Finance (No. 2) Bill

Stephen Pound Excerpts

Wednesday 25th March 2015 Commons Chamber

[Mr Gauke]

My hon. Friend makes a very good point. I confess that I am a little young to remember the 1959 election, but some hon. Members will recall it.

[Stephen Pound (Ealing North) (Lab)]

Thank you.

[Mr Gauke]

I am looking at the hon. Gentleman. He may recall, as a very young lad, the 1959 general election.

[Stephen Pound]

indicated assent.

[Mr Gauke]

He does. I am sure he was a very young man at the time. Under a great deal of pressure, Hugh Gaitskell ruled out all sorts of tax increases and at the same time made all sorts of promises about public spending. The British people rumbled the Labour party in 1959 and did not believe that that was a credible position. As a consequence, they returned a Conservative Government with an even bigger majority. Labour Members might want to be a bit careful about drawing parallels with 1959.

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[Mr Gauke]

The Government have a very good record in delivering jobs—sustainable jobs—in this country.

[Stephen Pound]

rose—

[Mr Gauke]

I will give way to the hon. Gentleman, who will no doubt enlighten the House about the 1959 general election.

[Stephen Pound]

I would be delighted to do so. I campaigned against Sir Oswald Mosley in Kensington North—admittedly, I was only 11 years old, but I did a fairly good job. He did not win.

I put it to the Minister that, in 1959, the Conservative party was very different—it was a much more consensual, nay Butskellite, Conservative party. One thing the Conservatives stood on was house building. They had a proud record. Does the Minister believe that the Bill will help house building in this country?

[Mr Gauke]

I share the view that we need to build more houses in this country, but I am pleased that last year housing starts were at a record high for seven years or so, that planning permissions are going up, and that we have reformed planning law to enable more houses to be built. In the Budget last week, there were details of 20 housing zones that could support something like 45,000 homes. That is consistent with a desire to ensure greater opportunity for people to acquire their own home.

It is also worth pointing out that in last week’s Budget we introduced Help to Buy individual savings accounts, which will enable people to acquire deposits so that they can enter the housing market. In terms of continuity, I would not necessarily be proud of everything connected with the Conservative Government of the 1950s. I absolutely think we need to do more to get more people into the housing market, and this Government are delivering on that and we are definitely moving in the right direction.

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[Shabana Mahmood]

That was not even a valiant attempt to try to answer my questions, but the hon. Gentleman is not on the Front Bench and I suppose I am being a little uncharitable in suggesting that he cannot answer a question that his own Chancellor is not prepared to answer either.

We have numbers of £12 billion, £13 billion and £5 billion from the Chancellor, yet with all the might of the Treasury behind him and lots of officials to do the numbers we have no detail on how those figures will be found. The Government spent a whole Parliament trying to talk up their record on tax avoidance and they are saying that they will get £5 billion in the next Parliament, yet there is no detail on how those amounts will be made up and no guarantee that they will be delivered. I am not surprised that the hon. Gentleman cannot answer those questions if those on the Government Front Bench will not either.

The Conservative party’s plans for what they would like to do if elected in a few weeks’ time are extreme and go much further than deficit reduction. They are trying to deliver a surplus of £7 billion. That had to be changed from the previous desire to get a surplus of £23 billion, because the Government got spooked by recognition across the country of what that would mean for the size of the state. They have now come down to £7 billion, which still means that they have to go further and faster in the early part of the next Parliament than they have in the previous five years.

Those choices have to be paid for. Given that some budgets are protected and that commitments to international development and aid spending will not change, and given the scale of what the Conservative party wants to achieve with the country’s finances, it is physically not possible to do such things without putting the NHS at risk of cuts or potentially of charging, or without raising VAT. That is the charge being made—it is not just about the history and the record. The hon. Gentleman could have resiled from the Conservative party’s record, but he chose not to do so. The combination of the Conservative party’s history on VAT and its figures for the next Parliament tells us that if it is elected a VAT rise is coming. There can be no doubt about it, given the combination of those two factors.

The hon. Gentleman attacked our plans and commitments, but for every commitment that involves raising revenue, we have highlighted where that revenue will come from and we have made the figures public. It was the Labour party that called for the OBR to conduct an independent audit of all parties’ manifesto commitments. We could have avoided this debate if we had allowed the OBR to do so. I was very happy to submit my party’s plans to an independent audit. I wonder why the Government chose not to do so. Perhaps they had something to hide. Perhaps they did not want to be robbed of the ability to have a “tax bombshell”-type poster. The needs of the Conservative party’s election marketing material should not have trumped the responsible thing to do: to allow the OBR independently to audit all parties’ manifesto commitments. I was very happy for that to happen.

The bankers bonus tax would pay for one policy and one policy alone: the compulsory youth jobs guarantee. [Interruption.] If the hon. Gentleman thinks the stubbornly high rate of youth unemployment is a laughing matter, he is mistaken. The Conservatives stole a few of our policies in last week’s Budget. Rather than laughing off the idea of the bankers bonus tax, I would have been happy for them to have stolen that policy, as it would have delivered jobs for the young people in my constituency who could find themselves on the jobs scrap-heap for many years to come. The Conservatives should have adopted it; it would have made a real and practical difference.

[Stephen Pound]

I am extremely grateful to my hon. Friend for her innate generosity in giving way. Does she not agree that new clause 1 would provide transparency and openness, and that the report would be immensely useful? Does she honestly think that any true democrat and believer in fiscal transparency could do anything other than support the Labour amendment?

