The Economy

Bim Afolami Excerpts

Thursday 22nd March 2018 Commons Chamber

[Elizabeth Truss]

The figure that the hon. Lady has given is not correct. During the current spending review period, we are spending more per head on infrastructure in the north of England than in the south. In the longer term, there will be decisions to be made about which projects we fund in the north, but we are absolutely committed to ensuring that the north has its fair share of transport and infrastructure funding.

Since rail privatisation, the number of complaints has fallen by 75%, satisfaction has risen from 76% to 81%, and the days of waiting hours for a train and a stale sandwich from British Rail are long over.

Royal Mail was loss-making when it was in public ownership, sucking up resources that could have been spent on services such as the NHS. By contrast, it has been financially healthy in every year since privatisation. If Labour Members think that they could do a better job of running those services, they need to demonstrate how. On current form, I believe that their proposals would mean chaos and confusion, and if we include the £350 billion for the strategic investment board, they would also mean the addition of an eye-watering half a trillion pounds of debt to the UK balance sheet.

[Bim Afolami (Hitchin and Harpenden) (Con)]

My right hon. Friend is making a very powerful speech. Does she agree that the Government’s approach is about practically achieving the best outcomes for people, whereas Labour’s approach is ideologically driven and will lead the country into more debt and more borrowing?

[Elizabeth Truss]

My hon. Friend is absolutely right. Rather than giving people and businesses the ability to shape their own futures, Labour Members want to put power in the hands of vested interests such as the unions and big companies. They say that they want to get rid of the state aid rules. That would prevent competition from taking place properly, and the end result would be taxpayers, including small businesses and families, picking up the tab through higher taxes. Labour’s plan would mean less money for schools and hospitals, and more money diverted to loss-making businesses.

The reality is that Labour still has not learnt the lessons of its failings in 2010. It has not learnt that a Government with no control over public finances will damage the economy and damage public services. When Labour left office, we were devoting 45% of our national income to public spending, and we have seen the longest increase in debt since the Napoleonic wars. Labour just does not understand that allowing the state to get too big cuts out individual enterprise. It cuts out people’s incentive to take on risk, try new things and do new things. State-owned companies compete for space and resources with private companies, starving them of oxygen. What is worse is that what Labour is planning would have to be funded through higher taxes.

Under the last Labour Government, we saw public services that did not improve in terms of the outcomes for patients or students, but we also saw huge amounts of money squandered. The hon. Member for Stalybridge and Hyde (Jonathan Reynolds) is laughing. Is he laughing at the fact that in the international education league tables, the UK ended up 26th in mathematics? We saw no improvement, although vast amounts of money were squandered.

Through the fiscal discipline of the last eight years, we have reduced the deficit by three quarters to 2.3%, and we have reached the turning point of debt falling as a share of the economy in the coming financial years. Our efforts, needless to say, have been opposed at every turn by the Labour party, but they have restored confidence in our economy. They have boosted investment, and they have led to more jobs and growth. The Government’s concrete plan to get debt down has given us a competitive advantage. If businesses know that we can keep our house in order, they will base themselves here in the UK, creating highly skilled and well-paid jobs.

At the same time, we have ensured that our public services are improving through public sector reforms such as the introduction of academies and free schools, and programmes that have put more people into work. We are seeing record cancer survival rates, better school results and record employment levels, because we have made the decision to reform the way in which our public services work. Because of our stewardship of the economy, we are now able to target Government spending where it is needed and where we recognise that there are issues.

Alongside our national retraining programme, we are tripling the number of fully qualified computer science teachers, so that our young people are able to succeed in the modern economy. We are increasing infrastructure spending on things like transport, which the hon. Member for Colne Valley (Thelma Walker) mentioned, to a 40-year high, even though we are having to make difficult decisions elsewhere. Yesterday we struck a deal to give nurses and other NHS staff a 6.5% pay rise over three years in exchange for reform that will improve patient outcomes, to make sure we can continue to recruit high-quality people in the NHS. We can do that only because we have got control of the public finances and we have fixed the economy, measures that Labour opposed at every turn.

So let me be clear: if we had listened to Labour and let the public finances spin out of control, there would be no money to invest in public services, and there would be no money now for that NHS deal, so nurses would not get their well-deserved pay rise. It is Labour that put public services at risk by losing control of spending and crashing the economy. Conservatives are delivering a stronger economy, stronger public services and a pay rise for hard-working NHS staff.

We are not out of the woods yet, however. Debt and borrowing are still too high. Debt is forecast to peak at 85.6% of GDP in 2017-18, the highest it has been for 50 years. That leaves us vulnerable to economic shocks in the future that are by their nature hard to predict, but—worst of all—it places a burden on the next generation, because we are still spending £50 billion a year on interest payments, more than the combined amount we spend on the police and armed forces. So in order to ensure the UK’s economic resilience, improve sustainability and reduce the burden on future generations, we need to get our debt falling. However, even despite all these obvious facts that are all there in black and white, the Opposition continue to call for big spending announcements.

[Bim Afolami]

On debt interest repayments, will my right hon. Friend explain further how even a relatively modest rise in interest rates would make what is currently £50 billion of interest repayment completely unmanageable if Labour got in and we had a run on the pound?

[Elizabeth Truss]

My hon. Friend makes a good point, and the reality is that the Opposition are planning for a run on the pound; they have actually released documentation that suggests that this is a real risk should they get into power. I find that incredibly worrying.

As I mentioned, the Opposition have called for big spending announcements. That is fiscal fantasy land, and there are only two ways it could be achieved. First, we could borrow more and plunge ourselves further into debt, making us less resilient to any potential shocks that might happen to the economy. Secondly, we could increase taxes, which would be bad news for families, bad news for businesses and bad news for the economy.

The Opposition claim that they could just increase taxes on the highest earners. That is simply not true. The levels of taxation they are talking about for their plans for a state on steroids would lead to the highest taxes we have seen in peacetime history, and the people who would really suffer are ordinary working people struggling to get by, and struggling to get on the housing ladder. Those are the people who would be hammered by Labour’s tax increases.

