Oral Answers to Questions

Alan Reid Excerpts

Tuesday 14th May 2013 Commons Chamber

[Danny Alexander]

I hope that the hon. Gentleman will have a look at the employee ownership pilot on apprenticeships, the purpose of which is to put much more of the funding, and more of the control over the way in which apprenticeships are designed and supported through colleges, in the hands of employers to make sure that the skills training that the young people get is suited precisely to the needs of the employers concerned.

[Mr Alan Reid (Argyll and Bute) (LD)]

Small businesses in remote areas such as Argyll and Bute have been greatly helped by the Government’s decision to freeze fuel duty and to introduce the island fuel duty discount. This means that businesses on the islands of Argyll and Bute benefit from fuel duty being 18p a litre less than it would be under Labour’s plans. I very much welcome the Government’s policy, and will the Chief Secretary make the case to Europe to extend the island discount to remote parts of the mainland, such as the Kintyre peninsula?

[Danny Alexander]

I am grateful to my hon. Friend. Every small business in the country is benefiting from the fact that fuel taxation is 13p a litre less under this Government that it would be under Labour’s plans. It is the coalition Government who are on the side of those firms. I will make the case to the European Commission to extend the discount to the most remote areas. We are working to build a case on that and I would welcome his support, and that of his local authority, in doing so.

Public Service Pensions Bill

Alan Reid Excerpts

Wednesday 24th April 2013 Commons Chamber

[Sir Bob Russell]

I am delighted that the trust and confidence that I placed in the Minister on the public record on Monday has been justified. I thank him, those around him and those in the other place for bringing matters to a resolution that, although a compromise, is one that I hope we can all live with. In that spirit of concord, I thank Opposition Front Benchers for their contribution. We should praise the representatives of the Ministry of Defence police and fire and rescue service, because without their sterling endeavours, we might have ended up with a right mess.

I remain critical of the Ministry of Defence, because if it had been involved at an earlier stage, we would not have got to the stage where a resolution was needed. I am still concerned that we are looking at this matter the wrong way around. It is the fitness of the people to do these very dangerous jobs that should be paramount, not the retirement age or the pension. They defend and provide security and fire services for nuclear installations. I urge the Ministry of Defence, notwithstanding the resolution of this particular matter, to look calmly at the security and fire protection that its police and fire and rescue services provide in the national interest to ensure that they are fit for purpose. Nobody doubts the courage and commitment of the individuals concerned. However, as I said on Monday, do we really want our nuclear installations to be looked after by people of my age?

[Mr Alan Reid (Argyll and Bute) (LD)]

I am pleased that the Government have agreed to make this amendment. My constituents who work as police officers and firefighters at Faslane and Coulport will be pleased that the Government have listened to their case and tabled this amendment.

The report will look at the impact of the Bill on the health and well-being of defence police and firefighters, and at the ability of those over 60 to meet the strict fitness requirements that are necessary for the important and dangerous job that they do. The report will also consider the consequences of early retirement for the workers who are forced to retire early on health grounds because they cannot meet the stringent fitness requirements in their 60s, as well as the cost to the taxpayer.

The Government inherited this anomaly and it was missed by Lord Hutton in preparing his report. The Government have been faithful to the Hutton report in the Bill. I am pleased that they have listened to the concerns of defence police and firefighters, and have agreed to table this amendment.

After Monday’s debate, defence police and firefighters in my constituency expressed concerns to me about the size of the abatement of their pay that it was suggested might be necessary to reduce their retirement age to 60. I hope that all the calculations on the abatement of pay will be transparent in the report. Calculating pension contributions is an enormously complex process. Following a review by the Government Actuary’s Department, the abatement on pay rates for MOD firefighters has been reduced retrospectively from 9% to 7.8% from 1 April last year. The fact that that calculation has been made only recently and has been backdated is an indication of how complicated a subject this is. It is important that during the review, all the calculations are transparent and independently verified, and that the workers are allowed to ask questions about them.

I am delighted that the Government have listened and brought forward the review. I am fairly confident that the review will find that it is not good for the workers or for the taxpayer for people doing these strenuous and dangerous jobs to work beyond 60. The calculations will show that if the retirement age is 65 or 68 and significant numbers of people are forced to retire early on health grounds, both the taxpayer and the worker will lose out. The worker will lose out because they will not get the full pension that they had expected. The taxpayer will lose out because the amount that has been paid into the pension pot will not cover the cost of the pension if it is paid out early.

It would not be right for these workers to work beyond 60. The right comparison is with civilian firefighters and police who work for local authority fire services or other police forces. I am fairly confident that the review will recommend a retirement age of 60. I congratulate the Government on listening to the legitimate concerns that have been put forward.

[Sajid Javid]

I thank all hon. Members who spoke in the debate on Monday and who have spoken to me outside the Chamber. In particular, I thank my right hon. Friend the Member for Bermondsey and Old Southwark (Simon Hughes) and my hon. Friends the Members for Colchester (Sir Bob Russell) and for Argyll and Bute (Mr Reid) who have spoken today. I also want to put it on the record that my right hon. Friend the Member for East Yorkshire (Mr Knight) has made representations on behalf of his constituents on this important issue. He has been robust in representing them, even though as a member of the Whips Office he is not able to speak on their behalf in the Chamber, and that is reflected in the Government’s amendment.

Public Service Pensions Bill

Alan Reid Excerpts

Monday 22nd April 2013 Commons Chamber

[Chris Leslie]

I am amazed that hon. Members who are in government refuse to take responsibility for the offices that they hold and for the decisions that they have in their grasp. I said that it is important to admit that a mistake has been made for these 350-odd MOD firefighters and police. Why on earth cannot Members on the Government Benches say the same? [Interruption.] If the Minister wishes to correct me, I shall be delighted to hear.

