Finance (No. 2) Bill
Debate between Angela Eagle and Lindsay Hoyle(9 years, 9 months ago)
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Ms Angela Eagle (Wallasey) (Lab)
On a point of order, Mr Deputy Speaker. It has just come to my attention that the Government have tabled a motion for debate on the final day of this Parliament, with no notice whatever to myself as shadow Leader of the House. The motion proposes changes to the way in which the Speaker is elected—procedural matters in the House—with no consultation with Her Majesty’s loyal Opposition and no consultation with the Chair of the Procedure Committee, for debate in only one hour tomorrow. Is this in order? Do you believe that the procedures of this House should be bandied around by the Government in this way, and that we should have surprises delivered to us in this manner on the last day of the first ever fixed-term Parliament? The motion attempts to influence the results of the first thing that will happen in the next Parliament, with no chance for large numbers of Members who had no knowledge that this was happening to participate.
Mr Deputy Speaker (Mr Lindsay Hoyle)
It is a business matter for the Government, as the shadow Leader of the House is well aware. Rightly or wrongly—whichever the House may decide—a business motion was agreed to yesterday, as I understand it, and as we know, business of the House is decided by the Government, not by the Chair, so it is not a matter for the Chair.
Devolution and the Union
Debate between Angela Eagle and Lindsay Hoyle(10 years, 1 month ago)
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Ms Eagle
We are already doing some pre-work, before the election. We want this to happen very quickly after the election, and want to be ready to come forward with some views after proper conversations with people from across the entire country. We are looking at models such as the Scottish constitutional convention and the Irish constitutional convention, which happened after the crash. There are good models out there that we can use to bring about a process that would give a new settlement the legitimacy it deserves. [Interruption.]
Mr Deputy Speaker (Mr Lindsay Hoyle)
Order. The shadow Deputy Leader of the House needs to stop enticing colleagues to speak. I want to hear the shadow Leader of the House.
Ms Eagle
I will get on with that later, Mr Deputy Speaker.
Our amendment, had it been selected, would have brought about proposals that would meet the scale of the challenge and unite the country through conversation and consensus; that is exactly what we would seek to do.
When the Prime Minister appeared on his front step just hours after the result of the Scottish referendum was announced, his intention was not to bring our country together, but to try to find a new way to divide us with his partisan suggestion of English votes for English laws, which he appears to want to apply to Finance Bills. Instead of behaving like a Prime Minister, he behaved like a man concerned only with his own narrow party interest who was running scared of the UK Independence party.
The need for a distinct voice and identity for the English is something that I understand, but the issue is much wider than who votes on what, and in which way, in this House; today’s debate has demonstrated that. Look at what this Government have done to make worse the problem of unfair access to resources. They have instigated huge cuts to local authorities in England, and they have hit the poorest areas hardest.
The effect of the Barnett formula distribution pales into insignificance compared with what has been happening in local government allocations. My local authority will have suffered a 57% cut to its 2009-10 budget by the end of this Parliament, which is a loss of over £700 per household. While the social safety net is torn away in the Wirral, Surrey Heath has received an increase of £25 per household. With their modest announcements on some cities, the Government have come very late to any thought of meaningful devolution of power to the English regions. Indeed, they have centralised power quite significantly, beginning with the complete dismantling of the regional development agencies.
Meanwhile, Labour Members have been proposing the biggest devolution of power ever to the English regions. After the McKay commission reported on the West Lothian question, the Government’s own press release said:
“The Government is giving serious consideration to this report. Given the significance of the recommendations for both England and the UK as a whole, it is right to take the time required for a thorough and rigorous assessment.”
That welcome and sensible approach was thrown over on the morning after the referendum. I hope that we can see it reasserted in the months ahead.
Labour has a proud record of constitutional reform achieved by trying to find cross-party consensus. We devolved power to cities as well as nations. We passed the Freedom of Information Act and the Human Rights Act. We began the process of Lords reforms, and I hope that we will be able to finish it by establishing a senate of the nations and regions. We understand that there is more to the debate than just English votes for English MPs; it is about how our democracy works and how we can rebuild trust in it.
I urge Members to vote against the motion because of its reference to a review of the Barnett formula, which would go against the promises that were given to the Scottish people before the referendum. There is an exciting possibility of progressive change ahead and the prospect of a radical improvement in the way the UK is governed, which would take power and accountability closer to the people and renew our democracy. I believe that we should seize it.
Badger Cull
Debate between Angela Eagle and Lindsay Hoyle(10 years, 9 months ago)
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Mr Deputy Speaker
I will be quite honest: I do not treat what you have said as a point of order. There is no record of the vote as yet, and we will have to wait and see.