Alongside our fiscal policy, we have a clear independent monetary policy and a macro prudential framework that has helped to bring inflation under control and promoted financial stability. We must remember what happens when the Government do not get this right: the banks had to be bailed out under the failure of Labour’s tripartite regimes. Our reforms, which included establishing the Financial Policy Committee in the Bank of England, have made sure we have the sound financial institutions that people can rely on. In 2017 the Bank of England tested the financial system against a scenario that was more severe than the global financial crisis, and our system had the capital to cope. Our independent monetary policy regime has also kept control of inflation, which is set to fall this year, easing pressure on living standards.

Ten years ago we were on the brink: we were teetering on the edge of a very serious crash, and public spending was out of control. Over the past eight years, and as a result of the policy decisions we have taken, we have seen a huge growth in the number of new businesses opening in this country; we have got more people, particularly the young, into employment; and we have put our public services on a sustainable footing.

We are getting our public finances back to black. This week’s economic news has been positive, but we are not complacent. We recognise that there is more work to do and we will continue to work hard to make sure our economy continues to grow, because as Britain prepares to leave the EU it is more important than ever that we unleash businesses and the people of Britain to fulfil their true potential.

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[Bim Afolami]

I want to take the hon. Gentleman up on his point about personal debt levels. Does he agree that it is because this Government’s fiscal management has been so sensible—and recognised as such by the international markets—that interest rates have been kept low? This means that personal debt repayments are now lower on average than they were when the Labour party left office.

[Peter Dowd]

We lost our triple A rating under the hon. Gentleman’s Government, so I do not think he has any room to point the finger at anyone.

While stressed-out doctors and teachers go to work every day, the Government duck responsibility and parliamentary scrutiny at every opportunity. The Chief Secretary to the Treasury might call these hard-working people “blobs”, but every day they run our health service and educate our children. Rather than spending her time attacking workers and the professional classes, the blob snob Chief Secretary should instead focus her attention on lifting the public sector pay right across the board and stepping up and taking action on our schools.

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[Peter Dowd]

Yes, and quite frankly, what the Government tend to do in these situations is stick their fingers in their ears. They do not want to hear these facts.

I know that the Chief Secretary to the Treasury has been much more active, particularly on our trade deficit in regard to dairy products and the interests of cheesemakers. This has led her to extol the virtues of “unfeta-ed” markets on so many occasions that I have begun to feel that I “camembert” it any more. It has become increasingly clear that the Government’s economic policy has more holes in it than a Swiss cheese. But there is a serious point here. During her seemingly endless public interventions, the Chief Secretary to the Treasury can only focus on a single theme. She has brought it back to us today, and I thank her for that. It is her belief that the state should continue to recede under permanent austerity. Schools, hospitals, social care, childcare, road maintenance, pollution standards and local government services more generally are all under the cosh, while her beloved market forces create new vape shops on every corner, and more misery.

[Bim Afolami]

To be more accurate, was not the Chief Secretary to the Treasury actually talking about a percentage of the total GDP of the state, and not the quantum amount? The heart of her argument was that if we continue to grow the economy as we are doing, we will have much more money for our public services. That was the real core of the point she was making.

[Peter Dowd]

Look, the reality is that the economy is not growing to the level it should be, because this Government are not investing in it. Actually, something like 50% of the growth in the economy is going to the most well-off 10%, and that is not reasonable. It is not fair. I ask the hon. Gentleman to bear those figures in mind. It is not simply a question of the growth in the economy; it is a question of where that growth goes and whether it is being shared out reasonably.

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[Peter Dowd]

I know; I was busy here. The hon. Member for Ochil and South Perthshire (Luke Graham) makes a point about exports, but we have seen the biggest devaluation in the pound for as long as anyone can remember, and I suspect that that has had something to do with it. It is hardly down to the policies of the Government; it is an unexpected consequence.

Let us move on to something released today. Her Majesty’s Inspectorate of Constabulary and Fire and Rescue Services yet again reports huge pressures on police forces, with emergency services responding not in seconds, minutes or even hours, but days. The “golden hour” is being stretched to up to a week—there is an achievement by this Government from a strong economy! It comes in the wake of the UK Statistics Authority having to correct the Prime Minister’s imaginative—not a word that we often use in association with the Prime Minister—use of police funding figures. I cannot see much cause to celebrate the current state of the economy after eight years of Tory austerity.

Britain continues to have astonishingly low levels of productivity compared with other G7 countries, which is a direct result of this Government’s failure to invest productively and proactively in the economy. Bizarrely, however, the Chief Secretary wants to celebrate—she did it again today—the poorly paid, precarious labour market that has fostered unproductive business models, which rely on exploitation instead of innovation and investment. For example, much of her Policy Exchange speech was spent singing the praises of Uber, as she did again today, but Uber’s labour practices and poor track record on safety have made it the subject of an investigation by Transport for London. She sits in awe of some large corporations that use every opportunity to dodge their taxes. Yesterday, we heard about Facebook misusing people’s personal data for profit. Is that the sort of country we want to live in? Of course it is not. Is that the sort of company that the Chief Secretary thinks is marvellous, wonderful and a model?

The Labour party embraces the opportunities of a fourth industrial revolution that empowers working people to take control of their own lives, yet the Conservative party wants to return to the practices of the first industrial revolution, when the world was dominated by the interests of the few. It is strange that the Chief Secretary talks about freedoms while advocating a society in which the broad mass of citizens are denied basic rights. For example, how has the slashing of public services, while tax breaks are being handed to big corporations, made us freer? It has only trapped people in poverty and poor health.

[Bim Afolami]

The hon. Gentleman’s speech illustrates the big dividing line between the two sides of the House. The Chief Secretary is concerned with people and consumers having access to high-quality, well-paying jobs and high-quality public services; the Opposition and the hon. Gentleman are obsessed with vested interests and the producers, many of which are not providing a good service to the British people.

[Peter Dowd]

Things are not going very well on that basis, but the bottom line is that that is the Tories’ one-dimensional approach to things. Producers and consumers often interact. The person who works in the factory is a consumer and a producer. This goes to the heart of why the Tories just do not get it. They are the one-dimensional party.

