Consumer Rights Bill (Carry-Over Extension)

Debate between Lord Beamish and Jacob Rees-Mogg

Monday 12th January 2015 Commons Chamber

[Mr Jones]

I am quite aware of that, and I apologise for digressing into areas that are beyond the scope of the Bill.

The central point is that this Government have not been able to programme their Bills properly during this Parliament. Depending on where this Bill gets to in the stack of Bills in the other place, it could end up in the wash-up. If Lord Moynihan presses these matters to a vote again, as he said on the radio this morning that he would, we shall have ping-pong and this Bill and others could end up either being filleted or in a ping-pong session. That could result in important legislation not being put forward. The use of this Standing Order shows that the Government have failed in one of their basic tasks—that of timetabling their legislation in this House. It is an indictment of the incompetent and arrogant way in which they have acted.

[Jacob Rees-Mogg (North East Somerset) (Con)]

Does not this show precisely the reverse? Does not it show the ambition and forthrightness of the Government in having such a busy programme, even at the end of five years, that they need an extra 67 days? That dynamism is something of which the Government should be proud.

[Mr Jones]

I am glad I have woken the hon. Gentleman from his slumbers. In fact, the opposite is the case. The Government have had a year in which to get the Bill through, yet they have had to argue for an extension to finish the process for this and other legislation. They cannot hide behind the argument that there has not been enough time to consider the Bill; there has been plenty of time. This Government have an inbuilt practice of trying to get Bills through the House as quickly as possible, which is why they have ended up with a logjam in the other place. That is not good for this House, because the Bills do not receive proper scrutiny. This House should be the place in which amendments are tabled and discussed.

During this Parliament, we have seen some very badly drafted Bills. They have not only needed amendment in the other place but come back to this House, at which point the Government themselves have had to table reams and reams of amendments. That is about bad drafting of legislation. It says exactly the opposite to what the hon. Gentleman suggests, in that if the Government cannot get it through in a year, that shows either incompetence or, as I said, a strategy whereby they were trying to push everything to the other place so that when they have their in-built majority there they can bang it through as quickly as possible.

That does this House, or how the public see it, no favours. They do not understand the effectiveness of the other place and how it changes Bills. This House should be where amendments are introduced and things are changed. Without that, all we are doing is rubber-stamping the Government’s legislation—that should not be the position. Members should propose amendments and argue against badly drafted legislation and against things they feel strongly about, as on occasion have the hon. Members for Wellingborough (Mr Bone) and for North East Somerset (Jacob Rees-Mogg).

I think that we will be seeing more of these carry-over motions, which is an indictment of how this Government have been managing legislation. The Procedure Committee needs to look at this practice in order to ensure in future that this House is the body that not only drafts legislation, but ensures that it receives proper scrutiny.

Question put and agreed to.

Recall of MPs Bill

Debate between Lord Beamish and Jacob Rees-Mogg

Monday 3rd November 2014 Commons Chamber

[Jacob Rees-Mogg (North East Somerset) (Con)]

It is a great pleasure to be serving under your chairmanship in the Chamber, Sir Roger, rather than being hidden away in a dark corner of the House.

I have a very modest amendment to bring forth: amendment 38, which I hope the Committee will consider. All I am doing is changing one word. I am changing the word “maximum” to “minimum”, so I am in fact changing only two letters; I am changing “ax” to “in”, so we are axing “ax” and bringing in “in.” The reason for doing so is because I am a supporter of my hon. Friend the Member for Richmond Park (Zac Goldsmith): I think that if we are going to have recall we should do it properly, and if we are going to do it properly we should do it generously, and if we are going to do it generously, it should be easy for people to exercise their right under it.

[Mr Kevan Jones]

I know the hon. Member for Richmond Park (Zac Goldsmith) is unable to be here today through illness, but in the argument he was putting forward last week in Committee he championed the fact that people would have to turn up to one place to sign the petition, arguing that that would somehow make it very difficult to achieve the threshold. Is the hon. Member for Richmond Park now saying that that was not the case?

[Jacob Rees-Mogg]

My amendment is supported by my hon. Friend the Member for Richmond Park, and he kindly added his name to the list; indeed it appears immediately beneath mine on this amendment, so yes, indeed, it does have his support, which I am very grateful for. It is a recognition of the difference between constituencies and the fact that this point is already provided for in other areas of legislation. I listened carefully to what my hon. Friend the Minister said and he made some very important points in saying that there may be discrepancies between one constituency and another and raising the issues of cost.

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[Mr Jones]

I am sorry, but the hon. Gentleman has not answered my question. The point the hon. Member for Richmond Park was arguing last week was that because people would have to turn up in person to one point—the town hall, for example—his proposed provisions would not often be used. Is the hon. Member for North East Somerset (Jacob Rees-Mogg) now saying that the hon. Member for Richmond Park is arguing we should have multiple centres to make it easier for people to take part in a recall?

[Jacob Rees-Mogg]

The hon. Gentleman is tempting me to make arguments for somebody who is not here, which is a wonderfully hypothetical approach to be taking. I must make my own arguments for what I believe about this Bill, and my hon. Friend the Member for Richmond Park will make his arguments when he is here, as he did so eloquently last week in favour of his amendments to the Bill. I must focus on my amendment 38, and its purpose, however. I hope that clarifies the matter, Sir Roger.

I was saying that I completely understood what the Minister was saying on the issues of differentiation between constituencies and cost, but the first point is accepted in all our elections anyway, and is accepted in legislation that this very Government passed. The legislation providing uniform constituencies made exceptions for the very largest geographical areas, because it recognised that it is unreasonable not to make different arrangements for those beyond a certain size. Therefore, when there are thousands and thousands of acres—sometimes into the thousands of square miles—we make different arrangements from those that we have for the much smaller, more compact constituencies.

