mr Lennon replied, “He’s not even the greatest drummer in the Beatles.”
I rise because it is dreadful to hear this wrong story being perpetuated in the House of Commons. It is a myth that that conversation ever took place, in my opinion—people can check it now on Google. We have in Birmingham a fine comedian called Jasper Carrott who once told that story as a joke. Such is the way that Google works these days that when someone tells a joke like that, it finds its way on to a website somewhere and a myth is perpetuated. We are hearing that story told again in the House of Commons today. I am concerned that it will be recorded inappropriately, so I hope that my hon. Friend will consider that.
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Order. I am sure that when the hon. Member for Brentwood and Ongar (Alex Burghart) responds, he will ensure that his words are directly relevant to new clause 1. This is an important issue and I am sure that Members would not want people to think that we were treating it light-heartedly. We should be taking it very seriously.
You are quite right, Madam Deputy Speaker. I assure you that my comment was directly relevant to the Bill, but my peroration was cruelly interrupted by my hon. Friend the Member for Walsall North (Eddie Hughes). He has now set the record straight but, in the process, destroyed one of the great anecdotes about the Beatles. I was going on to say that new clause 1 is not even the best amendment that the Opposition have put up The Minister made it clear in Committee that with “regard to a review of the legislation, as stated in the tax information and impact note published in December 2016, HMRC will monitor the effects of the provisions through information collected in tax returns. I therefore urge the Opposition not to press new clause 3.” ––[Official Report, Finance Public Bill Committee, 19 October 2017; c. 97.] A form of review is therefore already under way. This Bill is fair and will get a good deal for all our constituents.
My hon. Friend is making a great speech. Another vital factor that we must consider is the element of trust, which will come up repeatedly as we discuss further amendments. It is important that taxpayers can trust this Government to ensure that we collect the maximum amount of tax and then deploy that tax appropriately to provide excellent public services. My hon. Friend suggests that it is important that the Bill is fair, but it is also important that it is trustworthy and that the people watching this debate on telly at home—millions of them—have faith that the Government are firm, fair and trustworthy.
I thank my hon. Friend for that wonderful speech. He is of course entirely right that these measures are fair. They get a good deal for the British taxpayer and will help to underpin future investment in our fine public services.
Clarifying non-dom status is absolutely the right thing to do, but it is also crucial to ensure that our tax regime is fair. We have heard from other Members that non-dom status contributes £9 billion. My constituency—this is also relevant to the constituency of the hon. Member for Aberdeen North (Kirsty Blackman)—has seen a lot of mergers and acquisitions activity, and it is important that this country’s tax regime is clear, simple and straightforward, with people encouraged. The Wood Group and Amec merger will create a FTSE 100 company that will be headquartered in Aberdeen, and Baker Hughes and GE, another huge oil company, has a lot of influence on the UK’s continental shelf. Does my hon. Friend agree that unless we keep this country’s tax regime attractive to inward investment and non-doms, we could lose some of that investment, which would damage my constituency and that of the hon. Member for Aberdeen North?
I entirely agree with my hon. Friend. It is crucial, perhaps now more than ever, that this country is entirely open to money, to investment and to good business practice from around the world. It is incumbent on the Government to ensure that they create an environment that will bring jobs and investment into his constituency and mine, and indeed into all parts of our country. I also want to voice my wholehearted support for Government amendment 17—a fine amendment if ever there was one—which sets the Treasury record straight, as ever it should be.
I begin by thanking the hon. Member for Bootle (Peter Dowd) for his interesting and informative contribution. Alas, I am going to have to disappoint him and say that I will urge the House to reject new clause 1, but I thank him most sincerely for the generosity with which he gave way to the wave upon wave of Government Members who wanted to challenge him—it was a veritable intervention-fest. My hon. Friend the Member for Braintree (James Cleverly) mentioned the “The Morecambe & Wise Show” but in the hon. Gentleman’s case, I was reminded more of the 1980s show “Game for a Laugh”—[Interruption.] Perhaps that was unkind, but we had some fun along the way.
Does my right hon. Friend agree that an important point to make about non-doms is that the idea that they are all multimillionaires, if not billionaires, is an absolute fallacy? Many non-doms quite properly have that status, but the idea that they are fat cats or rich people with oodles of money who are up to dodgy dealings is an absolute myth. Many of them are actually of modest means, but invariably those of more substantial means are great entrepreneurs and we need them in our country arguably more than ever before.
My right hon. Friend is entirely right and pre-empts the point that I was about to make, which is that it is quite wrong of the Opposition to castigate all non-domiciled individuals in this country and to characterise them as tax dodgers. In fact, the hon. Member for Bootle made the point that there are over 100,000 non-doms in the United Kingdom. The vast majority of them do not have lots of overseas assets or may have no overseas assets; they are not opening up trusts and putting assets in them. They simply come over here, sometimes for a couple of years or so, to work and contribute to our economy.
What the Minister says is true so far as it goes, but I recently met representatives of Man, with which the Minister will be familiar. At £100 billion, Man runs the biggest hedge fund across Europe. They want robust, predictable and understandable regulation to provide certainty for investors, rather than slackness that allows people to creep through holes and exploit loopholes. They want to know where they are. They do not necessarily want a race to the bottom; they just want a reliable system for investing over the long term.
Certainty for the future is precisely what the proposals deliver, and they were extensively consulted on for a couple of years before coming into effect. We are providing exactly the certainty that the hon. Gentleman wants As is characteristic of the hon. Member for Aberdeen North (Kirsty Blackman), she made some fairly thoughtful comments about the importance of ensuring that the tax code is not overly-complicated. She will be aware of the work that we are doing with the Office of Tax Simplification. I was grateful for her at least partial welcome for some of our anti-avoidance measures which, as many Members rightly pointed out this afternoon, have brought in £160 billion since 2010 My hon. Friend the Member for Braintree referred to the Bill as “gargantuan.” Having spent what feels like most of my life reading every syllable of it, I think that is a rather polite description of this colossus of a Bill, which has 760-odd pages. He mentioned Morecambe and Wise, and it was a nice touch to characterise the way in which the Opposition play the same old tunes. For the Government, of course, the tune is “Bring Me Sunshine”. We believe in an economy that works for everybody; we believe in bright, sunny uplands; we believe in possibilities, we believe in the future; and, above all, while I am a Treasury Minister, we believe in fair taxation My hon. Friend was also right to mention the £160 billion. He particularly stressed the importance of getting away from the corrosive message of always beating up those who are an apparently easy target. We need to talk our country up, not do our country down.
Does the Minister understand the deep concern about the need for transparency, legitimacy and fair returns in the aftermath of the Panama papers? What specific actions have the Government taken, or are they just saying, “Oh, well. It doesn’t matter. We’ll just get on as normal.”?
We are right in the vanguard, as the hon. Gentleman knows. The OECD’s initiative to address base erosion and profit shifting has, among other things, brought in the transfer of information between countries on the very issues he raises. We are no slouch when it comes to addressing such issues My hon. Friend the Member for Hitchin and Harpenden (Bim Afolami) also talked about tax avoidance. He confessed to the “novelty” of listening to the hon. Member for Bootle, which is perhaps a little harsh as I often learn a lot from listening to him. My hon. Friend also talked about the importance of attracting the best people to our country from all walks of life, and he is right My hon. Friend the Member for Brentwood and Ongar (Alex Burghart) made an important point about the setting up of trusts. The trusts of those who become deemed domiciled under the Bill will have to have been in place before that particular moment in time. It is worth stressing that taxation falls due, in the normal manner, only when income in taken out of a trust. My hon. Friend also got us tangled up in a debate about the Beatles and Ringo Starr, but then my hon. Friend the Member for Walsall North (Eddie Hughes) told us that it was Jasper Carrott all along, and we are grateful to him for that I begin my response to the hon. Member for Bootle by reminding the House of the significant changes that the Bill introduces to the way in which non-domiciled people are treated in the United Kingdom for tax purposes. The new rules that the Government are introducing fundamentally change the way non-doms pay tax in the UK by ending permanent non-dom status. Under the Bill, non-doms who have been resident in the UK for 15 of the last 20 years will no longer be treated as non-domiciled by the tax authorities. Instead, they will pay tax in the same way as everyone else, bringing £1.6 billion in much-needed extra revenue for our public services To maintain fairness and to keep our tax system competitive, the Bill protects non-residents’ trusts from being wholly introduced to the UK tax system. New clause 1 would impose an obligation on HMRC to review the operation of those protections for non-resident trusts. The review would consider the cost of the protections and the effects they have on taxpayer behaviour, including the effect of removing the protections. Although I understand the intention behind the new clause, I do not think it is necessary to legislate for such a review to take place. HMRC and Her Majesty’s Treasury have hundreds of officials monitoring the tax system and assessing the risks, which is right and proper given the Government’s responsibility to ensure that the tax system delivers value for money for the UK taxpayer There is a more fundamental case against the new clause—a case about fairness and unintended consequences. The trusts that the Bill seeks to protect are those created before an individual is deemed to be UK domiciled. Many of these complex trust structures will have been set up long before the individual even thought about moving to the United Kingdom and will not have been set up to comply with the UK’s tax rules. In the circumstances, it is not unreasonable that the new domicile rules are introduced in a way that protects trusts from unintended consequences. It would be unfair to ask a non-dom to pay tax on money they never intended to bring into contact with the British tax system in that way.
Is the Minister saying it is fair for someone to tax plan to leave the country, make a load of money and hide it in various places where tax is not charged before coming back to live in the British environment, where they always wanted to live, and avoid all that tax?
I am not saying that at all. What I am saying is that, where a non-dom has a family trust or some other perfectly legitimate arrangement—they might not have been to this country at all when the trust or arrangement was set up—and is subsequently deemed to be domiciled in this country, it is not unreasonable that the contents of that trust should be protected, with the important caveat that tax is due to the UK tax authorities as soon as income is taken out of the trust.
In terms of tax planning, a merchant banker or whatever in their twenties could plan to leave Britain for a number of years, make a lot of money and protect that money in a tax haven before coming back and receiving all the benefits—sending their kids to public school and all the rest of it—without paying tax in Britain.
I think I have answered that question. It is probably time to move on Even with these protections in place, non-doms who become deemed UK domiciled will be protected from tax, as I have said, only on income and gains that remain in the trust. Any moneys withdrawn or benefits provided will lead to a tax charge on the individual. This is a fair system that has been carefully considered and consulted on since it was announced more than two years ago. It is simply unnecessary to introduce legislation to place additional bureaucracy and additional reporting burdens on HMRC, which already scrutinises non-doms’ compliance with the UK tax regime Government amendment 17 will remove and correct a minor inaccuracy in schedule 8 to ensure that the policy is delivered as intended. The change applies to part 4 of the schedule, on the cleansing of mixed funds. For the purpose of these rules, a qualifying individual is one who was not born in the United Kingdom and whose domicile of origin is not in the United Kingdom. The amendment simply corrects the Bill by replacing “or” with “and” when defining a qualifying individual. I therefore urge the House to accept the amendment These reforms have been carefully drawn up to ensure that we get the right balance between protecting the public finances, remaining internationally competitive and showing how much we value the contribution of non-doms in the UK. I therefore urge the House to reject new clause 1.