[Mr Alan Reid (Argyll and Bute) (LD)]

Will the hon. Gentleman give way?

[Chris Leslie]

Another Liberal Democrat. Yes.

[Mr Reid]

It was a legitimate question from the hon. Member for Stevenage (Stephen McPartland). Labour is seeking to form the next Government. The next election is only two years away. Surely the hon. Member for Nottingham East (Chris Leslie) should answer questions about what his party will do if it is in power?

[Chris Leslie]

How much more of an answer can I give than the actions that we will take in the Division Lobby today? Instead of the party political games that the Liberal Democrats and the Conservatives are playing today, it is a responsible thing to do to try to help—[Interruption.] They laugh, but this is not a laughing matter. They expect these firefighters and police officers to work up to the age of 67 or above, and that is not the right thing to do.

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[Chris Leslie]

Absolutely. Sadly, there is also an argument that the Government, by holding out in this way, are letting down those serving in our armed forces. They are giving the impression that they think they can sweep the issue under the carpet and let it ride. There are already concerns that they might be increasing the risk to national security by cutting the number of MOD police officers—from 3,600 to 2,400 by April 2016—and in many ways a feeling of betrayal is starting to accumulate.

This matter might be an irritant for the Minister, whom we know is looking for a pat on the head from his betters higher up the food chain, but it would be nice if he, rather than trying to deliver a neat and perfect Bill with no loose ends by resisting any issues that annoyingly come up in the course of debate, used his position to take account of the important questions that come up. I have encountered a number of such issues in my time at the Opposition Dispatch Box and as a Minister, and it is quite plain that at some point in the next few weeks Ministers will have to put their hands up and admit that they will back down. It would be far neater and quicker, and to the Minister’s credit, if he said so now.

This matter needs to be resolved. Telling MOD firefighters and police officers to stop rocking the boat and to accept a half-baked assurance that the Government might enter into some negotiations on whether the pension age should be 65 gives them no way to protect their situation beyond the short duration of the Minister’s tenure in office. We need to correct that glaring error in the Bill. I commend Lords amendments 78 and 79 and urge the House not to disagree with them.

[Mr Reid]

I am disappointed that the Government have not accepted Lords amendments 78 and 79. I support the rest of the Bill, which I think contains good proposals for tackling the issue of people living longer, but I think that that one part is an anomaly and an oversight, as Lord Hutton has admitted. It will leave MOD police and fire personnel in an anomalous position as the only uniformed personnel who will not retire at 60.

Many of my constituents who work as police and firefighters at Faslane and Coulport will be affected. As has been said, their counterparts in local authority fire services and other police forces will retire at 60, and I believe that they, not other civil servants, are the correct comparison for defence police and firefighters.

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[Hywel Williams (Arfon) (PC)]

The hon. Gentleman is making fine points about the physicality of the job. The Minister said that the terms and conditions of the pensions of MOD firefighters and police are immaterial to their ability to carry out the job. Does the hon. Gentleman agree with me and disagree with the Minister?

[Mr Reid]

I agree that the pension rules are immaterial to their ability to carry out the job. That is the point that I am trying to make. The work of the uniformed services is unique because it involves short bursts of high physical effort and mental alertness. That is what makes these jobs different and why I do not believe it makes sense for them to have to carry on beyond 60.

There should be a simple rule for retirement age. The uniformed services should retire at 60 and other people should retire at the state pension age. If the Lords amendments were accepted, that principle would be implemented. Defence police and firefighters, like other uniformed services, are highly trained and their job puts them in dangerous situations and requires a high degree of fitness.

I hope that the Government will reflect and agree—if not today, then at some point in the future—that people in these occupations can retire at 60.

[Mr Anderson]

Ever since this Government took office there has been an attack on public sector pensions. Throughout the debates on public sector pensions, they have ignored the advice of the members of the schemes, the trade unions and the organisations that represent the members. They have torn up long-held agreements, reduced payouts, increased the length of time that people have to pay in and increased the level of contributions.

Many of the Government’s arguments have been based on the work of John Hutton. They have said to Labour Members: “Not us, guv! Your man gave us the template and we’re following his work.” Why on earth are they ignoring John Hutton now? Is it because they have an in-built anti-public sector dogma? Do they want to pull down public sector workers whenever they have the chance to get away with it? Is it because—I think this is the main reason, because the Treasury’s fingerprints are all over this—they are driven by the dogma of a failed Chancellor, who wants to save money in any way that he can because his plan A has failed miserably and the economy of this country has not just stagnated, but has stalled and gone backwards?

John Hutton has said clearly that he made a mistake. My hon. Friend the Member for Nottingham East (Chris Leslie) quoted him. He said that he had missed this point, that he had made an error, and that if he had known about it, he would have addressed it at the time. At the end of his speech, John Hutton said:

“It is incumbent on us to address that issue and not to use the technical arguments as an excuse for not addressing this fundamental discrepancy.”—[Official Report, House of Lords, 12 February 2013; Vol. 743, c. 570.]

A discrepancy is what this is. It is not a huge issue of principle. It is something that was missed by the people who were advising John Hutton, including the trade unions. It was also missed six or seven years ago when we changed the rules. Back Benchers like me should have raised it with our Government. Opposition Members at that time, including Liberal Democrat Members, should have raised it. However, we did not raise it, the trade unions did not raise it and the civil servants who were giving the advice at the time did not raise it, and it went through.

It could be put right now. As John Hutton said, it is a fundamental error. If it is not put right now, is it just because the Government are being contradictory, given that they have argued at every other time that we should follow John Hutton’s template, or because they are being cynically hypocritical? We could put it right, and we could do it now.

