David Davis
MP for Goole and Pocklington · Conservative · United Kingdom
“On a point of order, Madam Deputy Speaker. May I start by congratulating my right hon. Friend the Member for New Forest West (Sir Desmond Swayne) on putting a Bill in front of the House that has support from literally everybody in the Chamber?”
“The Post Office Horizon scandal highlighted the institutional instinct to find a convenient scapegoat. Innocent people paid the price, while the institution sought to protect itself. If the Thirlwall inquiry asks too narrow a set of questions, systemic NHS failures will go unexamined.”
“Last month’s sentencing of Nicola Sturgeon’s husband exposed the real reasons behind the Scottish Government’s persecution of Alex Salmond. From 2010 to 2022, Peter Murrell abused his position to embezzle almost £500,000 from the SNP to buy luxury items. He used SNP money to buy a £33,000 Volkswagen Golf.”
“The consultants also reported that in the two months since the change infants have been sick but recovered as expected.” The report highlighted deficiencies in staffing levels, leadership and communication, but, in the trial, it was not shown to the jury—they knew nothing of it.”
“One of the nurses let go later described it as “the decimation of the Nursing and Midwifery service”, adding that “eight registered nurses...were replaced with nursery nurses...unqualified staff are replacing qualified staff”.”
“There was little space, cots and incubators were stored in corridors, and mothers struggled to find somewhere to breastfeed their babies. Susan Gilby, the hospital’s chief executive between 2018 and 2022, later described the unit as “dark, dingy and cramped”, providing a “less than ideal” environment to work in.”
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“My hon. Friend makes a powerful point. I am not going to make a political point out of this, but I will make a policy point. When I was the Public Accounts Committee Chairman 20 years ago, it would not be true to say that the Inland Revenue behaved like a charity. It was always pretty tough, but in the last 20 years it seems to me that the exercise of its judgment has become more and more oriented to cash and less to justice. That is what we are addressing today. Part of the reason for that is that successive Chancellors have blurred the distinction between tax avoidance and tax evasion, one of which is illegal and one of which is a matter of judgment. That has put a huge burden on HMRC’s judgment, so that we see it effectively making the law through its judgment and in ways that are deleterious to our constituents.”
“Let me remind the House of a few of the Committee’s findings. The Committee found that the Public Bill Committee for the Finance (No. 2) Bill in 2017 “did not adequately scrutinise the loan charge.” That is incredibly important for something that will be retrospective, but it did not properly scrutinise the loan charge. I think it was spoken about only by the Minister and the Opposition spokesman, and by nobody else. The Committee said that many witnesses told it that they had joined these schemes—this is the point made by my hon. Friend the Member for East Surrey (Mr Gyimah)—without being aware of HMRC’s attitude towards them. Many were assured by employers or promoters that these schemes were above board and, indeed, as he said, they could not have had the jobs if they had not accepted the terms.”
“There is a real issue about the approach of HMRC, and I am going to be rather harder than the all-party group in my recommendations. I think it is being just a little bit too reasonable, and I will come back to that in a second. [ Interruption. ] I think a number of Conservative colleagues are threatening to sue me for calling the right hon. Member for Kingston and Surbiton (Sir Edward Davey) reasonable. Before I come to my main point, I want to go back to the report on this subject carried out by the House of Lords Economic Affairs Committee. We all have very emotional cases impacting on our judgment, but we cannot say that about the House of Lords. The House of Lords looked at this incredibly dispassionately. Its Members do not have constituents, so they can in a way be viewed as much more dispassionate than us.”
“My hon. Friend is absolutely right, and I will come back to that point in a second. This also rests on this point of judgment: how does an ordinary lay person forecast what HMRC will decide in 10 or 20 years’ time? We see this—unlike others, I am not going to butter up the Treasury Bench today—even in the responses of Ministers in previous debates and even in the letter we received from the Financial Secretary this morning. He talked about the reason for the definition of this scheme, and said it was for the “sole purpose of avoiding tax”. Well, I have news for the House: I have at least a couple of ISAs—individual savings accounts—which are there for the sole purpose of avoiding tax. Are they now illegal? Is that the criterion we should apply? Well, plainly not.”