I do not fully accept the Minister’s point about cost. Clause 18 provides Ministers with considerable powers to make regulations affecting the opening hours of the places where the petition may be signed. The hon. Member for Dunfermline and West Fife (Thomas Docherty) has raised this matter in the past. In my view, it would therefore be possible for people to sign the petitions in local post offices during their opening hours. This would involve minimal cost, while giving constituents in the larger geographical areas easier access to the process.

This is important because the difference in size between the constituencies is extreme. I have here a little list, at the top of which is Ross, Skye and Lochaber, whose area is 4,709 square miles. That is a little over 3 million acres, which is three times the size of the county of Somerset. To have only four places in such a vast area would place an unreasonable constraint on people’s ability to exercise the democratic right that we are proud to be giving them. We should be positive about the Bill; it is a good thing to allow constituents to have greater control over their Members of Parliament. Access to the process would be very easy in the smallest constituency, Islington North, which has an area of only 2.8 square miles. Such a constituency would hardly need more than one place, because it would not be too difficult for people to get around, unlike in Ross, Skye and Lochaber.

In my own area, God’s own county of Somerset, my hon. Friend the Member for Somerton and Frome (Mr Heath)—whom I am happy to see in his place—represents an area of 367 square miles. The constituency of my hon. Friend the Member for Bridgwater and West Somerset (Mr Liddell-Grainger) is even bigger, with an area of 417 square miles.

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[Jacob Rees-Mogg]

I rather agreed with the hon. Lady when she expressed her concern about the difficulties of voting by post. It has become much too easy and is susceptible to high levels of fraud, and I do not believe that that is a problem only in Northern Ireland. It is increasingly a problem in England, and probably in Wales and Scotland as well. We have heard about the problems in Birmingham; my hon. Friend the Member for Birmingham, Yardley (John Hemming) has made regular references to them. I would therefore prefer people to be able to go somewhere physically and add their name to a list.

[Mr Kevan Jones]

It is a Daily Mail myth that postal vote fraud is rampant. When the Electoral Commission ran its all-postal-vote pilots in, I think, 2006, it found that there was not widespread fraud, although there were problems in certain communities.

[Jacob Rees-Mogg]

There are undoubtedly greater difficulties with postal voting. My major concern is that it undermines the secrecy of the ballot. When ballot papers go into people’s homes, they are likely to be seen as a family affair, in contrast to the secrecy involved in going into a corner of a polling station to vote. As I was saying in response to the hon. Member for North Down (Lady Hermon), I believe that it is better for people to turn up to vote in person and that that should be facilitated. That would reduce the need for excessive postal voting.

I shall not go through all the constituencies on my list, but I should point out that my own has an area of 122 square miles, or about 85,000 acres. That is about the maximum area that could conveniently have only four registration places. Such an arrangement would simply be unreasonable in a bigger constituency, such as that of my hon. Friend the Member for Somerton and Frome.

There is a broader point to make: the rural areas often get forgotten. There is a polling station in my constituency that is in somebody’s porch. About 85 people go to vote there. There are even smaller polling stations across the country; some have only a couple of dozen electors who are eligible to vote in them. We used to make it easy for people to turn up and vote, and if we are introducing new democratic rights, we ought to make it similarly easy for people to turn up and exercise them.

We should think about the rural areas: they have fewer people, but their democratic rights are just as important as those of people who live in dense urban areas, as the hon. Member for Caerphilly (Wayne David) so rightly said. There are differences between constituencies, and we recognise them in other ways. In passing, it is worth mentioning the great county of Yorkshire, which has a particularly large number of seats that cover large areas and have small populations. Yorkshire has more acres than there are words in the Bible, if the Apocrypha is excluded, and it is divided into very large geographical constituencies. Again, each of them ought to have more than four places for people to go to. I hope that the Government will listen on this matter, and understand the need for rural populations to exercise their rights as freely, properly and easily as the urban mass population.

[Mr Kevan Jones]

I want to comment on amendment 38, which the hon. Member for North East Somerset (Jacob Rees-Mogg) has just spoken to. Like my hon. Friend the Member for Caerphilly (Wayne David), I am generally sympathetic to the idea that having a maximum of four places would be disadvantageous and totally impractical in some large rural constituencies. In the Western Isles, for example, there would have to be a decision about which islands should have such a place. There is a genuine need for the Government to consider that problem.

Finance (No. 2) Bill

Debate between Lord Beamish and Jacob Rees-Mogg

Tuesday 1st April 2014 Commons Chamber

[Mr Jones]

If the hon. Gentleman reads the OBR report published in, I think, March 2012, he will see that the figure was 7.7%, not 11%. I think that he should get his facts right rather than constantly regurgitating figures as if they were fact when they are clearly not.

[Jacob Rees-Mogg]

I think that the hon. Member for North Durham (Mr Jones)—

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[Mr Kevan Jones (North Durham) (Lab)]

The hon. Member for Cities of London and Westminster (Mark Field), who is unfortunately no longer in his place, said that the Budget gave him a feeling of “upbeat optimism”. We have also just heard the hon. Member for Macclesfield (David Rutley) say that we should all be smiling, as though the Budget were to be the salvation of our nation. The Conservative party will clearly go into the next election using “Happy Days Are Here Again” as its theme tune.

[Jacob Rees-Mogg]

The hon. Gentleman will recall that “Happy Days Are Here Again” is traditionally a Democrat theme tune. I think it unlikely that the Conservatives would borrow from the left in America.

