HMRC Impact Analysis: Customs

Lady Hermon Excerpts

Tuesday 8th October 2019 Commons Chamber

[Jesse Norman]

My hon. Friend is right to point out that although there is a cost, we do some £275 billion-worth of trade with the EU; we should see this in that context. As I say, the figures are before we take into account any behavioural change, either by UK exporters and hauliers or importers, or by the EU, and should be seen in the wider context of the liberalisation that we expect to occur after Brexit.

[Lady Hermon (North Down) (Ind)]

The Chief Constable of the Police Service of Northern Ireland has already spoken directly to the Prime Minister, and has made it abundantly clear to him that his police officers will not carry out customs functions at or near the border after the UK leaves the EU. That being the case, the Minister has a duty to explain to HMRC officials what plans the Government have to keep those officials safe when they are carrying out their functions at or near the border after the UK leaves the EU.

[Jesse Norman]

I am grateful to the hon. Lady for that question. That is a very serious issue. I have discussed it with senior officials at HMRC, and I can tell her that they are taking the issue extremely seriously.

Customs and Borders

Lady Hermon Excerpts

Thursday 26th April 2018 Commons Chamber

[Yvette Cooper]

There is no doubt about that. If we have no customs union, there will be less free trade than we currently have, and that is where the manufacturing industry is at risk.

Manufacturing is very important in my constituency, and we are very proud of having Haribo there. I have been to visit, and I particularly enjoyed doing the quality-control checks on the Starmix—we made sure that they were particularly rigorous and tried many times to make sure that the Starmix was very top quality that day. The chief executive of Haribo said clearly to me:

“If a truck loaded with materials that we desperately need to make a product is held up or not released at border control for a day or two, the worst case scenario would be production grinding to a halt”.

That is the reality.

We know, too, that this issue is particularly important for the Northern Ireland border. Ministers have rightly said that there should be no hard border between Northern Ireland and the Irish Republic or between Northern Ireland and Britain. Parliament has a responsibility to make sure that that happens.

[Lady Hermon (North Down) (Ind)]

Will the right hon. Lady take a moment to reflect on the statement that the Prime Minister made yesterday at Prime Minister questions when she was happy to endorse the idea, peddled by the Government again, that no deal would be better than a bad deal? That is a very dangerous strategy, and I say that as someone who represents a Northern Ireland constituency. If we have no deal, we will inevitably have a hard border in Northern Ireland, and we will see the return of violence in Northern Ireland.

[Yvette Cooper]

I have huge respect for the hon. Lady’s views on this, and I agree. We have to show some responsibility. This is not something on which we can simply trade political slogans or vote for an abstract. We have to be very honest and real about the consequences. The removal of the security and economic checks at that border and the growing economic integration between Northern Ireland and the Republic, as well as with the rest of the United Kingdom, are an important part of ending a conflict in which so many people have died. We have a huge responsibility to future generations who will not forgive us if we just rip all that up and throw it away because we did not face the facts.

--- Later in debate ---

[Kate Hoey]

No, I will not give way to my hon. Friend.

I should like to move on to the issue of the border and Northern Ireland. Under the Tony Blair Government, I was one of those who went over and campaigned for a yes vote. I was very keen to see what happened happen, and I pay tribute to all those who made that happen. There is no doubt that there is an issue relating to Northern Ireland and the Republic of Ireland, but the European Union is seizing on divisions to pursue certain demands that are just not necessary. It is certainly using the Irish border as an issue with regard to the customs union. EU officials recently said that they had systematically and forensically annihilated the Prime Minister’s proposals for a loose customs arrangement, but in fact they did not do that—they simply refused to discuss any creative compromise. They talk down every British proposal, and they are being helped by some in this Parliament who talk down everything positive that is said about what might be done. Proposals are talked down and talked down.

People need to remember that there is already a legal border in Northern Ireland for excise, alcohol, tobacco, fuel duty, VAT, immigration, visas, vehicles, dangerous goods and security. Indeed, the primary function of the hard border of the past was to be a security border, not a customs border. People forget that because they want to forget what happened during those long years of troubles. Today all those border functions are enforced without any physical infrastructure, so adding customs declarations and marginally divergent product standards to the long list of functions that the border already implements invisibly does not require a huge, drastic change to the nature of the border.

Even in the most complicated area—agriculture —the director of animal health and welfare at the Department for Environment, Food and Rural Affairs has already given evidence to Parliament that sanitary and phytosanitary-related risks would not be altered by Brexit from what the authorities are already managing across the border pre-Brexit, and that additional infra- structure at the border would not be needed. There are already cameras—not at the border itself, but further away—and checks are going on all the time. There is intelligence all the time. There is no reason why businesses on both sides of the border that need to move back and forth every day will have any problem.

[Lady Hermon]

I am grateful to the hon. Lady for allowing me to intervene. I can assure her that I do not forget the appalling years before the signing of the Good Friday agreement.

Will the hon. Lady please address the worrying issue that, if there is in any shape or form a harder border than what we have at the moment, Sinn Féin will exploit that and agitate for a border poll, which would jeopardise Northern Ireland’s constitutional status as part of the United Kingdom? I, as a Unionist, will not tolerate that, and we need to be careful that we address that issue.

[Kate Hoey]

Of course Sinn Féin would love a border poll, but as the hon. Lady knows, there are regulations about when a border poll can be held, and there has to be a certain ratio of contentment before that can happen. It is almost as if we are being blackmailed by Sinn Féin and those who have been responsible for violence in the past. It is as if we have to shape our whole economic policy and future according to whether some dissidents will start to do dreadful things again. That is not how we should tackle it. We should take those people on and put them in jail, and we should make sure that decent, ordinary people can go about their lives without being attacked and threatened by the idea that if we do not do Brexit in a particular way, terrorism will start again.

