Finance Bill

Debate between John McDonnell and Catherine West

Report stage & 3rd reading
Monday 24th May 2021 Commons Chamber

[Catherine West (Hornsey and Wood Green) (Lab)]

I rise to speak briefly in support of Labour’s new clause 24. We are often told, are we not, that the boldest measures are the safest. Unfortunately, the Government seem to have done a bit of a U-turn, or failed to be bold, going from a promised 3% to 2% on their non-residence surcharge. That is a hugely missed opportunity. It could really have helped the London property market, holding to account the wealthy as opposed to so many of those who struggle to get on to the property ladder.

I also want to talk about the register of overseas entities. First, I echo the words of my hon. Friend the Member for Hackney South and Shoreditch (Meg Hillier), who talked so movingly about those in housing need in her constituency. That is something that many of us in London see, day in, day out, in our surgeries. In my case, I think of particular companies that, after properties are built, purchase a number of different apartments, selling them, for example, to the far east. Even people who have saved and saved cannot afford to purchase an apartment in that block, as opposed to those who buy an apartment to hold as an investment, even keeping it empty at a time when we have such desperate housing need. The Treasury should consider clamping down on this practice.

On the wider point that this measure could address if it were not so shy, consideration should be made of the cost of assets and the fact that the huge inflation of assets does not help savers or the young. There are so many young people in desperately insecure employment who will never get on to the housing ladder unless we start to address this terrible situation. We also know that with low interest rates it is almost impossible to save the amount of deposit that is needed. The Help to Buy scheme, which in some parts of the country has worked quite well, has not worked particularly well in many of our neighbourhoods. It simply has not been able to touch the sides of what is needed.

The second point I want to make on the amendment on the register of overseas entities is, once again, how disappointing it has been that we have failed to hold to account those abroad who seek, for various reasons, to hide their financial interests in the UK. We look at this in the context of the Sunday Times rich list from last Sunday, where we see 24 new billionaires in the UK while 4.3 million children in the UK are living in poverty. That desperately needs to be addressed, yet it is five years since David Cameron first promised, when he appointed his anti-corruption tsar, to actually do something about corruption and overseas finance. Instead we have this go-slow, whether on having proper credentials for registering businesses at Companies House, on some of the measures in the Bill or on going from 3% to 2%. Who stands to benefit from that? It is not our constituents; it is people abroad who clearly have some kind ear of the Government. That desperately needs to be addressed.

Having read Catherine Belton’s book “Putin’s People”, I hope the Minister is able dispel my fear regarding its allegation that £1 million has gone to the Tory party from Mr Temerko, who is a very wealthy Ukrainian businessman. That money is tied to a corrupt regime where the courts will do the bidding of the Government in Russia. That money is tied up. We should not be beholden to these people; we should be standing up to them.

I also want, while I am talking about the register of overseas entities, to comment briefly on the terrible situation with Belarus in the last 24 hours. The Treasury needs to be much more campaigning. I know that working for the Treasury is all dry facts and figures, but look at how important its work has been in saving our economy and saving our workers. Well, let us now look at how revolutionary it could be in holding to account some of the corrupt regimes that have their money tied up in London’s economy. Will the Minister look at whether he can work with the Foreign, Commonwealth and Development Office to bring forward sanctions against state-owned enterprises—some of which continue to have UK subsidiaries, such as BNK UK, which is the UK arm of the Belarusian state oil company—and outline how the Government can plan to stop the Belarusian Government from using the London stock exchange to raise money and sustain Mr Lukashenko’s grip on power? Furthermore, how can the Treasury, working together with the Foreign Office, examine the evidence for further sanctions against individuals who support and help to sustain the regime, such as Mr Mikhail Gutseriyev, who was mentioned today in the urgent question? I hope that the Treasury will work together with the FCDO to right this wrong.

Finally, a statistic to finish these few words. Despite the sanctions imposed last year by the Foreign Secretary, with which I agree, there are fewer Belarusian entities sanctioned now than in 2012. Only seven entities are currently designated, compared with 32 under EU sanctions in 2012. In the space of 12 months, this dangerous regime has stolen an election, employed brutal repression against its own people and hijacked a civilian airliner. I feel as though our economy is facilitating that, and we simply cannot let that pass. I beg that with the mention of the overseas register, the Treasury will work hand in glove with the FCDO to bring these people to book, and to establish a genuine and committed economy that, at its heart, cares about human rights.