[Mr Jones]

I would not put anything past the new Conservative party, although I know that the hon. Gentleman is part of the ancient—even prehistoric—Conservative party. It is clearly part of the Conservative party’s strategy to try to give the impression that we have turned the corner and that the sunlit uplands are now before us. The public are neither so stupid nor so naive as to believe that, however, because they are living the reality of what this Government are doing to this great nation of ours.

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[Mr Jones]

I agree. Some particular issues that appertain to Northern Ireland need to reflect the common land border with the Republic of Ireland.

As we have heard several times this afternoon, the Liberal Democrats are trumpeting as a great thing the fact that we have increased the personal allowance. The people who gain from it most are not the poor but those on middle incomes. MPs—quite apart from some Government Members who earn a lot more than their parliamentary salaries and who will gain even more—will gain more than the low paid.

[Jacob Rees-Mogg]

The hon. Gentleman must bear it in mind that nobody gains more than the £700 and that in the early stages the higher rate taxpayers were not included in the increase in the lower rate threshold. It was clawed back from them, so what he says about MPs is actually not correct.

[Mr Jones]

I was referring to some of the hon. Gentleman’s colleagues and I do not know whether he is included, as I did not look up his figures. The right hon. Member for Wokingham (Mr Redwood), who was in the Chamber earlier, earned £213,000 last year on top of his salary. He will therefore gain from the tax cut that the Government have given him. The Conservative Member with the highest figure earned something like £800,000 a year.

VAT, the cuts to housing benefit, the bedroom tax and the changes to tax credit have all affected those individuals. My hon. Friend the Member for Glasgow North East also mentioned national insurance, which affects those who are on very low pay. As for the idea that the increase in the personal allowance is somehow a great gift to the low paid, it is, as somebody said earlier, simply about giving with one hand while taking away with the other.

One missed opportunity in this Budget is that of putting investment into our economy. Clearly, the narrative is about a small state and the Conservative party wants as small a state as possible. The view expressed by the hon. Member for Macclesfield gave the game away and that is, basically, that the only people who create wealth in this country are entrepreneurs and business, that somehow public expenditure is a bad thing and that spending money on services does not create any wealth at all. In the early days of this Government, the one thing that sucked more money out of the economy than anything was the cuts to public services and local councils. Councils do not sit on money, they spend it in their local communities. I know that many small businesses, including one small building company in Chester-le-Street, nearly went to the wall because their main contracts were with the local authority.

The hon. Member for Redcar used a comparison with maxing out credit cards, but the idea that the state is like an individual’s personal bank account is complete nonsense. Clearly, if the state invests in infrastructure and other things, we get growth in the economy.

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[Mr Jones]

I totally agree. The hon. Gentleman should look at my record on Newcastle city council, because I always ensured that we got value for money. But there is a big difference between getting good value for money for the taxpayer and his suggestion that local authorities and public services spending money will somehow not have an effect on local economies. It should come as no surprise to anyone that taking money out of people’s pay packets, whether in local councils or public services, will have an impact on private sector jobs in local communities.

[Jacob Rees-Mogg]

The point that the hon. Gentleman is missing is that the money that is taken out of the taxpayer’s pay packet is tax in the first place, so this is merely changing the money from being spent in one part of the country to being spent in another; it is not creating new money.

[Mr Jones]

I disagree. Were we to build a new motorway or railway line, such as HS2—I am sure that the hon. Gentleman is a great advocate of that vanity project—the increased speed with which people would be able to move around and do business would have an impact, so it cannot be said that that will not have an effect. We come back to the idea that somehow Governments cannot have an impact on what is happening.

Last week my hon. Friend the Member for Middlesbrough (Andy McDonald) raised with the Prime Minister the disproportionate amount of money spent on transport in London, compared with the north-east. Interestingly, the Prime Minister rattled off four transport projects that he claimed this Government had delivered for the north-east. He was very confident about his facts, which did not surprise me, because his public school background means that he can be very confident even when talking complete nonsense—it does not really bother him, because that is the way he has been brought up. He mentioned the Tyne and Wear Metro and the Tyne tunnel—I cannot remember what the third and fourth projects were. They were all agreed by the previous Labour Government. In fact, the Tyne tunnel was finished before this Government came to office. The idea that this Government are somehow leading on those big infrastructure projects, which are desperately needed in the north-east, is ridiculous, because clearly they are not.

Housing is an issue that could be completely missed in the Budget. The way forward is clearly to encourage people to buy their own homes, and I have no problem with that, but if someone is in low-paid work on a zero-hours contract, and possibly having to work two part-time jobs, as many people do, the idea that they will ever get the credit worthiness to own their own home is complete nonsense. What we need, certainly in the north-east and in my constituency, is affordable housing for rent. The easy thing that the Government could do—it would not cost them any money—is give housing associations the borrowing requirements they need against their assets to build houses. The Government could do that, but they are not. Instead, they are creating an artificial bubble in the housing market. Look at the difference between the north-east and the south. Prices in the north-east are still £5,000 lower than in 2008; in London and the south-east, they are 77% higher. Ridiculously, housing is completely unaffordable for most people in London and parts of the south-east, with average house prices of £400,000. Even people with reasonable standards of living find it hard to buy a house.

I turn to youth unemployment, one of the great tragedies of the Government. I fear that there will be a repeat of what we saw in the 1980s—a completely lost generation of young people. They have no opportunity for a job, not only in the short term but in the longer term. Why is that important? If someone meets us for the first time, they usually ask us two things: our name and what we do for a living. Some people cannot answer the second question about a fundamental part of who they are. Some say that there are lazy people, but I am sorry—there are hard-working people struggling to make ends meet.

