NHS Pensions: Taxation

Richard Drax Excerpts

Monday 8th July 2019 Commons Chamber

[Elizabeth Truss]

I disagree with the hon. Lady. We are taking steps to deal with this issue, and the Health Secretary is currently meeting representatives from the medical profession to discuss this in more detail. Wide-ranging reforms to the taxation and pension systems are not things to be wished overnight; they have to be properly worked through.

[Richard Drax (South Dorset) (Con)]

May I add to the sense of urgency by speaking up on behalf of the chief executive of my local community hospital trust? This is affecting not only clinicians but senior staff, too. They want to continue in many cases, but now they are leaving. These are highly valuable, experienced people whom we need to run these trusts. Please can we sort this out as soon as we can?

[Elizabeth Truss]

My hon. Friend is right about ensuring these people do not face very high marginal rates and an undue tax burden, which is precisely what the Opposition propose—they want to see taxes raised for higher earners.

HS2: Buckinghamshire

Richard Drax Excerpts

Monday 29th April 2019 Commons Chamber

[Ms Ghani]

I absolutely take on board my hon. Friend’s frustration. He has already made a number of representations to me and to the Secretary of State. HS2 Ltd must get better. I am hearing that at the Dispatch Box, and HS2 will be hearing it too. HS2 must improve its community engagement: it must ensure that the community engagement managers are working effectively and in a timely fashion, and ensure that answers are given to the questions that are being posed. I do not think it is fair that Members of Parliament are having to make representations on behalf of their constituents. HS2 should be sorting out the issues so that they do not even reach MPs’ surgeries, and I shall be taking that back to it as well.

I know that my hon. Friend—a bit like me—wants the line to come as soon as possible, but there was a slight delay to ensure that we were considering Northern Powerhouse Rail. He may remember that there was also an election, which took up a substantial amount of time.

[Richard Drax (South Dorset) (Con)]

If I recall correctly, HS2 was an unaffordable electoral carrot offered by Mr Blair and, I believe, Lord Adonis initially. It is regrettable that the Conservative party has taken it up, because it is unaffordable. May I suggest that the money that we have would be better spent first on upgrading the lines that we have, and then, if necessary, on expanding capacity by putting down new lines next to the existing ones, thereby reducing the impact on the countryside et al? In particular, of course, we would like a bit more money to be spent down in Dorset, please.

[Ms Ghani]

I feel slightly nervous about answering my hon. Friend’s question, because I have failed to turn up at a number of events in his constituency, and I am worried about the reception that I shall have at my next meeting there.

Let me remind my hon. Friend that investment in the lines in his area is already taking place. This is not an either/or project: we need to continue to invest in our traditional rail network. He referred to events in the past. I was not here at that time, but my job as a Minister is to ensure that we make the right decisions for the future. The impact that this project will have on our communities and on growth means that it is a very good project for us to support.

European Union (Withdrawal) Act

Richard Drax Excerpts

Thursday 6th December 2018 Commons Chamber

[Richard Drax (South Dorset) (Con)]

Before I start, I want to say this. Two Opposition Members have called myself and other honourable colleagues “extremists”. I am not an extremist; I am a humble Back-Bench MP trying to deliver what the British people asked us to.

I wonder how posterity will record this period of our island’s history and democracy. Will it be a period of unity, courage, integrity and democracy in action, or will it be a period of division, rancour, faint-heartedness, lack of integrity and the will of the people disrespectfully ground into the dirt? I had hoped and prayed for the former, but I fear the latter is more likely to darken the pages of our history books in the future, unless there is a Damascene conversion in Government policy. I remind the House that we agreed to an EU referendum by 544 to 53 votes, to trigger article 50 by 461 to 89 votes, and to pass the EU (Notification of Withdrawal) Bill by 498 to 114 votes. Those were not marginal wins.

Our instructions and our duty are clear: to leave the EU in its entirety. However, regrettably and sadly, there are many politicians on both sides of this House and the upper House who are doing all they can to prevent Brexit. If their will wins, why on earth should any of us stand for this place again? Why should we knock on doors and sell our hopes for the country, whichever party we belong to, when no one will believe a word we say? Despite frequent warnings, we are being led to a dark place, unprecedented in our history.

I was grateful to be granted a private meeting with the Prime Minister on Tuesday. Having written to her frequently with my blunt assessments of her direction of travel, what I say in this Chamber. I have communicated directly to her.

