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Commons Chamber

Volume 612: debated on Tuesday 28 June 2016

House of Commons

Tuesday 28 June 2016

The House met at half-past Eleven o’clock

Prayers

[Mr Speaker in the Chair]

Oral Answers to Questions

Business, Innovation and Skills

The Secretary of State was asked—

Industry Innovation

We want to make the UK the best place in Europe to innovate, to patent new ideas and to grow new businesses. That is why we are creating a supportive business environment—for example, with research and development tax credits and through Innovate UK.

The UK’s position as the world leader in offshore renewables is underpinned by industry and academics from across the European Union working together on innovation projects, and by funding from the European Investment Bank and other European or collaborative research and development funds. Can the Secretary of State give me an assurance that our No.1 position will not be put at risk by Brexit?

The UK is the world’s largest offshore wind market today, and it will still be the largest by the end of the decade, with 10 GW expected to be installed. Despite the decision to leave the European Union, I am confident that we can still co-operate on science and research, as many countries outside the European Union do with their EU counterparts. I believe that that will ensure that this sector remains very strong.

Innovation and research are inextricably linked. Yesterday, when I asked the Prime Minister about the impact on our research institutions of the decision to leave the European Union, he assured me that existing contracts would be honoured. However, researchers are applying for funding on a daily basis. What support can be put in place to deal with the uncertainty that exists today, tomorrow and next week?

As the hon. Gentleman knows, there will be no change immediately; the current structures will stay in place for at least two years. Of course companies are concerned about what will replace them, and that is exactly what we are working on now with many researchers, businesses and others. The Minister for Universities and Science is taking this very seriously and he has already been speaking to a number of stakeholders.

A vital component of innovation in business is a superfast broadband connection. Would the Secretary of State consider extending the excellent satellite voucher scheme to allow the pooling of vouchers to enable the establishment of community schemes such as fixed-point wireless?

I will certainly discuss that with the Secretary of State for Culture, Media and Sport. I was pleased to have introduced that scheme in my previous role as Culture Secretary, and it has been making progress. My hon. Friend would perhaps also like to know that infrastructure will be absolutely key to the new national innovation plan, which will be published shortly.

Mr Speaker, you will know well, because you were with me, that I met representatives of the textiles industry and the university in my constituency last Friday. They are absolutely appalled by the decision to leave the European Union. Surely we need more than the rather calm words we have heard this morning. There should be an emergency package to deal with the real concerns of the great exporters and innovators of this country.

Of course there will be a number of companies, whether in textiles or other sectors, that will have concerns, particularly about the short term. That is why my colleagues and I are already in touch with a number of companies and businesses around the country. This afternoon, for example, I will be holding a round table with businesses representing every sector of the economy, and we will be following up on precisely those issues.

The innovation that British industry now needs is a range of innovative trade deals with the world’s super-economies outside the European Union, and we need to act on this now rather than waiting to start until after our exit. What steps is my right hon. Friend taking to supercharge the trade unit within his Department to get crack trade officials working on these agreements straightaway?

My hon. Friend is absolutely right. With this decision, there are of course short-term challenges, but he highlights the fact that there are also medium and long-term opportunities, one of which is trade. The Department had already thought about that in case the decision went in favour of Brexit. I am pleased that we did that preparatory work and we will now be putting it to use.

Scotland, which voted to remain in the European Union, has secured around £120 million from Horizon 2020, the biggest EU research and innovation programme. Participation in EU research and innovation programmes has enhanced our scientific and business reputation, so what are the Minister and his Department going to do to ensure that similar funding and support options are available post-Brexit?

The hon. Lady may be interested to know that several countries that are not in the European Union are part of research and science collaboration programmes—Israel, for example—so if we choose to do so, it is perfectly possible to continue working with our EU partners on science and research.

Late Payment

I am implementing a package of measures to support a cultural change to tackle late payment, including the small business commissioner, the duty for large businesses to report on payment practices, and support for the voluntary prompt payment code.

I thank the Secretary of State for his answer and welcome his work in this area. In addition to late payment, there is the issue of lengthy-term payment. For example, an SME in my constituency is negotiating with a multinational company, which presents an excellent opportunity. However, the terms and conditions of the proposed payment schedule would mean a 98-day wait for payment on a £3 million project, which is something of a disincentive and, indeed, a risk. I recognise and welcome the fact that the market is opening up to SMEs, but does my right hon. Friend agree that we need to keep working to inspire a more level playing field across all aspects of business practice if SMEs are truly to compete?

I absolutely agree with my hon. Friend. The reporting requirements that I mentioned will give small businesses the information that they need to make more informed decisions, to negotiate fairer terms and to encourage other companies to improve payment practices. We take this very seriously in the Department and we are determined to change this kind of bad practice.

But one of the worst performers regarding late payments to small and medium-sized enterprises is the public sector. What is the Secretary of State doing to ensure that Government Departments, agencies and local government promptly pay the small businesses that they use?

The hon. Gentleman will be pleased to hear that while that was the case back in 2010, when payment practices throughout the public sector were appalling, there has been a significant improvement throughout central Government and beyond since then. At my Department, for example, we take great pride in paying almost all invoices within seven days.

As the Secretary of State knows, we welcome the move to set up a small business commissioner to help with late payment, but the proposals are modest. Will he assure the many small businesses that will be dramatically affected by any downturn resulting from Brexit that he will put additional support for them in the supply chain to deal with the consequences of any of their customers delaying payment to deal with the problems of Brexit?

I assure the hon. Gentleman that the proposals are not modest. The small business commissioner will have significant powers and the ability to help, including by providing general advice and direct services for the smallest of businesses. The commissioner will also be able to consider complaints and to take super-complaints from trade bodies.

Midlands Engine

I continue to promote the midlands engine, which could add an extra £34 billion to the local economy by 2030 and create 300,000 new jobs. I am pleased that Sir John Peace has been appointed chair of Midlands Connect to drive productivity and growth across the whole of the midlands region.

Whether through energy providers, video games companies or manufacturers, Warwick and Leamington’s local economy is a great contributor to the region’s prosperity. What measures are being implemented to build on such successes and to transform the wider midlands engine from concept to reality?

I recall fondly visiting video games companies with my hon. Friend, who does a great deal to help local businesses, including by hosting a business forum last Friday. The midlands engine is already delivering. For example, we have a £5 million trade and investment package, £60 million for research, and a £5 million award for Midlands Connect. I am determined to do more.

The result of last week’s referendum shows that there is deep discontent in many of our market towns and coastal areas, where people feel left out and left behind because they have not seen the benefits of economic growth. What steps will the Secretary of State take to ensure that the devolution agenda increases jobs, skills and infrastructure investment in some of these peripheral economies, not just in our great metropolitan cities?

The hon. Lady will know that, since 2010, we have seen considerable growth in every single region of the UK, including in the midlands. With our focus on the midlands engine, we want to see even more. She is right to highlight the importance of devolution. In my Department, for example, the devolution of skills will make a big difference.

One of the best ways of bringing in new industries and new jobs to replace the ones that we have lost in the west midlands over the past few decades would be to back Dudley’s exciting plans for an institute of technology, building on the brilliant work that is going on at Dudley Advance. Earlier this year, we were delighted to welcome a visit by the Minister for Skills, and I think that he was very impressed with what was going on. Will the Secretary of State meet a delegation from Dudley to hear about these plans and to discuss them with us in detail?

7. Before the events of last week, I was delighted to hear that my constituent, Sir John Peace, was appointed head of the midlands engine project. Sir John is the founder of Experian, one of the midlands’ key financial service companies, and the chairman of Burberry. Will my right hon. Friend reassure me that it is exactly people like Sir John who will be in his thoughts and working with the Department over the summer to ensure that the midlands economy is prepared for Brexit over the next few weeks and months? (905539)

My hon. Friend is absolutely right and makes a very powerful point. The midlands is doing well, but it can do better. Trade and investment will be key. I plan to lead the first midlands-only trade mission abroad—to north America in this case—in September, and I would be honoured if companies from his constituency joined me.

Insolvency Regulation (BHS)

As the hon. Gentleman knows, the Insolvency Service’s investigation into BHS continues. We are always looking to ensure that Britain is an open place in which to do business, but with the proper regulation in place to protect workers and prevent abuses. We recently launched our consultation “A Review of the Corporate Insolvency Framework”—not something that trips off the tongue. Importantly, if there are any early emerging findings arising out of the BHS case, I can assure him that they will be fully taken into account.

I am grateful to the Minister for her response. Nevertheless, I am sure that Members of the House and people across the country were dismayed yesterday when they read that the pensions black hole in this country has reached a high of £900 billion. Can she assure this House, me and my constituents who work at BHS in Clydebank that, after reflecting on last week’s vote and the BHS scandal, the Government are doing everything in their power to assure their pension funds?

The hon. Gentleman makes a good point. Yesterday was a dreadful day on the markets— two of our banks actually had to stop trading. Today, according to the results, is a better day. As the Prime Minister said yesterday, nothing has changed at the moment, so it is really important that we talk up our great country and our great economy, and that we instil confidence and stability on all sides.

The issue of pensions is very important in the context of not just BHS, but Tata Steel. The consultation finished on 23 June. Will the Minister please update the House on where we are with the pensions scheme, and also reflect on the fact that the trade unions and many others have said that putting that scheme into the Pension Protection Fund would be a complete disaster?

The consultation has, of course, now finished. There were concerns, certainly among Government Members, that Opposition Members perhaps had not been as supportive about the future plans for Tata as we would have liked, but, as the hon. Gentleman knows, our doors always remain open to him. He has done great work to ensure that we have a sustainable steel industry in south Wales.

Many workers at BHS, such as those in my constituency, will no doubt have been watching in horror as events unfolded. What further support and assurance can the Minister give to the staff at BHS to support them through this difficult time? Furthermore, I have found—I am sure that other Members have, too—that BHS is not willing to engage with me as a local Member of Parliament. What can she do to ensure that it will engage with Members?

I am quite surprised that BHS will not engage, as the hon. Lady puts it; that is not at all satisfactory. We are working hand in glove with the Department for Work and Pensions to ensure that people are getting the support and opportunities that they need to get jobs. I am pleased that that work continues. In fact, government does continue, notwithstanding last week’s vote.

Counterfeit Electrical Goods

My officials and the Intellectual Property Office have met online retailers to reduce the availability of counterfeits on their platforms and to help to co-ordinate law enforcement action against sellers. The dedicated IP crime unit that was launched by the coalition Government investigates sales of counterfeit goods. In October 2014, the Government rightly introduced a criminal sanction to address intentional copying of products protected by registered design.

Research undertaken by Electrical Safety First has found that 64% of counterfeit products are now purchased online, with sales via social media increasing by 15% every year. Have the Government considered the impact of this trend on consumers and the industry itself?

I thank the hon. Lady for giving me notice of her supplementary question, because I can now give her a proper and good answer; otherwise, she would have just heard me say, “I will happily meet her.” I will happily meet her, but I can also say that the Government, industry and law enforcement are working together to tackle the threat posed by online sales of counterfeit electrical goods. We have something called Operation Jasper, a partnership between trading standards and industry that has been targeting the sellers of counterfeit goods, particularly on Facebook, and has succeeded in removing thousands of listings and users’ profiles.