I will give two examples from my constituency. I met someone on a zero-hours contract working in a store, which I will not name, in the Metrocentre—that great cathedral to Thatcherite free market enterprise.

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[Jacob Rees-Mogg]

I am grateful to the hon. Gentleman for that intervention. The thing about corporation tax is that a lot of corporations can be taxed almost anywhere in the world. That is why I think the Government are absolutely right to bring down the rate of corporation tax. It will help businesses to be headquartered in the United Kingdom, which is good for the UK in terms of employment and, indeed, tax revenues, by which I mean not just corporation tax revenues, but the other tax revenues paid by companies, namely business rates and employer national insurance contributions, as well as the taxes paid by their employees. We get a larger, more successful economy if we are relatively generous to corporates.

Northern Ireland Members have spoken of the particular circumstances there and the competition Northern Ireland faces from the Republic of Ireland. That is a very good case of tax competition between neighbours and it can be seen very bluntly in Northern Ireland because of the land border. We see less of it on the mainland of the United Kingdom because we do not cross borders quite so easily and we do not necessarily focus on it as much as we should. I think that the Government are absolutely right on corporation tax and that they should continue down that line.

The Government have also been right on the raising of thresholds and I hope they will continue with it. It makes sense, as my hon. Friend the Member for Redcar (Ian Swales) has said, because it is not logical for people on the minimum wage to be paying taxes. There is no point in taxing people who are low earners merely to pay them benefits with their own money. Although it was a Lib Dem policy in the last election and they deserve credit for that, it was suggested earlier by Lord Saatchi and Peter Warburton in a booklet they produced for the Centre for Policy Studies. The Conservative antecedents of the policy are pretty good and solid. It is a Tory policy in origin and it ought to continue.

The aim of the Government in the long run should be that people on the minimum wage should pay neither tax nor national insurance. In that way, the amount of benefits that needs to be paid to them will be very significantly reduced, as will the administrative burden. Roughly speaking, tax collection costs 1% of the amount collected, and benefit payments cost about 2% of the benefits paid out, so if we tax people to pay them benefits, the overall cost will probably be about 1.5% of the total amount paid and received. The policy is very good and welcome.

Another policy that must be welcomed is the change to pensions. Questions about pension funds came up when my right hon. Friend Chief Secretary to the Treasury spoke. What the Government are doing is very simple: they are allowing people to keep their own money. That is not very popular among Labour Members, who seem to have the view that it is the Government’s money and should be distributed as they, rather than individuals, wish. Conservative Members and, indeed, Liberal Democrats who still have some residual liberal attachment believe that the money belongs to the individual taxpayer.

The policy has a very clear advantage for the tax authorities, because it clarifies the idea that pension saving is nothing but a tax avoidance boondoggle. It is about taxing people once, rather than twice. People are taxed when they withdraw the money from their pension fund, with a 25% exemption, rather than taxed when they put it in. It is worth bearing in mind that if that was at any point reversed, the withdrawal would be taxed as a capital gain rather than as income, and the rates that applied might be very different from those that currently apply to withdrawals from pension funds. Any Government who intend at any point—whether at the higher or the lower rate—to withdraw the benefits of saving through a pension fund should consider the ultimate pay-out, and how the policy is a fair means of taxing people and ensuring that they are not taxed more than once.

As my hon. Friend the Member for Dover (Charlie Elphicke) said, this was a “steady as she goes” Budget. It is very impressive. The Government have not gone for cheap gimmicks, as parties sometimes do before elections; they have gone for continuing the work, which they started in 2010, of getting the country back on track. They are doing so in a way that benefits the least well-off in society the most. It is absolutely striking that the real incomes of every decile other than the highest-paid decile will rise by more than prices this year, as they did last year.

That Government achievement is helping where help is most needed: it is helping business to allow it to invest; doing more to help exporters; helping to rebalance the economy for the long term; and—gloriously, splendidly and rejoicingly—it is doing something to ensure that people have their own money. What a fine Conservative principle that is. We believe that the individuals and their families who build up society have the greatest wisdom about how they spend their money, not the tax authorities that dish it out. What is being done with pensions is the clearest statement of that. Yes, if people buy Lamborghinis, Bentleys or Porsches, they will spend it unwisely—

[Mr Kevan Jones]

Buy British.

[Jacob Rees-Mogg]

None of them is British, unless people buy Aston Martins. We could say, “Let us all buy Aston Martins with our pension funds to save the British car industry.” If we decided to do so, we would at least be spending our own money to support Britain. If we ended up sleeping in the Aston Martin, we would have nobody but ourselves to blame; it would not be the nanny state, the socialist state or the “Let’s tell you what to do” state that had taken charge. For that, we should rejoice at the Budget and the Bill.

High Cost Credit Bill

Debate between Lord Beamish and Jacob Rees-Mogg

Friday 12th July 2013 Commons Chamber

[Jacob Rees-Mogg]

The obvious answer to that is that there is no better credit-rated borrower than the Conservative party, the oldest party in history.

[Mr Jones]

Given the mess that the Chancellor is making of the economy, I am not sure I agree with the hon. Gentleman. The point is that the Conservative party can accept a cheap loan from a person involved in payday lending, at the same time as many of our constituents and ordinary hard-working families are being charged 74% interest. It goes further. Adrian Beecroft is a major stakeholder in Wonga which, as has been mentioned, charges up to 4,000% interest. He wants us to deregulate more—zero-hours contracts, the minimum wage and all the other things that he wants put forward in a deregulation Bill—but that will cause more of the problem. I am not surprised that he is in favour of it, because it will lead more people to payday loans at exorbitant rates from the likes of Wonga. I am a bit baffled by the Government’s approach to the Bill. It would be sensible to send it to Committee, debate it and if they want to amend it, they can bring forward proposals.