I thank the hon. Member for Brentwood and Ongar (Alex Burghart) for referring to Plutarch, a Greek citizen who became a Roman citizen—but not a non-dom in that country. Our new clause would require a review to be undertaken on the effects of “the provisions for the protection of overseas trusts in relation to deemed domicile.” Like Queen Gertrude in “Hamlet”, Conservative Members protest too much. Why can we not have a review? That is all the new clause asks for: a review. What is wrong with a review Question put, That the clause be read a Second time.
I beg to move amendment 1, page 14, line 15, leave out “different” and insert “higher” This amendment removes the power for the Treasury to reduce the £30,000 threshold in connection with the taxation of termination payments by regulations.
With this it will be convenient to discuss the following: Amendment 2, page 14, leave out lines 20 to 23 This amendment is consequential upon Amendment 1. Amendment 3, page 14, leave out lines 27 and 28 and insert— “(2) “Injury” in subsection (1) includes— (a) psychiatric injury, and (b) injured feelings.” This amendment explicitly includes (rather than excludes) injured feelings within the definition of “injury” for the purposes of payments which are excluded from the provisions of Chapter 3 of Part 6 of the Income Tax (Earnings and Pensions) Act 2003 (payments and benefits on termination of employment).
Labour’s amendments on redundancy payments focus, first, on ensuring that there is proper democratic scrutiny of any attempt to reduce the £30,000 threshold for the taxation of termination payments, rather than the power to do so residing merely in regulations and, secondly, on ensuring that injured feelings are included in, rather than removed from, the definition of injury for the purpose of tax-excluded payments It is frustrating to be back in the Chamber to debate these issues again, with, again, no indication from the Government of any change in their position. The discussions in the Bill’s previous stages, including in Committee, detailed many ways in which provisions against aggressive tax avoidance and evasion could be tightened. Yet, rather than heed those reasonable suggestions for the removal of loopholes, the Government seem keen to target those made redundant as a potential source of revenue The changes in clause 5 are occurring in the context of the Government being determined to rush headlong into reducing corporation tax rates, despite the Institute for Fiscal Studies and others being clear that there is no automatic link between lowering rates and increasing revenue. In fact, I would hazard to suggest that in this case the opposite might be true. The Government’s previous cuts to corporation tax have manifestly not increased business investment The changes in the clause are also occurring when, as we have discussed, many loopholes have been retained for non-doms and, furthermore, while new measures for corporations exempt some of those firms that appear to have the most labyrinthine business arrangements, designed for tax purposes—not least some public infrastructure companies One might, then, wonder exactly why the Government have decided to stick to their guns and focus tax increases on those who are made redundant, which is effectively the idea that the provisions in the clause promote. We have been told by the Minister repeatedly that there are no immediate plans to reduce the threshold beyond which termination payments are taxable. If that is the case, why create the power to reduce it?
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If I may finish, I will be more than happy to take an intervention To use an appropriate analogy on Halloween, I would not have bought a pumpkin last weekend if I expected it to sit on the shelf when I brought it home. I would have bought it because I expected to carve it, although not very artistically, for my children. I would not purchase something if I did not think I was going to use it, so why are we spending valuable parliamentary time debating a measure that will never be used?
I simply wish to point out that, as I think the hon. Lady will know, the statutory instrument on changing the £30,000 threshold would have to be passed by the House under the affirmative procedure. It would be an affirmative SI, so it would have to be voted on by the House.
The Minister’s point exemplifies exactly what I anticipated might happen. I was just about to say that the second line of defence from the Government, after proclaiming that they would abstain from using the powers that they are so keen to give themselves, is that, in any case, they would have to bring any change to the House for a vote. Indeed, that is what has occurred just now. We are all aware of the difference between passing a measure through the ordinary legislative procedure, with the amount of scrutiny that that receives, and passing a measure through the type of approach that the Minister has mentioned just now. I regret that this appears to be part of a piece, with a broader trend to exempt new policies from the parliamentary scrutiny that they deserve and that the British public have rightly come to expect from its elected representatives Arrangements for those facing redundancy are not, and should not be, a matter of purely technocratic interest. The Government’s failure to raise the tax-free threshold for statutory redundancy pay has meant that it has already lost much of its original real value. That perhaps explains why, when the Government consulted on this issue, there was no conclusive evidence in the consultation either of widespread abuse in this area or of a clamour for a reduction in the threshold We are also asking the Government to reconsider their plans on injury to feelings payments as part of termination payments.
My hon. Friend is making an excellent speech. Does she agree that the watering down of injury to feelings compensation is just another part of this Government’s plans to undermine and erode workers’ rights?
The concern is that this could be part of a piece of a broader movement to erode some rights that have existed for working people in the past.
Some 85% of payments under the £30,000 threshold are not touched by these changes. Where there is the potential for manipulation of amounts above £30,000, does the hon. Lady not agree that that potential tax avoidance loophole should be closed?
I am grateful to the hon. Lady for her comments, but I must tell her that the consultation on the measure did not reveal widespread evidence of such manipulation of the rules. It was quite clear in that regard. Indeed, when advice was sought about appropriate measures in this area in the future, a range of different views came from stakeholders and consultees about the way forward. She is right to say that we are not talking about these changes affecting everyone who is made redundant. They apply to a minority of people, but it could be people who have had a very difficult time and who really rely on that redundancy payment for sustaining some kind of quality of life into the future. It is absolutely important that we have a proper debate about, and parliamentary scrutiny of, any changes, which is exactly what our amendments are intended to do I was talking about the new plans for injury to feelings payments as part of termination payments. I noted that there were many claims from the Government on this topic on First and Second Readings of the Bill, not least that payments allotted via tribunals would not be affected by these measures, but it is not the case that employment tribunals can decide whether payments are subject to tax or otherwise. That is not within their power. Yes, in some cases, some types of employment tribunal award are “grossed up” to take account of the tax that will be due, but that is very different from deciding whether an award is in and of itself taxable, which seemed to be implied in some of the previous debates on this issue In addition, the measures proposed in the Bill would cover the far more common payments made directly by an employer to settle discrimination complaints as part of a redundancy or other dismissal.
The hon. Lady asserts that those awards made by tribunals are not necessarily non-taxable, but those made for discrimination, for example, are completely non-taxable.
If we are talking about payments made for discrimination in the context of a redundancy payment, yes, they are. That is our exact point, which is why we are discussing this matter about injury to feelings. We have had some comments in this House which appear to misunderstand the nature of injury to feelings payments. In some cases, these have been trivialised, almost suggesting that these payments are made because an employees’ nose has been put out of joint rather than something potentially more serious. But “injury to feelings” is a substantive legal category. Where there is genuine evidence of misuse of this category, that should be stamped out, but we have not been provided with such evidence as part of our deliberations on the Bill. Injury to feelings is related directly to discrimination experienced by a person because of their characteristics as an individual—their age, gender, sexual orientation, disability status or ethnicity. This should be taken seriously and it should not be a focus for penalising individuals, as is the case under these proposals. Again, as my hon. Friend suggested, this appears to be part of a piece, with more general measures watering down the protection to individuals suffering from discrimination at work, whether or not they take that discrimination to a tribunal. Clearly, tribunal fees have been struck down because of their discriminatory impact. Now measures are popping up that water down individuals’ protections in other ways.
Just so that our constituents appreciate what is happening in the broader context, does the hon. Lady welcome the announcement that was made in September by the presidents of the employment tribunals of England and Wales that, in each of the three bands for injury to feelings, the maximum award is rising?
Again, I would be very careful to separate out tribunal awards that are made in the context of discrimination at work, which is not what we are talking about, from awards that might relate to redundancy, which is what we are focused on. In relation to discrimination generally, there has been a long-running discussion about what the rates should be for different bands. If one looks at the average award, or, even better, the median award, we are not talking about massive sums of money. It is very important that the public receive that message. For example, someone who has experienced discrimination on the basis of sexual orientation is generally receiving much less than £10,000—I regret that I cannot recall the exact figure. It is very important that we do not give the impression that people are somehow holding companies to ransom in this area. Indeed, that is perhaps underlying some of the change that has been forced on the Government through the court decision that we should not have tribunal fees, because these tribunals are being used not vexatiously, but purposely for people to protect their rights at work In conclusion, Labour’s message on this Finance Bill is clear. We felt that it offered an opportunity to reboot our economy, to deal with our massive productivity challenges and our cost of living crisis, and to shore up public finances by sealing loopholes for the very best-off people and biggest multinational companies. Instead, we have a series of missed opportunities and measures focused on soft targets, rather than on those who can afford expensive accountants and engage in complex schemes to avoid tax.
The House will be delighted to know that I do not intend to speak for very long. We have discussed this matter a number of times before. It is important to note that this measure is a revenue-raising one; the aim is to make £430 million for the Government. However we paint it, these workers are facing redundancy. They are receiving the pay-out at the same time as losing their jobs, so they are vulnerable by their very nature, and are having to think carefully and reassess how they go forward. This additional money will go to the Government, rather than to these workers who are being made redundant. For that reason, the Scottish National party will support the Labour party’s calls, particularly those regarding termination payments.
Does the hon. Lady put in that category, for example, Fred Goodwin, who received a £2.7 million advance on his pension as part of the package he received when he left the Royal Bank of Scotland?
I am not sure that that was a redundancy payment that would be counted in this category. I do not know the tax status of the gentleman, or how much tax he would have paid on that or any other payments he received. It does not appear as though the Government are looking to pursue such people. It seems that they are looking to make tax changes.
The coalition had the chance to do something about Sir Fred Goodwin. Does the hon. Lady agree?
That was before my time in this House. I am not sure what power Parliament would have had regarding the payments. I obviously do not think that somebody who has demonstrably not behaved very well should get huge sums of money as a result The SNP has been clear about our position. We feel that the measure does not offer the protection we would like for workers who are being made redundant. The Government understand that this is our position, and we ask them to make moves on the matter.
