Charter for Budget Responsibility

Pete Wishart Excerpts

Tuesday 13th January 2015 Commons Chamber

[Chris Leslie (Nottingham East) (Lab/Co-op)]

It is worth recapping at the end of this debate why we are here and why we are having this debate at all. We are still talking about the deficit because the Chancellor of the Exchequer has failed to fulfil his promise to get rid of that level of borrowing—the difference between our expenditure and our income as a nation. This charter, of course, is a device designed to distract from the Chancellor’s failure, making out as though the Tories still have a plan as they originally set out. As my hon. Friend the Member for Glasgow North East (Mr Bain) correctly pointed out, this debate was also supposed to provide a party political opportunity to smear the Opposition and to set up the Conservatives’ election tactics.

[Pete Wishart (Perth and North Perthshire) (SNP)]

Will the hon. Gentleman give way?

[Chris Leslie]

No, I will not give way to the hon. Gentleman.

The trouble for the Chancellor is that this debate gives us an opportunity to draw attention to his colossal failure to fulfil his promise to tackle the deficit. In his eagerness to trip up the Opposition, he has caught himself in a series of contradictions and entangled himself in his own spin.

We should remember that it was only nine months ago that this charter was changed. It keeps changing because the Government desperately have to pretend that they have a grip on things and that they are somehow on top of the deficit issue. The deficit after the next general election, however, is predicted to be a massive £76 billion. Revenues have collapsed over the lifetime of this Parliament, and we have seen rising tax credits and rising levels of housing benefit to subsidise low pay and the high-rent economy that the Chancellor has been fashioning. The Government now find themselves with an extra £200 billion-worth of borrowing over what they originally set out.

The Tories love to talk tough. They publish their documents—[Interruption.] I am delighted to see the Chancellor back in his place. He loves to bang that Dispatch Box and was getting very shouty and loud in his earlier contributions, but the reality is that his strategy has failed. The Chancellor and the Chief Secretary do not have a clue about what they are doing.

The debate was revealing, however, and I would like to ask the Chancellor about it. He said in his opening remarks that his deficit plan had not gone any slower than he had planned. I have taken the opportunity to look at the Hansard record of what the Chancellor said. He said:

“What we have done is cut the deficit by a half. We have neither gone faster than we said we were going to go, nor gone slower than we said we were going to go.”

The Chancellor has got himself into a terrible muddle if he thinks that he did not promise to eradicate the deficit back in 2010. The Prime Minister himself said:

“In five years’ time, we will have balanced the books.”

That was the Prime Minister’s solemn promise to the country.

The Chancellor did become a little bit over-excited. Perhaps he found this rather a difficult occasion, given that the situation was blowing up in his face. Not only did he get into a tangle thinking that he had not changed his deficit reduction plan, but he got into a terrible muddle with the charter. That is quite embarrassing for the Prime Minister in particular. At 3.30 pm on 15 December, the Prime Minister said in a speech that targeting the current budget deficit would be

“a great, black, ominous cloud”

—that it would be a total disaster—but by 4.30 pm, the Chancellor had tabled a Charter for Budget Responsibility that actually supports a current budget process, which is, of course, the correct strategy.

Perhaps the Chancellor needs to be reminded what he said originally, in his 2010 Budget speech. He said that the mandate was current—[Interruption.] Does the Chancellor want to deny that he said, back in 2010, that the mandate was

“current, to protect… productive public investment”?—[Official Report, 22 June 2010; Vol. 512, c. 167.]

If so, let him correct the record now from the Dispatch Box. He will not do that, however, because he knows that targeting the current budget is the right thing to do.

At no point does the Charter for Budget Responsibility commit itself to a fixed deadline for 2017-18. The Treasury would like to pretend that it does, but it does not. Instead, it goes for a “rolling horizon” and year 3 of a five-year rolling forecast. The Chancellor needs to understand properly what that means; he did not quite get it earlier. It means that the target moves forward by a year each year. Perhaps the Chancellor does know that. Perhaps he did this because he wanted to wriggle out of any responsibility to which he might be held now, ahead of the approaching general election. However, if he feels that this is somehow a firm commitment to 2017-18, he is wrong. Labour Members believe that we shall need to get the current budget into surplus as soon as possible in the next Parliament, and nothing in the charter is inconsistent with that view. The Chancellor, incidentally, did not really talk about the charter at all.

--- Later in debate ---

[Danny Alexander]

It is a neutral assumption about the public finances that does not reflect the policies of the Liberal Democrats. I was just in the middle of describing those things, because people want to see some light at the end of the tunnel. They do not want a Dickensian world of decimated public services. I do not see any need for tens of billions of pounds of further cuts beyond 2017-18. If it happens, the reality for many people would be grim. Going too far or too slowly will not offer that light at the end of the tunnel.

[Pete Wishart (Perth and North Perthshire) (SNP)]

rose—

[Danny Alexander]

No, I will make some progress because there are only a couple of minutes left of the debate. For our part, we Liberal Democrats are very proud to support this charter. Indeed, this is Liberal Democrat fiscal policy being voted on in Parliament. As my hon. Friend the Member for Redcar said, we will eliminate the structural deficit by 2017-18, but do so fairly, so we will ask those with the broadest financial shoulders to bear the heaviest burden by paying a little more in tax. When we have the national debt falling as a share of our national output and have eliminated the deficit, we will then balance the books, allowing borrowing only for productive capital investment or for financial stability. That means that we will finish the job and then be able to invest in our public services so that the people of the country can enjoy the world-class public services that they expect. That is the common-sense approach to keeping our national finances under control and to ensuring that our stronger economy also delivers a fairer society.

We should not delay the time by which we seek to finish the job, as the Opposition wish. Putting our nation’s finances back in order is the responsible thing to do, and that is what this charter does. It sets out two clear, simple, coherent targets for the public finances in the next Parliament. The first is to balance the structural deficit by the third year of a rolling five-year forecast, which, to correct the Labour Front-Bench team, does mean meeting that target by the financial year 2017-18. Should Labour win a majority at the election, it will be judged on that three-year target, so it should be straight with its own Back Benchers about what it is asking them to vote for. The second target is to be judged on those goals twice a year by the independent OBR, and also to be judged by the British people as they scrutinise the plans that each party puts forward at the general election against what we are voting for today.

This vote is deeply serious. These rules are a wise, sensible and balanced framework for the public finances in the next Parliament. The British people will expect us to stick to it, so I commend this charter to the House.

Question put.

Income Tax

Pete Wishart Excerpts

Wednesday 5th November 2014 Commons Chamber

[Chris Leslie]

No, we believe that instead of having the married couples break, which does not actually help many married couples, it would be far fairer to introduce that 10p starting rate of tax, because it would help many, many more people. The hon. Gentleman has hit upon yet another example—perhaps this is one for an Opposition day debate on a different occasion—where the Government constantly choose the route of unfairness, limiting the help to those who need support and assistance. Labour believes that everybody should have a share in growth and prosperity, which is precisely the opposite of the trickle-down economics that we have had so far from the parties in the Government.

[Pete Wishart (Perth and North Perthshire) (SNP)]

Getting back to the 50p tax rate, does the hon. Gentleman have any explanation for the fact that when we voted on it in March 2012 only two Labour Members voted in that Division and the rest abstained? What is the explanation for that?

[Chris Leslie]

We have consistently opposed this outrageous change to dish out a tax cut for the very privileged 1% in society. The hon. Gentleman should join us, and I hope he will, in voting for today’s motion, as it is about a key divide in British politics and in Scottish politics. It is very important that we expose the fact that by cutting the top rate of tax on earnings above £150,000 from 50p to 45p Ministers have wilfully accelerated the divide between the majority and the richest 1%.

HMRC (Scotland)

Pete Wishart Excerpts

Tuesday 22nd July 2014 Commons Chamber

[Gregg McClymont (Cumbernauld, Kilsyth and Kirkintilloch East) (Lab)]

It is a pleasure and a privilege to have the final Adjournment debate before the House departs for the summer recess. The future of HMRC jobs in Scotland is an issue close to my heart. It is hard to grow up and live in my constituency without developing personal connections with what is known locally simply as the tax office. A number of my friends and family have worked or work at HMRC Cumbernauld, and it is by some distance the largest employer in my constituency, currently employing about 1,400 staff working across the spectrum of tax, benefits, debt management and the like. It is the UK’s largest tax office. Hon. Members have doubtless at one time or another had communication with HMRC Cumbernauld—not, I hasten to add, because of anything untoward, but simply because that is where so many tax communications are sent from and to.

In 57 days, Scotland will make its decision on whether to remain in the United Kingdom with England, Wales and Northern Ireland or whether to leave, and Scots are weighing up a wide array of issues and interests as they come to a judgment on that decision. That is why every survey of Scottish public opinion illuminates the public’s desire for more information and facts on the issues in hand. Some things are, by definition, uncertain about what would happen if Scotland was to leave the United Kingdom—things that will depend on negotiations with the rest of the United Kingdom, which will depend on the future performance of the Scottish economy in particular. But Scotland’s role in HMRC is not one of those things about which there is uncertainty. The arithmetical facts are these.

Across the UK, HMRC employs 70,000 people. More than 9,000 of those posts are in Scotland. In percentage terms, 13% of UK HMRC staff are in Scotland, a significantly above-population-share of the total. More than 3,000 more posts are allocated in Scotland than a population share would provide. That is testimony to the excellent job that Scottish HMRC staff in Cumbernauld, in East Kilbride and elsewhere provide. It is hard to argue otherwise than that this indeed is a Scottish HMRC jobs dividend. Leaving the United Kingdom would bring to an end Scotland’s role in HMRC. That is surely uncontroversial—a fact, not an opinion.

