Amendment of the Law

Debate between Harriett Baldwin and Steve Baker

Monday 26th March 2012 Commons Chamber

[Harriett Baldwin (West Worcestershire) (Con)]

This is a Budget that rewards work from a Government who are making work pay, and I want to express on behalf of the small businesses in Malvern and the surrounding cyber valley in my constituency the enthusiasm that exists for taking advantage of the opportunities for growth and the lower taxation rates for small businesses.

Since today’s debate is the technology debate, I point out that in my constituency we have a growing cyber sector. There is an enormous amount of business growth, and it is estimated that 500,000 jobs will be created in the sector over the next decade. Those jobs are great for young people. There is enormous demand among firms in my constituency for teenagers who may have spent a lot of time in their bedrooms on their computers and have become ethical hackers. People in my constituency with those skills are snapped up by local businesses. Perhaps that is why the number of unfilled jobcentre vacancies in West Worcestershire rose by 70% last month, which shows that there are a lot of businesses with the confidence to take on an additional employee.

As a member of the Select Committee on Work and Pensions, I wish to make a point about the Government’s introduction of universal credit. We have talked a lot in these debates about the top rate of tax, but let us think about the rate that those on the lowest incomes had to pay for 13 years under Labour. Page 95 of the Red Book shows that the marginal deduction rate for a lone parent with one child working more than 10 hours was 100%. We are changing such disincentives to work by moving to universal credit, which will be very powerful in helping those on the lowest incomes into work and out of poverty.

I want to make the rather controversial statement that despite the bad press on behalf of pensioners on Thursdays, this Government have done more to help pensioners and future pensioners than any other Government in history that I can remember. First, there is the triple lock on the state pension, which will increase pensions every year by the higher of inflation, 2.5% or earnings. That is worth an enormous amount to today’s pensioners—no more 75p increases.

[Steve Baker (Wycombe) (Con)]

Did my hon. Friend, like me, hear the shadow Chancellor appearing on the Vine show during the week? The first person who came on after he had spoken was a pensioner, who denounced him and his measures.

[Harriett Baldwin]

My hon. Friend will also have heard in the Budget that we are abolishing the means test, which has been such a disincentive to saving for low-income pensioners, and bringing in a powerful simplification of the state pension. That will be worth much to future pensioners.

The Government are also introducing auto-enrolment, which will bring 5 million additional savers into the occupational pensions market. That is a most important step to strengthen the pensions system, and it has cross-party support.

Most important was what the Budget did not do. It did not make further changes to pension taxation and regulation, such as the amount that people can defer from their salaries to take as future retirement income. That is an important point for the overall stability of the system. Did you know, Mr Deputy Speaker, that under the previous Government it was possible to put £250,000 into your pension fund? That was absolutely extraordinary, and I welcome the fact that this Government have lowered that limit substantially so that pensions provide fewer tax reduction opportunities for those on the highest incomes.

Finally, the Government have taken some difficult decisions on overall pensions policy and made some sensible changes that will stabilise the pensions system and make it more sustainable for the future. This is a Budget that rewards work and is good for business, and I urge all hon. Members to walk through the Lobby this evening to support it.

Public Services (Social Enterprise and Social Value) Bill

Debate between Harriett Baldwin and Steve Baker

Friday 19th November 2010 Commons Chamber

[Steve Baker (Wycombe) (Con)]

I congratulate my hon. Friend the Member for Warwick and Leamington (Chris White) on the way in which he introduced the Bill. I strongly agree with the spirit of his remarks. It is only on the margin that I find myself disagreeing either with my hon. Friends or with the right hon. Member for Salford and Eccles (Hazel Blears), who is no longer in the Chamber. Where I am ambivalent is on a few philosophical points. Although I realise that philosophy may not be as fashionable in this place as it once was, I hope that Members will forgive me if I dwell on some of the philosophical aspects for a few moments.

As I said in an intervention earlier, it is my view that all enterprise is social. I believe that society is co-operation, and that in a society based on the division of labour, we necessarily cannot have a gift economy. We cannot have a planned economy. It is necessary for unhampered market prices to fall for us to discover people’s revealed preferences. We talked about values earlier. Values are so important, and so unique to the individual. They are about more than money, and yet people reveal the intrinsic, inherent values that they hold in their minds only when they disburse their own money. I do not just mean when they buy fripperies for themselves; I mean when they give to charity, and when they buy gifts for others. There is nothing dishonourable about spending one’s own money in line with one’s own values.

For a long time Labour Members have been appealing to reason. They have believed that if only the state had enough power, or the right power, or this, that and the other—if only it had a national or local framework—and if only enough power were exercised in society, things would be rational and reasonable and stable and static, and they would become better. I put it to the House, however, that the experience of the last 100 years has been that that has not happened.