“It said that of course these disguised remuneration schemes are “unacceptable tax avoidance”, but it also said: “The loan charge is, however, retrospective in its effect.” This House was formed in order to challenge the King, in his day, on the justice of the taxes he was demanding, and to put their own concerns back to the King to get them corrected before we paid the taxes. We should not forget the fundamental reason for this House’s existence, which is to look after our constituents in the face of demands from the state. The Committee made a recommendation that HMRC should in future make clear public statements when it is looking at avoidance schemes. Because of the fact that so much of the burden of the decision falls on HMRC, it should make it clear to the public at large and anybody in those schemes when it is investigating them.”
“I think part of the blame lies with HMRC, but part of the blame lies with the employers. Many people have said that that is where HMRC should focus its effort, but the House of Lords Committee found “little evidence of action taken against those who promote disguised remuneration schemes.” It went on to say that “HMRC appears to be prioritising recovery of tax revenue over justice”. That point is central to today. The Committee noted that the people involved were unusual subjects of this sort of recovery, because of the nature of their employment and so on.”
“No, I am afraid not. That is why we find not city slickers, bankers or finance specialists, but nurses, doctors, locums and careworkers caught up in this. All those people will never have the resources to pay back this money. It does not matter whether it is over two, five, seven or 10 years, they will just never have it. Many witnesses said they had declared the schemes to HMRC. This really is the criminal aspect of this: someone declares a scheme, and then 20 years later or 10 years later, HMRC comes back and says, “Sorry, we haven’t closed your year, and you can pay now”. They are being asked to pay not a small amount, but £20,000 or £30,000 in the case of some my constituents. What the Committee found is very important because, again, where does the blame lie?”
“It just means his house or his car has to go, and his family is breaking up under the strain. My view is very simple: this should not be retrospective at all before 2017—at all—because there is no reason for it whatsoever, given the behaviour of HMRC. If we do not get something like that—I say this to the Treasury, and they can add this into their accounting—I, and I suspect many others in this House, will start to pursue a right in law for every citizen that limits the extent to which the state, and particularly HMRC, can take any retroactive action whatsoever against persons, not companies such as the Vodafones, but against individuals, because it seems to me that we owe a duty to our constituents to have some certainty from the state in relation to the taxes they pay.”
“No, I am afraid not. I have a couple of minutes left and I am going to come to an end in a second. That is the House of Lords’ view, and it was very critical. For a House of Lords report, it was an incredibly critical report. Let me turn to the motion and the all-party group’s approach. As I say, it is incredibly reasonable: let us have a review—a judge-led review or whatever—and take some time to sort this out. I am afraid I think that that is altogether too reasonable in the light of the pressure that is being created by this policy. People who are under this policy now are suffering mental strain day in, day out. They are not people who are ever going to find £20,000, and to say to them that they have five years to pay if they are—as one of my constituents is—on a minimum pension, is meaningless.”
“I am worried about the process we are debating. My right hon. Friend knows that I concern myself with process and, indeed many times in government I fought his corner on process, unbeknown to him. The last time that we took such a controversial Bill through the House so quickly was actually on the day when he became the Chancellor of the Duchy of Lancaster. The Data Retention and Investigatory Powers Bill went through almost equally quickly with equally strong, powerful arguments. The hon. Member for West Bromwich East (Tom Watson), now the deputy leader of the Labour party, and I spent nearly a year and a half in court challenging the quality of the decision on that Bill. We won and in effect had it struck down. Does my right hon. Friend not worry about the quality of what he is doing today?”
“Extremist views take root more easily when the communities involved feel beleaguered or at odds with the rest of society—that is one reason I disagree with the Home Secretary on the Shamima Begum case. Has the Home Office researched the attitudes of the various communities in Britain to its own counter-terrorism policy, both legislative and operational?”