The heart of my point is how policy is influenced. The Prime Minister said this week that nobody buys Conservative party policy. We have heard very good contributions from Conservative Members who are clearly in touch with what is happening on the ground. However, while the Conservative party chairman, the Minister without Portfolio, the right hon. Member for Welwyn Hatfield (Grant Shapps) has described payday lenders as “obscene”, he is not afraid to accept their money.

Representatives from Wonga attended an event at the Conservative party conference that was described as a “speed dating event”, at which the Economic Secretary to the Treasury, the hon. Member for Bromsgrove (Sajid Javid), the Exchequer Secretary to the Treasury, the hon. Member for South West Hertfordshire (Mr Gauke) and the Minister of State, Department for Business, Innovation and Skills, the right hon. Member for Sevenoaks (Michael Fallon) spent 20 minutes at each table. The idea of speed dating two of them might not seem too bad, but the idea of speed dating the right hon. Member for Sevenoaks is taking things too far.

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[Jacob Rees-Mogg]

Perhaps the hon. Lady refers to:

“You have made my Father’s house a den of thieves”.

I was not going to quote that because I thought it was so well known that it would be unnecessary to trouble the House with it. Interestingly, however, the money changers in the temple were changing ordinary Roman coinage into the special coinage used in the temple for buying sacrifices and so forth, and making a very healthy return on that. I am not quite sure that it is the same as usury, which is another reason why I was not going to mention that precise example. However, it is interesting that these issues have come up over the years.

The councils of the Church have considered the matter. At the council of Nicaea, the Church council that set out the Creed also decided that the clergy may not lend money at interest, and that interest may not be charged above a rate of 1% a month. The same issues were being discussed then—the rate of interest being charged and who may be involved in the process. The rather splendid Pope Sixtus V—I rather like somebody called Sixtus V; there seems to be some incongruity in it—said that charging interest was

“detestable to God and man, damned by the sacred canons and contrary to Christian charity.”

We see that these issues have been problematic for not just hundreds but thousands of years. They have been debated by theologians and looked at by economists.

The fundamental point is that there are people who have money to lend and people who want to borrow, and bringing the two together, when done in a suitable way, is beneficial to both sides. It makes it possible for people to spread payments, make investments and order their lives in a way that is convenient to them, and at the same time it makes a profit for the person on the other side of the transaction, who has excess capital to lend out. However, with that come difficulties and problems that Governments have sought to solve over generations.

At this point, I think it is relevant to quote the introduction to Henry VIII’s Act against usury, which shows the context of the problem. It states:

“Where before this Time divers and sundry Acts, Statutes and Laws have been ordained, had and made within this Realm, for the avoiding and Punishment of Usury, being a Thing unlawful, and of other corrupt Bargains Shifts and Chevisances, which Acts Statutes and Laws been so obscure and dark in Sentences, Words and Terms, and upon the same so many Doubts Ambiguities and Questions have risen and grown, and the same Acts Statutes and Laws been of so little Force or Effect, that by reason thereof little or no Punishment hath ensued to the Offenders of the same, but rather hath encouraged them to use the same.”

That, I fear, is why, in the end, I am not going to support the Bill. What happens is that Parliament legislates to rectify a problem but finds that what it legislates does not actually do that. Henry VIII’s Act was repealed within six years. It was against usury and also set a maximum rate on mortgages of 10% per annum. However, it did not work, because there are always people needing to borrow money and people willing to lend it to them. The question is how that is done, at what stage in the process and who is involved.

Having a source of borrowing within a regulated business system is preferable to loan sharks, who have been mentioned. We hear about “legal loan sharks”, and they may become illegal in some of their practices, but as far as I am aware Wonga, however bad a company it is, does not send people round with baseball bats. There seems to be a fundamental problem in legislating in a way that will push people in difficulties in that direction.

[Mr Kevan Jones]

I agree with the hon. Gentleman, but in many cases such companies use financial baseball bats on people.

[Jacob Rees-Mogg]

But the difficulty is that the loan shark uses both financial and physical baseball bats. That is not to say that the behaviour of Wonga is good, and I will come on to that. However, there are already measures available for a crackdown, to use the word we heard earlier, on the operations of such companies. I accept that there are problems with the way in which such lenders operate. I oppose the Bill not because I do not think there is a problem but because there are already measures that can be taken but are not being taken. Another statute is not the answer to the problem.

That leads me on to the FCA and the normal laws. If I may, I will cite the case of a constituent who came to me not because he had borrowed money from Wonga but because it came after him saying that he had. Somebody had used his name, had borrowed I think about £300, and had got it deposited in a criminal bank account—a bank account not belonging to my constituent. Wonga then came after him and said, “You owe us this money. Please may we have it back?” He is a wealthy man, so he would have had no difficulty paying this money if he felt like it, but he was also not the sort of person who was going to be fiddled around with and pay money that he did not owe. So he said to Wonga, “I do not owe it. I never took out that loan. That is not my bank account.” Wonga wrote back saying, “That’s absolutely fine. We’ll write it off.” He said, “No, that is not absolutely fine, thank you very much. That is criminal activity and I should like it reported to the police.” He reported it to the police, but he was not the sufferer of the crime. It did not affect him. He was not short of £300; merely his name had been used. The police therefore would not do anything on his account and Wonga refused to report it to the police. Therefore it was allowing a crime to be committed and in effect rolling up the cost of that into the interest rate it charged to the people who borrow from it—in a payday loan at a very high rate, as has been mentioned—and taking that as a cost of doing business.