Many colleagues have already exposed the deal for what it really is, but I would like to briefly list five of the reasons why I cannot vote with the Government on Tuesday. First, it does not deliver what the people voted for. Secondly, the backstop is a potential trap. Thirdly, the Prime Minister promised repeatedly to respect the constitutional integrity of the United Kingdom; the withdrawal agreement does not. Fourthly, we intend to hand over up to £39 billion of taxpayers’ hard-earned money without so much as a by-your-leave. Fifthly, the much ignored and extremely ambiguous political declaration leaves far too much room for mischievous politicians, both here and in Brussels, to play fast and loose with the UK struggle to leave the EU.

As I have the time, may I briefly touch on the no deal? When we negotiate, we have to have something to fall back on. We need a point beyond which we will not go any further, and that is what the no deal option is. It is one that none of us wants—whatever those in this House think that people like me think, we do not want it—but the WTO terms are not the end of the world, and under those terms the EU cannot discriminate against us. This whole debate is about our destiny—the future—and once we have grabbed that future, the rest will fall into place.

--- Later in debate ---

[Dr Fox]

One thing that perhaps has not been fully understood in the public domain as a result of the complexities around Brexit is that it does not matter what model we want to have as the future partnership— we have to have a withdrawal agreement if there is to be any continuity. That is part of the article 50 process. We have to have a withdrawal agreement with a view to the future relationship that we will have. That is where the backstop comes in. The Irish Government, in particular, made it very clear that they would not be willing to contemplate a withdrawal agreement unless it had certain guarantees that are embodied in the backstop.

On that subject, it is very clear, and I entirely understand, why many of my colleagues do not like the concept of the backstop as it is constructed. I have to say that I share, as does the Prime Minister, many of those same anxieties. It comes down to a question of trust, and as the Attorney General said in his evidence to the House the other day, it comes down to a balance of risks. Many in the House have made it very clear throughout the day that they would not trust the European Union to release Britain from the backstop. That is a big worry that many of my colleagues share.

But it is equally true to say that, if we cross to the other side of the channel, we find those who take the view—which I understand is very difficult for some in this House to grasp—that this is a great and wily move on the part of the United Kingdom, because if it does not get what it wants in the future economic partnership, it could park itself in the backstop, not making any financial contribution and not having free movement, but having access to the single market. There are those in other countries who say, “Why should our taxpayers pay for the UK to have that privilege?” It would be very difficult for the Commission, which would ask, “What do we tell Norway and Switzerland, which do have to pay for that privilege of access to the single market?” We have to try to understand that this does work in both directions, difficult though that may be for us conceptually.

[Richard Drax]

My right hon. Friend and I have had many face-to-face talks. This is not a wily move by the United Kingdom. This deal will allow the United Kingdom to leave the EU. The backstop very clearly, and we have heard it from the Attorney General, means that we may not be allowed to leave unilaterally—so stuck in it. It is not a wily move and the compromise down the middle deal has upset everybody. We need the unilateral right to leave this institution, as the people of this country instructed us to do.

[Dr Fox]

It is certainly true that there has been some movement on this issue. Originally it was envisaged that the backstop had to be permanent. Now the agreement is clear that it is designed to be a temporary measure. We should understand that, if we do not like the whole concept of the backstop here, it is also not liked in continental Europe. That should be the biggest incentive we have to never get there and to reach a trade agreement on a future partnership.

I was struck by the contribution of my hon. Friend the Member for Morecambe and Lunesdale (David Morris), who made a point that is worth reflecting upon. Had David Cameron brought this country back a deal that said, “You can be outside the single market, the customs union, the common fisheries policy and the common agricultural policy, make no contribution and end free movement,” I wonder what the reaction would have been at that point in history. That is the agreement we are talking about today. I know that I, for one, would have been biting his right hand off for an agreement like that.

Financial Implications for the Next Generation

Richard Drax Excerpts

Tuesday 4th December 2018 Westminster Hall

[Richard Drax (South Dorset) (Con)]

I beg to move,

That this House has considered the financial implications for the next generation.

It is a pleasure to see you in the Chair, Mr Hollobone, and to give this speech. It is also a pleasure to see my friend and colleague the Minister in his place. I have huge respect for him and I know that he has gone to considerable length to help with this debate.

As the Member of Parliament for South Dorset, over the past eight and a half years I have had the great pleasure of getting to know many of my constituents. I have always undertaken to represent them without fear or favour, whatever their political beliefs, which is why I have called this debate to discuss the appraisal of our nation’s finances by Mervyn Stewkesbury. He is a well-respected and successful businessman from Weymouth, in my constituency. Mr Stewkesbury owns and runs his property company Betterment Homes and he is in the Public Gallery to listen to this debate.