Ms Angela Eagle (Wallasey) (Lab)
Further to that point of order, Mr Deputy Speaker. This is now the second time the House has debated this issue on a Back-Bench motion, with overwhelming votes to stop the cull. What good is it having debates in Parliament if the Government are wilfully staying out of the Lobby, not involving themselves in voting for the policy that they are pursuing in the country, and taking no notice whatsoever of votes of this House. Is not this making this House an irrelevance?
Mr Deputy Speaker
I can understand that frustration is being shown at this time, but I am not in a position to offer any more advice.
Budget Responsibility and National Audit Bill [Lords]
Debate between Angela Eagle and Lindsay Hoyle(13 years, 10 months ago)
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Jacob Rees-Mogg (North East Somerset) (Con)
I entirely agree with the hon. Lady on the difficulty of forecasting, as even the best economic forecasters get it wrong, but I wonder whether she was as shocked as I was to read in the Financial Times about the bullying of the International Monetary Fund by the Treasury and the Financial Services Authority. Was that not a pretty disgraceful way to behave?
Mr Deputy Speaker (Mr Lindsay Hoyle)
Order. We are in danger of going off into past subjects. The hon. Lady may be tempted to answer, but we have to deal with the Bill before us and not with speculation in a newspaper about bullying. I think that we will stick to the Bill.
Ms Eagle
Thank you, Mr Deputy Speaker.
Let me be the first to say that the Opposition support an independent OBR, so long as it is indeed independent. In that respect, the OBR has some ground to make up and some points to prove after its very difficult start in life. Initially it was located a few doors down from the Chancellor in the Treasury and consisted entirely of Treasury civil servants. Its much vaunted “independence” was utterly compromised in June last year when it was unwisely bounced into the politically convenient early publication of employment forecasts, suspiciously just ahead of Prime Minister’s Question Time—the Minister did not refer to that incident. The forecasts themselves turned out to be controversial and the OBR ended up looking more like an offshoot of the propaganda machine inside Conservative central office than an independent and trusted forecasting organisation. Sir Alan Budd, the interim head of the OBR, announced his shock departure shortly afterwards. We may well have to wait until he writes his memoirs to find out exactly what really happened.
Mr Mark Field
Although the hon. Lady makes a fair point about explicit mandates, it is surely also the case that there was absolutely no explicit mandate for any of the actions taken by the erstwhile Government after 2008, given the situation that we found ourselves in.
Mr Deputy Speaker (Mr Lindsay Hoyle)
Order. We are getting tempted once again. If Members stick to the Bill, that will be helpful.
Ms Eagle
There is a difference between having an economic policy that is put into place directly after a general election, when manifestos said one thing and the Government did another, and responding to a crisis that very few people saw coming and that threatened the entire infrastructure of the global banking system. There are obviously differences between those situations, but I respect the hon. Gentleman’s expertise in financial matters, particularly regarding the City.
The Government have chosen to cut public expenditure faster and deeper than any other country in the industrialised world except Iceland and Ireland. They have chosen to announce the deepest cuts in public spending in the UK since the second world war. Nine months into the life of this Government there is still no sign of any plan for jobs and growth, but sensible people know that without a plan for jobs and growth it will not be possible to get the deficit down as the OBR predicts it should come down. Meanwhile, the cuts are beginning to bite and the OBR has forecast that more than 330,000 public sector jobs will be lost. Some 10,000 police jobs have been announced as going so far, and there are reports that 250 Sure Start centres will close. Unemployment, which had begun to fall, is now rising again and inflation, which was low and falling when we left office, is now rising. All that is before the effects of the Government’s ill-advised decision to increase VAT. Growth has stalled.
Mr Deputy Speaker
Order. Hon. Members have been tempting us away from the Bill, but I am sure that the hon. Lady wants to stick to it. We do not want to be tempted through further interventions, so if she will keep to the Bill, that will be helpful.
Finance Bill
Debate between Angela Eagle and Lindsay Hoyle(14 years, 5 months ago)
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The Chairman of Ways and Means (Mr Lindsay Hoyle)
It is too late to object now, so let us proceed.
Clause 4 ordered to stand part of the Bill.
Clause 5
Power to repeal high income excess relief charge
Ms Angela Eagle (Wallasey) (Lab)
I beg to move amendment 60, page 3, line 9, at end add—
‘(4) An order under this section may only be made once the Treasury has published a report, including—
(a) the outline for the proposed replacement arrangement for the provisions contained in Schedule 2 to the Finance Act 2010;
(b) a distributional analysis showing the likely impact of the proposed replacement arrangement; and
(c) the revenue implications of the proposed replacement arrangement.’.