In my constituency in South Lanarkshire, which is home to the headquarters of the Scottish fire and rescue service, 214 house fires were caused by faulty electrical items in the past five years alone. As trading standards are largely enforced locally, online sales might be harder to tackle, so what is the Government’s strategy for curbing the rising online trade in counterfeit electricals?

I think that I have answered that question, but the hon. Lady makes an important point about some of the dangers from faulty goods, especially those sold online. I was delighted that Lynn Faulds Woods, whom hon. Members will know from her various campaigns over the years to ensure that people are kept safe, has been working with the Government. She produced an excellent report and her work continues in how we are looking at policy to make things better and safer.

Traineeships Programme

I am surprised that you have shortened my name today, Mr Speaker.

The traineeship programme grew by more than 85% in 2014-15. Our first year evaluation showed positive progression rates with 50% of trainees moving on to apprenticeships and work, and a further 17% going on to further learning.

I am sorry to disappoint the hon. Gentleman. Perhaps the world should know that his full name is Mr Nicholas Edward Coleridge Boles.

Well played, Mr Speaker.

There is still a perception, I am afraid, that traineeships and apprenticeships are somehow second class compared with other career routes. As a former apprentice, I know just how rewarding they can be. This summer, I will be running a skilled trades summer school in my constituency to help young people to realise the advantages of electrical and mechanical engineering, the motor trades and joinery, for instance. Will the Minister meet me and members of Oldham College to talk about how we can raise the profile of those very important trades?

I congratulate the hon. Gentleman on his fantastic initiative, which is particularly powerful given his history as an apprentice—he can preach the reality of it. I have to confess to him that I have never been to Oldham, so I would love to come for the first time to join him.

Traineeships ought to be a route to good-quality apprenticeships, but we know that there remains a substantial gender pay gap for apprentices of more than £1 an hour. Will the Minister suggest how traineeships can be developed to encourage girls and young women into career routes that pay good salaries and have good prospects?

The hon. Lady identifies an important challenge that has been long in existence, and we have a long way to go to correct it. The key thing is to try to persuade young women to go for the kinds of jobs that are open to them and would pay them much better rates: STEM-related careers and engineering-related jobs. Traineeships are often a good way for people to get a taste for a profession but, equally, we need to attack the problem much earlier—at primary school—to shape the attitudes of young girls and make them understand that, like the shadow Minister, the hon. Member for Newcastle upon Tyne Central (Chi Onwurah), they have a career in technology open to them.

Peter Cheese, chief executive of CIPD, has said that if the Government are serious about improving the quality of apprenticeships and skills, as well as the quantity, they need completely to overhaul the apprenticeship levy. Is he right?

He is right, to the extent that we want massively to improve the quality of apprenticeships, as well as the quantity, and they are not in conflict. But of course, if we are going to do both, we have to have more money to spend. That is why the apprenticeship levy is absolutely critical. It will enable us to take Government spending on apprenticeship training from £1.5 billion a year at the moment to £2.5 billion a year in England by the end of this Parliament, which is essential if we are to get the quality as well as the numbers up.

The Minister has tried to construct a reassurance on traineeships, but the facts that have been dragged from the Government tell a different story. Freedom of information figures published in FE Week show that just 9% of 19 to 24-year-olds and just one in five of all 16 to 24-year-olds went from traineeships to apprenticeships. The Labour party has consistently supported traineeships for getting many more young people into quality apprenticeships, so why have the Government wasted three years, failing properly to promote, explain or target them? Ten days ago, the Minister warned about Brexit uncertainties threatening apprenticeship growth and the levy, so will he now spell out new initiatives to tackle the necessary increase in traineeships, including support to further education colleges and providers who are desperate to press ahead with them; or else risk failing the young generation?

I congratulate the hon. Gentleman on being one of the few people to resist the temptation to resign in the past 48 hours. He and the shadow Home Secretary, the right hon. Member for Leigh (Andy Burnham), will go down in the history books as brave champions of modern opposition.

I am delighted that the hon. Gentleman is an avid reader of FE Week; it is an interesting publication. He will know that traineeships are not only about pre-apprenticeship programmes. The whole point of traineeships is to take people into apprenticeships, jobs or further training—whatever is best for them—and he would seek to narrow this programme, the great strength of which is its versatility.

Skills Shortages

As has been often discussed, we are introducing an apprenticeship levy, which will have two main outcomes. First, we will dramatically increase spending on apprenticeships. It will also require large employers either to invest in apprenticeships or to see their money used by someone else.

I am grateful to my hon. Friend for his answer. He will be very aware, as I am, that certain employers have said that they are not happy with the apprenticeship levy and have asked the Government to rethink, but does he agree that the levy is the best way to ensure that businesses invest in their employees’ skills and for the Government to put apprenticeship funding on a sustainable footing?

Forgive me, Mr Speaker; we are all somewhat discombobulated at the moment. I should have mentioned that I am seeking to group this question with a later one.

My hon. Friend is absolutely right. What we are trying to design with the apprenticeship levy is actually something of an innovation in government: it is a new tax, but the companies that pay the tax will be able to spend it on training that directly benefits them, so it creates a huge incentive for those employers who pay the levy to get maximum benefit from it by creating more apprenticeships, and I believe that it will have a powerful impact in her constituency.

The importance of home-grown skills is clearly now even more important, given the result of the referendum last week. Considering the importance of EU funding to British universities, what steps is the Minister taking to ensure that universities and other major providers of skills in the UK are equipped and supported, following last Thursday’s vote?

I agree with my hon. Friend. One of the results of the decision to leave the European Union is that we as a nation will have to do what we have done for hundreds of years, which is live by our wits and our talents, and we need to develop those talents by investing in education, in science, in research and in skills training. He is absolutely right about the crucial role that universities play—obviously, my hon. Friend the Minister for Universities and Science is leading on that—but we are working closely together to get more universities involved in providing degree apprenticeships, so that people can get degrees and rise to high positions through apprenticeships.

One of the messages that has clearly come across to me from my experience campaigning in the referendum is that the free movement of people between this country and the rest of the European Union is no longer acceptable to the people I represent. What contingency plans has the Department got for what it will mean for the British economy to end the free movement of people?

The hon. Gentleman will know that no changes are going to take place any time soon in any of the arrangements with the European Union. We have made a decision that we are going to leave the European Union, but there will be a lengthy process of negotiation to establish exactly what new arrangements will be put in place. However, he is right that one of the chief sources of concern in our communities is the free movement of people, and I am sure he is also right that in his constituency, as in my own, that will have been a motive for many people to vote. That does not alter the fact that whether we are inside the single market or not, whether we have free movement of people or not, investment in the skills of our own people so that British people can get the best British jobs is what we need.

The most recent employment skills survey conducted by the UK Commission for Employment and Skills found that 2 million staff had skills not currently being utilised in the workplace. Can the Minister detail the steps that he is taking to work with businesses to utilise those skills more productively?

I feel as though I hardly use any of the skills that I have acquired during my long life—certainly not in this job. The hon. Lady is right that that applies to many people. It is one of the key reasons why we have resisted pressure to make apprenticeships something only for young people and only for new recruits, because for someone of 45, for example, who is returning to work after a career break or who has suddenly discovered in themselves an interest and a potential that they did not know about, it is right that there is Government support through apprenticeship training to enable them to develop those new skills and go on to a rewarding career.

19. Local businesses in Worcester tell me that they worry about skills shortages and they want to invest in young people. In order for them to do so, it is crucial that young people coming out of school have information about apprenticeships. Does the Minister agree that we need to keep on making sure that inspiring apprentices and their employers get into our schools to talk about the opportunities that apprenticeships can offer? (905551)

My hon. Friend is right. I know that he will be playing a vital role in shepherding through Parliament the Bill that will require all schools to allow other providers of opportunity post-16, whether FE colleges or apprenticeship employers, to come into the school to talk to young people during school hours, so that they are aware of the full range of opportunities out there, including apprenticeships.

One of the ways in which skills gaps in the economy have been filled is with EU nationals. That opportunity could now be lost to Scotland, especially in particular sectors and in rural areas. Can the Minister give an assurance to EU nationals currently filling skills gaps in the Scottish economy that their skills are valued and that they will be able to stay?

I am very happy to do that and I am grateful to the hon. Lady for giving me the opportunity to do so, not just in relation to Scotland but elsewhere in our country. In my Lincolnshire constituency there are certain industries, such as food growing and processing, and the NHS, which would find it very hard to operate without the skills brought in by highly valued migrant workers, not just from the European Union, though importantly also from the European Union. The Prime Minister was very clear yesterday that those people’s position in our country is secure, their working rights are secure, and we remain a member of the European Union. Not only are they secure, but they are valued. We welcome them and we want them to stay here and help us make our society great.

Higher Education

The higher education and research White Paper, and now the Bill before Parliament, set out the steps that we are taking to raise the quality of higher education and to help ensure that all students get the teaching experience that they expect and the employment outcomes that they expect from their time at university.

The University of Winchester is exceptionally strong in degree apprenticeships. It performs consistently well in student satisfaction surveys and regularly tops 90% in graduate prospects figures. Does the Minister agree that these are all key drivers for young people in deciding to make what is a significant investment in higher education, and that Winchester seems well placed for that?

The University of Winchester is leading the way in degree apprenticeships, as in so many other areas. I was delighted, on Friday, to meet its excellent vice-chancellor, Professor Joy Carter, and I will meet her again shortly. Winchester is a good example of a university whose students have excellent satisfaction ratings and excellent employment outcomes, with 95% going on to employment, graduate employment or further study in a very short time.

The University of Sussex down in Brighton gets £9 million of funding from the European Union. The leave campaign was very clear that that funding would be replaced by British Government funding after Brexit. Will the Minister get to his feet and guarantee that that funding will continue? If not, will he bring his brother down to Brighton to explain directly to students why the door of education is going to be slammed in their faces?

This Government, more than any other, understand the importance of science funding. That is why we have protected science spending until the end of the Parliament—a decade of real-terms protection. Our universities and institutes can continue today to apply for EU competitive funding streams under Horizon 2020, and I am sure they will continue to be successful in the future.[Official Report, 5 July 2016, Vol. 612, c. 4MC.]

I praise the Catapult programme run by the Department, but can the Minister give us any indication of the opportunities for it to be rolled out more widely and to be available to people in areas such as Northern Ireland?

Certainly. In our manifesto we committed to rolling out our very successful catapult network, which provides shared facilities that companies, on their own, could not afford to construct. That enables our businesses to maximise the value of research coming out of our university system. In this Parliament, we have already delivered new catapults at Alderley Park in Cheshire and in Cambridge, with the precision medicine catapult. This is an expanding and very successful network, and it will continue to be so.

The Minister’s higher education White Paper rightly bangs on about how important high-level skills are, but the imminent skills White Paper is not even part of his new Higher Education and Research Bill. With those who teach, manage and work in HE fearful of the consequences of Brexit, should he not be prioritising skills strategies for both our community-based and internationally focused universities and using FE colleges as key HE providers? Why is he instead gambling the bank on allowing unknown, brand-new providers to get degree-awarding powers from day one—probationary degrees from probationary providers—risking our universities’ brand reputation overseas, as well as jobs and productivity at home?