[Pete Wishart (Perth and North Perthshire) (SNP)]

I congratulate the hon. Gentleman on securing the debate, but is not his timing just a little bit unfortunate? The Westminster Government are actually closing HMRC offices as he is on his feet. I know he does not like Scottish independence and I know he does not like what the Scottish Government are doing, but can he grudgingly accept the fact that we are having no compulsory redundancies in Scotland, which would mean that HMRC staff would be much better treated in an independent Scotland than they would be by the Westminster Tories?

[Gregg McClymont]

I will come to a couple of the hon. Gentleman’s points, but on the issue of HMRC jobs, I am sure he will agree that it is an arithmetical fact that Scotland has a significant dividend from UK HMRC jobs. That is because of the professionalism of staff in Scotland, but it is something that must be put on the record.

Let us tease out a little further these arithmetical facts and then, I think, what we might judge an outcome to be for Scotland after leaving the UK and ending our membership of HMRC. We know as a fact that Scotland has significantly more tax-collecting jobs relative to the UK as a whole. Is there any reason to imagine that an independent Scottish state would need those surplus tax-collecting jobs relative to the size of the UK tax-collecting system? It seems to me that it is hard to imagine why that would be the case. The jobs dividend in Scotland regarding HMRC posts does not reflect different Scottish conditions regarding tax collection, but simply historical decisions and the excellent work undertaken by the Scottish tax office staff.

I have also heard it said by those who might accept in a conversation the arithmetical facts around the number of Scottish HMRC jobs—perhaps by the hon. Gentleman and certainly by others—that there will be no compulsory redundancies, and of course new civil service posts will be needed in a separate Scottish state, the implication being that surplus tax-collecting staff would be transferred to those posts. As the hon. Gentleman said, the SNP Government have given a promise that there will be no compulsory public sector redundancies, but is that promise from Alex Salmond worth the paper it is written on? It is easy to promise something, as things stand, when it looks, as things stand further, as though that promise will never be tested, but let us think a little more about the state, the structure of the Scottish economy and the civil service and public sector jobs therein.

Scotland does not have a small public sector. Our public sector is significant— bigger than that of the UK as a whole. I was glancing through the Scottish Government’s most recent statistics, and they clearly show that Scotland has more public sector jobs and significantly more tax-related public sector jobs than the UK as a whole. I welcome that—it is a credit to the staff and their professionalism—but it suggests that the slack to absorb surplus tax-collection posts in a separate Scottish state will be hard to identify. I say that based on the arithmetical facts, but also as a judgment about the relative size of Scotland’s public sector. Indeed, if we add to that the difficulties that Scotland would inevitably face as it transitioned into an entirely distinct and separate state, as the Institute for Fiscal Studies and other independent experts have observed, one has to question, with some substance and credibility, what that would mean for those tax-collecting jobs in Scotland, and particularly in the largest tax office in the UK in Cumbernauld.

It is my judgment, based on those arithmetical facts, that defending existing public sector provision, not increasing the size of the public sector, is likely to be the reality faced by my constituents working for HMRC in Cumbernauld. In the end, the argument about what happens when we have a substantial surplus of tax-collecting jobs is about whether those posts can be absorbed in the wider Scottish public sector. That is a fundamental question in the referendum debate. There are facts, as I have set them out. There are also judgments, and the hon. Member for Perth and North Perthshire (Pete Wishart) takes a different view, but it is surely incumbent on all of us to give the Scottish people all the facts as they bear on the debate and to let them draw their own conclusions.

The role that HMRC plays is important for my constituency and for Scotland. The next Labour Government are committed to tackling the tax gap. It looks as though in the last financial year the tax gap widened again, despite the Government’s efforts to close it. In my judgment, closing that tax gap will not be achieved without using the professionalism and experience of Scottish HMRC staff.

I am not suggesting that this is the only issue we face in the debate before 18 September—not at all—but for constituents of mine who either work in the tax office or who have friends and family who work there, the issues need to be put on the record and the facts displayed; then a judgment can be made by the people of Scotland.

--- Later in debate ---

[The Financial Secretary to the Treasury (Mr David Gauke)]

I congratulate the hon. Member for Cumbernauld, Kilsyth and Kirkintilloch East (Gregg McClymont) on securing the debate. He continues to make a firm, clear and eloquent case on what is, understandably, a hugely important issue for him and his constituents: the future of the HMRC office in Cumbernauld.

Before dealing with some of the detailed points the hon. Gentleman raised, I would like to explain some of the context behind the changes occurring in HMRC staffing. As hon. Members will be aware, HMRC is currently reshaping itself in order to become a more modern, flexible and cost-effective organisation that can deliver better and more personalised services for customers, increased tax revenues through greater compliance activity and, crucially, better value for money for the public.

In order to provide the best possible value to the taxpayer, HMRC has had to downsize. In fact, it has been steadily reducing the number of employees since it was formed nine years ago. Over that time it has reduced its staff levels from around 97,000 full-time equivalents in 2005 to around 60,000 now. On top of that reduction, and as part of its increased work on digitisation, HMRC will soon be implementing a new system whereby it will scan incoming post. The rational behind that change is that it will remove the need for sorting and transportation. Instead, correspondence will be moved to where it can be dealt with instantly, ensuring that taxpayers’ queries are dealt with more quickly and effectively.

However, a consequence of that change will be that fewer staff will be needed to handle post, which will have an impact on HMRC’s five regional post rooms, as the hon. Gentleman mentioned. I should point out, however, that with regard to business presence and work force size, the recent changes have not had a disproportionate impact on Scotland. In April 2011, around 13% of HMRC’s work force were based in Scotland, and at the end of last month, following the significant reductions it has achieved across the UK, the proportion of its work force based in Scotland remains around 13%.

As it reduces in size, it makes sense that HMRC will need to bring its people together into larger sites where they can work more flexibly and more easily share the costs of office space and IT. In May 2012, HMRC made the concluding announcement about the estate changes it would be making during the spending review period. That saw, as the hon. Gentleman has said, a number of its offices across the country announced for closure, but at the same time it was also confirmed that there would be 16 strategic locations nationwide until at least 2020. Two of those are in Scotland—Edinburgh, encompassing Bathgate and Livingston, and Glasgow, encompassing Cumbernauld, East Kilbride and Paisley.

[Pete Wishart]

The HMRC office in Perth was, of course, closed in the past year under this Government’s stewardship. How many jobs has HMRC lost in Scotland under this Government, how many offices have closed and how many jobs does the Minister foresee going in the course of the next five years?

[Mr Gauke]

I reiterate that the changes in Scotland reflect those across the United Kingdom. The proportion of jobs is identical to what it was three years ago. It is the case that HMRC has reduced significantly in size since 2005, and it is anticipated that it will continue to do so across the United Kingdom. We have stated that we anticipate that staff numbers will fall to about 54,000 by the end of this financial year, although, to be fair, HMRC is expanding its staff in particular areas. There is no reason to believe that Scotland will be disproportionately affected by further reductions. That has not been the history of what has happened in the past.

HMRC continues to review its business, work force and estates needs, and is currently in consultation on a proposal to close a further 12 smaller offices during 2015, two of which are in Scotland—namely Glenrothes and Irvine. Those are all smaller offices and HMRC, for the reasons I stated previously, believes that it makes more sense, and will deliver better value to the public, to bring those staff into larger workplaces. I should make it clear, though, that the consultation on those decisions will, of course, include the consideration of equality impacts and will involve HMRC’s employees, their trades unions, Members of this House and other local interests.

It is also worth bearing in mind that, while the number of general business roles has been reducing in size—as HMRC tries to increase compliance-related yield—the number of roles in that specific area is increasing. Hon. Members may be aware that in June, HMRC advertised up to 2,100 vacancies primarily in compliance roles—up to 680 of which will be based at offices in Scotland. Many of those will be at the newly opened compliance centre in Edinburgh, and HMRC’s debt management and banking business aims to create up to 170 jobs in Cumbernauld, as the hon. Member for Cumbernauld, Kilsyth and Kirkintilloch East has pointed out. Therefore, as HMRC’s work moves forward, new opportunities are opening up for its work force, including in the Cumbernauld constituency.

The hon. Gentleman referred to the September referendum and the future for HMRC staff should there be a vote for the Union to come to an end. Neither the Scottish Government nor the UK Government know for sure what will happen if the people of Scotland vote to leave the UK. In the event of a majority vote in favour of independence, both the UK and Scottish Governments agree that negotiations would be needed. Both Governments have agreed that negotiations to establish a new Scottish state cannot begin unless—and until—there is a yes vote in the referendum. That does not mean, however, that representatives of the UK would or could facilitate everything that the Scottish Government have said they hope to achieve through independence.

If the people of Scotland were to vote to leave the UK, the negotiations that would follow would be unprecedented, highly complex and incredibly detailed. There are too many unknown factors at this stage to say how negotiations would proceed and how long they would take. As the hon. Gentleman will know, the Scottish Government’s White Paper set out what they would like to happen if Scotland became an independent state; it is not a blueprint or a legally enforceable document, and it cannot predict the outcome of the negotiations between the UK and the new Scottish state. In fact, much of what is included in the White Paper depends on the agreement of the UK Government and numerous other public bodies and organisations. In this instance, I therefore cannot get into any detailed discussion of what might happen should such an event occur. However, the hon. Gentleman was quite right to raise, on his constituents’ behalf, concerns about uncertainty for HMRC employees in the event of Scotland leaving the United Kingdom. I am sure that I speak for the vast majority of Members of the House when I say that I hope that those negotiations never come to pass.

