The Economy

Ian Murray Excerpts

Thursday 24th October 2019 Commons Chamber

[John McDonnell]

Madam Deputy Speaker, I know that large numbers of Members are seeking to make speeches—I will take a number of interventions, but I will protect the time as best I can for others to speak.

Let me give my hon. Friend this assurance on that critical point: in our last Labour party manifesto, we promised that we would review the mineworkers’ pensions scheme—it is dear to my heart, because I was one of the administrators of the scheme soon after I left university, when I worked for the RMT—and we will review it because we want to lift miners and many miners’ widows out of the poverty that they now live in. We give that commitment.

I mentioned insecure work. There are now about 900,000 people on zero-hour contracts—up by 100,000 from a year ago—and real wages are still below pre-crisis levels. The Government like to talk about wage rises and wages rising at their fastest rate in a decade. It is a bizarre claim, because the Government have been in charge of the economy for the last decade, suppressing wages all through that period. According to the Financial Times, the UK was the only major economy where growth returned but wages fell. According to TUC calculations, since 2010, average pay has also fallen for 7.7 million low to middle-income earners, and 11.5 million middle to high-income earners. It is extraordinary that that was not even acknowledged in the Queen’s Speech—that we now have a low-pay, insecure-job economy that this Government have created over the last decade.

[Ian Murray (Edinburgh South) (Lab)]

What my right hon. Friend’s wonderful speech is proving is that Government priorities make a difference. The previous Labour Government lifted millions and millions of children out of poverty, and the Government’s priorities since 2010 have plunged them all back in again.

[John McDonnell]

Let me put on record that we pay tribute to Gordon Brown for the work that he did during that period. He committed himself to lifting children out of poverty and, my God, he delivered it.

Devolved Administrations: Borrowing Powers

Ian Murray Excerpts

Tuesday 9th July 2019 Westminster Hall

[Luke Graham]

I thank the hon. Gentleman for his intervention. I could not agree more. What I cannot understand is the clamour and constant push for powers from the SNP, who have been saying, “We want more powers; we need them.” We have the borrowing powers. We have the tax-varying powers. We have flexibility over the business rates. We have flexibility over council tax. It is Edinburgh that decides how much our local authorities get. Just like the hon. Gentleman, I have experienced my local authority being underfunded in a way that has meant that education and general maintenance in our counties has suffered. I cannot understand it either. I wish a representative from the SNP was here to put the SNP’s case for those cuts and its economic programme. Unfortunately, the SNP is completely absent from a very important debate.

[Ian Murray (Edinburgh South) (Lab)]

I congratulate the hon. Gentleman on securing this debate. These are the kind of debates we should be having to set the record straight about what is happening in Scotland and its fiscal position. He mentioned the Scottish Government’s underspend. I believe that they have returned more than £2 billion in the last four years in underspend. On the borrowing requirement, I understand that the Hong Kong dollar is an independent currency, but it is supported by reserves of double the GDP of Hong Kong. That means that if an independent Scotland were to set up its own currency, it would require somewhere in the region of £360 billion of reserves to support that currency. Where would Scotland get that from?

[Luke Graham]

I wish SNP Members were here to say how they would meet those responsibilities. I will not speak on behalf of the Scottish Labour party or the Scottish Liberal Democrats, but we are parties who support and respect devolution. We are the parties who are trying to make devolution work more effectively. That is why we are having these debates and changing the machinery of government to try to make it work more effectively. The SNP is the only party that does not believe in devolution. That is why it is not involved in these debates and why its members are not here today. All they care about is separation.

As the hon. Gentleman rightly points out, the SNP has not faced up to some of the responsibilities and costs of that separation. That is illustrated by the underspend. Some £100 million is somehow being rolled forward as part of setting up a new social security agency. That was agreed in 2016. We want to look at how to best serve our constituents. We do not want to be state building; we want to make sure that our constituents get the benefits that they need. Rather than spending £100 million-plus on setting up a new social security agency, which means our constituents will have to stop at three or four places to get the benefits they require, I would prefer to use that money to top up the benefits, and use current Department for Work and Pensions systems to ensure that constituents get the money they need. Our constituents would benefit, but we would not have to go through state building, and we would not have to spend money when it is not required. As I am sure the Chair appreciates, welfare is an incredibly complicated area of policy, and the systems that have supported our welfare state have been in development for over 60 years.

On the borrowing powers that we have on the resources side, there is power to borrow up to £300 million for forecast error. That is important, because as Derek Mackay, the Finance Secretary in the Scottish Government, recently outlined, their income tax forecast is down by around £1 billion. Again, this might be something that we should be debating in Westminster and Holyrood. The forecast error borrowing allowance is around £300 million, and it already looks like there will be a £1 billion gap. How will we bridge that responsibly without increasing taxes for people in Scotland, or irresponsibly having to go back to Westminster?

--- Later in debate ---

[Luke Graham]

It feels wrong to bash the SNP when its Members are not here to respond, but this is another clear example of the SNP putting the nationalist interest above the national interest. We could be using those powers to serve our constituents today, rather than deferring their use for years and years to further grievance and stoke the flames on social media.