I am working closely with my colleague the Skills Minister, whose forthcoming White Paper will have many of the answers to the questions the hon. Gentleman has posed. We are surprised by the tone of scepticism about the potential for new higher education providers to lift quality and enhance the range of high-quality higher education on offer in this country. I am afraid, though, that that is of a piece with the Labour party’s previous opposition to the conversion of polytechnics and to new universities in the 1960s.

STEM Subjects

Thank you, Mr Speaker. The Government are fully committed to making the UK the best place in the world to do science. The number of full-time students accepted to study STEM subjects in England is up 17% since 2010. Initiatives such as the STEM ambassadors programme and the new Polar Explorer programme are providing inspiration for young people to consider STEM careers.

To what extent can studio schools, such as the excellent Space Studio in Banbury and the new Bicester Technology Studio school, be used to promote the take-up of STEM subjects later in a student’s career, whether that is at university or as part of an apprenticeship?

That is right: studio schools are pioneering a new and valuable approach to learning and are focusing on equipping students with a wide range of employability skills and academic qualifications. Schools such as the ones my hon. Friend mentioned in Banbury and the one in Bicester that will open in September give students the opportunity to work with specialist employers such as the UK and European space agencies and those in the fields of technology, sustainable construction, engineering and computing.

As vice-chair of the all-party parliamentary group on nuclear energy, I am extremely keen to get more women into the nuclear industry and into studying STEM subjects at school and university, because we cannot meet the skills shortage without attracting more women and girls into engineering. I was therefore really pleased to hear the Minister agree with my hon. Friend the Member for Stretford and Urmston (Kate Green) about the need to get in much earlier, at primary school level, if girls are going to take that subject right the way through to higher education. What specific action are the Government taking to achieve that aim, and how will they take into account the good work that we are already carrying out in west Cumbria?

The Government continue to work with all partners to raise awareness and interest in STEM careers. Initiatives such as the Inspiring Science Capital Fund, a £30 million programme that we launched with the Wellcome Trust, STEM Ambassadors, which is a £5 million-a-year programme, the Polar Explorer programme I have already mentioned, and the industry-led Your Life campaign are providing inspiration for young people to consider STEM careers. I am pleased to say that over 50% of STEM undergraduates are now women.

The Minister will know how important EU research funding is to our universities, particularly in relation to STEM subjects. He will also know that those leading the leave campaign promised that no sector would lose out as a result of Brexit. Forget about the next two years—if I could push him on his earlier answer, what will he be doing to ensure that UK Government funds replace European funding, pound for pound, in supporting research in our universities?

We remain members of the European Union. Our institutions are fully able to apply for and win European competitive funding schemes, and they will continue to be able to do so until such time as we change the basis of our relationship with Horizon 2020.

Land Registry

We recently consulted on options for the Land Registry. The consultation closed on 26 May and we are currently reviewing the responses. Until this is completed, no decision will be made.

Having a Land Registry office in Hull, I note that in the consultation of July 2014, when the coalition scrapped plans to sell off the Land Registry, only 5% of people consulted said that it would be more efficient and effective to do so, and the Government admitted that the case for change had not been made. So what has changed since then?

As I said, no decision has been made. It is clear, however, that the Land Registry has been moving increasingly from the use of paper to electronic means, and these modernisation and efficiency changes need to carry on. Regardless of ownership, this is just the kind of change we want to see.

One of the strengths of the Land Registry is its transparency and independence, but those proposing to buy it have links to offshore tax havens—places that do everything to avoid such transparency and independence. The sale to firms with links to tax havens will undermine the trust of homeowners and mortgage lenders. Is not the truth that this sale of family silver makes a complete mockery of Government claims to be tackling tax avoidance and tax evasion?

It would be entirely wrong to comment on any press speculation, but, as I said, no decision has been made.

Apprenticeships

13. What steps the Government are taking to promote apprenticeships in the arboriculture, forestry, horticulture and landscape sector. (905545)

We are working with employer groups to develop new apprenticeship standards such as arborist and forest operative. If I am ever seeking a new career, I can hardly think of a better one. We are also working on a pilot between the Department for Environment, Food and Rural Affairs and BIS to support a boost in the number of apprenticeships available in the national parks.

I am delighted that the Government are addressing the skills shortage in this important area with their horticulture and landscape trailblazer apprenticeships. However, what talks has the Minister had with the Department for Education to make sure that courses offered to students provide what businesses actually need so that apprenticeships really work? I am going to welcome him to my constituency to talk about this so that perhaps he can assure me a little more.

That is an excellent question. The advantage I have is that I am also a Minister in the Department for Education; I talk to myself worryingly often. My hon. Friend makes a very important point. When the skills plan is published, which will be soon, we will be guided very heavily by the review recently completed by Lord Sainsbury, who is looking at how we can ensure that the courses that people are offered in college are genuinely the courses that employers want because they provide the skills they need for modern jobs.

I am sure that the people of Taunton Deane are in a state of eager anticipation and high excitement at the prospect of a visit from the Minister.

Wales also offers opportunities for apprenticeships in forestry and horticulture, but employers and colleges in Wales are very concerned about how the apprenticeship levy will work. What recent discussions has the Minister had with Julie James, the Welsh Government Minister, and when does he expect the scheme details to be finalised?

The hon. Lady asks a reasonable question. I had discussions with the Welsh Minister before the elections, which suspended matters briefly. There have been intensive contacts at official level not only between Her Majesty’s Revenue and Customs and the Welsh, Scottish and other Governments on how the levy arrangements will work from a tax-raising point of view, but with my officials on how the levy will operate. We will publish more details before the summer recess.

Courtaulds

My thoughts are very much with the workers and their families at this difficult time. Jobcentre Plus has acted swiftly to offer support, including a jobs fair with other local partners for Courtaulds staff and others.

I thank the Secretary of State for that answer, and I know that he has a personal interest in Courtaulds. Will he take steps to tighten loopholes restricting companies from moving assets to third-party companies before going into administration, which puts any potential sale of the company in jeopardy?

My hon. Friend will know that my father’s first job was at a Courtaulds mill. I have taken an interest in the company for a long time and what has happened is very sad. Current insolvency law already enables assets to be disposed of prior to the start of formal insolvency and before recovery. It is, therefore, possible to take action against directors for misconduct, if that is what the administrators find. We will look carefully at the report when it is published in three months’ time.

British Steelmaking

Crossrail, Europe’s biggest construction project, uses 7,000 tonnes of almost exclusively British steel. Network Rail sources 96% of its steel rail from Britain and it is all made in Scunthorpe—that is 120,000 tonnes a year for the next six years. We have changed the procurement rules so that wider social and economic factors are taken into account in public procurement, both locally and nationally, giving UK steel every chance to win contracts. In fact, it would be almost impossible not to buy British steel.

North Cornwall has two new possible proposals for branch lines, one in Wadebridge and the other on the Okehampton link. Does my right hon. Friend welcome those proposals, and does she think, in the light of the recent EU referendum result, that it would be beneficial for British steel to be used in every new railway construction across the whole country?

We have changed the procurement rules in relation to Government funding, but there is really no excuse. We know how brilliant British steel is—[Interruption]—especially when it comes to the construction of railway lines. It is the best steel in the world, which is why so many people buy it when they are constructing rail lines.

I welcome the Minister’s comments about UK steel, and Scunthorpe steel in particular. What is she doing to ensure that there is a clear pipeline of infrastructure projects in train so that the correct capacity is put in place for creating the steel for those projects?

I am grateful, as ever, to the hon. Gentleman for his question. One of the things that will certainly take place today is the Secretary of State leading an extremely large meeting, as the hon. Gentleman might imagine, of all the key players in British industry, following last week’s vote. One of the things that we have already discussed is the need to make sure that we address—if at all possible, and if we can really get determination—huge infrastructure projects. Whether it is HS2, a third runway or whatever, it is incredibly important that we make the very best of what has been a very bad decision by the British public, if I may say so.

Topical Questions

Following last week’s referendum result, my Department has been talking to businesses up and down the country, and we will work with them over the weeks and months ahead. To that end, later today I will host a round table with trade bodies and business leaders to consider our next steps. I would also like to take this opportunity to welcome Tim Peake back to earth after six months of education and inspiration aboard the international space station.

I spent last week visiting businesses right across Telford. Notwithstanding short-term market volatility, the gilt market has been strong throughout and equities are back up today. Business leaders in Telford are confident about the future. Having visited Telford on several occasions, does the Secretary of State agree that it has a great future and is a great place to do business?

I absolutely agree with my hon. Friend; I will visit Telford again and again with her. She will know that unemployment in her constituency has fallen by 60% over the past six years. That is testimony to the strength of local businesses, to her own work and to this Government’s policies. I will work with her in every way to secure Telford’s bright future.

Despite the Secretary of State’s complacency, this is a very difficult time for British business. Over the past 24 hours we have lost our triple A rating and £150 billion has been wiped off the value of the FTSE 350. Will he reassure the many worried workers and businesses that, unlike with Tata, when he was on the other side of the planet, he will be in the boardrooms of Nissan in Sunderland, Hitachi in Newton Aycliffe, Jaguar Land Rover in Solihull and other businesses across the country to share his plan for a secure economic exit as they make investment decisions in the weeks and months to come?

I was hoping to welcome the hon. Lady as the new shadow Business Secretary, but I understand that she is not in that position yet—if her leader is having problems filling it, I am happy to make some suggestions. I assure her that, yes, because of last week’s decision, there are of course some short-term challenges for businesses, but we must also remember that there are medium and long-term opportunities as well, including for the auto industry.

It is clear that the Secretary of State not only does not have a plan, but does not even have a plan for a plan. He cannot say whether he personally wants to retain access to the single market for goods and services. Is it not true that the only plan he has is for his joint leadership bid, and that British businesses and the British job market stand to lose from the economic uncertainty that his party’s divides have unleashed?

I was hoping that the hon. Lady would not play party politics with something as straightforward as this. Many businesses up and down the country are reflecting on last week’s decision, and my job is to reassure them that that decision can be made to work. As well as challenges, there are plenty of opportunities, and when I meet businesses later this afternoon that is exactly the message I will be giving to them.

T2. The Greater Manchester region is a huge supporter of apprenticeships, with 30,000 starts last year alone. I recently met the young apprentices from Thales in my constituency, who are doing excellent and innovative work on the development of underwater sonar systems. Will the Minister outline what additional support his Department is giving to the city region to increase apprenticeship uptake? (905464)

I congratulate Greater Manchester on achieving a 75% increase in apprenticeships since 2010. My hon. Friend will be aware that we have devolved the apprenticeship grant for employers—an incentive payment to encourage employers who have not previously employed apprentices to do so—to Manchester so that the authority there can target it at the particular kinds of employer that it wants apprenticeship growth to come through.

T4. As we head towards Brexit, many EU-derived regulations will no doubt come under the microscope. Some of the most important are the working time regulations, which protect vital safe working limits in the workplace. Will the Government confirm that they intend to retain all elements of the working time regulations? (905466)

The first thing the hon. Gentleman should know is that nothing changes right here and now. For the next few years, there will be no changes—we are members of the European Union, and all our rights and obligations will be respected. In the longer term, this country has always been committed, quite rightly, to workers’ rights. That will not change.

