Royal Bank of Scotland

Lord Watts Excerpts

Thursday 13th June 2013 Commons Chamber

[Sajid Javid]

I agree. We have talked about Stephen Hester and the role he has played in bringing the bank back from the brink, but that would not have been possible without the dedicated staff that RBS has had, and we must never forget the contribution they have made in repairing the bank.

[Mr Dave Watts (St Helens North) (Lab)]

It is clear from the Minister’s statement that the Chancellor has sacked the chief executive. Can the Minister assure the House that there is no gagging clause in the chief executive’s contract when he leaves with his package of £5 million that will stop him setting out his own views on when RBS should be sold?

[Sajid Javid]

I do not know whether the hon. Gentleman was listening to the statement I made. If he was, he would realise that the RBS board made this decision.

Tax Fairness

Lord Watts Excerpts

Tuesday 12th March 2013 Commons Chamber

[Mr Foster]

No.

The previous Government introduced the fuel duty escalator, hitting the pockets of families and businesses, whereas we have taken steps that will make pump prices 13p per litre lower than they would have been under Labour. They abolished the 10p tax rate, hitting 800,000 single earners, whereas we are taking 2.2 million people out of paying tax altogether. Whereas in 2000 they gave pensioners a miserable 75p a week pension increase, last year we gave the biggest ever increase of £5.30 a week.

[Mr Dave Watts (St Helens North) (Lab)]

Will the Minister explain why he thinks it is fair that at the same time as they introduce the bedroom tax, the Government find money to give the richest people in the country a tax break?

[Mr Foster]

We are not here to discuss the under-occupancy arrangements. Let me remind the hon. Gentleman, who has breezed into the Chamber, that we have had discussions on many occasions about this. I am aware of 300,000-odd families with two or more spare bedrooms and 250,000 families who are overcrowded, so it is right and proper that we take action to try to help them out, and that is what we are doing. I am more than happy to talk about this Government’s record on fairness.

Economic Policy

Lord Watts Excerpts

Monday 25th February 2013 Commons Chamber

[Mr Osborne]

My hon. Friend is absolutely right. If we lose that credibility in the markets and are unable to convince the world that we can pay our way—that would be the case if we had a reduced commitment to fiscal consolidation—interest rates would go up, which would affect families with mortgages and small businesses with those crucial loans that are helping them to expand and take people on.

[Mr Dave Watts (St Helens North) (Lab)]

Will the Chancellor change the economic medicine before he kills the patient?

[Mr Osborne]

We have revived the patient from the near-death experience it had under the Labour Government.

Banking Reform

Lord Watts Excerpts

Monday 4th February 2013 Commons Chamber

[Greg Clark]

I agree with both parts of my hon. Friend’s question.

[Mr Dave Watts (St Helens North) (Lab)]

The Minister says that he wants to establish new bodies to set bonuses and pay in banks. Can he guarantee that on those boards will be ordinary customers and businesses, and that they will not be stacked with bankers’ friends?

[Greg Clark]

I think it important for the responsibility exercised by remuneration committees in particular to have regard to the experience of ordinary working people up and down the country. I see no reason why the way in which bonuses are thought about in boardrooms in the City should be any different from the way in which they are thought about in any other industry.

Professional Standards in the Banking Industry

Lord Watts Excerpts

Thursday 5th July 2012 Commons Chamber

[Ed Balls]

All my experience—and there are many Members on both sides of the House who have more detailed experience than I have—is that Select Committees find it much harder than a judge-led inquiry to secure the release of necessary and essential documents and, more importantly, to find out which documents they should ask for in the first place.

Finally, and above all in our view—and I note that the Attorney-General did not correct me on the calling of witnesses, but perhaps he will advise the Chancellor for his speech—only a judge-led inquiry can truly persuade the public that the inquiry is properly independent and objective and, given the Chancellor’s behaviour, non-partisan.

[Mr Dave Watts (St Helens North) (Lab)]

Is it not clear that the Government, stacked with bankers and payrolled by the bankers, are frightened of a judge-led inquiry because they want to cover up the scandal?

[Ed Balls]

My hon. Friend makes his point in his own particular way. I was saying that the inquiry needed to be independent, objective and non-partisan, so I understand his concerns. I would probably also understand his bafflement about why the Chancellor and Prime Minister seem to be unwilling to appear before a public inquiry looking at wider issues of culture.

--- Later in debate ---

[Mr Andrew Tyrie (Chichester) (Con)]

The rigging of the LIBOR market is shocking. It is the worst case of City malpractice I can recall. The Chancellor proposed the idea of a Joint Committee to me in several phone calls over the weekend. It was an honour to be considered. None the less, I made clear right from the start what ingredients I viewed as required to make a success of it.