[Shabana Mahmood]

My hon. Friend is absolutely right. We have been debating whether VAT will go up, but new clause 1 is pretty innocuous. It calls only for a review and an assessment of the impact the rise in VAT has had on living standards. If the Minister wanted us to believe what the Prime Minister said today in Prime Minister’s questions—that he is ruling out a rise in VAT—then what is the problem? Adopt the new clause, add it to the Bill and let us have the assessment. He would be able to show how VAT has had an impact and why the Conservatives are doing such a good job, if they are elected again, in not letting it go up.

Tax Avoidance (HSBC)

Stephen Pound Excerpts

Monday 23rd February 2015 Commons Chamber

[Julian Smith (Skipton and Ripon) (Con)]

Many small businesses and taxpayers in north Yorkshire will be shocked by the time line that the Chancellor has just described. Will he clarify once again what the last Government knew and when?

[Stephen Pound (Ealing North) (Lab)]

What a creep!

[Mr Osborne]

They don’t want to hear about their record in government, Mr Speaker. Every single alleged offence happened when the Labour Government were in office. The information became publicly known when the Labour Government were in office. Lord Green’s first public appointment was as chair of the Prime Minister’s business council under the Gordon Brown Administration. The information was received from the French authorities under the last Labour Government. So I think the whole House—and, indeed, my hon. Friend’s constituents, who pay their taxes—would like the shadow Chancellor to get up and express a little bit of humility and contrition for the mistakes made when he was in office.

Money Transfer Accounts

Stephen Pound Excerpts

Wednesday 17th July 2013 Westminster Hall

[Sajid Javid]

I think that both hon. Gentlemen knew that I was coming to this issue next. I am referring to the immediate effect of Barclays’ decision. I recognise that some of the things that I mentioned a moment ago, although very welcome, are long-term projects. In the short term, the Government are committed to doing everything that they can to minimise the impact on individuals and businesses in the UK of any immediate changes in this market. I understand that businesses in this sector will face challenges. That is why we are committed to working with the banks, trade associations and money service businesses to try to find solutions that do not mean extensive business closures. However, the truth is that we do not know what the full impact of some of the decisions that have been discussed here today will be. We are monitoring the situation and will continue to do so in the course of the next few months.

[Stephen Pound (Ealing North) (Lab)]

I am extremely grateful to the Minister for giving way; he is being very generous. In terms of immediacy, does he not agree with this point? My constituent George Boateng has contacted me to say that an entire parallel industry—the so-called hawala system—exists now and is totally and utterly unregulated, and we could end up with a situation in which we have a sort of reverse Gresham’s law: we end up losing money transfer that is legitimate and regulated and going into a completely unregulated system. Surely that cannot be anyone’s intention.

[Sajid Javid]

The hon. Gentleman raises a fair point. He is correct, to the extent that if individuals cannot find a legitimate alternative that can reach the parts of countries they want to reach at a reasonable cost, they may be tempted to use illegitimate means, which makes the issue all the more important. I accept his general point.

We are committed to ensuring that commercial decisions taken by banks do not inhibit individuals in the UK from remitting money to families abroad, but, once again, there may be challenges. Individuals might need to approach firms other than those with which they are used to dealing. There may be increased charges. Remittance flows to some countries may be affected, specifically those with less developed or non-existent banking sectors, such as Somalia, as we heard from the hon. Member for Cardiff South and Penarth. I share his concern.

Section 5 of the European Communities (Amendment) Act 1993

Stephen Pound Excerpts

Monday 22nd April 2013 Commons Chamber

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

May I begin by saying how pleased I am that this debate has come to the Floor of the House and commend my right hon. Friend the Leader of the House for bringing it here? He was unduly modest to send it upstairs to Committee because this gives us an opportunity to highlight the Government’s achievement and send it to Brussels with a panache that says, “We know what we are doing and we are pleased to educate you.” Unlike the hon. Member for Nottingham East (Chris Leslie), who I think has been confused in his economics this evening, the document shows how well we are doing, compared to our continental colleagues.

Before I adumbrate our great achievements and the success of this Government since 2010 as set out in the document before us, there is one little matter that I wish to raise about the surveillance mission that the European Union is entitled under a 2011 agreement to send into a country that is not meeting the convergence criteria. Although it cannot punish us for failing to meet the convergence criteria, the European Union can, I believe, send in a surveillance mission or even a rather ominous-sounding enhanced surveillance mission.

I hope the Government will be clear, and I thought from what my right hon. Friend the Minister was saying that the Government are being clear, that they will not accept such surveillance and will use all their abilities to discourage the European Commission from sending any surveillance mission. It would be a great audacity—a great cheek—if it were to do so when 19 member states are in special measures for their economic failings for the excessive deficit procedure. We, of course, are in it too because of our deficit, but those 19 other members are in the eurozone, which is why bringing their budgets together is so important, whereas for us it is essentially a technicality from the Maastricht treaty.

It is a matter of importance that the Government have got the policy right. The key to getting it right is found on page 31 of the documentation and then on page 15. Page 31 deals with the quality of the public finances. It deals with what the Government are doing to consolidate our situation and the projection. Projections should be treated with the greatest suspicion. All forecasts are wrong, and it is merely a question of how wrong they will turn out to be. None the less—

[Stephen Pound (Ealing North) (Lab)]

Is that a forecast?