T5. Pendle is home to a number of excellent aerospace companies such as Euravia, Senior Aerospace Weston and Rolls-Royce. What assurance can Ministers give the aerospace sector of the Government’s ongoing commitment following the vote to leave the EU? (905467)

As my right hon. Friend the Secretary of State said, later today we will meet the trade council that represents the aerospace industry, and we are fully committed to that. We will continue to work closely with the aerospace growth partnership to tackle barriers to growth, to boost exports, and to grow high-value jobs. In particular that will include support for research and development, which now stands at £3.9 billion for aerospace research.

T9. Fire and rescue services attend up to three fires a day that are a result of faulty tumble driers. Which?, the Local Government Association, Electrical Safety First and other consumer interest groups have all raised concerns about how Whirlpool has handled that problem. Is the Minister comfortable that Whirlpool has merely issued a safety statement and not a total recall? (905472)

I have had a meeting with the hon. Lady, for which I am grateful, and she has really led for consumers on this issue. As I think I explained, an investigation has suggested that the approach taken by Whirlpool was reasonable, and that the nature of the risk was not such that a total recall was required. However, she is right to say that the company needs to get a move on, and it is not right or reasonable to leave people waiting for months and months to have a faulty product, for which Whirlpool should be accountable, replaced.

T6. Does my right hon. Friend agree that it is the duty of Ministers who are loyal to the Crown to promote the British economy and not to talk it down? Will she agree to a joint meeting with me and Ministry of Defence procurement to discuss how we can more effectively promote and develop defence industries such as those in my constituency? (905468)

I agree with my hon. Friend and he is absolutely right: these are obviously difficult times, but it is important that we do not talk down our great British economy and that we instil stability and confidence. He is right to mention our defence industry. As he might imagine, we work hand in glove with the Ministry of Defence on that issue and will continue to do so. I have already spoken to the Minister responsible for procurement in the MOD.

Ah, splendid: the robust Chair of the Business, Innovation and Skills Committee, Mr Iain Wright.

I think that is the kindest thing that anybody has ever said to me.

The Secretary of State fully appreciates that uncertainty lasting for months and years will drain business investment away from Britain. In our Select Committee this morning, Funding Circle told us that an £100 million investment deal with a European consortium will now not go ahead—it has been pulled, and it will not be the only one. Today’s round table is a welcome gesture, but in the face of the current unprecedented uncertainty, what tangible actions is the Secretary of State putting in place to maintain and stimulate inward investment, maintain that funding gap, and steady business nerves?

It is good to see some leadership on business issues on the Labour Benches. The hon. Gentleman makes an important point. Today’s round table is not a gesture; it is about genuinely listening to businesses and businessmen and women about the issues that they face, and about how to take advantage of the opportunities that will be created. He will know that nothing changes for at least a couple of years, which will give us time to plan for the future, including for inward investment opportunities and new trade opportunities. I would be happy to meet him and discuss that issue further.

T7. A significant amount of public money has been allocated to bring superfast broadband to areas missed out by the commercial roll-out, but because of a bureaucratic logjam it remains unspent while a significant number of small businesses in Cheltenham are left frustrated and unable to grow. What more can be done to unlock that money and get the remaining premises connected? (905469)

May I say how pleased I am to see you in the Chair, Mr Speaker? A rock of stability as the stormy seas of change crash around us—[Interruption.] I was considered the thinking woman’s Boris Johnson—my hon. Friend the Member for Uxbridge and South Ruislip—but I now see that I am my right hon. Friend the Member for South Holland and The Deepings (Mr Hayes).

One great benefit of Brexit is that in the past 24 hours not a single colleague has bent my ear about broadband, and it is a sign of things returning to normal that we are now discussing that important subject. I hear what my hon. Friend says. There are often problems on the ground, and I would like to go to Cheltenham and meet those businesses, plus the council, and see whether we can work together. We often find that on the ground wayleave rights are not being granted, or that something like that is holding back the investment that we need in places such as Cheltenham, which is home to so many high-tech businesses that are now free to trade around the globe.

In 2010, the Post Office chief executive said that in Paisley the cost of the refurbishment of the post office had been £439,000. That money was spent making significant changes to “improve service to customers and enhance the profitability of the Crown network”. Given that it is now planned that the post office will move from this upgraded high-quality unit to the wholly inaccessible and inadequate WH Smith, will the Minister please justify to me and my constituents why the money was spent on refurbishment in the first place?

I will keep it brief, Mr Speaker.

The hon. Lady tabled a named day question on this matter and I have replied to explain that this is a matter for the chief executive of the Post Office, Paula Vennells. She has written a letter to the hon. Lady, which is in the House of Commons Library. For the benefit of the House, I can confirm that through the £13 million investment in our 50 Crown post offices, £440,000 has been spent on the Paisley branch. Through the Crown transformation plan, we have a Post Office that is more stable and closer to breaking even than ever. There are 11,500 branches, 200,000 extra opening hours and 3,800 branches open on Sundays. The people of Paisley have a strong and secure post office.

I commend the Ministers on the Treasury Bench for their pragmatic approach to last week’s result. I think that we are all committed to the UK becoming an outward-looking global trading nation. With that in mind, will Ministers redouble their efforts to support the Australian Prime Minister, who has said that he has instructed his officials to work with New Zealand to prepare a trade deal with the United Kingdom very shortly?

My hon. Friend highlights the opportunities of Brexit and we absolutely should now start embracing those opportunities; free trade agreements with many more countries is just one of them. Australia is an excellent example, and that is exactly the sort of thing we should be working on.

Many of my constituents have no or very little access to computers and the internet. Will the Government continue to press banks and other key providers to retain high street services for customers who receive utility and other bills in paper form on request?

The Department for Business, Innovation and Skills does not intervene in the individual billing arrangements of utilities or companies, but there are arrangements in place to make sure that those who need paper bills are able to request and receive them. Those who have disabilities, such as the blind, have protections to make sure that they can receive appropriate billing. If there are particular issues for any particular constituent, I would be very happy to look into them for the hon. Gentleman.

Small and independent retailers in my constituency have, over recent months, experienced extreme difficulty in accessing telephone and broadband services when moving into new premises. I, too, experienced this when I moved into my new community office in Ilkeston. Will the Minister agree to talk to service providers to ensure that the installation of these services, which are so vital in the 21st century, are carried out in a reasonable timeframe?

I have made no secret of my concerns about Openreach’s quality of service. We have had a very successful rural broadband programme, but there seems to be a particular unit in Openreach that targets MPs and makes them extremely angry. They take it out on me and I take it out on Openreach. It needs to improve its terms and conditions, and its new chief executive has made supplying businesses his priority.

Will the Minister finally give a date for the implementation of the pubs code? With licensees currently missing out due to the Department’s mistake and the delay, will she now apply the Burmah Oil principle to ensure that the code is retrospective from the original date, as it clearly can be?

We have re-laid the regulations, and I am looking forward to them passing through their various stages so that we can implement the pubs code as a matter of urgency. I very much hope that it will be implemented by the time the House rises.

Thank you for giving me two bites at the cherry, Mr Speaker.

I welcome the Government’s commitment to new universities coming forward, and I am working hard to further one in my Somerset constituency. Given recent developments regarding the EU, does the Minister agree that it is now even more essential that we enable universities to provide the skills needed to upgrade the workforce and maintain our position in the world?

Yes, indeed. The productivity challenge facing the country is grave, and our universities are a big part of the answer. New universities in higher education cold spots such as Somerset will be a big part of our solution to these challenges.

I understand that the UK Government have yet to confirm whether the allocation of the apprenticeship levy in Scotland will be based on the number of employers in Scotland, or the percentage of the levy paid in Scotland. Will the Minister provide that clarification today? If not, when will he?

As I indicated to the hon. Member for Llanelli (Nia Griffith), I have been in discussions with the Minister representing the Welsh Government in this conversation. These discussions are ongoing. This is a matter for Her Majesty’s Revenue and Customs, not something for which I am directly responsible, but I know that there have been intensive negotiations and discussions. I do not want to pass the buck, but I fear that I will have to encourage the hon. Lady to direct her question to a Minister at Treasury questions, because the Treasury and HMRC are handling these discussions.

Thank you, Mr Speaker.

This month it was announced that manufacturing exports from Northern Ireland to non-EU countries increased by 24%, while those to EU countries fell by 4%. What steps can the Minister take to help Northern Ireland firms to exploit opportunities to grow international economic links to promote growth in Northern Ireland, increase employment and help to reduce the UK balance of payments deficit?

It is great to hear—the hon. Gentleman is absolutely right—that manufacturing is on the rise in Northern Ireland and throughout the UK. Volumes are up, exports are up and employment is up. There are, of course, further steps that we can take. Someone asked earlier about free trade agreements, and that is something that we can do and exploit now that we have Brexit.

Points of Order

On a point of order, Mr Speaker. I was led to believe that the Labour Front-Bench team was requesting a statement on this morning’s further chaos around HS2—both its preparedness and the resources it is sucking up from our economy. Did you receive any application for a statement on HS2? We have the Business Secretary here today. Does he not realise that British industry, which is in chaos and reeling from Brexit, wants to see HS2 stopped now before it sucks up all those resources?

I certainly would not discuss on the Floor of the House applications for urgent questions—as colleagues will understand, it is a long-standing convention that those matters are not the subject of exchanges on the Floor—but I can say to the hon. Gentleman that I have received no indication from any Minister of an intention to make a statement on HS2. He will know that I am very conscious of requests from Ministers to make statements, and never would I be more likely to be aware of such an intention than in relation to HS2, but there has been no such notification of intent to my office to date.

On a point of order, Mr Speaker. Members of Parliament are being bombarded with electronic communications from Team Trump on behalf of somebody called Donald Trump. I am all in favour of free speech, but I do not see why colleagues on either side of the House should be subjected to intemperate spam. Efforts to have them deleted have failed. Would you be kind enough to intercede with the Parliamentary Digital Service to see whether they might be blocked?

First, may I commiserate with the hon. Gentleman who, as far as I can tell, has undergone an irritating and—some might think—exceptionally tedious experience? I am grateful to him for notice of his point of order. All hon. Members receive large numbers of emails and will have devised ways of dealing with the flow. However, while this is not directly a point of order for the Chair, I do not think it acceptable that Members should be bombarded with emails the content of which is offensive. I will ensure that members of the Parliamentary Digital Service, who have the facility to block certain types of email, are made aware of this issue. Moreover, I shall ensure that they contact the hon. Gentleman. In so responding to him, I emphasise that other right hon. and hon. Members might also wish to avail themselves of this service.

Finance Bill

(Clauses 7 to 18, 41 to 44, 65 to 81, 129, 132 to 136 and 144 to 154, Schedules 2, 3, 11 to 14 and 18 to 22 and certain new Clauses and new Schedules)

[2nd Allocated Day]

Further considered in Committee

[Mrs Eleanor Laing in the Chair]

Before I call the Minister to move Government amendment 114 and for the sake of clarity, I grant the Minister the Chair’s permission and the House’s sympathy in respect of his requirement to stand throughout the proceedings—or, indeed, to be in whatever position suits him so that he can spend several hours at the Dispatch Box with his current disability. He has the House’s sympathy, as I said, and he may do as he sees fit.

