Finance Bill (Fourth sitting)

Debate between Philip Boswell and Roger Mullin

Tuesday 5th July 2016 Public Bill Committees

[Roger Mullin]

I rise to speak to new clause 2. I commend the Minister for mentioning the importance of productivity and of generating much more investment. I am sure everyone in the Committee agrees wholeheartedly. However, the problem of productivity relates to particular strata of apprenticeships—for example, higher-skilled apprentices are needed. Fundamental questions are being asked in the different jurisdictions of the UK about how best to address that. Although one levy system is being imposed in the UK, different forms of apprenticeships are being created. There is some anxiety among employers and different Government agencies about whether the Government should be moving at this pace before these matters are clarified.

This is a probing new clause. I simply ask the Minister to address a few short questions to assist our further thinking. First, in the designing of the levy system, was account taken of the fact that different apprenticeship systems operate with different funding levels in different parts of the United Kingdom?

Secondly, we know that some of the systems and administrative arrangements that are being put in place vary considerably from one part of the UK to another. To what extent does the Minister accept that the levy may be top-sliced to fund some of those systems? For example, as he is aware, the digital voucher system that is planned for England will not operate in Scotland. Is it to be funded separately, or will the funding come out of the levy costs?

Thirdly, who has to pay this levy? It makes a lot of sense, and the Minister talked eloquently about businesses, but it is not merely traditional businesses that are expected to pay the levy. In Scotland, further education colleges are the biggest provider of the education that supports the apprenticeship system. On the latest calculation, they will collectively have to pay approximately £1.9 million for the apprenticeship levy, when we expect them to be the main providers of education training. I would like to hear the Government explain why colleges and some large training providers are expected to pay the levy. Will that not dilute their resources for investment in quality apprenticeships?

With those questions, I would like to hear some of the Government’s further reasoning. I think that there is a case, which has been made to us by many employers and agencies, for the Government to take their time and be careful about implementing the levy.

[Philip Boswell]

I fully support the comments of my hon. Friend the Member for Kirkcaldy and Cowdenbeath. I rise to speak to a different issue relating to the clause. I have concerns about the apprenticeship levy and its application and implementation in the devolved Administrations. Skills policy is devolved, so the design and implementation of the apprenticeship programme in Scotland are devolved to Holyrood. Such programmes are also devolved to the Welsh and Northern Irish Assemblies.

Bank of England and Financial Services Bill [Lords]

Debate between Philip Boswell and Roger Mullin

3rd reading: House of Commons & Report stage: House of Commons
Tuesday 19th April 2016 Commons Chamber

[Roger Mullin]

I agree entirely with my hon. Friend. Indeed, it is particularly apposite that he makes that point now, because as my hon. Friend the Member for East Lothian (George Kerevan) pointed out, the Bank of England is a very different kind of bank from a few short years ago. It has a much more political role than it did, and it makes decisions that have a wider impact than before. Its name surely now needs to reflect the impact of its decision making.

The second reason why my hon. Friend the Member for Edinburgh East (Tommy Sheppard) is entirely correct is because of the changed political climate in the UK. The hon. Member for Carmarthen East and Dinefwr (Jonathan Edwards) made similar points about the need to recognise the role of Wales. This is important. It is not a flimsy point; it is fundamental for people who want to see an important central institution that has proper regard for all the nations that it seeks to serve. A short while ago, I was looking at a list of the court of directors of the Bank of England. Looking at the representation provided by its 11 members, one would be inclined to rename it “the Bank of the City of London”, because there is little proper representation for the UK’s nations and regions.

I enjoyed the analogy the hon. Member for Carmarthen East and Dinefwr made with cricket. It is not a subject in which I can claim particular expertise. [Interruption.] Or interest? No, I have some interest in it. The hon. Gentleman pointed out that there is the England and Wales Cricket Board. One Mike Denness, born not far from where I was born in Scotland, was the captain of the English cricket team some years ago; again, I am showing my vintage.

We must have proper regard to all the nations represented in the United Kingdom. I was stung by the Minister’s comment that the Bank of England represents the whole of the United Kingdom, the implication being that it had always done so, but I do not think that is at all true, in terms of its policy making. The hon. Member for Bishop Auckland (Helen Goodman) and my hon. Friend the Member for East Lothian made the telling point that the Bank has had undue regard for one part of the UK. Many commentators would say that the interest rate setting policy of the Bank of England pre-2008 paid undue regard to the City of London and surrounding areas, and too little regard to the north of England, the Scottish economy, the Northern Ireland economy and the like.

That leads me nicely on to new clause 2 and why there should be representation for the nations and regions that make up the UK on the Bank of England’s court of directors. A short time ago, I had a quick look on the internet to see who these esteemed figures are, and unless I am proven to be incorrect—or the internet is incorrect—one is also a non-executive director of the Financial Conduct Authority. Such interlocking directorships do not serve economic policy and the financial sector well. Do we have such a tiny pool of appointable people that bodies with such an important relationship to one another have to be represented by the same directors? That is not a sign of strength in our appointing arrangements, but a position of extreme weakness.

Why are these things important? My hon. Friend the Member for East Lothian mentioned a word that has cropped up many times in Committee discussions: he talked about the importance of avoiding group-think. Many studies show it to have been part and parcel of the flawed decision making that contributed to the crash in 2008. If we want to avoid group-think, we need people who are willing to think differently and to ask the critical questions, and we need a chairman willing to seek out those with alternative views. I do not see that happening today.

Some years ago, I was sitting within the confines of a company that was considering a large proposal. A paper was presented, and the chairman quickly went around all the directors asking for their thoughts. Every single person around the table immediately said, “I think this is a really great paper and we should go with its suggestion.” The chairman, being extraordinarily wise, said, “I am extremely uncomfortable that we have an immediate consensus, so I am going to postpone this discussion until our next meeting. I want you to go away and generate some alternative, critical views.” That is the wise course of action; it is about not being sucked into group-think. For all those reasons, new clause 2 deserves the support of all those who do not want to replicate the mistakes of the past.

[Philip Boswell (Coatbridge, Chryston and Bellshill) (SNP)]

Like many others in the Chamber and, as is clear, in the Treasury Committee, I welcome the progress made on the Bill but have serious concerns about it and, in particular, its role in the systematic gradual compromising of the independence of the two key regulators, the FCA and the Prudential Regulation Authority. Further to the Minister’s announcements in her opening remarks, which were touched on by many in this House, including my hon. Friend the Member for East Lothian (George Kerevan), I welcome the Government’s determination that more oversight is needed on the appointment of the chief executive of the FCA by the Chancellor. However, I have concerns about the new procedures, as announced. Until this legislation is in place, this is very much open for debate and I sincerely hope we will debate it thoroughly, in the way described by my hon. Friend the Member for Kirkcaldy and Cowdenbeath (Roger Mullin).

Another consideration is this: if the Treasury Committee recommends the appointment to be put forward as a motion to the House, the Government could simply whip votes to approve the Chancellor’s appointment. Select Committees provide substantially more apolitical deliberation of key specialised issues. For that reason, a direct Treasury Committee veto of the appointment needs to be considered.