Income Tax (Charge)

Debate between Jamie Stone and David Mundell

Thursday 28th October 2021 Commons Chamber

[David Mundell (Dumfriesshire, Clydesdale and Tweeddale) (Con)]

It is a pleasure to follow the hon. Member for North Tyneside (Mary Glindon). I am sure that her late husband would have been pleased to see her banging the drum for her constituency.

I want to speak in this debate because I want to make two points: the first is about levelling up; the second is about the impact of the spending review on the Foreign, Commonwealth and Development Office budget. First, however, it would be appropriate to reference my own constituency, which, outwith the highlands of Scotland, is the largest constituency in the United Kingdom. It is therefore extremely welcome news that fuel duty is to remain frozen, especially just now when family budgets are already under so much pressure. Over the past 12 years, since the freeze on fuel duty was introduced, I have argued for its extension. It currently saves the average driver £10 every time they fill up, compared with how the escalator would have operated. In a rural area, fuel costs are always higher, so the further freeze announced by the Chancellor will be welcomed across my constituency.

The Chancellor’s announcement of a £150 million fund to help thousands of small and medium-sized Scottish firms to recover from the pandemic is also good news. The UK Government’s furlough scheme helped to save hundreds of thousands of jobs during the pandemic, and this fund will now help small businesses in Scotland to grow back even stronger. I hope to see it benefit companies across my constituency when the full details are announced.

It is particularly welcome that, through the Barnett formula, the block grant to help support public services in Scotland is to increase by £4.6 billion. As we have heard from the hon. Member for Glasgow Central (Alison Thewliss), this is not welcome. We know that, however much money there might have been in that Barnett increase, it would never have been enough for the Scottish Government. Some grievance would always have been manufactured, however the funds were deployed. On this occasion, however, I want to express my own grievance, and it is about the way in which the Scottish Government allocate funds within Scotland. The south of Scotland is systematically starved of resources, and my constituents feel that, because we are not a nationalist-supporting area, we do not see resources coming into the south of Scotland.

[Jamie Stone]

Does the right hon. Gentleman agree that the problem affects a slightly wider area than just the south of Scotland, and that the very remote areas of the highlands have the same problem as he does?

[David Mundell]

Indeed. The very northernmost part of Scotland is well represented by his good self, and the hon. Gentleman does not sit on the SNP Benches.

Access to Cash

Debate between Jamie Stone and David Mundell

Wednesday 20th October 2021 Westminster Hall

[David Mundell (Dumfriesshire, Clydesdale and Tweeddale) (Con)]

It is a great pleasure to serve under your chairmanship, Mrs Miller, and to take part in another debate on access to cash. I commend the hon. Member for Pontypridd (Alex Davies-Jones) not just for securing the debate, but for setting out the issues. I also commend my hon. Friend the Member for Blackpool North and Cleveleys (Paul Maynard) for his passion on this issue, which he has pursued relentlessly in Parliament and with the Minister. The Minister has always offered good grace and helpful engagement, but as my hon. Friend intimated, we are at the crunch point and need action.

In her contribution, the hon. Member for Makerfield (Yvonne Fovargue) touched on something that the Minister and I have not always agreed on. I feel that the Government have not done enough to convey the message that cash is safe. During the covid crisis, cash was no less safe than using a PIN pad and terminal. The Bank of England and many other international authorities confirmed that, and I do not think a clear enough message was given out that cash was safe. We also know that many retailers and other service providers have just used covid as an excuse to move to cashless payments, rather than there being some safety or security issue.

As we have discussed, the issues of acceptance and access are interlinked. Of course, the third key issue is the ability to deposit cash, which remains incredibly important for many voluntary and smaller organisations. To give an example from my local community, people do not go to coffee mornings, when they are allowed again, with their iPhones.

[Jamie Stone]

I thank the right hon. Gentleman for giving way—he is an old friend indeed. Does he agree that there is an additional safety aspect to somebody having to travel a long distance with a lot of cash on them?