Clause 144

General anti-abuse rule: provisional counteractions

I beg to move amendment 114, page 194, leave out lines 12 to 15 and insert—

“( ) notifies the person of the person’s rights of appeal with respect to the notified adjustments (when made) and contains a statement that if an appeal is made against the making of the adjustments—

(i) no steps may be taken in relation to the appeal unless and until the person is given a notice referred to in section 209F(2), and

(ii) the notified adjustments will be cancelled if HMRC fails to take at least one of the actions mentioned in section 209B(4) within the period specified in section 209B(2).”

With this it will be convenient to discuss the following:

Clause stand part.

Government amendments 115 to 174, 178, 175 to 177 and 179.

Clause 145 stand part.

Government amendments 82 to 86.

Amendment 4, in clause 146, page 209, line 25, leave out from “penalty” to end and insert

“shall be 100% unless the GAAR Advisory Panel or an officer duly delegated by that panel considers that there are exceptional reasons for lessening that percentage.”

Government amendments 87 to 99.

Clauses 146 and 147 stand part.

Government amendments 100 to 110.

Government amendments 112, 111 and 113.

Schedule 18 stand part.

Government amendments 69 to 81.

Clauses 148 and 149 stand part.

Amendment 1, in schedule 19, page 516, line 21, at end insert—

‘(2A) A group tax strategy of a qualifying group which is a MNE group must also include a country-by-country report.

(2B) In paragraph (2A) “country-by-country report” has the meaning given by the Taxes (Base Erosion and Profit Shifting) (Country by Country Reporting) Regulations 2016.”

Amendment 5, page 516, leave out line 39 and insert—

‘(2) The director or directors of the head of the group are personally jointly and severally liable to a penalty of £25,000 if:”.

Amendment 6, page 517, line 1, leave out

“head of the group is”

and insert

“director or directors, held jointly and severally liable, of the head of the group are”.

Amendment 7, page 517, line 5, leave out

“head of the group is”

and insert

“director or directors, held jointly and severally liable, of the head of the group are”.

Amendment 8, page 517, leave out lines 11 to 15 and insert—

‘(5) At the end of that period, the director or directors of the head of the group—

(a) are personally jointly and severally liable to a further penalty of £25,000, and

(b) where the failure mentioned in sub-paragraph (4)(b) continues, are liable to a further penalty of £25,000 at the end of each subsequent month in which no such group tax strategy is published.”

Amendment 9, page 517, line 15, at end insert—

‘(6) Any director held personally liable to pay a penalty under this Part cannot be reimbursed by the head of the group or any entity within or associated with that group.

(7) If the head of the group or any entity as described in subsection (6) is found to have either fully or partially reimbursed a director or directors for the penalty for which they were personally liable, the head of the group or the entity will in turn be liable for a penalty of £100,000.”

Amendment 10, page 518, leave out line 24 and insert—

‘(2) The director or directors of the head of the group are personally jointly and severally liable to a penalty of £25,000 if:”.

Amendment 11, page 518, line 29, leave out

“head of the group is”

and insert

“director or directors, held jointly and severally liable, of the head of the group are”.

Amendment 12, page 518, line 33, leave out

“head of the group is”

and insert

“director or directors, held jointly and severally liable, of the head of the group are”.

Amendment 13, page 518, leave out lines 39 to 43 and insert—

‘(5) At the end of that period, the director or directors of the head of the group—

(a) are personally jointly and severally liable to a further penalty of £25,000, and

(b) where the failure mentioned in sub-paragraph (4)(b) continues, are liable to a further penalty of £25,000 at the end of each subsequent month in which no such group tax strategy is published.”

Amendment 14, page 518, line 43, at end insert—

‘(6) Any director held personally liable to pay a penalty under this Part cannot be reimbursed by the head of the group or any entity within or associated with that group.

(7) If the head of the group or any entity as described in subsection (6) is found to have either fully or partially reimbursed a director or directors for the penalty for which they were personally liable, the head of the group or the entity will in turn be liable for a penalty of £100,000.”

Amendment 15, page 520, leave out line 12 and insert—

‘(2) The director or directors of the company are personally jointly and severally liable to a penalty of £25,000 if:”.

Amendment 16, page 520, line 17, leave out

“head of the group is”

and insert

“director or directors, held jointly and severally liable, of the head of the group are”.

Amendment 17, page 520, leave out lines 27 to 31 and insert—

‘(5) At the end of that period, the director or directors of the head of the group—

(a) are personally jointly and severally liable to a further penalty of £25,000, and

(b) where the failure mentioned in sub-paragraph (4)(b) continues, are liable to a further penalty of £25,000 at the end of each subsequent month in which no such group tax strategy is published.”

Amendment 18, page 520, line 31, at end insert—

‘(6) Any director held personally liable to pay a penalty under this Part cannot be reimbursed by the head of the group or any entity within or associated with that group.

(7) If the head of the group or any entity as described in subsection (6) is found to have either fully or partially reimbursed a director or directors for the penalty for which they were personally liable, the head of the group or the entity will in turn be liable for a penalty of £100,000.”

Schedule 19 and clause 150 stand part.

Amendment 19, in schedule 20, page 534, line 23, at end insert

“, or P has introduced Q to a person R with whom P has a business relationship, where P knows or should know that R is likely to facilitate Q to carry out offshore tax evasion or non-compliance.”

Amendment 20, page 535, line 5, at end insert

“; and P will be deemed to have known if P wilfully or recklessly failed to make such enquiries that a reasonable and honest person would have made”.

Schedule 20, clause 151, schedule 21, clauses 152 and 153, schedule 22 and clause 154 stand part.

New clause 4—Report on the workings of the General Anti-Abuse Rule

‘(1) The Chancellor of the Exchequer shall, within one year of the passing of this Act, publish a report on the workings of the General Anti-Abuse Rule.

(2) The report must include but need not be limited to—

(a) the number of meetings held by the General Anti-Abuse Rule Advisory Panel;

(b) the date by which the procedures of the Advisory Panel were published;

(c) the number of cases referred to the Advisory Panel and by whom;

(d) the number of cases on which a decision has been made by the Advisory Panel;

(e) the number of outstanding cases on which a decision has not been made by the Advisory Panel, and the dates on which those cases were first referred to the Advisory Panel.”

New clause 5—Report on the number of deliberate tax defaulters

The Chancellor of the Exchequer shall, within one year of the passing of this Act, publish a report containing the number of deliberate tax defaulters whose details have been published, and an estimate of the number of taxpayers who have been deterred from deliberately defaulting as a result of the provisions contained in section 94 of FA 2009 as amended by this Act.”

New clause 6—Report on the asset-based penalty for offshore inaccuracies and failures

‘(1) The Chancellor of the Exchequer shall, within one year of the passing of this Act, publish a report on the impact of the asset-based penalty for offshore inaccuracies and failures.

(2) The report must include but need not be limited to—

(a) how much tax revenue has been recouped due to this measure;

(b) the amount of monies paid in asset-based penalties; and

(c) the number of persons upon whom asset-based penalties have been levied.”

New clause 7—Report on the impact of the criminal offences relating to offshore income, assets and activities

‘(1) The Chancellor of the Exchequer shall, within one year of the passing of this Act, publish a report on the impact of the criminal offences relating to offshore income, assets and activities.

(2) The report must include but need not be limited to—

(a) the number of persons who have been charged with offences under each of sections 106B, 106C and 106D of TMA 1970;

(b) the number of persons who have been convicted of any such offence;

(c) the average fine imposed; and

(d) the number of people upon whom a custodial sentence has been imposed for any such offence.”

New clause 8—Whistleblowing in relation to tax evasion

The Chancellor of the Exchequer shall conduct a review of arrangements to facilitate whistleblowing in the banking and financial services sector in relation to the disclosure of suspected tax evasion, and report to Parliament within six months of the passing of this Act.”

New clause 9—Estimated impact of extending the scope of the Register of People with Significant Control Regulations 2016

The Chancellor of the Exchequer must, within 12 months of this Act coming into force, publish an estimate of the impact on levels of tax avoidance and tax evasion of extending the requirement placed on UK-incorporated companies by the Register of People with Significant Control Regulations 2016 to publish a register of people with significant control to companies incorporated in the Crown Dependencies and the Overseas Territories which have significant levels of trading activity within the UK.”

This new clause would require the Chancellor to publish an estimate of the impact on levels of tax avoidance and tax evasion of extending the current requirement on UK-based companies to publish information about people who have significant control over them to companies incorporated in the Crown Dependencies and the Overseas Territories which have significant levels of trading activity within the UK.

I begin by expressing my gratitude for your dispensation, Mrs Laing. I will, of course, take interventions, and I hope it will not disconcert Members if I remain standing at the Dispatch Box while doing so. There is a great deal to cover and a large number of amendments have been tabled by Opposition Members, many of which I shall have to cover briefly. I shall try to provide as much information as I can as quickly as I can and respond to points raised in the course of the debate.

Clauses 144 to 146 make administrative changes to the general anti-abuse rule—the GAAR procedure—and introduce a new penalty for those who enter into abusive tax arrangements. Clause 144 allows Her Majesty’s Revenue and Customs to make a provisional GAAR counteraction where it believes additional tax is due but the assessment time limits are due to expire. Clause 145 is an administrative change to strengthen the GAAR’s procedural efficiency. The GAAR procedure currently requires each user of the same type of marketed tax avoidance arrangements to be referred separately to the GAAR advisory panel. This is an inefficient use of HMRC’s and the advisory panel’s resources, so clause 145 corrects this. Clause 146 introduces a new penalty of 60% for taxpayers who enter into abusive tax arrangements that are counteracted under the GAAR.

The Government have tabled 84 amendments to clauses 144 to 146, making minor changes to ensure that the legislation works as intended, but let me respond now to new clause 4 and amendment 4, which relate to the GAAR clauses I have just outlined. New clause 4 asks the Government to conduct a review of the GAAR in a year’s time. The GAAR advisory panel is already required to publish anonymised reports of the cases it considers. It is difficult to see how this new clause could provide a better insight into GAAR cases than this.

Amendment 4 proposes that a penalty of 100% is introduced for the GAAR. While under HMRC’s existing penalty rules a penalty of 70% to 100% will usually be charged in cases of fraud, it is right for the GAAR penalty to sit just below this. Under the new measure, tax avoiders can be charged penalties under the existing penalty rules and the GAAR penalty up to a maximum of 100%. As such, the amendment does little more than what we are already suggesting, and I therefore urge the House to reject it.

Clause 147 and schedule 18 introduce the new serial avoidance regime and a new threshold condition for the existing POTAS—promoters of tax avoidance schemes— regime introduced by clause 148. The new serial avoidance regime will tackle those tax avoiders who use multiple tax avoidance schemes. It will work by putting avoiders on notice when HMRC defeats a scheme they have used. If they use further schemes and HMRC defeats them, they will face serious and escalating sanctions, including a penalty starting at 20% of tax understated and reaching 60% for a third scheme defeat while under notice. Clause 148 introduces a new threshold condition for the promoters of tax avoidance schemes regime so that promoters who have promoted three schemes that have been defeated by HMRC over an eight-year period risk entering the POTAS regime.

The Government have tabled 27 amendments to clause 148 and schedule 18. The amendments to schedule 18 provide for those who try to avoid tax through companies they own or partnerships to be brought within the scope of the new regime. Amendments to clause 148 provide for POTAS to cover circumstances where tax avoidance is promoted through associated persons. The remaining amendments make minor changes to ensure the schemes work as intended.