--- Later in debate ---

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

I congratulate the right hon. Member for Normanton, Pontefract and Castleford (Yvette Cooper) on securing today’s extremely important debate. I thank all Members for their passionate, heartfelt and informed contributions. I do not intend to go through all the contributions, given their volume and the fact I would like to make sure I leave time for any Member who wishes to intervene on me to ask any questions or to make any points. If I have time, I will leave a minute for the right hon. Lady at the end.

A number of important points have been made in this debate. First and foremost is the matter of Northern Ireland and its Irish border. Some Members have suggested that, in fact, we are prepared to jettison the Good Friday agreement, to undermine it in some way or not to stand up for it, which is certainly not the case. We remain entirely committed to the Good Friday agreement, as we do to having no hard border between the Irish Republic and Northern Ireland and, indeed, no effective customs border down the Irish sea.

[Lady Hermon]

Will the Minister give way?

[Mel Stride]

I give way to my hon. Friend.

[Lady Hermon]

Thank you. It is nice that the Minister regards me as an hon. Friend.

I gently say to the Minister that it would be very helpful in a sensitive situation if the Prime Minister would stop repeating the mantra that no deal is better than a bad deal, because it directly contradicts her pledge, sincerely meant, to uphold the principles of the Good Friday agreement, which I believe she does and intends to do. However, there is a contradiction there, and I am sure the Minister agrees that we do not want to see any risk of a hard border with Ireland. That would lead to violence along the border.

[Mel Stride]

The position of the Prime Minister and the Government is that we are confident of a deal. In that context, this issue of no deal is not particularly pertinent.

Other important points have been raised. I think everybody recognises the importance of having as frictionless a border as possible. Of course, it is recognised that we would achieve that if we stayed within the customs union or a customs union, which is de facto the same thing, but that is not the same as suggesting that there are not alternative arrangements—I will discuss those alternative arrangements in a moment—that would achieve as good as the same thing as a frictionless border.

Many Members today have raised the importance of being free as a nation to go out and negotiate our own free trade arrangements, which of course means that we need to leave the customs union.

Duties of Customs

Lady Hermon Excerpts

Ways and Means resolution: House of Commons
Monday 20th November 2017 Commons Chamber

[Mr Leslie]

Some solutions have to be forthcoming. I have high hopes for the Minister’s winding-up speech. I do not know whether he is able to say anything about that suggestion, or about any other part of the negotiation.

Let us remember that the customs union currently allows a vehicle manufacturer to sell a car in Berlin as easily as in Birmingham or Bradford. That is the nature of the market we currently have, but it could end if we impose tariffs at the levels to which the motion paves the way.

Earlier, the right hon. Member for Carshalton and Wallington (Tom Brake) raised the border with Northern Ireland, and my hon. Friend the Member for Edinburgh South talked about how the Belfast agreement is one area where that question is crystallised most of all. I cannot think of any hon. Member who would say that there should be a hard border between Britain and Northern Ireland. If we are not to have such a border, there should not be a hard border between Northern Ireland and the Republic of Ireland. Of course there cannot be a hard border between the Republic of Ireland and the European Union, but, somehow, we are talking about instituting a hard border between the European Union and the United Kingdom. The logic of that, as the right hon. and learned Member for Rushcliffe (Mr Clarke) said earlier, completely falls to pieces. We are still waiting for that blue-sky solution, the kite flown in the recent trade White Paper. The Irish Government are now asking for written proposals from UK Ministers on those points.

These are serious questions, and a lot of it roots back to whether we will find ourselves voluntarily opting for circumstances in which we want tariffs, hard borders and rules of origin checks to be put in place. By supporting the amendments tabled by my hon. Friend the Member for Edinburgh South, the House has a way to signify that, actually, we choose a different course by choosing to retain as much as possible of the frictionless free trade and tariff-free area that we currently enjoy in the customs union.

[Lady Hermon (North Down) (Ind)]

The Prime Minister has emphasised that there will be no “physical infrastructure” on the border between Northern Ireland and the Republic of Ireland. The Secretary of State for Northern Ireland, in evidence to the Select Committee on Northern Ireland Affairs, ruled out having cameras on the border. If we are not to have cameras or physical infrastructure on a frictionless, seamless border, how exactly does the hon. Member for Nottingham East (Mr Leslie) foresee the Government being able to collect customs duties on imports between Northern Ireland and the Republic of Ireland?

[Mr Leslie]

There is absolutely no logic to the Government’s position right now. Again, none of this was on the ballot paper in the referendum. That is important to remember because people are assuming that, somehow, this is a natural consequence of the referendum result. It is not. We could choose to negotiate to remain in the customs union. By doing so, of course, not only would we have that fantastic free trade access for 50% of our imports and exports, as at present, but we would retain our access to the 57 free trade agreements with non-EU countries that we have by virtue of our membership of the European Union and customs union—that is another 12% of our trade. Added together, knocking on two thirds of our trade is, in many ways, dependent on our current relationship with the customs union.

I look forward to the speech of my hon. Friend the Member for Oxford East from the Labour Front Bench. I say to her and to our Front-Bench colleagues that we cannot just sweep away the question of the customs union. It is positive that the Labour party is saying we want to stay in the customs union for the transition period, and it is positive we are saying that, after Brexit, we want to get as close as we can to a customs union, but I urge Labour Front Benchers to go that little bit further.