First, the Joint Committee’s terms of reference should be tightly drawn and forward looking. This cannot be a witch hunt. Having an exhaustive and inquisitorial committee of inquiry, whether it be within or outside Parliament, into the respective roles and responsibilities for mistakes of Ministers, civil servants, the Bank of England, regulators and commercial banks would do more for the history books than for the quality of legislation. The job of the Joint Committee must be to concentrate on how to get one part of the banking Bill into better shape, and in quick time. For that purpose it will need tightly drawn terms of reference, focused on improving standards and corporate governance in banking, and it can and should do the work quickly.

Secondly, as I said in that conversation, any committee of inquiry, particularly a parliamentary Committee, must have the support of the major parties across the House of Commons. It appears from what I am hearing here that it does not have that support at present.

[Mr Watts]

Is it not the case that any inquiry will have public support only if it is carried out on a cross-party basis? It is amazing that a Chancellor who seeks such co-operation from the Opposition should go out and the first thing that he does is tell lies about—

[Hon. Members]

Withdraw!

[Madam Deputy Speaker (Dawn Primarolo)]

Order. Sit down, Mr Watts. I am on my feet.

Mr Watts, you will have to rephrase that last bit. You will do it briefly, and then Mr Tyrie will continue his speech—and that includes withdrawing the accusation of lying.

[Mr Watts]

I will withdraw that comment, Madam Deputy Speaker. I will say that the Chancellor gives the impression that he did something that he did not do, and then refuses to apologise. How does he think that he can secure co-operation across the Benches when he does that?

[Mr Tyrie]

I shall not address the second part of the hon. Gentleman’s question, but the first part was absolutely right. I think it essential for us to have cross-party support for any inquiry of whatever type.

Let me now refer to a tiny bit of history. A hundred years ago, partisanship made a mockery of an attempt by a Select Committee to investigate the Marconi scandal. The Conservative Opposition killed any value that that inquiry might have supplied, and as a result Select Committees were written out of the piece for inquiries for nearly 100 years. I think it vital for Parliament that another clash of the Titans—which seems to be going on now—does not leave us in a position in which we, as Parliament, cannot subject this issue to an inquiry of any type.

Finance (No. 4) Bill

Lord Watts Excerpts

Wednesday 18th April 2012 Commons Chamber

[Mr Dave Watts (St Helens North) (Lab)]

Is it not right that the people who caused financial problems and hardship for many families and created mass unemployment pay a fair amount of tax to compensate for the damage they did to the economy? Is that not exactly what the amendment would provide for?

[Mr Redwood]

Many people would think that the outgoing Government had a lot of responsibility for the crash, along with their professional advisers, the quangos and the Bank of England, who apparently did not see it coming. They had very light regulation in the lead-up to the credit crunch and then very tough regulation. [Interruption.] Labour Members feel there is some justice in my response, as they are getting very heated, but we are straying rather far from amendment 5.

The point of the amendment is that the Labour party wants to raise an unspecified amount by taxing unspecified people who apparently earn more than Labour thinks is good for them. The Opposition would spend that on youth measures, and they want the Government to come back with a report on how that money could be spent.

My hon. Friend the Member for Staffordshire Moorlands (Karen Bradley), who rightly said that she could support a bank levy to try and get the deficit down, was speaking sense, but this, as she will have realised, is not the proposition of the Labour Opposition. They do not want to get the deficit down. They want to find another pot of money to increase spending. I am with them in their aim of reducing youth unemployment. We will make much more progress in reducing youth unemployment if we have stronger banks able to finance a more vigorous recovery. I urge the Government to work more strongly on that. The more money they take off the banks in taxes, however tempting that is, the less the banks will be able to lend to people to get the recovery going, so the proposal could be self-defeating.

--- Later in debate ---

[Mr Bailey]

Perhaps we should. Perhaps we should introduce a tax on certain members or major funders of the Conservative party, too.

[Mr Watts]

Does my hon. Friend not think that it a bit ironic that people who are suggesting that the previous Labour Government’s problems created the financial crisis are the same people—the Liberal Democrats and the Conservatives—who were calling for less regulation? It is interesting how the Government are trying to rewrite history.

[Mr Bailey]

I have often made the same point myself. I was on the Government Benches at the time of the so-called financial crisis and the run-up to it, and I do not remember any demands whatsoever from the then Opposition for us to introduce heightened regulation of the banking system. It is very easy to be wise in retrospect.