[John McDonnell [V]]

We are at a stage in the Bill’s progress that is almost like a wash-up. We are trying to make last-minute appeals to the Government for action on a number of key issues, and all the appeals to the Government so far by the right hon. Members for Haltemprice and Howden (Mr Davis) and for Chingford and Woodford Green (Sir Iain Duncan Smith), my hon. Friend the Member for Hackney South and Shoreditch (Meg Hillier), the hon. Members for Brighton, Pavilion (Caroline Lucas) and for Richmond Park (Sarah Olney) and others are on worthy causes that should be addressed, as are the amendments from the Labour Front Benchers.

We must remember the context of the Government’s surcharge policy. It was to spike the approach that the Labour party was making about a levy on overseas ownership, on exactly the grounds laid out by my hon. Friend the Member for Hackney South and Shoreditch about the desperate need for housing and to prevent housing from being used continuously as an investment asset for profit, rather than to put roofs over the heads of our families. I wholeheartedly support and welcome all those appeals, but even if with my Catholic upbringing I believe in the powers of conversion, I somehow doubt we have been able to convert the Minister to a sufficient level for him to accept the amendments. I hope to be surprised, but I doubt it.

I tabled amendment 23 not in the hope of converting the Conservative Government, but to enable me to express justifiable anger about the Government’s approach. The Government are attempting to legislate for a real-terms pay cut that will affect millions of low-paid workers through the freeze in the tax threshold. Those include many of my constituents who have had to make ends meet on 80% of their wages for much of last year. Yesterday—this has already been referred to—it was galling to see the other side of the coin. The Sunday Times rich list showed that during the pandemic more billionaires have been created in the UK than at any time in the past 33 years. The levelling-up policy that appeared last year was the levelling up of millionaires into billionaires.

The Chancellor should have used the occasion of the Budget and this Bill to level up capital gains tax to income tax rates, for example. It cannot be right that we tax work more than we tax income from wealth. Ahead of the Budget it was rumoured that the Chancellor was considering equalising capital gains tax and income tax. That would have been a much fairer way of raising revenue than increasing taxes for people on low and average wages, which the Government’s proposals on tax thresholds will do.

Child poverty has been mentioned, and in my constituency 42% of children are growing up in poverty—a figure that has sadly increased each year since 2015. Child poverty is often a consequence of low pay. The majority of children living in poverty in my constituency live in working households. We should be doing everything we can not just to protect but to boost the incomes of the low paid, not drag them into taxation or increase the taxes on them. The Bill will cut the income of someone working full time on the minimum wage. We know that 2 million workers rely on universal credit to top up their low pay, yet in a few months, the Government are going to cut universal credit by £20 a week.

Poverty has been rising in this country, and whether it is the £20 cut to universal credit, the stealth tax in the Bill, or this year’s paltry increase in the minimum wage, the Government’s actions will increase poverty still further, and increase suffering as a result. My amendment would ensure that the tax thresholds for the personal allowance and the higher rate were kept in line with inflation, as per the Income Tax Act 2007. I tabled it because I wanted to draw attention not to Labour party policy but to Conservative party policy, because in the last general election the Conservative manifesto pledged:

“We promise not to raise the rates of income tax”.

The manifesto continued:

“This is a tax guarantee that will protect the incomes of hard-working families across the next Parliament.”

I just hope that Conservative Members will have the good grace at least to acknowledge that clause 5 of the Bill breaches that pledge, and that incomes are not protected. More of people’s incomes will be hit by income tax, and that is especially harsh on the millions of public sector workers who now face from this Government a pay freeze, a 5% rise in council tax and now this stealth tax rise on their income tax.

Financial and Social Emergency Support Package

Debate between John McDonnell and Catherine West

Wednesday 25th March 2020 Commons Chamber

[John McDonnell]

Thank you, Madam Deputy Speaker.

On Monday, the Prime Minister ordered the 21-day lockdown and asked non-essential retail and leisure facilities to close. We all supported that measure. Indeed, we called for and welcomed it. Today we need clarity and security for all. The spike in deaths that had been predicted hit us yesterday, with 87 of our fellow citizens killed by coronavirus in a single day. The number of people who have lost their lives has reached 435, and we all send our condolences and deepest sympathy to their families and friends. Sadly, we know that there is every likelihood that worse is to come. People understand the health risks. They fear for their loved ones and neighbours.