I am grateful for the opportunity to speak once again in the debate about the taxation of termination payments Before entering this place, I was an employment rights lawyer for more than decade, so this issue is very important to me. I have represented employees who had been dismissed and discriminated against day in, day out. Very often, this would involve negotiating termination packages or settlement agreements for them. The Bill seems to make it harder for people to get proper compensation for their ill treatment. Having seen at first hand the devastating effect that dismissal and discrimination can have on someone’s life, I am deeply concerned that the Bill seeks to narrow the scope of termination payments An employee can currently receive up to £30,000 in tax-free compensation as part of a settlement package. The figure already excludes from the tax-free amount things that would generally be considered as pay, such as accrued but untaken holiday pay, any unpaid wages or bonuses due, and pay in lieu of notice that is provided for in the contract of employment. However, sums for future loss of earnings or for injury to feelings are generally not subject to tax, provided they do not exceed £30,000 Far from this being about tax avoidance, it is about properly compensating people who have been wrongly treated rather than treating them as a means to top up the coffers. Despite this, the Government wants to give themselves the power to decrease the tax-free amount that can be paid to an employee upon termination. Under the proposals, the threshold could be reduced using secondary legislation, without the full and proper scrutiny of parliament. The Minister says that the Government have no intention to reduce the threshold.
The previous Conservative Government changed the redundancy legislation. The purpose of redundancy money is to tide people over until they can get another job, so it should not be taxed at all.
We know that redundancy payments and the way in which they are capped means that they often do not adequately compensate people after they have been dismissed from work. The fact that the Government want to give themselves the power to decrease the threshold prompts a question: why do they want to do it if they do not want to exercise that power? It seems that they would treat those who have suffered wrong treatment in the workplace as a source of revenue rather than as victims worthy of support. This is all the more important when taking into account the fact that the tax-free threshold has not increased since 1988.
Even given the fact that, as the hon. Lady said, the threshold has not increased for some time, it still covers 85% of payments made in this country. Surely that is an acceptable amount.
The amount should reflect someone’s loss of earnings, their ability to get back on their feet and the injury they have suffered after redundancy, so it is not good enough to tell 15% of these people, “We don’t care about you.” If the threshold had risen in line with prices, it would be £71,000 today. Surely the Government should be going after the billions hidden in tax havens and the corporations that avoid paying tax, as well as properly resourcing HMRC, rather than going after those who have been treated badly at work. Being dismissed or discriminated against at work can have a catastrophic effect on someone’s life, so the Government should not be attacking those who might be at their most vulnerable.
Will the hon. Lady give way?
I will make some progress It seems curious that the Government want to make it a priority to enshrine it in statute that compensation for injury to feelings awards connected to the termination of employment should be taxed as earnings. This is yet another example of how the Government, rather than going after the big corporations that are avoiding tax, would penalise those who have been unlawfully discriminated against at work When we last debated the Bill in Committee on 11 October, it was suggested by Government Members that injury to feelings was some sort of new concept that Labour was trying to introduce to create a tax loophole. Yet injury to feelings is a well-established head of damage, enshrined in the Equality Act 2010 and in the various pieces of anti-discrimination legislation that preceded it, including the Sex Discrimination Act 1975. Guidance on the level of awards was given in the case of Vento some years ago, and it has just been upgraded. The highest award is £42,000 for the most serious acts of discrimination, which usually involves a course of conduct over many years, and the lowest award is £800—usually for a one-off comment. That is established legal principle Under these proposals, however, such awards would be taxed as a matter of routine when the £30,000 threshold is exceeded. Not only does that seem inherently unfair to victims of discrimination, but in practical terms it will lead to all sorts of litigation and drafting issues about whether an award is in connection with the termination or a previous act of discrimination unconnected to the termination. For example, a woman is subjected to sexual harassment at work over a sustained period. She subsequently tells her employer she is pregnant and is dismissed as a result. She pursues a claim for sexual harassment, unfair dismissal and maternity discrimination. She is awarded £30,000 for loss of earnings, which takes her up to the tax-free threshold. She is awarded another £10,000 for injury to feelings. Who determines what part of the award is for the harassment, which is unconnected to the termination of her employment and therefore not taxable, and what part is in relation to the pregnancy-related dismissal and therefore taxable Moreover, because personal injury claims will be exempt from tax but injury to feelings will not be, we are likely to see more employment tribunal claims pleading personal injury—for example, psychiatric damage—which will inevitably lead to complex medical evidence and longer hearings. With strains already on the employment tribunal system and on HMRC, that is surely not the route we should be going down. Or is this just the start of a slippery slope, with the Government ultimately wanting to tax all injury to feelings awards and all personal injury awards For those reasons, I urge the Government to accept our amendments and to go after the real tax avoiders, not hard-working individuals who have been treated unlawfully at work.
Following our vigorous and constructive debate during the Committee of the whole House last month, I welcome the opportunity to reiterate the importance of the changes we are making to the taxation of termination payments today. In doing so, I thank the hon. Members for Oxford East (Anneliese Dodds), for Lewisham West and Penge (Ellie Reeves) and for Aberdeen North (Kirsty Blackman) and acknowledge their contributions Before I respond to some of the detailed points raised, let me begin by briefly reiterating the objectives of the changes we are making. As I have outlined previously, the current rules on the taxation of termination payments can be unclear and complicated. Unfortunately, this complexity has led to a small minority of individuals and employers—particularly those with the most generous pay-offs—seeking to manipulate the rules to avoid paying the tax that is owed. They do so by characterising large pay-offs as termination payments rather than earnings, so that they qualify for the £30,000 tax exemption and an unlimited employee national insurance contributions exemption. As Members on both sides of the House have agreed, this situation is clearly unfair for the vast majority of employees, who are unable to manipulate their payments in this way. The purpose of this clause is to tighten and clarify the tax treatment of termination payments to make the rules fairer and prevent manipulation As we have heard, amendments 1 and 2 would remove the power to reduce the £30,000 tax exemption threshold for termination payments by regulations. As I have said several times in this House, the Government have no intention of reducing this tax-free amount, despite the best efforts of Labour Members to suggest otherwise. Let me assure the House again: any reduction in the threshold would be subject to a statutory instrument and the affirmative procedure, so the House would have to approve any such proposal. The House rejected this amendment in Committee of the whole House, and I urge it to do so again Amendment 3 would exempt from taxation all termination payments for injured feelings. As the House heard earlier this month, this amendment would present further opportunities for those seeking to manipulate the system by opening a large loophole for payments to be routinely reclassified on account of an injury to feelings, without any medical evidence, simply to pay no tax. This is hard to prove or disprove, and it would be very difficult for HMRC to regulate. In any case, payments for injured feelings will of course continue to qualify for the £30,000 tax exemption like any other normal termination payment. The House wisely rejected this amendment earlier this month, and I urge it to do so again The changes being made by clause 5 are a fair and proportionate way to close a loophole in the rules that has unfortunately been open to manipulation in the past. The Government have repeatedly shown that many of the concerns raised by Labour Members are unfounded —and, frankly, give the appearance, at least, of misconstruing an important tax avoidance measure as some kind of attack on those losing their jobs. This politicking is unworthy of the Opposition. I have heard no new arguments or evidence today to convince me of the need to reconsider this clause. I therefore urge the House to reject the amendment Question put, That the amendment be made.
I beg to move amendment 7, page 78, line 19, after “day”, insert “no earlier than 1 January 2022” This amendment provides that the provisions for digital reporting in Clause 60 may not be brought into force before 2022.
With this it will be convenient to discuss the following: Amendment 8, page 78, line 20, at end insert— “(4A) No regulations may be made under subsection (4) until 90 days after the Chancellor of the Exchequer has laid a report before the House of Commons which sets out— (a) the steps which HMRC has undertaken to establish that suitable software is available; (b) the results of the testing by HMRC and others of that software, and (c) the reasons why mandatory use of the software is in the interest of HMRC and taxpayers.” This amendment would require the Chancellor of the Exchequer to report on software suitability and testing before giving effect to the provisions of Clause 60. Amendment 9, in clause 61, page 78, line 34, after “day” insert “no earlier than 1 January 2022” This amendment provides that the provisions for digital reporting in Schedule 14 and Clause 61 may not be brought into force before 2022. Amendment 10, in clause 62, page 79, line 12, at end insert— “(5A) No regulations may be made under sub-paragraph (5) on a day prior to 1 January 2022.” This amendment provides that the provisions for digital reporting in Clause 62 may not be brought into force before 2022. Amendment 11, page 79, line 19, at end insert— “(6A) Regulations under sub-paragraph (5) may not impose mandatory requirements for businesses to generate quarterly updates.” This amendment provides that any system for quarterly updates to be generated must not be mandatory. New clause 2—Taxation of chargeable gains: review of treatment of commercial property held by persons with foreign domicile— “(1) The Taxation of Chargeable Gains Act 1992 is amended as follows (2) After section 14 (non-resident groups of companies), insert— “Review of treatment of commercial property held by persons with foreign domicile (1) Within three months of the passing of the Finance (No. 2) Act 2017, the Commissioners for Her Majesty’s Revenue and Customs shall complete a review about the taxation of chargeable gains held by persons with foreign domicile. (2) The review shall consider in particular the implications if the treatment of commercial property were to be the same as the treatment of residential property under section 4BB(2) (3) The Chancellor of the Exchequer shall lay a report of the review under this section before the House of Commons within three months of its completion.”” This new clause requires a review to be undertaken of the treatment of capital gains on commercial property disposed of by UK taxpayers with a foreign domicile. New clause 3—Income provided through third parties: review of effects generally and in relation to sports image rights— “(1) The Chancellor of the Exchequer shall, no later than 21 July 2019, undertake a review of the effects of the changes made in relation to income provided through third parties (2) The review under subsection (1) shall consider in particular the effects in relation to sports image rights (3) The Chancellor of the Exchequer shall lay before the House of Commons a report of the review under this section no later than 15 October 2019 (4) In this section— “the changes made in relation to income provided through third parties” means the provisions of sections 34 and 35 of and Schedule 11 to this Act, “sports image rights” means the rights or purported rights, whether or not protected or capable of protection under any relevant laws, associated with the identity or activities of a person where those rights or purported rights are associated with their participation or former participation in a sport.” This new clause requires the Chancellor of the Exchequer to carry out and publish a review of the effects of provisions for disguised remuneration in relation to income provided through third parties, including particularly the effects in relation to sports image rights. New clause 4—Impact analyses of provisions of this Act— “(1) The Chancellor of the Exchequer must review the impact of the provisions of this Act in accordance with this section and lay a report of that review before the House of Commons within six months of the passing of this Act (2) A review under this section must consider— (a) the impact of those provisions on households at different levels of income, (b) the impact of those provisions on people with protected characteristics (within the meaning of the Equality Act 2010), and (c) the impact of those provisions on different parts of the United Kingdom and different regions of England (3) In this section— “parts of the United Kingdom” means— (a) England, (b) Scotland, (c) Wales, and (d) Northern Ireland; “regions of England” has the same meaning as that used by the Office for National Statistics.” This new clause requires the Chancellor of the Exchequer to carry out and publish a review of the effects of the provisions of the Bill on households with different levels of income, people with protected characteristics and on a regional basis. New clause 5—Review of the conditions of registration for third country goods fulfilment businesses and traders using their services— “(1) Within six months of the passing of this Act, the Chancellor of the Exchequer shall complete a review of the conditions of registration for third country goods fulfilment businesses and the traders using their services. (2) The review shall consider in particular— (a) an automatic joint and several liability for VAT between registered fulfilment businesses and the traders using their services, and (b) a requirement that registered fulfilment businesses should charge VAT to customers on behalf of traders using their services (3) The Chancellor of the Exchequer shall lay a report of the review under this section before the House of Commons within one month of its completion.” This new clause requires a review to be undertaken of the conditions of registration for third country goods fulfilment businesses and the traders using their services. Government amendments 12 to 16.