Tax Avoidance (Public Servants)

Lord Watts Excerpts

Thursday 2nd February 2012 Commons Chamber

[Danny Alexander]

I think the hon. Gentleman should be careful about how he characterises these arrangements, given that they are currently subject to a review.

[Mr Dave Watts (St Helens North) (Lab)]

On a day when another 100 of my constituents have lost their jobs because of the failed economic policy of this Government, how does the Chief Secretary to the Treasury think those people will feel about the Government allowing tax dodges, and allowing Ministers to take no responsibility for their actions? When are the Government going to come clean?

[Danny Alexander]

I suspect that they will feel, as I do, that urgent action needs to be taken. We have changed the arrangements in this case, and the review will root out whether any other such arrangements were put in place either under this Government or when the hon. Gentleman’s party was in office. He should wait carefully for the results of the review.

Oral Answers to Questions

Lord Watts Excerpts

Tuesday 24th January 2012 Commons Chamber

[Danny Alexander]

Of course, the burden of the deficit reduction is fair overall, and we know that the burden falls most highly on the richest 20% of the population. However, with spending cuts needing to continue for longer—another two years—we need to redouble our efforts, both to tackle tax avoidance and to deliver the income tax cuts that we have promised, by lifting the personal allowance as rapidly as the nation can afford. Those are, of course, issues that we shall be considering in the run-up to the Budget.

[Mr Dave Watts (St Helens North) (Lab)]

Why does the Minister not look at employing more tax inspectors, given that billions of pounds are going unpaid because there are not enough tax inspectors to do the job?

[Danny Alexander]

Not only have we looked at that; we are doing it. In the spending review, we announced an extra £900 million for HMRC, which is creating an extra 2,000 specialist posts to tackle tax avoidance and tax evasion. It took the hon. Gentleman’s party 12 years just to set up a specialist unit at HMRC to deal with high net worth individuals. We have extended that to ensure that there is a specialist unit to deal with the tax affairs of all those who pay, or should pay, the 50p rate.

Fuel Prices

Lord Watts Excerpts

Tuesday 15th November 2011 Commons Chamber

[Mr Dave Watts (St Helens North) (Lab)]

I am sorry that my amendment was not selected by Mr Speaker, because I believe that the motion is wishy-washy. I will explain the reasons for that later. My amendment went into some of the details that need to be addressed to help hard-working families.

Like many Members, about four or five weeks ago I started to receive letters from constituents on this issue, mainly prompted by the FairFuelUK campaign. At the time I wrote back to my constituents to tell them that I could not support the campaign because it called for tax cuts without saying how they would be paid for. I have little time for campaigns by the Daily Mail, the Daily Express, FairFuelUK or the TaxPayers Alliance, which are extreme right-wing organisations that promote tax cuts at the expense of public services.

However, I have now changed my mind after speaking to some of my constituents. There is no doubt in my mind that high fuel prices are having a tremendous impact on many low-paid and middle-paid families in my constituency. It is clear that the Government have no idea about the impact that high fuel prices are having on many constituents around the country. It is also clear that they have no understanding of the impact that wage freezes, high inflation, tax increases and high unemployment are having on the general public and the economy. Many of my constituents will have no pay increase for two years. Prices go up in the shops virtually every week. Heating and petrol prices are a particular problem for many of my constituents, and many of them are struggling to stay afloat.

The second reason I support the campaign is the decision by the Liberal Democrats and the Tories to raise VAT to 20%, which has had a massive impact on the cost of living and on my community. It has made the situation worse. We have now had a flatlining economy for 18 months and unemployment is at a 17-year high. Those who believe that the motion will address those issues are sadly mistaken. What we need is a complete review of economic policy in this country, taking on board something like the Labour plan for jobs and growth. Unlike Labour, the Government parties have no policies for growth. Labour’s policies of providing 100,000 jobs for young people, bringing forward investment in major projects and schools, a temporary reversal of the VAT rise—

[Mr Deputy Speaker (Mr Lindsay Hoyle)]

Order. We need to stick to fuel prices.

[Mr Watts]

I am sticking to them, because the people promoting the motion believe that it will address their constituents’ problems. We have heard many Members talking about the impact that high fuel prices are having on their constituencies. I know that to be the case, but it is only part of the problem that people face on a daily basis. We need a review. At the last election the Tories promised to cut fuel costs and to stabilise them in the immediate future and the long term.

Many families depend on cars to get themselves to work and to deliver their children to school—

[Mr Deputy Speaker]

Order. I call Mark Garnier.

--- Later in debate ---

[Martin Vickers]

I entirely agree with my hon. Friend, who strengthens my case.

