Oral Answers to Questions

Debate between Kevin Hollinrake and John McDonnell

Thursday 30th November 2023 Commons Chamber

[Kevin Hollinrake]

The hon. Member is absolutely right to raise this issue. The Post Office has launched a public consultation regarding the Clapham Common post office. The Post Office maintains that locals will continue to have good access to services. There is a post office within a mile of the Clapham Road branch, and three further branches within two miles. Nevertheless, the Government support the post office network with a significant amount of financial support—£2.5 billion over the past 10 years—so we do continue to support post offices. We know how important they are to constituents and other colleagues in this House. I am very happy to meet her to discuss this particular case.

[John McDonnell (Hayes and Harlington) (Lab)]

10. What her planned timetable is for the ratification of the comprehensive and progressive agreement for trans-Pacific partnership.

Strikes (Minimum Service Levels) Bill

Debate between Kevin Hollinrake and John McDonnell

Consideration of Lords amendments
Monday 22nd May 2023 Commons Chamber

[Kevin Hollinrake]

We do not see that as being the case and we do not agree with that position. We think the Bill is effective and that it is the right thing to do to make sure that people can go about their daily lives unhindered, without fear or concerns about not being able to access vital public services.

I turn next to Lords amendment 1, which changes the application of the Bill from the whole of Great Britain to England only. The amendment would mean that strike action would continue to have disproportionate impacts on the public in Wales and Scotland. As the Government have always maintained, the purpose and substance of the Bill is to regulate employment rights and duties and industrial relations in specified services. Industrial relations is clearly a reserved matter and therefore we consider it right and appropriate to apply the legislation to the whole of Great Britain.

I also point out that the employer has statutory discretion on whether to issue a work notice ahead of the strike, specifying the workforce required to achieve the minimum service level. We hope that all employers will issue work notices to ensure that minimum service levels are achieved where it is necessary to do so. Employers must consider any contractual, public law or other legal duties that they have.

[John McDonnell (Hayes and Harlington) (Lab)]

The Lords passed an extremely sensible amendment asking the Government simply to consult before they go further with this legislation. To give an example of why consultation is needed in my constituency, there is no such thing as a minimum service for air traffic controllers. In effect, that means that the Government are barring air traffic controllers from ever taking industrial action. Those sorts of consultations need to take place before the Government, as others have said, inflame the industrial relations climate in this country.

[Kevin Hollinrake]

As the right hon. Gentleman knows, we have already consulted. Those consultations closed around the middle of May. We will obviously look carefully at all the submissions made; it is important that we do. Ministers—I have one sat next to me: the Minister of State, Department for Transport, my hon. Friend the Member for Bexhill and Battle (Huw Merriman)—will make sure that stakeholder submissions are properly taken into account.

Strikes (Minimum Service Levels) Bill

Debate between Kevin Hollinrake and John McDonnell

Committee stage
Monday 30th January 2023 Commons Chamber

[Kevin Hollinrake]

I am very happy to write to the hon. Gentleman to confirm that point, but we absolutely believe that this legislation is lawful and compatible with human rights legislation and international obligations.

My right hon. Friend the Member for North East Somerset (Mr Rees-Mogg) made a typically insightful and thoughtful speech that no doubt provoked thinking on both sides of the Committee. He talked about the Henry VIII powers in the legislation, but I reassure him that they are restricted only to genuinely consequential amendments. I do not believe they are as wide ranging as he set out.

My hon. Friend the Member for Crewe and Nantwich (Dr Mullan) was absolutely right—this was also reflected in the contribution of my hon. Friend the Member for Southend West (Anna Firth)—that we are not anti-union, but we are pro-protecting the public.

[John McDonnell]

Will the Minister give way?

[Kevin Hollinrake]

I will make some progress, if I can. I may come back to the right hon. Gentleman in a moment.

My hon. Friend the Member for Newbury speaks with great authority on these matters and, as I said, pointed out clearly that the ILO says that as a general principle MSLs are not restricted to essential services, as some Members have claimed, and can cover other elements such as education and railway workers. She also said quite rightly that from their speeches the Opposition seem to want the country to grind to a halt.