It is nonsense to say that the workers in question are somehow civil servants first and police officers or firefighters second. When they run into a building, they do not think, “I’m a civil servant”, they think, “I’m the man who’s going in to sort out a terrorist or to try to rescue somebody from a fire.” I said before that there is no difference between them and a police officer or firefighter working for a local authority, but at times there is, because sometimes they run into buildings where there are things like nuclear weapons, explosives or somebody waiting for them with a shotgun, a machine gun, a hand grenade or other explosive device. The physical and mental intensity and the pressure on them is huge, and that should be represented in the Bill.

The argument that people in different pension schemes cannot be on different terms and conditions is nonsense. For years in the national health service, we allowed mental health nurses to retire at 55, or if they chose to carry on working, their pension was guaranteed at that age, because of the nature of their work. It was about the intensity of going to work every day and grappling with some of the most disturbed people in society. That was the right thing to do then, and it is the right thing to do today.

We all saw what happened 30 years ago, when Margaret Thatcher’s Government reduced the retirement age for coal miners first to 62 and then to 60. They did so for the right reason—they realised that people in that industry were a special case and deserved to be seen in that way. At the time of the reduction, in 1980, the life expectancy of a miner was 65 years and two days, so they got their pension for two days. Because of the change in the law, they got the chance to get their pension for up to five years longer, and that was the right thing to do. It is clear to me that the change in the Bill is nothing other than an attempt to escape from the need to pay people what they are entitled to.

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[Dr Eilidh Whiteford (Banff and Buchan) (SNP)]

I wish to make a few brief points in support of Lords amendments 78 and 79, which seem eminently sensible and seek simply to bring the normal pension age for MOD police and defence fire and rescue personnel in line with arrangements for other fire and police personnel who do broadly similar jobs. As others have pointed out, when the amendments were first debated in the other place, Lord Hutton seems to have acknowledged that the omission of MOD police and firefighters from his original considerations was an oversight. I agree wholeheartedly with his remarks when he said:

“It is incumbent on us to address that issue and not to use the technical arguments as an excuse for not addressing this fundamental discrepancy.”—[Official Report, House of Lords, 12 February 2013; Vol. 743, c. 570.]

I support the Lords amendments because MOD police and firefighting officers need consistent treatment with other police and firefighters.

Lord Hutton’s conclusion in recommendation 14 of his report was by no means arbitrary. In recommending a normal pension age of 60 for uniformed services personnel, the Hutton report drew on a wide evidence base. It recognised that the nature of the job places intense physical demands on officers and requires them to maintain levels of health and fitness that are not necessary in other day-to-day jobs. That acknowledgment has underpinned the design of terms and conditions for police and firefighters for many years, and remains as pertinent and relevant as it ever was, even if the age at which those personnel will be eligible for retirement has shifted.

It is useful to remember that changing demographics and increases in life expectancy have underpinned the process of pension reform. However, although life expectancy has increased significantly in recent decades, the increase in healthy life expectancy has not kept pace. People are living longer, but they are more likely to live with debilitating health conditions or disabilities. I made general observations on that in earlier stages of the Bill, but it is particularly relevant to the uniformed services, because it is imperative that officers are physically capable of meeting the demands of the job. Hutton implicitly acknowledged that when he called for the increase in normal pension age for the uniformed services to be kept under regular review.

We must be realistic about the physical limitations of mere mortals. Hard physical work takes its toll on human bodies. It is clear that people who work in heavier, more demanding jobs suffer more physical strain as they get older. Like the hon. Member for Argyll and Bute (Mr Reid), I was struck by the briefing ahead of the debate from the Defence Fire Risk Management Organisation, which set out in some detail not only the physical demands placed on defence fire and rescue personnel, but the risks to officers, which increase with age—they rise exponentially for officers aged 50 and over. We must be realistic about what we ask people to do. We should not do the sums on paper without thinking of the real cost.

We need to be careful when we talk about the monetary cost. The Minister relied on the argument that the measure will cost too much, but we need to be careful if we assume that the higher pension age will save us money. All hon. Members know that staff retiring on health grounds can be an expensive business. It is all the more expensive when the reasons for a person leaving their job are linked to their occupation. That is an extremely expensive way to do things. We need to look at both sides of the balance sheet before we jump to the conclusion that treating MOD police and firefighters differently from other police and firefighters will save us money.

At the end of the day, this comes down to the fact that MOD police and the defence fire and rescue officers are, to all intents and purposes, uniformed service personnel. They need to be fit and strong, and physically and mentally capable of carrying out their duties in an emergency. We need to recognise that and treat them in exactly the same way—as far as possible—as we treat other police and firefighters.

Another important part of the context is that morale in those services has been put under considerable strain in recent times owing to changes to terms and conditions and proposed reductions to services. Like the hon. Member for Colchester (Sir Bob Russell), who intervened earlier, I have MOD police in my constituency—they look after the St Fergus gas terminal. I am therefore very much aware of the great uncertainty that has overshadowed the service because of MOD reviews. I am also aware that a proposed voluntary early release scheme, for which, I believe, 600 officers applied, has been subject to a rethink. I am glad that the MOD has recognised the folly of rushing in with ill-thought-through cuts, but officers who had applied for early release have been left in a kind of limbo. The service needs to ensure that younger officers come up through the ranks, but the uncertainties of the past few years have undermined morale and the good will of officers, who take substantial risks in their day-to-day working lives, and who we expect to be on the front line during any crisis.

That is why I do not have confidence in the solution set out by the Minister. I know that some of his Liberal Democrat colleagues in the coalition have accepted it—if I had not seen officers being mucked about by the MOD’s prevarication over the early release scheme, I would have more confidence in the Government’s proposals. However, having witnessed that, and seeing that the issue is still unresolved, I really do not have that confidence. In that context, I would be keen to see the amendments go through as they are, and I urge Liberal Democrats to come through the Lobby and make their voices heard on behalf of their constituents.