I rise to speak to amendments 7 to 11, which relate to the Government’s Making Tax Digital proposals. I do not think I will be able to get in any references to ancient Rome or Greece, unlike my colleagues, because of the subject matter Given that the debate on this package of measures has been ongoing since the first version of the Finance Bill, Labour’s many concerns have been well rehearsed at every stage of the discussions. However, they are not our concerns alone. They echo the worries of businesses, service providers and the trade associations that represent them, including the Institute of Chartered Accountants, the Chartered Institute of Taxation and the Federation of Small Businesses We recognise that Labour’s repetition of and emphasis on the potential damage that the measures might have had has led to a number of concessions over the summer. The Government had to concede that the timeline for implementation was not feasible and undertook a U-turn to delay the implementation of digital reporting for VAT until 2019. The Federation of Small Businesses described that change to the timetable as a “lifeline for small firms”. Labour has also ensured that there is an exemption for small businesses operating under the VAT threshold of £85,000 However, we do not believe that those changes are enough. That is why Labour proposes this package of amendments today. To be clear, we support the principle of digitising tax returns, as we would any measure that purported to simplify the compliance and reporting burden on UK businesses and that might help HMRC efficiently and accurately to collect the amount of tax it is owed. That does not change the fact that the Government have made a chaotic mess of implementing Making Tax Digital. This significant and important change to the system needs to be approached with due care and attention If the Government’s measures are carried out as currently proposed, there is a risk that added costs and unintended consequences will be passed on to small and medium-sized businesses, as tax experts and accountants have warned. The Government’s target implementation date is unrealistic and unworkable. What is more, it will coincide with the uncertainty created by Britain’s departure from the EU, which is already creating a significantly tougher operating climate for small businesses. I note the comments made by Conservative Members during the debate on the first group of amendments about not wanting a review of any measure in the Finance Bill to coincide with Brexit. I am sure that they will apply that view consistently to this package of measures. To be frank, nobody is sure whether HMRC or business can be ready for the implementation date. At present, the plans are rushed and poorly thought through. This is why our amendment proposes that the date is put back to 2022 to allow time for consideration and compliance and to avoid a clash with our exit from the European Union.
Government amendments 12 to 16 fix a small technical error that could otherwise result in an outcome that was not intended. They will ensure that landlords who stop renting out a property and move in rather than sell it are not unintentionally disadvantaged when using the cash basis I now turn to the Opposition’s amendments. New clause 4 requires the Chancellor to review the impact of the provisions on households at different levels of income, the impact on people with protected characteristics, and regional impacts. The Treasury considers carefully the impacts of its decisions on individuals and groups with protected characteristics in line with both its legal obligations and its strong commitment to promoting fairness. The Government have published distributional analysis of measures contained in the Finance Bill in the “impact on households” document which accompanied spring Budget 2017. The Treasury and HMRC also published tax information and impact notes for individual tax measures that include an assessment of expected equalities impacts. I therefore urge the House to reject new clause 4 The Bill includes provisions for the introduction of Making Tax Digital programme. The tax gap resulting from errant carelessness currently stands at £9.4 billion. The Government’s plans for Making Tax Digital aim to address the tax gap and provide a more modern digital service that will help businesses to get their tax right. However, as discussed in Committee, it is also important to do this in a way that works for business. My announcement of 13 July allows a small business more time through a phased implementation of Making Tax Digital. This change has been widely welcomed and stakeholders are now working hard to prepare for MTD Opposition Members have, as we have heard, proposed amendments that would make three changes to the implementation of Making Tax Digital. First, they propose that the programme should be delayed until 2022 at the earliest. As I have said, I have already made changes to the timetable of Making Tax Digital, so that businesses have longer to prepare. Secondly, Opposition Members are seeking to prevent mandatory quarterly updates for VAT under MTD. Most businesses paying VAT already report quarterly. Businesses that are mandated to use MTD for VAT will not be required to provide updates to HMRC more frequently than they do currently, or to provide any more information. Finally, the Opposition have pressed for a report on the suitability of software at least 90 days before MTD for income tax is mandated. The Government are already committed to ensuring that a full range of software is available for MTD and that these have been tested thoroughly. I therefore urge the House to reject the amendments tabled on these clauses.
At a Public Accounts Committee sitting last week on the future customs border and the software upgrade for that, the permanent secretary appeared to suggest that Making Tax Digital was the highest priority IT programme for Her Majesty’s Revenue and Customs. Would the Minister agree with that, or does he think that we should prioritise making sure that our systems can cope with the many changes that may come about through Brexit?
Of course there are a number of HMRC-led IT programmes; Making Tax Digital is but one of them. A new system for customs, the customs declaration service system, will replace CHIEF—the customs handling of import and export freight system—and that has very high priority. We are on target for full roll-out in January 2019; we will begin the CDS pilot in August next year. I am satisfied that the balance is correct at the moment.
Has the Minister spoken to his colleagues in the Department for Work and Pensions, who are embarking on a £13 billion IT contract for universal credit, on the lessons to be learned and the impact on people who are trying to use a system that is evidently not fit for purpose?
As that programme relates to DWP, the question would be best directed in that direction, but I assure the hon. Gentleman that, to the extent that the Treasury and HMRC impinge on the programme, it is for us a very high priority I turn to new clause 2, which, although not debated, was tabled by the hon. Member for Walthamstow (Stella Creasy). I would like to deal with it, because I know that from her perspective it was a very important new clause. I understand why she suggests extending the rules on the taxation of capital gains from commercial property disposals by UK taxpayers with a foreign domicile, but I fear that the new clause and the discussion it has prompted have fallen foul of the complexity inherent in this area. I would like to clarify some of the issues First, contrary to the new clause, it is residence and not domicile that determines whether the disposal of an asset in the UK is within the charge of capital gains tax. UK residents, including non-doms, will always be liable for CGT on the profits from selling UK land, whether that land is residential or commercial. Also, it does not appear that the change that the hon. Lady proposes would apply to foreign companies owning UK commercial property, as domicile does not apply to companies These elements of confusion mean that it is far from clear that the review proposed would work. I remind the hon. Lady that this Government in 2015 started taxing non-residents on their gains from UK real estate—something that previous Governments had ducked. Those changes give a sense of the amount of revenue that an extension of them to the commercial property market would raise. The Office for Budget Responsibility certified that the 2015 changes will raise £40 million this financial year and £70 million in the next. That gives a more realistic sense of the order of magnitude of the amount that this change could raise than the figures suggested in previous debates The hon. Lady has also suggested that taxpayers are designating residential property as commercial property to avoid paying the residential charge. Let me be clear: if residential property is being designated as commercial property, that is a matter of tax avoidance or evasion, not of the scope of CGT. HMRC has not seen any evidence of this practice The hon. Lady has provoked a good debate on this issue. Although I urge the House to reject new clause 2, which confuses too many of the issues at stake, I recognise that a number of points in this area are worth consideration, and we will certainly continue to look closely at the issue of non-residence and CGT on commercial property New clause 3 seeks to commit the Government to carrying out and publishing a review of the tax treatment of income provided through third parties, in particular in relation to sports image rights. Image rights payments have long been taxable. There have been cases where employers have tried to inflate payments for image rights and to reduce salaries accordingly, to deliver a tax saving to both employers and employees. I thank my hon. Friend the Member for Dover (Charlie Elphicke), whom I see in his place, for the insights, advice and support that he has given me on this issue The courts have ruled that genuine image rights payments to an employee are not taxable as earnings. It is therefore for HMRC to ensure that image rights payments are genuine and taxed in the right way. At spring Budget 2017, this Government committed HMRC to publishing clear guidelines for employers who make image rights payments for the use of an employee’s image, and HMRC has done that. HMRC undertakes extensive compliance activity to ensure that employers play by the rules and image rights payments are taxed in the right way. The new clause is not necessary, so I urge the House to reject it New clause 5 asks for a review of the conditions of registration for third country goods fulfilment businesses. The review would also need to consider the case for imposing either joint and several liability or direct liability on third country goods fulfilment businesses for the unpaid VAT of their overseas clients The Government are proud of their record in tackling online VAT fraud, a complex international problem. The UK has led the way with a package of measures that Government first announced at Budget 2016. It includes the fulfilment house due diligence scheme provided for in the Bill and powers for HMRC to hold online marketplaces jointly and severally liable for the unpaid VAT of overseas traders The Government have already undertaken extensive consultation on the scheme in the past 18 months. I assure hon. Members that we will continue to monitor the impact of the legislation. I therefore urge the House to reject new clause 5.
I commend to the Minister the better solution to this issue: making the online marketplaces themselves liable for the VAT on sales outside the EU. In the Public Accounts Committee, Amazon thought that that was a better solution and it would be happy to implement it. The EU wants to do it. The Government have consulted on split payment. Is it not time to push ahead to ensure that we get all the revenue we deserve and need?
My hon. Friend rightly raises one of the approaches that could be deployed to ensure that VAT is paid: the split payment system, whereby the platform itself is responsible for collecting the VAT and passing it on. That is certainly something, along with other measures, that we are considering It has been a pleasure debating this group of amendments. I hope that hon. Members are satisfied on the points we have discussed and I urge the House to reject the amendments and new clauses tabled by Opposition Members.