[Jacob Rees-Mogg]

That was a wonderful interjection, as always, from the hon. Member for Ealing North (Stephen Pound). I fear not. It is a statement based on a knowledge of history that forecasts invariably turn out to be inaccurate and it is merely a question of how inaccurate they turn out to be.

But if we look at what the Government are trying to do, they are getting spending down from 47.4% of GDP to about 40% of GDP. We know from our history that about 40% of GDP is a sustainable level of Government spending. It is a level that I personally would like to see reduced further, but it is none the less a level that has been consistently affordable over the long run, certainly going back to the early 1970s, based on taxation revenues going up to 38.3% of GDP. Now, 38.3% of GDP for tax revenues is very near the peak level that has ever been achieved. It is rare for tax revenues to go above 38% of GDP or to remain there for a sustained period.

So what is being done with the public finances is an extraordinarily effective consolidation on both sides, with taxes being pushed up and expenditure being cut, with most of the burden being taken by expenditure cutting and with a small amount of it on tax raising. That is setting the basis for a long-term recovery of the economy. Where I think the hon. Member for Nottingham East was perhaps unduly party political in what he said—uncharacteristically so, because he is normally a man of such consensus, support for the middle way and so on—was in ignoring the benefits of monetary activism.

I refer right hon. and hon. Members to page 15. The key difference between the UK economy and the continental economies is that we have the ability to change our monetary policy to ease the austerity—[Interruption.] Indeed, printing money. Absolutely right. It is the printing of money that is allowing the deficit to be sustainable and is allowing businesses and individuals to carry on borrowing and work through a consolidation of their finances, which is also in the document—the consolidation of individual finances—to take place in a way that is not crippling. On the continent that is not happening, which is shown up in the gilt yield figures. The latest gilt yield figure is 1.65%. That is the lowest in our history. In Italy it is at 4.05% and in Spain just under 4.5%, which shows the much tighter monetary situation in Spain and Italy as compared with the United Kingdom. That is why the austerity programmes in those countries are causing such extraordinary pain, whereas in this country it is manageable.

That is why I say the document is a model for our friends and neighbours across the channel. We ought to send it to them with a fanfare, with trumpeters, with Garter King of Arms leading the way, to say to them, “Look, this is how you do it. This is how you restore a country to fiscal sense, and you do it through monetary easing.” Although I loathe the fact that we have to report to a multinational body about matters that are our own sovereign right and should not be interfered with from abroad, on this occasion we can take real pride in what the Government are achieving and what they are working towards and the manner in which they are doing it.

Infrastructure (Financial Assistance) Bill

Stephen Pound Excerpts

Monday 17th September 2012 Commons Chamber

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

This debate, on a Bill that most people agree with, has been fascinating. The last five speeches, by my hon. Friends the Members for Easington (Grahame M. Morris), for Glasgow North East (Mr Bain) and for Walthamstow (Stella Creasy), my right hon. Friend the Member for Greenwich and Woolwich (Mr Raynsford) and my hon. Friend the Member for Scunthorpe (Nic Dakin), are worth reading. They were superb. I do not usually follow the parliamentary convention of saying, “It is a pleasure to follow”, but it was a pleasure listening to their speeches. My hon. Friend the Member for Easington demonstrated a commitment to, and deep knowledge of, his constituency. My hon. Friend the Member for Glasgow North East set out the implications for Scotland and the overall economic situation. My hon. Friend the Member for Walthamstow was passionate about the problems and returned, as ever, to Wonga. My right hon. Friend the Member for Greenwich and Woolwich displayed his ministerial experience, while my hon. Friend the Member for Scunthorpe demonstrated his passion.

A succession of MPs have stood up and urged the inclusion of particular projects in the Bill. May I be a contrarian and suggest one that should not be included in the Bill—the expansion of Heathrow airport? I am worried because although the Bill is meant to account for ready-made projects—those on the drawing board and ready to be implemented over the next 12 months—there is no sunset clause. Furthermore, it can be renewed and additional sums can be bestowed simply by statutory instrument. Now, I am not a conspiracy theorist, but my constituents might start to believe in conspiracies: we had 12 months of intensive lobbying by the aviation industry; after that, the Chancellor expressed scepticism about existing Conservative party policy, which was against a third runway at Heathrow; then the Prime Minister announced a review of that policy by someone who was director of the CBI, which had lobbied for a third runway; and now we have a Bill that would go on the shelf as almost suitable for funding the expansion of Heathrow. It is no wonder, then, that my constituents are anxious about the attitude of the Government to that measure.

The measures in the Bill would perfectly suit Ferrovial, the Spanish company established by a fascist in the 1930s who made his profits as a result of contracts awarded to him by Franco. It would ideally suite Ferrovial to come forward and seek funding for the infrastructure expansion at Heathrow. I am sure it would be willing to pay for the tarmac, but not for all the infrastructure that goes with it, particularly the road and rail network needed to support a third runway. I fear that Ferrovial will come forward seeking Government guarantees to fund and back up the expansion. I say that because its construction company globally is in serious difficulties, or certainly is in doubt.

I give notice that despite the cross-party support for the Bill, which I also support, I will be moving amendments to ensure that the expansion of Heathrow is not part and parcel of it. I expect coalition support for that on the basis of the existing coalition policy, sworn in this Chamber by the Prime Minister, that the Government will not bring forward the expansion of Heathrow during the lifetime of this Parliament.