[John McDonnell]

It is irresponsible for a Minister to come to this House, when there is a clear conflict in the law that needs to be interpreted, without that interpretation and just to say that he is going to write to us. That is irresponsible. Will he now define to us what reasonable steps he expects a union to take to comply with the legislation as it is and to instruct its members to go to work during a strike? What are those reasonable steps?

[Kevin Hollinrake]

That would be for a court to decide—[Hon. Members: “Oh!”] Of course it would be for a court to decide, because the only action that can be taken against a union can be by the employer in the courts. A union would then define what the reasonable steps would be. I will move on.

Draft Subsidy Control (Subsidies and Schemes of Interest or Particular Interest) Regulations 2022

Debate between Kevin Hollinrake and John McDonnell

Monday 14th November 2022 General Committees

[John McDonnell (Hayes and Harlington) (Lab)]

These Committees might not be the most exciting part of parliamentary life, but we should try to at least understand what we are dealing with. I have found my way around the SOI and the SOPI and the SAU part of the CMA, but what defines a “sensitive sector”? It does not seem to be laid out anywhere, as far as I can see.

[Kevin Hollinrake]

That is a very good question. I was just getting on to that. Sensitive sectors are areas of economic activity in which there is a record of international trade policy disputes, evidence of global overcapacity within the sector or evidence that one or both of these features will apply to the sector in future.

If the right hon. Gentleman looks at the last part of the regulations, he will see that it lists the sectors that would be defined as sensitive, and those include automotive, steel and other sectors. Subsidies in those sectors have greater potential for substantial distortion, even at lower values. That is why those sectors are subject to a lower monetary threshold, of £5 million, to be defined as a subsidy of particular interest. The Government have set out a list of these sectors in the regulations.

The monetary thresholds are cumulative. As such, a subsidy of £5 million may be above the threshold for a subsidy of particular interest if the recipient had already received a related £6 million subsidy within the last three financial years. This avoids public authorities salami-slicing subsidies to avoid scrutiny. In addition, the regulations set out a minimum value for referral of £1 million. That means that where related subsidies cumulate above the £10 million threshold for subsidies of particular interest, public authorities will have to refer only the most recent subsidy if it exceeds £1 million.

The second element of the criteria is specific categories of subsidy. Subsidies designed to rescue an ailing or insolvent enterprise are subsidies of interest, and restructuring subsidies are subsidies of particular interest. That reflects the fact that both rescue and restructuring subsidies have greater potential to cause undue distortion, but rescue subsidies are often time-critical, since the enterprise may need the subsidy urgently if it is not to go out of business. The final specific category of subsidies is those that are explicitly conditional on relocation. Such subsidies are prohibited entirely, unless they have a beneficial effect on economic or social disadvantage in the UK as a whole. Subsidies in that category are subsidies of interest if they are £1 million or below, and subsidies of particular interest if above that value.

The regulations also apply to subsidy schemes. A subsidy scheme will set out the parameters under which subsidies may be given. The assessment of compliance with the subsidy control requirements will be carried out for the whole scheme, rather than for each subsidy given under that scheme. As such, if a subsidy of particular interest can be awarded under a scheme, that scheme is a scheme of particular interest and is subject to the referral procedures. The same applies to subsidies and schemes of interest. The referral can occur once, at scheme level. Subsidies given under schemes will never be referred to the SAU.

[Kevin Hollinrake]

That is a good question, and I thank my hon. Friend for it. The trade and co-operation agreement includes some oversight; clearly, we made some commitments in that agreement regarding subsidies, which is what the statutory instrument and the previous legislation have both sought to address. However, we believe that the approach we are taking to subsidies is far more effective and quicker to deliver than the European Union one. Under that approach, we would have to take a scheme to the European Union, have it approved and then have it come back, which might take several months. Our approach sets out a broad set of principles: a local authority or central Government can set out a scheme and, as long as it adheres to these principles, the subsidy can be delivered far more quickly. In our view, that is a far more effective process.