From the very outset some years ago, Mr Stewkesbury has had an agenda. His concern, which he has expressed repeatedly to me, Ministers and various party leaders since 2010, is the economy. In particular, he believes that our national debt and deficit are too high. He has been an assiduous correspondent since my election in 2010, and indeed briefly ran against me in his genuine desire to make these facts known. His manifesto, as a matter of interest, was based entirely on his financial predicament. He had no other agenda, so keen was he to make his point. I am delighted to say that I won and he did not, despite a very honourable attempt to do so.

Put simply, Mr Stewkesbury believes that we are going to hell in a handbasket, and that he has the figures to prove it. He does not think that any of the responses he has received since 2010 have been adequate. I have therefore taken the opportunity to bring this matter before the Minister and my fellow MPs, in the hope that Mr Stewkesbury may receive a satisfactory answer. If that is not achieved, I hope that this debate will at least serve our country by airing a subject that should be aired repeatedly.

Of course we should live within our means, and Mr Stewkesbury is not alone in suffering sleepless nights over the size of our national debt. The most recent quarterly report from the Office for National Statistics confirms that our national debt at the end of March 2018 stood at around £1.8 trillion. This is equivalent to nearly 86% of our GDP, reaching the reference value of 60% set out in the Maastricht treaty excessive deficit procedure.

However, let me be clear that there is no solace here for the Opposition. It is worth noting that we first exceeded the 60% limit in March 2010, at the end of Labour’s 13-year rule, when debt was just shy of 70% of GDP. On the plus side, our deficit or net borrowing in the financial year to March 2018 has dropped by £5.9 billion for the second consecutive year, indicating that the tide has—we hope—begun to turn. Also, although the debt has increased by nearly £44 billion, as a percentage of GDP it has fallen by 0.9 percentage points, from 86.5% to 85.6%. This fall in the ratio of debt to GDP implies that GDP is currently growing at a greater rate than Government debt—again, movement in the right direction. However, as I am sure you understand, Mr Hollobone, this remains a mighty tanker to turn.

A most informative letter from the former Economic Secretary to the Treasury, my right hon. Friend the Member for North East Cambridgeshire (Stephen Barclay), in August 2017 confirmed that when we inherited the largest budget deficit since the second world war in 2010, we were borrowing £1 in every £5 that we spent. Now we borrow £1 in every £16 we spend, as a result of reducing the deficit. The Minister also confirmed that over the same period debt rose as a share of GDP, although by less than it would have risen had the deficit not been reduced. In the same letter the Minister accepted that Mr Stewkesbury was correct in pointing out that the overall public sector net debt had risen. That, of course, is Mr Stewkesbury’s main concern, and one that we cannot afford to brush under the carpet.

I personally believe that, in view of the recent Budget spending increases, claims that austerity is over and the promise of billions more pounds for the NHS—which I do not think we have—it is time to bring this private citizen’s concerns into the public domain. I cannot vouch for all of Mr Stewkesbury’s points, nor his figures, but they form part of his profoundly and sincerely held belief that our country is heading to financial ruin. I am told that Mr Stewkesbury’s figures are all taken from Government and Treasury publications, which are publicly available.

I would like to point out that Mr Stewkesbury’s ire is not exclusively reserved for the current Government. His research dates back many years. His graph, interestingly, shows how national debt began to soar just as we joined the EU in 1973. He says that for 25 years before we joined the EU our debt increased on average by 1.4% year on year, but from the moment we joined, and for the next 45 years, it increased on average by 9% every year. He claims that had we not joined and maintained that 25-year borrowing record, our debt would now be £66 billion instead of £1.8 trillion.

As I have said, Labour receives equal scrutiny. Mr Stewkesbury was amazed to hear the shadow Chancellor, the right hon. Member for Hayes and Harlington (John McDonnell), tell the BBC on 18 March:

“Austerity is a political choice, not an economic necessity.”

Mr Stewkesbury asks:

“How can he possibly say this, when we are overspending and borrowing around £300 million every day?”

He is not enamoured with the economics of the Leader of the Opposition either, adding that his pledge to

“spend our way out of debt”

is nothing short of ridiculous.