[Mr Reid]

I want to make it clear on the record that I believe the Government when they say that they want to keep the retirement age at 65, instead of increasing it progressively to 68 when the state pension age goes up. The Government have made that offer. My argument was that the retirement age should be 60, because of the decline in their physical ability to perform at peak fitness after that age.

[Dr Whiteford]

The hon. Gentleman makes a valid point. Like me, he has constituents who have applied for the early release scheme and been mucked about. That is why we should settle the matter today on the Floor of the House, instead of allowing it to be sent off into the long grass where we can prevaricate some more before failing to reach the conclusion that people need to be treated with consistency.

The question of consistency underpins everything. There is recognition that other police and firefighters need a lower normal pension age than those in less physically demanding roles. People who do the same jobs, but for the MOD, need to be recognised in exactly the same way. I urge the Government to observe the spirit of the Hutton report, accept that this was an oversight, and do the right thing by our MOD police and firefighters by accepting the Lords amendments. I hope, even at this very late stage, that the Minister will capitulate.

Finance (No. 2) Bill

Alan Reid Excerpts

Thursday 18th April 2013 Commons Chamber

[Mr MacNeil]

My hon. Friend is right—[Interruption.] Yes, there is, of course, a Scottish Labour Member on the Front Bench, but the hon. Member for Kilmarnock and Loudoun (Cathy Jamieson) is present because of duty, rather than will, which is why the hon. Member for Central Ayrshire is here.

[Mr Alan Reid (Argyll and Bute) (LD)]

rose—

[Mr MacNeil]

If the hon. Gentleman will be patient, I will make some progress before giving way to him.

[Mr Reid]

rose—

[Mr MacNeil]

I am sure the hon. Gentleman will be patient. He is usually a patient man, and I am sure he can display some patience now.

The chief executive of the UK Airport Operators Association, Darren Caplan, recently said:

“Our eye-wateringly high levels of APD already mean we pay the highest passenger tax on flying in the world—and this is not disputed by anyone in Government.”

The truth is that APD rates are having a devastating effect on the UK, and especially on Scotland. Let me pass on the views of some key people in Scotland. Jim O’Sullivan, managing director of Edinburgh airport, said on the BBC news on 6 December 2011:

“APD is already costing Scotland passengers and having an impact on tourism revenues. We know from discussions with our airline partners that it is a major factor in their decision to connect further routes to Scotland. We would urge the Westminster Government to see Scotland as it does Northern Ireland and understand the need to both reduce and devolve this unfair and damaging tax.”

Amanda McMillan, managing director of Glasgow airport, said:

“On the question of devolution of APD, Glasgow Airport has always been supportive of this proposal given the Scottish Government’s more progressive approach to aviation and its greater appreciation of the role the industry plays in supporting the growth of the Scottish economy.”

Scottish Government Transport Minister, Keith Brown, said:

“We need to be able to deal with the competitive and connectivity disadvantages that Scotland faces and if APD were devolved now we could provide the means to incentivise airlines to provide new direct international connections to Scotland, benefiting our aviation industry and our passengers and supporting the growth of the Scottish economy. The UK Government needs to listen to the many voices in Scotland who clearly want to see full devolution of the policy on APD.”

--- Later in debate ---

[Mr Reid]

The hon. Gentleman forgets one point: Northern Ireland is attached by land to the Irish Republic and Scotland is attached by land to England but is not attached by land to Ireland. The difference here is that people were driving from Belfast to Dublin to catch connecting flights, whereas, obviously, people cannot drive from Glasgow to Dublin to catch connecting flights.

[Mr MacNeil]

That is a very strange argument for a Member who, like me, represents islands. It also could be argued that a passenger travelling from Stranraer would have a far shorter journey to Northern Ireland than a person travelling overland from Cork to Northern Ireland. The hon. Gentleman may not be aware that aircraft travel through the air, not overland or across the sea.

[Mr Reid]

On the question of islands, the hon. Gentleman knows the following information as well as I do, but it is important that the Committee be given it: flights from the islands in our constituencies are exempt from APD.

[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.

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[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.

[Mr Reid]

It is important to set out first of all what the debate is not about. It is not about whether air passenger duty is a sensible tax; it is about whether we should be devolving air passenger duty on long-haul flights to Scotland and Wales. I must admit that I was disappointed by the lack of preparedness of the hon. Member for Na h-Eileanan an Iar (Mr MacNeil) for the debate, as he was not able to answer a simple question from the hon. Member for Central Ayrshire (Mr Donohoe). It must be remembered that the SNP has the whole Scottish civil service machine to back it up. I am extremely surprised that the hon. Gentleman did not come armed with an impact assessment produced by the Scottish Government to show the benefits of devolving the tax to Scotland. He had no impact assessment whatever.

[Mr MacNeil]

Is the hon. Gentleman for or against the devolution of APD to Scotland?

[Mr Reid]

I am waiting for somebody to advance the case for that. The Scotland Act 2012 contains provisions whereby, if the Scottish Government make the case to the UK Government for any tax to be devolved, that tax can be devolved. I am waiting for the Scottish Government to make the case.

[Mr MacNeil]

The hon. Gentleman is a politician, a Member of Parliament elected to Westminster. Is he unable to advance the case himself to devolve APD to Scotland? That is a shocking state of affairs.

[Mr Reid]

It is the hon. Gentleman who tabled the new clause and spoke to it today. It is incumbent upon him to make the case. I do not have the benefit of the entire Scottish civil service machine at my beck and call, which the SNP has.

[Angus Robertson (Moray) (SNP)]

Could the hon. Gentleman please tell the Committee what is the policy of the Scottish Liberal Democrats, the party he represents? What is his party’s policy?