The Government’s entire economic strategy has been the transfer of private losses on to the public sector through austerity, using the state to pay for the losses built up by their donors. In other words, the Chief Secretary’s free, lightly regulated markets have ended up costing us all a good deal, and she now wants to expand that even further at greater expense to us all. Her Government’s economic strategy has left us buckling under huge national debt, with public services in crisis. It has left us with NHS trusts ending this financial year with a £1 billion deficit, and we have seen capital transfer to revenue for about the past four years, which is hardly the sign of a strong economy.

Oral Answers to Questions

Bim Afolami Excerpts

Tuesday 27th February 2018 Commons Chamber

[Elizabeth Truss]

We have given the NHS a sustainable settlement. It received an additional £6.3 billion, but it is also important that we reform our healthcare services, that we put in place sustainable transformation plans, and that we are investing in capital and new technology and making sure that we use our fantastic frontline workers—nurses and doctors—in the best way possible.

[Bim Afolami (Hitchin and Harpenden) (Con)]

As the Chancellor knows, investment in infrastructure is key to ensuring that we can build the thousands of homes that this country needs. Will the Chancellor agree to meet me, other Hertfordshire MPs and the leader of Hertfordshire County Council to discuss how we might be able to do that in Hertfordshire, where we need to deliver about 100,000 new homes?

[Mr Philip Hammond]

Yes, I am always delighted to meet my hon. Friend and his colleagues. Hertfordshire is one of the high-pressure housing areas, where it is absolutely essential that we deliver additional housing if we are to improve affordability.

Finance (No. 2) Bill

Bim Afolami Excerpts

3rd reading: House of Commons & Report stage: House of Commons
Wednesday 21st February 2018 Commons Chamber

[Helen Whately]

I am not surprised by the hon. Lady’s intervention. The point is that there is a thorough impact analysis of the Budget. Where does it get us if we endlessly go around these things, again and again?

[Bim Afolami (Hitchin and Harpenden) (Con)]

If we compare 2003 to 2006 under the Labour Government with 2013 to 2016, we will see that the number of women in business and entrepreneurship has grown by more than 40%. Does my hon. Friend agree that that shows the Government’s commitment to women in business?

[Helen Whately]

Another very well-informed point from a colleague about the great progress that women are making in the workplace with the support of this Government.

The headline point that I was keen to make is that this Government have a track record in reducing inequality. I am keen to ensure that we base what we say on the track record—the track record of improving the lives of people on the lowest incomes and of reducing inequality.

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[Stephen McPartland]

The hon. Lady makes a very earnest point, but I cannot accept those figures.

A huge amount of money has gone into social care. At the moment, there are people in my constituency on fixed and low incomes who are very disappointed about the 3% that is going to be levied on their council tax for social care, because that will have a negative impact on their income, although it helps other sections of society and is the right thing to do. This new clause is about academics and economists as opposed to helping real people on the ground on a day-to-day basis. Some Labour Members are shaking their heads, but they got involved in politics for the same reason that I did, which is to help people to get on in life and achieve the best that they can. That is why I am a Conservative and why most people in this Chamber are Conservatives.

Returning briefly to the welfare system, as that is my area of expertise, we want a system that works. When we look at universal credit, the Treasury’s distributional analysis provides an analysis of the cumulative impact on welfare and public services. My view is very much about developing policies to help people get on in life. New clause 9 is just about providing some information on what has affected people in the past over a number of years, and by the time we are focused on the next Budget or other fiscal event, things have moved forward again.

[Bim Afolami]

My hon. Friend is making, as I think everybody knows, a very powerful speech. Does he agree that new clause 9 is indicative of the fundamental difference between Labour Members and Conservative Members? We care about action and doing things and improving people’s lives; they want more analysis.

[Stephen McPartland]

My hon. Friend makes a very powerful point. We can see why he was selected to be the Member of Parliament for Hitchin and Harpenden. He stands up for his constituency incredibly well, as does my right hon. and learned Friend the Member for North East Hertfordshire (Sir Oliver Heald). I am proud that we have three Hertfordshire MPs who are speaking in this debate because we are interested in helping people to get on in life. As a result, we have incredibly low unemployment in our areas.

Finance (No. 2) Bill

Bim Afolami Excerpts

Committee: 2nd sitting: House of Commons
Tuesday 19th December 2017 Commons Chamber

[Laura Pidcock]

It is heartbreaking. Of course we want to keep as many of those brilliant young people in my constituency as possible, with the education they have received being put back into infrastructure and a rich economy, but the long-term employment just is not there.

New clause 6 would also address gender inequality, because it is women in my constituency and right across the country who have borne the brunt of inequality, as most women always do. Women, particularly working-class women, suffer structural inequality throughout their lives. On average, women earn less than men, have lower incomes over their lifetime and are more likely to be living in poverty. As has been mentioned, women are therefore less likely than men to benefit from cuts to income tax, and are more likely to lose out because of cuts to social security benefits and public services.

In conclusion, I urge Members to support new clause 6 and I call on the Government to carry out equality impact assessments so that my constituents can see, in black and white, the hard facts and the truth. If the Government are so proud of their achievements, why are they not shouting them from the rooftops so that they can receive full credit? Why not let everybody know what Government policy has achieved? Unfortunately, Opposition Members know that the facts will tell the truth and reveal that the Government do not care one jot about my region and that they are happy for wages to stagnate and for people to experience poorer lives with all the consequences that that entails. People in my constituency work extremely hard, and they definitely deserve much better. Please support the new clause so that we can see what the Government are actually doing to our region.

[Bim Afolami (Hitchin and Harpenden) (Con)]

I rise to respond to some of the points that have been made by Opposition Members. I shall start with what the hon. Member for North West Durham (Laura Pidcock) said about the Government, or the Conservative party, talking about how work is the best route out of poverty. Do correct me if I have misquoted you, but you went on to say that the work in our economy at the moment exacerbates poverty. You felt that it is currently not the best route out of poverty. Is that correct?

[Laura Pidcock]

Sorry, but is this a debate or a questions session?