To return to specific HMRC matters, HMRC as an organisation has to work within its resources and to fit its future shape. Its plans to deliver an increasingly modern service for its customers, while increasing tax revenues, depend on making changes to its structure and the size of its work force. The changes to date are making an impact and helping it to provide a much better service for the rest of the United Kingdom. In fact, last year it secured nearly £24 billion in additional compliance revenues—a record—and it achieved its best ever customer service levels, and all that was done by about 2,000 fewer staff, who oversaw £235 million of efficiency savings. The staff are doing an excellent job. Although I sympathise with the hon. Gentleman about the job losses in his constituency, which he mentioned, and with the staff themselves, we need to make sure that our services continue to provide the best possible value to the public. We remain committed to a consultative approach to ensure that any changes are managed in the very best way possible.

May I just make one further and final point, Mr Speaker? As the last speaker before the summer recess, I am the last hon. Member to speak from the Dispatch Box or indeed anywhere in the House and to turn to the Table to see the reassuring presence of Sir Robert Rogers. I know that the House has already had an opportunity to pay tribute to him, but I will just put my thoughts on the record. He has brought to his position an enormous amount of authority and a great love for this House. In an environment that can sometimes be a little heated, he has been a consistent embodiment of a sense of fairness, decency and not a little kindliness. In his distinguished career, he must have listened to many thousands of speeches delivered by many hundreds of right hon. and hon. Members. As the deliverer of the last of those speeches—and, I hope, on behalf of the many hundreds who have spoken before me—may I thank him for his outstanding service and wish him a long and happy retirement?

Question put and agreed to.

Wales Bill

Pete Wishart Excerpts

Tuesday 24th June 2014 Commons Chamber

[Nia Griffith]

Amendment 13 would remove a clause which would make it possible for people to stand both on the regional list and in the constituency. A bizarre argument is put forward in favour of dual candidacy—if dual candidacy is not allowed, the smaller parties in Wales may struggle to find sufficient candidates of any quality—but if such parties expect the electorate to take them seriously as parties that could help form a Government in Wales, they need to demonstrate that they can find enough additional candidates to field on each of the five regional lists.

Could this problem of finding candidates be something to do with which parties we are talking about and what they believe in? Could it be that young people in Wales are not rushing to put themselves forward as Conservative candidates because they know that the Conservative party in Westminster abolished the education maintenance allowance, while the Labour Welsh Government have retained it, or because the Conservative Government here did away with Labour’s future jobs fund, whereas the Labour Welsh Government have launched a similar programme, Jobs Growth Wales, focusing on the private sector? There is also the issue of university tuition fees.

Could it be that people are not coming forward as candidates for Plaid Cymru because they do not want an independent Wales, or because they do not want to support cutting tax for the better off, as Plaid Cymru’s economic adviser, Adam Price, has confirmed is its policy? People have realised that Plaid Cymru is not the progressive party it pretends to be, but a reactionary party.

Perhaps people do not want to put themselves forward as Lib Dem candidates as they are somewhat confused. One minute we hear that the Lib Dems are in favour of a reserved powers model, yet we struggled to see any of them in the Lobby with us, supporting our amendment. I am not sure where they are now.

People simply do not like to think that they have bothered to go out to vote, only to find that although their preferred candidate won, the candidate or candidates they rejected also got in. We all remember the Clwyd West scenario where the Labour candidate won the constituency—

[Pete Wishart (Perth and North Perthshire) (SNP)]

What advice has the hon. Lady had from her colleagues in Scotland on this issue, given that they are now almost totally dependent on the list for their membership in the Scottish Parliament and have reviewed their whole attitude towards dual candidacy? It is a democratic good, according to Scottish Labour.

[Nia Griffith]

I am not casting aspersions on any individual list candidates. We have two excellent Labour list Assembly Members in west Wales—Rebecca Evans, who champions disability issues, and Joyce Watson, who champions human trafficking issues. They are doing an excellent job, because they are focusing on topics, not sitting like some great cuckoo on one constituency out of eight and making that their sole focus of attention, ignoring what is happening in important aspects of the other seven constituencies that they represent.

We have seen such abuse in Wales before. I am sure my right hon. Friend the Member for Neath (Mr Hain) will remind us again, as he has done many times, of the blatant abuse of the list system. He has quoted frequently from the leaked memorandum from Leanne Wood, the leader of Plaid Cymru, in which she gives explicit instructions to her party’s list Assembly Members to direct their time and resources, paid for by the taxpayer, to Plaid Cymru’s target seats.

Some people say that putting into the 2006 Act the clause that prevents an individual from standing for both the constituency and the list was a partisan move by the Labour Government, but we knew full well that it would also prevent our candidates from standing for both. We had at least four sitting constituency AMs who we knew were likely to be vulnerable to electoral change in the 2007 Assembly election and who could have hedged their bets by standing for both. That might have been very cosy for them, but as a matter of principle we knew how much the electorate hated it. On the doorsteps we heard people ask, “What difference will it make if we go out and vote?” It was extremely difficult to convince people after the Clwyd West scenario, because whoever the constituents voted for, all four parties were elected.

It was extremely important to us to stand by our principle, rather than making some sort of cosy situation for our AMs. In fact, I would go so far as to say that in some circumstances, depending on the specific arithmetic for the region, a candidate who could stand for both the constituency and the list could be pretty much guaranteed to be elected on one or other of them. That could breed a certain complacency, which would not serve the electorate well at all. We take issue with the accusation that this is a partisan point, because it is a point of principle. We strongly oppose clause 2, which seeks to turn the clocks back and allow dual candidacy. Our amendment therefore seeks to remove that clause from the Bill.

Our view is that the Assembly’s electoral arrangements should be decided in Wales, so we have also tabled an amendment proposing that an order should be laid in the Assembly by the Welsh Government before any change on dual candidacy can be implemented. I hope that Members will vote for our amendments.

--- Later in debate ---

[Pete Wishart]

I am genuinely interested in the right hon. Gentleman’s view on this issue. What advice does he have for Scottish Labour, which has just done a total U-turn on dual candidacy and is now allowing the practice to go on? Will he disparage Scottish Labour as much as he seems to be disparaging Plaid Cymru for carrying out this appalling act?

[Mr Hain]

rose—

Finance (No.2) Bill

Pete Wishart Excerpts

Tuesday 8th April 2014 Commons Chamber

[Jonathan Edwards]

The hon. Gentleman always makes very intelligent points. I believe that he is talking about the Laffer curve. I will discuss the optimal rate of taxation later, but I agree wholeheartedly with his comments.

A report for the Office for National Statistics entitled “The Effects of Taxes and Benefits on Household Income, 2011/12”, which was released in July 2013, showed clearly that, while income tax is progressive, as it should be, the effect of indirect taxes such as VAT means that the bottom fifth of the income groups pay the most out as a percentage of their gross income at 36.6% in taxes, while the top fifth pay 35.5%. The overall tax system is therefore still heavily weighted in favour of the highest earners. Plaid Cymru believes in progressive taxation irrespective of the timing and state of the wider economy. We believe that those with the broadest shoulders should bear the burden of taxation. A Scandinavian model of progressive taxation is part of our DNA.

The House has voted on this measure only once, during the resolution votes following the 2012 Budget debate. I am delighted that it was Plaid Cymru and Scottish National party Members who called that vote. The shadow Chancellor must have been having an off-day, because the entire parliamentary Labour party abstained, apart from two honourable exceptions, the hon. Members for Bolsover (Mr Skinner) and for Newport West (Paul Flynn), if my memory serves me correctly. Although Labour Members voted against the Government’s 2012 Budget, which reduced the 50% rate to 45%, they missed the only vote that we have been able to have directly on the reduction of the top rate.

[Pete Wishart (Perth and North Perthshire) (SNP)]

I am sure my hon. Friend will agree that what happened to the Labour party that evening was cataclysmic. Does he have any explanation as to why the Labour party missed that vote that evening? Something from the Whips Office suggested headless chickens, but that would be showing disrespect to headless chickens. Does he have any idea why Labour abstained on what was one of the key policies at that point?

[Jonathan Edwards]

Unfortunately, I cannot enlighten my hon. Friend, other than to say that the Western Mail informed me that senior Labour staff described it as a “balls-up”.

To be slightly more serious, I was happy that, in response to an intervention from me last week on Second Reading, the shadow Chief Secretary, who is in his place, said that should Labour form the next UK Government, it would restore the 50p top rate for the duration of the next Parliament. I would certainly support that, and I look forward to doing so if there is a Labour Government. My understanding before his answer was that Labour was proposing a temporary increase in the top rate, so I welcome that development. I hope that during today’s debate, the Labour Front-Bench spokesman will confirm that that will be its policy at the next election and beyond.

Owing to the manner in which Finance Bills are processed, it is impossible to press to a vote amendments to alter tax band rates, which is why both new clause 4 and Labour’s amendment 4 call for a review from the Treasury of the impact of re-introducing the 50p rate. The 2011 Budget included the provision of a review to reduce the 50p rate. As I said, nobody foresaw the Treasury introducing such a policy within a year. In other words, the 2011 Budget provisions were a sop to Tory donors that their party was minded to reduce the top rate at some point in the future. The following Budget then introduced the policy.