In many ways, the human response has been tremendous. I pay tribute to the British people for their response. We have heard about many of the community-based mutual aid groups that have sprung up, as well as the 170,000 people who have signed up as volunteers to offer support for those who need it. National health service staff have been mentioned today. We just cannot thank them enough, heroes and heroines. There are also the 11,000 recently retired NHS staff, who, despite all the risks, have returned to the profession.

People and businesses were initially reassured by the Chancellor’s financial package, but we have to be honest with ourselves: in recent days, gaps have emerged. People are worried and alarm bells are ringing across our constituencies. We in this House are trying to behave responsibly—we are socially distancing ourselves. [Interruption.] Some want to distance themselves even further. But politically we have come together, and we are working across party lines to get this right. In that spirit, we have all been appealing to the Government to act urgently to plug the gaps that have come to light. Let us be honest: this is not a blame game, but genuine, constructive engagement from Members of all parties.

Our constituents are raising issues with us—with all of us—as Members have mentioned. The self-employed in our constituencies, workers on insecure contracts, health and social care workers and so many others—we have been inundated, have we not, with emails, telephone calls and even personal representations—all have one thing in common: they are worried about their security, their income, their job and in some instances their home, but especially about the wellbeing of their families, their children and their elderly relatives.

It is the job of Government, the job of politicians and the job of all of us to provide such reassurance, especially at the most worrying times. I have to say that while people by and large are behaving responsibly, some employers are not. We have heard about them today from my hon. Friend the Member for Newcastle upon Tyne Central (Chi Onwurah), the hon. Member for Glasgow South West (Chris Stephens)—he urges us to name and shame them—my hon. Friend the Member for Sefton Central (Bill Esterson), the hon. Member for Gordon (Richard Thomson) and my hon. Friend the Member for Brighton, Kemptown (Lloyd Russell-Moyle). All of them named such businesses.

I have been contacted by one of the hon. Members who could not be here today, my hon. Friend the Member for Liverpool, West Derby (Ian Byrne). He gives the example of Matalan in his Liverpool constituency, where shops have been closed but online shopping goes on. The employer has got 200 workers in a shift—packed together and working closely—handing items of clothing straight to each other with no gloves, masks or cleaning products. It is now reported that contract workers have been told they face the sack if they self-isolate. That sort of behaviour is unacceptable. Yes, there are the Tim Martins and the Mike Ashleys, but we have heard today that too many employers are behaving in this way.

Let us be clear as well—and let us do this cross-party—that while we condemn those employers, we also condemn those banks that see this crisis as an opportunity to hike interest rates on overdrafts, knowing that so many are going to see their income fall. We condemn those retailers that are hiking prices as people anxiously shop less frequently—profiteering in a crisis.

The whole country needs clarity about what should be happening in this lockdown for both businesses and workers. The Prime Minister described it as a war against this virus, and I agree with him. In the second world war, the initial period was described as the phoney war. I have to say that for many, because of the inconsistencies of the interpretation of the lockdown, we seem in some places to be in a phoney lockdown.

[Catherine West]

In reference to mixed messages, does my right hon. Friend agree that there is a mixed message from the Foreign Secretary, who says that all UK citizens must return home, yet when we contact the Foreign Office it appears there is no help available for people to come home?

[John McDonnell]

I will come on to the issue of repatriation, but let me mention it now. All of us now have constituents contacting us about their loved ones who are not able to come home. We need clarity about what support is available and can be given. If it requires emergency measures, let us undertake them, because people are now deeply worried and isolated.

--- Later in debate ---

[John McDonnell]

The problem we have, as my hon. Friend points out, is that this is a voluntary scheme for employers to participate in. What we have to do is to use everything we possibly can to urge employers to participate, protect their workers and use to maximum effect the scheme itself.

[Catherine West]

Will my right hon. Friend congratulate the Business, Energy and Industrial Strategy Committee on the fact that Wetherspoons just did a U-turn, so that staff will be paid and participate in the Government’s scheme? Is that not an excellent exhibition of what cross-party MPs can do? People scoff at Back-Bench MPs, but is it not wonderful to see the Select Committee in action and to see that Wetherspoons is now going to do the right thing? Does that not the challenge for groups such as Cineworld to do that as well?

[John McDonnell]

It demonstrates that naming and shaming works, and at some time in the future I might drink to that.