It is nonsense to suggest that there is such a thing as a jobs-first Brexit, which is as nonsensical as saying that we could have a books-first library closure. It just does not work. If we end up going down this route, exiting the customs union and the single market, jobs will be lost. We have already seen 900 jobs go in the European Medicines Agency today from the UK to Amsterdam; we are talking about highly skilled, highly valuable activity. I am appalled that we are in that circumstance, and it is just the tip of the iceberg. I therefore urge my colleagues to support the excellent amendments from my hon. Friend the Member for Edinburgh South.

--- Later in debate ---

[Anna Soubry]

I could not agree with the hon. Gentleman more. That is what the people need to understand now: there is this third option. There is this other way of getting a Brexit. We would be out of the European Union, so we would have satisfied the 52% of voters on that, but we would deliver what everybody wants, which is the best possible Brexit that is in the interests of everybody in this country, with the economy, jobs and prosperity right at its heart. This would solve the problem that Northern Ireland faces and that Ireland faces, because we would keep the customs union.

[Lady Hermon]

I am deeply disquieted by the fact that prominent Conservative Members are seemingly in favour of no deal as we leave the EU, because today’s Belfast Telegraph carries a report saying that republican organisations in Northern Ireland and Sinn Féin are hoping that there is a hard Brexit. They are exploiting that idea to then campaign for a border poll to try to rip Northern Ireland away from the rest of the UK. That is extremely concerning to me, as a Unionist.

[Anna Soubry]

I listen to the wise words of the hon. Lady, as she, more than many, knows exactly the serious consequences of getting this wrong. It is not just about trade and the economy in Northern Ireland; it is also about the politics. I take the point that there is a huge danger of abandoning the customs union and going for some ghastly hard border, which plays right into the hands of Sinn Féin, the IRA and all the rest of them.

I am not going to speak for much longer, because I agree with so much of what has been said by the three Members I particularly picked out and by the hon. Lady. I am old enough to remember my father having a car and when we asked what had happened with it and why did we not have it, we were told, “It is down in the garage and we are waiting for a part. It hasn’t cleared customs.” Some other Members will remember that, too. The terrible problem with much of this debate is that so many people are so much younger than I am and they have never experienced this. People like me are old enough to remember the days of having to have our suitcases opened at customs control, but this is lost on huge swathes of our population. Yet here we are actually beginning to plan for a return to those bad, dark days when we were the sick man of Europe.

So we need to stay in the customs union for the sake of our economy and because it will deliver what the people want: we will get on with this and we will make progress. We can take it, because it is there on a shelf and we can take it off the shelf. We may have to tweak it here and there but it will get us on and it will deliver Brexit, and it will ensure that we can then look at these huge other domestic problems we face.

I was going to say something else, but I have no doubt completely forgotten it. It matters not, though, because these are important matters. [Interruption.] Ah, I know what it is. As I said the other day, history will record the profound irony, which cannot be right, that the overwhelming majority of right hon. and hon. Members in this place agree that we should be in the customs union and the single market. The only reason why that is not even on the table anymore—this is an uncomfortable truth—is because, I fear, my party is in hock to 30 to 35 hard, ideologically driven Brexiteers. The British people will not thank my party unless we stand up for business and for the economy. We must deliver Brexit but also make sure that we deliver for the British people.

Finance Bill

Lady Hermon Excerpts

Tuesday 12th September 2017 Commons Chamber

[Craig Mackinlay (South Thanet) (Con)]

I know you have just taken the Chair, Mr Deputy Speaker, and I am afraid that we have not have heard too much good news this afternoon, so I want to bring that good news to Members.

We have closed the tax gap. We are raising more tax than ever before by closing down some of the more ambitious and egregious tax systems that Labour did nothing about over the 13 years that it was in power. We have got unemployment down to the lowest level since 1975. We are doing more to close the tax gap—it is very difficult to assess what a tax gap is; by its very nature, it is very difficult to put one’s finger on—than ever before. Thirty million people are saving £1,000 in tax due to the massive increase in personal allowances from £6,500 a year in 2010 to £11,500 a year today. That is a real benefit to the lowest paid across this country. We can add to that increases in the living wage, with another £1,400 going to everybody in this country. For pensioners, we have raised the level of state pension, again adding more for those who need it.

My hon. Friend the Member for Newark (Robert Jenrick) made a very clear point about how the wealthiest in this country are now paying a higher amount of tax than ever before because we are doing what we can to close down the inefficiencies in our tax system. It is strange that Labour Members have always talked big about the wealthy not paying their share, but the Conservatives are actually making them do so. We have reduced the inequality in pay grades between the sexes. Apparently, for people in their 20s that pay inequality is now down to zero. All that is being achieved by this Government.

[Lady Hermon (North Down) (Ind)]

If everything is going so swimmingly for this Government and they have achieved so much, why on earth should they not lift the 1% pay cap for all public sector workers?

[Craig Mackinlay]

We will be having a debate about that tomorrow, I believe. The fact is that we had a £150 billion per year deficit when we came into power with our then Lib Dem partners in 2010, and we have got that down to just a little over £50 billion a year. A GDP borrowing requirement of 10% in 2010 is now down to 3%. I certainly hope that as we grow this economy we will be able to look at public sector pay in a more reasonable and appropriate way in future, but that is a debate for tomorrow and for years ahead.