As I have mentioned, when David Cameron’s Conservative Government were elected in 2010, the financial black hole in which we found ourselves was bequeathed to us by the departing Labour Government. Who can forget the note left by the departing Chief Secretary to the Treasury, the right hon. Member for Birmingham, Hodge Hill (Liam Byrne), which read, “I’m afraid there’s no money left”? Perhaps it would have been funny, had it not been true. Certainly, that is Mr Stewkesbury’s view. He says that over the past seven years he has spent more than 5,000 hours studying Government finance and that we are “on course to bankruptcy”. He says that it is an indisputable fact that Government cannot go on overspending and borrowing forever without ending in bankruptcy, but that, according to him, is precisely what we are doing. In a letter to me earlier this year, he explained that it had taken 100 years to rack up a debt of nearly £450 billion by 2005, when the debt was £446 billion, and that is taking into account two world wars. Then, Mr Stewkesbury says, over the following years of Labour, coalition and Conservative rule that figure has more than quadrupled to £1.8 trillion. Sobering figures; sobering stuff.

Mr Stewkesbury adds that many of our assets, not least our gold—thanks to Labour—have been sold and an additional £375 billion has been printed. He claims that one asset sold, for £757 million, was the UK’s stake in the channel tunnel. He believes that allowed us to go for three days, five hours and 36 minutes without having to borrow any money. I would be grateful if the Minister could help on that point.

Mr Stewkesbury’s graphs show that in the seven years from 2010 our debt increased by £719 billion. He then explains the consequences. He says that in 2010 the debt for each living person was £16,231, with interest at £9 per person per week. By April 2017 those figures had risen to £26,526 and £14 respectively. He goes on to say:

“For 40 years our debt on average doubled every five years. Do the same again and by 2026 our debt will be more than £50,000 per person, with interest in the region of £30 per week per person. This is not sustainable.”

Neither is the fact, he says, that the Government, on average, overspent and borrowed £338 million every single day during 2016-17. Last year, he adds, the Government increased the debt by £123 billion. Government spending now equates to £231 per week for every living person, at a time when two in five work in the private sector, which, in the main, pays for our public services, including pensions, through tax.

Mr Stewkesbury believes that our children’s future is at risk, and he claims that party politics—of all parties—has played a significant role. For more than 40 years, he says, parties of all colours have attempted to buy voters with unaffordable promises. Here I will add my own two pennies’ worth. I absolutely agree that too often Governments of all colours have promised things that we simply cannot afford and have attempted to buy the voters. I hope that disingenuous habit will not continue in future. I most humbly suggest that what voters actually need is the truth, and if that is financially unpalatable, they need to hear it.

Last month, in his most recent communication with me, Mr Stewkesbury wrote that our debt interest payment alone is circa £50 billion. People outside this place, whether they are in the private or public sector, ask, “Richard, why aren’t you doing this? Why aren’t you doing that?”—always about money, of course—or say, “Spend this, spend that; do this, do that,” but when I tell them the rather sobering fact that before we do anything we have a massive debt interest to pay, a remarkable quiet comes over them when that sinks in. Before we progress anywhere, we have to pay £50 billion—every year. It is a terrifying sum of money, which we have to reduce. I hear cries of austerity, but I am not sure that austerity is working in that sense, because we still have a vast debt interest.

Mr Stewkesbury thinks it is totally irresponsible to claim that austerity is over when we are still borrowing £155 million every single day. Furthermore, he opines, it is irresponsible of the Government to claim that austerity is over until we are living within our means and repaying our debt. He is concerned that, according to Government figures, they expect to borrow a further £52 billion this year and £44.1 billion in 2019-20, so our debt will exceed £1.8 trillion by 2020. That equates to £28,371 for every living person.

Mr Stewkesbury has consistently sought clarification on one particular piece of historical accounting, but has never had a satisfactory answer. Labour’s actual debt in 2010 was reported as £759 billion. Later that figure was increased to just over £1 trillion. Mr Stewkesbury would be most grateful if the Minister could explain why those figures seem so different.

Finally, on Brexit—I thought I might get through one contribution without mentioning that word, but unfortunately Mr Stewkesbury has not allowed me to do that—he quotes an interview I gave, in which I said:

“We want to be in control of our destiny and I am baffled by anyone who cannot understand why.”

He, too, wants us to be in control of our destiny, but feels that that is impossible if we go on overspending and borrowing about £300 million every day.

Despite the many letters Mr Stewkesbury has received from the Treasury, he believes that the truth—or perhaps the facts—has yet to be explained to him. He dismisses the many letters he has received as pages and pages of waffle. He particularly resents being told that we are in a stronger financial position than in 2010, and believes that the figures prove otherwise. He says that one Minister wrote to say that Government debt is expressed as a share of GDP and that, in reducing the deficit, the Government have made significant progress in improving the health of the public finances. With the current debt at 85.6% of GDP compared with 69.6% in 2010, his concern is understandable. He and I very much look forward to hearing the Minister’s response, when he can hopefully allay Mr Stewkesbury’s concerns.