I have a serious gripe with that on two counts, which I know very well from my own business life in financial services. The first is that there is a basic principle of know your client. If somebody comes to my business and wants to invest with us, we have to know that client. We have to understand what their objectives are, what their wealth is, what their situation is, what type of investment is suitable for them. We have also to know who they are—who they really are, that they genuinely are who they claim to be. The know your client rule is at the absolute heart of financial regulation in this country, but for some reason Wonga and the payday lenders can completely ignore it.

[Mr Jones]

They actually do know their clients. They know that if they lend money to them they will get them on the lending circuit. They know these people cannot pay, and that is a way of getting into roll-over loans, which increase profits.

[Jacob Rees-Mogg]

The hon. Gentleman makes an interesting point, but knowing your client is not knowing a group of clients or a class of clients; it is knowing your client as an individual—as a person. That has been in the rule book of the FSA before and of the FCA now, and of the Investment Management Regulatory Organisation before them. It is a fundamental rule of financial services that we should know the counter-party with whom we are dealing and we should not deal with that counter-party if we do not, because we have a regulatory obligation to ensure the product we are offering is suitable to them. This seems to me to be a matter not of legislation, therefore, but merely of the FCA covering the bodies that are making the payday loans through its existing regulations, which would need very little change. That is a very straightforward means of putting this anomaly right.

Finance Bill

Debate between Lord Beamish and Jacob Rees-Mogg

Monday 2nd July 2012 Commons Chamber

[Jacob Rees-Mogg]

No, I do not. I do not believe that taxation is a matter of morality. I believe the law is a matter of morality and it is immoral to break the law, and therefore I divide very firmly between tax evasion and tax avoidance, which is the historical position of this Parliament—and, indeed, of English law. Tax evasion is criminal and should be prosecuted to the full extent of the law. I think the scheme used by a comedian, whose name momentarily escapes me but who is quite famous, was almost certainly unlawful, and that scheme should be prosecuted.

[Mr Kevan Jones]

I know the hon. Gentleman lives in a rarefied world, but does he not understand the anger felt not only by low-paid workers, but middle-earners, who pay their tax through pay-as-you-earn and have no opportunity to avoid tax, unlike the footballers to whom he referred? This situation cannot be fair in any society.

[Jacob Rees-Mogg]

It is very important, once again, to differentiate between avoidance and evasion. If we have passed laws that allow people, for example footballers, to sell the rights to their name and corporatise that, we can change the law, and the fact that this Parliament has not changed the law means that people are entitled to do it.

--- Later in debate ---

[Jacob Rees-Mogg]

Oh, he is behind me. My hon. Friend the Member for Amber Valley said that the effect of the amendment from our Labour friends would be to bring the tax rate down to 40p. I am not sure that it was wise of him to say that, because those of us who were listening may be tempted to go into the same Lobby as the Opposition later, to help them achieve that objective.

I want to talk about the other great aspect of the Budget, and to give full credit to our Liberal Democrat friends for twisting Conservatives’ arms to get them to do something that they have always wanted to do anyway: get as many people out of taxation as possible by raising the thresholds. As the thresholds are raised, so the incentive to work becomes greater. The hon. Member for Edinburgh East (Sheila Gilmore) said that we wanted to make the out-of-work work harder by cutting their benefits, and the in-work work harder by cutting their taxes, and thought that was illogical. Of course it is not, because a person does not get unemployment benefit for working; if a person works, they lose their benefit, and if we encourage people to work, they have more money. Likewise, if we cut people’s taxes, they have more money, so they are likely to work harder.

When we raise the threshold, we find that many millions of people are able to work more easily. They will be taken out, to some degree, of the poverty trap, which is one of the most crushing and pernicious taxation and benefit traps that anyone has to face. The move, in stages, to a £10,000 threshold is a very bold thing to do in a time of economic difficulty, but it may have some of the greatest social benefits of any of the policies that the Government are following. It really is a noble approach to taxation—an objective that is fundamentally worthy.

[Mr Kevan Jones]

I have listened carefully to the hon. Gentleman, but I am not sure that he realises that a large number of my constituents, and possibly his, who are in low-paid jobs claim council tax benefit, housing benefit and tax credits. However, all of those have been cut by the Government, and that counters the encouragement to work, in terms of the increase in the threshold.

[Jacob Rees-Mogg]

I am always grateful for the hon. Gentleman’s thoughtful interventions, but one of the greatest mistakes that Governments make is to have this merry-go-round of taxation and benefits, whereby we tax people and then pay them back their own money in benefits, with a cut taken for administration in between. It is much more sensible to take people out of tax altogether. I would like the threshold to be raised considerably higher, basically towards average earnings, so that the bulk of people do not pay tax at all on what they earn, but do, of course, pay in other ways, through other taxes—through indirect taxation. That takes away the major disincentive to go into employment, and lets people benefit from the fruits of their labour. That is an important proposal that has come forward, and it is popular throughout the country, though I would not say that there was literally cheering in the streets.

Sovereign Grant Bill

Debate between Lord Beamish and Jacob Rees-Mogg

Thursday 14th July 2011 Commons Chamber

[Mr Jones]

That is another debate and it is difficult to quantify what the hon. Gentleman says is brought in. I do not just look at this in terms of money, but take the more fundamental view that we have a Head of State and should support her in the work that she does on behalf of this nation. What I am saying is that we need to be clear about what that costs. We should be honest about how much it costs, even if it costs more than £34 million, and not hide the way in which moneys are spent.

I broadly welcome the thrust of the Bill, but I hope that the NAO report looks not just at how royal expenditure is spent on the sovereign grant, but at other moneys that are paid to the royal household. It might suggest, for example, that the money that comes from the Ministry of Defence should not come out of defence expenditure.