I am rather reminded of the scene in “The Lord of the Rings” in which Boromir, I believe, turns to Frodo and begs to be given the Ring of Power because he would use it for good. I am afraid that the limits to the use of this Ring of Power—state power—are highly circumscribed. They are circumscribed, because society is a dynamic process of information discovery. It is simply not possible for the state to obtain the information that it needs in order to co-ordinate society by decree, or indeed to intervene powerfully in society to produce good outcomes. It is impossible because the information that is necessary is dispersed in the minds of millions, indeed billions, of people; it is impossible because the information is tacit, it is practical, and it could not be transmitted even if it were accessible; it is impossible because society is a dynamic process, and information is therefore discovered through the changing process of social interaction; and it is impossible because the very act of the state’s intervening to fulfil the whims of politicians and officials prevents information from being discovered.

Some people listening might recognise these as arguments advanced in the past under the heading of “The Fatal Conceit”. I fear that in our benevolent intent, with our good will, and given all those great things that we have heard today about building a better society, we are in danger of holding on to that fatal conceit: the conceit that the state, if only it could obtain enough information, could co-ordinate society.

The right hon. Member for Salford and Eccles pointed out that the state is often in the way of the very social entrepreneurs whom she wishes to see succeed, and that she wishes to see the system change in order to get it out of people’s way and get it behind them. But I ask the House how much longer we are to continue in the fallacious belief that if only we could change the way in which the state coercively determines what people are to do with their own lives, things would become better.

The right hon. Lady mentioned charities and mutuals, and we could also discuss co-operatives and friendly societies. I would not disagree at all with her intent in respect of such organisations. I think that they are healthy, I think that they are honourable, and I think it is a great pity that the labour movement was key in stamping them out. We are bearing the cost of its follies in that regard. I have no objection whatever to mutuals or co-ops or, indeed, trade unions. What I have an objection to is the use of coercive power to organise society.

Provided that those traditionally leftist labour movements are organised to sustain themselves by making a surplus, and provided that they are not bailed out with taxpayer’s money—we might well mention the banks, but perhaps that is for another day—I will support them. I will gladly support mutuality, co-operatives and, of course, charities. However, we have talked about the public ownership of capital goods. Labour Members have worried that capital goods might be—heaven forbid—privatised, but what is privatisation? Could it be that a mutual owning its own capital goods is private in some sense? Perhaps we need a new word, because to me “public” does not necessarily mean “state”, and “society” does not necessarily mean “state”.

I should be very happy indeed if assets—capital goods—currently owned by the state were put into the genuine ownership of mutuals. The question is not whether those assets should be put into genuine ownership outside the state; it is how ownership can be transferred in such a manner that justice is done. There is no doubt in my mind that many of those assets have been acquired by the state unjustly, but far be it from us to double the injustice by selling them in an inappropriate way, and then disbursing the capital gains by spending to live today.

In short, what concerns me is that we are lapsing into something which might best be described as communitarianism. It sounds so laudable. Oh, it does: it sounds so laudable—as did socialism, back when socialism meant Marxism. It always sounds so laudable. But the fact is, whether Labour Members like it or not—and I am afraid that the same applies even to some of my hon. Friends—in the end, when we come up with a national plan, a national social strategy, and local authority strategies for social enterprise, inevitably we must use the coercive power of the state in an attempt to direct society, a task that is impossible through the very nature of society itself.

[Harriett Baldwin]

It is a pity that my hon. Friend was not present when I made some comments about his earlier interventions, but let me ask him now whether he takes his philosophical position so far that he does not believe that the state should spend any taxpayers’ money. That seems to be the logical end point of his philosophical disquisition. Most of us would agree that we raise taxes coercively, and that we spend them; why should we not spend some of them on social enterprise?

[Steve Baker]

I am grateful to my hon. Friend for giving me the opportunity to say this. Given that I sit in this place as an elected politician, of course I believe that there is a role for democratic politics and for government. What I am expressing, however, is a deep scepticism based on solid theory, and indeed on the practice of the last 100 years, about any attempt to organise society using the state. I believe that such attempts are generally a mistake. That is not to say that the practice should be eliminated—far be it from any Member of the House of Commons to suggest that—but the fact is that it has not been a great success.

My hon. Friend is absolutely correct in saying that we are currently taxing and spending to an enormous degree, but we must make up our minds about whether that is healthy. It seems to me that the degree to which society has power is determined by the degree to which the state has power. The more power the state takes to itself, the less power society will have. I am afraid we must face up to the reality that, while the state is spending more than half of national income, human social co-operation is largely directed by the coercive power of the state.

My hon. Friend may well say that the logical conclusion is as she described, but I think that that was recognised by the old Liberals of the 19th century. Indeed, I wish that the new Liberals of the 21st century would pick up the same point. However, I do not suggest that we should go there immediately; I am referring to the direction of travel.