Finance (No. 2) Bill

Debate between Catherine McKinnell and Jonathan Edwards

Wednesday 9th April 2014 Commons Chamber

[Catherine McKinnell]

The hon. Gentleman makes an important point, and I entirely agree that the Government should be absolutely focused on economic growth. The debate about APD is part of that discussion, and the regional air connectivity fund must also be part of the conversation. The Government need to provide clarity on those issues in this Finance Bill and in the future.

As I said, Labour remains to be convinced of the merits of devolving air passenger duty. The Calman commission proposed that it be considered, and the Labour Government committed to keep it under review.

[Jonathan Edwards]

The hon. Lady made a telling point in response to my hon. Friend the Member for Arfon (Hywel Williams) when she said that the Labour Treasury Front-Bench team remained to be convinced of the position taken by the Labour Government in Wales. As she knows, the Labour Government are in direct intergovernmental negotiations with the UK Government’s Treasury team. If the First Minister and the Welsh Government cannot convince their own party, what credibility can they have in those vital negotiations with the UK Government?

[Catherine McKinnell]

I have said clearly that the Labour party remains to be convinced of the merits of devolving APD, but let us remember that the Wales Bill that is currently going through Parliament contains a number of devolved tax powers for Wales and is the appropriate place to debate these issues in the round. Labour’s devolution commission in Scotland considered the matter again and argued that devolving APD within the mainland of Great Britain would generate unhelpful tax competition within the UK.

Finance (No. 2) Bill

Debate between Catherine McKinnell and Jonathan Edwards

Thursday 18th April 2013 Commons Chamber

[Catherine McKinnell]

The hon. Gentleman makes an extremely strong point, and one that I have made repeatedly. This might seem like small change to the Chancellor, but it could make a very big difference to some of the people affected by his failing economic plan.

I am sure, given the concerns recently expressed by apparently senior Liberal Democrats, that Lib Dem Members will join us in calling for a commitment from their Conservative colleagues in the Government. Indeed, only last month a member of the Liberal Democrat tax working group stated:

“While the Treasury’s own figures about the 50p are highly questionable, the politics of cutting tax for the very rich make no sense; there is no reason why a 50p rate shouldn’t be part of a solution for tough times.”

[Jonathan Edwards (Carmarthen East and Dinefwr) (PC)]

I agree with many of the hon. Lady’s points. Plaid Cymru will fight the next Westminster election on a pledge to reintroduce the 50p rate. Will the Labour party do the same?

[Catherine McKinnell]

We have made it perfectly clear from day one that we do not support the cut to the 50p rate now, and we call on the Government to analyse the impact of the introduction and premature removal of the 50p rate. When we come to publish our next manifesto, we will review the state of the economy and whether a 50p rate would be the right response. I hope that Members of other Opposition parties, as well as Liberal Democrats, will support our amendment, because it would help to establish whether the 50p rate would bring in the additional Exchequer revenue that was anticipated—but if the Government refuse to back it today, we will never know.

The President of the Liberal Democrats, the hon. Member for Westmorland and Lonsdale (Tim Farron), said:

“Cutting the top rate was a stupid thing to do. It probably raised up to £3bn a year. We should pledge to restore the 50p rate at the next election. It’s not enough to be fair, you have to be seen to be fair.”

Their current, or former, Treasury spokesman—I can never work out which he is—Lord Oakeshott—

Finance Bill

Debate between Catherine McKinnell and Jonathan Edwards

Tuesday 3rd July 2012 Commons Chamber

[Catherine McKinnell]

I will speak to new clauses 10 and 12, as well as the Government amendments that the Minister has already set out for us in quite some detail today.

The Opposition’s new clause 10 seeks to put a stop to the chaotic farce of ill-thought-through VAT changes being slapped on items from the pasty to the caravan, from haircuts to church alterations—imposed, defended, downgraded and then, in some cases, eventually quietly removed by Ministers during the parliamentary recess, once they realised quite how ridiculous the changes were to begin with, particularly given the current economic climate. We simply ask the Government not to meddle with VAT exemptions until they have carried out a proper assessment and worked out exactly what the impact of any change would be on jobs, living standards and businesses.

We assume that, before imposing a 20% tax, the Government will do their sums, work out who would be affected, consult them and think long and hard about whether such a change was a good idea. Our new clause 12 seeks to reverse the VAT bombshell, which, as I am sure many Members will recall, the Liberal Democrats shouted so loudly about before the election, and before they all subsequently discovered that they actually supported raising the 20% rate after all. That was a surprise all around, even to themselves, I think. In fact, everyone’s surprise about that was surpassed only by the discovery that the Liberal Democrats had also been in favour of £9,000 tuition fees all along.

Labour is clear that higher VAT hits the poor harder than the rich. It drives up the cost of living at a time when people are already feeling the squeeze, and it takes money out of people’s pockets and off the high street at a time when businesses are crying out for spending to drive growth. Our five-point plan for jobs and growth calls for VAT to return to 17.5% on a temporary basis until the economy is strong enough to cope with a rise. That would give £450 a year back to couples with children, to give the economy a boost and to drive growth.

[Jonathan Edwards (Carmarthen East and Dinefwr) (PC)]

The hon. Lady will of course recall that we had this exact same debate during last year’s Finance Bill, and when the House divided on a Plaid Cymru-Scottish National party motion her party abstained. Can she explain her party’s damascene conversion in tabling the same amendment to this year’s Finance Bill?

[Catherine McKinnell]

Can the hon. Gentleman clarify whether he is talking about the debate that we had on raising VAT from 17.5 to 20%, because that is what we are addressing today?

[Jonathan Edwards]

An amendment last year sought to do exactly what the measure she is arguing in favour of would do. That was presented to the House by Plaid Cymru and the SNP, and the Labour party abstained.

[Catherine McKinnell]

I thank the hon. Gentleman for that clarification. I do not have the full details of the intricacies of that particular debate, but I know that what I am proposing is our policy and we support it. We are going to vote today for this measure to reduce VAT to 17.5%.