[David Mundell]

Indeed I do, and I think the hon. Member for Pontypridd made those comments in her opening remarks. We have to have the three elements: access, acceptance and the ability to deposit. Like the hon. Member for Caithness, Sutherland and Easter Ross (Jamie Stone), I have a very large constituency—in fact, it is the largest constituency in the United Kingdom outside the highlands—where many of these issues of rurality are to the fore, so the issue of the 1 km within a rural context has to be properly addressed. We also have to have a better understanding of how engagement with post offices will work.

I remain very concerned about the post office network. I recently had four post office closures in significant communities, because a well-known retailer decided that it would no longer have post offices within its premises. Just glibly saying that the post office has a role might be right, but it is not as simple as that. We need to understand the basis on which it will underpin the availability of cash. I welcome the progress since the last debate, and I hope that we can achieve the same level of progress in the coming weeks, with a response to the White Paper and an understanding of the timescale. As my hon. Friend the Member for Blackpool North and Cleveleys said about the crunch, the banks have to put up or shut up. If they do not put up, we have to take the necessary action here in Parliament.

Covid-19: Government Support

Debate between Jamie Stone and David Mundell

Wednesday 7th July 2021 Westminster Hall

[Jamie Stone (Caithness, Sutherland and Easter Ross) (LD) [V]]

It is a pleasure to share in this debate under your chairmanship, Mr Mundell. We go back a long way. I congratulate the hon. Member for Midlothian (Owen Thompson) on securing this important debate.

I wish to talk about a subject that I have mentioned before: insurance for live events. Even those who have been eligible for support will struggle in the recovery phase if they are unable actually to stage live music events. Many events cited by the Government as examples of cultural recovery fund support have been unable to go ahead this year due to a lack of insurance, including huge events such as the Glastonbury festival.

Why are they cancelling? Because they cannot get commercial covid insurance cover, or not at a competitive rate. Since January, I and others in all parties have been calling for the Government to put in place a Government-backed covid cancellation insurance solution. I have said it before, but such a scheme is not unprecedented. It has been done before with insurance for terrorism losses and—I point out yet again—the Government made a profit on that, which is worth remembering. I have said that repeatedly to Ministers and I hope that they will heed my call.

If we do not get events back up and running again, I fear that, in addition to losing good events in this country, we will erode something that is very important to Britain. Our culture and music are part of our soft power and, as we know, people come from all over the world to attend such events. Again, that is exactly why it would be helpful if insurance could be put in place.

Before I conclude, as Members know, I have the honour of being the joint chair of the gaps in support all-party parliamentary group. I want to put on the record my sincere thanks to my joint chairs and all the many Members who pulled together to form the APPG. I think it is the biggest in the history of the House of Commons. That shows just how important the issue that the hon. Member for Midlothian has brought to our attention today is.

[David Mundell (in the Chair)]

Thank you, Mr Stone. It has been a pleasure to chair you for once.

Covid-19: Access to and Acceptance of Cash

Debate between Jamie Stone and David Mundell

Thursday 3rd December 2020 Westminster Hall

[Jamie Stone (Caithness, Sutherland and Easter Ross) (LD)]

It is a pleasure to serve under your chairmanship, Mr Mundell, which I think is a first in the 21 years that we have known each other.

I will dwell briefly on cash machines, because excellent reference has already been made by the two previous speakers. I commend the hon. Members for Blackpool North and Cleveleys (Paul Maynard) and for Makerfield (Yvonne Fovargue) for two very fine speeches, which will mean a lot to my constituents in the far north of Scotland.

There is a village called Durness in north-west Sutherland, which is the northernmost and westernmost inhabited community on the British mainland. Every year, they have a tremendous Highland games and tourists come from far and wide. I remember my predecessor bar one, Robert Maclennan, the late Lord Maclennan of Rogart, being chieftain of the games some years ago, resplendent in kilt and everything else. He greeted me very warmly and said he had had six glasses of whisky. He was in extremely good form.