“Following the comments from my hon. Friend the Member for South Dorset (Richard Drax), my point of order is altogether too mundane to detain the House.”
“The chief executive officer of Capita says that it will lose a lot of money on its recruitment contract on behalf of the MOD. In that case, I presume that the Government have a strong legal case for simply terminating the contract without compensation and taking it back in-house and doing it properly.”
“In Scotland, as in the rest of the United Kingdom, there are grants of up to £1,050 per employee for training employees, and up to £200,000 for new IT systems for dealing with new customs arrangements. Given the importance of this, why is it not more widely advertised both in Scotland and in the United Kingdom?”
“I declare a family interest in the answer to my question. The undoubted problems with health assessments are causing delays in the appeal process right across the board, not just with PIP and others, but with disability living allowance and mobility allowances. Will the Minister agree to see me and discuss how we can accelerate the process, because some appeals take more than 39 weeks to come to fruition, with the effect that children have to wait over a year before they get their proper allowances?”
“I thank the Prime Minister for giving way. As she knows, many of us would have preferred a circumstance where we could unilaterally have withdrawn from this agreement, and that does not apply after what the Attorney General said earlier. That means that we are going into a circumstance where there will be a deal of trust over how we resolve the backstop and, in particular, over whether the alternative arrangements prove acceptable to the European Union and the Republic of Ireland. Some of those alternative arrangements have previously been rejected by the Union and the Republic of Ireland. Has the Prime Minister detected any change in mood on the part of the Union and the Republic with respect to a constructive outcome to dealing with the Northern Ireland border?”
“Unlike the Leader of the Opposition, may I welcome the Minister to the Dispatch Box? I know from my own experience that, unlike the Leader of the Opposition, the Minister is a brilliant master of his brief. The Leader of the Opposition talked about trust. Is not the Prime Minister demonstrating the trust that this House should put in her by going to Europe and negotiating with the Europeans a deal that will deliver on the requirements of the British people—unlike the Opposition?”
“That reputation will not be protected if it is felt by our competitors around the world that our family, as it were, are allowed to have standards that are lower than those of the City of London. Mr Speaker, will you will seek advice from Speaker’s Counsel about how we can ensure that laws passed by this House are carried out by this Government?”
“Further to that point of order, Mr Speaker. First, this matter, even were it dealt with in 2020, would have been long overdue. It was an issue that was critical for the Public Accounts Committee when I was the Chairman of it many years ago, so it is a long overdue issue. Secondly, it is not a question of the will of the House, but of the laws passed by this House. The intention of the House was that the instruction to bring an Order in Council in 2020 ought to be carried out in 2020, and that is clear from the Hansard of the time. As the right hon. Member for Barking (Dame Margaret Hodge) says, the business that has been pulled today was about protecting the reputation of the City of London.”
“The Home Secretary quite rightly says that he cannot comment on the individual case of Shamima Begum. However, it does raise a more general issue. In that case, citizenship was removed after the birth of the latest child who therefore presumably has a right to British citizenship herself. What, if anything, are the responsibilities of the British state to that child in this event?”
“The Minister will be aware that he could replace and upgrade every piece of rolling stock in the country for less than half the price of High Speed 2. Why do we not just cancel this white elephant and give the public something that they want?”
“Given the debate and dispute about the meaning of the Government’s motion, will my right hon. Friend be clear with the House that if the European Union does not agree to a deal that is acceptable to this House and the Government, we will still be leaving on 29 March?”
“The Leader of the Opposition and the leader of the Liberal party both implicitly criticised the UK Government’s record on workers’ rights in comparison to Europe. They both ignored the fundamental right of safety in the workplace, on which we have had the best record in Europe in every year since we joined, so there is little to fear in this area. Given that, will the Prime Minister guarantee to the House that any future changes in this area will be subject to the control of the House?”