[Bim Afolami]

I shall continue.

[Laura Pidcock]

rose—

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[The Temporary Chair (Albert Owen)]

Order. Is the hon. Member for Hitchin and Harpenden (Bim Afolami) referring to me, because he is saying “you”? He should refer to the hon. Lady, and if he wishes to take an intervention, he must sit down.

[Bim Afolami]

I give way to the hon. Member for North West Durham.

[Laura Pidcock]

In my speech I was talking about precarious work. In debates on universal credit, Government Members talk about it getting people into work faster, but we know that the system is for people who are in work and that they receive a top-up payment because their pay is low. I meet many people in my constituency, including social care workers who do not get paid for their mileage. They are working, say, 14 hours a day and getting paid for six hours. That entrenches their poverty because they do not have a proper contract and they are not being paid a fair rate, but they have all the outgoings that they would have if they were not receiving state help.

[Bim Afolami]

Whether it is in respect of the Bill, the new clause or what we are discussing now, the important thing is that it is of course the Government’s intention to create more better-paying jobs. That is what the Treasury team and everybody across Government strive to do every single day. That is not to say that every single person in this country is currently at the level of prosperity we would like, but that is the aim of all the activity that is coming out of the Bill and out of the Treasury.

[Stella Creasy]

If that is the aim, what data are the Government collecting to be sure that they are achieving it and to find out whether there are any variations? That is what we are talking about. The issue is not the policy, but whether it is having an impact and whether we can understand that impact. Does the hon. Gentleman understand that?

[Bim Afolami]

I do indeed understand that. There is currently so much data, much of which has already been talked about by Opposition Members, on regional disparities, and on disparities of race and age, and between urban and rural areas. There is so much data, so Government policy must aim to bear it all in mind, which is what Ministers do.

[Sarah Champion]

I am grateful to the hon. Gentleman for his generosity in taking interventions. We need to hear a few facts. The data that he is talking about, which we are citing as evidence of why this is so important, is being collected by charities and the House of Commons Library. With respect to both the duty of care and the provisions of the Equality Act 2010, this work should be done by the Government. That is what we are asking for.

[Bim Afolami]

If the hon. Lady will permit me, I will make a bit of progress and then I will respond to her remarks in the fullness of my speech.

It is important to make my next point in relation to new clause 6 clear. We have heard Opposition Members say that women, or certain members of ethnic minorities, are more likely to be lower paid than other members of society. By taking the lowest paid people out of tax and increasing the national living wage, we are benefiting those groups of people who might suffer from low earnings. In addition—

[Ian Mearns]

When Government Members talk about, and celebrate, the fact that people are being taken out of income tax altogether, what they are doing is celebrating an economy of low pay. They are celebrating an economy where people are being paid so little that they are just above, or just at, the income tax threshold. For me, that underlines what it is actually like out there in constituencies such as mine in Gateshead.

[Bim Afolami]

I am afraid that the hon. Gentleman is mistaken. It is not celebrating low pay to say that people who are currently earning lower amounts should take home more of their money. That is not a celebration; it is about making their lives, every day and every week, that bit easier. It is worth saying that taking the lowest paid people out of tax and raising the national living wage is having significant benefits for many of the people—

[Stella Creasy]

The hon. Gentleman is being very generous with his time. I think he may have missed one of the points that we are making. For example, when the Government raise the tax threshold, 66% of the people who do not benefit—because they do not earn enough—are women. Seventy three per cent. of the people who benefit from a rise in the higher income rate threshold are men. What he is talking about and what we are talking about are two different things. We are talking about the differential impact of policy, and asking the Government to do the sums that are currently being done in the charitable sector, so that we can make better policy. Surely he wants those sorts of policies to have an equal benefit, but at the moment they do not, because we do not have equal pay.

[Bim Afolami]

I believe that all policy in this area, or, frankly, in any area, should be set to make sure that we are trying to generate as innovative, dynamic and successful an economy as possible. The hon. Member for Walthamstow (Stella Creasy) mentioned cutting corporation tax in her speech. She thought that that effectively benefited more men than women because men are more likely to be shareholders than women. The way we should deal with that, in my view, is to encourage more women to be entrepreneurs. We should work to make sure that women have access to being shareholders and that women have more ability to reap the benefits of that—

[Jim McMahon (Oldham West and Royton) (Lab/Co-op)]

Will the hon. Gentleman give way?

[Bim Afolami]

If I may, I would like to make a bit of progress.

As the evidence has shown, cutting corporation tax increases, rather than decreases, the tax take going to the Exchequer. If that shows this country to be a better and more dynamic place in which to set up and start a business, that will benefit all people in this country. That is the approach that the Government should take. If we want to improve the performance of the British economy and if there happen to be more men than women who are shareholders, it is no answer to say that we should therefore not take action to improve the activity of the British economy.

[Stella Creasy]

I have a very simple question for the hon. Gentleman, although I appreciate that he is getting some assistance from the hon. Member for Spelthorne (Kwasi Kwarteng): can he produce the data to prove that men and women will benefit equally from the changes to corporation tax?

[Bim Afolami]

I do not have the data now to be able to respond to the hon. Lady. What I do know is that Conservative Members will never take lectures from the Labour party; we have our second female Prime Minister, the gender pay gap is the lowest on record, and this Government have done more for childcare and support for families than the Labour Government ever did. The idea that this Government should take lectures on this issue from Labour Members is disgraceful.

[Laura Pidcock]

The hon. Gentleman is celebrating two female Prime Ministers somehow drastically pulling every single woman out of poverty. That is not the answer. We need structural change and the evidence to tell us whether women are equal, not the tokenism of two female leaders. Margaret Thatcher did not do much to pull women in my community out of poverty.

[Bim Afolami]

rose—

[Dawn Butler]

Before the hon. Gentleman responds, will he give way again?

[Bim Afolami]

I shall.

[Dawn Butler]

I am sure that the hon. Members around the hon. Gentleman are trying to get him to stop talking, but Labour Members do not mind. It is actually nice to see you go through your journey of trying to put the pieces together and understand the problems we are talking about. You cannot justify any of your statements because you have no data.