Why is this important? Why did I apply for this debate on borrowing? It is so important because of the underspend that, as I said, has been widely reported. It was £450 million last year. It has certainly had a real impact in my constituency, which covers two council areas: Clackmannanshire, which is the smallest county in Scotland, and part of Perth and Kinross, which is in one of the largest counties in Scotland. We have seen impacts on frontline services. In Perth and Kinross, teacher numbers have reduced. We have had to increase waste charges, and we have had a 3% increase in council tax. In Clackmannanshire, we had the threat of closure of two primary schools, which I and council colleagues were against. We had the threat of closure of the Alloa Leisure Bowl, a reduction in our secondary school supplies and a 4% increase in council tax.

Given that the SNP argues for all those powers and makes such a stand about being stronger for Scotland, it cannot make such an argument in this place and then be absolutely weaker for our local authorities and let down our public services, children and communities in such a colossal way. As I said, the underspend could well be justified. If SNP Members were here—I was hoping to have a bit of a debate with them—they could justify it by saying they were carrying some spending forward to future years, as we said about the welfare and social security agency. We might disagree with that, but at least it could be justification. As colleagues will hopefully realise, and as I have argued, given the borrowing powers that exist, the development of the Scotland reserve, and the increase in block grant coming from Westminster, there is no need for huge underspends in the Scottish budget. We simply do not need them. We can use the borrowing powers when we need to. For example, should there be a Scotland-specific shock, we could access £600 million if we needed emergency cash for our frontline services. We can actually spend the money we need now, so why cut our local authorities when it is clearly not needed?

[Ian Murray]

The hon. Gentleman is making a very powerful argument. I know he might disagree with the policy issue, but there is a principle issue. The Scottish Government have full powers to do something about issues that they talk about a lot, such as the WASPI—Women Against State Pension Inequality Campaign—women and the rape clause in universal credit. They have the powers and a massive underspend, but they refuse to do anything.

[Luke Graham]

That is exactly my point. It is one of the main reasons I wanted to have this debate. Again, it is one thing to criticise on social media, but another to write letters to a paper when it is a one-sided argument. I applied for this debate because I wanted all parties to be here, and to have the opportunity to justify underspending by nearly half a billion pounds and then standing up in the Chamber and criticising the Prime Minister, the Government and often Opposition party leaders for their lack of policy and lack of caring for our constituents. That is inconsistent, it is indefensible economics, and it is unbecoming of MPs and a political party that sits in this Parliament.

--- Later in debate ---

[The Financial Secretary to the Treasury (Jesse Norman)]

It is a delight to speak under your chairmanship, Mr Hollobone. This is an important topic that commands interest not only across the House but, more importantly, across the four constituent nations of our Union and among our constituents. I take my hat off to my hon. Friend the Member for Ochil and South Perthshire (Luke Graham) for securing the debate and for the energy that he and his generation of Scottish Conservative MPs bring to the House of Commons. It has been a tremendous tonic and has been very good for the House as a whole.

Like my hon. Friend, I am surprised and a little dismayed that the Scottish National party is not present for the debate. That in itself tells a story that we need to explore more widely and that I will come to later. He raised a wider issue, so I will talk about what the Government are doing more generally before I address the question of Scotland that he raised so eloquently.

As my hon. Friend and everyone in the Chamber will know, the Government are committed to strengthening the Union, which is arguably the oldest and most successful partnership of its kind in the world. Only last week, the Prime Minister announced an independent review to ensure that Departments in Whitehall work in the best interests of the Union. Protecting the Union is also a priority for both candidates who are vying to be the next Prime Minister.

[Ian Murray]

I understand that the Minister’s opening remarks are about the Government protecting the Union, but what does he say to the 63% of Conservative members who would rather see Brexit than the UK staying together?

[Jesse Norman]

I do not think that they regard that as in tension with a proper unionism; they worry about the union with the EU. In their view, they are giving voice to a sovereignty that the United Kingdom of Great Britain and Northern Ireland expresses and has done for more than 200 years.

As colleagues will know, I can never talk about the Union without mentioning my great hero, Adam Smith. He said that the 1701 union was:

“a measure from which infinite Good has been derived”

to Scotland. How right he was. The reason why that was true for Smith and is true now is that the Scots took advantage of the potential offered by that incorporating political arrangement. As the House will know, Scots spread out across the world, ran large chunks of it and were extremely effective and successful entrepreneurs and businesspeople. Their country and the United Kingdom as a whole greatly benefited.

Borrowing powers are one of the most important ways in which the Government are strengthening the constitutional settlement, by providing devolved Administrations with greater choice and responsibility. Greater resource borrowing helps to ensure budgetary stability and affords devolved Administrations the flexibility to manage volatility associated with their new revenue-raising powers—or tax powers, in Scotland’s case. Similarly, capital borrowing powers offer much greater control over infrastructure investment.

The Scotland Act 2016 increased the Scottish Government’s capital borrowing limit to £3 billion, with an annual limit of £450 million. The resource limit was also raised to £1.75 billion, with an annual limit of £600 million. Those are substantial sums that create a degree of responsibility. To have those powers is to be trusted to exercise them responsibly. If that means investing them in better services on behalf of local people, that is the responsibility that those Administrations face.