Finally, a distinct approach will apply to tax schemes. All tax schemes will be schemes of interest and may be referred to the subsidy advice unit. The cumulation rules will apply differently to subsidies given under tax schemes. Only subsidies given as part of the same tax measure within the last three financial years will count towards the cumulative threshold for subsidies of particular interest.

[John McDonnell]

If I am being dim here, I apologise, but I have gone through the explanatory notes to find out the definition of a sensitive area, and it is not there. The schedule to the regulations contains a table showing the various industries—copper, aluminium and so on— but regulation 6 does not explain how a sector becomes defined as sensitive. The Minister can write to me on this question if an explanation is not forthcoming, but I am curious how that list was compiled. Does it come from the primary legislation? I could not find a definition there either. For example, aviation is referred to separately in the main body of the legislation, but that might well be defined as a sensitive area. Obviously, I have a natural interest in this issue.

[Kevin Hollinrake]

It is experiential; it is based on the record of international trade policy disputes and evidence of global overcapacity. Automotive may sit within that.

[John McDonnell]

It’s not defined in the legislation.

[Kevin Hollinrake]

That is how they have been defined. I am happy to write to the right hon. Gentleman with further detail.

[John McDonnell]

Simply, the legislation before us does not seem to describe the principles or the process by which a definition can occur. I might have got it completely wrong, but it would be useful to understand that at least.

[Kevin Hollinrake]

It is a fair point. In the interest of time, I will consult on this and write to the right hon. Gentleman.

In conclusion, the regulations set out the definitions and criteria for the categories of subsidies and schemes that will have greater potential to lead to undue distortion and negative effects on competition or investment in the UK or on international trade or investment. These subsidies and schemes will be subject to an additional layer of scrutiny in the form of referral to the subsidy advice unit. That is crucial to the effective functioning of the UK’s new subsidy control regime, which will give public authorities the flexibility and freedom to deliver bespoke subsidies that meet the needs of the UK economy. I commend the regulations to the Committee.

--- Later in debate ---

[Kevin Hollinrake]

I thank the shadow Minister for her comments, and all Members for their thoughtful contributions. I begin by reminding the House what the regulations aim to do. They set out clear definitions and criteria for two categories of subsidies and schemes that have been identified as having greater potential to lead to distorting effects. These are subsidies and schemes of interest or particular interest.

Public authorities giving or making subsidies or schemes of interest will have the option of referring these to the subsidy advice unit established within the Competition and Markets Authority, while those giving or making subsidies or schemes of particular interest must refer them to the unit. The definitions and criteria set out in the regulations are based on clear monetary thresholds as well as specific categories of subsidy. I am confident that they strike the right balance when it comes to providing protection from undue distortion or negative effects on competition or investment within the UK or international trade or investment, while being administratively simple for public authorities to apply.

I have committed to write to the right hon. Member for Hayes and Harlington with more detail on the categories of subsidy; the shadow Minister also addressed that in her remarks. She will be aware, having read the consultation, that we consulted in full on the question of sensitive sectors and published accompanying analytical information. The Government’s response to the consultation sets out a rationale for the selection of these particular sectors, but I am very happy to write to her too.

[John McDonnell]

There is a difference between clarity in a consultation paper and clarity in legislation. I would like to hear about the legislation.

Contingencies Fund Bill

Debate between Kevin Hollinrake and John McDonnell

Committee stage & 2nd reading & 2nd reading: House of Commons & Committee: 1st sitting & Committee: 1st sitting: House of Commons
Tuesday 24th March 2020 Commons Chamber

[John McDonnell (Hayes and Harlington) (Lab)]

May I start by assuring the Treasury Bench that the official Opposition will support this Bill? I support the Government throughout, obviously, but as the Minister might expect, we will be constructively critical as well throughout the process.

This Bill, as the Minister says, will enable the Government to access the resources to tackle the crisis. I have to say, there is a sense of irony here, because only three months ago I hoped to be bringing forward a Bill for about £250 billion as well, for long-term investment in our infrastructure—but that is another story. It probably would have been supported as well, because it was infrastructure spend. Anyway, we will support this Bill, but we have the opportunity to raise some issues on the way in which the resources will be applied—forgive me if I do that.