Proponents argue that the reduction in the additional rate to 45p has led to a windfall for the Treasury because of reduced avoidance and evasion. I noticed in the lead-up to the Budget last month that some Tory Back Benchers were making the case for a reduction to 40p for this Budget based on higher than expected tax receipts—some £9 billion—following the top rate changes. In the newspapers this morning the hon. Member for Taunton Deane (Mr Browne) was making a similar call for his party to adopt the 40p top rate come the general election. He is not in his seat, so perhaps he has been told to go somewhere else. I find that argument difficult to swallow as individuals seeking to avoid tax at a 50p rate would surely be minded to do so with a 45p rate. The higher than forecasted tax receipts used to justify a further cut in the top rate was surely as a result of higher than projected economic performance, and therefore a 50p rate would have brought in even more receipts for the Treasury.

Finance (No. 2) Bill

Pete Wishart Excerpts

Tuesday 1st April 2014 Commons Chamber

[Danny Alexander]

I am tempted to say that we are wandering slightly from the Bill. I can draw the hon. Gentleman’s attention to several measures in the 2010 Liberal Democrat manifesto that proposed reining in excessive expenditure by the Labour Government.

I note that Labour Members have tabled a so-called reasoned amendment. I point out that we are investing in new technology and new energy sources because of the Labour Government’s failure to tackle rising energy bills; because of their failure to get young people into work, we have created the conditions for more than 1.5 million new jobs in the private sector; because of their failure to boost housing supply, we have had to cut back hundreds of pages of planning laws, and because of their failure to help families with child care costs, we have taken bold steps to introduce tax-free child care. In short, because of Labour’s failure to create jobs and growth and build homes, the British public asked the coalition to clear up the mess. The Bill takes further steps to do that. A Labour party that stands in its way is a blockage on the road to recovery.

[Pete Wishart (Perth and North Perthshire) (SNP)]

The Chief Secretary to the Treasury will of course be grateful to Labour for voting with his Government on the welfare cap. Was he as surprised at that as I was, however, given that he will have observed what happened in Perth, with all those weekend socialists proclaiming their commitment to the left-wing cause, only to come down here and vote with the Tories?

[Danny Alexander]

The hon. Gentleman is wilfully misinterpreting what the welfare cap is about. If he had listened to my speech summing up the debate on the welfare cap last week, he would have discovered that the cap was a means of ensuring transparency and accountability to the House in relation to increases in welfare expenditure. In the past, welfare increases were smuggled through the forecasts without proper transparency and scrutiny. The reforms will ensure that, when expenditure is forecast to breach the cap, the Minister responsible will have to come to the House and explain why the breach is happening and what he or she intends to do about it. That could include introducing measures to reduce expenditure; it could also include an increase in the cap, if that is regarded desirable. Given that the hon. Gentleman’s party seems to believe that, under independence, it would be possible for taxes to fall and for expenditure to rise without the chickens coming home to roost, it is not surprising that it should oppose measures to increase accountability to this House on expenditure. The result of the vote last week showed, however, that the House as a whole welcomes the opportunity to hold the Government to greater account for expenditure increases in that area.

Currency in Scotland after 2014

Pete Wishart Excerpts

Wednesday 12th February 2014 Westminster Hall

[Pete Wishart (Perth and North Perthshire) (SNP)]

On a point of order, Mrs Riordan. Is it entirely fair that, in a debate as important as this one, 95% of the time is given to one side and we are now restricted to five minutes? How could that possibly be fair? Can you look into that so that we get more time to put the other side of the case so that the people who are watching this get the opportunity to hear it?

[Mrs Linda Riordan (in the Chair)]

The Member in charge of the debate gets as long as they want for their first speech, and then the time allotted is down to the number of Members who wish to speak. Rather a lot of Members wish to speak in this debate.

--- Later in debate ---

[Katy Clark]

Thank you, Mrs Riordan. As I say, I agree with the hon. Member for Dundee East (Stewart Hosie): I would have liked a longer, more detailed debate. I hope that this is just one of a series of debates in this House on these kinds of issues.

[Pete Wishart]

The hon. Lady is a fair and reasonable woman, and she has accepted that we have very little time to address the other side of the argument. This really important debate must, of course, be heard in the House of Commons; will she work with us to try to ensure that when we debate these issues in future, we get a more equitable division of the time, so that both cases are made?

[Katy Clark]

I suggest to the hon. Gentleman that perhaps the first step would be for his colleagues to put in requests to speak.

--- Later in debate ---

[The Financial Secretary to the Treasury (Sajid Javid)]

I welcome you to the Chair, Mrs Riordan. It is always a pleasure to serve under your chairmanship, and it is good to see my right hon. Friend the Under-Secretary of State for Scotland here today. I congratulate the hon. Member for Edinburgh South (Ian Murray) on securing this debate, on his excellent, thoughtful speech and on giving all hon. Members an opportunity to discuss this important issue. The debate has been lively and passionate. Indeed, it has been the liveliest and most passionate Westminster Hall debate that I have yet seen, which shows how important the issue is not just to the people of Scotland but to the people of the entire United Kingdom.

It is no exaggeration to say that the currency that we use affects everyone every day, whether they are individuals buying food or paying off loans, businesses paying their employees or trading across borders or banks protecting savings or providing mortgages. Currency is one of the most important issues in the Scottish referendum debate. Members may be aware that last April the UK Government issued a comprehensive paper exploring an independent Scotland’s possible currency options. Members will be aware—many hon. Members have referred to this today—that just last week the Governor of the Bank of England, Mark Carney, set out his views on currency unions in measured and, as he describes it, technocratic terms. Members may also have read that the Chancellor plans to give a speech on the matter later this week.

[Pete Wishart]

In the past few days, the Prime Minister and the Chancellor have been playing good toff, bad toff with Scotland. The Prime Minister is love-bombing us from London, and the Chancellor will be threatening us on currency in his speech in Scotland in the next two days. Which one does the Minister support—the good toff or the bad toff?

[Sajid Javid]

That goes to show that the SNP is not interested in a serious debate on one of the most important issues facing the Scottish and British people. That speaks for itself.

The Government have consistently stated throughout the debate that the current economic arrangement—one currency in one United Kingdom—is in the best interest of everyone. We have also consistently stated that it is highly unlikely that a currency union between an independent Scotland and a continuing UK could be made to work. I will use the remaining time to remind hon. Members of our analysis, which explains why that is the case.

First, the lessons of the eurozone crisis are there for us to see. Currency unions do not work without close political and fiscal integration. As a result of the crisis, those countries that use the euro are moving towards ever greater integration to address the challenges that they face. Scottish independence, though, is all about disintegration and would inevitably mean that the continuing UK and Scotland move further apart. The Scottish Government’s proposal for a currency union without fiscal or political integration lacks any credibility and makes one wonder whether the Scottish Government actually understand what the word “independence” means.

Secondly, we know that the economies of an independent Scotland and a continuing UK would be very different and would diverge over time as a result of different laws, different regulations and different industries. One industry that we know would be important for Scotland is North sea oil. A significant portion of an independent Scotland’s economy would depend on oil revenues. Were a change in oil price to affect the two countries differently, a one-size monetary policy with one currency for two separate nations would simply not be suitable.

Thirdly, despite the Scottish Government’s claim, we do not believe that a currency union would be in the interest of an independent Scotland. Such a union would inevitably constrain Scotland’s own economic policies because the remaining UK, to manage the risks of the union, would need to set interest rates and maintain oversight of an independent Scotland’s tax and spending plans. Indeed, a currency union would also be likely to undermine an independent Scotland’s economic resilience and credibility. If, for example, the financial markets sensed that the Bank of England’s monetary policy did not suit Scottish circumstances, they might doubt Scotland’s commitment to the currency union, which would, in turn, lead to financial market speculation. In such circumstances, if markets were not calmed, there would be a very real possibility that Scotland would be forced to adopt its own currency in a time of crisis. One is reminded of the recent situation in Cyprus when there was plenty of talk of the country potentially leaving the euro. Members will know that that was prevented only after a huge bail out from other eurozone members, which came at a significant cost to Cypriots, many of whom lost up to 40% of their deposits in domestic banks.

Fourthly, just as a currency union is not in Scotland’s interest, it is hard to see how it could be in the interest of the remaining United Kingdom. Such a union would involve the remaining United Kingdom giving up an element of its economic sovereignty, as we have heard from many hon. Members today. The public would feel very strongly about that. It would increase the risk of having to bail out Scottish banks, and the idea of putting the remaining United Kingdom’s economy at risk because of another country’s banks just as we are getting our own banks in order would make no sense.

Before I come to an end, I will address some of the questions that have been raised. I listened carefully to the speech of the hon. Member for Dundee East (Stewart Hosie) and what he has to say on this issue is very important. I agree with the shadow Minister that he is an intelligent person who makes valuable contributions in the House, but from what I have heard today, he does not seem to want facts to get in the way of a good argument.

The hon. Gentleman and other hon. Members mentioned the banking bail outs of 2008. I remind him that the cost of recapitalising the Royal Bank of Scotland was £45 billion, which is the largest banking bail out the world has ever seen, plus an additional £275 billion of state support through guarantee and funding commitments. That sum is more than 200% of an independent Scotland’s GDP.