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[The Temporary Chair]

Order. That was a very long intervention with too many “yous”. Let us get used to the parliamentary language and have a proper debate.

[Bim Afolami]

I will conclude my remarks by saying that it is important when we talk about these issues—in this House or outside—always to remember that improving the performance of the health service, the economy or anything relating to Government policy will benefit everybody in this country, if we make the right judgments and the right policy.

[Jim McMahon]

Well, well, well. When it comes to naivety, there is a very fine line; it can often be endearing before it eventually becomes quite offensive. And I did find the speech of the hon. Member for Hitchin and Harpenden (Bim Afolami) offensive. It began in the spirit of naivety. I could see that he was nervous at the beginning of his contribution—quite rightly, it turned out, towards the end—because he did not have the data that was being presented.

The debate went on and Labour Members presented the data, but rather than actually taking account of it, the hon. Gentleman continued, in a very odd way, to try to defend what most reasonable people would say is a quite indefensible position. He was essentially saying, “Listen—if men are doing okay, surely women will eventually do okay too.” I am not sure whether the solution he came up with to the shareholder conundrum was for women to find wealthy husbands who are shareholders, as if that might somehow lift them out of poverty and allow them to be the beneficiaries of the cuts in corporation tax.

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[Jim McMahon]

How dare the hon. Gentleman suggest that the 114 people working in that factory in Oldham were not in proper employment? They were producing, they were manufacturing, they were selling, and people wanted to buy the goods because they were of a high quality. It was not a handout or a giveaway. They were not sympathy cases: they were people who were working hard in a supported environment to produce something that people wanted to buy.

In some ways, this is the problem that we face. When the problem is so disconnected and not part of the everyday experience of Conservative Members, it is easy for them to ignore it. I cannot ignore it. When I go back to Oldham West and Royton, it is my community. I see the impact of cuts, of austerity, and of suppressed wages. I see the hollowing out of our employment structure. All right, people at the top are doing very well, and there are more jobs at the bottom, but the middle has been completely taken out. People talk about an economy that will support people into better employment, while 8 million adults and children are living in poverty in working households.

That is the economy we have in this country, because the routes of progression in employment simply do not exist. We are happy to be the bargain basement employment capital of Europe in this new relationship—let us be honest. Providing that the bankers and the insurance services are all right, we really do not care what it means for the rest of the economy as long as there are people working at Costa Coffee to serve the coffee in the morning. That is what the Government really believe. It is okay hon. Members shaking their heads, but where has the investment in our key industries gone? We need investment in manufacturing and engineering, creating jobs that produce things that people want to buy, pay decent wages, and support people into a lifelong career so that at the end of it they have a decent pension.

Speaking of pensions, what did the Government do in the autumn statement for the WASPI women? These women have worked and contributed all their lives, doing everything that was asked of them by Government. At the last minute, planning for their future, they were left cut adrift, and when they came to the Government to ask for support, the Government turned away.

[Bim Afolami]

rose—

[Jim McMahon]

I absolutely give way to the hon. Gentleman if he can justify that.

[Bim Afolami]

Would the hon. Gentleman welcome anything at all in the Government’s recently announced industrial strategy, which was, in many respects, targeted towards some of the poorer communities in this country?

[Jim McMahon]

I am going to give the hon. Gentleman a real answer on this point and not just grandstand, because it is important. I will explain the problem with the industrial strategy as it stands. For a town like Oldham, it is absolutely critical that the UK has an industrial strategy that holds water—that is forward thinking, ambitious, and has a framework of funding to support growth. I would welcome an industrial strategy that did that, and I think that when it started, that is what it tried to do. The problem is that something fairly dramatic has happened in the meantime, and that is Brexit. What I would have expected the Government to do in the context of the referendum result is not just to dominate Parliament’s time with the transitional and transactional relationships with Europe now and when we leave. I would have expected the Government of the day to produce a real, compelling vision of what type of Britain there is going to be when we leave the European Union. That has not taken place. The domestic legislation coming through this place is non-existent. Money is being taken out of vital public services that would be the foundation for the type of industrial strategy that is being talked about. Money is being taken away from our education and skills system, which would be the starting point for any investment strategy in our economy, particularly in manufacturing and engineering.

So would I welcome anything in the industrial strategy? I would simply welcome the principle of an industrial strategy, but it cannot be done on the cheap. We have seen—let us be honest about this; it transcends different Governments—a complete turning away from UK manufacturing and engineering, at the cost of the communities that people in this place represent. In order to replace that with a forward-thinking industrial strategy, the resources then have to follow, and we have not seen that—we have seen the opposite. Money has been taken away from our Sure Start centres and from our schools. Our colleges are chronically underfunded, with many on estates that are crumbling, struggling to keep up even with basic maintenance. Our apprenticeship system is in tatters since the introduction of the apprenticeship levy. All these things matter if we have a forward view about what type of country Britain can be.

The new clauses are important in that context because if we want to create, after Brexit, an inclusive and fair Britain that allows everybody to benefit, we have to make an honest assessment of where Britain is today. We are not in a good place. Our economy is shot. Our job market has been hollowed out, and the good, well-paid jobs in the middle have been taken away. Our housing stock is not fit for purpose and we are investing £9 billion a year into the pockets of private landlords, although we know that 40% of that stock does not even meet the decent homes standard. Those are the really important issues that Members need to think about. If they do not take proper account of what the information tells us, how on earth can we collectively make informed decisions that send us in a different direction?

Finance Bill

Bim Afolami Excerpts

Tuesday 31st October 2017 Commons Chamber

[James Cleverly]

My hon. Friend is spot on. I cannot help but think that new clause 1 is more to do with Labour Members feeling that they need to table revised clauses because they do not know what to say. A call for a review of this kind invariably occurs when people are not sure what to say.

Mr Speaker, you will be disheartened to hear that I am about to conclude my comments. I strongly urge Members on both sides of the House to reject the new clause. We should do everything we can to send a positive message to businesses currently in the UK, to businesses that may think about coming to the UK and to business people who are deciding where they will domicile and to pay tax. We need to let them know that the UK is open, ready to do business and welcomes business people, as long as they pay their fair share in tax and help to support the public services that we value.