Ms Eagle
The amendment seeks to delay the making of any order under clause 5 until the Treasury has published a report that outlines the proposed replacement for the provisions in section 23 of, and schedule 2 to, the Finance Act 2010, a distributional analysis of the impact of the proposed arrangement and the revenue implications of the replacement provisions themselves. Clause 5 creates a power to remove the paving legislation that would have enabled the so-called high income excess relief charge to be levied in time to be collected in April 2011. That was legislated for in section 23 of, and schedule 2 to, what I suppose we must now call the first Finance Act of 2010, given that we look to be on course to pass three of them this year. I never thought that I would be comparing Finance Acts to buses—none come along for ages and then three come along at once—but it looks like 2010 is going to demonstrate the similarity. We are only in the middle of discussing Finance Bill issues in this Session, and obviously we will resume with part two later in the year.
Finance Bill
Debate between Angela Eagle and Lindsay Hoyle(14 years, 5 months ago)
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Ms Angela Eagle (Wallasey) (Lab)
We have had an interesting debate. We just heard from the hon. Member for Morecambe and Lunesdale (David Morris) the most amazing reason why debate in the House should be curtailed that I think I have ever heard used in a democracy. I hope we are not going to hear more arguments that debate in the House should be curtailed because of the cost, as that seems rather odd.
I begin my response to a long and illuminating debate by adding my congratulations to those who made their maiden speeches. The hon. Member for North East Cambridgeshire (Stephen Barclay) gave an extremely entertaining speech about the history of his constituency. He told us that it was better known as the fens, which sounds a lot more exciting than its current name, which if I may say, is rather boring. He then spoke of the history of drainage in the fens and many of the issues that he is confronting as a newly elected Member. I wish him a long and happy membership of the House. He certainly made a good impression with his maiden speech.
My hon. Friend the Member for Scunthorpe (Nic Dakin) also made an extremely accomplished maiden speech this evening, paying suitable tribute to both his predecessors, Elliot Morley and Ian Cawsey. He displayed a passion for the constituency that it is now his privilege to represent. He lives there and clearly loves it, and I am sure that we will hear many more such contributions from him.
The hon. Member for Ipswich (Ben Gummer)—a chip off the old block—made a characteristically good maiden speech, as did the hon. Member for Weaver Vale (Graham Evans). The latter paid a tribute to his predecessor that Labour Members appreciated. I congratulate all hon. Members who made their maiden speeches tonight. I am not sure how many more maiden speeches there are to get through, but I have always enjoyed listening to Members’ first contributions to the House. After many years of listening to such speeches, I have not lost my enthusiasm for them.
The debate was initially joined enthusiastically and with a great deal of energy, but that energy petered out on the Government side of the House halfway through the evening. Instead of the usual to and fro of debate, there was no sign of anyone on the Government side willing to stand up to defend the Finance Bill. Government Members ran out of steam and stopped participating. As the Bill goes to Committee and Report in the next couple of weeks—unusually, that will take place completely on the Floor of the House—I hope they will show a little bit more stamina than they managed to show today, when the debate was somewhat one-sided.
The right hon. Member for Wokingham (Mr Redwood), whom I no longer see in his place, is one of life’s optimists. He told us that we are all far too pessimistic about the state of the economy. To listen to him, one would not have thought that his right hon. and hon. Friends on the Treasury Bench had spent the past few weeks driving down confidence in the economy with the scaremongering tactics they have been using to justify the measures in the Budget.
We then heard from the hon. Member for Dundee East (Stewart Hosie) on behalf of the Scottish Nationalists, who is a long-standing and experienced contributor to Finance Bill debates. I have served on many Finance Bill Committees with him and, as always, he brought his astute experience and forcefully expressed opinions to the debate. He was especially exercised about the increase in VAT in the Bill which, he said—I have to say I agree with him—contradicts the fairness theme that is purported to run through the Budget. He described it as unforgivable and economically foolish.
We also heard from the hon. Member for North East Somerset (Jacob Rees-Mogg) who gave us something of a history lesson and, like so many of his colleagues, foolishly raised the spectre of Greece. They really will have to stop doing that if they are to be reasonable and responsible.