I was very taken by the maiden speech made by my hon. Friend the Member for Moray (Douglas Ross) and especially by his story about the previous Chancellor, my right hon. and learned Friend the Member for Rushcliffe (Mr Clarke), putting a seal on that barrel of cask whisky. Let us hope that he put a seal on it meaning that it may be opened tax free, for the benefit of all, in due course.

The statistics on what we have achieved speak for themselves. The one that bears the most fruit is that on the lowering of corporation tax. We generally tax things that are bad. We put high rates of tax on things such as cigarettes or alcohol because we want to stop their use to some extent because of their perilous health effects—particularly those of cigarettes. Why would we want to follow Labour’s proposal to raise the tax on corporates? It seems to me that unless we want to supress profit and jobs and to do entirely the opposite of what we actually want to achieve, raising tax on corporates is the worst thing we can do—and it has been shown to be the worst thing. Members should not take my word for it. The Institute for Fiscal Studies took the Labour party’s spending plan to pieces before the election.

That is the good news. I am not always in favour of Finance Bills, and I am particularly not always in favour of one of this size. As I have said before, I am a chartered accountant and chartered tax adviser, and I still work as that from time to time. I am afraid that it does no good for UK competitiveness that we now have one of the most complex tax systems in the world. It now runs to 22,000 pages and 10 million words. Compare that with the entire tax system of Hong Kong, which runs to 350 pages in its entirety. In the early days of my training, in the late ’80s, the tax law rewrite was being discussed. We then had the Office of Tax Simplification, run for a time by John Whiting CBE, a man I know well and a fellow member of the Chartered Institute of Taxation. It is time to do what we can to slim down legislation and make it fit for purpose.

Much of what we have been doing of late is going in the right direction. Let me canter through various parts of the tax system and give my comments thereon. On inheritance tax, the proposals to give an increasing exemption for the family home must be the right way forward. For many people, the reason their property has become of such high value is often not to do with their circumstances. It might have been caused by quantitative easing resulting from the 2008 failure and the inflation of prices. Of course, the north-south divide and the sheer desirability of London and the south-east, as well as restrictions on planning, have caused a huge asset bubble.

One area that has much to say for itself and has been discussed a lot this afternoon is the extension of inheritance tax to non-domiciles. The situation has been daft for a long time as non-doms have benefited from tax exemptions across vast parts of our tax code, but we should strike a note of caution this afternoon. Clause 33, expanded in schedule 10, deals with non-doms who use a company or trust to hold UK residential property. There is perhaps a flaw in the Bill as drafted that needs clearing up, and that could be done in Committee.

The situation as it is designed deals with non-doms who own a residential property through a foreign company. Let us say that that non-dom is a New Zealander, who owns a property portfolio through a New Zealand company. If that were the case, he could now be subject to inheritance tax on that UK property.

That in itself is not an issue, but my worry is that if an alternative non-dom had provided the financing to the non-resident company for that UK property purchase—this could involve a vehicle that had never had anything to do with the UK—there is potential under the Bill as drafted for that loan to be caught under UK inheritance tax rules. I am not entirely sure that that was the intention. For example, a Swiss investment company owner—or even a foreign discretionary trust—providing finance for a non-dom company to buy UK residential property could find itself within the inheritance tax net even though it had never set foot in the UK. A foreign discretionary trust could even find itself facing 10-year principal charges. Again, I am not sure that that was the intention. We have done much—starting some years back with the annual tax on enveloped dwellings and the extension to stamp duty for properties purchased that way—to try to unwind corporate structures that own property in the UK. No other party has tried to make the playing field level for UK citizens in this country who are doing the right thing, but we are now rightly extending those measures to include non-doms.

I know that we have had the election, and circumstances have brought us to where we are today. There are no surprises in the Bill, and it is not retrospective, but I believe that we should avoid the practice of proposals coming into force, many of them on 1 April this year, before the legislation has been agreed in this House. For instance, if the proposals on non-doms owning a residential property through a foreign company become law, a situation could arise in which a person who had died sometime after 1 April was subject to a law that had not yet been enacted because it had not received Royal Assent. We should avoid situations such as that.

My concern about some parts of the inheritance tax extension to non-doms—I am not saying that it is not right at all—is that we need to get the balance right. My right hon. Friend the Member for Wokingham (John Redwood) highlighted the fact that there is a balance to be struck between making Britain an appealing place for business and deterring non-doms from coming here at all. Many of those who come will be spending out on improvements and jobs as well as contributing to the VAT take. There is a balance to be struck and, unlike Labour, we know where that balance is. My hon. Friend the Member for Newark (Robert Jenrick) put it rather well when he said that we would rather see more people becoming wealthy than see the poor suffering as long as the rich did too.

Pensions have gone through what can rightly be called a revolution over the past few years, starting with the pension freedoms that came into play in 2015. The way in which we took our pensions was very restrictive. We accumulated our funds, but we had no choice but to put them into annuities that could, depending on the interest rate at the time, have provided a rather poor outcome. It is therefore absolutely right that we now have pension freedoms. We can do what we like with the pot that we have accumulated. We can have draw-down income, and we can use it far more flexibly.

It is recognised that massive amounts of tax relief are available in the area of pensions. There is nothing wrong with the current annual allowance of £40,000; that is the right level. However, I do have some problem with the lifetime allowance of £1 million, because I do not think a senior nurse aged 45 to 50 in the NHS pension scheme was ever intended to be knocking on the door of lifetime allowances. If somebody with their own self-invested personal pension or defined contribution scheme has a good fund manager and has done well during their working life, is it fair for them to be penalised by comparison with somebody who has not had such a good fund manager and whose returns have not been quite so good? I am not in favour of the lifetime allowance, but I am certainly in favour of the annual allowance.