I think we are all slightly bamboozled by the order in which this part of the debate has happened. None the less, I am thankful for the opportunity to speak We have raised concerns about Making Tax Digital and we will carry on doing so because we have issues with the way in which some of these things are being implemented. I appreciate the fact that in Committee the Minister took the time to answer questions about lack of internet access. I am still not 100% clear about the position for those people who have only intermittent access to the internet. I understand what he was saying about those people being able to make a case to HMRC about why they cannot, through the Making Tax Digital scheme, do quarterly reporting. However, I am still not convinced that the language on that was robust enough to protect any of my constituents who, because of their internet connection, are unable, for example, to reasonably undertake the quarterly reporting that is being asked of them. If he is able to come back on that and clarify the position, I will be grateful. The point he made in Committee was useful, but possibly not strong enough in that regard The other issues we have about Making Tax Digital concern those people who are in particularly rural areas and who therefore struggle with lack of access to technology and the internet and with doing the quarterly reporting. There are also people who do not have access to HMRC offices in the way they used to. We have raised all those concerns. I have said that I am pleased that the Government have changed the way and the order in which the implementation is going to happen. The SNP is not against Making Tax Digital and quarterly reporting, but we have concerns and we want to ensure that our constituents and businesses in our constituency are protected On that note, we said in our manifesto this year that we would support the phased introduction of Making Tax Digital. I want to be clear that we will not, therefore, support Labour’s amendment 11, which is the tack that we also took in Committee. We would not want to vote against something that is a manifesto commitment New clause 2 is on commercial property and non-doms. The statements that I made earlier about the issue of non-doms and about the concerns regarding the complexity of the tax code and possible loopholes in relation to that, apply exactly in this regard. I am pleased that the new clause has been tabled by the Labour party, including the hon. Member for Walthamstow (Stella Creasy), I think. I say that quietly in the hope that I have got the constituency right. I am pleased that this has been put forward. Constituents have got in touch with me and several of my colleagues about this. The Scottish National party has previously raised concerns about the taxation of non-domiciles, and we will continue to do so, in particular around some of the loopholes. We will support new clause 2—many of the constituents who wrote to me will be delighted about that—and I am pleased that this matter is on the table and being debated today.
As it is Halloween, I rise to give the Minister a fright, because if he thinks he is going to get away without properly examining new clause 2 and the benefits that it could bring to our country and British business, he is in for a trick-or-treat moment. There are certainly ghosts that haunt our politics—[Interruption.] I am disappointed to see you being so slow, Mr Deputy Speaker—[Interruption.] That is certainly very spooky As I said, there are ghosts that haunt our politics, so I start my speech by putting on record my thanks to the former Member for Tatton, George Osborne, for inspiring new clause 2. Indeed, I noted that the Minister referred to his work, too. These were the words of the former Member for Tatton in 2015 when the then Government brought in the first rules around tax and non-doms: “It is not fair that non-doms with residential property here in the UK can put it in an offshore company and avoid inheritance tax.”—[Official Report, 8 July 2015; Vol. 598, c. 325.] By using those words, the former Chancellor raised two important issues: first, the fairness of our taxation system and, secondly, how it extends to foreign ownership. He was absolutely right to introduce those measures, but what we are talking about today is the necessary and inevitable conclusion of that debate: what we do when people raise issues about fairness and foreign ownership. The new clause answers that call because, frankly, it is not fair that British businesses have to pay corporation tax on their capital gains when they sell commercial properties, but overseas businesses trading in the UK in UK-based property do not It is not fair that we are one of the few countries in the world to treat its businesses in this way and let foreign companies off the hook—all those real estate investors who some might feel donate so much else to some in this country, but who do not pay their taxes. As the previous Chancellor argued, people can put property into an offshore company to avoid tax If the Minister’s main objection to the new clause is the way in which I have described the domicile of these people, he ought to think again. Certainly, he ought to do as I did today and google the term “tax efficient Jersey UK real estate”, because when he does and he sees the advice being offered to non-resident companies, I suspect he will find it galling. He will find companies including BNP Paribas Real Estate, Ogier, Bedell Cristin and Hawksford boasting about how UK real estate investment trusts based in Jersey but listed on the international stock exchange do not pay the same rates of stamp duty as those resident in the UK, and do not pay capital gains tax. Indeed, the International Stock Exchange itself states: “we have pragmatic listing requirements for this product” That simply means that the businesses involved get to avoid the same charges that our British businesses have to pay. We as British taxpayers should be asking why any company is using such a model—why such companies are given these listings and are able to buy and sell UK property in this way—because it is very hard to see what the justification is, and why we make it so easy to exploit this loophole when there is tax on residential property sales, but not on commercial properties The former Chancellor boasted in 2015 that making non-UK-based people pay capital gains tax on their residential property sales would raise £1.5 billion over the course of this Parliament. The purpose of the new clause is to tell us just how much closing this loophole would raise, and just how much these companies are making through such behaviour Sadly, because the Minister was so determined to get through his speech so quickly, I did not hear the number he came up with. I certainly find it striking that HMRC does not know how much money is missing, but in the spirit of this cross-party measure, let me offer the House some of my own figures The British Property Federation says that there is about £871 billion of commercial real estate in the UK, which represents 10% of our nation’s entire wealth. That is a hugely important market in its own right, but how we buy and sell commercial property also affects our residential property market, as it has an impact on the price of land. For those of us who represent constituencies where house prices are exorbitant, to say the least, tackling the overheating in our property market would be a very noble thing to do. I believe that we would get support for that from both sides of the House. We know that about 20% of commercial real estate is sold every year, and that it was worth an eye-watering £115 billion in 2015—that is the figure the taxman knows about. We also know that about 30% of commercial property in the UK is held in these offshore trusts and companies. For those who are fans of “Countdown” and want to see how I have done my homework, I have done my sums assuming an 8% increase as the long-term trend rate for commercial property prices. Working on that assumption, if about 20% of that property is sold and the current 19% rate of corporation tax is used, there would be about £11 billion of taxable gains every year. It is therefore not unrealistic to expect that around £6 billion of taxation could be collected.
We are told time after time that we should live within our means and that our public services will pay the price if we do not, so is it not the case that the first thing we should do is to maximise our means?
Spoken like a true former local authority leader who has had to deal with the consequences of Government cuts This is about the question of fairness that was put forward by the former Chancellor. None of this is illegal. We might consider it immoral, but it is certainly not illegal, and none of it is captured by UK anti-avoidance rules. The Minister is not being open about companies that might include UK residents who have their properties held offshore. This is unfair to UK businesses. I understand that at present there is concern about economic policies and a dangerous air of radicalism in British politics. Let me reassure Conservative Members who might feel frightened about supporting this measure to close the loophole, and fear that it could be a radical socialist policy—I happen to think that it could be—that this is simply a question of fairness This is also something that most other countries do. Canada, Australia and the rest of Europe do it, so the new clause would bring us into line with them. Indeed, the OECD model double tax treaty explicitly preserves the right of countries to tax non-residents on their capital gains from the disposal of local real estate The Bill itself brings in anti-avoidance measures relating to inheritance tax and to holding property through non-UK companies. That is why it is difficult, having listened to the Minister in Committee, to understand why this particular proposal has been put into the “too complex” category. In Committee, he voted against a similar provision because he argued that it was just too complex, while admitting that the rules introduced in 2015 were designed to catch individuals holding a title over a dwelling in a trust or a closely held company. He argued against the proposal because he said that it would require what he considered to be a whole tax code. My problem with the Minister’s saying that this is too complicated is that it places him and the British Government in a special category. If most other countries can get their heads around how to tax non-resident companies’ capital gains on commercial properties, I simply fail to understand why it is beyond the wit and wisdom of the UK Treasury to do so My hon. Friend the Member for Oldham West and Royton (Jim McMahon) has mentioned the human impact of this situation. The Institute for Fiscal Studies tells us that the Chancellor has black hole in his budget of £20 billion and rising, and that is before we even consider the cost and impact of Brexit. If my estimate is right that closing the loophole would raise £6 billion every year, that money would pay for the entire public health budget helping people with diabetes and heart disease. It would cover restoring nursing bursaries and keeping open our police stations that are currently destined for closure. It would entirely cover the cost of a public sector pay rise in line with inflation—that is according to the IFS’s figures, not mine. When reports tell us that the Government are so short of money at a time when a Budget is coming up, “Is it fair?” and “Can we afford not to do this?” are two important questions for British taxpayers I disagree with the Minister, but if he is worried about the drafting of new clause 2, I would support his tabling an amendment to address the use of the term “domicile”. Even if Government Members are worried about the detail, new clause 2 simply looks at the numbers, so it would give us some information. HMRC does not know the amount that we are missing out on as a result of this loophole. The Minister mumbled something about OBR figures, but I have done my own calculations and we are not talking about small change. This money could have a tangible impact on our public finances now I am sad that the hon. Member for Dover (Charlie Elphicke) is not in the Chamber because he chided my hon. Friend the Member for High Peak (Ruth George) in September about a lack of action on loopholes. This proposal has cross-party support, so I would love Members from both sides of the House to recognise that when we see something that is unfair and costs us billions of pounds, we can act quickly. I am sure that the Minister will be given an opportunity to respond to the debate, so if other countries can do this, if British businesses are suffering unfairness, and if our public services desperately need the cash, will he think again? He says that he keeps the tax situation under review, so if he will pledge to publish a specific review of capital gains tax on commercial properties, I will happily not press the new clause to a Division British taxpayers have a right to know how much money is leaking out of our system as a result of the loophole. I would wager that many MPs will be lobbied by their constituents about closures in their community, public service cuts and struggling businesses, and by people who cannot afford their own home due to the overheated property market. Those people will want answers, so I look forward to what the Minister has to say. When we were young, we were all told that money does not grow on trees, but in this instance the roots are overseas, and it is up to the Minister to pull them up.
I call the Minister.
It is pleasure to appear before you for my second appearance, Madam Deputy Speaker To pick up quickly on a point made by the hon. Member for Aberdeen North (Kirsty Blackman), digital exclusion is covered in clause 62, which provides that the digital exclusion condition is met if “for any reason (including age, disability or location) it is not reasonably practicable for the person or partner to use electronic communications or to keep electronic records.” That is the test, and the Bill contains powers to allow HMRC’s commissioners to bring in further grounds for exclusion as the measure is rolled out and we see how it operates I see that the hon. Member for Walthamstow (Stella Creasy) has been on her phone and has already tweeted that I have rejected her advances in this debate, but I am now at the Dispatch Box trying to make my points. She makes her points powerfully and raises an important issue, as I signalled earlier, but she has to accept that new clause 2 would not actually do what she would intend it to do. It confuses non-doms with residents, which is the critical distinction, and would classify companies as being non-domiciled, which they cannot technically be. This is a complicated area about which we had an extended debate in Committee, but I have made it clear that we will continue to consider it. We take on board the general thrust of what the hon. Lady wants to achieve.
I make it clear that I am not making advances to the Minister; I am making arguments to him. Let me ask him one simple question: if this is so complicated—if it seems that the UK Treasury cannot do it—why can most other countries operate without a loophole?
I have already conceded that point. We are looking at this, which rather trumps any questions about why we are not. We are considering it very seriously, and I said earlier that we are looking closely at the issue of non-residents and capital gains tax on commercial property.
I am pleased to hear that the Government are looking at this important issue, and I congratulate my hon. Friend the Member for Walthamstow (Stella Creasy) on her significant work. When will the Government publish their findings?
It is not a question of publishing information on every area we look into, but I have made it clear that we are seriously considering the issues that have been raised. I have also made it clear that new clause 2 would not do what the hon. Member for Walthamstow describes.
Will the Minister give way?
I will give way one last time. We went through this at considerable length in Committee.