It should be clear that those individual borrowing powers come on top of the funding that devolved Administrations receive through the Barnett formula. The fact that devolved Administrations already receive a share of all UK Government borrowing under the formula explains the need for limits on their borrowing to ensure the sustainability of the public finances. Spending decisions taken by the UK Government continue to deliver growth and prosperity across the whole of the United Kingdom. As my hon. Friend and colleagues will know, last year’s Budget provided a funding boost of £950 million in Scotland, £550 million in Wales and £320 million in Northern Ireland.

By 2020, all three devolved Administrations will therefore have received a real-terms increase during this spending review. Before adjustments for tax devolution, block grant funding will have grown to more than £32 billion in Scotland, £16.1 billion in Wales and £11.7 billion in Northern Ireland. There has been further support through city deals and growth deals, including more than £1.3 billion for eight such deals in Scotland.

I reassure my hon. Friend and the House that the Government are also committed to devolving greater responsibilities on tax and welfare. Once the 2016 Act is fully implemented, more than 50% of the Scottish Government’s funding will come from revenues raised in Scotland, making the Scottish Government more accountable to the people they serve. That is surely the point—with power comes responsibility—so the fact that the SNP is not present in the Chamber is a token of the wider problem of the Scottish Government’s lack of accountability. It is unfortunate that, although one constantly hears that Government’s grievances, they do not spend to address the issues of which they complain—my hon. Friend the Member for Angus (Kirstene Hair) is absolutely right to make the point about playing politics. However, the question at the heart of the debate and of the points raised by my hon. Friend the Member for Ochil and South Perthshire is not one of disingenuousness or hypocrisy but one of public service and accountability.

I thank my hon. Friend the Member for Ochil and South Perthshire for securing this debate and for his important and eloquent speech. It poses a challenge to the Scottish Government to live by what they say and to do what they profess. I am grateful to have had the opportunity to speak for the Government and demonstrate our continued support for the sustainability and prosperity not just of the Scottish nation and economy but of those of Wales and Northern Ireland.

Question put and agreed to.

Draft Animal Welfare (Amendment) (EU Exit) Regulations 2019

Ian Murray Excerpts

Monday 18th March 2019 General Committees

[David Rutley]

I thank my hon. Friend for his question. I know he has a keen interest in this issue, and I assure him that through the statutory instruments we have been debating over recent weeks, we will make sure that current EU law is brought into the UK. We are committed to going further: we will address the issue of animal sentience, increase sentences for animal cruelty and ban wild animals in circuses, all through primary legislation. We will also ban third-party puppy and kitten sales, which I know is an issue of real interest, not least to my hon. Friend the Member for Lewes. We have a very full agenda.

[Ian Murray (Edinburgh South) (Lab)]

Could the Minister tell us in his opening remarks how much his Department has spent on these statutory instruments in this week alone, let alone the past few months?

Spring Statement

Ian Murray Excerpts

Wednesday 13th March 2019 Commons Chamber

[Mr Hammond]

I am interested in the hon. Lady’s suggestion that fragmentation is a barrier to productivity. If she is working with her local enterprise partnership, I would be happy to engage with them and talk about the challenge. We want to drive improved productivity throughout our public services, including our further education sector.

[Ian Murray (Edinburgh South) (Lab)]

Has the Chancellor ever heard of the WASPI campaign? If he has, is he deliberately choosing to ignore WASPI women?

Treasury

Ian Murray Excerpts

Monday 12th November 2018 Ministerial Corrections

The following is an extract from proceedings on an urgent question on EU Customs Union and Draft Withdrawal Agreement: Cost on 22 October 2018.

[Ian Murray (Edinburgh South) (Lab)]

The Minister has been asked five times to identify the figures for unemployment if we leave the customs union, so let us make it easier for him: will unemployment go up or will it go down?

[John Glen]

What I can say is that unemployment in this country is at a record low, demonstrating the coherence of this Government’s economic policy.

[Official Report, 22 October 2018, Vol. 648, c. 32.]

Letter of correction from the Economic Secretary to the Treasury:

An error has been identified in my response to the hon. Member for Edinburgh South (Ian Murray).

The correct response should have been:

Draft EEA Passport Rights (amendment, Etc., and Transitional Provisions) (EU Exit) Regulations 2018

Ian Murray Excerpts

Wednesday 24th October 2018 General Committees

[The Economic Secretary to the Treasury (John Glen)]

I beg to move,

That the Committee has considered the draft EEA Passport Rights (Amendment, etc., and Transitional Provisions) (EU Exit) Regulations 2018.

It is a pleasure to serve under your chairmanship, Mr Austin. The Treasury is in the process of laying around 70 statutory instruments under the European Union (Withdrawal) Act 2018. That is being done to ensure that a functioning legislative and regulatory regime for financial services is in place should the UK leave the EU without a deal or an implementation period. This is the second debate in the House as part of that programme, and I look forward to several more in the weeks ahead.

The overriding objective of that work is, as far as possible, to maintain continuity at the point of exit by maintaining legislation as it currently exists. Where existing EU legislation would not operate properly in the UK context, we need to amend it to ensure it works effectively after we leave. We are therefore using powers delegated to Ministers under the withdrawal Act to fix deficiencies in applicable EU law that will be transferred directly to the UK statute book at the point of exit, and to fix existing UK law to ensure that it is not deficient on and after exit day.