Clause 149 introduces a new requirement for large businesses to publish their tax strategies, ensuring greater transparency about their tax approach to HMRC, shareholders and the public. Transparency promotes good tax compliance while providing a fairer, more stable and competitive environment in which to do business. The strategy published by businesses must cover the areas specified in legislation, be updated annually and remain accessible. A penalty may be chargeable if a strategy is not published or if the information contained does not meet the requirements of the legislation.

The Government are also committed to tackling cases of aggressive tax planning. Schedule 19 introduces a new special measures process which will apply sanctions to large businesses that persistently undertake aggressive tax planning or refuse to work with HMRC in a collaborative and transparent way. Taken together, clause 149 and schedule 19 will help to reduce the appetite for aggressive tax planning and improve large business tax compliance.

On the amendments tabled by the Opposition, amendments 5 to 18 would collectively introduce a requirement for directors of a business to be personally, jointly and severally liable for a penalty of £25,000 should the business fail to comply with the legislation, rising to a monthly charge of £25,000 after the initial 12 months have passed. Amendments 9, 14 and 18 also propose that the said named directors should not be reimbursed in any way and would impose further penalties.

These amendments are disproportionate and go against the principle of encouraging behavioural change across businesses. Boards take a collective responsibility for any decisions made on behalf of their businesses and their tax strategy is no exception. Ultimately, this Government believe any penalty is a business responsibility, not one to be pursued across a group of directors. In summary, these amendments would result in less clarity around any sanctions, not more, and I urge the House to reject them.

The amendment to clause 149, tabled by the right hon. Member for Don Valley (Caroline Flint), seeks to require large multinational enterprises to publish a country-by-country report on their activities within their published tax strategy. As I have set out, this Government fully share her aims of increasing transparency and clamping down on avoidance and evasion wherever it occurs. Indeed, this Government have led the way in calling at an international level for public country-by-country reports. However, I do not believe that her amendment would help to achieve the objectives that we all share. It is technically flawed, and hence would not achieve the stated transparency or pro-business objectives that we all espouse.

The right hon. Lady has said that multinational businesses such as Google would be forced to publish headline information about where they do business, the money that they make and the tax that they pay, but that is not the case. According to Government legal advice, the amendment would, in practice, place such a requirement only on UK-headquartered multinationals. Foreign-headquartered multinationals such as Google would not be caught at all, and that undermines the transparency objective of the amendment.

The amendment also risks putting UK multinationals at a competitive disadvantage by imposing a reporting requirement that does not apply to foreign competitors operating in the same market. For example, a company headquartered in the UK, whether on the mainland or in Northern Ireland, would have to file public reports, but a company headquartered in the Republic of Ireland—or, indeed, pretty well anywhere else—would not. That, I think, contradicts the level playing field objective whose importance the right hon. Lady has emphasised. At a time of increased uncertainty, we should be particularly cautious about disadvantaging UK-based businesses and imposing on them a further commitment that does not apply to their foreign competitors.

I am grateful to the Minister for giving way, especially as he is in pain. He said earlier that the amendment was “technically flawed”, but that is not the advice that my right hon. Friend has received. It seems to me that, in reality, the Government are more driven by their ideas about tax competition. Will the Minister confirm that that is the case? If it is, I suggest to him that transparency is more important for the British people in particular, and that if any global company chooses to leave the UK simply because of demands for transparency and demands that it pay fair tax, which will be a rare occurrence, it may well be that it is not the sort of company that we want to be headquartered here.

There are some issues of timing, but I must emphasise that the only companies that would fall within the scope of the amendment would be UK-headquartered companies. The Googles of this world would be unaffected. We believe that all this should be done on a multilateral basis, and—although my timing may be slightly unfortunate—I should point out that considerable progress has been made at European Union level. Indeed, the relevant commissioner has said that we are on the cusp of a deal and that he hopes that it will be concluded during the course of the Slovakian presidency, in the second half of this year. The UK has been leading the way in that debate, and, indeed, we have been calling for the Commission to toughen up its rules.

I will just finish what I am saying before I give way. I am being bombarded by distinguished right hon. Members.

We know that the debate on corporation tax tends to focus on companies’ sales, but corporation tax is not based on sales; it is based on activity. If a company takes part in a lot of activity in the UK but makes a lot of sales in another jurisdiction, it is likely to pay a lot of tax in the UK, but not a lot of tax in other jurisdictions where there is little or no activity but a great many sales. If the UK is the only jurisdiction that is putting out this information, or requiring its companies to put it out, there will be many examples of UK companies that are acting completely properly in foreign jurisdictions and not paying a lot of tax in those jurisdictions, but are vulnerable to criticism. It would be very much easier for all businesses to be able to point to an Italian, German, French or Swedish company that is in the same position, with a lot of activity in its own jurisdiction and a lot of sales in another jurisdiction, and is paying its tax where the activity is, not where the sales are. If the UK is acting unilaterally, I worry about unfair reputational criticism of our companies. As the right hon. Member for Barking (Dame Margaret Hodge) knows very well, reputational damage to a business can damage its commercial interests,.

Surely the problem is that so much of what we are finding out about companies—about where they do their business, where their profits are, and where they pay their taxes—is emerging through leaks. Massive reputational damage is being done to those companies. The amendment gives us a chance to put things on a much better footing by providing not all the information about companies, but the baseline headlines about where they do business, where they trade and where their profits are. Surely that is something on which we can lead.

I think that the principle and the destination are pretty clear. We are moving in the direction of companies’ publishing this information, and I believe that the UK should be leading the way in working out a multilateral deal in which a number of countries impose essentially the same requirements. That, I think, would help to improve transparency and would provide a level playing field.

I do not think that the UK should be the last mover in this respect by any means. The United States seems to be some way away from moving in this direction, and I do not think that we should wait for the United States; I think we should be there before it. We should be able to deliver, especially given that such good progress is being made at European Union level. We remain members of the European Union, and there is appetite for this in other EU states. I have no doubt that, if no progress has been made in a year or two, the right hon. Member for Don Valley will come back and ask, “Why has this not happened?”, and in that event her case would be strengthened. However, I think that until we have given the deal a fair wind, it would be premature to act unilaterally.

The Minister has a perfectly justified and extremely good reputation for being sympathetic in driving this agenda forward. He will recall our discussions, both in opposition and back in 2010, about precisely the point that is addressed in the amendment. We all agree that companies should pay tax where their profits are earned.

The Minister knows as well as I do that some of the poorest people in the world live on top of some of the richest real estate, and that extraction taxes should be paid where those profits are earned. May I ask him to respond fully to the point that is being made by the right hon. Member for Don Valley (Caroline Flint)? If he thinks that her amendment is defective in some way, will he commit the Government to looking at those defects and considering whether they can frame a clause that would address the first part of what she said, with which I understood him to say he agreed?

The Finance Bill is not the ideal way in which to address this issue fully. I make no criticism whatsoever of the right hon. Member for Don Valley, who has shown much ingenuity in managing to ensure that her amendment is in order, but this is essentially an issue for company law.

We are keen to implement public country-by-country reporting, and we want to do it on a multilateral basis. As I have said, if there was a lack of progress the Government would obviously want to return to the issue, given the concerns that I think are felt by Members in all parts of the House. However, I think that we are in a position to aim for what I am sure we all agree would be the best result: achieving our aims on a multilateral basis.

It is clear that the Minister has some sympathy with the amendment tabled by my right hon. Friend the Member for Don Valley (Caroline Flint) and most of the Public Accounts Committee, along with many other Members in many parties. Rather than requiring my right hon. Friend to come back to the House, will he therefore commit the Government to looking at this matter unilaterally if multilateral agreement is not achieved? Or will he go even further today and agree to a sunrise clause to add to the proposals that my right hon. Friend and I, and others, have put forward, so that this can come into action if the multilateral agreement that he is hoping for does not come to fruition?

We are in quite a fast-moving area, and the progress that has been made in recent months has been considerable. Just at the beginning of this year, it looked unlikely that a deal would be possible, but now it looks as though the EU is heading in that direction. As I have said, the EU Commissioner has said that something is likely to happen by the end of this year. I must add the slight caveat that we will have a new Prime Minister by then, but it is certainly my view that if we have not made progress by this time next year on reaching a multilateral agreement, we will need to look carefully at the issue once again. I do not want to make a full commitment on this because—I am standing here desperately with the Dispatch Box as a source of support—I might no longer be in this position by then. I make that caveat, but I believe that there is every chance of an agreement. I would be disappointed if we did not make progress, but in the event of that happening—I hope it is unlikely—we would need to look at this again. I suspect that there is agreement between us here that it would be better for us to get a multilateral agreement than for us to go off alone.

I think I have heard the Minister say that there will not be a multilateral agreement that includes the United States. So is it the Government’s position that we do not want to act unilaterally for the UK, but we will act unilaterally within the EU—even if we are not in it—even though the EU itself contains only 20% of the world’s multi- nationals? Is he saying that this does not need to be multilateral, and that it just needs to be EU-lateral?

I do not think that this has to be universal, but there would be disadvantages for the UK if we were the only country to do it. There is a sense that UK companies would be criticised for failing to pay very much tax in jurisdictions where they did not have a lot of activities but had a lot of sales. This comes back to the point about educating the public about how corporation tax works. I think it would be an awful lot easier if there were just a few examples of other countries doing this. I do not think it needs to involve every other country, but if, for example, Germany, France and Italy had the same type of system, every time a UK company was criticised we could say, “What about that French company? What about that Italian company? The same principles apply to them.”

We do not have to move at the pace of the slowest, but if we adopt an isolated position on this, there would be a reputational risk for UK businesses. We do not need to run that risk, particularly as good progress is being made, and I urge the House not to accept this amendment. Instead, I hope that we will be able to implement a measure over the next few months.

I suppose it depends which multinationals are in which segment of competition, but is the Minister saying that as long as, say, two or three other countries were to do this, the UK would join in?

I do not want to put a precise number on this. There is a threshold, and it depends on which countries those might be, but if I thought that three or four significant economies were going in the same direction, the case for doing this would be much stronger. Or, to put the reverse argument, if I were standing here next year and two or three other countries had gone down this route, the concerns that I am expressing from the Dispatch Box today would clearly carry less weight than I think they do today.

Perhaps I can help the Minister. On behalf of the Public Accounts Committee, I sent an open letter to the chairs of European finance and public accounts committees or their equivalents. The Minister might have picked up the fact that, to date, the letter has been signed by the chairs of parliamentary finance committees in Germany, Hungary, Finland, Norway and Slovakia, as well as by senior MPs in the Netherlands, the Czech Republic and Bulgaria. We also know that the French Finance Minister, Michel Sapin, is doing some interesting work in this area, as are many others. Does that help to push the Minister in the right direction and enable him to make us more of an offer today?

Well, it supports my optimism that we are on the cusp of a multilateral deal, and that will enable us to work out the legislation in the most comprehensive and effective way. As I have said, our preference would be to do this through company law rather than through a Finance Bill, but the hon. Lady’s intervention supports what I was saying earlier about the comments of the relevant EU Commissioner at the last ECOFIN meeting in Luxembourg, which I attended 11 days ago. He was optimistic that we would reach agreement by the end of this calendar year. If that is the case, it is hugely encouraging, and the point that the hon. Lady has just made supports that proposition.

