Budget Resolutions

Debate between Lord Grayling and David Davis

Wednesday 6th March 2024 Commons Chamber

[Sir David Davis]

I might return to that shortly.

The truth is, as my right hon. Friend the Member for Epsom and Ewell (Chris Grayling) said, the Chancellor has done a skilful job in dealing with an extraordinarily difficult backdrop. I think there are more things he could do—I will talk about that in a second—although much of that is down to the structure of Government decision making, rather than his fault. For example, as the Leader of the Opposition said, we are dealing with a world in which Putin has weaponised supply chains and destroyed the economic basis of our anti-inflation policy that has worked for the previous 10 years.

I understand the Chancellor’s caution and his desire to retain the confidence of the markets. Against that, it is remarkable that he has taken £20 billion out of national insurance, at about £900 a head for 27 million people and for another 2 million self-employed people. Frankly, people are underestimating the success the Government have had with inflation reduction and employment. For most of my time in this House, the idea of 800 new jobs a day, every day, for an entire Government’s tenure, would be extraordinary—that certainly did not happen under the previous Labour Government—so we have quite a lot to be happy about.

That said, if I had my way, I would not have gone for national insurance; I would have reduced income tax. Why? A lot of assertions have been made in the public domain, probably in relation to the Treasury, that national insurance is less inflationary than income tax. That is bogus nonsense. The only argument to support that is that cutting national insurance will pull tens of thousands more people into the employment pool, but so will cutting income tax. Because income tax applies to people above the age of 65, cutting it would also keep highly skilled and capable people, who we do not want to retire, in the workforce. I would have preferred an income tax cut rather than a national insurance cut, but that is what we have got and it is probably much better than we would have got from the Opposition.

While I am talking about income tax, I want to make one point en passant. At every Budget, I have raised the question of IR35, which is oppressive on small businesses and the self-employed. It drives people out of the country; the Public Accounts Committee is looking into that issue and I hope it will come up with a conclusion some time soon. I will keep at the Government to deal with IR35 and the related issue of the loan charge. Frankly, His Majesty’s Revenue and Customs is behaving in a barbaric manner, reminiscent of the Post Office, so I will continue to raise that issue.

I want to raise a number of structural matters. My right hon. Friend the Member for Wokingham (John Redwood) made the point I was going to make about the Bank of England. The current structure of the Bank of England, its guidelines and its rules, are flawed in a big way. They handicap the way Government can operate on fiscal policy and on inflation. We need to address that and my right hon. Friend made a good point about that.

There is also the issue of the OBR. George Osborne created the circumstance under which the OBR almost sets the guidelines and the fiscal rules for the Government. The Government are then terrified of what the markets will do if they do not follow the OBR’s attitude. I understand the Prime Minister has a picture of Nigel Lawson in his study. He ought to read Lawson, because Lawson’s view on economic forecasts of any sort was that they are pseudo-technical nonsense. He did not believe in forecasts and we would do well to learn from him. The whole British establishment is suffering from a collective delusion about the amount of authority that rests with OBR forecasts—in fact, with all Government forecasts.

Let me give the House an example. The Bank of England’s forecasts failed to predict the worst inflation crisis in modern times. In 2022, the OBR’s UK borrowing forecast was more than £100 billion—I repeat £100 billion—off the mark. Last year, the Office for National Statistics—not in forecasting, but just in measuring—announced revisions that added £50 billion to the size of the British economy. Panmure Gordon turned round and said that it had completely rewritten the story of post-covid Britain, which it had. A new report on the OBR has suggested that, since 2010, the combined total of the OBR’s errors in growth forecasts aggregates to over £500 billion, and its errors in forecasting public sector debt accumulate to more than £600 billion: this is the mechanism that Chancellors are using to decide how much tax they can afford to cut. To remind people, the fiscal rule is that there should be a reduction in the percentage in 2029—that is the difference between two guesses. It is not a rational way to run an economy.

[Chris Grayling]

I was particularly struck by the change to capital gains tax and the reference to the Laffer curve. Does my right hon. Friend agree that it is disappointing that the OBR in particular still does not appear to look at dynamic impacts of tax changes in a way that is essential for the future?

English Votes for English Laws

Debate between Lord Grayling and David Davis

Wednesday 15th July 2015 Commons Chamber

[The Leader of the House of Commons (Chris Grayling)]

I beg to move,

That this House has considered the matter of English votes for English laws.