Fairness and Inequality

Pete Wishart Excerpts

Tuesday 11th February 2014 Commons Chamber

[Mr MacNeil]

We voted against its abolition. It would not have gone—we would have the 50p tax rate right now—if the hon. Lady and many others had joined us in the Lobby. The question is: why did she and her colleagues not go through the Lobby to vote against the cut? Where were Labour Members that night? There was no sign of them. Would anybody from the Labour party care to tell me why they did not vote against the cut to the 50p tax rate? I would be very pleased to hear why not. Will one of the about 20 Members on the Labour Benches please stand and explain why Labour did not oppose the cut to the 50p tax rate? Going once, going twice, gone: Labour has refused to explain.

[Pete Wishart (Perth and North Perthshire) (SNP)]

I remember that evening very well. To call Labour Members headless chickens would be an affront to headless chickenry, given the way they were running around. Does my hon. Friend agree that perhaps it was a principled abstention that the Labour party pursued that evening on the 50p tax rate?

[Mr MacNeil]

Well, a principled abstention by the Labour party is news to me, but I take on board what my hon. Friend says.

I was talking about hunter-gathering. I was not so much hunting Labour Members as asking why they did not go through the Lobby on the 50p tax rate. I was discussing why people have certain outlooks in life. I think that when people view the fruits of their success as being the result of a hunt that involved a great deal of good fortune and support, they might have a tendency to be slightly more left wing, whereas those who think the fruits are the result of their own individual hard graft might have a tendency to be more right wing and view their gains as a gather. I will make no further judgment on that idea—I just want to put it out there and let people chew it over—but I think there is something deep-seated in our own personal biases as to why we arrive at certain points of view.

--- Later in debate ---

[Mr MacNeil]

My hon. Friend is absolutely correct. We can see that again in the philosophy behind the bedroom tax, which is not one that I subscribe to in any way. Last night, I stumbled across a Channel 4 programme on Walsall and Glasgow housing authorities. It talked about having to demolish houses in Walsall, due to their being left empty: people cannot stay in them because of their cost and what people have lost in welfare. Glasgow housing authority has demand for 1,500 more one-bedroom properties—people want them so that they will not be penalised—but it does not have them. It is, inefficiently, trying to build them so that people can avoid the bedroom tax, but the costs are colossal.

[Pete Wishart]

I am loth to interrupt my hon. Friend’s fantastic speech, but perhaps I can help him a little. We know a bit about what the Labour party proposes to do with the Scottish budget because of the cuts commission. It intends to do away with universal benefits and it does not like free bus passes and free prescriptions. That is what it would do if it gets control of the levers of power in the Scottish Parliament. We know exactly where it is going with its cuts commission.

[Mr MacNeil]

My hon. Friend is absolutely correct. Johann Lamont has a cuts commission. [Interruption.] I hear from the Labour Front Bench that she does not have a cuts commission, which is another example of how Labour Scottish Members say one thing while Labour in Scotland says another. If Labour Front Benchers want to tell us what Johann Lamont is doing—if she has told them—they are more than welcome to intervene.

--- Later in debate ---

[Mr Brown]

I am saying that a rosy picture is being painted. Some will say, “It is happening in London and the south-east”, but the Minister represents a Welsh constituency, which is rural, just as mine is. People in rural constituencies and in some urban constituencies are finding things really difficult indeed. The situation is still pretty tough and they do not recognise this rosy picture that is often painted.

Also in the other place yesterday, Lord Lawson stated that

“it is far more important to focus on making the poor richer than on making the rich poorer”.

I have to agree with that, but the Minister replied:

“we want to make sure that everybody makes a fair contribution to society and that all those in work get a fair wage for their labour. Obviously, there comes a point when taking too much tax from those right at the top becomes counterproductive.”—[Official Report, House of Lords, 10 February 2014; Vol. 752, c. 408-09.]

I would have to argue with that; those comments by the Minister tell us an awful lot about what those on the Government Benches are thinking.

Where we disagree with the text of the motion is on the words

“successive governments of all political hues have presided over an underlying trend of rising income inequality since the early 1980s”.

There can be no doubt that over the past 30 years or so there have been some particularly difficult and distressing times for many families, but during the early years after the change of government in 1997 rapid improvements were made right across the country. [Interruption.] I am not about to rewrite history; I am about to tell the Chamber what actually happened, because we tend to forget. This relates to a point made by the hon. Member for Carmarthen East and Dinefwr (Jonathan Edwards), because he said that if Labour were to win the next election we would be carrying out the current Government’s spending plans. When Labour came to power in 1997 we held by the tight budgetary constraints, but as a party coming from opposition to government we decided that we would spend the money in a wholly different manner. What did we do with the chance that came our way? We created employment opportunities for young unemployed and long-term unemployed people, the disabled and lone parents through the new deal, and those very chances that were given to so many people brought about a marked change when coupled with the introduction of the national minimum wage and working tax credits. It was not the answer to every woe that people had suffered under the previous Government, but it was a major step forward. For many individuals, especially women, it meant that they no longer had to try to hold down two or three jobs to make ends meet.

The motion makes reference to inequality between men and women, but fails to recognise the gains made by women under the Labour Government from 1997 to 2010. I am talking about not just the minimum wage and tax credits but extensions to child care, which allowed more women to participate in the labour market, and extensions to maternity leave, which meant that women no longer had to choose between work and family life soon after having a child.

Let me now mention one or two things that have been raised this afternoon, including the issue of food banks. Over the past 12 months, there has been a 170% increase in the number of people using food banks. Between 2010 and 2011—some two years ago—61,468 people were using food banks, compared with more than 346,000 now. Those are only the Trussell Trust figures. There are other ad hoc, less regulated, food bank systems.

The Minister mentioned welfare reform. Let me tell him, in case it has slipped his mind, that the previous Labour Government introduced three welfare reform Bills, and we maintained that those who could work should work and should be given help and support into work.

[Pete Wishart]

Where does the hon. Gentleman stand on the great “more powers” debate in the Labour party? Is he one of the boycotters, or is he an enthusiast of more powers? Would he give welfare powers to the Scottish Parliament, so that it is under Scottish people’s democratic control, or does he want to keep it with the Westminster Tories?

[Mr Brown]

I will come to that in just a moment. It is not that I need time to think. [Interruption.] Let me tell the hon. Gentleman that I am a solid believer in devolution.

We put three welfare reform Bills through the House. They were designed to ensure that those with the greatest need received benefits not just to exist but to live. We were able to recover that money by getting others into work. We were making progress on that when the banking crisis hit and turned the world upside down.

--- Later in debate ---

[Mr Weir]

I cannot believe what I am hearing from the hon. Lady. What I said is that the Scottish Government have taken action on and invested money in those matters. We have not claimed that we have solved every problem under the sun—we cannot possibly do that—but what we have said is that we have done all we can with the powers we have and that with the powers of independence we will be able to do so much more.

[Pete Wishart]

My hon. Friend is making a very powerful speech. Does he share my great concerns about the cuts commission? Labour has said that everything is on the table and has set out a whole list of things, including tuition fees, free bus passes, prescription charges and free personal care. Is my hon. Friend as worried as I am that if Labour gets its hands on the levers of power, those things will be under threat?

[Mr Weir]

I do indeed have great fears about what will happen to our country if we do not get a yes vote in September, because either this lot will continue in power with the cuts already promised by the Chancellor, or we will have the Labour cuts commission and heaven knows what it might come up with.

We have a different vision for our country. We will be able to do many things with independence that we cannot do under devolution. The problem of child care, for example, is not just about improving the early education of our children and helping families, important as those things are; it is also an important economic policy. If we can raise female participation in the labour market to the levels achieved in, for example, Sweden, we will not only boost general economic performance, but raise an extra £700 million a year in tax revenue.

Under devolution, the Scottish Parliament has been able to increase the amount of child care available and it has recently announced a further extension, but with independence we could go beyond that and deliver our ambitious plan for the provision of free universal child care for all children aged one to five—a policy that, when fully implemented, would save families up to £4,600 per child per year.

Why do we need independence to deliver that? Because at the moment, as I have said, Scotland receives a fixed budget from Westminster. We would not receive the increased tax revenues resulting from having more women in the workforce unless Westminster decided that we should, so under devolution the costs of providing increased child care would have to be met from within a fixed budget, which would inevitably mean cuts in other services. Those who are making that argument need to tell us where they want to see the cuts. That social and economic transformation can be achieved only when we have access to all of Scotland’s resources, and that is why we need independence delivered to the full.

We could also take action to ensure that most people are treated fairly and that work is genuinely a route out of poverty. We should not accept this as a given, but the fact is that many women work in low-paid jobs, so what we do with the minimum wage really matters to the living standards of women and their children. With independence, we will able to guarantee that the minimum wage will rise at least in line with inflation every year and not leave it to the whim of the Government of the day.

It is interesting to note that, if the minimum wage had increased in line with inflation over the past five years, the lowest paid would be £600 a year better off than they are now. That has been the cost to the lowest paid of not being able to take such decisions ourselves and of not being able to make the impact we want on the inequality that stalks our nation.

With independence, we and not Westminster will be responsible for implementing the Equal Pay Act 1970, closing the scandalous 32% gap that still exists between the pay of men and women. Why is it that 44 years after that Act was passed there is still such a huge gap between their pay?

Decisions being made down here about the retirement age are also a problem. Just a few years ago, women could expect to retire at 60. By 2020 the retirement age for women will be 66—an increase of six years in just a decade. As things stand, young women entering the work force today will probably have to work until they are about 70. Of course, we all have to accept that people are living longer and that things cannot stand absolutely still—we accepted the first rise in the retirement age—but the rapid increases being imposed by Westminster are not right for Scotland, because we have different demographics. We have serious problems in some of our communities and we are working hard to deal with them. The fact is that life expectancy is often much lower in some of those communities than in the general population. It is, therefore, surely better that decisions about the retirement age are taken in Scotland, where such distinctive circumstances will be properly taken into account.