[Stephen Pound (Ealing North) (Lab)]

I am not entirely sure if Ealing North and Hillingdon constitute a coalition but, if it does, may I say that that coalition is solid and that we are as one on this?

[John McDonnell]

Interestingly, the coalition against the expansion of Heathrow has been cross-party up until now. If I remember rightly, the Government’s deputy Chief Whip committed to lying down in front of the bulldozers if it ever came about, and he was not moved in the reshuffle, so I take that as another commitment to opposition to the policy. I hope that the Government will support an amendment to prevent the Bill from being used to give guarantees on the funding of the expansion of Heathrow, certainly during the lifetime of this Parliament. We can then debate the matter with the subsequent Government.

Like everybody else, I am desperate for infrastructure investment in my constituency, which is suffering from a housing crisis on a scale not seen since the second world war. Housing should be included. The hon. Member for Reigate (Mr Blunt) argued for the funding of prison cells, but was not willing to argue that housing be funded. Housing my constituents is just as important as housing prisoners, given the housing crisis.

My schools also need to be renovated, because Hillingdon council pulled out of Building Schools for the Future at the last minute and pupils in my constituency are now being educated in crumbling schools. The buildings that are being built for new classes are portakabins, which are substandard for the long-term future.

On alternative energy, I want the green new deal to be implemented in my constituency as rapidly as possible. It has ground to a halt as a result of the Government’s measures on solar panels and on the funding of alternative energy in general.

As my hon. Friend the Member for Leeds West (Rachel Reeves) said, there has been an element of déjà vu to this debate. I remember Alan Milburn arguing in favour of private finance initiatives in 1997. We were told then that PFI was the solution to our infrastructure and investment problems and that it would transfer the risk from the public sector to the private sector. With the greatest of respect to a number of my hon. Friends, that did not happen. What we saw instead was profiteering at vast expense to the taxpayer and profligate expenditure that produced very little for the amount that we invested.

The bizarre thing about the plan under discussion, which will introduce another scheme to keep expenditure off the books and within the parameters set by the European Union with regard to public expenditure, is that it will transfer the risk back from the private sector to the public sector, so now the public sector will take all the risk for schemes. My hon. Friend the Member for York Central (Hugh Bayley) raised a number of detailed points that need to be answered and I have an additional question. If we look at the briefing paper for the Bill, we will see that it will also be able to fund revenue expenditure. Therefore, in addition to the capital expenditure, I take it that if some of these capital schemes go wrong, we will fund the revenue consequences as a result. There needs to be a detailed analysis—my hon. Friend the Member for Walthamstow mentioned the Public Accounts Committee—and it needs to take place now, before the next debate on this Bill. We are almost entering into another PFI-type situation whereby a grab of short-term resources will result in long-term costs.

That is all because no Government will grasp the real nettle, which is that there is no lack of resources in this country; the problem is that they are in the wrong hands and are not being used productively. The crisis in the economy was not caused by over-expenditure by the previous Government. The only time borrowing went up dramatically was when they had to bail out the banks and bring in large-scale quantitative easing. In fact, the level of public expenditure in relation to GDP just about met the John Major levels. The problem was that we never balanced that expenditure with an appropriate taxation regime. What we need to do now is introduce a fiscal package that includes a wealth tax, a financial transaction tax, land valuation taxation and measures to tackle tax evasion and avoidance, so that we can fund public expenditure and not have to create devices that in the long term will cost us more and produce so much less.

I regret that we may well be here in five years’ time—I do not look forward to it—as a result of this Bill, counting the cost as we did with PFI. Members need to consider the Bill’s detail as we move to the next stage, because it is the detail that will cost taxpayers dear and result in profligate spending and some abortive spending on some of the projects that have been mentioned tonight and that we all hold dear on behalf of our constituencies.

This has been an interesting debate, but I worry that when everyone agrees that we need to speed up and expedite the Bill, we will not give it sufficient consideration. That is what happened to the PFI legislation and we lived to regret it. I hope that we do not live to regret this Bill.

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[Sajid Javid]

All decisions covered by the Bill will be made by the United Kingdom Government: by the UK Treasury, or by relevant Secretaries of State. However, when projects clearly relate to devolved regions, the Government will work very closely with the relevant Departments in those regions.

The hon. Member for Walthamstow (Stella Creasy) made a thoughtful speech containing some very good points, but I must take issue with one of her closing comments. I believe she said that one of the problems with the Bill was that it placed restrictions on spending. It does place restrictions on spending, because this Government are very keen on restrictions on spending. The previous Government lost sight of that, which is what got us into this mess in the first place.

[Stephen Pound]

Let me add my voice to those of Members who have already congratulated the Minister.

The Minister has rightly called the House’s attention to the absence of members of certain political parties. May I remind him that the Democratic Unionist party, one of the parties representing Northern Ireland, has a strong interest in the Bill, although much of the material that we are discussing today is devolved? The issue of infrastructure development in Northern Ireland is essential. Will he assure me, and silent members of the Northern Ireland parties—unusually silent—that he will continue that dialogue?

[Sajid Javid]

I agree with the hon. Gentleman: they are unusually silent, although they are welcome to intervene on my speech. However, I can tell the hon. Gentleman that people in Northern Ireland should be assured that the Bill is intended to help infrastructure investment throughout the United Kingdom. I agree with him that there are often some special cases in Northern Ireland, which suffers from a relatively higher level of unemployment than other parts of the UK. I look forward to receiving applications from the Province.