[Mr Reid]

What we are debating today is a proposal from the SNP and Plaid Cymru to devolve certain aspects of APD relating to long-haul flights from Scotland and Wales. I was expecting an analysis to be presented, but hon. Members could not even tell us the number of flights that would be affected. When the hon. Member for Na h-Eileanan an Iar moves amendments in future, he should present detailed analysis of the benefits and everything else that would be affected.

To compare the situation of Scotland with that of Northern Ireland is not accurate. As I said in an earlier intervention, the justification for devolving air passenger duty to Northern Ireland was the land border with the Irish Republic, which means that people from Northern Ireland would be attracted to travel to airports in the Irish Republic for long-haul flights to take advantage of the lower taxation. That situation clearly does not apply in the case of Scotland and Wales. People would not save money by travelling from Scotland to the Irish Republic in order to take a long-haul flight.

[Mr MacNeil]

Will the hon. Gentleman conduct a little thought experiment? Imagine that the Irish Republic had the same level of air passenger duty as the United Kingdom. What would the net effect be? It would be fewer people flying, which would dampen our economic growth. The point of having APD devolved is to enable economic growth. I hope the hon. Gentleman can grasp that fundamental point. I also hope that if the Liberal Democrats have a policy of devolution of APD, it is to devolve it to Scotland. If they do not have a policy, I would be very pleased to provide the SNP’s policy, which they can adopt free of charge.

[Mr Reid]

As the hon. Gentleman perfectly well knows, the SNP policy is clearly for independence, not for devolving particular taxes. He may put forward a good case for not having APD at all, but that is not what we are debating today. There are perfectly good arguments for abolishing APD or for a lesser rate of APD outside London and a higher rate of APD for the likes of Heathrow. The Heathrow tax was mentioned. Good arguments could be advanced but that is not the debate today. The debate today is on the specific proposal to devolve APD on long-haul flights from Scotland and Wales. I am disappointed that with all the back-up that the SNP has from the full Scottish civil service machine, it was not able to present a proper impact analysis today.

As I was saying, the Scotland Act contains provisions that allow the Scottish Government to request that extra taxes be devolved, so there is a system for doing that. I suggest that the way forward for the SNP is to request that the UK Government, under that Act, consider that. We could then have a proper, detailed debate with all the facts and figures at our disposal.

[Mr MacNeil]

One of the quotes I gave earlier mentioned the fear of the loss to Scotland of 2.1 million passengers before 2016. Would that information not at least encourage the hon. Gentleman, if he is going to develop a policy, to develop one in favour of the devolution of APD?

[Mr Reid]

Well, that is something the Scottish Government could put forward to the UK Government as an argument for devolving the tax. I will take an intervention from any SNP Member who can—

[Angus Robertson]

I will ask the hon. Gentleman my question a second time: what is the policy of the Scottish Liberal Democrats?

[Mr Reid]

I gave way to the hon. Gentleman on the assumption that he would answer my question, rather than coming up with another one himself. I think that we have exhausted this debate. In conclusion, the SNP and Plaid Cymru have not made the case today, so I will not be following them into the Lobby.

[Cathy Jamieson]

It is always entertaining to hear the hon. Member for Na h-Eileanan an Iar (Mr MacNeil), who moved new clause 3 on behalf of the SNP. I have shared a few flights with him, both short-haul and long-haul, and know how passionately he speaks on these matters. I hope to take a flight to Inverness in the not-too-distant future—[Interruption.] It is great to hear that SNP Members are so keen for me to get to the Labour conference, along with the other Scottish Labour MPs who will be playing a full part in proceedings.

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[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.

[Mr Reid]

Let me put it on record that I will not support the new clause because, as I said, the hon. Member for Na h-Eileanan an Iar (Mr MacNeil) did not make the case for it. There has been no proper impact assessment. There are mechanisms by which the case could be made, but SNP Members have not done so today.

[Cathy Jamieson]

I thank the hon. Gentleman. He has put his position firmly on the record in exactly the way I would anticipate, because I know from the work that he has done on the Scottish Affairs Committee and elsewhere that he takes this issue extremely seriously and is not slow to make points that are often not entirely in line with his Government colleagues if he feels that that is the right thing to do. His comments are very important.

I want to finish by probing the Minister further to see where the Government intend to go with this. Although representations have been made, the Government have not committed to anything other than looking at the rates for this year and the year ahead. It is unclear whether they intend to address any anomalies and conduct further work—perhaps building on various independent reports and the work of the Transport Committee—in order to consider the issue in more detail.

Those who tabled the amendments will not be surprised to hear—I suspect they expected me to say this—that we will not support them. I look forward to hearing what the Minister has to say about how we might usefully take this issue forward, not just for the benefit of Scotland, Wales and Northern Ireland, which are very important, but for the benefit of the various regions and areas of England where hon. Members are making a case on behalf of their constituents.

--- Later in debate ---

[Mr MacNeil]

I can tell the Minister straight away that we will not be withdrawing our new clauses; we will be pressing them to a vote.

This has been an enjoyable debate. I certainly enjoyed the contribution from the hon. Member for Central Ayrshire (Mr Donohoe), who is not in his place at the moment. [Interruption.] I am told he is on a plane to Inverness. I wonder. I have found an exchange in Hansard between him and me from March this year, when I pointed out to him in an intervention that the UK’s tax

“is reputed to be the world’s most onerous tax on air travel, and I am sure the hon. Gentleman will agree that it is damaging Scottish airports terribly.”

From everything that he said today, we might be under the impression that a certain answer was given, but no. The answer he gave was:

“I do agree with the hon. Gentleman on this occasion; it is not very often I can say that. The Government are doing absolutely nothing for air passengers, the aviation industry and those who work in it. They continue with this tax, while our competitors throughout the world are laughing at us.”—[Official Report, 25 March 2013; Vol. 560, c. 1332.]

I just wish the hon. Gentleman was here now, to come through the Lobby with us and put some meaning into his words.