[Bim Afolami (Hitchin and Harpenden) (Con)]

I felt that, as I was going to speak this afternoon, I should listen to speeches by colleagues in the House.

[David Linden (Glasgow East) (SNP)]

Controversial.

[Bim Afolami]

I know that is a controversial view that many have. In particular, I listened very carefully to the speech by the hon. Member for Bootle (Peter Dowd) from the Opposition Front Bench.

[Peter Dowd]

Quite right.

[Bim Afolami]

I am. The hon. Gentleman made some interesting remarks, but I am going to pick him up on one phrase, which we should think about and bear in mind as we look not only at the implications of new clause 1 but at the Bill as a whole. He said that the British public are no fools. As I listened to him expound on that, I thought to myself, “The British public in the public gallery and the many millions undoubtedly watching the debate at this moment are no fools and will realise that this Conservative Government, since 2010, have brought in more than £160 billion-worth of anti-avoidance and tax evasion measures.” The British public are no fools. They will realise that the Conservative Government, since 2010. have reduced the tax gap—the gap between what should be collected in tax and what actually is collected—to 6.5%, the lowest that has been recorded. The British public are no fools and will see that this Government, a Conservative Government, will abolish permanent non-dom status for the first time. Those are the practical achievements that the Bill helps to build on.

On the precise nature of new clause 1, I can do no better than agree with my dear and honourable Friend the Member for Chelmsford (Vicky Ford), who suggested entirely accurately that the timing of such a review may cause disruption. It may be a significant disincentive and difficult from a business perspective because of the Brexit negotiations and the situation at that time. It is also important for us, whatever party we represent, to recognise that this Government are making the case for a sustainable fiscal policy that makes sense in the modern world.

We have heard from many Members on both sides of the House about the international context in which we operate. We are in a smaller world; we all know the impact that technology and ease of travel are having on every aspect of life. Bearing that international context in mind, things are more competitive. We cannot rest on our laurels.

[John Redwood]

On that point, would my hon. Friend care to reflect on the issue of footballers? The Labour Front-Bench team was saying that footballers often got away with things under this heading, whereas I thought many people in Britain like the idea that very talented footballers could come to our country for a limited period of time under sensible arrangements for their tax affairs. Does my hon. Friend think that is reasonable?

[Bim Afolami]

Not only do I agree with my right hon. Friend about footballers, but I think that most people—among the millions watching this debate, as I have said—will recognise, because they see and enjoy the top-quality premier league football in this country, the impact that top foreign players make. It is not just footballers but music stars, artists, creatives, writers, financiers, businesspeople, entrepreneurs—all of them can be such an asset to this country. Footballers are a very visible example, but we should not forget the more hidden, less public face of that. Britain is good at attracting such people, and we should continue to be good at it, and be proud of that fact in this House.

On the Bill, the Government are making the case for a sustainable fiscal policy, and we must bear in mind the case for the simplification of taxes. The hon. Member for Aberdeen North (Kirsty Blackman) always makes good speeches, and made the point that simplifying taxes is a good aim that we should always think about. The Minister, the Government and everybody in this House should always be thinking of ways in which we can make things simpler. We should also always be thinking about ways in which we can make things fairer, and ensure there is a genuinely level playing field for all businesses that seek to work in this country. That is not only fair from an ethical perspective, but having a level playing field is an integral part of what makes Britain a good place to do business. We should focus on both simplifying our tax code and on making it fairer.

[Charlie Elphicke]

My hon. Friend is being generous in taking interventions. He served on the Finance Bill Committee so will have seen the size of the Bill; it resembles a doorstop. Does he think that we should shrink our Finance Bills and have simpler tax laws?

[Bim Afolami]

Yes, I did have the huge pleasure of serving on the Finance Bill Committee and it was fascinating. The Finance Bill is undoubtedly a whopper; it is huge. There is a good case—I am sure the Minister will come to this in his remarks—for saying that we need to think more actively about ways to make measures shorter and more easily digestible for hon. Members. I say that without detracting from the substance of what the Government are doing, which I completely support.

[Craig Mackinlay (South Thanet) (Con)]

The UK tax code is now 22,000 pages long and involves 10 million words. Does my hon. Friend agree that we need to lessen that level of complexity if we are to be globally competitive in the future?

[Bim Afolami]

I agree with my hon. Friend. Being in government is a complicated matter, and Rome was not built in a day. This Bill can continue the work that Treasury Ministers have already begun on how we address the difficulty involved in making things fairer and simpler, while also making sure that we have the right incentives for businesses to come to our country, and grappling with that in the context of trying to make sure that the tax code is simpler.

[Charlie Elphicke]

Does my hon. Friend agree that leaving the EU presents a great opportunity for us to take back control of our tax system and make it a lot simpler—and that, perhaps, all the EU rules are part of the reason why it has got so long and complex?

[Bim Afolami]

I hugely respect my hon. Friend. It is worth mentioning for the benefit of those who do not know it that he was a top tax lawyer, so he knows the value that complexity brings to tax lawyers in the City of London. On his point about the EU, I am no expert on these matters and defer to the Minister and other Members, but my view is that we must be more realistic and accept that a lot of things are of our own making; and with the advent of our leaving the EU we have the opportunity to make ourselves even better as a place to do business. I am sure that my hon. Friend and the Minister would support that.

[John Redwood]

The problem with the comments of the hon. Member for Aberdeen North (Kirsty Blackman) is that she wanted both a simpler tax code and to close loopholes. As I understand it, a great deal of its complexity and length has come from adding detailed ways of trying to close the loopholes, so there is a conflict there. Genuinely simpler tax codes have fewer taxes, which would be a great start, as would having lower rates with a common tax base. At present, however, we have too much complication, partly because of trying to close loopholes.

[Bim Afolami]

I accept that point. Members present appear to be reaching consensus that the Government should always be thinking of how to balance the need for fairness and simplicity with closing loopholes so that people do not take advantage of the fair laws in this country.