[Ian Murray (Edinburgh South) (Lab)]

I am grateful to the Minister for giving way so early in his contribution. I hope he will tell us before he finishes what projections the Treasury has made of the number of potential job losses in the financial services sector if the UK leaves the EU without a deal.

[John Glen]

I will be very happy to address that point in due course, either in my introduction or when summing up.

That work will provide the UK’s financial services sector with much-needed certainty about regulatory requirements in the event of no deal, and ensure that firms can continue to do business in the UK. That is consistent with the Government’s position that, although the best outcome is for the UK to leave with a deal, in the meantime we must—and we will—continue preparing for no deal. I want to underscore the point that the tabling of this statutory instrument was a planned activity that was widely anticipated by the regulator and industry.

--- Later in debate ---

[John Glen]

I cannot give my hon. Friend a precise figure, but it would be a considerable change in the way that the regulators operate and would need a considerable reconfiguration of resources in an ideal scenario. Having had conversations with Sam Woods and Andrew Bailey at the PRA this morning, it is a scenario for which they have made contingency provisions.

The volume of applications received by the UK regulators is expected to increase significantly, as many hundreds—perhaps thousands—of EEA firms submit applications for UK authorisation. That will include applications from large and complex businesses with a substantial UK presence. To minimise the disruption faced by EEA firms and UK businesses and consumers due to the loss of EEA passporting rights in a no-deal scenario, the draft regulations fulfil the Government’s commitment, made on 20 December last year, to introduce legislation to establish a temporary permissions regime.

[Ian Murray]

The Minister said a few moments ago that the regulations would allow UK financial firms to continue doing business as regulated businesses in the UK. Can he say whether they would be allowed to continue doing business in the EU?

[John Glen]

I am sorry if I made a mistake in what I said; the regulations actually allow EEA firms to continue operating in the UK. The reciprocal right of UK firms to operate in the EEA does not exist at the moment. That is a reciprocal decision that we hope will be in the interest of EEA states to make with respect to the comfort of their citizens, who receive financial services from UK firms, but that is not something that has happened yet.

This regime would enable EEA firms operating in the UK, via a passport, to continue their activities in the UK for up to three years after exit day, allowing them to obtain UK authorisation or transfer business to a UK entity as necessary. The regulations would also give the Treasury the power to extend the regime, which is crucial to alleviate the potential scenario in which some EEA firms cannot be authorised within the three-year period. The Treasury would not be able to extend the regime as a matter of course, but only if it considered it necessary to do so. The use of the power would also need to be based on a robust assessment from the FCA and PRA regarding the effects of extending or not extending the period. The length of the regime could only be extended by 12 months at a time. The instrument that would extend the regime would be subject to the negative procedure, and that has been drawn to the special attention of the House of Lords by the Secondary Legislation Scrutiny Committee Sub-Committee B, in a report published last week, on 18 October.

My officials and I judged that choice of procedure to be appropriate, given that the power to extend the regime is conferred by the draft regulations under discussion today, which are subject to the affirmative procedure. I reassure hon. Members that we take parliamentary scrutiny seriously, and although this affirmative instrument introduces the power to pass regulations via the negative procedure, the Treasury believes that if similar provision were to be made by an Act of Parliament, it would also be via the negative procedure, not least because the power is so tightly drawn.

The temporary permissions regime would ensure both that firms can continue servicing UK businesses and consumers for a temporary period after exit day, and that they have appropriate time to prepare for and submit applications for UK authorisation and can complete any necessary restructuring. The PRA and the FCA can manage the expected applications for UK authorisations from EEA firms that were previously operating in the UK via the passport in a smooth and orderly manner.

The draft regulations are a pragmatic response to a complex problem, and are needed to minimise disruption to users and providers in the UK financial services sector in a no-deal scenario. I note that the Secondary Legislation Scrutiny Committee report has acknowledged the importance of the regulations in achieving that objective, and I emphasise to the Committee how widely desirable they are both to the industry and to the regulators.

It is also important that industry understands what we are doing, how it will work and why it is necessary. To aid that, the regulations were published in July in draft form along with an explanatory policy note to maximise transparency and understanding before their introduction. The regulators responsible for the authorisation and supervision of financial services firms are now in the process of consulting industry to ensure that the rules that would apply to firms in this regime function properly when the UK leaves the EU.

To conclude, the regulations are essential to ensuring that we have a functioning financial services regime in a no-deal scenario. They provide reassurance for EEA financial services firms, UK businesses and the customers they serve that they will continue to be able to operate here, no matter what the outcome of the negotiations. The City’s success is based on being the most open and dynamic financial centre in the world. Ensuring that EEA financial services firms can continue to operate here after exit day will help to maintain that status, protect jobs and preserve tax revenues to fund our vital public services. I hope that colleagues will join me in supporting the regulations, which I commend to the Committee.

--- Later in debate ---

[Ian Murray]

It is a great pleasure to serve under your chairmanship, Mr Austin, to consider what is, in the Minister’s words, one of the most significant pieces of secondary legislation he has known.