I was discussing fairness. In the two unitary authorities that cover northern Lincolnshire, it is estimated that constituents pay £167 million a year in motoring taxes, compared with the £95 million that is spent on roads infrastructure—again, that is clearly unfair.

[Mr Watts]

Will the hon. Gentleman give way?

[Martin Vickers]

I think that I am running out of time.

I said earlier that my constituency is a major centre for the road haulage industry. Most large commercial vehicles do about 8 miles per gallon. The planned increase due in January will add £15 a week to the running costs of a single vehicle, which will impact not only on individual businesses but on the supply chain. The Federation of Small Businesses has produced figures that detail the impact on businesses in that category.

I recognise, as I said earlier, that the Government must protect their income streams. There has been much talk in recent weeks about the 50p tax rate. That must be secondary to a reduction in car taxes. Very few people in my constituency can even dream of earning an income that would demand a 50p tax rate. I want to get rid of it as soon as possible, but now is not the time. Rural bus services have been reduced. The Government understand the impact on local people in northern constituencies in particular, and I urge them to act as soon as is practicable.

--- Later in debate ---

[Fiona Bruce]

My hon. Friend makes a very good point.

Let me give the House some specific examples of small businesses in my constituency that are suffering in that way. Smallwood Storage Ltd is a transport and storage business in Sandbach employing nine people. This week it told me:

“We need a level playing field, the price of fuel has become too high as a percentage of our overheads and is out of proportion with the rates we charge. As a small business, we do not have the power of larger companies and are being squeezed from all sides.”

Another local company, B Lakin Transport, a haulage businesses in Somerford employing 10 people, said:

“Increased fuel costs have knock-on effects on everything…as the price continues to creep up, customers will go elsewhere and even look to foreign drivers who can use cheaper fuel from the continent; avoiding the extortionate prices in Britain.”

It continued:

“A driver from Luxembourg can fill up their petrol tank in Luxembourg at a fraction of the cost here. In October 2011, 1000 litres of unleaded fuel would cost £1130 in Luxembourg compared to £1350 in the United Kingdom—that’s a saving of £220 each time the tank is filled.”

Let us remember that haulage competitors from Luxembourg can fill their tanks there, drive to the UK and then return to Luxembourg without having to fill up here at all. B Lakin Transport tells me:

“Combine this with the exemption from road tax for foreign drivers, and we are clearly at a significant disadvantage to these foreign drivers from the outset.”

[Mr Watts]

Does the hon. Lady agree that it is very important that we are honest with the British public in saying exactly what sort of cut we are looking for? I expect that the level that the Chancellor will look at will be a lot less than is being suggested here today.

[Fiona Bruce]

Through the motion, we are asking the Government to explore a number of ways in which they could assist small businesses, such as the ones that I am describing, with this predicament.

I will cite another business in Cheshire. It is not a small business, but it is an interesting comparison, because it is not a haulage company. Roberts Bakery is a large family business that produces bread in Northwich, just outside my constituency. Just yesterday, it informed me that the increase in fuel prices since last year alone has added £10,000 a week, or £500,000 a year, to its delivery costs. That is a serious additional overhead for such a family company.

The price of fuel is hindering such businesses from playing their essential role in the economic recovery and job creation that we so desperately need in this country. It is effectively pricing UK businesses off the road, driving people out of work, preventing companies from taking on and holding on to contracts, and fuelling further economic difficulties.

I signed up to support the motion, and I applaud all the other Members who have done so. I ask the Government to consider as a matter of urgency the impact that high fuel duty rates are having on local economies such as the one in my constituency, and to take action to address the issue accordingly.

--- Later in debate ---

[Mr McCann]

That gives us the real picture. I shall say more about that in a moment.

My constituents know that the price of oil is linked to the complexities of production, of exchange rates and of international stability, and that interference in one or more of those factors can cause prices to spiral out of control. They lose comprehension, however, when they see little evidence of price reductions when those factors are reversed. I remember well that in 2008 the price of oil was $147 a barrel and the price of unleaded in my town was £1.15. Yesterday, the price of oil was $114 a barrel, and the price of petrol £1.35.

[Mr Watts]

Will my hon. Friend give way?

[Mr McCann]

I have already taken a couple of interventions. If my hon. Friend does not mind, I want to allow a couple of other Members to get in.

We need some answers from the Minister to explain the phenomenon that I have just outlined, because the public just do not understand it. If this debate is to have any credibility, it also needs to address some other issues. I do not believe the hon. Member for Harlow’s simplistic proposal that reduced prices will bring in more income. If he believes that we need to reduce fuel duty, he must tell us where the resulting cuts would be made. Or would he advocate increasing other indirect taxation, or direct taxation, to fill the gap?