I disagree with the words “at considerable length.” I am grateful to the Minister for trying to explain what I am attempting to do. For the avoidance of doubt, the Opposition are asking that British taxpayers and businesses who are paying this charge know exactly what other companies are getting off paying. He tried to mention something from the Office for Budget Responsibility and he clearly has some figures in his head for how much the loophole is potentially costing the British taxpayer. Will he repeat loudly and clearly what he thinks the number is and where he got his evidence?
As I have said, we are looking at this and we will continue to do so. I have carefully considered the points raised by the hon. Lady both on Report and in Committee, and I think I have a clear understanding, as she does, of what she wishes to achieve. New clause 2 would not do what the hon. Lady intends. I hope that she will take some comfort from my assurances about our looking at this matter and that she will not press the new clause to a Division. Whether or not she does, I urge the House to reject the Opposition amendments and new clauses.
I beg to ask leave to withdraw the amendment Amendment, by leave, withdrawn. Clause 62 Digital reporting and record-keeping for VAT Amendment proposed: 11, page 79, line 19, at end insert— ‘(6A) Regulations under sub-paragraph (5) may not impose mandatory requirements for businesses to generate quarterly updates.”—(Jonathan Reynolds.) This amendment provides that any system for quarterly updates to be generated must not be mandatory. Question put, That the amendment be made.
I beg to move, That the Bill be now read the Third time The work of HMRC, though typically not seen as the most glamorous aspect of government, is arguably the most important. If we do not collect tax, we cannot pay for our public services. Every time a new loophole opens up in the tax code, that is another school we cannot afford or another nurse we cannot employ. That is why since 2010 we have significantly improved HMRC’s ability to fight tax avoidance and evasion, and we have raised £160 billion in so doing. That is a far stronger record than in the 13 years during which Labour was in government, but the work is never over In this Finance Bill, we are going further than ever to make sure that people pay their fair share. First, we are tackling disguised remuneration schemes by introducing new charges on those artificial loans. Secondly, we are updating the rules on how large companies account for the cost of interest, bringing to an end excessive interest expenses claims. Finally, we are giving HMRC the greater powers it needs to punish avoidance enablers effectively. Taken together, the changes will advance our fight against aggressive tax avoidance Alongside our avoidance and evasion work, the Government are committed to making the tax system fairer as a whole. In the Bill, we are bringing to an end permanent non-dom status. There can and should be no denying that non-doms have made a great contribution to our prosperity, but permanent non-dom status can be unfair to UK-domiciled citizens. From now on, with the abolition of non-dom status, those who have lived in the UK for years will pay UK tax in the same way as everybody else does The Government recognise that we need to move with the times, and part of that is our work on making tax digital. Every year, the Exchequer loses more than £8 billion in avoidable errors. By making tax digital and easing communications between HMRC, businesses and the self-employed, that loss will be significantly reduced. To help businesses to adjust, we will go forward with a gradual process, as I set out in my written statement. We are confident that the timetable is the right one I would like to take a moment to thank Members on both sides of the House for their scrutiny of the Bill on Second Reading and in Committee. The debate has been broad and thorough, and I am particularly grateful to the Labour and Scottish National party Front Benchers for the courtesy and consideration that they have shown me and for their contributions to the debate I would like to make one or two final observations. It is, of course, the duty of the Opposition to oppose, to scrutinise and to hold the Government to account, and there has been much good, positive scrutiny from the Opposition—some of it of the highest quality—during proceedings on the Bill. But it is, surely, also the duty of the Opposition to do so responsibly and without taking us too far from the facts or too deep into the politics. Where that occurs—for example, with the branding of all non-doms as tax dodgers, when many are far from wealthy and always pay their tax in the UK—it corrodes this country’s competitiveness and our reputation for fair play. If our clamping down on tax abuse around termination payments—typically for those who receive the largest payments of all—is presented as punishing those who have lost their jobs, it just frightens people. That approach is wrong. The Government stand squarely behind positively supporting our economy and all who work in it, and we always will. I commend the Bill to the House.
The Finance Bill that is before the House is nothing short of a wasted opportunity. It is indicative of a Government who wish to serve the interests of a wealthy few at the expense of the many. That is a fact. Rather than introducing measures to bolster people in their daily lives, such as sensible proposals on investment, fair taxation, raising the UK’s woeful productivity and improving the terrible productivity in many of the regions, the Finance Bill will, if it is enacted, water down workers’ rights, bring added financial burdens to small and medium-sized businesses and exempt offshore trusts from any reform of non-dom status. It is telling that Conservative Members spent more time on the latter than they did on redundancy payments or digital taxation, which affects many of our small businesses. This Government are enveloped in atrophy. They have done nothing to tackle falling wages, deal with rising levels of personal debt, or tackle poor productivity. They have overseen an economy in which women are paid, on average, 14% less than men, and in which there are large race and disability income gaps. They refuse to invest in the nation’s infrastructure or in the British people. Under Tory rule, Britain has become one of the most unequal countries in Europe. UK Government investment is lower than that of every other major economy. That is a fact Inflation is outstripping wage rises, while housing and energy bills are rising once more and our productivity is lower than in the rest of the G7. What a record after seven years. The public sector pay cap has driven down wages, and cuts to in-work benefits are leading to more people than ever using food banks, with 1 million food parcels having been given out. Meanwhile, the Chancellor boasts of high levels of employment, but is in absolute denial about the rising numbers of people in insecure, low-paid work that does not meet their needs and those of their families The Government have managed to stitch up Public Bill Committees, despite not having a majority, and they are using arcane rules to deny this House the ability to amend and scrutinise legislation. The younger generation feel betrayed after seven years of Tory austerity. The Government have trebled tuition fees to over £9,000 and abolished maintenance grants, ensuring that the average working-class student leaves university heavily in debt and with little prospect of relieving it. The bottom line is that the Tory Government are in complete and utter decay. The housing market is entrenching and extending inequality between regions, classes and generations. Quite frankly, we cannot support a Bill that does not put any of that right, so we will not support it.
I am delighted to be in the Chamber to talk about the second of the three Finance Bills we will have this year. When the Chancellor stood up and said we would move to having fewer fiscal events a year, I am not sure that this is what he had in mind. I am particularly excited about the third one, which will be coming along soon, and I really hope that it takes account of Brexit because the Government’s Finance Bills have so far failed to do so. I hope we will have a Budget that takes account of the economic shock that will happen as a result of Brexit, puts in place the infrastructure spend that we particularly need and makes it clear that we should stay in the single market On our specific concerns about this Finance Bill— I saw you getting a bit edgy, Mr Deputy Speaker, but I will get on to it—I agree with Labour Front Benchers that there have been a number of missed opportunities, and we still have concerns. We have previously mentioned these concerns, but they bear repeating because this place is good like that The first issue is VAT on police and fire services. This Finance Bill should have taken the opportunity to remove the VAT paid by Scottish police and fire services. We have made this case time and again and we will continue to do so. I hope that the Chancellor will listen and make changes in the Budget. We would like the VAT that police and fire services have paid to be paid back, and we would like the VAT bill to be got rid of in the future. There is a precedent for doing so—other organisations do not have a VAT bill—and we will carry on making this case very strongly.
My hon. Friend makes the interesting point that this is not simply about making a change for the future, but about repaying the money that has been overpaid for some years. Will she re-emphasise to the UK Government the message that we are not simply looking for such a change, but want paid back that which should never have been paid in the first place?
That is absolutely the case, and I thank my hon. Friend for highlighting this point. It is very important that the Government recognise that Scottish police and fire services never needed to pay this money and that they give us back the overpayments that have been made. Frontline police and fire services are losing out as a result of those organisations having to pay VAT I have a couple of other points specifically about the Bill. We have already raised the issues involving termination payments, which Labour Front Benchers did a very good job of highlighting. I am very concerned about the impact on vulnerable people and those who have lost their jobs and about the fact that this £430 million tax take for the Treasury means there is £430 million less for people who are made redundant I say again that I am pleased by the moves the Minister has made in relation to changing the implementation and phasing in of digital reporting. I appreciate his making it clear that tax measures put in place by the Treasury and implemented by HMRC are constantly under review. My concern is that even though it is said that these things are constantly under review—that is always said during the passage of Finance Bills—there is very little evidence of any reviews actually happening. Certainly, the majority of the reviews that do take place are not made public, so we cannot see the impact of those tax measures. I have done some digging and asked the Library about these matters, but as I say, very few of the reviews have been made public. It would therefore be good if the things the Minister has said will be under constant review were actually under constant review and if that could be shared with Members across the House and not just, for example, people working within HMRC I gather that the changes to elections for removing fields from petroleum revenue tax have widely been welcomed by the industry. In two successive Finance Bills, successive Chancellors have committed to changing the tax regime for decommissioning assets, so that it will be easier to transfer late-life assets to a new clearing in the market, which is very important in maximising the economic recovery of the North sea fields. I say again that Chancellors have promised that twice, yet action has not been forthcoming The Chancellor has said that the results of the review will be in the Budget. I do not want him to back away from the commitment that he has made. It is very important for the oil industry, not just in Aberdeen and the north-east of Scotland, but for the hundreds of thousands of people who are employed in the industry across the United Kingdom. It is very important that it does happen to maintain confidence in the industry. We have had a period in which things have not been great in the industry. Confidence is beginning to build again and this change would make a huge difference Something that we voted against in Committee and that we disagree with is the change to the dividend nil rate. It is being reduced from £5,000 to £2,000. The SNP has argued against that not only because it is the wrong way to go, but because it is being brought in too quickly. People who have set up a small business or become self-employed in the recent past may not know that this change will be coming in and hitting them very shortly, so they will not have built it into their business plan. I am concerned not that it will reduce entrepreneurship, but that it will affect people who have made finely balanced financial decisions about the future fairly soon. We raised those concerns in Committee. For me, this is the worst proposal in the Finance Bill—the one that I disagree with the most and that I would argue against the most strongly I have made the key point that the Bill ignores Brexit. I agree with those on the Labour Front Bench that the Bill ignores productivity. Every day, more statistics come out and more issues are raised about the lack of productivity growth in the UK and the ripples that that causes. The Conservatives keep saying how great it is that we have so many people in employment. The problem is that those people are not getting wage rises that even keep pace with inflation. People are getting poorer, even though they are working hard, sometimes in low-paid jobs, simply because wages are not keeping pace with inflation. That is a big concern for us When she came to office, the Prime Minister was very clear that she would try to do things for people who are just about managing. Over the past year or so, it has become clear that life for those people has been getting significantly worse. I would like this year’s Budget to take account of that, to take account of the fact that austerity has failed and to take account of the fact that people are poorer as a result of this Government’s policies and make moves to change that Question put, That the Bill be now read the Third time.