Two issues—two myths, I should say—arose again and again in the speeches of Labour Members. The first—

Bank of England (Appointment of Governor) Bill

Stephen Pound Excerpts

Friday 6th July 2012 Commons Chamber

[Kwasi Kwarteng]

Absolutely. In her very direct way, my hon. Friend hits the nail on the head.

[Stephen Pound (Ealing North) (Lab)]

As it is fairly obvious that we are running into the sands of procrastination and filibustering—

[Mr Deputy Speaker (Mr Nigel Evans)]

Order. Mr Pound, resume your seat. If I heard a filibuster taking place, clearly I would have ruled it out of order. Mr Kwarteng, after his initial little problem, has been in order.

[Stephen Pound]

I profoundly apologise, Mr Deputy Speaker; I abase myself before you.

I put it to the hon. Gentleman that he might just as logically say that dictators dictate. Surely there can be no greater or more magnificent ornament of the constitution than the Chair of the Home Affairs Committee, to whom I listened last week as he interviewed a preferred nominee for the post of Her Majesty’s chief inspector of constabulary. A little bit of democracy is not that painful; it is rather a healthy thing.

[Kwasi Kwarteng]

The right of veto proposed in the Bill, which apes the structures in the United States of America, is totally inappropriate and would take the constitution down a road that we have not travelled down before. My hon. Friend the Member for West Suffolk talked at length—but to the point, I must say—about the structures in the United States. It is important that we understand what goes on in the United States in order to understand what might happen here if the Bill becomes law.

We well understand the recent financial history of the world. I was working in the City in 2000—[Interruption.] I am not ashamed that I had a job outside this House. I do not think that it is something I should apologise for. I worked on a dealing room floor in 2000 at the time of the election in the United States. The financial uncertainty that prevailed in the markets as a consequence of the indecisive nature of that election, with the fight between Bush and Gore being taken up to the Supreme Court, was debilitating. I have first-hand experience of that.

I would not want to see a situation in this country in which a candidate to be the Governor of the Bank of England was scrutinised by the Treasury Committee and an impasse reached, resulting in days or even weeks without an appointment being secured. I know from first-hand experience that that is the worst message that could be sent to the financial markets in what are perilous and uncertain times. It would be irresponsible of us to delay or complicate the process in that way.

Pay and Consultants (Public Sector)

Stephen Pound Excerpts

Tuesday 13th March 2012 Westminster Hall

[Daniel Kawczynski (Shrewsbury and Atcham) (Con)]

I congratulate the hon. Member for Hammersmith (Mr Slaughter) on securing this important and timely debate. I speak as somebody who has worked in both the private and public sectors. I started my life after university in the private sector. I spent a great deal of time trying to secure as large a salary from my bosses as I could, always pushing for a better company car, health insurance, ever greater bonuses and shares in the company. I felt that that was fair and appropriate, as the company was making a great deal of money, I was contributing to that wealth and the shareholders were happy to pay that sort of remuneration.

Having come into the public sector, I think that those of us who work in it should not be thinking about trying to make a lot of money. It has a lot to do with mindset and with educating people about the different responsibilities involved in working in the public rather than the private sector. One must never forget in the public sector that one’s salary comes, in the main, not from wealthy people but from extraordinarily hard-pressed families who are struggling to pay their bills and, in certain cases, to keep a roof over their heads and those of their family. All of us who work in the public sector must bear that in mind.

I am participating in this debate because I want to raise something specifically with the Minister. I went to Pontesbury village hall in my constituency to meet first responders, people in remote rural Shropshire villages who respond to emergency cases before an ambulance arrives. In many cases, they save people’s lives. It is the big society in action. I found out on Saturday that there are 144 such responders in Shropshire, and I pay tribute to them. Someone said to me at that public meeting that the chief executive of the west midlands ambulance trust earns £180,000 a year. I was absolutely staggered by that, bearing in mind that a lot of the work carried out by the first responders—as I have said, they are all part of the big society in action—is charitable work. They are on a shoestring budget and yet provide a vital service.

I telephoned the chief executive of the West Midlands Ambulance Service NHS Trust following the meeting because of the concerns raised by that constituent at the public meeting in Pontesbury, who said to me, “We do the work primarily from charity. Did you know that the chief executive of the ambulance trust is on £180,000?” There was anger, frustration and bewilderment from my constituents, who were all there in a voluntary capacity, undertaking a vital role in teaching people how to be first responders. Even I was taught how to resuscitate someone while I was there—not that I want to put it into practice, of course, for fear of hurting someone. I was extremely impressed with what was going and worried about my constituents feeling upset about the high salary.

I telephoned Mr Marsh, the chief executive, to ask him how he could possibly justify earning £180,000 a year, which is a staggering amount. His response was, “I do a very important job.” Of course he does an important job—managing the West Midlands ambulance service is an extraordinarily important job. However, I tried to convey to him that it is no more important than the job of the Prime Minister, a point that the hon. Member for Hammersmith alluded to at the beginning of his speech. Why should any public sector employee be paid more than the Prime Minister of the country, who has a huge amount of responsibility on his plate?

Police and crime commissioners will be elected in November. My understanding is that the police and crime commissioner for our area in Shropshire will be remunerated somewhere along the lines of £100,000 per annum, which I am pleased about. That is a far more suitable salary for people in the public sector rather than sky-high, rocketing salaries.