“That should be good for every citizen, but it should be good first and foremost for those who have done the right thing, for those who have looked after themselves and for those who reasonably could have expected the Government to protect them.”
“A failure to right this wrong will only serve to further undermine the public’s trust in politics and financial institutions The Government say, or said then, that this comes down to an issue of “affordability”, but affordability is always a decision of priority: what comes first? The Government did not say that they did not have any money—they said they did not have enough money. What is more important than this: keeping our word, supporting the poor, upholding an institution that is important to people in the future, as well as these victims? All those things make this issue incredibly important. So in my view the affordability argument was flawed in the first place, but that was the position. Now, even that falls down, because we are supposedly, as the Prime Minister tells us, at the end of the era of austerity—good.”
“Typically, in my constituency at least, they were retired factory workers, teachers, nurses and small businessmen, who believed they were setting themselves up for at least a tolerable and reasonable retirement—I was tempted to say a comfortable one. That is a perfectly honourable, reasonable and laudable ambition for all our citizens. As my hon. Friend made clear, the Conservative party promised in our 2010 manifesto to compensate the victims—not partially compensate them or compensate some, but compensate them. Like him, I was a signatory to that—indeed, I was heavily involved in getting it to happen. So I feel personally committed to it, too. It was right there in black and white, and it is there with my signature on it, just like everybody else’s.”
“The Government failed to ensure that accurate returns were in the public domain; they failed to take ample opportunities to step in; and they failed to use their full range of powers. So, frankly, it seems to me that the Treasury plucked a cut-off date from thin air—there is no other way of describing it. The ombudsman called on the Government to compensate the victims fully: to put them in the position they would have been in if the scandal had not occurred. That is the test: where would they have been if this scandal had not occurred? Leaving aside the pre’92 victims, that is a far cry from the 22p in the pound that has, in effect, been paid to many of those whom we have chosen to compensate. As has been said, this ultimately comes down to an issue of public trust. These victims were not wealthy investors.”
“Moreover, as we have heard, nearly all the pre-1992 cases involved some of the oldest and most vulnerable victims—they were also probably the poorest—who have so far received only a paltry sum of money. If the state fails to regulate properly, it inevitably forces that cost on to the consumer, and it is incumbent on the Government to make that right—and make it right in full. The ombudsman was clear that there were fundamental failings by the then Department of Trade and Industry, the Government Actuary’s Department and the Financial Services Authority. The truth is that they knew, for most of the time, that this was a fraudulent Ponzi scheme. My hon. Friend the Member for Harrow East has described it as such and we should understand that Ponzi schemes are frauds—it is straightforward and simple.”
“Member for Leeds North East said, in calling for all those affected by injustice and maladministration from 1990 onwards to receive full compensation. The chairman of Equitable Life himself said that the report was inarguable. The report made no distinction between post-1992 and pre-1992 investors, and nor did anyone else—not the victims, not Equitable Life, not the ombudsman and not the Public Administration Committee. The Government’s rationale was that people who invested before 1992 were not affected by the scandal. Well, I am afraid that I completely disagree. These were long-term investments that were affected by ongoing and long-running maladministration. They were affected by the continuing failings of both Equitable Life and the regulators.”
“I start by congratulating my hon. Friend the Member for Harrow East (Bob Blackman) and the hon. Member for Leeds North East (Fabian Hamilton). I hope they will take it in the right way when I say that their continued presence here after a decade gives me an overwhelming sense of déjà vu. Having spent a couple of years’ penance on the Front Bench, I come back to find that, despite their sterling efforts, the issue is still before us. The Equitable Life scandal is one of the greatest failures, perhaps the greatest failure, of public oversight and regulation in modern times, so it was the right decision to act in 2010. But, sadly, to act only partially was a failure of moral leadership, as my right hon. Friend the Member for New Forest West (Sir Desmond Swayne) intimated. The ombudsman’s report in 2008 was unambiguous, as the hon.”