We recognise that this is the gravest crisis facing our country that any of us in this House has known. We are debating matters of life and death, and the proposals that we make now and the decisions that we need to take in the coming months obviously deserve scrutiny, and that scrutiny should be welcomed on all sides. Last night, the Prime Minister was right to call for people to stay at home to protect our NHS and to save lives. We called for enforcement measures yesterday morning, and the Mayor of London and many others have been making private representations for greater clarity and greater action.

Clear and detailed guidance to employers and workers is needed on which workplaces should close. As we saw in the earlier response to the statement, a lack of clarity remains about certain operations, particularly within the construction sector. We have received reports from unions, particularly those representing construction workers, that there is utter confusion on the ground at the moment about what operations should be maintained and which workers should be on site. For anyone who has been anywhere near the construction industry or worked on site at any time in their lives, things have not changed that much in recent years. These workers also work in some of the most insanitary conditions, so we have to ensure that they are properly protected.

The Chancellor and the Government must act immediately so that every single worker has a protected income. We discussed that earlier today. We want to ensure that every single household is secure in their home, whether they rent or mortgage, so that no one who makes the right choice to stay at home faces hardship. Last week, the Chancellor set out an unprecedented scheme to underwrite 80% of the wages of all workers “furloughed”—as he put it—promising that no redundancies or lay-offs were needed and that the Government would do, “Whatever it takes”. Today is the time to deliver, with clarity and security for everybody, including our most vulnerable, whatever it takes to keep them protected and safe. That is why we are supporting this Bill to enable the resources to be available.

Last night, the Prime Minister effectively shut down every non-essential business. I want the Chancellor and Treasury Front Bench to make it clear now that every single worker, in every single one of those businesses, will be covered by the 80% income protection scheme, and that if, as a result of that 20% cut in incomes, they fall below the thresholds for universal credit or housing benefit, they will be eligible for top-ups. I ask the question, will the Government consider setting a national minimum wage floor for the income protection schemes? That would protect the lowest paid, because 80% of low pay might result in some people being paid below the national minimum wage.

Will we now get more clarity on exactly when the income protection scheme will be operational? Will the Government also condemn employers such as Wetherspoon that have now stopped wage payments and told employees that those will not resume until the end of April? Some senior members of the Government have an influence over that particular employer, so we would welcome the Government making it clear to that employer that that he should pay his staff and that he should close so that that company can play its part in protecting the health of our community.

The Government cannot act only for workers who are furloughed. They must also step up for the many who will be having their hours reduced but not stopped altogether, by topping them up to at least 80% of their regular wage, or through some other scheme. When the Minister responds, will he clarify what will be the protection for workers who have been put on short time?

Sadly, many workers have already been laid off as a result of this terrible virus. The Secretary of State for Health and Social Care was extremely candid and honest last week when he said that he could not live on the £94.25 per week statutory sick pay. I do not think any of us can. How can the Government expect entire families to afford a week’s shop on that sort of income? Will the Government therefore increase the appallingly low level of statutory sick pay and ensure that all workers are eligible for it? So many are not at the moment. Will they also increase the £73 rate of jobseeker’s allowance and employment support allowance for disabled people? Will they also look at the even lower rate of carer’s allowance? Carers are expected to live on £66 a week.

As we discussed earlier today, there are 5 million self-employed workers in this country, many of whom cannot work from home. We desperately need a scheme that will be ready for them soon. It needs to guarantee them the 80% of income that others have been guaranteed. Whether it is a cabbie, a childminder, an actor or a plumber, there are battalions of self-employed out there who need their security. We need confirmation that a scheme will be brought forward not within days but within hours, to give them that assurance.

We also urge the Government to work with the construction industry and the trade unions to find a solution that covers the particularities of that sector—we have pointed them out before—with workers employed through payroll companies and umbrella companies. Most of them are forced into self-employment, and often exploitative self-employment of the worst sort.