One of the more interesting speeches from those on the Government Benches came from the hon. Member for St Ives (Andrew George), whose words we listened to with extreme care given his actions so far in tabling amendments to the Bill. Clearly, he is struggling with the VAT increase. It is worrying him. He said that he did not think the Red Book was accurate in its assessment of VAT as progressive and he raised the tantalising—for me, at any rate—possibility that he might consider amending the Budget in Committee or Report on the Floor of the House. We will certainly wait to see whether he does so, and we will look carefully at the issues that he wishes to raise.
We had a series of speeches from my side of the House, beginning with an extremely eloquent contribution from my hon. Friend the Member for Warrington North (Helen Jones), who talked about how regressive the VAT increase will be. She also said that the banks were being treated softly while industry was being treated relatively badly by the proposals in the Finance Bill.
We also heard from my hon. Friend the Member for North Durham (Mr Jones) and my right hon. Friend the Member for Oldham West and Royton (Mr Meacher), both of whom had pertinent critiques of the Budget judgment and the strategy implied by the Bill. We heard a tour de force from my hon. Friend the Member for Eltham (Clive Efford), who understandably had a go at the Liberal Democrats for their twisting and turning on VAT. He had some words to say about the Office for Budget Responsibility, which I will come back to.
We heard a superb speech from my hon. Friend the Member for Cumbernauld, Kilsyth and Kirkintilloch East (Gregg McClymont)—[Interruption.]
Mr Deputy Speaker (Mr Lindsay Hoyle)
Order. There are too many private conversations going on and it is difficult to hear. We are getting near the end and I am sure that hon. Members can wait a little longer.
Ms Eagle
Thank you, Mr Deputy Speaker. I was just mentioning the speech by my hon. Friend the Member for Cumbernauld, Kilsyth and Kirkintilloch East—I cannot pronounce the name of his constituency very well, but it is definitely in Scotland. He made a superb speech about the political nature of economics and the attempts that have been made to hide what are basically political choices by describing them as economic imperatives that are somehow objective. He exposed what he called superstitions and myths around that whole area and demolished a lot of the arguments that the Government have been making to justify the Budget judgment in the Finance Bill. In particular, he talked with great wisdom about the paradox of Government thrift, which he pointed out is completely unlike budgeting for households. I look forward to many more such contributions from him as the Bill goes through its stages on the Floor of the House.
My hon. Friend the Member for Bethnal Green and Bow (Rushanara Ali) also made a good contribution, which I particularly welcome because I enjoyed canvassing with her during her election campaign. She is already well-loved, liked and respected in her constituency. She asked an important question that the House would do well to bear in mind as we consider the policies and legislation before us: where is the justice in the Budget measures, which will hit the poorest hardest? My hon. Friend the Member for Wansbeck (Ian Lavery) pointed out the perverse glee he perceived among Liberal Democrat and Conservative Members over the pain that will be inflicted through the Budget and this Bill. His speech demonstrated the human face of public sector workers, many of whom have found their reputations decried in the newspapers, and the jobs and the contribution that public sector workers make to our society belittled.
My hon. Friend the Member for Bishop Auckland (Helen Goodman) observed that the Budget judgments are very optimistic on jobs and, in particular, growth prospects, and she highlighted the impact on work incentives of some of the policies and Budget changes in the Red Book.
Stephen Pound
On a point of order, Mr Deputy Speaker. I would never presume to teach you your job, but some of us on this side of the Chamber are having great difficulty in hearing the priceless words that the shadow Minister is enunciating because of the well-refreshed ejaculations that are coming from those on the Benches opposite.
Ms Eagle
Thank you, Mr Deputy Speaker. I am trying to put the idea of well-refreshed ejaculations firmly out of my mind.
I was about to discuss the analysis by Howard Reed of Landman Economics and Tim Horton of the Fabian Society of the progressive or regressive nature of the Budget. They calculated the effect of the entire package, not just the tax changes. They included the distribution of the billions of pounds of extra spending cuts that had been announced, and then added an assumption of 25% cuts in departmental budgets. Their calculation showed that the combination of all the measures announced in the Budget that this Bill begins to enact will take £1,514 from the bottom 10% of households, which is fully 21.7% of their income. In sharp contrast, the richest 10% will experience an annual loss in income and services of £2,685, which is the equivalent of just 3.6% of their income. If there were 40% cuts in departmental budgets, as was briefed by the Chancellor and Chief Secretary at the weekend, the figures would be grimmer still.