The petition is about a free school site in Hackney that is designated for 630 pupils. We have strong concerns locally that it is not suitable for those pupils. It would not create a suitable modern school facility. It has a complete lack of play space for children and will cause undue stress on the local area, particularly with traffic because of the breadth of the catchment area. The petition states: The petitioners therefore request that the House of Commons urges the Secretary of State to refuse the appeal against Hackney Council’s decision to refuse planning permission Following is the full text of the petition: [The petition of residents of Hackney, Declares that the former police station in Lower Clapton Road is not a suitable building for a new school of 630 pupils due to its size, as there are access issues which are fundamental to the success of the school; further that these issues make it an inadequate learning environment; further that there is almost a complete lack of play space for young children; further that there is a complete lack of play space for young children; further to there being an unacceptable burden on the local area due to likely car use for pupil drop off/pick up and further to over intensive use of local facilities due to inadequacies of school site. The petitioners therefore request that the House of Commons urges the Secretary of State to refuse the appeal against Hackney Council’s decision to refuse planning permission. And the petitioners remain, etc.] [P002070]
I rise to present a petition on behalf of my constituents. There are 19,000 names on this petition, all gathered within four weeks, which demonstrates the determination of Scunthorpe market traders and their customers to stand up for the market in the face of the threat posed to its future by North Lincolnshire Council The petition states: The petition of residents of Scunthorpe County Constituency, Declares that Scunthorpe Market has been trading on the same site for over a century serving generations of local people; further that North Lincolnshire Council may split the market over two sites; and further object to the North Lincolnshire Council’s plan to move traders to an outdoor market on the grounds of: impracticality, hygiene considerations and concerns around stock The petitioners therefore request that the House of Commons urges the Government to reach out to North Lincolnshire Council to encourage them to keep Scunthorpe Market together in the current location And the petitioners remain, etc [P002071]
I rise to present a petition of the residents of the United Kingdom to request that this House urges the Government to hold a public inquiry into the so-called “battle of Orgreave”. The Government argued a year ago that no lessons could be learned from an inquiry and that, because no one had died, justice could go unserved. But, in the words of the Prime Minister, historical inquiries are not archaeological excavations. They are not purely exercises in truth and reconciliation. They do not just pursue resolution. They are about ensuring justice is done The petition states: The petition of residents of the United Kingdom, Declares that the events of Orgreave Coking Plant in June 1984 and the aftermath, had a huge and lasting impact upon coal field communities; and further to public suspicion surrounding the actions of the South Yorkshire Police a deep mistrust in the community remains as a result The petitioners therefore request that the House of Commons urges the Government to commit to a full public inquiry into policing at Orgreave, and its aftermath to finally authoritatively establish the truth And the petitioners remain, etc [P002072]
I am delighted to have secured this debate to raise awareness of the very rare condition known as Pompe disease. I hope that the very holding of this debate will contribute to that, and I look forward to the Minister’s response, and hope that he will set out some constructive suggestions on what we will do going forward to deepen knowledge and understanding of this awful disease My journey towards an involvement with Pompe disease and securing this debate began when I was visited in my constituency surgery by my constituent John Foxwell. He is a polymath. He is an award-winning author and publisher, specialising in communication technology. He worked for his community, too. He lives in my constituency at present, but he previously lived in Devon where he was both an elected councillor and served as mayor, and was also a trustee and director of his local food bank Drawing widely on his experience as a teacher and headteacher, John Foxwell has contributed to UK Government policy over the past 20 years. He has managed national educational projects including the first education action zone and the Building Schools for the Future project, and contributed to education White Papers. His reports on education have been drawn on by international companies. Prior to that, he worked in buying and merchandising for a multinational cycle and auto retailer. Knowing the importance of communication, he also founded companies that assisted those who come to the UK from other countries, developing translation tools and assisting community cohesion Now, however, John Foxwell has had to leave that remarkable career behind him. He has to spend up to 15 hours a day on a mechanical ventilator to enable him to breathe, as his diaphragm is paralysed. He cannot walk far, or lift or bend or lie flat—if he did, he would struggle to breathe—and he falls easily. A common cold could cause him to go into respiratory failure and die. His life expectancy is significantly reduced. His wife has had to give up her own job to look after him. She is one of an army of carers across the country whose work needs to be recognised right across the House John Foxwell is one of only about 150 people in the UK who have Pompe disease. The condition is named after a Dutch medic called Joannes Cassianus Pompe. Given that he was Dutch, his surname was probably pronounced “Pompa”, but the disease has become known as “Pompey” disease. He was born in Utrecht in September 1901, and later studied medicine at the city’s university. His breakthrough came in December 1930, when he carried out a post-mortem on a baby girl who had died at the age of just seven months. He discovered that her heart had become enlarged and that the muscle tissue in the heart had become like a mesh. He thought that a substance build-up was causing that to happen to the heart muscle and came to the conclusion that that substance was glycogen. In other words, the sugar strings that store energy in cells had not broken down as they should have done, due to a faulty gene inherited from the little girl’s parents. Dr Pompe became a pathologist at the Hospital of Our Lady in Amsterdam in June 1939, and after the German invasion of the low countries in the second world war, he became a part of the Dutch resistance. He was involved in finding places for Jewish people to hide from Nazi persecution. His laboratory at the hospital housed a radio transmitter that was used to send messages from the Dutch resistance to the United Kingdom. He was eventually arrested by the Nazis in February 1945, after the transmitter was detected. On 15 April 1945, he was executed as part of a reprisal for the Dutch resistance blowing up a railway bridge. The discoverer of this disease seems to have been a very brave man indeed Dr Pompe had discovered what came to be known as the first category of the disease, the infantile variety that presents in small babies who fail to thrive, and that often leads to death from heart failure in the first year of life. Life expectancy in those case is, alas, less than two years. The second category is “late onset” where, as the name suggests, symptoms do not become apparent until later on in life. As is the case with my constituent John Foxwell, progression is generally slower, but it is characterised by skeletal muscle wasting that causes mobility issues and breathing problems Those who suffer from the disease receive support from Muscular Dystrophy UK—I put on the record my thanks to it for sending a briefing in advance of this debate—and the Association for Glycogen Storage Disease (UK), which also provides support to sufferers here. The standard treatment for Pompe disease is enzyme replacement therapy. The faulty gene that is inherited from sufferers’ parents stops the creation of an enzyme called acid alpha-glucosidase—I will refer to it as GAA from here on—that breaks down the sugar strings of energy in muscle cells. The enzyme replacement therapy involves a genetically engineered enzyme that assists with regulating glycogen—the sugar strings— and is received into the body by regular infusions. The trade name for the enzyme is Myozyme, which is available from the pharmaceutical company Sanofi Genzyme The availability of Myozyme differs slightly around the country. In England, it is directly commissioned by NHS England under specialised criteria. In Wales, where my constituent lives, the All Wales Medicines Strategy Group recommended to the Welsh Government that Myozyme should be endorsed within the NHS in Wales for the treatment of Pompe disease, but there is a specific restriction in that it is not endorsed for late-onset Pompe disease on grounds of insufficient evidence of clinical effectiveness.
I congratulate the hon. Gentleman on presenting such a wonderful account of the gentleman involved in the history of the disease. Like others, I have been contacted by Muscular Dystrophy UK, and rare diseases come up here often and are a particular interest of mine. This is ultimately a question for the Minister, but does the hon. Gentleman agree that the Department of Health must ensure that there is adequate support for the centres across the UK that provide highly specialised care for patients with this rare muscle-wasting disease? I think the Minister will respond to that, but the hon. Gentleman’s speech encapsulates what we are all trying to achieve here.
I am grateful to the hon. Gentleman. I entirely agree that support for the different centres across the country is absolutely vital. While we all know that health is a devolved matter, awareness is so important and is something that we can still promote across the United Kingdom My constituent’s particular issue with accessing treatment is that he falls into a category that does not have general commissioning for late-onset Pompe disease, meaning that he would be left having to make an individual funding request, only some of which are successful. However, the reality is that nobody has a chance of accessing the treatment if the disease is not diagnosed in the first place, which was the real challenge facing John Foxwell. His diagnosis took over seven years. Many consultants told him that his diaphragm was paralysed—that was pretty obvious—but they made no link to the disease that was causing the paralysis. John went through some incredibly difficult periods of low appetite, when he was living only on jelly and milkshakes. Unable to function and to continue with the wonderful career that I described, he moved back to Wales, where he was originally from, to die Then the diagnostic break came. Nevill Hall Hospital, Abergavenny, is in the constituency of the hon. Member for Monmouth (David T. C. Davies), but none the less it serves a number of my constituents in Torfaen. A respiratory consultant at the hospital gave my constituent a mechanical respirator, which helped him significantly. In addition, he was advised to see a neurologist, who conducted a series of tests, including a genetic test that finally identified late-onset Pompe disease Pompe disease is incredibly complex, and it requires a multi-disciplinary approach. The medical disciplines required include geneticists, pulmonologists, neurologists, cardiologists, respiratory therapists, physiotherapists, dieticians and clinical psychologists. Conditions that cross the medical disciplines in that way are, of course, a challenge for our NHS across the country, but it is a challenge that we can and must meet I will conclude with an email that my constituent sent to me, which shows where he is at the moment: “Now I am almost a recluse as I find that leaving the house is extremely challenging. I don’t know the future, but I do know, from statistical testing in other countries, that there are many more people with Pompe Disease out there that are needing to be diagnosed and that I want to be able to assist…in understanding the disease and supporting them when they need help. I am creating Pompe Wales, a Pompe Disease specific charity, to be able to help others who have Pompe, to be able to make the medical professionals aware of Pompe and its symptoms and to link with other Pompe organisations around the world” That shows that those who suffer from the disease, named after Dr Pompe, share characteristics with him—they are determined and courageous. But, for them to be able to fight this disease, it must first be identified. The only way to do that is to raise awareness across the medical professions. Nobody should suffer unduly because of falling victim to a disease that is extraordinarily rare.
I congratulate the hon. Member for Torfaen (Nick Thomas-Symonds) on securing this debate. I often think this about Adjournment debates, but this shows how excellent the House of Commons is in that it can debate a Finance Bill and then discuss a condition like Pompe disease I read the hon. Gentleman’s article in The Times this morning. The article was well written, and it set out very clearly the heart-breaking impact that this disease has had on his constituent’s health. I am sure his constituent appreciates very much the way he has taken up the issue. Well done for getting an article in The Times I hope my response will go some way to reassuring the hon. Gentleman and his constituent that the importance of understanding how to recognise and treat rare diseases such as Pompe disease is increasingly recognised by policy makers and healthcare service providers, not just in England but across the UK and internationally The hon. Gentleman spoke movingly about the subject, and he is of course right to praise the army of carers in our country. Carers Week is a big deal in my constituency, as I am sure it is in his, and he is absolutely right to praise the work of Muscular Dystrophy UK. When I was a Back-Bench MP, I was a member of the all-party parliamentary group on muscular dystrophy, which was chaired by a now former Member. Having grown up with friends who suffered with muscular dystrophy, and who ultimately lost their fight, I have a lot of time and respect for Muscular Dystrophy UK The number of rare disease patients can be very small. For example, Pompe disease has an estimated prevalence of one in every 40,000 births, but collectively some 3.5 million people in the UK alone are affected by what we term, in policy terms, rare diseases. To put this in context, one in 17 people will therefore suffer from a rare disease at some point in their lives. As we have heard, patients with Pompe disease are deficient in or completely lacking the activity of an enzyme that affects the ability of cells to degrade glycogen, causing its build-up in the body cells, which impairs their ability to function normally. Pompe disease often affects neonates—newborn children—and becomes apparent from within a few days to a few months after they have been born. Sadly, affected infants often require long periods in paediatric intensive care units, with many going on to require long-term mechanical ventilation, as the hon. Gentleman said.