Many Members have discussed in the speeches made so far—I told you, Mr Speaker, that I was listening—the importance of businesses bringing in money to fund our public services. We all recognise that that is important; indeed, it is the reason why many, if not all, of us became Members of Parliament. However, it is also worth making the point that having a thriving economy in which individuals, on their own merit and through their own effort and time, can make the most of themselves is in and of itself a good thing. We should not always revert to thinking about business as something simply to be milked for the Exchequer; the Exchequer, the Government and Parliament should set, and are setting, a clear, simple, as-low-as-possible framework in which individuals and corporations can thrive. That is the sort of fiscal and economic policy that I support.

[Vicky Ford]

I thank my hon. Friend for the work he has done on the detail of this Bill. Does he agree that clauses 29 to 32 remove the loophole of permanent non-dom status, but clause 8 means that the UK can continue to benefit from the approximately £9 billion a year from overseas investments, yet if we accept the Labour amendment we put that £9 billion at risk?

[Bim Afolami]

My hon. Friend is expert in these matters and knows about them in immense detail, having served in the European Parliament. When both serving on the Finance Bill Committee and during this debate, I have been struck by the keenness of this Government to be fair at the same time as promoting competitiveness. Fairness and competitiveness together are what make Britain the best place in the world to do business.

[Alex Burghart (Brentwood and Ongar) (Con)]

It is an honour and a privilege to be speaking during the Report stage of the Finance Bill. You will know, Mr Speaker, although some Opposition Members might have forgotten, that I am the MP for Brentwood and Ongar. Today is a great day in the history of Brentwood, because “Woman’s Hour” has announced that it is the best place in the UK for women to live and work. That is something for us all to celebrate. Underpinning that achievement is the fact that Brentwood is a fantastic place to work and do business, and our sense of business acumen is itself underpinned by hard-headed pragmatism. When I bring my constituents complex pieces of legislation, including Finance Bills, they always ask me two things. They ask me whether the legislation is fair, and if they are going to get a good deal out of it. The measures that we are discussing are indeed fair, and I believe that taxpayers in my constituency will get a good deal from them.

Finance Bill (Fifth sitting)

Bim Afolami Excerpts

Committee Debate: 5th sitting: House of Commons
Tuesday 24th October 2017 Public Bill Committees

Unite and the GMB have done a lot of work on representing people in the sector and they give the example of a sous chef who was offered a salary of £28,000 per annum and accepted the position on that basis. When he received his contract, he saw that his actual salary was £16,000 and he was told not to worry, because the remaining £12,000 would be guaranteed as a fixed income generated by the tronc scheme. I am glad that the hon. Member for Hitchin and Harpenden looks shocked at that.

[Bim Afolami (Hitchin and Harpenden) (Con)]

On the question whether a scheme is being run by the employer or by employees or staff, is the hon. Lady alleging that employers are acting contrary to existing guidance and legislation? I am not entirely sure.

Finance Bill

Bim Afolami Excerpts

2nd reading: House of Commons
Tuesday 12th September 2017 Commons Chamber

[Bim Afolami (Hitchin and Harpenden) (Con)]

It is a pleasure to follow so many important, thoughtful and eloquent speeches from both sides of the House. I will refer to some of them, but start by considering where the British economy is today and by recognising, as my hon. Friend the Member for Brentwood and Ongar (Alex Burghart) has just made clear, that a lot of our discussions in this debate on productivity, on trying to increase median earnings, on trying to raise wages and on getting more money into people’s pockets are predicated on the lowest unemployment rate since 1975. They are predicated on the Conservative Government since 2010 finally taking action to address the deficit and the debt. We should not forget that fact, and we should realise that we stand on the shoulders of successful Conservative economic policy as we enter this debate.

This Finance Bill, as many of my hon. Friends and other hon. Members have already made clear, addresses many important issues and should be welcomed on both sides of the House. In particular, it addresses fairness. In what ways does it address fairness? It clamps down on aggressive tax avoidance and tax evasion. In particular, it makes sure that large multinationals pay their fair share of tax, which enables us to keep taxes on SMEs and ordinary individuals lower.

What is the Conservative Government’s record in this area? The tax gap is now only about 6.5%. For those Members who are unaware, the tax gap, to which many Conservative Members have already referred, contrasts the amount that a fiscal measure should yield to the Exchequer with what it actually yields. Our tax gap is one of the lowest in the OECD and is this country’s lowest for many, many years.

This Finance Bill ends permanent non-dom status for the first time—that definitely never happened under a Labour Government. There are a couple of other more technical measures on interest deductibility for certain companies and on offsetting losses for large multinationals. The Bill makes it harder for certain large businesses—by all means, not all—not to pay their fair share.

It is important that we consider what the Conservative approach to the economy has been. My right hon. Friend the Member for Wokingham (John Redwood) made a powerful speech at the beginning of the debate in which he eloquently set out how, as Conservatives, we believe in a higher tax take, not higher tax rates for individuals. The higher tax take is what is significant. Following up on what my hon. Friend the Member for North West Hampshire (Kit Malthouse) said, high tax rates on certain people or companies just to make ourselves feel better can often yield lower tax revenues for the Exchequer, which presumably is not a wise economic policy, although it seems to be the one pursued by Labour.

As we have heard many times, including just now from my hon. Friend the Member for Redditch (Rachel Maclean), the top 1% pay between 27% and 28% of all income tax, which is one of the highest levels this country has ever seen. The corporation tax rate has been reduced significantly since the Conservatives came into government in 2010. In the financial year 2009-10, this tax yielded £37 billion, whereas in the financial year 2016-17, it raised £50 billion. That is the impact of Conservative economic policy, and we should not forget that our approach is about raising the tax take, rather than raising tax rates.

We should also consider where fiscal policy is now and how we should think about it in the future. It is important that the Government seek to be a little more flexible in some of their actions on fiscal policy. It is important for business confidence that they present the positive, forward-thinking growth agenda for the 21st century that we all want to see. We need to expand opportunities and incentives for people to invest in this country and for people who run businesses, or who want to set them up in Britain, to expand them and grow. My hon. Friend the Member for North West Hampshire spoke eloquently and at length about the importance of this country’s difficulty in growing medium-sized companies into large ones. Let us be more ambitious in fiscal policy so that we can encourage more of that activity.