I hope that the Minister will be willing to channel the leadership and enthusiasm that the UK showed in relation to the diverted profits tax, when we chose to go out alone and not wait for international agreements on base erosion and profit shifting. We introduced a whole new tax, with compliance burdens and penalties, and I suspect that that was a far bigger deal than requiring companies simply to disclose what they are already disclosing but in a slightly different format. I think that that was the right way to go.

My hon. Friend is right to mention the fact that we went ahead with the diverted profits tax, although doing so was clearly consistent with the direction of the base erosion and profit shifting process. That tax also brought in significant revenue to the UK, which has been very helpful.

If we want to achieve greater transparency, as I believe we all do, it is right that we focus on driving forward international efforts on public country-by-country reporting. In order to get full information on foreign multinational entities’ global activities, multilateral agreement will be required to enable countries to introduce comprehensive rules with the widest possible scope. This will allow for a comprehensive multilateral approach that applies consistently across UK and foreign multinational entities. We must get this right so that, when it is introduced into UK law, it is effective and enforceable. We will continue to support and drive this multilateral change forward following the result of the referendum, and I share the determination of the Members supporting this amendment not to move at the pace of the slowest.

I will give way one more time, but I am conscious that I am taking up a lot of time in what is quite a short debate.

The Minister is being extremely generous in giving way. I am sure we all agree with him that this should be done multilaterally—there is nothing between us on that—and I am sure that it will be helpful to his aim of being able to demonstrate strong support for this across the House of Commons when he is dealing with his international partners. I should like to make a suggestion, and I hope that it will be helpful. Would he consider asking his officials to draft a clause for public discussion that is not defective and that he could put to his colleagues multilaterally as a measure that they might wish to include in their parliamentary legislation?

I am grateful to my right hon. Friend for that suggestion. Let me take it away, because there are a number of ways in which this could be done, and we would want to consider it. I believe that this debate will be helpful to our parliamentary and governmental colleagues in other jurisdictions in that it demonstrates our cross-party determination to make progress on this matter. We are committed to acting swiftly to implement international agreements, as we have done with the OECD BEPS recommendations on country-by-country reporting. We are committed to improving the transparency of multinational tax affairs, but we support an effective multilateral approach. At this time of increased uncertainty, a domestic measure of the sort being discussed today would, I fear, disadvantage UK business for the reason that I outlined. I look forward to hearing the contribution of the right hon. Member for Don Valley, but I hope she is satisfied with the assurances that I have provided today.

Clause 150 and schedule 20 create new civil penalties for those who have deliberately assisted taxpayers to evade UK inheritance tax, capital gains tax or income tax via offshore means. The bill introduces a financial penalty of up to 100% of the tax evaded and public naming in the most serious cases.

I want briefly to respond to Opposition amendments 19 and 20. The intentions of amendment 19 seem twofold. The first would ensure that it is considered enabling to act as an introducer. Schedule 20 already covers acting as an introducer, so that part of the amendment is unnecessary. The second aim is to set a test to check whether it objectively appears that the adviser should have known that the advice was likely to enable offshore tax evasion and is therefore an enabler. The test would introduce a great deal of uncertainty, meaning that it would be unclear how much due diligence should be completed.

Similarly, amendment 20 proposes a test that would ask whether the adviser wilfully or recklessly failed to make inquiries that a reasonable and honest person would have made. The courts generally recognise that knowledge includes so-called “blind-eye” knowledge—where a person has a firm suspicion about specific facts and deliberately decides not to find out more about them—meaning that an enabler cannot bury their head in the sand. If they have good reason to think that they are assisting evasion, failing to make proper inquiries will not help them and they will be penalised under the schedule as it currently stands. Given the restrictions and uncertainty that amendments 19 and 20 would introduce, I urge hon. Members to reject them.

Clauses 151 to 153 and schedules 21 and 22 strengthen the civil sanctions levied on offshore tax evaders. Clause 151 will increase the minimum penalties for deliberate offshore tax evasion to 30% of the tax due. The current minimum penalty is 20% and the maximum penalty will remain up to 300% of the tax due. The clause will require offshore evaders who are seeking to minimise or reduce their penalty to provide more information about their evasion and enabling activities in co-operation with HMRC.

Clause 152 removes the protection from being publicly named for deliberate offshore tax evasion unless an offshore evader comes forward to HMRC voluntarily and makes a full disclosure. In addition, clause 152 allows HMRC to name the individual who controls a company or entity that has participated in offshore tax evasion.

Clause 153 introduces a new asset-based penalty that will apply to the most serious cases of deliberate offshore tax evasion, where the tax loss exceeds £25,000, and will levy a penalty of up to 10% of the value of the asset connected to the evasion. Such assets could include physical property, intellectual property, shares and bank accounts. The asset-based penalty will be levied in addition to any other tax-geared penalties and interest due. Taken together, the measures will provide HMRC with a greater understanding of tax evasion while significantly increasing the penalties on tax evaders and those who help them.

New clauses 5 and 6 concern the reporting of a number of offshore tax evaders who have been named by HMRC and the number of asset-based penalties levied within a year of the passing of this Bill. The asset-based penalties are expected to apply from the 2016-17 tax year and the strengthened naming provisions are expected to apply from the 2017-18 tax year, with the first details published under this clause expected to be in 2019-20. As such, there would be no time for the activities covered by the amendments to have happened by the deadlines set for the Government to report on them.

The Government are taking action to increase penalties on offshore tax evaders and those who enable them. However, there remains a persistent minority of taxpayers who continue to evade UK tax in that way. To tackle the minority, clause 154 introduces a new criminal offence for those persistent offshore tax evaders. Crucially, the offence does not require the prosecutor to prove that the taxpayer intended to evade their UK tax responsibilities offshore, increasing our ability to prosecute offshore tax evaders. A successful conviction under the offence can result in a fine or a prison sentence of up to six months. Those who continue to break the rules should face tougher sanctions and the new offence will help to ensure that they do.

New clause 7 makes a requirement to publish a report on the impact of the new criminal offence within a year of the Bill being passed. The new criminal offence is expected to come into effect from the 2017-18 tax year at the earliest, which is beyond the one-year deadline set out in the new clause, making it redundant. In addition, HMRC already publishes information on tax crime.

New clause 8, tabled by the SNP, proposes a review of arrangements to facilitate whistleblowing about suspected tax evasion in the banking and financial services industry. HMRC values the extensive information provided each year by the public. During the 2015-16 financial year, HMRC received over 125,000 pieces of information from the public. HMRC’s actions are subject to independent scrutiny and regular inspection from the Office of Surveillance Commissioners. I am satisfied that that gives me good assurance that its work in this area is well managed and highly effective. We therefore do not believe a review is necessary and urge Members to reject the new clause.

I want to make two points about the response to whistleblowing. First, as I read the clause, it would lead to a review of whistleblowing in the banking and financial services sector. During my period as the Chair of the Public Accounts Committee, we did a lot of work on the whistleblowing from Falciani on the Swiss bank accounts and on the PwC leaks in Luxembourg. What was so interesting was that the only action that the two financial institutions took was to try to pursue the whistleblowers through the courts—trying to get them indicted and jailed. That is unacceptable.

Secondly, the internal HMRC lawyer who gave us the evidence that demonstrated that a sweetheart deal had been entered into with Goldman Sachs could not, in the end, return to his job. Everything of his was rifled through from his wife’s computer to his telephone and everything else. That is not good enough. I urge the Minister to think again and to instigate a review.

I note what the right hon. Lady says, but I will not let her comments about sweetheart deals pass. We have discussed the matter before, and I point her in the direction of Sir Andrew Park’s review of those settlements and his conclusion that there were no sweetheart deals. This is an issue that she and I have discussed before and no doubt will discuss again, and I fear that we will not reach agreement. I note her points, but I am not persuaded by the case for new clause 8.

I am conscious that this is a relatively short debate and that I have already taken up a large proportion of it. I am not quite done, but I will take a short intervention.

My point is about the NHS, where whistleblowers have suffered exactly the same kind of detriment, but the Government are now trying to change their attitude. I do not understand why we would not want to support whistleblowers within the industry when we have had one scandal after another for the past decade.

My point would be about the sheer scale of the information provided to HMRC. I quoted the 125,000 pieces of information from the public, but by no means are all of those whistleblowers. HMRC certainly does receive a substantial amount of information from whistleblowers, which is helpful. As for how that works and its contribution to HMRC’s activities, I am not aware of worries that that is not working or that the existing provisions with regards to whistleblowers are ineffective. Of course these matters are always kept under review. If I thought that there was a strong case for returning to this issue, I would certainly be interested in doing so, but I am not hearing that at present.

The right hon. Member for Barking (Dame Margaret Hodge) has been waiting very patiently for me to turn to new clause 9, which would require the Government to estimate the impact on the tax gap of expanding our forthcoming register of persons with significant control to companies in the Crown dependencies and overseas territories. I do not believe that the clause would be effective in achieving its aims. It would cast the net too narrowly by focusing on companies with significant levels of trading activity in the UK. As the Prime Minister announced at the recent anti-corruption summit last month, the Crown dependencies and overseas territories have agreed to hold beneficial ownership information on all companies incorporated in their jurisdictions. Importantly, they will share that information with Her Majesty’s Revenue and Customs and UK law enforcement agencies, which means that our authorities will be able to see exactly who owns and controls companies incorporated there.

Although I understand the aims of the new clause, it would be less effective than the steps that we have already taken to improve transparency and tackle tax evasion. I do have some sympathy with the argument that, no doubt, we will hear from the right hon. Lady, but I am not persuaded by it, and I hope that she will not press her new clause to a vote.

I will not take up any more time of the Committee. I have tried to cover as much ground as I can and to anticipate the arguments that we will hear for the rest of this debate. I hope that the Government clauses, schedules and amendments can stand part of the Bill.

I will try to be relatively brief, but, as the Minister has said, there is an awful lot to get through. I know that many Members wish to speak—indeed, today we have a profligacy of right hon. Members with us, particularly on the Opposition Benches, which is very good—so, perforce, I will have to be brief on various issues.

Labour does not oppose clause 144. On clause 145, which is to do with the general anti-abuse rule, I would like some assurance from the Minister that there are enough staff to deal with this work. I realise that the Government have gone into reverse gear on this, which I welcome, and the number of full-time equivalents has gone up from 57,000 to 60,000 this calendar year. That is a good step, but HMRC was significantly underperforming because it was very understaffed, and clause 145 proposes an additional amount of work for staff to do, so I should like some reassurance on that.

Clause 146 proposes penalties for the general anti-abuse rule. The Chartered Institute of Taxation, which has been extremely helpful to all Members, especially those on the Opposition Front Bench, is concerned that someone might be punished in a rather draconian manner for an innocent error of judgment. However, when my excellent researcher, Imogen Watson, looked at the case to which CIOT referred, she found that it was one to do with customs and excise rather than corporation tax and income tax. Perhaps the Minister can provide some clarification on that.