I have often spoken in the House on energy, and it will be no surprise that I want to say a few words about it. In its recent campaign, Energy Bill Revolution made the point that fuel poverty has increased across the UK by 13%, but one gain from devolution is that that is not the case in Scotland. Under the latest Scottish house condition survey, which was revealed at the end of last year, the number of those in fuel poverty in Scotland has decreased by 3.4% at a time when energy prices are rocketing. That is a tremendous achievement by successive Scottish Administrations, who have made real efforts to tackle fuel poverty. However, there is so much more we could do.

--- Later in debate ---

[Stephen Crabb]

With the leave of the House, I start by thanking the hon. Member for Banff and Buchan (Dr Whiteford) for summarising the debate in her usual intelligent way, and all right hon. and hon. Members who have participated in this wide-ranging and interesting debate on subjects of huge importance to Members on both sides of the House—fairness and inequality.

I will meet head on some of the criticism that has been levelled at the Government by saying that no Government Member is painting a rosy picture about the challenges that many households and families still face. None of us is complacent about the issues that we have been debating. As the country is still recovering from the economic trauma that it was subjected to between 2008 and 2010, much progress remains to be made in seeing wages increase, seeing the emerging economic recovery spread to all parts of the country, and ensuring that people from all walks of life in all parts of the UK can share in that emerging economic recovery.

We are not painting a rosy picture about that recovery, but neither do we subscribe to the view that has been put consistently today by Opposition Members that the growth is somehow not real; that it is somehow patchy and fuelled by London and the south-east and what is happening in the housing market. If they take time to look at what the statistics tell them, they will see that the emerging recovery is broadly balanced across all the sectors of the economy—manufacturing, construction, tourism, services and exports. Progress must still be made to ensure that the recovery reaches all parts of the UK, but just as three years ago they were deficit deniers, as we come to the end of this Parliament they have become growth deniers. They deny that the growth and the recovery are taking place.

This evening I will be urging hon. Members to reject the motion, because at its heart is the biggest risk of all to the emerging economic recovery, which is a return to the failed economics of more spending, more borrowing and more debt. Just as so many Government Members this afternoon have asked where the equity is in saddling our children and grandchildren with yet more debt, the fair, compassionate, progressive thing to do is to meet that challenge head on and see the deficit come down.

In the minutes that remain I will refer to a number of the speeches made by hon. Members. I pay tribute to the opening speech by my hon. Friend the Member for Carmarthen East and Dinefwr (Jonathan Edwards), who spoke with typical passion and made a plea for fairness. However I take issue with his description of Wales as a colonial economy. I absolutely reject that term. Wales is not a colonial economy. The economy of Wales is highly integrated with the rest of the United Kingdom. One reason why support for separatism is so low in the Principality is that real people out there understand how integrated the Welsh economy is with the rest of the United Kingdom. They reject the separatism of Plaid Cymru and the Opposition.

We had a long and interesting speech from the hon. Member for Na h-Eileanan an Iar (Mr MacNeil). He started by introducing the philosophical challenge of what to do with a box of chocolates among children. I disagreed with a lot of his economic analysis, but I strongly agreed with him when he said that behind all the economic statistics that we are talking about are real lives. Members on both sides of the House should not lose sight of the fact that when we talk about record numbers of people returning to work and unemployment falling in our constituencies, those are real lives. People are making their way back into the jobs market, upping their skills and getting new confidence, which will make a powerful difference in our communities.

The hon. Gentleman also made an important point about the decline of social mobility. I put on record that both his nation of Scotland and mine of Wales at one time were beacons of social mobility. There was a time in Wales and Scotland when increasingly it did not matter who one’s mum and dad were, what street one grew up in or what jobs one’s parents did. There was a progressive trend of social mobility. We have gone into reverse on that, and that is one of the great tragedies of what has happened in the economy in recent decades.

My hon. Friend the Member for Aberconwy (Guto Bebb) made what I think was the speech of the day. He spoke with expertise and experience about small businesses being the engines of job creation, not only in Wales but across the UK. Members on both sides of the House should pay tribute to him for the work he has done, particularly on interest rate swaps and on challenging the banks on the way in which they have treated small businesses in recent years. He spoke powerfully and passionately about the ethical and moral underpinning of our welfare reforms and what we are trying to achieve. It is not just about deficit reduction, and it is not about attacking the poor or anything so absurd; it is about seeing lives changed and communities that were blighted by worklessness unlock their potential so that they can increasingly share in the emerging economic growth.

The hon. Member for Angus (Mr Weir) drew on his expertise on fuel poverty and energy markets. I promise to write to him, or to ensure that one of my ministerial colleagues does, on the specific point he raised. He mentioned pensioner poverty, as did other Members, so let us remind ourselves of the figures. In 2011-12, 1.6 million pensioners were in relative poverty, which is close to the lowest rate recorded. Pensioners are less likely to be in relative low income than the population as a whole. The Government want all pensioners to have a decent and secure income in retirement.

The hon. Member for Dumfries and Galloway (Mr Brown) seemed a little confused and uncertain about what is happening to income inequality, so let us put on the record what the statistics show: income inequality is falling under this Government, having reached record levels under the previous Labour Government. I very much agree with his comment that young people are not only our future—they are more important than that—but our today. That is why we are making efforts to see youth unemployment fall, just as unemployment is falling right across the country. We take seriously the opportunities facing our young people and are in no way complacent about the challenges that today’s generation of young people will face. However, let me remind Opposition Members that if we are serious about the kind of future young people will face, we absolutely must reject the terms of the motion, which calls for a return to more borrowing, more spending, more deficit and more debt.

My hon. Friend the Member for North East Somerset (Jacob Rees-Mogg) made a characteristically entertaining speech in which he made some extremely important points about business being the generator of growth and the creator of jobs in the economy. He used the analogy of a rising tide carrying all boats, but it is business and private sector growth that makes that tide rise. We absolutely agree.

The hon. Member for Oldham East and Saddleworth (Debbie Abrahams) drew on her expertise in health inequality and made a characteristically well-judged speech. I just remind her that in the nations of Wales and Scotland, which we have focused on today, many of the policy levers that relate to health inequality—housing, health and education, for example—lie with the devolved Governments. I encourage her to look at what is happening in Wales. If she studies that in detail, she might have some serious and difficult questions for her Labour colleagues in Cardiff.

My hon. Friend the Member for Bedford (Richard Fuller) made an excellent speech reinforcing the point that if we are serious about fairness, we must take seriously the issue of what kind of future our young people and their children will face. That is why we remain absolutely committed to reducing the deficit and restoring stability, discipline and order to our national finances.

The hon. Member for Llanelli (Nia Griffith) spoke about zero-hours contracts, which she clearly regards as a negative thing. The number of zero-hours contracts in the economy was the same in 2013 as it was in 2000, so the idea that there has been some kind of explosion in the number is just not correct. If she really regards them as such a bad thing, she should speak to her colleagues running Carmarthenshire—

[Pete Wishart]

claimed to move the closure (Standing Order No. 36).

Question put forthwith, That the Question be now put.

Question agreed to.

Main Question accordingly put.

Economic Growth

Pete Wishart Excerpts

Wednesday 15th May 2013 Commons Chamber

[Ed Balls]

I will read our amendment to the hon. Gentleman so that he knows exactly what we will vote for. We say

“that the priority for the Government now should be growth and jobs and that we need reform of the European Union, not four years of economic uncertainty which legislating now for an in/out referendum in 2017 would create”.

Let me quote to the hon. Gentleman the press release issued this morning by the Engineering Employers Federation, which knows about manufacturing investment in the long term. It says:

“EEF, the manufacturers’ organisation believes the current debate is ‘letting British business down’ with politicians making claims that the EU isn’t working for Britain rather than focussing on how to work to make it better”.

Let me set out further our position on this reform agenda, which has been set out in recent weeks and months by the Leader of the Opposition, the shadow Foreign Secretary, the shadow Home Secretary and me. Instead of four years of uncertainty, our Labour amendment says that the priority now should not be walking out of meetings or being entirely ignored but arguing with influence to get the reforms agreed. These include reform of the common agricultural policy, tough new budget discipline in the European budget with stronger independent audit—[Interruption.] Conservative Members should listen, as I would have thought they agreed with many of these things. The priorities include reform of family-related payments to EU migrants, greater national flexibility in transitional arrangements, a balanced growth plan and a new growth commissioner, an end to the wasteful Strasbourg Parliament and more powers for national Parliaments.

Let us reflect for a moment on what the president of the CBI said just a few weeks ago:

“UK membership of the EU encourages large company capital investments within the UK, creating jobs and wealth that trickle down to medium and small company suppliers”—

the kind of trickle down we quite like. He continued:

“Departure would be bad for employment and growth across a broad business spectrum.”

This is what Sir Richard Branson wrote in January:

“An exit would be very bad for British business and the economy as a whole...The EU is the UK’s biggest trading partner, its combined market dwarfs the US and China. For that reason alone the UK must stay in to help rebuild the EU.”

He was right.

Let this sink in: Conservative Back Benchers, with the blessing of many Conservative Front Benchers, are proposing today an amendment that aims to break our ties with our main trading partner, blight inward investment into the UK and put at risk upwards of 3 million jobs. Let it sink in, too, that the leader of the Conservative party, the Prime Minister of our country is not just too weak to do anything about it—he is caving in, day by day, to their demands.