The issue is not just about mega-high salaries for individuals, but about how even small organisations manage taxpayers’ money. One parish council in my constituency, Bayston Hill parish council, manages to spend £43,000 per annum on administration costs and the salary of a clerk—this is just one parish council. We all have a responsibility to acknowledge and accept that our wonderful country is on its knees financially, and we all have to take responsibility in ensuring that debts are paid off and that salaries are reasonable.

I am conscious of the time, so I will end by talking briefly about my concerns about the pay of certain BBC executives. My understanding is that Mark Thompson is on a salary of more than £600,000 per annum, which I find—I will go as far as to say this—nauseating, deeply distressing, worrying and troubling. At a time when BBC Radio Shropshire is facing cuts—not a single person in that entire organisation is paid more than £55,000 per annum, and it is a wonderful service that provides many people in our rural county with vital services—the director-general of the BBC is earning more than £600,000. I fundamentally object to that.

[Stephen Pound (Ealing North) (Lab)]

We have just heard the exposition of Kawczynski’s law—that one squeezes as much from their employer as they possibly can, including company cars. Surely the director-general of the BBC is merely following the sound and good advice of the hon. Gentleman?

[Daniel Kawczynski]

There is an important distinction. I was working in the private sector, with shareholders as private individuals. Mr Thompson works for the BBC, which, by the way, forces millions of people up and down this country to pay for TV licences. I have applied for a debate on the rationale and efficiency of the way in which that tax is collected. There is a fundamental difference.

I am grateful for being called, and I end my speech now so that other hon. Members may speak.

[Clive Efford (Eltham) (Lab)]

This is the first time that I have participated in a debate under your chairmanship, Mr Howarth, so I am pleased to be here today. I congratulate my hon. Friend the Member for Hammersmith (Mr Slaughter) on securing this important debate.

In response to concerns about the time, I will make just two quick points to add to the forensic examination by my hon. Friend regarding public sector pay and the use of consultants, and I would like the Minister to consider them.

When my hon. Friend opened the debate, he was intervened on several times, and Members pointed out that some of the problems had existed under the previous Government. I fully accept that. A lot was made of the issue around the time of the general election, and the then Opposition were right to do so. There were concerns in the public about the rates of pay that were paid through public funds—taxpayers’ money. That is a legitimate issue to raise. Having raised the issue, even going as far as to say in the coalition document that the Government would reduce public sector pay, that there would be a cap on pay and that a mechanism would be put in place for agreeing pay that is above the rate of the Prime Minister’s salary, it is legitimate to have a debate such as today’s to examine what progress is being made.

What we have seems to be an approval of a mechanism for avoiding tax and paying higher salaries for the performance of tasks and roles that are paid for out of the public purse. There is a certain irony in that some of the mechanisms seem to allow payments that end up reducing the amount of tax that is available to pay for the services in the first place. We are talking about people who are recognised to be on the payroll, but whose salaries are paid through private companies. An article in The Guardian on 16 February states that many people who are being paid through private companies and who are avoiding paying tax at source

“are listed as full-time legal, IT or human resources consultants. The department said many of them had been employed for a long time, and appear on staff directories.”

Such people are, for all intents and purposes, full-time employees—of the national health service, in this particular case—and yet they are being paid through service companies that allow them to reduce their tax liabilities.

The article says that Departments are complicit in that. It states:

“The arrangement can be tax-efficient both for the individual and for the Whitehall department, including arm’s-length bodies, since the department may not need to pay national insurance in addition to fees.”

My concern here is that Departments, which are paid for by tax and whose revenues are collected by the Exchequer, seem to be colluding to reduce the amount of money paid to the Exchequer. Will the Minister respond to that, or at least look at the issue? When she conducts her review, will she specifically respond to that? Am I alone in thinking that there is something peculiar about a Whitehall Department seemingly colluding with the private sector to reduce the amount of tax payable? Is that practice acceptable? Should we be encouraging such practice?

[Stephen Pound]

My hon. Friend came into the House at the same time as I did. He will remember, as I do, the huge debate on IR35 at the time, which I thought had addressed the issue. Is he as shocked as I am to hear today, and to read in the sheets of that august organ, Private Eye, that a golden carousel fuelled by avarice is spinning chief executives from one fleshpot to another, letting them fill their boots on the public purse without even pausing for breath? Does he agree that that should have been sorted years ago? I thought that it had been by IR35.

[Clive Efford]

My hon. Friend is tempting me along a path that I do not wish to go down because I have limited time. However, he has made his point and put it on the record.

I will quote from another article in The Guardian dated 15 February to illustrate my point further. What is disturbing about that article is that the officers within the Department—whether inadvertently or not—have failed to give the full facts in answer to a Member asking questions specifically about the use of such vehicles for paying permanent members of staff in the NHS. The confusion seems to rest around whether those people are classified as civil servants, or whether they are private sector consultants.

The series of e-mails that The Guardian quotes from in the article suggests that there are attempts within the Department to facilitate that sort of arrangement. I find that alarming. The answer provided failed to give the full facts to the House. The article states:

“The emails handed to the Guardian also show senior civil servants at the department discussing the possible reputational damage to the department and seeking to avoid ways of revealing the nature of the payments sought in a written question last December by Gareth Thomas, the shadow Cabinet Office minister”.

The Guardian goes on to say that the answer to the question from my hon. Friend the Member for Harrow West (Mr Thomas) stated:

“It is not the department's policy to permit payments to civil servants by ways of limited companies.”