I turn to housing. We welcome the moves to protect mortgage holders, with payment holidays now put in place for mortgagees, but we need the same security for renters and for the Government to understand the difference. For a renter, a rent holiday is not the same as a mortgage holiday. Rent is paid continuously during a tenancy, while mortgages have a fixed term, meaning that repayment terms can be simply extend. It is therefore important that the Government act to ensure that rents are paid, not merely that payments are suspended for this period.

We are extremely disappointed by the legislation published yesterday. Frankly, many believe that the Prime Minister has broken his promise to the country’s 20 million renters in 8.5 million households. It was not an evictions ban, as the Prime Minister promised. That legislation will not stop people losing their homes as a result of the virus; as my right hon. Friend the shadow Secretary of State for Housing, Communities and Local Government said, it just gives them some extra time to pack their bags. To be frank, it is just not good enough. The Government must look again; we urge them to look again.

There are also wider problems. Over recent years, austerity cuts have lessened the value of support available via housing benefit. The Government must immediately suspend the benefit cap and rid us of the bedroom tax that has affected so many families. We welcome the moves announced last week on local housing allowance, but the Government must go further and restore the local housing allowance from the 30th percentile back to the 50th percentile of market rates, as it was before 2010.

People will have made rental decisions based on their incomes, and they should not be penalised by the unforeseeable impact of the coronavirus, when we are asking people to lock themselves away. Now is not the time for families to be downsizing or sofa surfing with parents, grandparents or friends in cramped conditions. Many of us represent constituencies where overcrowding has become the plague of modern existence.

May I briefly pay tribute to the Mayor of London, Sadiq Khan? His team has worked tirelessly and creatively in securing hotel accommodation to get London’s rough sleepers off the streets, though we would like to know more about the duration and the cost of the deal that the Government have procured with hotels. It is important that the Government act to keep households in their homes so that that attachment to work, school and study can continue seamlessly at the conclusion of this extraordinary period. We cannot have a situation in which, at the end of this, tenants have either depleted all their savings or, worse, have amassed large and unpayable bills. If this is the case, the Government will be deferring evictions only a few months down the road, so the suspension of evictions for private and social tenants should be extended, we believe, from three months to six months. Shelter has estimated that as many as 20,000 eviction proceedings are already in progress and will go ahead over the next three months unless the Government take action to stop them, and they must be stopped. When the Financial Secretary to the Treasury rises to his feet, he must be clear that there will be no evictions of any kind during this period.

In addition, we also believe it necessary to suspend all bailiff proceedings for the same period. Practically speaking, there are clear health and safety issues about bailiffs entering the homes of families who may be self-isolating. Furthermore, what measures is the Chancellor proposing for suspending payments of household utility bills? That was raised in the discussions this morning and we will support measures that are brought forward. During this period, we cannot have bailiffs and we cannot have disconnections of water, energy or internet.

What are the Government doing about those without internet access? Many people in our communities rely on libraries to access the internet, but now those libraries are closing. What measures will the Government bring in to ensure that people can get online, whether for benefit services or to maintain some form of social contact? These are huge demands being placed on the civil service, and I pay tribute to all those public servants throughout our public administration who are working day and night to establish these schemes. They are not often praised, but they are in this situation.

The civil service has been depleted by a decade of austerity. As extra demands are placed on, for example, Her Majesty’s Revenue and Customs and the Department for Work and Pensions, other civil servants are being redeployed. Are those recently retired or made redundant from the service being asked to come back to assist, just as we have invited other professionals to come back into the NHS?

Will the Minister also confirm that the current round of HMRC office closures and redundancies will at least be paused, if not reversed, at this stage? What adaptations have been made for those working in the mass call centres of HMRC and the DWP? Is the telephony technology there for them to work at home? Is there greater social distancing within the call centres themselves? We all know that universal credit cannot cope now, but its roll-out was again delayed in the Budget. Millions more households are becoming eligible for universal credit, housing benefit and other payments, so are the Government confident that the system can cope with this increased demand, because the feedback that we are getting from our constituents on the frontline is that they find it impossible because of the long waits to get through and have their case dealt with successfully. No one is blaming the civil servants; it is about resources and investment.