“Sorry, but I am finishing on this point. I am pleased to say that I am back in the fray, on the Back Benches, and I hope that we can quickly slay this dragon, once and for all.”
“The Home Secretary makes a good case for the importance of a firm but fair immigration policy, but does he accept that when we implement such a policy, it also has to be civilised? With that in mind, does he intend to do anything about the national shame of the 10,000 migrants in holding centres in this country?”
“It is important that, in the public eye, we maintain the view that this is a fair and sensible proposal. I say to the Leader of the House that, although there will be a one-year review, I hope we will look at those issues before the year is up.”
“Whatever the real reasons, the public will not forgive us for not being there, so it is absolutely necessary that we put this measure in place and keep it after the year is up. I have no doubt that that will be the outcome. There will be issues, some of which my hon. Friend the Member for Shipley (Philip Davies) raised. His concerns are not always popular in the House, but some of them are real. Quorum will be a serious issue on Fridays and so on, so we must deal with that. I agree entirely with his amendment on miscarriage. That should go nem con, as it were. He raised the issues of serious illness, irrespective of who the Member is, of being a primary carer for somebody who is seriously ill, and of the death of a close relative. The public will see it as necessary that we address those issues to maintain the fairness of this proposal.”
“I commend the Leader of the House and the right hon. and learned Member for Camberwell and Peckham (Ms Harman) for pursuing this proposal. I also commend the hon. Member for Hampstead and Kilburn (Tulip Siddiq), who is not with us but will perhaps be the first gainer from it. This proposal is overdue. Unlike my right hon. Friend the Member for Basingstoke (Mrs Miller) who wants radical change quickly, I am an incremental reformer of the House because reform of the House has unexpected consequences. This proposal, however, is overdue. It is overdue because pairing is obsolete. As the hon. Member for Wolverhampton North East (Emma Reynolds) made plain, in today’s politics being absent is not good enough.”
“My hon. Friend is entirely right. It is important, in this context, that we do not throw the baby out with the bathwater—that is a terrible metaphor, now that I think about it. The simple truth is that we must retain our ability to do our job in a way that the public accept is fair, sensible and effective.”
“That is the last intervention that I will take, Mr Speaker, because I will finish in about 10 seconds. This is a massively important issue and I hope we will carry it nem con tonight, but we must understand that this will not be the end of the reform. It will lead to a series of reforms that are right and proper for this House and will improve our Parliament.”
“The control of the timing of the backstop by the European Union hands enormous amount of negotiating power to the other side in this negotiation. Without change, it jeopardises the control of our money, borders, regulatory independence and, yes, our constitution too. It must therefore be time-limited under our control, and that must be legally enforceable. Is that what the Prime Minister is seeking?”
“I, too, welcome the right hon. Gentleman’s approach and the tone and tenor of his opening remarks. I hope that during his speech—perhaps not immediately—he will lay out his criteria for acceptance of whatever the outcome should be, not in terms of his rather artificial six tests, but real criteria in the national interest.”
“The hon. Gentleman, quite rightly, makes the point that a number of expert economic opinions all say much the same thing, but of course that is exactly the same as was the case before the referendum. [ Interruption. ] Members may not like the facts, but I will repeat the facts to them. Exactly the same was true before the referendum. The Government’s forecast was in the middle of those expert opinions and the outcome was approximately £100 billion out in the first two years after the referendum. So there is a reason to say that the experts may be all talking within a hall of mirrors.”
“I do not believe that it will survive, which means that the shadow Chancellor’s question, “What are the future options?” is the central question of the debate.”
“That has massive implications for what I just said. The deal would still leave us, whatever the Chancellor says, subject to the rule of the European Court of Justice, albeit by a back-door and concealed route. It would see Northern Ireland carved out of the United Kingdom and tied to the European Union single market and the customs union, and it gives away £39 billion in exchange for the vaguest of political promises on a future deal. Because of all that and because we would be locked in at the discretion of the European Union, it puts us in a formidably bad negotiating position for the future. In my view, other than the constitutional issues, that is the most serious practical aspect of what is proposed.”