There was a cash machine in Durness, run by the Bank of Ireland, part of Robbie and Fiona Mackay’s shop. They used to tell me that the amount of money that came out of that machine the day before the games and during the games was absolutely staggering—tens of thousands of pounds. That was, of course, then spent on whisky or on whatever else at the highland games and it went straight back into the local economy. Then the machine was taken away. As Robbie Mackay said, “They can get cashback in the shop, but I can’t stay open until the wee small hours; I can’t be open at 6 in the morning.” That was the problem and it became a huge cause célèbre in that part of Sutherland.At the end of the day we did get a cash machine back in, but as the hon. Member for Makerfield said, getting them back again once they have been closed is a near-impossible task. I can tell Members that it is: I have the T-shirt. For every one we win, we lose a lot of others.



The second anecdote—just to colour in the cash machine issue—is that some years ago, maybe even 10 years ago, there were huge gales in the north of Scotland and the electricity went out—not for a few hours, not for a day, but for three, four or even five days in some communities in my present constituency. That meant, of course, that the cash machine did not work, and neither did contactless, so it is worth remembering that the present electronic regime is vulnerable to an electricity failure.

That is as much as I want to say about cash machines, except that they absolutely underpin my constituency. Of course we can withdraw cash from bank branches, but as I have said an awful lot of times during my three years in this place, we now only have one bank branch in the entire county of Sutherland. That is 2,028 square miles; it is a vast county, with one bank branch, in Golspie. That means that people have to make a 150-mile round trip to go to a bank branch, which is causing huge difficulties for my constituents.

As all colleagues here today know—I have mentioned this many times in this House—it seems as if there is a sickening liturgy of closures, one after the other, which we are unable to do anything about. Of course I am told, “You can use the post office.” That is not the silver bullet, because—as has already been alluded to—many is the post office that has already shut, or is shutting, in the relevant town, and the distances to get to the nearest post office are impossible. In no way do I denigrate what the Post Office does: it is a splendid institution, dating from the 19th century, and it is something that we can be very proud of as a British innovation.

I apologise for repeating myself, but one thing that I and others have been advocating is a joint banking hub approach, whereby the clearing banks work together to form a joint hub that would be owned in Scotland by the main clearing banks. That would mean a human face or faces behind the counter, who can advise. I bank electronically—I do it through my mobile—but I got a fright quite recently when I saw a debit coming off my account that I did not know anything about, and it was actually a banking fraud. Now, by dialling various numbers and taking a long time over it I got to the bottom of it, but had I been older than I am, or had I been a vulnerable person, that would have been very frightening. What better than to be able to go into a bank branch and ask, “What is happening here?” and be told, “Ah, this is a fraud we know about. We will kill it right now and get the money returned to you”?

I am not having a go at the Government, because the Government have actually been helpful. Before the pandemic, I had a constructive meeting with the Economic Secretary to the Treasury, and I was very grateful to him for that. He thought that there was possibly some mileage in the Government looking at the concept of a jointly owned banking hub, and indeed, on the business front, that concept has already been established—not for the north of Scotland, but nearer London, I think. Before the covid outbreak, I had hoped that I could have a look at it and see how it worked, and whether we could apply the same principle to the clearing bank idea, tweaking it suitably.

The other thing about having a human face behind a counter, or in a building that really exists and is reasonably accessible to people, is the issue of depositing money. We can take money out of a cash machine, but we cannot stick it back through the slot, and during the covid pandemic I have heard from businesses that, by the very nature of what they do, have had to travel a considerable distance to bank their weekly takings. That, I suggest, is not terribly safe, not only because of the security risk—a person travelling with that amount of money on them, in their car—but, sadly, because of the likelihood of transmitting the disease. We can learn lessons from the pandemic about this.

When it comes to the idea of a hub, where there is a will, there is a way. It could be done, and what I try to say to the banks of Scotland is that it would benefit them in so many ways. I am digressing from taking cash out of machines, so I will be very brief, but I have constituents who tell me that they have a brilliant idea to start a little business, but that whereas their father or grandfather would have talked through the sums with the bank manager and the bank would have supported them to the tune of, perhaps, £20,000, my constituents cannot do that because it is not so easy now. They may have to travel somewhere far away, which, because of covid, is not so good.