What are the Government doing to encourage businesses to take up business interruption loans, when some businesses see loans as less effective than grants for keeping them afloat? Is there potential for increasing the level of grants and extending their range? Have the Government considered our proposal that such loan agreements should include job retention clauses, which would mean that when businesses receive a loan, they can give workers the security they need in the knowledge that they will not lose their jobs? It is not much to ask of a business receiving financial support from the Government in this way that they work towards our overall objectives.

[Kevin Hollinrake (Thirsk and Malton) (Con)]

The difficulty with what the right hon. Gentleman suggests is that most businesses do not know the extent of this crisis and the impact it will have on them. It is impossible at this point to determine exactly how long this will last or how deep a recession might be. Is he not asking the impossible of businesses?

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[Kevin Hollinrake]

I thank the hon. Gentleman for that contribution, and indeed for all the work he does on the all-party parliamentary group on fair business banking and for the many speeches he has made on the matter. I absolutely agree. The two best things that I have heard the Treasury say over the past two weeks—and there have been many—are, “We will do whatever it takes” and, “We are all in this together.” The banks should take that approach as well. I and many other Members of the House will be watching to make sure that this time the banks do the right thing and restore their reputation.

[John McDonnell]

The hon. Gentleman has done some sterling work on this, so would he like to comment on the figures that are coming out on 6 April and the interest rates for overdrafts from HSBC, First Direct, M&S Bank and TSB? Nationwide have already gone there, with an increase from 9.99% to 39.9%. What does he think about that?

[Kevin Hollinrake]

I think it is an absolute disgrace. I do not think that the FCA saw it coming, which is one of the flaws of the regulator. The FCA has been criticised many times in this place, including by the right hon. Gentleman. It told the banks, “Right, you’re not going to charge anybody any more than anyone else is.” But that let them all put their rates up to the highest level. It is exploitative and absolutely outrageous.

The banks need to look at this as a sector and start to treat their customers fairly, which of course is a basic requirement of the principles of banking, so the FCA should step in and look at this. In fact, I think it should be the subject of an inquiry by the Competition and Markets Authority. The fact that the rates are not just high, but all the same, smacks of directors getting together in a room and agreeing a figure. It cannot be a coincidence that all the rates are exactly the same in this supposedly competitive market.

On commercial loans, it is right that the Government have negotiated with the banks to give mortgage holidays, which of course have to be paid back but nevertheless give borrowers vital breathing space. I think the same is true of some commercial loans, but the banks are saying, “We’ll give you a holiday only on the payment of the principal, not the interest.” Those paying for a commercial loan are paying much more on the interest than they are on the principal, which again seems grossly unfair if we are all in this together.

We are going to work together to try to get through this, so I call on the banks to look at this again, to be fair and to rebuild their reputation. The final way they could do that is by suspending legal action, certainly in relation to residential repossessions but also for repossessions against businesses. They should show forbearance and use the business banking resolution service—I am one of the people who have been working on that in recent months—which will be like a super ombudsman for banking disputes. They should defer any issues they have with their customers until that service is properly established, so that those complaints can be resolved fairly—fair to the bank and fair to the customer.

Tax Avoidance and Evasion

Debate between Kevin Hollinrake and John McDonnell

Tuesday 25th February 2020 Commons Chamber

[John McDonnell (Hayes and Harlington) (Lab)]

I beg to move,

That this House notes that the tax gap, the difference between the amount of tax that should be paid to HMRC and what is actually paid, has been estimated at between a minimum of £35 billion and £90 billion; believes that successive Conservative governments have failed to address tax avoidance and evasion while making savage cuts to public services and undermining the social security net; further notes that the Tax Justice Network has described the UK as backsliding on financial transparency; is concerned by reports of the Conservative Party’s links with individuals and companies that have engaged in tax avoidance; and calls for the proper funding of public services after a decade of austerity and for robust action to tackle tax avoidance and evasion.

