Finance Bill

Debate between Bill Esterson and John Redwood

Tuesday 1st July 2014 Commons Chamber

[Mr Redwood]

I thought that I had dealt with that point. As far as I am concerned, it was proven conclusively in the ’80s that taking the rate down from 83% to 40% increased the revenue very substantially and on a sustainable basis. That was sufficient to persuade the official Labour party—perhaps not some Labour colleagues here today—not to increase the tax rate from 40% throughout its long years in government until the very end.

[Bill Esterson]

Does the right hon. Gentleman not recognise that the economic circumstances are now rather different from those he is talking about. Surely we need a study, as the new clause proposes, to enable us to look at what is happening now.

[Mr Redwood]

I do not think that the economic circumstances were as different as the hon. Gentleman thinks. In the early ’80s the Conservative Government inherited an economic crisis from Labour, just as this Government did. There was a lot of unemployment and a big task in getting people back to work and getting the economy growing again, rather like today. The Government at the time managed to do that, just as this Government are, so I do not accept his point.

However, I find the fact that Labour is going backwards on these issues rather perturbing. Why can the modern Labour party not understand the basic points that the Labour party that was victorious between 1997 and 2010 understood fully? Why can it not understand that it is possible to take the tax rate too high and get less revenue? The Treasury has now accepted the doctrine of the Laffer curve and understands that putting the tax rate above the optimising rate would surely be a very foolish thing to do. It knows that that applies to capital gains tax, as it clearly does to income tax. I submit that 50% was well above the optimum rate, because we collected rather less revenue than many people would have liked. I welcome the fact that the Government have started to put that right.

I do not think that we need the study that the Labour party is recommending today, and I advise it to think again about what it learnt in the ’80s and ’90s but appears now to have forgotten. It shows that the former Labour Chancellor was clearly not crowd-pleasing when he refused to increase the rate from 40%—he was clearly antagonising many of his Back-Bench colleagues by not doing so—so there must have been a good reason for it. I think that reason was a sensible one: it would have raised less revenue, rather than more. I urge the Government to reject new clause 14.

Academies Bill [Lords]

Debate between Bill Esterson and John Redwood

Monday 26th July 2010 Commons Chamber

[Mr Redwood]

The main mechanism by which academies could take more of the money would be by their being extremely popular and attracting more pupils, because most of the money follows the pupils. That is a thoroughly benign pressure. If these academies are going to take off and develop extremely good standards and reputations, they will attract more pupils and get more money, which they will need because they are teaching more pupils, and the other schools will need to pull their socks up. If the outcome is not as successful as that, the hon. Lady’s worries should fall away. Surely she must accept, however, that we need some challenge and improvement in the system, and that there is nothing wrong with choice.

Why is it that someone like the hon. Lady does not trust anybody other than the state and is never prepared to give anybody any freedom to initiate, innovate, change and improve? Cannot she see that we desperately need to raise school standards, and that we need to do something to try to make that happen? Her system was tried for 13 years, and it did not work.

[Bill Esterson (Sefton Central) (Lab)]

The right hon. Gentleman’s point about trust is unfortunate, to say the least. Governing bodies do not always get these things right, and that is why some kind of mechanism needs to be in place. The amendments are trying to achieve that and to remedy some of the problems caused by our not having enough time to do the job properly in Committee.

[Mr Redwood]

I have said that I love democracy, and it is often a good idea to give more people more votes. However, let me deal directly with the issue. Parents are not without powers or influence in this situation; if they were, I would immediately sign up to the amendment tabled by the hon. Member for Southport. I suspect, however, that Ministers will argue, like me, that it would be a nice addition but is unnecessary because there are other checks and balances in the system.

Let us consider those elements. First, there is an elected local authority that will have a lot of influence and control over these schools. Its voice will be heard because it has considerable influence over the appointments of the very people who will be making this proposal or decision for each school. The local authority often has members on the governing body, and the governing body has parent representatives. If the parents became alarmed by the way in which the head teacher and the senior governors were moving, they would presumably make their voice heard through the parent governors or use their ability to change those governors to make the point.

Finance Bill

Debate between Bill Esterson and John Redwood

Thursday 15th July 2010 Commons Chamber

[Mr Redwood]

Indeed, it tried to stop them on many occasions. If we do too much of that, however, we have a poorer country, a smaller tax base and all the rest of it. It is a pity that the Labour party still has such a downer on success, prudence and savers, but it might be surprised—hopefully, pleasantly surprised—in due course to find that people on more modest means take advantage of this flexibility as well. We no longer live in a world in which everybody retires at 65 and does no more work. I see around my constituency many people taking on paid work into their late 60s and early 70s, either because they want to or, in some cases, because they have to in order to supplement their resources. Why should we debar them from this flexibility any more than richer people, if they have savings?

[Bill Esterson]

The right hon. Gentleman mentioned the record of the last Labour Government on pensions, but what about the record of the previous Conservative Government when it came to the mis-selling of pensions? I trust he would accept that that was a serious problem.