Auto-enrolment has been one of the great successes, because I do not think that anybody is saving enough towards their pension.

Ways and Means

Lady Hermon Excerpts

Ways and Means resolution: House of Commons
Wednesday 6th September 2017 Commons Chamber

[Lady Hermon (North Down) (Ind)]

I am grateful to the Minister for allowing me to make an early intervention. So that the House can understand the voting patterns later tonight, will he clarify whether the motions before us are covered by the deal done between the Democratic Unionist party and the Conservative party? That answer will be very informative to the House and, indeed, to our constituents.

[Mel Stride]

I assure the hon. Lady that the process at the conclusion of this debate will be exactly the same as the one we go through on any consideration of Ways and Means measures in respect of such fiscal matters.

An open and consultative approach is important to our tax policy making process, and our commitment to a single major fiscal event each year is a further valuable step to improving the process for making fiscal policy. Just as with most other major economies, people will no longer face a host of tax changes twice a year.

The transition to the new Budget timetable will, of course, mean that a further Finance Bill will be introduced following this autumn’s Budget. In line with our past practice, the Government will next week publish drafts of some clauses that we plan to introduce in the next Finance Bill. The transition means there are fewer clauses than in recent years, but pre-legislative scrutiny will again help consideration of the Bill.

On that subject, Members may notice that there has been a slight change to the motions on today’s Order Paper. The Government have withdrawn a motion covering changes to the definition of a taxable disposal within landfill tax. That motion and the corresponding clause will no longer be taken forward in the current Bill.

--- Later in debate ---

[Mel Stride]

My hon. Friend is entirely right about that. We currently raise £7 billion a year from non-domiciled individuals, which is £1 billion more than was the case a decade ago. The provisions in this Bill will ensure that we raise a further £1.6 billion over the next five years, so this Government are serious about this issue and are acting on it.

Other clauses will legislate for the changes we have announced to the dividend allowance, reducing the differential between taxation of different individuals, and to the money purchase annual allowance for those who have accessed their pensions under the flexibilities that this Government have provided.

Finally, these resolutions provide for the Finance Bill to legislate for the Making Tax Digital programme.

[Lady Hermon]

I was provoked to my feet by the word “finally”. I am very concerned that a number of the resolutions before us include the words

“including provision having retrospective effect”.

I have waited patiently for the Minister, guided by Madam Deputy Speaker in his extensive contribution on this crucial piece of legislation—we are discussing the Budget and the Finance Bill, for goodness’ sake—to tell us why on earth so many provisions are having retrospective effect.

[Mel Stride]

The answer to the hon. Lady’s question is that many of these things relate to the fact that this Bill has been, in effect, interrupted; we now have a second Finance Bill because we had a general election some time ago, as a consequence of which not all of the measures that were going through Parliament at that time were proceeded with. The second point I would make to her is that the fact that some measures are retrospective does not mean that they have not been fully consulted on or that draft legislation has not been out there to inform the public and stakeholders.

[Lady Hermon]

I raise this point because where there is late payment of tax, for whatever reason, be it carelessness or inattention to a particular detail, penalties and fines will be imposed. When we are considering things having retrospective effect, we may well find that such provisions will not comply with our commitments under the European convention on human rights about the retrospective creation of fines and penalties. The Government will not want to hear that, but I just bring it to the Minister’s attention when we talk about the retrospective effect of any provisions in a Bill such as this, which involves fines and penalties.

[Mel Stride]

I thank the hon. Lady for her further thoughtful point, but I just return to my comments, which are that those who will be affected by the retrospective measures in this Bill will have had an opportunity to be fully apprised of them prior to their coming into force under an Act of Parliament.

In conclusion, the resolutions provide for the Finance Bill to legislate for Making Tax Digital. The Government are committed to creating a tax system fit for the digital age. Businesses increasingly interact with customers, manage their purchasing, organise their payroll and undertake a host of other functions online. It is the future for keeping their accounts and reporting their tax affairs. Moving to a digital system will help us to address the £9 billion annual cost of taxpayer errors. It is right that we act.

High Speed 2: Electronic Deposit of Documents

Lady Hermon Excerpts

Tuesday 11th July 2017 Commons Chamber

[Mrs Gillan]

It is clear to me and many others who are involved with the project that HS2 Ltd needs to improve not only its consultation processes but its communications processes, which are still appalling in many instances.

[Lady Hermon (North Down) (Ind)]

I am grateful to the right hon. Lady for allowing me to intervene to make a small but important point. She just raised the issue of older people often not being familiar with technology and electronically conveyed documents. Older people often suffer from visual impairments; indeed, some of them will need a Braille copy. Will she seek assurances from the Government that those who are at a disadvantage in reading documents will have assistance?

[Mrs Gillan]

The hon. Lady makes a good point. I am keen to ensure that, in a process that is so inequitable, with the state against the citizen and the citizen receiving very little help, we impress on Ministers and HS2 Ltd that there are people who need assistance to navigate and understand these documents. I feel passionately that they need to have that assistance. Had the hon. Lady seen people who are going to lose their house having to appear alone before a Select Committee of this House, with a silk—a QC; an expensive, highly paid barrister—set against them, she would understand why I implore Ministers to make sure that suitable personnel are available to help people to interpret and access the documents. The shadow Minister asked for the telephone line to be free; I am going to go further: I want Ministers to ensure that that telephone line is manned by competent people who actually know what they are talking about and can guide people through the process easily. That is extremely important.