This is, as I promised in the business statement last week, the first of two days of debate on the subject of English votes for English laws. It gives me the opportunity to explain once again the Government’s proposals and to listen to views from across the House. We committed last week to have two days of debate . We will have the second day when the House returns in September. I decided that for practical reasons it was not sensible to have a debate over two days with a large gap between them, so today’s debate is on a motion for the Adjournment. We will continue after the recess with the second day of debate, when the substantive motions will be put and debated. As I committed to the shadow Leader of the House, we will make provision for amendments to be tabled for that debate. It was always the intention that that would happen. The appropriate motion will be passed ahead of that debate to enable her and anybody else who wishes to do so to table amendments for discussion during that day’s debate.

[Mr David Davis (Haltemprice and Howden) (Con)]

I commend my right hon. Friend for amending the timetable on this matter, which is serious and important for the interests of the English, the Scots and the Union. Before the next debate, will he publish a list of the measures in the Queen’s Speech that he thinks will be affected in terms of who can vote for them?

[Chris Grayling]

I am happy to do that. We have already indicated previous Bills that would have been affected by this measure, and we continue to work on that. The certification process that will exist in future has not existed in the past, and there is a fundamental difference between territorial extent as indicated in a past Bill that, for example, might refer to England and Wales as a single jurisdiction but be applicable to England only. I am happy to ensure that what my right hon. Friend asks for happens. In the current Session, I am aware of only one Bill that is likely to be entirely English-only, which is the proposed buses Bill. Many other Bills will be partly English—or English and Welsh—only. I remind the House that, notwithstanding any future certification by the Speaker, every Member of Parliament will vote on every Bill that passes through this place, and no one will be excluded.

--- Later in debate ---

[Chris Grayling]

I am cognisant of the hon. Lady’s point. She would not expect me to announce the business in advance, but I take note of what she says. I can assure her that we will have a sensible process, and of course I will be available to hear comments from Members while the House is sitting and when it returns.

The other point raised with me, apart from the question of timetabling, was Members’ ability to vote on legislation that might have implications for the block grant, the so-called Barnett consequentials. There has been some discussion about how the House makes decisions on the block grant and how the Barnett consequentials work. This House approves the Government’s spending requirements each year through the estimates process, and we did that last night. The Government publish our spending plans, broken down by Department. The cash grants to the devolved consolidated funds that in turn fund the spending of the devolved Administrations are included in the relevant estimate: Scotland Office, Wales Office or Northern Ireland Office. Some of the individual departmental estimates are debated each year. The choice of these debates is a matter for the House through the Liaison Committee.

The decisions on the estimates are given statutory effect in a Bill each summer. The whole House will continue to vote on these supply and appropriation Bills. Through those means, decisions on the block grant funding to the devolved Administrations are taken. The block grant total each year is based upon a number of factors, including the calculation of Barnett consequentials, or the impact of individual spending decisions in different parts of the UK.

There are no readily calculable Barnett consequentials arising from individual Bills, because there is no direct relationship between any one piece of legislation and the overall block grant, even when the Bill results in extra spending or savings. An education Bill for England does not change the Department for Education’s budget outside the estimates process.

The two processes are separate. Decisions relating to departmental spending, including the block grant and the outcome reported to the House, are taken first in spending reviews and then in the annual estimates process. It is up to Departments to operate within the limits of the Budget allocation agreed. Any costs associated with legislation they take through Parliament must be borne within a Department’s overall budget.

We have listened to Members’ concerns and I understand the need to clarify the position relating to expenditure, so I want to be crystal clear. In order to assist today’s debate, I have republished the changes we propose to make to the Standing Orders of this House, with some small but important clarifications. They make it absolutely plain that Members from across the entire House—all Members—will approve departmental spending, which, as I have said, sets out the levels of spending for the devolved Administrations, reflecting Barnett consequentials. All MPs will vote on the legislation that confirms those decisions.

In addition, we have clarified that where legislation involves an increase in a Department’s expenditure, as voted on by the whole House in the estimates process, all MPs will continue to vote on that specific decision. All aspects of public spending will continue to be voted on by the whole House.

[Mr David Davis]

I am one of those who have raised very firmly with my right hon. Friend the question of the Barnett formula. The handling of the House’s procedures is as much about perceived fairness as it is about actual fairness. He is right to say that most Bills do not have large carry-over implications for funding, but occasionally they might and under such circumstances the Bill’s money resolution becomes incredibly important. I make this point speculatively—I have not come to a conclusion on it myself yet—but perhaps my right hon. Friend should allow the House to debate such money resolutions so that if, for example, the right hon. Member for Gordon (Alex Salmond) wanted to object to a particular measure because of its money implications, he could then do so.

[Chris Grayling]

I have listened carefully to my right hon. Friend. Money resolutions will also be voted on by the whole House. There will not be a decisive English say. I take note of my right hon. Friend’s comment on the timing of debates. Mr Deputy Speaker, I suspect that you and your colleagues in the Chair would regard comments about a money resolution as in order in a debate on a Bill, but if that proves to be a problem I am very open to looking at whether we can find another way to ensure that money resolutions can be debated.