The hon. Member for North Antrim (Ian Paisley) made a very good speech when, as I see it, he described air passenger duty as a win-win situation. I welcome the fact that air passenger duty was devolved to Northern Ireland and I wish those in Northern Ireland well. I hope it succeeds and I hope the economy there grows from strength to strength. The devolution of air passenger duty to Northern Ireland will benefit us all, whether we live in Scotland, England, the Republic of Ireland or Wales. We have nothing to fear, only fear itself. In years to come, when the Northern Ireland economy—hopefully —develops with that, we will see the wisdom of devolving that power and the folly of not devolving it to other parts.

My hon. Friend the Member for Carmarthen East and Dinefwr (Jonathan Edwards) made a very strong speech—a star speech, in fact. He mentioned the Silk commission and Labour’s immediate need to devolve APD—it was the other week, but of course there is no sign of Welsh Labour in this place today. The word “immediate” has a different meaning for Labour Welsh Members from its meaning for the rest of the English-speaking world. The hon. Gentleman certainly gave us a scary update of the economic situation in Wales, where people face the double whammy of Labour in Cardiff and the Tories in London, with their wee pals in Westminster, the Liberals, giving them a hand. He reminded my colleagues just how fortunate we are to have the SNP Government in Scotland, led by luminaries such as Michael Russell, Kenny MacAskill, Nicola Sturgeon, Alex Neil, John Swinney and, of course, Alex Salmond, the First Minister.

The hon. Gentleman reminded us that the Westminster branch of the Labour party does not want to give powers to the Labour Cardiff branch. Clearly, the Labour brothers in Wales are as happy a band as those in Scotland. We wonder whether they will send an ambassador to Inverness this weekend—I doubt it. They are probably having a punch-up, one with the other, in Cardiff.

Talking of punch-ups, that brings me to the hon. Member for Argyll and Bute (Mr Reid), who offered himself to the Chamber as a punch bag and was taken up on that offer. My hon. Friend the Member for Moray (Angus Robertson) repeatedly asked him what his policy was and he repeatedly failed to answer the question. He was even offered the policy free by the SNP, but he would not adopt it, just in case, such was the level of uncertainty. He is a nice fellow but his politics are sadly lacking. The arms are open—if he wants to cross the Floor and join the SNP, he will be welcome. It is his politics he has to change.

The hon. Gentleman said that the SNP had not made the case. Hang about. Any daft case the Conservatives make and the Liberals happily wander through the Lobbies, be it on tuition fees, the bedroom tax—whatever it is, it is yes, yes, yes from the Liberals. He seems to be unable to make the case himself for APD to be devolved to Scotland—that was sadly lacking. Will he vote tonight for clause 183? Will he come through with us on clause 183? Will he vote against the increase or will he vote for it?

[Mr Reid]

The hon. Gentleman was asked a simple question by the hon. Member for Central Ayrshire (Mr Donohoe): how many flights will be affected? In the half hour since then, has he managed to find out?

[Mr MacNeil]

The hon. Gentleman has not said whether he is voting with us in the Lobby or voting for an increase in APD. On the fourth time of asking, he is still unable to tell us what the Liberal Democrat position in Scotland is on devolution of APD.

The hon. Member for Sedgefield (Phil Wilson) made me pause and think for a while. He wants to bring in differences in the UK, which I welcome, but sadly he carped at the SNP. I think he took the wrong approach there. I would be happy to see economic growth in the north-east of England. I would not feel diminished in any way if the economy of the north-east of England were to improve, and he should not feel diminished either by Scotland advancing. I suggested to the hon. Member for North Antrim earlier that it is a win-win situation. The view of the hon. Member for Sedgefield is that it is a lose-lose situation. I am pleased to say that that view was not shared by the hon. Member for Vauxhall (Kate Hoey), who could see the benefit of devolving APD to Scotland and Northern Ireland.

The hon. Member for Kilmarnock and Loudoun (Cathy Jamieson) certainly understands the need to devolve APD, but then argued against it. She said the proposal was piecemeal, but did not want to make a start on it anywhere. Cannot she see that with or without independence more growth in Scotland benefits us all, as more growth in the Republic of Ireland and France surely benefits us all? We should be moving with a big heart to ensure that that can happen everywhere and not be stifling growth. The hon. Lady is a sensible woman and in her heart of hearts she knows the wisdom of the proposal. Of course she strayed a little far and upset my hon. Friend the Member for Carmarthen East and Dinefwr, but I am sure that she will reflect that she possibly went too far.

Labour unfortunately is employing again the Bain principle: no matter what the SNP does, no matter how sensible or wise, Labour will not vote for it. If Labour has one other principle, it is the Kilbrandon principle, which it established in 1970, whereby it prefers a Tory Government to independence for Scotland. We have seen that time after time, particularly through the damaging 1980s.

The Minister mentioned inflation, but the Government have decided increase the duty at the highest level possible. I am glad that he is looking at what is happening to our friends in the Commonwealth and in the Caribbean in particular. Disappointingly, he was unable to say whether the duty caused a competitive disadvantage to the UK compared with other countries that we do not share a land border with. I hope that the finest minds in the Treasury can go and research that and perhaps in years to come we will have an answer. For Wales there were no figures.

The upshot of this is that the UK Government are continuing to hamper Scotland. At first, it was a policy of omission, but we can now see that they are clearly hampering Scotland by commission. That is why we must vote for independence in the autumn of 2014.

Question put, That the clause be read a Second time.

Budget Resolutions and Economic Situation

Alan Reid Excerpts

Thursday 21st March 2013 Commons Chamber

[Ed Balls (Morley and Outwood) (Lab/Co-op)]

It is the morning after—the cold light of day—and the full reality of this Chancellor of the Exchequer’s fourth Budget is starting to sink in. What a huge disappointment it was; what another wasted opportunity. On growth, on borrowing and on living standards, this Chancellor’s plan has completely failed.