[Mr Philip Hollobone (in the Chair)]

We will move straight on to the Front-Bench contributions. The guideline limits are five minutes for the Scottish National party, five minutes for Her Majesty’s Opposition and 10 minutes for the Minister, but we can be flexible.

--- Later in debate ---

[Richard Drax]

I am most grateful to the Minister, to the hon. Member for West Ham (Lyn Brown) and the hon. Member for Glasgow East (David Linden) for their contributions, and to you, Mr Hollobone, for listening to a debate that was full of figures. Such debates are perhaps not always the most gripping, but they are nevertheless important.

The hon. Member for West Ham made some very relevant points. The only point that I would like to make generally to the Minister is that it seems to me that one can look at it as Baroness Thatcher did—and gosh, how we miss her. She always used to say that it is like running a household: if the household spend more than it earns, it goes bust. If a shop—which is where, of course, she came from—makes more than it spends, that money can be reinvested in the business, and perhaps the staff can be paid a bonus, or whatever it may be. That is how she explained running an economy. I know that is very simple, and it is more complicated than that in real life, but the basics are true. Perhaps I can leave the Minister, and the Opposition, with that thought.

I did not agree with the representative of the Scottish National party, the hon. Member for Glasgow East, who said that by leaving the EU we would go to hell in a handcart economically. I would say that the opposite is true, because it will give our country the chance to generate more income. We need to earn more, so that those who earn more pay more tax and those taxes can pay for all the public services that the hon. Member for West Ham rightly pointed out are in urgent need of more money. I would totally concur with that, but we cannot just produce money from nowhere.

We cannot keep printing money; we have to earn it as a country. I hope and pray that when we leave the EU, and I hope that we do—fully—we will be free to generate such an economy, and to give our entrepreneurs, and the businessmen and women in this country, the chance to get out there and generate wealth for the services that we need to pay for.

I thank everyone who has taken part, and I thank you, Mr Hollobone, for chairing the debate.

Question put and agreed to.

Resolved,

That this House has considered the financial implications for the next generation.

Oral Answers to Questions

Richard Drax Excerpts

Tuesday 17th April 2018 Commons Chamber

[Mr Speaker]

Indeed, that too.

[Richard Drax (South Dorset) (Con)]

Cities are important, but so too are seaside towns such as Weymouth. We desperately need investment in those places, or they will just go to rack and ruin. Having met a Minister from the Ministry of Housing, Communities and Local Government recently, I understand that Government are looking at initiatives for towns and seaside towns. Can the Minister confirm that that is true? If so, what money will be available?

[Robert Jenrick]

My hon. Friend raises an important point. The Government’s strategy is not limited to cities. The Transforming Cities programme is for our smaller and larger cities, but we are also interested in coastal towns and communities. I recently met a number of parliamentary colleagues representing those communities, and I would be happy to meet my hon. Friend to talk about how the Treasury will be working with CLG.

Spring Statement

Richard Drax Excerpts

Tuesday 13th March 2018 Commons Chamber

[Mr Hammond]

Just to correct the hon. Lady on a couple of points, the report that she refers to, which was published by the Exiting the European Union Committee, was not done by HM Treasury. It was prepared, as I think she knows very well, by a cross-departmental group of Government economics professionals in response to the criticism that had been levied at the Treasury model that was used before the referendum. Of course it did not model the Government’s preferred outcome scenario; it modelled a couple of standardised outcome scenarios that the Prime Minister has already rejected. We are not going for a Norway model or a Canada model. We are negotiating with the EU for a bespoke solution. When we have made progress in those negotiations, we will model the outcome that we expect to get, and when Parliament comes to vote on this issue—hopefully later this year—it will have in front of it the output of that modelling.

[Richard Drax (South Dorset) (Con)]

I congratulate my right hon. Friend on his upbeat performance, and on standing up for the economy and our country. As a former soldier, may I put in a plug for our armed forces? They undoubtedly need more money. We live in dangerous times. Will he take that into account in the Budget?

[Mr Hammond]

As a former Defence Secretary, I yield to no one in my admiration for the armed forces. I understand the challenges that defence faces and the complexity of the defence budget, with its many long-term projects operating at the cutting edge of technology. In case there is any misapprehension, however, I would like the House to be absolutely clear that defence will receive more than £1 billion of additional funding in each year of this Parliament. It has the fastest-growing RDEL—resource departmental expenditure limits—budget of any Department across Whitehall. We will, of course, continue to consider the specific needs of defence, but I would not like anyone to have the impression that, as I have read in some organs, the defence budget is being cut. It is not—it is being substantially increased.