[Jacob Rees-Mogg]

The shadow Chancellor concluded his remarks by saying that he had looked up the Commons Journal for 1760. He is, of course, a very modern man. I went a little earlier and looked up the Commons Journal for 1575. I thank the Library for its assistance in helping me to find what I was looking for. I was looking for the behaviour of the House towards a Mr Peter Wentworth, a man who represented a Cornish seat and had the temerity to criticise the then sovereign, Elizabeth I. He said that

“none is without fault, no, not our noble Queen”.

For this “prepared speech” and

“divers offensive matters touching Her Majesty”

he was taken prisoner to the Tower and held there for a month at the insistence of the House of Commons. I must say that I think they knew how to behave in 1575, and it is a model for us today.

I want to come on to who really owns the Crown Estate, because that is important in this discussion. That is why I intervened on the Chancellor, and I am grateful to him for taking my intervention. It is important to remember that the Crown Estate is the property of the sovereign in an ultimate sense, though gifted for a reign. The importance of that is that the sovereign therefore has a right to ask for money. One might think that they would get the money anyway, but sovereigns have been promised money by Parliament that has been stopped. One just needs to go back to Charles II, who handed over all his feudal dues to the Government for £100,000 a year in perpetuity for all his heirs and successors. I am not sure that that £100,000 has been paid once in the last three hundred and some odd years. The Crown, by virtue of owning the Crown Estate, can guarantee that it is entitled to a revenue. The fact that at the beginning of each reign it could theoretically demand the Crown Estate back is important reassurance and a reassertion of that right.

Civil List

Debate between Lord Beamish and Jacob Rees-Mogg

Thursday 30th June 2011 Commons Chamber

[Jacob Rees-Mogg]

I clearly have not asked for full transparency on the royal tax affairs. Indeed, I would argue for the precise opposite, because I do not think it is particularly sensible to be investigating in close detail how the royal family spend their money. I recall a line about motes and beams; we have had quite a problem with our own expenditure in this House and I am not sure that we have got things entirely right. Before we start criticising the monarchy and looking over every biscuit that the Queen buys, we should make sure that we have our own house in order.

[Mr Kevan Jones]

The hon. Gentleman would not be suggesting that a way of controlling the royal household would be to have the Independent Parliamentary Standards Authority running it, would he?

[Jacob Rees-Mogg]

I would most certainly not be recommending that IPSA comes anywhere near our sovereign.

When the Crown Estate was granted in 1760 by George III, at the same time as he gave up his claim as King of France, the monarchy was in deficit and it needed extra money to fulfil the functions that were being fulfilled. Some of those functions were greater than those now paid for by the civil list. That is all certainly true, although Parliament would vote excess resources to pay for things such as the Army, so my hon. and noble friend the Member for Caithness, Sutherland and Easter Ross (John Thurso) was not entirely fair on the point about paying for the Army.

Now the Crown Estate is in substantial surplus and I think that the Chancellor, in his proposals, which in many ways are very good, may be being somewhat canny, because the next sovereign would be able to cancel this arrangement and say, “I should like £200 million a year, thank you very much.” There is no requirement on a new sovereign to agree to hand the Crown Estate over in return for a civil list. The hon. Member for North Durham (Mr Jones) said that this is taxpayers’ money and not the Crown’s money, but it really is the Crown’s money because, on becoming King, the Prince of Wales or any other sovereign could simply rescind the agreement and claim it back. The Crown Estate is the sovereign’s property, which the sovereign gives to Parliament to help to pay for the costs of the nation; it is not taxpayers’ money that is being handed over. [Interruption.] Does the right hon. Member for Morley and Outwood (Ed Balls) want me to give way?

European Union Bill

Debate between Lord Beamish and Jacob Rees-Mogg

Tuesday 11th January 2011 Commons Chamber

[Mr Jones]

I had moved on to dealing with a new point, but I am willing to go back. I am glad that the hon. Gentleman raised that point, because I can now mention a couple of issues in response. First, any law passed in this country will be interpreted by the courts. If they do something that we do not agree with, this House has the power to change it. The danger with including the sovereignty argument in clause 18 is that courts would then have debates about sovereignty, and that would be strange. How would this House then be able to change the law or interpret a court’s interpretation of sovereignty?

[Jacob Rees-Mogg (North East Somerset) (Con)]

I believe that what Lord Hope is saying is that this House could pass an Act that was not, in itself, lawful. What amendment 41 would achieve is a reassertion of the fact that this House could not do anything of the kind and that any act of this House is superior to any judgment of any court. If these arrangements are based on the rule of law, rather than the supremacy of Parliament, the judges could always overrule Parliament, and that is extraordinarily dangerous.

[Mr Jones]

Judges often do overrule Parliament on the interpretation of the law. The danger of going down the line that the hon. Gentleman is suggesting is that we might be saying that when we pass a law it could never be challenged or changed. Would we be saying that every law passed in this Parliament is perfect and will never be in need of amendment or interpretation? As has been said, the entire case law of this country and the way in which we have developed laws in this country has resulted from people challenging laws, including in terms of European legislation. The Thoburn v. Sunderland City Council case clarified the position. I am not a lawyer, but I have employed many lawyers over the years at great expense and so I know that they will argue different ways around things. Sometimes they will do so to make a point, but on other occasions they will do so to get their fees up. On laws such as this or on health and safety legislation, which was the area that I was involved in, case law precedents always develop. In the cases I was involved in, that went on to bring justice to many people who had been involved in the asbestos industry. The important question is: do we really want judges to start giving interpretations of sovereignty? That is the danger in what the hon. Member for Stone is proposing in his amendment.