[Ged Killen (Rutherglen and Hamilton West) (Lab/Co-op)]

Does my hon. Friend agree that given that, in the Minister’s own words, there is nothing of comparable significance to this statutory instrument, it is extraordinary that no Scottish National party Member is here to stand up for Scotland’s financial sector?

[Ian Murray]

I am delighted that we managed to contrive that intervention to put on the record that there is no one here from the third party of this House. Under the normal procedures of a Committee of such significance, it gets the right to respond, but has decided to pass up that opportunity. Given what the Minister said about the significance of the statutory instrument, there perhaps should be someone from that party here.

That does not take away from the fact that the statutory instrument says everything we need to know about the Government’s stance on Brexit. They are having to put through a statutory instrument to ensure any EEA firm that does business in the UK will be able to continue to do so after we leave the European Union in the event of no deal. There is utterly nothing from the Government about what will happen in the event of no deal. With the Prime Minister being stabbed in the back and hanging from the noose—in the words of Conservative Back Benchers—it looks increasingly unlikely by the day that we will end up with anything other than no deal or something close to it. What will happen to UK financial services firms that operate in the European Union?

I intervened on the Minister to ask whether he would expand on the fact that the Treasury is doing a significant amount of work. It should be commended for that work, but the Minister was questioned at least a dozen times in the House this week about the impact on jobs and this country’s GDP of a no deal scenario, or indeed a Chequers scenario or a Canada plus plus plus scenario. He fundamentally refused to answer that question.

In my earlier intervention, I asked whether the Minister could tell us the impact on jobs in the financial services sector in the event of no deal, which is what the statutory instrument is about, and he said he would answer in his summing up. I suspect that, by the time he gets to his summing up, he will not have a figure from the Treasury analysis, either because he does not have one, or because it is one that the Government do not want people to hear.

I hope the Chancellor comes to the Dispatch Box on Monday with a copy of the report from the Office for Budget Responsibility and lays out the impact of staying in the European Union, a no deal scenario, which is what the statutory instrument is about, a Chequers scenario, a Canada plus plus plus scenario, an hon. Member for North East Somerset (Mr Rees-Mogg) scenario, and the former Foreign Secretary’s scenario. For our financial services sector, it is merely a couple of reporting quarters away. I hope the Chancellor lays out the impact on jobs of leaving the European Union under all those plans, and everything in between, even if the Government give us just a range.

The Conservative party can fight internally all it wishes about who should have the keys to No. 10 and No. 11 and who should be doing the Brexit negotiations, but my constituency of Edinburgh South relies on financial services. We are talking about tens of thousands of jobs across Edinburgh and Scotland and the United Kingdom, billions of pounds in tax revenue to the Treasury every single year, and the underpinning of this country’s entire exporting system. Even if it were to come to pass, the Chequers plan, which looks as if it is just about as dead as the dodo, does not even mention the services sector. It is 80% of our economy, and it is not even mentioned in the Chequers plan.

[The Chair]

Order. Could we get back to the statutory instrument?

[Ian Murray]

The order is about the ability of EEA companies to continue to trade in the UK in a no deal scenario, but makes absolutely no mention of how UK financial services companies will be able to operate in the EU if we end up in such a scenario, and the statutory instrument has to kick in. It is important to highlight that the Government are doing an awful lot of work preparing for a no deal scenario in one way, but they are not doing it in the opposite way in terms of what the financial services sector has said.

The Chancellor said in a speech last March that he wanted full regulatory alignment between Britain and the EU for financial services post Brexit, which would mean that the statutory instrument would be redundant. However, he has been overruled because that is not what is on the table, either from the EU or from the Prime Minister in terms of her negotiating position in Brussels. If the Chancellor has now been overruled, perhaps the Minister can tell us what the Government’s position is with regard to UK financial services post Brexit in any scenario and the impact that leaving will have on financial services.

Is it possible even to deliver what is being asked for in the statutory instrument? The regulators are hardly well known for their efficiency and speed at the moment in dealing with minor issues regarding some of the scandals and overhangs of the financial services sector disaster in 2008. Paragraph 12 of the explanatory memorandum states:

“The impact on business, charities or voluntary bodies is that firms that currently operate in the UK on the basis of an EEA financial services passport will require a legal expert to examine the new legislation and understand its implications.”

They do not just need a legal expert; they need somebody of a much higher authority, probably a bit closer to God, to understand what the Government’s position will be with regard to the European Union.

Today’s statutory instrument is yet another that I have scrutinised in this place that is packed full of Henry VIII powers—no recourse to Parliament, no recourse to the people, and no recourse to the financial services sector. Has there been any consultation with the financial services sector on this statutory instrument? I expect there has been very little. Has anything been done on whether the regulators can actually deliver some of the stuff in a no-deal scenario? Today, in reports coming out of the Cabinet meeting, the Government are saying that Government-run ships might be needed to bring medicines and goods into the UK in a no-deal scenario—we may need to nationalise the shipping industry. That is coming from a Conservative Government, not the Leader of the Opposition. That is the kind of impact we are going to have if the Government continue on this trajectory of preparing for no deal and turning a blind eye to the interests of this country.