I thank the Minister for that positive introduction to his speech. One issue that my constituent raised with me was that because this disease is genetic it can be picked up by a blood test from birth. He has asked whether such testing could be done on a more regular basis. I understand that this is difficult because the disease is so extraordinarily rare, but I flag it up for the Minister’s attention.
The hon. Gentleman makes a good point, and I know my officials will be listening carefully to what he says. I may come to touch on that point, if I do not deal with it specifically, but I am sure he will remind me Some patients with Pompe disease are treated with an enzyme replacement therapy called Myozyme, which is a direct replacement of the missing enzyme via infusion therapy. Myozyme dramatically alters the natural history of the disease in infants, but many patients still require complex long-term follow-up, as the hon. Gentleman’s constituent does. NHS England commissions its service for patients with Pompe disease from eight national centres; five of these are for adults and three are for children. The centres provide an inclusive, holistic, multi-disciplinary service—the point the hon. Gentleman rightly makes—for patients with lysosomal storage disorders. That is the wider term for these conditions, including Pompe disease. The centres provide rapid diagnosis, an assessment of disease burden, provision of disease-specific therapy, advice on symptom control and palliative care, where this is, sadly, necessary for patients with untreatable disorders. In conjunction with patient advocacy groups, the centres also provide support for affected families. We of course support these centres utterly—that point was put on the record so well, as usual, by the hon. Member for Strangford (Jim Shannon) As the hon. Member for Torfaen says, late-onset Pompe disease may not become apparent until later in childhood, adolescence or most commonly, as in the case of his constituent, Mr Foxwell, in adulthood. Although late-onset Pompe disease is usually milder than the infant forms of the condition, patients can experience progressive muscle weakness in the legs and trunk—the main body—and it can affect the muscles that control breathing, which is why the mechanical ventilation becomes necessary. As we have heard, as the condition progresses, breathing problems can become more serious and often prove fatal We know more can be done to diagnose rare conditions earlier. Currently, the average rare-disease patient consults five doctors, can receive up to three misdiagnoses and waits four years before receiving their final diagnosis. These delays in diagnosis often mean that opportunities for timely interventions can be missed and/or that patients may be given unsuitable or harmful treatments to treat their misdiagnosed condition; more than half of patients wait for more than one year after the first symptoms and some have waited over 20 years. Although not a great term, I am reliably informed that this is called a “diagnostic odyssey”, which causes uncertainty and distress for those affected, as well as considerable costs for health and social care budgets. We should remember that The 100,000 Genomes Project—
rose—
I was going to touch on that project, but before I do I shall give way to the hon. Gentleman again.
I am grateful to the Minister for giving way again. Before he moves on to the genomes project, I just wanted to touch on the issue of the diagnostic odyssey. My constituent’s diagnostic odyssey was seven years, and clearly although the symptoms, particularly the issue involving the diaphragm, were very apparent and were picked up, this was about making the link from there to the rare disease. Clearly, one always has to take into account statistical probabilities—there is no direct criticism of any medic or anything like that here—but part of trying to reduce that diagnostic time must be about increasing awareness among the medical profession of many of these rare diseases.
Yes, I absolutely agree. I also have ministerial responsibility for cancer—if only I had a pound for every time I heard early diagnosis mentioned in the office. I shall explain how I think the rare diseases strategy can help with that. Of course, it is important not just for rare diseases, but what the hon. Gentleman says is absolutely right The 100,000 Genomes Project addresses parts of the unmet diagnostic need I have described. It focuses on patients with a rare disease and their families and on patients with cancer. The sequencing of an individual’s genome is increasingly utilised as a diagnostic tool in cases where an individual has unrecognised signs and symptoms and to support the diagnosis of a rare disease. I am pleased to say that around 25% of patients whose genome is sequenced through the project now receive a diagnosis for the first time. In addition, despite their often chronic and progressive nature, the associated long-term complications of some rare diseases can be targeted and addressed early if they are diagnosed as such. That is clearly the holy grail. The UK rare diseases policy board has been tasked with looking at the diagnostic issues—the odyssey that I mentioned—and I look forward to it reporting its initial findings to me. I am told that they will come in early 2018, so I shall look out for them I assure the hon. Gentleman that the Government are and remain dedicated to improving the lives of all patients with rare diseases. The publication of the UK strategy for rare diseases in 2013 represented a significant milestone for all patients with rare diseases, and it is now being implemented throughout the country. The strategy set out our strategic vision and contains 51 commitments, concentrating on raising awareness, better diagnosis, which has been touched on, and patient care. It also has a strong emphasis on the importance of research in our quest to better understand and treat rare diseases. Research is so important. The Government are committed to implementing the strategy in full by 2020, and we know that the real test of success will be when patients and families affected by rare diseases experience real improvements The Minister of State, Department of Health, my hon. Friend the Member for Ludlow (Mr Dunne), announced in a 28 March Westminster Hall debate on the implementation of the strategy that NHS England will produce an implementation plan for the commitments in the strategy that it has lead responsibility for, and I shall hold NHS England to account ministerially. The Department of Health is now working collaboratively across stakeholders to produce the implementation plan for all those commitments that fall outside NHS England’s remit. Both NHS England and the Department are aligning the publication of those complementary plans, and I want them on my desk by the end of the year We appreciate the fact that any specific rare disease is, by its nature, very rare, so we should be honest about the fact that there is often a scarcity of patients and expertise in any single country. The diagnosis, treatment and management of rare diseases strongly benefit from cross-border collaboration. Through an EU initiative on patients’ rights in cross-border healthcare, European reference networks were set up throughout European countries earlier this year. These virtual networks act as centres of knowledge, skills and expertise in the field of rare diseases and complex conditions, and provide a platform to create partnerships between healthcare providers here in the UK and throughout Europe The UK is already a key player, leading six ERNs—more than any other member state—and participating in 23 of 24 networks, including what is known as the Metab ERN, which covers rare hereditary metabolic disorders such as Pompe disease. Six NHS trusts participate in the Metab ERN, which aims to ensure a joined-up approach to care by bringing together paediatric and adult metabolic physicians throughout the EU. That is really important. The ERNs are a cornerstone of the UK rare diseases strategy, and the Government are committed to ensuring that no patient should be put at a disadvantage through the UK’s exit from the EU—and that is a priority for me. Therefore, an important element of our future plan will be to continue to play a leading role in promoting and ensuring public health—I am also the Public Health Minister—both in Europe and around the world. Hopefully, that will further strengthen the long tradition of international collaboration, which our clinicians and scientific community have in this country, and often lead across Europe and the world Let me touch further on research. The full potential for improving our knowledge of rare diseases and our work towards better treatment and, hopefully, prevention can only be realised by continued research into rare diseases. That is why the National Institute for Health Research has established 20 biomedical research centres that develop new groundbreaking treatments, diagnostics and care for patients with a wide range of diseases The centres enrolled patients across 60 NHS trusts and, in partnership with Genomics England, led a pilot for the rare diseases element of the 100,000 Genomes Project that has delivered the sequencing of whole genomes of more than 12,000 bioresource participants.
rose—
I think that I can anticipate the hon. Gentleman’s intervention. Go for it.
I am very grateful to the Minister for his generosity in giving way. My constituent has been unable to demonstrate the exceptionality required to access the treatment through an individual funding request. In reality, there is only this one standard treatment. One thing about the research into rare diseases that the Minister has referred to is the need to discover more options for treatment rather than having only one realistic one, as is the case so much of the time.
I completely agree with the hon. Gentleman. That is why I said that research is absolutely central to this. Let us be honest: this country has led the world in this field. We have an absolutely fantastic record and long may that continue, because people’s lives benefit and depend on that. Once again, he is spot on. Let me conclude my point. In 2016-17, the NHIR research infrastructure supported studies into Pompe disease across nine of its centres and facilities The hon. Gentleman referred to national variations in access to Myozyme treatment for Pompe disease across the UK. In England, NHS England funds this treatment for all patients, regardless of age or the form of the disease. In Scotland, the Scottish Medicines Consortium does not accept Myozyme for routine use, but it is funded for children and adults by its ultra-orphan drugs risk scheme. NHS Scotland also provides any patients with particularly complex needs access to highly specialised services in England. In Wales, I understand that the treatment is funded for children and adults with late onset of the juvenile form of the disease, but not the adult form where the symptoms are less severe As the hon. Gentleman will be aware, healthcare in Wales is a devolved matter, but I am sure that he will raise any concerns with the Welsh Government. I was delighted to hear about the setting up of Pompe Wales, which he talked about in his speech. It sounds really interesting. Obviously, it is in Wales, so perhaps he could send me details of it when it becomes available.
The Minister is entirely right. It is commissioned in Wales for the infantile aspect. There is no general commissioning for late onset. There has to be what is called an individual patient funding request, where a patient has to demonstrate certain things, including exceptionality.
The hon. Gentleman has put that clearly on the record Finally, it is worth noting that the rare disease landscape has been greatly transformed since the UK strategy was published in 2013, especially considering Brexit, the evolving legacy of the 100,000 Genomes Project and new emerging technologies such as genome editing. The recent independent chief medical officer’s report “Generation Genome”, which I said at Health questions was a landmark piece of work, and the “Life Sciences: Industrial Strategy” make it clear that genomics has an important role to play in future healthcare delivery, including the treatment of rare diseases. The House of Commons Science and Technology Committee is also currently engaged in an inquiry into genomics and genome editing in the NHS, and I look forward to seeing its report in due course. I can assure the hon. Gentleman that we will harness the remarkable prospects that these new developments present for the benefit of our rare diseases patients. The NHS has always harnessed new technology to lead the world, and it will continue to do so in this field I thank the hon. Gentleman once again for highlighting these issues in this debate and in today’s media for his constituent and for all those who suffer from Pompe disease and other rare diseases. I hope that I have helped to reassure them a little that the Government and the NHS are working hard to tackle these conditions and to help to improve the lives of people suffering from Pompe disease and other rare diseases because, ultimately, that is what we are here for Question put and agreed to.