That led to the belief that no civil servant was being paid through such a mechanism. However, it transpires that there is an issue surrounding the definition of a civil servant. A civil servant is someone who is on pay-as-you-earn, rather than someone who is being paid through one of those mechanisms. Therefore, the answer was entirely misleading. Whether that was deliberate or not, we need to have some answers to that practice. Do the Government think that that is a satisfactory definition? Alternatively, does it need clarification so that when hon. Members seek answers in the future about how people are being paid, we get accurate answers? We can then be the scrutineers of what is going on with public sector pay and how much public sector money is being used. With that, I conclude my speech.

Northern Ireland Economy

Stephen Pound Excerpts

Thursday 1st March 2012 Westminster Hall

[Stephen Pound (Ealing North) (Lab)]

The hon. Gentleman will have noticed that the person who most represents the delightfully happy people of Northern Ireland is a 65-year-old mother of four living just outside Larne. I wonder whether he knows the lady.

[Ian Paisley]

No—that’s why she’s happy.

Fuel Duty (Northern Ireland)

Stephen Pound Excerpts

Wednesday 22nd February 2012 Westminster Hall

[Ms Ritchie]

The hon. Gentleman brings me into an interesting debate about the devolution of tax-varying powers to Northern Ireland, which my party supports. He raises the other important issue of the block. No doubt, as with corporation tax, that matter will be decided by the Office for Budget Responsibility. Naturally, we in Northern Ireland would say, collectively across parties, that we are a special region within the UK, notwithstanding our political or identity differences. We are coming out of a legacy of conflict and that needs to be addressed for the people who live there.

[Stephen Pound (Ealing North) (Lab)]

Surely, the point is that Northern Ireland is the only part of the United Kingdom with a contiguous land border with another European country. Just as in Europe, there are variable tax rates on borders—between Luxembourg and Belgium, for example—so surely there is a case for recognising that the problem is not solely part of the rural differential, although that is significant. It is a cross-border issue. We must look to that as well. Surely, Her Majesty’s Government should be working in that direction.

[Ms Ritchie]

I thank my hon. Friend for his intervention. I wish to progress to the issue he mentioned, because we share a land border with the south of Ireland. There are differential tax rates and we in the north of Ireland need to be given a certain degree of comfort.

With specific reference to Northern Ireland, having brought attention to the general problem besetting the market, I now turn to our own constituencies and Northern Ireland in particular, where the situation is even more severe. I have already highlighted the general point in relation to Britain, but I emphasise that from January to December last year petrol and diesel prices in Northern Ireland were the most expensive, and in January this year the price of diesel was the most expensive in the European Union. The AA has recently demonstrated that Northern Ireland has higher fuel prices than any other region and that on average we pay 134.6p at the pump, while the average price in the UK is 133.5p.

Prices continue to rise in Northern Ireland. In December 2011, it cost £66 to fill a standard 50-litre engine—£70 for diesel—and within a year this has gone up to £70, a 6% increase. A family in my constituency that owned a Ford Galaxy car with a 70-litre engine recently told me they are faced with a £100 bill every time they refill their car. Such families will be faced with paying hundreds of pounds more than they used to every year, an amount that I guarantee the Minister is not insignificant for the vast proportion of people, at a time when they are already suffering, with welfare reform proposals coming down the line and with the cost of motor car insurance much higher in Northern Ireland, particularly in rural areas, compared with comparable regions in Britain.

The average family sends £680 a year to the Treasury in London just to cover fuel duty. Many families will be affected by the public sector pay freeze enacted by the very same Treasury. The high cost of fuel is particularly problematic for the poorest in society, for whom such an amount represents a significant proportion of income and for whom the use of a car is most important to remain economically active.

There is a discrepancy not just between regions but within them, with rural areas in Northern Ireland, including my constituency, particularly prone to high prices. Indeed, this problem is exacerbated by large retailers operating across many sites, charging different premiums by location, a practice that drives up prices in certain areas, particularly in rural locations, where the dependence on fuel is often the greatest.

The problem in rural areas can be compounded by the absence of large supermarkets to drive down the prices. For example, the AA cited the lack of Asda forecourts in Northern Ireland as a key contributory factor, meaning that price competition is not as keen as in the UK. I urge the Minister to review how location-specific pricing and the absence of large supermarkets distort the market and create an unfair playing field.

We cannot separate this problem from our investment in public transport services. It may interest the Minister to know that, historically, Northern Ireland has received the lowest spend per capita on transport infrastructure, leaving the car as king and often the only viable choice. A perfect example of this is the atrocious management of the rail link between our two biggest cities, Belfast and Derry, which has been compounded by the legacy of blinding ignorance to organising the network on an all-Ireland/island basis.

Simply put, people have no option but to get in their car. Those who are priced out of the market by high fuel prices are often left economically isolated and socially disfranchised. Indeed, there needs to be joined-up thinking on a north-south basis regarding the fuel duty regime to avoid striking disparities, particularly around the border, as my hon. Friend the Member for Ealing North (Stephen Pound) mentioned. This problem distorts the local market for fuel and leaves local retailers and consumers at a marked disadvantage.

These problems are faced not only by our people but by our businesses. We hear the Secretary of State for Northern Ireland and Treasury Ministers talk about rebalancing and growing the Northern Ireland economy. This seems to be rhetoric in search of a policy at the minute. Does the Minister not agree that one of the main things holding back business growth in Northern Ireland is the punitive price of petrol? Action here would be the ideal way for the Treasury to demonstrate its commitment to growing the Northern Ireland economy.