I say to the Minister what I have said to previous Treasury Ministers. I would like him to stand up and promise to my constituents that not one of them will lose their jobs in financial services as a result of the Government’s deal, no deal or otherwise, when we leave the European Union. I would like him to stand up and promise that to my constituents and the country, but I suspect he cannot. The reason is that the Government are jeopardising the whole sector and every single other sector. That is not just my words, but the words of the sector itself. One headline reads: “Finance industry tears into British Government’s Brexit trading plans” with regard to services and financial services. The Government have to go back and reflect on whether they are doing this in the interests of the country or in the interests of their party, and give me a cast-iron guarantee that none of my constituents will lose their jobs.

I am sure we will not be voting against this statutory instrument today because it is incredibly important—hopefully it will be unnecessary. Perhaps in the next few months, the Minister and some of his colleagues will realise that the Government and the country are heading towards the single biggest act of self-harm that the country has ever implemented, and they will put any deal back to the people and get the people to decide whether this is what they want for the future of this country. Anything else would be a total and utter dereliction of duty.

[John Glen]

First, I congratulate the hon. Member for Stalybridge and Hyde on his 13th statutory instrument. I assure him that we will have to celebrate at least his 30th together, in this room or one down the corridor.

As he always does, the hon. Gentleman has raised some very important matters and I will do my very best to respond. The first substantive point is whether these matters should be dealt with through primary or secondary legislation. This instrument and many others are affirmative instruments and we rightly have the opportunity to discuss this one today. That process was a matter of considerable debate during the passage of the Bill and was agreed by Parliament as the only practical way of proceeding. That sets the context for why we are doing that here.

The hon. Gentleman made a number of points about the regime and how it will work, including landing slots. The regulators will have the ability to set landing slots if they so choose. We have been working closely with the regulators on that and expect them to organise and schedule the landing slots in an orderly manner. They are limited because they have to be in a two-year period from exit day. I will come on to the specific points made by the hon. Member for Edinburgh South, but I would stress that these are arrangements for a no-deal scenario. The Government are fully committed to securing a deal—and a deal on financial services that is in the best interests, as I fully acknowledge, of the financial services sector, which has a considerable footprint across the United Kingdom.

The amendments to domestic legislation, both primary and secondary, are consequential amendments to provisions of domestic legislation that reference the EEA passporting system, which will no longer be in effect after exit day. This is essentially a clean-up exercise to remove redundant references to passporting arrangements on the UK statute book. It does not result in any policy change. Provisions in any onshored EU legislation that reference the EEA passporting system will be similarly amended in the relevant individual exit statutory instruments that will be laid as part of the ongoing onshoring programme.

The hon. Member for Stalybridge and Hyde raised the issue of the extension period of around six to 12 months to three years. The extension is necessary to ensure a smooth transition for firms moving from the current system of passporting rights to full UK authorisation. It will bring the statutory deadline set out under the Financial Services and Markets Act 2000 in line with the overall three-year duration of the regime and will help to ensure the overall application process can be managed in an orderly manner. It will not disadvantage firms, as every firm in the regime will be able to undertake the same activities they were entitled to undertake before exit day.

Ultimately, the Government are committed to ensuring a smooth transition for EEA passporting firms to UK authorisation. The determination of the three-year window was made in close consultation with the PRA and FCA, based on estimates that they made of the number of applications they would be likely to receive for authorisation. We believe this is good news for firms. It will not give them uncertainty; it will give them assurance. UK businesses and customers will welcome that.

The hon. Gentleman asked about applications for authorisation that are rejected. I can tell him that we will have further statutory instruments laid later on to enable such firms to wind down their UK-regulated activities in an orderly manner. On the Government’s negotiating objectives for passporting, the Prime Minister has made it clear that Brexit will mean an end to passporting. The temporary permissions regime is about managing that transition. We have set out a proposal for an ambitious future relationship in our negotiations. I will set that out in a moment.

The hon. Member for Edinburgh South raised the issue of an impact assessment of a no-deal scenario. As he readily acknowledges, the Treasury is undertaking a wide range of analyses in support of the negotiations and preparation. He cited various scenarios, all of which have different assumptions according to the people citing them as being desirable. In a no-deal scenario, there are a range of outcomes. We could make assumptions about a degree of hostility or a degree of co-operation from our friends and neighbours in the EU. EEA members would not serve their consumers very well if they did not offer a reciprocal regime. It is impossible to make a meaningful financial or jobs calculation because it is conditional on a range of assumptions and is not possible to set out.

[Ian Murray]

I just do not accept that excuse. The Treasury does projections on every single aspect of its work every single day. Indeed, the financial services sector itself has said that up to 10,000 jobs could go on day one if there is no access to the single market, so let me make it easy for the Minister, as I tried to in the Chamber earlier this week. Will unemployment, as a result of any of the scenarios, go up or down?

[John Glen]

I have stated my and the Government’s position. We are working towards a deal that is in the best interests of the United Kingdom as a whole. There was an awareness of this measure on 20 December last year. It was laid on 11 July. The head of the PRA came to the Select Committee on 11 July and set out how desirable it was. With respect to the wider question of the economic consequences of different outcomes, it would be beyond the scope of this Committee if I set that out here and now. However, I can say that we must have a deal that is right for financial services and allows us flexibility going forward, but this measure is about making sure that we have adequate certainty for consumers who benefit from the financial services of EEA firms, and that is what this is about.