--- Later in debate ---

[Mr Llwyd]

It is difficult enough to find a bank that will provide the money in the first place—when it rains, the banks want their umbrellas back—but I take the hon. Gentleman’s point.

Of course, it is not just businesses that are suffering. Families have been gravely hit by the rise in fuel prices, and, as has already been pointed out, fuel duty has a disproportionate impact on those who are least able to pay it.

[Mr Watts]

Does the right hon. Gentleman agree that the difference between this and earlier fuel price rises is that the Government’s present policy is to impose a pay freeze, while also allowing inflation to run at 5%? Families are being hit by the treble whammy of higher prices, inflation, and the increased price of petrol and other fuels.

[Mr Llwyd]

That is true. As we heard earlier from the hon. Member for Ynys Môn (Albert Owen) and others, families are being squeezed from all directions. According to figures issued yesterday by the Office for National Statistics, the poorest 20% of households pay proportionally twice as much in duty as the better off.

In rural areas such as my constituency, the cost of running a car is as important to people as their food budgets, because they cannot do without a motor vehicle. We have proposed the introduction of a fair fuel duty regulator that would prevent unexpected spikes affecting people at the pump through increased VAT, which is then pocketed by the Treasury. We suggested that an estimate be made of the fuel price over the coming six months, showing the amount of revenue that the Government would expect to receive, and that a cap be imposed if the price reaches an upper limit and VAT and fuel duty be frozen until the end of that period. The Government would, of course, receive their predicted amount, rather than a windfall from consumers who are already squeezed by the price hikes and unable to spend their income elsewhere.

Unfortunately, the then Labour Government in London stubbornly ignored the problems of rising fuel prices, and the motions in 2005 and 2008 addressing the issue were defeated. The Conservatives abstained in the vote on the 2008 Finance Bill, but decided only a few weeks later—in July 2008—that they would support a fuel duty stabiliser, a move that we welcomed at the time, believing that if they came to office they would introduce a mechanism similar to that we had been advocating. Sadly, when the matter was put to the vote in February this year, the voting pattern was reversed: the Conservatives and Liberal Democrats voted down our motion, while the Labour party abstained. This ever-changing position on a fuel duty stabiliser shows the political expediency of many politicians.

In March 2011 the UK Government cut fuel tax by 1p per litre and delayed some future rises, but the VAT increases have had a significant impact on prices. We voted against that move in summer 2010 and recommended a cut in June this year. The stabiliser model that we suggested is not the one that has been introduced by the UK Government, and it is clear that the problem has not yet been solved. Two further duty rises are scheduled for 2012, which could have dire consequences for business and motorists alike, especially given the ongoing economic difficulties, which are not likely to be solved in the near future.

We therefore need an effective and fair fuel duty stabiliser, and we must also look at pricing in rural areas. We must address the amount of VAT being levied, too. Most importantly however—and moving away from the impact of future fuel duty price rises—we also need to invest in renewable energy alternatives, to reduce our reliance on oil and other fossil fuels.

I heard the arguments about so-called Chelsea tractors. Where I live such vehicles are an absolute necessity—although they are often more downmarket than most Chelsea tractors. When I drive around the country, I have to do so because I cannot take public transport. In London and other conurbations, including Cardiff and Swansea, there is a choice. We need to make that choice viable. We urgently need to address this issue.

Eurozone Crisis

Lord Watts Excerpts

Thursday 27th October 2011 Commons Chamber

[Mr Osborne]

I agree with my hon. Friend that we have to be alert to the danger of the 17 eurozone members, which will have a qualified voting majority, caucusing on areas that are legitimately the preserve of the 27 member states. When this country, under the previous Government, allowed the eurogroup of Finance Ministers to be established and accepted that Britain would not be at that eurogroup, there was the fear that the eurogroup would caucus. That was one of the concerns of the then Government and Opposition. That actually has not happened. If anything, they have not co-ordinated and worked together closely enough over the past decade or so. However, he is absolutely right that we need to ensure that they do not caucus in the future in a way that undermines our voice and influence or that bounces all 27 member states. All member states not in the euro are alert to this challenge. Indeed, last night the Prime Minister had dinner with the Polish and Swedish Prime Ministers to discuss precisely that issue.

[Mr Dave Watts (St Helens North) (Lab)]

Will the Chancellor be crystal clear? Is he guaranteeing that no British money will be used for this bail-out directly, through the IMF or through any other vehicle?

[Mr Osborne]

I can guarantee that British money is not going into the special purpose vehicle.