I started with a light-hearted point about the Durness highland games; I conclude on the splendid galas that we have in our highlands. Wick gala is famous, and it is excellent, with great entertainment. There are lots of different acts on the backs of lorries. I remember, on one lorry, an excellent take-off of my immediate predecessor Viscount Thurso, which was very humorous; indeed, his lordship enjoyed it enormously. The way to contribute to the Wick gala is to throw money at the floats, which is caught in little nets. A lot of things that are good for civic society involve cash being given. In my hometown of Tain, people go around with buckets which money is thrown into. That is how it is done; it cannot be done with a card or contactless.

With that light-hearted point, I congratulate the hon. Member for Blackpool North and Cleveleys on securing the debate. It is super to see a constructive debate such as this taking place. I look forward with great interest to the Minister’s reply.

[David Mundell (in the Chair)]

Thank you, Mr Stone, for that—as ever—entertaining tour of your constituency. I will call Sarah Owen to speak next, and in the course of her contribution the Chair will transition to Yvonne Fovargue.

--- Later in debate ---

[David Mundell (Dumfriesshire, Clydesdale and Tweeddale) (Con)]

It is a real pleasure to serve under your unexpected chairmanship, Ms Fovargue. I am grateful to my hon. Friend the Member for Blackpool North and Cleveleys (Paul Maynard) not only for securing time in Westminster Hall to debate access to cash and acceptance of cash during the covid-19 pandemic, but for his continuing work on this subject, as highlighted in his very thoughtful opening speech. I am also grateful to the other participants so far—including you, Ms Fovargue—for raising a series of important points, some of which I will repeat.

This debate is urgent, because I fear that, accelerated by covid-19, we are sleepwalking quickly to a cashless society in a totally unmanaged and unprepared way, with potentially disastrous consequences for many of our constituents. I know there will be people who advocate the benefits of a cashless society, but even if that is the case, we must not proceed in this unplanned and ad hoc way. We know from research that some 17% of adults in the UK—around 8 million—would struggle in a cashless society, and those struggling the most would be the elderly, the vulnerable, the economically excluded and those in rural communities such as my Dumfriesshire, Clydesdale and Tweeddale constituency.

Shockingly, the National Audit Office’s recent report on cash found a fragmented system of oversight, with the Financial Conduct Authority regulating banks and the Payment Systems Regulator regulating payment systems identified by the Treasury. Coherence and co-ordination is urgently needed in this regard, along with clear, robust messaging from the Government on the importance of being able to use cash, at least for the time being. In my view, the Government’s promised legislation should not just address access to cash, but make the Financial Conduct Authority responsible for regulating a well-functioning retail cash system.

When I have previously raised this issue, the ability to access cash and the cost of doing so was the primary concern, along with the need for small businesses, charities and local organisations of the type that the hon. Member for Caithness, Sutherland and Easter Ross (Jamie Stone) mentioned, to be able to deposit cash. Now, however, the immediate focus has to be on cash acceptance. It is pointless to access cash if people cannot use it, yet cash is increasingly refused as a means of exchange. The Bank of England noted in its quarterly bulletin that 42% of people had recently visited a store that did not accept cash. More worryingly, Which?, to which my hon. Friend the Member for Blackpool North and Cleveleys referred, conducted a survey that found that four in 10 of those who had experienced difficulties paying with cash had been left empty-handed when trying to buy groceries, and almost two in 10 had been unable to buy medicine. Indeed, I learned only yesterday of another pharmacy that has gone cashless.

Industry-collated data suggests a 71% decline in cash use between early March and mid-April of this year. Conversely, my experience is of the importance of cash to people who have relied on it during the pandemic. Cash has been the means by which local communities have supported themselves, with neighbours, friends and family buying essentials for one another. Short of handing over one’s PIN and bank card, cash was the only option for many of those who needed others to help them when faced with domestic emergencies, given that such people were mostly older or vulnerable and were certainly not users of apps, credit cards or digital banking services. Indeed, many are part of the so-called unbanked community.