As to what will happen to UK firms that passport into the EEA , the Government, as I said, can take legislative action only in relation to EEA firms that passport into the UK. We cannot, through unilateral action, influence the status of UK firms operating in the EEA. However, as I said, it is hugely desirable for their consumers for them to do it. That is why we really want to avoid that situation and agree a deep and special partnership with the EU, as well as an implementation period, which is important for both.

EU Customs Union and Draft Withdrawal Agreement: Cost

Ian Murray Excerpts

Monday 22nd October 2018 Commons Chamber

[Ian Murray (Edinburgh South) (Lab)]

The Minister has been asked five times to identify the figures for unemployment if we leave the customs union, so let us make it easier for him: will unemployment go up or will it go down?

[John Glen]

What I can say is that unemployment in this country is at a record low, demonstrating the coherence of this Government’s economic policy.[Official Report, 12 November 2018, Vol. 649, c. 2MC.]

Taxation (Cross-border Trade) Bill

Ian Murray Excerpts

3rd reading: House of Commons & Report stage: House of Commons
Monday 16th July 2018 Commons Chamber

[Mr Speaker]

The right hon. Lady used commendable brevity, upon which I congratulate her.

[Ian Murray (Edinburgh South) (Lab)]

It is a great privilege to follow the right hon. Member for Witham (Priti Patel). We sit on the Select Committee on Foreign Affairs together and agree on much of its work. However, I am afraid that we agree on nothing when it comes to Brexit, and we have those battles in the Committee.

It is unfortunate that we have been left here this evening with a set of four amendments from the group of Conservative rebels who want to take us off a cliff edge. That is what the amendments are designed to do. We have unconfirmed reports that the Government may accept the amendments. I do not know whether the Financial Secretary to the Treasury will nod to indicate that he will accept them, but if he does, I hope he has a match or a lighter in his pocket, because he would do just as well to set the Chequers agreement alight, given the consequences.

On top of all that, the former Secretary of State for Exiting the European Union, the right hon. Member for Haltemprice and Howden (Mr Davis), must now regret leaving the Government, given that after threatening to resign five times, he finally went through with it by resigning following the Chequers agreement, which is just about to be ripped up by his own Front-Bench team and replaced with a much more hard-line position that will take us off the cliff with a hard Brexit. If he had only stayed on a few more days, he may have been able to see through the proposals that he started.

[Mr David Davis]

rose—

[Ian Murray]

I am happy to give way to the right hon. Gentleman, given that I mentioned him.

[Mr Davis]

I rise just to tell the hon. Gentleman that nearly everything he just said in that sentence is untrue.

[Ian Murray]

I am delighted to hear that he would have resigned regardless, but he must surely have some regret. Perhaps we should be glad that he resigned, given that he stood up in this Chamber, as a former Secretary of State, and tried to persuade the House that Operation Stack and having trucks and lorries queued up at our ports was positive for the country. I have never known a former Secretary of State to look at something like Operation Stack, which would be a tragedy for our economy had it continued for much longer, and turn it into a positive. If that is the kind of argument he is offering to this House and to the country, we should ensure that we vote down most of these amendments.

I find it extraordinary that after going through this process—these debates give me déjà vu—we are still hearing arguments about the customs union and the single market. The Government managed to botch together what is now called the Chequers agreement and now, a week away from this Parliament adjourning for the summer recess, they have completely torn it apart by again pandering, as the right hon. and learned Member for Rushcliffe (Mr Clarke) said, to 30 or 40 people on the hard right of the Conservative party. Those people would be being much more honest if they just stood up and said that they want the cliff-edge hard Brexit, rather than tabling amendments that drive a coach and horses through the agreement that the Government managed to reach.

[Craig Mackinlay (South Thanet) (Con)]

Is the hon. Gentleman really suggesting that the 163 independent members of the WTO are somehow teetering on a cliff edge or doing something rather odd? Are they not just normal trading nations that trade freely with each other? I find his “cliff edge” statement rather peculiar, because it does not treat the facts.

--- Later in debate ---

[Ian Murray]

I will tell the hon. Gentleman who is teetering on the cliff edge: the 10,000 or 12,000 people in my constituency who work in the financial services sector. The advice and analysis that we have had from the hon. Gentleman’s own Government’s Treasury is that staying in the customs union and the single market is the least worst option, and that the WTO route that he suggests would leave this country teetering on the edge of a GDP reduction of somewhere between 9% and 16%, depending on the part of the country. If that is a positive argument for taking us out of the EU, the country needs to be given a people’s vote on whether we are going down the right track.

The right hon. Member for Broxtowe (Anna Soubry) moved new clause 1. She did not really mention new clause 12, but it presents a customs union option that could provide a platform to unite the vast majority of this House. When the Division bell rings for the votes on new clause 36 and amendment 73, I agree with the right hon. and learned Member for Rushcliffe that we should all go into the Lobby against them to show how many people in this House actually want to protect this country’s future prosperity and how many want to take away any future prosperity for their own narrow ideological needs. I say to my own Front-Bench team that when the Division bell rings I hope Labour votes against those amendments and makes a stand against what the hard-line right-wing Brexiteers are trying to do to our country.