With a Budget in just over a fortnight, over the coming days we will be setting out an agenda of issues that we believe the Government need to address to tackle the social and climate emergencies that our country now faces. And yes, there is a social emergency in many of our communities. Yesterday, my hon. Friend the Member for Leicester South (Jonathan Ashworth), the shadow Health Secretary, exposed the appalling levels of health inequality across the regions of our country. Today, the Marmot report shows what he described as the “shocking” results of 10 years of austerity: life expectancy has stalled for the first time in more than 100 years, and has even been reversed for the most deprived within our community, women in particular.

Yesterday, the hon. Member for Denton and Reddish (Andrew Gwynne), the shadow Secretary of State for Communities and Local Government revealed the scandalous impact of cuts to local councils—for example, the impact they have had on the services desperately needed to keep our children safe. This afternoon, my hon. Friend the Member for Worsley and Eccles South (Barbara Keeley), the shadow Minister for mental health and social care, will describe the immense suffering and distress caused by the cuts in social care imposed by this Government. Members will remember the report only last year, reporting that 87 people died each day before actually receiving the care they needed.

At present, we have a Government who, on this evidence, have proved to be incapable of providing care for our people, of housing our people, of feeding them or of providing the work that will lift them and their families out of poverty. There is a lot of hyped-up talk about the big expenditure numbers that might be associated with the coming Budget. What we are interested in is outcomes, and the impact on the wellbeing of our people. These will be the key tests of the forthcoming Budget. Will it really end austerity? Will it really reverse the decade of austerity cuts that have been imposed on our community by this Government? Will it ensure that our people are properly cared for, properly housed, properly fed and lifted out of poverty? Alongside all of this, in a week when we have seen the Prime Minister’s failure to respond to the flooding that has damaged so many of our people’s lives, the overriding test is: will this Budget tackle the existential threat of climate change?

It is interesting that, contrary to virtually all the advice from mainstream economists 10 years ago, the newly elected Conservative Government took the political decision to impose austerity cuts on our community. As we have repeatedly said, it was a political choice, not an economic necessity. The alternative was to ensure that we had a fair taxation system to fund our social infra- structure, and that we borrowed to invest in our physical infrastructure to grow our way out of recession. The reality is rather that the neo-liberal ideologues simply could not let the economic crisis go to waste. They seized the opportunity to launch their experiment to downsize the role of the state through cuts, outsourcing and privatisation. This was linked to ever more restrictions to reduce the effectiveness of trade unions to represent their members and to shift the balance of power between capital and labour in the workplace.

The result has been that virtually every area of our public services is in crisis, with the slowest growth in wages in 200 years, 8 million of our people in working households in poverty and over 4 million of our children in poverty. The UN rapporteur has described levels of destitution in our country and the treatment of disabled people as an abuse of human rights. The Government’s alibi for austerity was the global financial crisis, even though Government spending was never a cause of that crash. Now, 12 years on, the Government no longer have that fake alibi for the cuts. It is clear the Tories do not just want to shrink public services and cut public sector jobs in the short term; they want to downsize our public services for good—as the Institute for Fiscal Studies has said, baking austerity into Government.

All this suffering, all this hardship, all this holding back the potential of a near-generation of our people would have been rendered completely unnecessary if we had had a fair taxation system and had invested in our economy. A fair taxation system starts with ensuring that people and corporations pay their taxes. That patently is not the case at the moment. There is much talk about levelling up; well, let us start with levelling up the rules of taxation and the amount many of the rich and the corporations pay in taxes.

[Kevin Hollinrake (Thirsk and Malton) (Con)]

Surely the right hon. Gentleman will be aware that the top 1% of earners in this country now contribute about 29.6% of all taxation, whereas in 2009-10 the figure was only about 25%. How can he say that is a failure?

[John McDonnell]

They pay that much because they earn so much more than everybody else, but the other issue, and it relates—[Interruption.] Let me finish. We have this debate time and again. The hon. Gentleman is referring to income tax, but when we take into account overall taxation we see that the poorest-paid in our country are paying about 40% of their income while the richest are paying around 34% of their income. It is the poorest who are hit hardest, it is the poorest who have shouldered the burden of austerity, and it is the poorest whose life expectancies are being reduced at the moment. That cannot be right; surely to God no one in this House was elected to ensure that life expectancy for the poorest stagnates and for some goes backwards.