As others have touched on, there is no doubt that part of the issue is the false perception that cash has not been safe to use during the pandemic. In my view, some have seized on that perception as an excuse to go cashless for their own purposes. In any event, it is just not true: as far back as April, the Bank for International Settlements advised that the risk of transmitting covid-19 via banknotes was low when compared with credit card terminals or pin pads. That view is shared by the Bank of England, which found that,

“the survival of virus on banknotes is no greater—indeed appears potentially less—than on reference surfaces representative of the many surfaces that people may come into contact with in their routine life.”

Cash is safer still if users follow the routine guidance on washing their hands regularly and on social distancing.

The Government now have a major role to play in making it absolutely clear that people should be able to use cash in routine transactions. If that is not possible on a voluntary basis among retailers and other service providers, legislation should be considered—at least for a fixed period—to support those who are least able to manage without cash in transitioning to a cashless economy. My hon. Friend the Member for Blackpool North and Cleveleys drew a useful comparison with the transition to digital television.

Amid the pushback on the use of cash, accessing and depositing cash has become increasingly difficult, with bank branch closures and the decline of free-to-use cash machines. Since 2015 there has been a 17% reduction in the number of free-to-use cash machines, and since 2010, 39% of the bank and building society branch network has closed. That has been acutely felt by local communities in my constituency, which have seen seven Royal Bank of Scotland branch closures in recent years, as well as the closure of the West Linton branch of the Bank of Scotland. Covid-19 has only added to the impetus of that trend: three other local cash machines have been lost, and the TSB in Peebles is scheduled to be shut. In your speech, Ms Fovargue, you made an important point about post offices, as did other hon. Members. Post offices in my constituency have been closed the next day because the postmaster was ill, meaning that people could not gain access to the post office.

[Jamie Stone]

The right hon. Gentleman is making an excellent contribution. Does he agree that the closure of local bank branches and post offices is all part of the downward spiral of Scottish high streets?

[David Mundell]

Indeed. The challenge of the high street is a considerable one.

Although our local post offices do a good and worthwhile job where they are still in the community, they are not a silver bullet. It is sometimes suggested that everything will be sorted out by the post office. The challenge is not only in having post offices in every community in the first place, but in the considerable issues that post offices face in providing those services and, very often, operating a retail outlet. That is why we need the joined-up approach to the whole cash system, as I have said.

As my hon. Friend the Member for Blackpool North and Cleveleys mentioned, there has been a rise in the number of cash machines that charge for use. Most cash withdrawals from machines are relatively small, so the charges mean that users effectively face a 10% to 30% tax on each transaction. Generic figures on the number of free-to-use cash machines mask the scarcity of such machines in rural and deprived areas.

When I last counted, there were fewer free-to-use cash machines in the almost 1,700 square miles of my Dumfriesshire, Clydesdale and Tweeddale constituency than can be found on or just off Victoria Street, a few moments from here. That imbalance is plain wrong and the industry must correct that. I welcome the fact that the banks, LINK and the card operators, which have come forward with innovative proposals about the interchange rate that applies to cash transactions, are all contributing to the thoughtful work that the Financial Conduct Authority and Payment Systems Regulator are undertaking, about which my hon. Friend the Member for Blackpool North and Cleveleys spoke in detail.

I was pleased to have the opportunity to discuss these issues recently with the Economic Secretary to the Treasury. I welcome his commitment to legislation and other initiatives on access to cash, but, as I have said, I hope they will go beyond access to cash and cover the entire cash system and responsibility for it. That legislation is needed now, along with the Government’s robust advocacy of our ability to use cash. Without action, our cash system is in danger of collapsing, leaving the elderly and most vulnerable to pay the price. I hope that the Minister can promise that action today as a matter of urgency.