There is absolutely no way we can achieve frictionless trade—what the Government want us to try to achieve—while putting in place policies that set hurdles in front of it. The amendments would mean no VAT alignment, but if there is no VAT alignment, there is no backstop. If there is no backstop, there is no withdrawal agreement. If there is no withdrawal agreement, we have to have a hard border between the Republic of Ireland and Northern Ireland. If that is the aspiration behind some of these amendments, we will in the future have to take a long hard look back at this point, when we are about to inflict the single largest act of self-harm to this country, to see what people were actually trying to achieve. The introductory remarks of the right hon. Member for Broxtowe on new clause 1 sum that situation up. She was attacked with pretty disgraceful remarks from some in her own party, but she was merely trying to put forward an argument that would prevent this country from doing economic damage to itself. What a remarkable thing to happen.

We have two Bills in front of us this week—tonight’s Bill and the Trade Bill tomorrow—and all the Government have to do is keep the customs union and the single market on the negotiating table. New clause 12 does not mean that the Government have to implement anything; it just asks them to keep the proposal on the table. That is what would be in this country’s best interests. I agree with the right hon. Member for Broxtowe that this Minister is one of the best in the Government. I disagree with the vast majority of things that he does, but he is courteous, intelligent and always answers questions in the best way possible. He cannot honestly be sitting there this evening ready to accept the four amendments thinking that that would be in the best interests not only of the country, but of the Chequers agreement that the Prime Minister managed to cobble together last Friday. We need Government Front Benchers with a bit of backbone to stand up for the interests of this country. By the time we go into the Division Lobby very late on Tuesday night to pass the Trade Bill—after the customs Bill before us has been passed—Government Front Benchers could then say that they have stood up to the hard right of this country and stopped economic Armageddon, and that they have done the right thing.

Treasury Spending: Grants to Devolved Institutions

Ian Murray Excerpts

Tuesday 3rd July 2018 Commons Chamber

[Ian Murray (Edinburgh South) (Lab)]

I am glad that the hon. Lady and her colleagues have been successful in getting this important estimates day debate, but I do have to pick her up on something. I represent a city that has a waiting list for social and council housing of 26,000 people. The Scottish National party has now been in power for over 10 years, during which time that list has doubled, not halved.

[Kirsty Blackman]

The Labour party was in charge in Holyrood before and could have cancelled the right to buy then, but it sadly did not. Unfortunately, we are trying to undo the legacy of Margaret Thatcher, who put in place the right to buy. We are trying to undo the legacy of the decimation of our council housing stock. The reality is that we can only build houses so quickly, and we are doing our very best. I would like to see the Labour party do a better job, to be honest.

--- Later in debate ---

[Douglas Ross]

Absolutely, and I want to finish on that point because it is important. My Moray Council has suffered one of the biggest funding reductions of all councils anywhere in Scotland. When the SNP in Scotland gets more money from Westminster, it spends less on our health service. It spends less on our local councils and it spends more on giving 42% of all SNP MSPs a job in Government. If that is what we get after 11 years in power from the SNP, the next election cannot come quickly enough.

[Ian Murray (Edinburgh South) (Lab)]

I am grateful to the hon. Gentleman for pointing out some home truths, but could we not sum up his speech and that of the hon. Member for Angus (Kirstene Hair) by saying that the UK Conservative Government is addicted to austerity, and that the SNP Scottish Government is addicted to austerity?

[Douglas Ross]

That is amazing from a Member of the party that brought about the collapse in the financial markets, which is why we have had to have good governance of our finances in this country—to deal with the mess left behind by Labour.

Draft Scottish Rates of Income Tax (Consequential Amendments) Order 2018

Ian Murray Excerpts

Monday 26th March 2018 General Committees

[The Financial Secretary to the Treasury (Mel Stride)]

I beg to move,

That the Committee has considered the draft Scottish Rates of Income Tax (Consequential Amendments) Order 2018.

May I say what a pleasure it is to serve under your chairmanship, Sir David? The order updates legislation to reflect structural income tax changes announced by the Scottish Government and includes a number of consequential amendments to tax reliefs, which remain reserved. The changes will ensure certainty and consistency for taxpayers across the United Kingdom, no matter where they are based.

The Government have transferred extensive income tax powers to the Scottish Government, ensuring that they are more accountable to Scottish taxpayers. Since April 2017, the Scottish Government have been able to vary the income tax rates and thresholds, except for the personal allowance for non-savings, non-dividends income.

[Ian Murray (Edinburgh South) (Lab)]

I thank the Financial Secretary for giving way so early in his contribution. Does he agree this statutory instrument means that the vow made during the independence referendum to devolve as much as possible under agreement to the Scottish Parliament has been approved?

[Mel Stride]

I would say that it is entirely in line with the vows we made at that time, and indeed the Scottish Government have exercised their right under the Scotland Act 2016 to vary Scottish tax rates—both the thresholds and the marginal rates. The Scottish Government used those powers at their recent budget to make a number of changes, including the introduction of a new starter rate of 19%.