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4.26 pm
Mr. Bill Wiggin (Leominster): I declare my registered interest in Commerzbank. Furthermore, since 1991 I have worked in foreign exchange markets.
The Bill introduced by the hon. Member for Sheffield, Hallam (Mr. Allan) is probably the most naive and short-sighted proposal that I have heard since becoming a Member. It is the financial equivalent of the Campaign for Nuclear Disarmament, from a party that embraces the single currency above all else.
The hon. Gentleman is right that the UK foreign exchange market is one of the largest in the world, transferring more than $1 trillion a day. However, that size is numerical and is used to advertise the advantages of doing business in the UK. It is a free market which, by its nature, is international. Owing to electronic transfer of funds, currency can be—and is—moved anywhere in the world.
The success of the United Kingdom as a foreign exchange player is based on three criteria: the UK is a good, English-speaking place to do business; there is wise and gentle governance by the Bank of England; and there are no extra burdens of cost or taxation. The Government have many better things to do—for example, improving our public services—than trying to find a way of pushing more foreign exchange business away from Britain.
The average margin on a foreign exchange deal would be less than 0.0001 of that currency—we call that a pip. The size of the profit means that only a huge amount of money would make it practical to continue doing such business.
The proposal is ill thought out. Its acceptance is, of course, in the grant of the Government. It reflects the greedy nature of a Government seeking to increase taxation through stealth, and would in the end kill the goose that lays the golden eggs—the huge amounts of income tax and company tax levied on companies conducting foreign exchange business—for the sake of chasing a difficult market that is far more liquid and international than any tax collector. I hope that the House will reject the Bill.
Mr. Kelvin Hopkins (Luton, North) rose—
Mr. Speaker: Order. Only one Member is allowed to respond.
Bill ordered to be brought in by Mr. Richard Allan, Mr. Harry Barnes, Peter Bottomley, Dr. Jenny Tonge, Mr. Simon Thomas, Mr. Neil Gerrard, Tony Baldry, Ms Julia Drown, Mr. Paul Marsden, Angus Robertson and Andrew George.
Foreign Exchange Transactions Tax Commission
Mr. Richard Allan accordingly presented a Bill to establish a Commission to inquire into the feasibility of a foreign exchange transactions tax; to provide for the Commission's remit and duration; and for connected purposes: And the same was read the First time; and ordered to be read a Second time on Friday 19 April, and to be printed [Bill 111].
4.30 pm
Michael Fabricant (Lichfield): On a point of order, Mr. Speaker. You will be aware that the channel tunnel is still closed. I do not know whether you are aware that many jobs are at risk, not only those of the 6,000 or more people employed by English, Welsh and Scottish Railways, but those of people in my constituency and other parts of the west midlands who use the channel tunnel as the link to supply parts and equipment to the continent. The tunnel has now been closed to freight for several days, and there are still only 15 gendarmes and five security officers in Calais trying to protect the compound against several hundred illegal asylum seekers who are trying to enter the United Kingdom.
I do not have to tell you, Mr. Speaker, while we are at it, that we are still failing to sell any beef to France. Given that the Prime Minister has said that we are now at the heart of Europe and that he has considerable influence with the French, I wonder whether he or anyone else has told you that—in addition to the very important statement on audit that we have heard today—he would like to make a statement on whether we can resume exports to the European Union through the channel tunnel.
Mr. Speaker: I have had no indication of such a statement being made.
Orders of the Day
Commonhold and Leasehold Reform Bill [Lords]
[2nd Allotted Day]
As amended in the Standing Committee, further considered.
Schedule 6
4.32 pm
Mr. William Cash (Stone): I beg to move amendment No. 73, in page 100, line 6, leave out sub–paragraph (4).
Mr. Speaker: With this it will be convenient to discuss the following amendments: No. 74, in page 101, leave out lines 13 to 15.
No. 84, in clause 74, page 35, line 30, after the "company", insert—
'(4A) The regulations shall include provisions which shall insure that in the opinion of the appropriate national authority RTM companies shall have access to sufficient working capital to function effectively.'.
No. 83, in clause 78, page 38, line 46, after "before", insert—
'(2A) The delivery of a notice of invitation to participate by hand at or by recorded delivery to the flat held by the person required to be served under section 78(2) hereof shall be deemed to be good service on the day of such service.'.