I am disappointed that there is currently no provision that will allow petitioners to petition electronically when the Bill is introduced—unless Ministers tell me differently. I had to bring petitions from constituents into the House myself, and they were charged £20 for the pleasure of defending their own properties, so I had to collect money and documents and bring them in to facilitate the process. My constituency is not far outside London; the people who will be affected by the phase 2 Bill live much further up the country. I would have thought Ministers had considered how other MPs’ constituents who are going to be affected by phase 2 will be able to submit their petitions this time around. I implore Ministers to look into that, because that is a matter of priority. We should wipe out the £20 fee, which is neither fish nor fowl; it is an insult to the people who are defending their properties and want their voices to be heard and it certainly does not cover the costs of this exercise, so I hope it will be cancelled.

I have another question, on paragraph (f) of the motion, which the Deputy Leader of the House will notice refers to

“any requirement under Standing Order 4A(1), 27A(6) or 224A(8) relating to private business to make a document available for sale at prescribed offices, if it is made available for sale at an office in London.”

Will he assure me that that does not mean that London will be the only place that such documents will be on sale? When the Bill is introduced, phase 2 will affect people from Birmingham northwards, so would it not be more sensible to make the documents available in, for example, Birmingham and Manchester? That would be of more assistance to the people affected by the project.

I would like to know when the Bill will be introduced and when Second Reading is anticipated. When we have another hybrid Bill of this size and complexity that affects so many people, it is important that as much warning as possible is given by the Government and by HS2 Ltd and that all the information is readily available well in advance and with explanation so that people can get their heads around it. There is no doubt that there will be support for the phase 2 Bill from all parts of the House. Once again, there will be a very small number of MPs opposed to it or raising questions about it, but the Government need not be afeared that they will not get their business through. However, if they are to embark on a project of this size and complexity, I ask them please to learn from the lessons and the mistakes that were made on phase 1, and not to put the people on phase 2 through the same agonies. If we do not learn and we do not then take action, we are failing people in this country.

Fixed Odds Betting Terminals

Lady Hermon Excerpts

Tuesday 26th April 2016 Westminster Hall

[Jim Shannon]

The hon. Gentleman is absolutely right. We have many concerns. Today’s debate is fixed primarily on the fixed odds betting terminals, but I accept that control is needed elsewhere.

The lack of regulation of FOBTs has meant that they have clustered in areas of high social deprivation. They can prey on the young and vulnerable. There is strong evidence that the high stakes on FOBTs in the low-supervision environment of a bookmaker have led to increased problem gambling. Recent Responsible Gambling Trust research on FOBTs showed that 37% of players exhibited signs of problematic gambling. At stakes of more than £13.40 a spin, that rose to 80% of players exhibiting problem gambling behaviour. One third of problem gamblers calling the national problem gambling helpline cited FOBTs as their issue. Let us be clear that the debate is about fixed odds betting terminals and the blight they cause on society.

[Lady Hermon (North Down) (Ind)]

There is evidence that the terminals have been used for money laundering. Will the hon. Gentleman reflect on the involvement of paramilitary organisations in money laundering through the terminals in Northern Ireland?

[Jim Shannon]

The hon. Lady is absolutely right. There is evidence of that, and I will give examples shortly. I am sure others will, too. Whenever there is misuse and a dirty laundering system, that has to be addressed.

More than half the UK population plays the national lottery, and they lost £7.2 billion last year. That compares with the less than 4% of the population who play FOBTs, who lost £1.6 billion. The unemployed are twice as likely to play the machines as someone in work. The demographic that bookmakers target with FOBTs are also the least likely to have access to bank accounts, debit cards and credit, and thus have restricted access to remote gambling sites. Bookmakers and the gambling associations are clearly targeting those who are vulnerable to start with, but who are perhaps in some difficulties with money, too.

Bookmakers are using the cover of account-based play, which was instigated by the Government, to provide cash top-up cards that facilitate access to their online sites; the hon. Member for Alyn and Deeside (Mark Tami) mentioned such sites in his intervention. The gambling lobby says that we need more evidence, but it is clear that the evidence is out there. It is comprehensive, and it consistently lines up on the right side of the argument: we need to protect the vulnerable and enact regulation. I hope that, arising from this debate, we will have a chance to enact regulation that will filter out from this House to the whole United Kingdom, including Scotland and Northern Ireland.

FOBTs are useful for money laundering, as the hon. Member for North Down (Lady Hermon) said. The machines have a few filters, but the money launderers know them and work within the limits. Supervision is low and closed circuit television is poor, so it is a safe way to money launder. Low-level drug dealers clean cash in case they are pulled over by the police. Generally, they are younger lads with smaller amounts of cash. In one West Yorkshire case, the police uncovered £18,000 of FOBT tickets being held by one drug dealer. The machines are used for underworld criminal activities by those whose thoughts are nothing but criminal and outside the law.

Using the proceeds of crime to fund a gambling addiction, or cleaning the cash obtained from a crime, is common. The most common use of FOBTs since they landed on the high street is for getting rid of dyed notes obtained during robberies on armoured vans, cash machines and so on. The notes are sprayed with an irremovable dye that is an immediate alert as to their origins. They are therefore not exchangeable. However, they are still identified as legitimate currency by note accepters on gaming machines. The machine with the highest cash transaction capability and ticket pay-out facility would be the preferred option for laundering, and that is the fixed odds betting terminal.