The Minister does not need to tell me the problems faced by small and medium-sized businesses in the current climate. Does she not agree that a cut in fuel duty would act as an immediate stimulus to the economy in Northern Ireland?

I do not want to create the impression, by focusing on these immediate measures, that I am ignoring the big picture. As a society, we must wean ourselves off dependence on oil. Without doing so we will have the same debate in the House year after year. Doing this will take foresight rather than expediency, and ambition rather than an “as you were” mentality, but until we reach that point, the Government must do more to help those in need; they must shoulder a fair share of the burden and not simply pass on price rises to consumers and local businesses. The Government must commit to their pledge to consult on a fuel duty stabiliser and cancel the planned duty increases scheduled for August.

In Northern Ireland this problem is particularly striking. We must address the basic problem, which is that our people pay more at the pump than in any region in the UK and, indeed, in the EU. There are clearly issues surrounding the operation of large retailers, which bring price competition, but not evenly across the board. As other hon. Members have clearly articulated, rural areas are often most vulnerable and often people and businesses in rural areas are most dependent on their cars. If the Treasury is serious about growing our local economy, would this not be an obvious place to start? I acknowledge that the Northern Ireland Executive at Stormont also have a major role to play.

These immediate measures must be buttressed by a sustainable approach to our energy future and transport infrastructure. My party and I are committed to proper investment in new, green energy technologies in Northern Ireland. I look forward to the Minister’s response.

Remuneration of EU Staff

Stephen Pound Excerpts

Tuesday 21st February 2012 Commons Chamber

[Cathy Jamieson (Kilmarnock and Loudoun) (Lab/Co-op)]

It is a pleasure to face the Minister across the Dispatch Box this afternoon, after being side by side with her this morning at the Rehab Group’s parliamentary pancake breakfast. Neither of us was able to run in the race, so we did not have that kind of competition this morning.

[Stephen Pound (Ealing North) (Lab)]

Will my hon. Friend give way?

[Cathy Jamieson]

Indeed.

[Mr Speaker]

With reference to the annual adjustment of the remuneration of EU staff, I feel certain.

[Stephen Pound]

On the subject of the annual adjustment of the remuneration of EU staff, my hon. Friend may be aware that when the MPs team won this morning, that was the sole topic of discussion.

[Cathy Jamieson]

I had better not incur the wrath of the Speaker by commenting, other than to congratulate those MPs who were able to take part. I note that, apart from my hon. Friend, none of them is here to participate in the debate. Perhaps they are recovering.

I begin by thanking the European Scrutiny Committee for recommending this for debate on the Floor of the House and for the work it has done in scrutinising these documents. European institutions can sometimes seem remote and impenetrable, but as we are aware, the workings of the EU in general, and of the Commission, have a significant impact on a range of issues that affect us all. We also know that the EU produces a huge volume of documents, and members of the European Scrutiny Committee do us a service by examining a number of those in detail, and recommending debate on the Floor of the House where there are further questions for the Government to consider.

The Committee’s reason for drawing attention to these documents relates to a number of specific concerns: first, the process that has led us to the position where once again we might see a legal battle between the Commission and the Council in the European Court of Justice; secondly, the Commission’s view that there was no justification for invoking the exception clause; and thirdly, questions about what action the Government have taken, and will take, regarding the negotiations on the amendment of Annex XI.

As the European Scrutiny Committee recognised, the documents are technical in content, but they nevertheless raise issues of far greater political importance. In properly scrutinising these documents, it is important to understand their background and history. The Minister has already covered some of that territory and I will not seek to repeat it. However, it is worth highlighting some of the context again, because it is entirely linked to the wider economic situation we face.

In less difficult financial times such documents, which essentially put in place the necessary paperwork for salary upgrading, might have passed, if not entirely unnoticed—the Scrutiny Committee would always have had an eye on them—at least without significant comment, except from Members who view anything to do with Europe as by its nature a bad thing. I do not take that view, but we are in a climate where there is justified anger at excessive pay, outrage at bankers’ bonuses and a general feeling that staff who are already highly paid should not get extra rewards simply for doing their job properly.

--- Later in debate ---

[Sammy Wilson]

I thank the hon. Lady for her intervention. If the Prime Minister wants his hand strengthened in his arguments with Europe on budgetary issues, and Europe’s interference with our courts and the rules affecting this country, one way of doing so is to have the backing of the people, in a referendum, for a different relationship with Europe. When one sees this kind of insular attitude being adopted, one understands why there will be increasing support for a referendum allowing for a change in the relationship.

[Stephen Pound]

As one who voted enthusiastically yes in the early ’70s, swept away, intoxicated by Margaret Thatcher’s endorsement of it, I can tell the hon. Gentleman that many people seeking a referendum simply wish to underline once and for all that this is no longer a question that we should return to every year, and that many of those seeking a referendum are pro-Europeans—a group among whom I proudly number myself.

[Sammy Wilson]

Ironically, the pro-Europeans are the people who have most vigorously opposed such a referendum. If the hon. Gentleman believed what he was saying, he would join me in saying, “Let’s have a referendum. Let’s hear what the people say,” although I suspect that he and many like him are afraid of what the people’s verdict might be. The one thing that I can be sure of is that this issue will reinforce the case that many of us in the House are making—that we ought to consider how our relationship with Europe can be altered so that we do not end up financing this kind of nonsense.