“I take his point that we have to look very carefully, as we did when I was in government, at the regional balance of some of these exports, but the aggregate picture is very clear. Our trading future is more in the rest of the world than it is in Europe. This has huge implications—massively underestimated by Treasury and Bank of England forecasts over and again—for the need to keep our freedom to do trade deals to maximise our ability to exploit that. I am not going to spend very long on the actual proposal that the Government have put in front of us, because it seems to me very clear that it will not survive the end of this debate. Very quickly, the Attorney General’s advice tells us that the backstop would endure indefinitely and that it would tie us to the customs union with no escape.”
“It has been a magnificent story over about one third of a century. In that time, this has had an impact on us, too. We have gone from having 60% of our trade with the European Union and 40% with the rest of the world 20 years ago to nearly the other way around—in a couple of years, 60% will be with the rest of the world and 40% will be with the European Union. I am loth to quote forecasts, given the bad name that they are being given at the minute, but the projection—not a forecast—is that that will continue. To pick up on the point made by the hon. Member for Dundee East, if we take the top three markets for British goods, or UK goods, in the rest of the world versus Europe, the top European ones of Germany, France and the Netherlands are dwarfed by our sales to America, China or Australia—our top three in the rest of the world.”
“Before I attempt to pick up on the shadow Chancellor’s final views on where we are going, rather than on where we are, I draw the House’s attention to a wider issue, which I think goes to a quite important set of facts that the hon. Member for Dundee East (Stewart Hosie) was talking about in terms of Scotland’s export arrangements. When economic historians look back on this time in 100 years’ time, I suspect that they will view Brexit as small by comparison with what has happened with the entire global trade. In the last third of the century, we have seen a huge transformation in the wealth of the world off the back of free trade. About a quarter of the world’s population, or well over 1 billion people, have been raised out of absolute poverty—$2 a day or thereabouts—by free trade.”
“People have to read more than one line of a speech. Perhaps the hon. Gentleman’s iPad is too small to carry more than one sentence. I also said that the critical part of the negotiation would not be the first two years, but the last three months, when France and Germany would determine the outcome. If the hon. Gentleman wants to quote me again, he should get it right next time.”
“That is what is laid out in the proposal, but the transition will then come to an end, and at the end of that, we will still have to make a decision on where we are going, backstop or no. I am afraid that we are always in, and the point is that it is at the behest of the European Union, not at our behest. I have nothing against the European Union, but it is the negotiating partner that may gain an advantage from delay.”
“If this deal goes down, as I think it will in a few days, there will be a scramble in London and Brussels to start putting those one-on-one, unilateral negotiations together. So there is a range of possibilities.”
“There are compromises between them; there are mixtures of them; but those three essentially capture the possible outcomes. Let me start with the issue on which I disagree with pretty much everyone who has spoken so far: the World Trade Organisation deal, the so-called no deal. The Chancellor called it a strict no deal, because he knows full well all the preparations that have been made in the Government to create a basic no deal, or basic negotiated outcome. There is a whole stratum, a whole spectrum, of possible types of no deal. Some of them deal with the issues that my hon. Friend the Member for Mid Worcestershire (Nigel Huddleston) raised earlier—aviation, data and so on.”
“Yes, that is also true, but the general point is that the overall timetable is not in our control; it is in the other side’s control. As we have seen throughout this entire negotiation, the moment we gave away sequencing at the beginning, we gave an advantage to the other side. My right hon. Friend the Member for Clwyd West (Mr Jones), the former Minister of State, is nodding: he remembers it. There are essentially three emblematic conclusions to this. The first is the World Trade Organisation, which we have talked about already—I doubt whether it will be a deliberate conclusion, but it is a possible one—the second is Norway, which a number of Members on both sides of the House have suggested might be the best outcome, and the third is Canada plus, plus, plus.”