The bookies and the suppliers adapted the software controlling ticket pay-outs to identify where less than 40% of the cash put in is wagered—that is where people either put cash in a FOBT and then print a ticket straight out, or stake a minimal amount of the total cash inserted—so that staff are alerted when people cash those tickets. Launderers have adapted to that by using minimal-risk wagering. The bookies are now making it easier for criminals by allowing them to put cash winnings on to a pre-paid credit card. They are not just hiding the cash, but making it electronic. Never ever think that the criminals and evildoers have not got ideas as to how to get around the law, how to work it to their advantage and how to launder some of that dirty money.

Following on from weaknesses in money laundering policies at Ladbrokes in 2013, Paddy Power was recently the subject of a high-profile money laundering investigation. That investigation resulted in the Gambling Commission reprimanding Paddy Power and imposing a £280,000 penalty; there were also serious failures in social responsibility. The Government are considering including betting shops in the European Union’s fourth money laundering directive. That would require the identification of customers transacting over £1,500 in a 24-hour period. The bookmakers are lobbying to be excluded from that, despite recommendations that they should be included first being made in 2001 in the Budd report.

The lack of FOBT regulation is a huge issue that cannot be ignored, and I am keen to ensure that the debate highlights it. Gambling the world over has evolved into a consistent structure, with the hardest gambling reserved to highly regulated venues such as casinos, where customers go with the knowledge and expectation of experiencing a harder gambling environment. Casinos have very high levels of player supervision and therefore protection. Players tend to be occasional visitors, and the casinos tend to be viewed as a destination leisure venue with more than just gambling on offer.

The Gambling Act 1968 put in place a regulatory permit for gambling. This set out that high-stakes gambling should take place in highly regulated and highly supervised environments such as casinos, and low-supervision environments should have lower stakes and require lower levels of supervision. Those principles were reaffirmed in the Gambling Act 2005 by Sir Alan Budd. Other countries follow this model. The UK is alone in offering very-high-stakes gambling of £100 on Britain’s high streets in the low-supervision, easily accessible environment of a bookmaker. Little or no monitoring and little or no supervision means vulnerable people can be taken advantage of. The regulation of fixed odds betting terminals is out of kilter with the principles of gambling regulation. They offer very-high-stakes gambling in an unregulated environment.

The only material restriction is that bookmakers are allowed four fixed odds betting terminal machines per shop. The result of this is that bookmakers have opened multiple betting shop branches in close proximity. That is a concern. When we look at the streets of the United Kingdom of Great Britain and Northern Ireland, we sometimes wonder whether we are in a gambler’s paradise—if there is such a place—because betting shops seem to be prevalent everywhere.

The bookmaker Paddy Power has focused its branches in areas with high immigrant populations. We have seen a 43% increase nationally in the number of betting shops located in town centres.

--- Later in debate ---

[Mr Robertson]

I will come to that in a moment, but I just wanted to establish where I am coming from on this issue. There is a link between bookmaking and horse-racing, and if we lose one, without doubt we will lose the other. I want that to be very clear. There are far fewer betting shops than there used to be. We hear about the proliferation of bookmaking shops, but there are something like half the number there used to be. It is important to recognise that, while certainly acknowledging the issues raised by the hon. Member for Strangford.

You have asked us to take very little time each, Sir Alan, and I am happy to comply with that. I hope that the Government will continue with their evidence-based approach. I am not convinced that there has been an increase in the number of problem gamblers. There are people with addictive natures who will be addicted to something, whether that is alcohol, drugs or gambling, but we are discussing only one form of gambling, and many other forms are available.

Any Member could use their mobile phone to empty their entire bank account into a betting account and lose all that money within a minute or two. I mention that to draw attention to whether it would be fair to place restrictions on one kind of gambling when so many other forms are available, including the national lottery. I have linked horse-racing to bookmaking, and I also want to link the national lottery to the many good causes it supports. Billions of pounds have been spent on good causes thanks to the national lottery. I have some news for Members: that money is taken not from the millions of pounds that are won but from the money that people lose on the national lottery each and every week.

I hope we can get a measure of proportion into this debate. The Government should take seriously the important points and concerns raised by the hon. Member for Strangford, but I ask them to continue with their evidence-based approach and to remember that the great sport of horse-racing depends on the actions taken by my right hon. Friend the Minister and the Government.

[Lady Hermon]

The hon. Gentleman is of course the Chair of the Northern Ireland Affairs Committee, of which I am very proud to be a member. He chairs us well.

The hon. Gentleman has called for an evidence-based approach to be taken before the Government do anything, and he mentioned race courses in Northern Ireland. Can he produce any shred of evidence that those who go to the horse-racing in Northern Ireland, or anywhere in the United Kingdom, are the same people who play on fixed odds betting terminals? Where is the evidence for that connection?

[Mr Robertson]

That is not quite the point I was making. The situation is a lot worse now, but five years ago PricewaterhouseCoopers produced a report that said that up to 95 shops in Northern Ireland, which represents around 30% of the total there, would close if fixed odds betting terminals were banned. The hon. Lady is not calling for them to be banned, but that shows the scale of the problem. Some 975 jobs would be lost, costing £18 million per annum throughout Northern Ireland. The knock-on effect for the betting industry and therefore for horse-racing would be huge, because it is the machines that tend to keep the shops going. I am sorry that I did not explain that earlier, but that is my point. Fixed odds betting terminals are far rarer in Northern Ireland, where there are fewer than two per shop, than in Great Britain, where the number is nearer to four, so I am not convinced that the problem is greater in Northern Ireland. That does not mean that there is no problem, but if there is one I do not think it is of the same scale.

Sir Alan, you have indicated to me that I should draw my remarks to a close, so I repeat to the Government: please continue to take an evidence-based approach, and please remember that the sport of horse-racing depends on bookmaking.