My right hon. Friend the Member for Normanton, Pontefract and Castleford (Yvette Cooper), the Shadow Secretary of State for Work and Pensions, commissioned the House of Commons Library to conduct a gender audit of the plans. It revealed that women would bear a disproportionate amount of the pain in the Budget. Of the nearly £8 billion net revenue to be raised by the financial year 2014-15, £6 billion will come from women and just £2 billion from men, despite the fact that women have considerably lower levels of income and wealth than men. The analysis does not include the impact of the savage cuts in public expenditure that the Deputy Prime Minister believes are necessary, and that are now being planned and announced. As women make up more of the public sector work force and rely more on public services, they will be hit harder by the pay freeze, hit harder by the job losses, and hit harder by the decimation of public provision for the needy, especially in their role as carers.
The Chief Secretary purported to rebut that earlier today by reading out a suggestion that the figures were not accurate because they assumed that all the family support is paid to women. It is not true that that assumption was made by the House of Commons Library. However, there are a couple of measures where the House of Commons Library has assumed 100% female receipt of benefits. That is the health in pregnancy grant and the Sure Start maternity grant.
The Conservative party and the Liberal Democrats will have to learn that merely asserting as loudly as possible that the measures in the Bill are “progressive” does not make it true. Producing a distributional table on page 67 of the Red Book which appears to show that it is progressive does not make their assertion true either, especially when the Institute for Fiscal Studies demolishes it the next day by pointing out that it included all Labour's key progressive measures enacted before the election to safeguard lower-income groups, and that it conveniently stops in financial year 2012-13, just before all the cuts to family support announced in the Budget are due to be implemented. If the Conservatives and Liberal Democrats were so confident that these measures are indeed progressive, they would commit the Government to carry on publishing those tables—[Interruption.]
Mr Deputy Speaker
Order. The House must come to order. Members are obviously coming near to the end. If we have a bit more patience, I am sure that we can move on.
Ms Eagle
If those two parties were so confident that these measures are progressive, they would commit the Government to carry on publishing those tables when the cuts really start to bite.
The huge hike in VAT is the regressive centrepiece of this regressive Budget and it features in the Bill. That is despite the fact that before the election the Prime Minister said on 23 April to Jeremy Paxman:
“We have absolutely no plans to raise VAT”,
and the Deputy Prime Minister fronted a huge VAT tax bombshell poster campaign warning about the dangers of electing a Tory Government, which still featured on his website until 9 o’clock this evening: when alerted to its continued presence by my right hon. Friend the shadow Chief Secretary, someone in the Deputy Prime Minister’s constituency finally did the decent thing and took it down.
Some Liberal Democrat Cabinet Ministers are even now trying to argue that VAT is not as regressive as they thought it was before the election. It seems that there is no limit to the depths that they are prepared to sink to justify the betrayal of their pre-election promises. VAT is regressive. It hits pensioners and those who are too poor to pay any income tax the hardest. Why then have the Government chosen to raise the bulk of their new tax revenue, nearly £13 billion, by using that tax?
We were assured that the cuts would be fairly distributed in a progressive way, but our early experience of the decisions coming out of the Treasury has confirmed our worst fears. The poorest areas have been hardest hit by cuts to discretionary programmes, which were intentionally aimed at areas in the most need.
One of the first cuts that the Government made was to the future jobs fund. That is at a time when we know, thanks to a leaked Treasury document, that the Budget measures alone will destroy 1.3 million jobs in both the public and private sectors and there are 69 students chasing every job. The prediction by the OBR that 2 million private sector jobs will be created in a mere five years is highly suspect, as an analysis by Adam Lent has pointed out. It took seven years after the 1980s recession and nine and a half years after the 1990s recession to create 2 million jobs, and we are expected to believe that the 2 million mark will be surpassed in record quick time despite the global shock of the credit crunch.
What about the sneaky little move from the retail prices index to the much lower consumer prices index as the definition used for benefit indexation? That cuts £6 billion from the benefits bill at the expense of pensioners and the poorest, the most vulnerable in our society. The delay in implementing the VAT increase will ensure that the price inflation it causes—
Mr Deputy Speaker
The right hon. Member is quite entitled to move the closure motion. It is the decision of the Chair whether to accept it, so what I would say is, Angela Eagle, I am sure you must be very near the end of your speech now.
Ms Eagle
I was talking about the sneaky little move from the retail prices index to the much lower consumer prices index as the definition used for benefit indexes. The delay in implementing the VAT increase will ensure that the price inflation it causes is not reflected in this year’s indexation cost, which is another sneaky saving from the poorest that the Government hope no one will notice.
This Finance Bill is a risky ideological experiment that will inflict real pain and suffering on those who did not cause the credit crunch. The Bill is regressive not progressive, it is deeply unfair and it is taking a huge gamble with an economic recovery that is not yet assured—we intend to oppose it.