Families, pensioners and businesses are paying the price, but what did we get yesterday? A change of direction? Action to kick-start our flatlining economy? Real help now for families on middle and low incomes? Any recognition from the Chancellor that things have not worked out as he planned? No. All we got was more of the same failing policies. Tweeting, tinkering, but no change, of course. The Chancellor confirmed that he will still go ahead in two weeks’ time with a tax cut for millionaires. We had more of the same failing policies and a long hard road to nowhere from a downgraded Chancellor who looks out of touch and increasingly out of his depth. Surely Britain deserves better than that. What do we have to look forward to this morning?

[Mr Alan Reid (Argyll and Bute) (LD)]

What my constituents on the islands can look forward to next month is fuel duty at 18p a litre less than it would have been if the right hon. Gentleman’s Government had still been in power. Is he not delighted that this Government have reversed his party’s policy and reduced fuel duty by 18p a litre for my island constituents?

[Ed Balls]

Unfortunately, the hon. Gentleman fought the last election by saying that his constituents should vote Liberal Democrat to stop the Tory VAT bombshell. VAT has gone up, petrol is up as a result and his constituents will make their choice in two years’ time.

What do we have to look forward to this morning? Another painful, contorted and pathos-bathed Budget debate speech from the Business Secretary. I look across at him sitting on the Front Bench and cannot bear to read out once again all those pre-election quotes. You know the ones I mean, Mr Deputy Speaker—[Hon. Members: “Go on!”] No, I just cannot bear it. They were the ones in which he warned that the Chancellor’s austerity plan, his VAT rise and his rapid spending cuts would choke off the recovery and make the deficit worse. The Business Secretary knew that this plan would fail and he now knows that he is deeply implicated in its catastrophic economic failure, yet he still does not have the courage to stand up and speak out about it. Long, contorted and fudged essays in the New Statesman just will not do. No wonder he was completely ignored in yesterday’s Budget. It is a personal tragedy as well as a national tragedy, but we will hear from the Business Secretary shortly.

--- Later in debate ---

[Vince Cable]

Yes, I think we do. That bears repetition and the hon. Gentleman has done it very well.

[Mr Reid]

Was my right hon. Friend as disappointed as I was that the hon. Member for Na h-Eileanan an Iar (Mr MacNeil) intervened and did not thank the Government for the 18p cut in fuel duty that this Government have given his constituents, thanks to campaigns by myself and other Government Members?

[Vince Cable]

My colleague is absolutely right. He reminds us of two things that the Government have done. One is the freezing of petrol duty. The other is the allowance for remote communities, which he ably represents, as does the hon. Member for Na h-Eileanan an Iar (Mr MacNeil).

Tax Fairness

Alan Reid Excerpts

Tuesday 12th March 2013 Commons Chamber

[Mr Gauke]

Debt is the accumulation of deficits. We inherited the largest deficit in our peacetime history, and every measure that we have taken to reduce that deficit the Opposition have opposed, and then they complain that debt is rising. That is the most absurd position. We are criticised for not borrowing enough, and then we are criticised for our debt going up. There is no consistency or credibility in the Opposition’s position, just as there was no credibility or consistency in their treatment of low-paid workers. In government, they raised the rate of income tax; in opposition, they make promises that they will cut it. When we remember the reality, why should those on low incomes ever trust Labour again?

[Mr Alan Reid (Argyll and Bute) (LD)]

In fairness of taxation, another area where this Government have done a great job is on fuel duty. The fuel duty is now 10p a litre lower on the mainland and 15p a litre lower on islands than it would have been if the Labour party had still been in power. I hope that my hon. Friend will continue that good work and that in the Budget there will be an announcement that the September fuel duty increase inherited from Labour will not go ahead.

[Mr Gauke]

I will take that as a Budget representation. It is perhaps worth pointing out that there was a measure that the previous Labour Government had to reduce the deficit, which was substantial increases in fuel duty over the course of this Parliament. That is a measure that we have been able to stop, and quite right too.

Public Service Pensions Bill

Alan Reid Excerpts

Tuesday 4th December 2012 Commons Chamber

[Dr Whiteford]

Most people in Scotland, whether they work in the public sector or not, recognise that these pension reforms—particularly the increase in contributions and the requirement to work for longer—have little to do with designing better pension schemes and everything to do with the short-term aim of deficit reduction. I do not think that public sector employees should be picking up that tab.

Ministers have relentlessly pursued affordability while abandoning sustainability and fairness. That is the wrong approach at this time. Most public sector workers have faced a pay freeze for the past three years. Their wages have fallen in real terms while they have experienced substantial increases in their cost of living, through increases in the price of food, petrol and domestic heating bills. They are being asked to pay more, to work longer and to accept significantly lower pensions thereafter. To me, that is just not a reasonable proposition. Public sector employees do demanding jobs, often under pressure and in difficult circumstances.

[Mr Alan Reid (Argyll and Bute) (LD)]

Will the hon. Lady give way?

[Dr Whiteford]

I will not; I am conscious that other Members want to speak.

Many of those public sector workers are already on quite modest wages, and they deserve measured and proportionate schemes that will give them confidence that they are saving adequately for their old age. They want to know that the goalposts will not be shifted yet again as they approach an ever-increasing retirement age. The Bill fails those tests, which is why I will oppose it this evening.

--- Later in debate ---

[Mr Alan Reid]

I just want to put it on record that the hon. Member for Banff and Buchan (Dr Whiteford) attacked her own Scottish Government. It is the Scottish Government who decide the level of contributions made to pension schemes in Scotland and how generous those schemes are. Under the Bill, that decision is devolved to them.

Question put, That the Bill be now read the Third time.