EU Referendum: Timing

Lady Hermon Excerpts

Tuesday 9th February 2016 Commons Chamber

[John Penrose]

Absolutely. Europe is one of those issues that may be extremely exciting for a small number of people—extremely exciting, perhaps, to a small number of people in this place and in the half-mile that surrounds us—but if we “bang on about Europe” for far too long, we shall run the countervailing risk of starting to turn people off the whole issue, important though it is. A decent period which, after all, we use to decide general elections is what the country and the electorate are used to. It allows plenty of time for a full and in-depth discussion of the issues that need to be covered, without necessarily boring everyone to tears and turning everyone off before they go to the ballot boxes. Of course I entirely accept that a gap will be necessary.

[Lady Hermon (North Down) (Ind)]

Given that Northern Ireland remains part of the United Kingdom and will continue to do so for a long time, I expect the Prime Minister of the United Kingdom to come to Northern Ireland and campaign for it to remain part of the European Union. It would be helpful if the Minister confirmed that the Prime Minister will indeed campaign in Northern Ireland, but will do so after the Northern Ireland Assembly elections and not before.

[John Penrose]

I thank the hon. Lady for giving me this opportunity to commit the Prime Minister’s forward diary in such a specific way, although I think it would be a career-limiting move were I to do so. I suspect that she will nevertheless make her point strongly, and my right hon. Friend will have an opportunity to respond to it specifically.

--- Later in debate ---

[Pat Glass]

Yes, I do. In areas such as my hon. Friend’s and my own, which have been dominated by flooding, that is a big issue.

[Lady Hermon]

The hon. Lady will of course be aware that the Northern Ireland Labour party intends to run candidates in the Assembly election, whether or not her party leader agrees. Is she aware of any objections from her colleagues in the Northern Ireland Labour party to the possibility of an early EU referendum in June? Has she heard of any complaints from them?

HMRC Office Closures

Lady Hermon Excerpts

Tuesday 24th November 2015 Commons Chamber

[Hannah Bardell]

I shall continue. The UK Government’s plan to slash 137 local HMRC offices across the UK will inevitably have a knock-on impact on the ability of SMEs to access information and advice on tax.

I would like to give my personal thanks to Gary Stein and his PCS colleagues who met me, my hon. Friend the Member for Linlithgow and East Falkirk (Martyn Day) and MSP Angela Constance immediately after the closure announcement. I know that other PCS colleagues held similar meetings across Scotland and the UK. Gary and his PCS colleagues are working hard to engage staff and management in offices in West Lothian and have made clear their concerns about morale and the range of issues that I have highlighted. It cannot remain unsaid how valuable our local unions are in this process, and I am sure that it is not without sinister intention that the Government have marched ahead with their undemocratic Trade Union Bill, which would mean that the important work that our unions do in such situations would be made ever more difficult. Never has it been more vital that we have good engagement with the workforces who deliver essential public services.

[Lady Hermon (North Down) (Ind)]

Will the hon. Lady give way?

[Hannah Bardell]

I would be happy to do so.

[Lady Hermon]

I know that the hon. Lady is storing up the best until last, but in the meantime I am grateful to her for allowing me to intervene. We have a serious issue in Northern Ireland. We are the only part of the United Kingdom to share a land frontier with another EU member state, which gives rise, very unfortunately for HM Treasury, to fuel smuggling and the loss of a huge amount of revenue along the border with the Republic of Ireland. The announcement of the closure of HMRC offices in Northern Ireland has serious consequences, so will the hon. Lady reflect on that before she calls on someone else to intervene?

[Hannah Bardell]

I share the hon. Lady’s concerns, which will be shared across Scotland and other parts of the UK. My local PCS representatives spoke about what they felt was a perfect storm brewing. The greater the pressure we put on our public services and the more we squeeze them, the more likely it is that there will be major breakdowns in the system.

I am going to finish up. [Hon. Members: “Oh!”] I am sure that the hon. Member for Upper Bann (David Simpson) can save his intervention for speeches by other colleagues. I urge all parties across the Chamber to support our motion and ask this Tory Government in the strongest terms to think again on these nonsensical and ill-conceived HMRC closures.

Tax Credits

Lady Hermon Excerpts

Tuesday 20th October 2015 Commons Chamber

[Damian Hinds]

It is indeed an extraordinary amount. For every month we fail to deal with the deficit, not only would we be racking up more debts for all our children but we would be incurring greater interest charges in the here and now, which means money not spent on other essential services.

[Lady Hermon (North Down) (Ind)]

I am grateful to the Minister for giving way, although I am not quite sure he will be so grateful when he hears my question. I have to admit—in fact, I am embarrassed to say—that I voted with the Government on the cut to tax credits. I did so on the clear basis and understanding that there would be mitigation in the Chancellor’s autumn statement of the worst effects of the cuts to tax credits. The Minister cannot imagine my anger as I listened to his party’s conference, and the Prime Minister and the Chancellor ruled out any such mitigation. I will be voting with the Opposition this evening, unless the Minister tells this House today what mitigation the Chancellor will guarantee in his autumn statement. I give the Minister the opportunity to persuade me to change my mind.

[Damian Hinds]

The hon. Lady, who is a veteran and very experienced in the House, will know I cannot pre-empt anything in the Chancellor’s autumn statement on this or on any other subject. She was right to vote with the Government on the statutory instrument. As I will be outlining in my remarks today, this is a reform package of measures for working people. It is the right thing to do for the future of those families and the future of our country.