We all want to see Britain lead the world in every sector, be it tech, manufacturing or finance. I welcome the announcement at the March Budget about the Treasury looking at how to tax tech multinationals, which are currently not taxed as much as they might be, and working internationally to do so. By doing that, we can reduce some of the taxes that hurt SMEs, such as business rates and comparatively high payroll taxes. If we can think and work internationally with our global partners on how we tax big multinational internet businesses, we might be able to bring down the level of tax for individuals and SMEs in this country.

Conservative Members have made it clear that we want to make Britain an even more exciting, attractive place in which to invest, and my hon. Friend the Member for Newark (Robert Jenrick) made an incredibly powerful speech about the importance of simplifying the tax code. I urge the Minister and the Government to look again and more seriously at that. Many Members have referred to the fact that the Finance Bill is heavy and thick. I am sure the Minister has drafted it with absolute care and dedication, but is it not a shame that it is so thick and that we cannot have a simpler tax code? I urge the Government to look again at more proactive ways in which we can simplify our tax system to make it easier for everybody, both individuals and businesses, from across the world and within this country.

Let me finish by making a few remarks on a subject that has been raised many times in this debate, productivity, which is the missing piece in our economic miracle over the past few years in this country. So many incredibly intelligent people, economists from across the country and across government, have examined the issue, yet our productivity has stubbornly been stuck below that of some of our leading European partners. We all know some of the ingredients—they include skills, infrastructure and, in certain respects, the tax system—but one thing that is not considered enough is business confidence in our fiscal policy and economic future. I urge the Government to present a more positive vision: show us how we are going to become a 21st-century economy in a more productive way. Let us show the world that we are the place to be for leaders in tech, finance, manufacturing and all the other areas of our economy. If we can do that more effectively, we will improve the capital investment from all over the world that inevitably aids productivity.

I fear that I may be wearing away Members’ patience, so I shall finish. The Government have made significant strides in sorting out the country’s economy; the Finance Bill builds on that work, I am proud to support it, and I commend it to the House.

Finance Bill

Bim Afolami Excerpts

Tuesday 12th September 2017 Commons Chamber

[Kit Malthouse]

I was about to come to that. The rise in taxation on dividend says something about how we treat the proceeds of risk. The argument has always been that dividends should be taxed less than income to recognise that risk. More times than not, if someone invests in a company, they lose their money. In some spheres, such as life sciences—a specialist area of mine—nine times out of 10 they lose their money. If someone invests in a drug discovery company, it is quasi-charitable giving—nine times out of time, they are giving to the economy for the good of their health, hopefully. The notion that dividends should be taxed just like every other income starts to erode the idea that as a Government and a society we want to reward risk taking.

In future Budgets, I hope that Chancellors will find a way to re-instil the sense in ordinary working people that they should think about starting and building their own business. Sadly, over the last couple of years, the number of people contemplating starting their own business has dropped. A couple of years ago, it was about 39% to 40%; according to the latest survey, it is now only about 14%, and the single largest barrier that puts them off is access to capital—the ability to get the money to start a business.

[Bim Afolami (Hitchin and Harpenden) (Con)]

What is my hon. Friend’s view of the fact that many economists, notably the American economist Tyler Cowen, have recently discussed how innovation has been slowing down not just in Britain but in America and across the developed world? Not disregarding his point about taxation, I think that points to something more fundamental about western economies and how the economic system is working.

[Kit Malthouse]

That is a very good and broad point, and I could talk for a long time about it—[Hon. Members: “Go on.”] I wish. It is definitely my perception, and the evidence certainly shows, however, that the operation of capital is becoming more and more sluggish across the western world.

As I said earlier when I mentioned those top 500 companies, capital is incredibly sluggish, particularly in the EU. In this country it has long been said that that is partly the fault of the housing market, in which so much private capital is tied up because we like to own our homes. In other countries, such as Germany, where that is not the case, capital may be more dynamic, and there may be more capital for investment. Whatever the problem—and we think there is a problem—Governments have a role in unlocking and lubricating the capital that is out there.

I think that both the enterprise investment scheme and the small enterprise investment scheme are good and worthy. Over the last couple of years, however, I have been pressing for them to be deregulated so that it becomes easier for people to invest, and they will not need an accountant, a lawyer and pre-approval from the Revenue to achieve—in the case of the EIS—modest tax reliefs and benefits in the future. We need a scheme that recognises the quasi-charitable nature of giving. I would like to see a system in which people who invested in a business would receive 100% tax relief up front, and then, if they ended up owing capital gains tax, would pay the tax. That would be a nice problem to have. When I have started my businesses, the last thing on my mind has been whether there is any capital gains tax to pay. What has been mostly on my mind has been raising the money, getting going, paying the staff, finding an office, and all the rest of it. I think that such a system would be simple, easy and understandable, and would encourage a great deal more investment in the drugs, therapies and technologies that we need for the future.

The Government have a patient capital review on the cards. It kicked off about a year ago under the chairmanship of Damon Buffini, who, as Members will know, is one of those much benighted private equity guys, and I shall be pressing the Government, hopefully, for its conclusion quite soon.

The second thing that we must bear in mind about the signal that we send with the change in dividend taxation concerns young people. We have talked a good deal about home ownership for young people, but their ability to access assets in general is something that should trouble us all. Those assets include shares. It might be a good idea to give young people an incentive by suggesting that it would be beneficial for them to build up small share portfolios. The Government will say, quite rightly, that they can start individual savings accounts, and of course they can. Dividends are tax-free in an ISA, and given that the ISA allowance rose to £20,000 a year in April, it is possible to accumulate huge amounts of money. The problem with ISAs, however, is that most people hold significant amounts of cash in them. There is no limit to what can be held in a cash ISA, and far too much money in ISAs is held in cash rather than being invested in the productive economy. People should be sent signals that they should be investing in companies.