May I return to what I was discussing before I was interrupted by the hon. Member for Aldridge-Brownhills (Mr Shepherd)? I am always pleased to take interventions from him because, as he knows, I am a great fan. Amendment 52 would be useful, not only for the debate, but as a safeguard. If we were in a situation where we thought that European law was somehow infringing on not only the rights and liberties of our citizens, but the activities of this House, it would be important. This is not an ideal situation. The Government are always talking about unnecessary legislation and it is possible that this entire Bill is just that. Clause 18 certainly is unnecessary because it simply declares what is already the case. That is an important point. There is an idea that the Government have dressed this up and that they are going to make some great fundamental change or are going to protect against any changes in European law, but that is not the case at all. It is also important to make it clear that future Parliaments will interpret European law and will disagree with what is being put forward in this Bill. We cannot allow this Parliament to leave future Parliaments hamstrung in relation to freedoms.

In conclusion, clause 18 was introduced as a political fudge and I doubt whether it will placate the red-blooded, anti-Europe sceptics on the Tory Back Benches. Neither will it placate the commentators in the press who want us to withdraw from Europe. The clear option is to amend the 1972 Act, which would be more honest. This has exposed the Prime Minister not only in that the detoxification of the Conservative brand clearly has not taken place but because, judging by tonight’s attendance, it has put him on a collision course with large sections of his own Back Benchers. As this Parliament goes on, we will increasingly see the true nature of the new Conservative intake.

Finance Bill

Debate between Lord Beamish and Jacob Rees-Mogg

Tuesday 6th July 2010 Commons Chamber

[Jacob Rees-Mogg]

The hon. Lady ought to allow me to get over-dramatic before accusing me of being so. Her point is to some extent valid; of course we need to consider these things rationally and deal with them in a sensible and prudent fashion. That is exactly what we have done. The point that I am trying to establish is that the level of debt needs to be tackled urgently. I am not saying that the United Kingdom is bankrupt; there are studies that show that there has been no default on our debt since 1688. I do not believe that the situation was going to lead to a default on gilt-edged securities. We had not reached that stage.

[Mr Kevan Jones]

rose—

--- Later in debate ---

[Jacob Rees-Mogg]

However, I do not believe that it would have been impossible, purely because of our strong history, for us to have reached that stage if we had not done something early—sooner rather than later. Does the hon. Member for North Durham (Mr Jones) still want to intervene? I shall be delighted to give way.

[Mr Jones]

Is it not the case that the average maturity of UK debt is some 14 years, as opposed to two years in Greece?

[Jacob Rees-Mogg]

The hon. Gentleman is absolutely right. That is why, as I was saying, it is right to address the problem now, when we are in a strong enough position to do it and take the pain. Nobody denies that cutting is painful. It is always difficult.

Having, I hope, established the seriousness of the situation, I want to move on to the balance between tax rises and spending cuts and why I think, once again, that Her Majesty’s Government have exactly the right balance. One figure has not been drawn out in these debates, but it is noteworthy. If we take net tax receipts and national insurance contributions as a percentage of GDP, we see that they will reach 36.4% in 2013-14. That level has not been achieved in any single year of socialist government from 1970-71 onwards. We are having the highest level of taxation as a percentage of GDP because of a Conservative Budget, of all things. Incidentally, the same figure was reached under the chancellorships of Lords Howe and Lawson. So the Conservatives are willing to tax when it is necessary to ensure the financial stability of the country.

--- Later in debate ---

[Mr Jones]

As a former trade union negotiator, I can tell my right hon. Friend that that is an old trick. People go into negotiations asking for 50% knowing that they will come out with 5%. It is exactly as she portrays.

If anybody wants to read about the Government’s game plan, or war plan, I recommend an excellent book—someone sent me a copy from Canada—called “Shooting the Hippo” by Linda McQuaig. It is nothing to do with wildlife, and I say to the more delicate individuals in the Chamber that it is not actually about murdering hippos, but where the title comes from is interesting. Part of the media hype in Canada centred on the example of the baby hippo that would have to be shot because the zoo could no longer afford the size of compound it needed. We thereby get into a self-fulfilling prophesy, in which there is somehow no alternative.

Hon. Members have mentioned the comparison with Greece; the Canadians used the example of New Zealand. The Tories and the Liberal Democrats have justified the emergency Budget by talking about our “sovereign debt crisis” as though it were the same as Greece’s, or that of some other southern European country. That has been the entire justification for the proposals. The hon. Member for North East Somerset referred to gilts and other investments as though they would be at risk if nothing were done, and actually claimed credit for the Government for the change in the gilt yield. However, the 10-year bond yield in the UK today is around 4.5%, but it actually dropped to 3.5% in February, way before the election.

[Jacob Rees-Mogg]

rose—

[Mr Jones]

To somehow attribute that decline to— [Interruption.] From a sedentary position, the hon. Member for Chelsea and Fulham (Greg Hands) asks me to give way. I am glad he is now either a Parliamentary Private Secretary or some other kind of bag carrier on the Back Benches, because it will stop him making his fatuous contributions. I hope that the Exchequer Secretary is a good Minister to carry bags for, unlike the Minister for Equalities or one of the other Liberal Democrat Ministers. I shall give way with pleasure to the hon. Member for North East Somerset.

[Jacob Rees-Mogg]

The financial markets in February had the intelligence to work out that there was an election in May and to consult the opinion polls. It was not exactly a case of consulting Mystic Meg.

[Mr Jones]

The financial markets obviously and clearly got it wrong, so I am not sure what point the hon. Gentleman is making. The idea that the Labour Government left us in such a dire situation is absolute nonsense. It, too, is part of the scare agenda.