[Pete Wishart (Perth and North Perthshire) (SNP)]

I agree with the shadow Chancellor almost entirely on Europe, but will he pledge today that he will not support an in/out referendum that might take the UK out of Europe?

[Ed Balls]

I want us to stay in the European Union; I am absolutely clear about that. Our amendment is absolutely clear, too, about the effect of an in/out referendum announced now. I am going to quote someone, which might go down well with the hon. Gentleman but perhaps not so well with some Conservative Members. Lord Heseltine said:

“To commit to a referendum about a negotiation that hasn’t begun, on a timescale you cannot predict, on an outcome that’s unknown, where Britain’s appeal as an inward investment market would be the centre of the debate, seems to me like an unnecessary gamble”.

My answer to the question of the hon. Member for Perth and North Perthshire (Pete Wishart) is that we will not take that unnecessary gamble now. It would be the wrong thing to do. This is exactly the same position as the one the Prime Minister and the Chancellor joined us in the Lobby to vote against in October 2011. How things change!

Let us remind ourselves of what the Prime Minister told the Conservative party conference in 2006; it is worth reading the whole quote so we can understand its full impact:

“For too long, we were having a different conversation. Instead of talking about the things that most people care about, we talked about what we cared about most. While parents worried about childcare, getting the kids to school, balancing work and family life—we were banging on about Europe.”

His party has certainly been banging on about Europe day after day over the last week—banging the nails in the coffin of Tory modernisation and in the coffin of this Prime Minister’s prime ministership, too.

We should not forget that this is the Prime Minister who last summer rejected calls for an in/out referendum. Then, just three months ago in his much-heralded Europe speech, the Prime Minister pulled his referendum stunt—a Europe speech to wrong-foot Labour and UKIP and unite the Conservative party. This is how The Independent reported Downing street’s gleeful boasting back in January.

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[Mr Osborne]

I will give way to the Scottish nationalists in a moment.

It was not this Chancellor but the German Chancellor who said the other day:

“If Europe today accounts for just over 7% of the world’s population, produces around 25% of global GDP and has to finance 50% of global social spending, then it’s obvious that it will have to work very hard to maintain its prosperity and way of life.”

That was the leader of Germany speaking. I believe that there are out there other people who also seek change, but above all, for the United Kingdom, because of the changes happening in the eurozone, we need a new settlement and I am confident that the Prime Minister will deliver it.

[Pete Wishart]

The Chancellor of the Exchequer and I know that the UK is halfway out of the European Union. Does he agree that the best way for the Scottish people to remain within the European Union is to vote yes in the referendum next year?

[Mr Osborne]

As our Scotland analysis papers show, Scotland would have to apply to join the European Union as it became a new state. I am glad the Scottish National party is taking part in this debate on economic policy. Perhaps we will get a clearer view from SNP Members, after the shambles of the past three weeks, of what their policy is on the currency that Scotland would use, should Scotland vote to leave the Union. We have not had a clear answer. Some members of the SNP have said that Scotland should have its own currency, others have said that Scotland should join the euro, and still others have said that they would negotiate a monetary union with all of us in order to keep the pound. There is complete confusion in the SNP ranks and until they have a clear answer to that, they will not be listened to on much else.

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[David Rutley (Macclesfield) (Con)]

The Queen’s Speech sets out a positive agenda—one that shows that Government Members are supporting hard-working people who want to get on in life and working to boost our national competitiveness to build the foundations for much needed sustainable economic growth.

The draft deregulation Bill rightly focuses on reducing the bureaucratic burden faced by all too many businesses. It is a subject on which I have campaigned long and hard during my time as a Member of Parliament. The Institute of Directors has calculated that the cost of regulation on business in this country is £110 billion a year. That is clearly too high. This Bill will make a difference by exempting from health and safety law the self-employed whose activities pose no potential risk to others. It will also give non-economic regulators a new duty—to have regard to the impact of their actions on growth. These are positive steps for businesses in Macclesfield and across the country.

Our ability to innovate has always been critical to our competitiveness. That is why it is indeed time to introduce the Intellectual Property Bill. I welcome the fact that the Federation of Small Businesses has said:

“Streamlining the patent system…will make it more cost effective for small businesses to protect their inventions.”

The Bill goes further by improving design protection, too. That is good news for this vital part of the UK economy, which accounts for more than 1% of gross domestic product.

As competitiveness improves, businesses will be better placed to create more jobs, and the national insurance contributions Bill clearly demonstrates the Government’s commitment to this vital task. The new £2,000 employment allowance will encourage in particular small businesses looking to take on more staff, and it will build on the Government’s proven track record of job creation, with over 1.2 million jobs created in the private sector since the election. I am pleased that we have the ambition to go further.

The Queen’s Speech sets out an important agenda that will improve our national competitiveness, but that ambition does not stop at the English channel—much to the disappointment of my hon. Friend the Member for Dover (Charlie Elphicke), who is no longer in his place. There is more work to be done within the EU and in wider international markets. As the UK’s competitiveness improves, we need British businesses exporting more. Britain needs to fall in love again with enterprise, entrepreneurs and exporting. Equally, businesses need to be more curious about exploiting opportunities overseas and follow the example of successful SME exporters such as J Tape in Macclesfield.

Trade associations and chambers of commerce should help raise awareness of the sources of support available to SMEs and they need to make sure that they are out there representing British businesses in vital growth markets such as Brazil and South Africa, where I suspect they are currently under-represented. British businesses should seize the day and make exports our business once again.

There have been reports in recent days of a real and growing appetite among my Conservative colleagues to address our relationship with the European Union. I can categorically confirm that those reports are true. It is increasingly clear that the public want the issue to be addressed as well. They understand that it is not just about sovereignty, but poses a clear and present danger to our real economy. I am pleased that the Conservative party, alone in the House, recognises that, and will offer an in/out referendum.

[Pete Wishart]

We have just learnt from The Spectator that the hon. Member for Mid Bedfordshire (Nadine Dorries) is talking about a UKIP-Conservative candidacy at the next general election. How many other Conservative Members are considering that, and does it constitute a new realignment of the right?

[David Rutley]

Whatever the hon. Gentleman may have read in the paper, and whatever blog may be in existence, there is no plan for any such coalition.

[Pete Wishart]

Are you sure?

[David Rutley]

Absolutely. We are categorical about that. We have a very clear plan. We are the only party in the House that is presenting proposals for an in/out referendum, and things will stay that way. On the back of that, I am confident that we can secure an outright Conservative victory.

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[Pete Wishart (Perth and North Perthshire) (SNP)]

In the few minutes available to me, I want to confine my remarks to amendment (b). When the history books are written and we come to the chapter that describes and explains the UK’s exit from the EU, this week will go down as an important and significant week. After this week, the UK’s departure from the EU becomes almost unstoppable.

The UK, already a surly, sulky, semi-detached member of the EU, always available to offer some withering criticism to one of its few remaining allies within the EU, already halfway out of the exit door, is like some sort of staggering drunk looking for the oblivion of last orders, on its way out chanting, “We are the famous United Kingdom. No one likes us. We don’t care.” That is the reality of the UK within the EU. Its exasperated, declining number of allies in the EU do not know whether to boo, cheer or sing hasta la vista, such is the state and condition of the UK’s membership of EU.

It is clear that the UK is on its way out. It will either be out on the basis of the salami-slicing favoured by the Prime Minister—let us renegotiate a new terms of entry, which will obviously be rejected by most of its European allies—or, more likely, it will be wrenched out following the yes/no referendum plan by the Government, in a sort of in-your-face Barroso gesture from the UK electorate. What we actually have is an irresistible momentum for the UK to be taken out of the EU.

Of course, the EU was not even mentioned in the Queen’s Speech—that now appears to be an unfortunate oversight—but it is centre stage, because we are entering a new Session of Parliament, the UKIP session. It is the age of Farageism, a desperate creed characterised by an obsession with departure from the EU and with immigrants. It is an unpleasant, intolerant, neo-liberal creed with a disdain and hearty contempt for minorities. That is what will underpin this Session of Parliament, because the Government know that UKIP will win the next European election.

That is not my country and I do not want it. I want my country out of all that. My country is very different. The reason UKIP does not do well in Scotland, and the reason there is the lone panda of one Conservative Member in the Scottish Parliament, is that that agenda simply does not chime with the collectivism and the social attitudes and values of Scotland. That is why UKIP got less than 1% of the vote in the most recent Scottish parliamentary elections. I am proud that my country is so different from the one we observe south of the border. I hope that England and the rest of the United Kingdom do not go down that road, but they are entitled to have the Government they vote for, just as my nation is entitled to the Government we vote for.

There is now the real prospect of a party whose members the Prime Minister refers to as fruitcakes, loonies and closet racists having a share in the running of the United Kingdom. What will the Government do to ensure that does not happen? They have tried to name-call and disparage, but that has not really worked, given UKIP’s success in the local elections. They could try to buy UKIP off, but that would not work either. They are absolutely stuffed. My advice to the Government is that they had been doing all right and should have stuck with the hoodie-hugging and huskie-mushing new Conservatism. They simply could never out-UKIP UKIP, which is the master of European obsession and grievance. They should stick to their guns and ensure that they are different from UKIP.

It used to be said that Scottish independence would lead to Scotland being taken out of the European Union. Not many people are saying that now.