No. 72, in clause 87, page 43, line 37, leave out—
'the claim notice is deemed to be withdrawn'
'the tribunal may, on the application of any person specified in section 86(2)(a) above, make an order declaring the application to have ceased to have effect on such dates as may be specified by the tribunal.'.
Government amendments Nos. 33A and 34.
No. 71, in clause 105, page 54, line 12, at end insert—
'(6) The tribunal shall have the power to appoint a new manager in the place of the RTM company if—
(a) the RTM company wishes to withdraw; and
(b) it is just and convenient to appoint a new manager.'.
Mr. Cash: We certainly had lengthy proceedings on the first day of consideration, and I have no doubt that we shall have some interesting debates today, particularly later, on forfeiture. We also wish to raise several important matters in the debates on the proceeding amendments.
Under amendment No. 73, we propose that certain provisions should be left out of paragraph 1(4) of schedule 6, which deals with premises excluded from the right to manage and buildings with substantial non-residential parts. That paragraph states:
- "For the purpose of determining the internal floor area of a building or of any part of a building, the floor or floors of the building or part shall be taken to extend (without interruption) throughout the whole of the interior of the building or part, except that the area of any common parts of the building or part shall be disregarded."
Amendment No. 74 would also leave out certain words in schedule 6 with regard to premises owned by a local housing authority. The words in question are:
- "This Chapter"—
- "does not apply to premises falling within section 72(1) if a local housing authority is the immediate landlord of any of the qualifying tenants of flats contained in the premises."
The Parliamentary Under-Secretary of State for Transport, Local Government and the Regions (Ms Sally Keeble) indicated assent.
Mr. Cash: The Minister nods. Therefore—in the hope that she will satisfy me on that question—I shall not need to take up a great deal of time.
Amendment No. 84 relates to clause 74, on the right to manage, and deals with the question of regulations. Serious questions arise about the right to manage and the membership and regulations provisions. Those are in common form and will therefore be applied across the board. Many of those who will be affected will want to know that there will be proper and adequate backing for the running of so-called right-to-manage companies. Because the provisions will be in common form, it is even more important that there should not be any unfortunate mishaps arising from a failure to provide proper and adequate working capital.
Our proposed new subsection states:
- "The regulations shall include provisions which shall insure"—
- "that in the opinion of the appropriate national authority RTM companies shall have access to sufficient working capital to function effectively."
I am sure that we all agree that it is in the nature of building maintenance that money is sometimes needed urgently. When a roof starts leaking or an underground water main bursts, urgent and possibly expensive works may be necessary. We all have experience of that, and it usually happens at the most inconvenient time. Work is required urgently and, when the regular repair work is started, more repairs frequently come to light, so that the cost increases dramatically. We all know that, after the urgent repair work has started, builders have a way of discovering things that require attention. Builders require prompt payment—otherwise they will simply walk off site.
An RTM company is likely to take over the management of a block after there has been widespread dissatisfaction with the existing landlord. In such cases, some tenants are likely to be withholding their service charge. That is normal and explains why it is necessary to have the right-to-manage arrangements. If there were no problems and everyone was always satisfied, there would be no need for such provisions. The first thing that the RTM company might need to do is bring leasehold valuation tribunal proceedings to extract the service charges due. The costs to the RTM company of such proceedings are irrecoverable, and that is another important ingredient in the practical approach to the problem.
The problem with the Government's proposals is that RTM companies have absolutely no working capital, yet to meet perfectly ordinary and foreseeable obligations—we not only imagine but know that they will happen—the RTM company will need working capital. The Government propose that such companies should be limited by guarantee and we discussed some of the arguments relating to companies limited by guarantee when we debated commonhold.
The members of a company limited by guarantee are unlike the shareholders of an ordinary limited company because they contribute no money up front to the company. I had an interesting discussion on that point with the Parliamentary Secretary, Lord Chancellor's Department, the hon. Member for North Swindon (Mr. Wills), because he is handling the Bill's commonhold provisions. I repeat for his benefit and that of the Under-Secretary of State for Transport, Local Government and the Regions, the hon. Member for Northampton, North (Ms Keeble), who is dealing with the Bill's leasehold provisions, that there is a real distinction between a company limited by guarantee and an ordinary limited company that has shareholders.
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