Amendment 4 on clause 146, which is tabled by me and my hon. and right hon. Friends, deals with raising the penalty from 60% to 100%. I heard what the Minister said about that, but I am concerned that the penalties would not be sufficient to change behaviour and encourage socially acceptable law compliant behaviour, which is what we all want to see.

Clause 147 deals with serial tax avoidance. The Chartered Institute of Taxation has expressed concern, and I understand its point, that this clause might introduce what would be a double penalty for an individual. Generally, we try to avoid double penalties for wrongdoing. Perhaps the Minister could have another think about the clause, or clarify for the Committee today that the CIOT has misunderstood things and there is no such double penalty being introduced. Could the Minister give us an indication—I know that these things are difficult—of how many non-taxpayers will mend their ways as a result of this measure and become taxpayers? Again, there is an issue of funding for HMRC.

Clause 148, which relates to the promoters of tax avoidance schemes, is supported by the Labour Front-Bench team. Although we support clause 149, which deals with special measures and so on, we have put forward amendments 5 to 18 on it—the Minister referred to them earlier. Those amendments deal with increasing the penalty to £25,000 from £7,500 and for holding a director or directors “jointly and severally liable”. Rather strangely, the Minister said that the Government were in the business of “encouraging behavioural change”. Well, so are we. Having higher penalties could encourage behavioural change, by which I mean somebody not indulging in bad behaviour, and filing their reports and so on. That is why we came up with the idea of joint and several liability rather than leaving it to one person. That means that all directors would be aware of what was going on. Furthermore, if the penalties were levied, they would not be reimbursable, as is too often the case. Too often, companies simply reimburse their staff when the staff have engaged in non-criminal wrongdoing. That is not an incentive for them to avoid wrongdoing in future—quite the reverse if anything.

With clause 149 comes amendment 1. I will be brief on that amendment, because my right hon. Friend the Member for Don Valley (Caroline Flint) will no doubt be speaking to it. It is an excellent amendment, which is fully supported by the Labour Front-Bench team. I will say a couple of things very briefly in response to what the Minister said on it. He said that the amendment is technically flawed. That may be the case, but this is the first of almost 200 amendments. If the Government supported it, they could have corrected any technical flaws they saw in it. I also think that they are being a bit timid here, because I do not see how the provisions under amendment 1 will lead to disadvantage to UK headquartered companies or to reputational damage—quite the reverse. Whether the Minister likes it or not, the reputation of Google was adversely affected in the United Kingdom because its tax deal with the UK authorities was not transparent and because people thought that Google was getting away with it. If there had been more transparency, Google’s reputation might not have been adversely affected.

Similarly, provisions in amendment 1 could lead not to reputational damage for UK headquartered companies, but reputational enhancement. I have to say to the Minister—I cannot resist it because he is such a good Minister—that, in our society, talking the talk is seen as hot air, but Gauking the Gauke is seen as being polite and helpful. May I urge him to walk the walk and support amendment 1? If it needs tidying up, he should do it and sort out the technicalities.

Let me talk now about clause 150 and schedule 20—I know that I am going at a bit of a gallop, but there are others who wish to speak. I heard what the Minister said about amendments 19 and 20, which are putative amendments to schedule 20. I defer to his superior knowledge, as this is a very technical area, and I am not an accountant. I think that I understood him to say that what was proposed in amendment 19 was already covered in schedule 20. In relation to amendment 20, he referred to “blind-eye knowledge”, which is a new one on me. I, like him, am a lawyer, and it seems that schedule 20 is introducing civil penalties and not criminal ones, so I accept what he says and will not be pursuing amendments 19 and 20.

Labour supports clause 151, which is to do with penalties in connection with offshore matters and offshore transfers. Clause 152 relates to offshore tax errors and publishing details of deliberate tax defaulters. Helpfully, the explanatory notes say that the clause will amend the Finance Act 2009 to allow HMRC

“the power to publish the details of an individual who controls a body corporate or a partnership”—

when it has been—

“charged a penalty for a deliberate failure to notify HMRC of a tax charge or deliberate inaccuracy in a return, and”—

when that individual—

“would have obtained a tax advantage”—

from it—

“had it not been corrected.”

This must involve an offshore matter or transfer.

That would mean HMRC publishing details of naughty taxpayers or naughty non-taxpayers. In that connection, may I urge the Government again to think about when HMRC, which is under the supervision if not the direct control of the Government and where the Government have a great say on overarching policy matters, to reconsider the question of taxpayer confidentiality? When deals are being done with large companies, as opposed to individuals, those deals could, as part of HMRC’s bargaining, include a waiver of confidentiality on the deal. So, for example, in the notorious Google tax deal, the Chancellor of the Exchequer—understandably —repeatedly said, “I can’t tell you how we got to the deal. That is confidential.” Yes, that was true, but unfortunately that was because HMRC, with the Chancellor of the Exchequer, failed to insert in that agreement with Google a waiver of confidentiality from the taxpayer. If the taxpayer waives their confidentiality, the Government can publish it all. That should be in such settlements, and should have been in the appalling settlement with Vodafone that was done for billions of pounds—I think under a Labour Government, shamefully.

New clause 4, tabled by me and my hon. Friends, relates to clause 152 and requires a report on the workings of the general anti-abuse rule. I am sorry that the Government are apparently not going to accept it. In connection with that, I understand what the Government have said about new clauses 5, 6 and 7 and about the timeframes in them being meaningless because the reports would have to be done before the measures on which they were reporting had been implemented. I quite understand that. I did not understand the Minister to say that about new clause 4, but, if he did, he could perhaps clarify when summing up that it is a deadline issue. If it is not a deadline issue, as it was with new clauses 5, 6 and 7, perhaps he could confirm that the Government will support new clause 4, as they should.

Clause 153 is quite interesting for those of us on the Opposition Benches who like to try to think widely on tax measures, because it is a small step towards a wealth tax. That might not be the Government’s intention, and I am not saying that it is Labour’s proposal on taxes. We are looking at things very broadly, but asset-based penalties for offshore inaccuracies and failures are introduced by clause 153 and schedule 22. In that connection, I want to raise an issue that was raised with me by the Law Society of England and Wales. I declare an interest in that I am a member in good standing of that organisation—as is the Minister, I suspect. The Minister might have a ready reply for the issue the society raised: as we are talking about asset-based penalties, how does one value the asset? What is the mechanism for its valuation and what happens for those assets that fluctuate in value?

Labour supports clause 154, on offences relating to offshore income, assets and activities. I think that the Minister has already responded on the question of new clause 7, which, in a sense, would be coupled with the clause. He pointed out that the deadlines would not marry up, with the report being done before measures came into effect, and I quite understand that. I apologise to the Committee for not spotting it.

That brings me on to new clause 9, tabled by my right hon. Friend the Member for Barking (Dame Margaret Hodge), which is supported by those on the Labour Front Bench. I will let my right hon. Friend explain its necessity and desirability to the House if she catches the eye of the Chair.

In the light of our debate this morning, an appropriate opening remark would be to point out that I believe that in the next hour we are debating the most important part of this year’s Finance Bill. Many amendments have been spoken about already this morning, and I am sure that Members will forgive me if I try to make my remarks brief and to focus only on three matters: the appropriate changes discussed in amendment 1, tabled by the right hon. Member for Don Valley (Caroline Flint) and others; new clause 8, tabled by me; and new clause 9, tabled by the right hon. Member for Barking (Dame Margaret Hodge). Let me say at the outset that the Scottish National party supports both that amendment and that new clause.

I will be brief, because I want to allow more time for the right hon. Ladies to present their case as fully as they can. Let me say something in general about why we are concerned. We all know that there is huge concern among the public about the extent of tax evasion and hidden wealth. It was a growing concern before the release of the Panama papers, and I remember discussing it in this House in the first week in February. It has been fuelled by concerns as people become more aware of the hiding of money in tax havens by individuals, corporations and trusts.

Let us put this debate into a broader context. According to Jason Hickel of the London School of Economics, tax havens hide one sixth of the world’s total private wealth. He has estimated that at about $20 trillion. Whether that is very accurate or not, all observers would agree that the total amount of money involved is absolutely staggering in scale. Indeed, the Panama papers from Mossack Fonseca are just the tip of the iceberg as regards what we face in the world today.

Many issues need addressing. Neither this debate nor the proposed amendment and new clauses address them all, but they are a start. I have been very disappointed by some of the Minister’s reasoning, particularly that on amendment 1. It struck me that he started to redefine on at least three occasions what he meant by multinational. First, he seemed, in my view, to be speaking as though it was almost global in nature, then it became EU-specific, then it became about just a few countries. It struck me that it is not amendment 1 that has not been thought through thoroughly, but the Government’s response to it. If the right hon. Member for Don Valley proposes to press it to a vote, the SNP will certainly follow her into the Lobby.

We know that many different groups are involved. The amendments specifically refer to corporations, but more than corporations are involved. If we had tabled our own amendment, we might have chosen slightly broader amendments to encompass trusts, for example. Being reasonable, we must put ourselves in a position where we make the first step. Sometimes somebody needs to make the first step.

When the Minister was talking, he reminded me of the days when I used to trod through the library at Stirling University, taking students and showing them back copies of Hansard. We could look at back copies of Hansard from the 18th and 19th centuries, and the subject that arose more than any other in debates in the House was slavery. One of the arguments continually used against doing something to make slavery illegal was that it would not create a level playing field.

Somebody has to be first. This is not just about finance and technical considerations, but about fundamental ethical considerations. Those ethical considerations are why we hope that these matters will be pressed to a vote and we will support the right hon. Ladies in that.

The hon. Gentleman is right that somebody has to go first. I have one thought for him, and I would be interested in his view. His country relies quite heavily on the oil industry. Is he absolutely certain that it is right to impose something on Shell or BP that the Italian Government will not impose on Eni and the French Government will not impose on Total?

I thank the hon. Gentleman for being interested in my view. Although I understand the point that is being made as well as that being made by the Minister, I think that in these matters, for all large corporations that operate nationally, taking the first step puts them at a reputational advantage because they are seen to lead the way even though there might be occasions on which doing that appears to put them at some short-term commercial disadvantage. So this is not as simple as saying that anyone is necessarily incurring a commercial disadvantage. For those reasons, we would welcome these new clauses, and we are aware that they would also apply to important sectors of the Scottish economy.

I shall briefly say something about the Scottish National party’s new clause on whistleblowing. I am particularly grateful to the right hon. Member for Barking for asking the Minister why he would not support that new clause. Indeed, as she spoke, I thought that, rather than our pressing the new clause to a vote here, it might be best to engage in cross-party discussions on how best to construct a thorough way forward. I agree wholeheartedly with the right hon. Lady, because when we look at the number of cases that have involved taking whistleblowers to court, one wonders where the balance of the scales of justice lie.

I recognise that changes have been made to the requirements on whistleblowing, some of which come into effect this September in the banking sector, but the requirements oblige companies to do things such as appoint their own whistleblowers champions and report the amount of whistleblowing to their boards. Those things require a culture of willingness in companies. If the will is not there, the current processes will have next to no effect. We are not saying that we know precisely how to secure effective whistleblowing. That is why it would be useful to have some cross-party discussions, in which I am sure the right hon. Lady would be happy to engage. In that spirit, although we believe in the new clause, we will not press it to a vote and look forward to supporting the votes led by the right hon. Ladies.