Criminal Justice and Courts Bill

Debate between Lord Grayling and David Davis

Tuesday 13th January 2015 Commons Chamber

[Chris Grayling]

My judgment was that a conventional level of judgment against public interest was not sufficient in this circumstance. We have discussed it extensively in the Department among my ministerial team and with our advisers. I have no qualms about setting a higher test. It will be a matter for the judges to decide how and when that test should apply. As my hon. and learned Friend would expect, rightly, the judges should have the discretion to do that. But I do not think it is unreasonable for this place to say that it wants a test that is a bar higher than the conventional public interest test and that this should be used only in exceptional circumstances.

[Mr David Davis (Haltemprice and Howden) (Con)]

I speak from memory, so forgive me if I do not have this exactly right. My understanding was that my right hon. Friend wanted effectively to strike out judicial reviews that were almost procedural, in which the outcome would have been the same whether the organisation had obeyed the rules or not. Could he see procedural issues being an exceptional public interest? I think that they are an important public interest: that we make our agencies and our Governments obey the law. It is after all the point of judicial review.

[Chris Grayling]

That is absolutely the case, but on more than one occasion in my ministerial time, and the same applies to Ministers in other Departments, I have faced cases that were brought on matters of public policy but were based on relatively minor procedural defects in a process of consultation, for example. Minor breaches should not automatically lead to a case being brought, with the taxpayer facing a bill of tens of thousands of pounds, when it was highly likely that the decision taken would have been completely unaffected by that procedural defect. That is what these proposals are all about.

Transforming Legal Aid

Debate between Lord Grayling and David Davis

Thursday 5th September 2013 Commons Chamber

[Chris Grayling]

The key to ensuring there is no miscarriage of justice is to make sure someone is properly legally represented. None of the proposals we have put forward have ever done anything to undermine the principle that in a trial somebody should have a properly qualified advocate of their choice to represent them, and that we must make sure that we have state of the art police and prosecution services—and my right hon. and learned Friend the Attorney-General is working hard to make sure we have a prosecution service that is as state of the art as possible. It is, of course, essential that we do everything we can to make sure there are no miscarriages of justice. Nothing in these proposals should mean that miscarriages of justice are more likely.

[Mr David Davis (Haltemprice and Howden) (Con)]

I welcome unreservedly the Justice Secretary’s response to the House’s concerns about the criminal justice system. What he has done in that regard has been excellent. However, I and other Members still have concerns about some of the proposals that have constitutional implications—judicial review, the residency test and so on. The Joint Committee on Human Rights is reviewing the Justice Secretary’s proposals. Will he wait until it reports before implementing the proposals with constitutional implications?

[Chris Grayling]

The JCHR wrote to me to ask about the timetable, but we tabled our proposals back in April and made it pretty clear what the timetable will be. Of course I will talk to that Committee, but we need to make progress on the financial side. We will shortly be carrying out a further consultation on judicial review matters. I am open to listening to all Members of the House on those elements we are consulting on, and those that require legislation will be fully debated in this House.

Voting Eligibility (Prisoners)

Debate between Lord Grayling and David Davis

Thursday 22nd November 2012 Commons Chamber

[Chris Grayling]

I welcome the right hon. Gentleman’s comments. I think it is worth recalling that when the convention was written, back in the 1950s, Stalin was in power in Russia and people were being sent to the gulags without trial. That is what the convention was all about, but over the past 50 or 60 years the Court has moved it away from those fundamentals, and into a territory that many of us find deeply unsettling and wrong. I think there is a compelling case for reform, but while the current situation continues, we must none the less respect the laws of which we are part, and put to Parliament the questions that I am putting to it today.

[Mr David Davis (Haltemprice and Howden) (Con)]

As the right hon. Member for Blackburn (Mr Straw) has just demonstrated, this is a non-partisan, parliamentary issue—a matter of debate across the House. In that context, I congratulate my right hon. Friend on doing exactly the right thing in the Bill and handing the decision back to Parliament. I am sure, given the debate that the right hon. Gentleman and I secured some time ago, that the House will effectively decide on the status quo, but that is for the House to decide. If that is what the House decides, does he accept that it will set a precedent, and that every time the European Court goes beyond the remit set by the treaty, to which we did sign up, Parliament will reserve the right to correct it and put things back into proper law?

[Chris Grayling]

My right hon. Friend has set out clearly the legal position: Parliament has that right. It has been endorsed in the comments made to a Committee of this House by the Attorney-General, as it was in the House of Lords 13 years ago by Lord Justice Hoffmann. That is the legal position—Parliament is sovereign, and long should it remain so.