[Henry Smith]

Does the hon. Gentleman think that an independent Scotland would have to join the euro, or does he want to keep the British pound?

[Pete Wishart]

The hon. Gentleman is not on particularly steady ground when it comes to the debate on Scottish membership of the European Union. To answer his question, we will not be joining the euro but instead will follow Sweden’s example.

The Scottish people are observing two futures. In one future they remain shackled to the United Kingdom, which will become increasingly shackled to an intolerant, right-wing agenda. The hon. Member for Mid Bedfordshire (Nadine Dorries) has already said that she will have a joint UKIP-Conservative candidacy at the next election. I do not know how many more Conservative Members will adopt that stance. What we are seeing is a realignment of the right. All I have heard from the 1922 committee, which has not been very pleasant recently, with all the disagreements about Europe, is that there is a faultline running through the Government. The Scottish people have a choice: they could have that future, or they could have their own future, determined by them and based on their values.

[Kelvin Hopkins]

The hon. Gentleman is making the case that Euroscepticism is an entirely right-wing view. In fact, across Europe the majority of Euroscepticism is on the left, among socialists, trade unionists and working-class people.

[Pete Wishart]

That might be true, but that is not how it is being demonstrated politically.

What we have observed is a total realignment. There are two different countries, and one is emerging south of the border with increasing UKIP results. It is absolutely certain that UKIP will win the next European election, and Conservative Members should be very careful about all that. They are right to be wary, because it could deprive them of office. I do not know what will happen, but Scotland has a choice—thank goodness—to do something different. We can remain shackled to an increasingly right-wing United Kingdom, almost relaxed about its continuing decline, or we can decide to have a future of our own, a future determined by the Scottish people, based on our social values and the type of community we want to develop and grow. We can choose to be a consensual and helpful friend in Europe, rather than one that likes to criticise, is semi-detached, does not really enjoy being there and is on its way out. Thank goodness we have that choice.

I know the type of future that my fellow countrymen and women will choose. They will opt to ensure that their future is in their hands. They will determine the type of Scotland they want: a Scotland standing proud in a coalition of nations around the world. That is the country I want and I am absolutely certain that that is what my fellow Scots will choose next year.

Finance (No. 2) Bill

Pete Wishart Excerpts

Thursday 18th April 2013 Commons Chamber

[Mr MacNeil]

I do not dispute that it has a great effect on everyone in the United Kingdom, but Scotland is currently in the United Kingdom and it therefore affects Scotland. I look forward to hearing the hon. Gentleman’s speech. I am sure that the points he raises will be very welcome.

[Pete Wishart (Perth and North Perthshire) (SNP)]

My hon. Friend referred to numbers, and I am sure that he, like me, will have noted that the hon. Member for Central Ayrshire (Mr Donohoe) is the only Scottish Labour Member who has bothered to turn up for this debate, such is their concern about the issue we are addressing.

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[Mr MacNeil]

The hon. Gentleman is right about that to an extent. For some flights, however, APD is paid on one of the legs going into the islands, so he is not entirely correct, and the flights that are exempt are those capable of carrying under 20 passengers with a take-off load of less than 10 tonnes. He should know the details of what he is talking about.

May I ask the UK Government a simple question? Why are they not devolving APD to Scotland? Is it because the UK Government do not want to see Scotland doing better? Is it because the UK Government care only about collecting revenues from Scotland? Or is it that they think that once one tax goes, all taxes will go—and that the often peddled myth that Scotland receives extra money from the indebted UK will be seen for the lie it is? Is there a fear of APD today, oil revenue tomorrow, so the mantra is that it is better to keep taxes together at Westminster?

The Government refuse to listen to sensible voices in Scotland. Robert Kerr, the chairman of French Duncan and the Scottish accountant of the year, said:

“More helpful would be a reduction in the rate of air passenger duty (instead, the Chancellor announced in his Budget that it would increase at the highest level of inflation for two years)”.

He continued:

“Scotland is preparing to welcome the world in 2014, when it hosts the second Year of Homecoming, the Commonwealth Games and the Ryder Cup. If we are to maximise the economic opportunities such events present, then we need more help from our governments rather than hindrance.”

I would add that when the referendum is won, Scotland will be in the world’s focus and many more people will want to travel to it. We do not want them to be penalised by the outgoing UK Government in Scotland.

APD should clearly be devolved. The UK Government have had enough time to think about the matter. Even the Calman commission, which was set up by the Tory-Labour tag team and their Liberal friends, recommended the devolution of APD. The UK Government’s response was to refuse to devolve it on the grounds that they were exploring whether to replace it with a per-plane tax. That decision has been made and the per-plane tax has been rejected, so what is the excuse now? I say that looking at the hon. Member for Argyll and Bute (Mr Reid). We look forward—if that is the right expression—to hearing the latest excuse from the Government.

[Pete Wishart]

My hon. Friend is correct that the Calman commission recommended the devolution of APD, but so does the jam-tomorrow Labour commission. At its conference in Inverness this weekend, Scottish Labour will be discussing the devolution of APD. I would be interested to hear whether the two Scottish Labour Members present will boycott that conference.

[Mr MacNeil]

I am sure that the hon. Member for Central Ayrshire will be on his feet presently to confirm his attendance in Inverness.

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[Jonathan Edwards]

The hon. Gentleman makes a powerful point. That is especially the case in Wales, as the Welsh Government own our national airport.

It is clear that the Bill is the appropriate legislative vehicle to move this issue forward. There is a clear precedent and, as I said, I believe the Treasury should accept the amendment, as it includes all the minor taxes recommended by Silk.

The Labour Welsh Government have recently acquired Cardiff airport, and the ability to attract long-haul flights to Cardiff would significantly improve the airport’s competitiveness. Cardiff airport has 1.5 million people in its catchment area and long-haul flights could attract people from even further afield. The development of Cardiff airport could act as a spur to growth in the south Wales economy, bringing in greater foreign direct investment through better business links, in turn bringing jobs and growth.

Quite frankly, I am amazed that the Labour party has not tabled its own amendment. That goes to show that the First Minister has absolutely no influence over his bosses down here. On Tuesday of this week, he stood in the National Assembly telling the Members and the people of Wales that

“the most important thing is to ensure that Silk part 1 is progressed”.

I would expect Labour MPs to file through the Aye Lobby when we vote, or his authority will be fatally undermined—but as the Labour Whips have sent them home, that will not be the case.

The fact that the Treasury has not used the Finance Bill to implement Silk also shows once again that Wales is an afterthought in the machinations of the British state. Those powers should be devolved, yet there is delay even though it is apparent that there is broad consensus among the main parties who represent Welsh constituencies, as evidenced in the Grand Committee debate and despite the fact that the commission received representations from all parties. Each month that passes by without these powers being devolved, the Welsh economy further deteriorates with job and economic prospects diminished, hopes and dreams shattered and lives ruined.

Over Easter, I attended a major forum meeting organised by Carmarthenshire county council to move the proposed Llandeilo bypass project forward. Despite being high up the Welsh Government’s priority list as a transport infrastructure project, it is being held up as a result of the savage cuts to capital budgets in Wales. If the amendment is successful, it will enable the Welsh Government to access borrowing powers to move the scheme and many others like it forward. In Carmarthenshire there is cross-party support for the project, and I would like to close by kindly informing my political opponents that should they fail to support the amendment their grandstanding in supporting projects such as the Llandeilo bypass will be exposed and there will be a heavy political price to pay in my constituency—a constituency I believe the Labour party view as a target seat come the next Westminster election.

[Pete Wishart]

No chance, not with you there.

[Jonathan Edwards]

Well, I am grateful for that comment.

Plaid Cymru has made jobs and the economy its absolute priority. That is why we have tabled this amendment on air passenger duty. We want to create a modern and prosperous Wales, and unlike our political opponents we have little faith in London Governments of whatever colour achieving that ambition. That is why we want the tools to get on with the job ourselves without delay.

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[Cathy Jamieson]

Thank you, Mr Evans.

I have no concern about whether what is on the Order Paper is in order; of course, if the Clerks have accepted it, it is indeed in order. I recall some of the Members who are bickering and heckling from the Back Benches making similar remarks about perfectly legitimate amendments that Labour Members have tabled in the past, and perhaps making similar suggestions. I am criticising not what is on the Order Paper but the fact that hon. Members apparently wish to widen this debate to the whole question of breaking off certain parts of the United Kingdom instead of focusing on the specific issue.

This is a very serious matter, as was highlighted during the Back-Bench debate that we had back in November. At that time, we as a House came to an agreement that the issue should be looked at in more detail. I would be interested to hear from the Minister what action has been taken. Prior to the election, the Conservatives gave a commitment to look at the per-plane duty. The resulting report was not taken forward for very good reasons; certainly, the industry did not support it. Following all the representations that have been made and the Back-Bench debate that took place, is the Minister now in a position to respond to some of the issues that have been raised today and to say whether a further report is necessary?

[Pete Wishart]

We do not have a clue what the Liberal position on APD is, and the hon. Member for Argyll and Bute (Mr Reid) does not have a clue himself. We have the “jam tomorrow” commission looking at this, but what is the view of the hon. Lady and the Labour party on APD?

[Cathy Jamieson]

Our view is that we will not support the new clause because we do not believe it is the correct way forward. The Labour party’s position, as already outlined by the leader of the Scottish Labour party, is to put forward some points for consultation. That is the right and proper thing to do. It is of course for the Liberal Democrats to answer for themselves rather than for Labour to do it for them.