Fuel Duty

Alan Reid Excerpts

Monday 12th November 2012 Commons Chamber

[Cathy Jamieson]

May I make a bit more progress, as we want to hear what the Government are doing? Their own figures tell us that the price of petrol is now more than 136p a litre. In my constituency, prices at a rural petrol station at the weekend were 139.9p a litre for petrol, and 144.9p for diesel. Only this morning, I heard a price of 160p a litre in the Scottish highlands.

[Mr Alan Reid (Argyll and Bute) (LD)]

When Labour was in power, other island MPs and I consistently went to see Labour Ministers to ask for an island fuel duty discount. It was refused. Within a year, this Government introduced that policy. Will the hon. Lady tell us what the Labour party’s policy is on a rural fuel discount?

[Cathy Jamieson]

I hope that when he goes back to his area, the hon. Gentleman is able to explain to his constituents why he has not backed the motion tonight.

--- Later in debate ---

[Mr Bain]

I entirely agree. Most of the jobs that have been created over the last couple of years have been part-time, insecure, low-hours posts. We have soaring under-employment in our country, with as many as 3.3 million people unable to secure sufficient working hours to make work pay. Nothing in the amendment would deal with that trend.

Combined with a VAT rise under this Government, fuel duty rises are particularly regressive. In 2009-10 the poorest quintile paid 3.5% of their disposable income in fuel duty, compared with just 1.8% paid by the top quintile. Overall, in the first year of this Government indirect taxes took 31% of the disposable income of people in the lowest fifth of earners, compared with just 13% among the wealthiest fifth of earners, and that was an increase from the previous fiscal year. According to the latest ONS study of factors affecting the retail prices index and CPI inflation measures, two of the major factors driving upward pressures were the price of clothing and footwear, which rose by 4.7% between August and September this year, and the rising cost of motor fuel, with petrol up by 3.9p per litre and diesel up by 3.5p per litre, compared with falls of 0.3p per litre in the previous year. These changes contributed 0.12% to the shift in the CPI inflation rate. In the year to this September, motor fuel costs alone rose by 2.8%. The case for action is therefore clear.

All these trends must be considered in the context of our low growth. The International Monetary Fund recently downgraded its estimate for UK GDP by 0.6% for this year and by a further 0.3% for next year. That is a crushing verdict, showing that the Government’s policies have sucked even more demand from the economy—as much as an additional £76 billion given the new evidence of the destructive multiplier effects of the Chancellor’s austerity measures. As the National Institute of Economic and Social Research has established, implementing the Government’s preferred rise in fuel duty in January would further weaken growth by 0.1% of GDP next year and keep unemployment higher than it needs to be some 48 months since the downturn began.

That is why I hope Members across the House will tonight take this opportunity to release some of the pressures ordinary households and businesses are facing by voting to postpone any rise in fuel duty until at least April.

[Mr Alan Reid (Argyll and Bute) (LD)]

The hon. Gentleman referred only to postponing the fuel duty increase. I want to put it on record that I think the Government should cancel the increase, and I hope they will do so. Why is the hon. Gentleman only in favour of postponing it? Why not cancel it?

[Mr Bain]

If the hon. Gentleman has the courage of the convictions he has just expressed, he should join us in the Lobby tonight. That will be the evidence his constituents will be looking for tomorrow morning.

On incomes, millions of ordinary people are under huge pressure because of the collapse in real wages, which has hit particularly hard since the onset of the current recession.

Oral Answers to Questions

Alan Reid Excerpts

Tuesday 6th November 2012 Commons Chamber

[Sajid Javid]

My hon. Friend makes a good point. A number of people have made those accusations. The important thing is that youth unemployment is falling—down by 62,000 in the last quarter.

[Mr Alan Reid (Argyll and Bute) (LD)]

Has my hon. Friend considered the submission that the Government have received from FairFuelUK showing that putting up fuel duty will hinder job creation, and will he give serious consideration to cancelling the planned January fuel duty increase inherited from the Labour party in order to boost job prospects?

[Sajid Javid]

We carefully consider all submissions from stakeholders, including the FairFuelUK campaign. The important thing is that had the Government continued with their inheritance on fuel duty, that duty would have been 10p higher, which would have made things a lot more difficult for ordinary people.

Finance Bill

Alan Reid Excerpts

Tuesday 3rd July 2012 Commons Chamber

[Mr Gauke]

Members will recall that the independent Office for Budget Responsibility revealed that the underlying damage to the economy and our challenge in repairing it was much greater than anyone had thought. It was therefore vital for us to take decisive action to restore the economic stability that was needed for recovery, and the Bill is part of that. In order to address the enormous debts that we inherited, confront Britain’s problems and get the economy moving, the Government have undertaken a sustained programme of deficit reduction.

As I said earlier, the Bill supports business and growth. It implements milestones for the corporation tax roadmap, overhauls the controlled foreign companies regime, and introduces the patent box.

[Mr Alan Reid (Argyll and Bute) (LD)]

My hon. Friend mentioned the controlled foreign companies regime. I support the Government’s efforts to ensure that all the tax that must be paid in the UK is paid in the UK, but, as he knows, concern has been expressed about the possibility that by introducing these rules the Government will inadvertently harm small developing countries which may lose tax revenue. I hope that they will ensure that there is no such side effect.

[Mr Gauke]

We debated that in the Committee of the whole House. The purpose of the CFC rules is to protect the UK tax base, as has always been the case, but the Government have a proud record of supporting developing countries, and we have a firm commitment to meeting our international obligations on that front. This country also has a proud record of building capacity in developing countries and improving their ability to collect taxes. In many developing countries, the UK has already made a substantial contribution, and we will continue to do so.

Both the patent box and the CFC changes form part of the Government’s wider plans, which will help UK businesses to operate in an increasingly globalised world. I am sure all Members agree that those measures are essential to restore medium and long-term growth.

Despite the challenging economic backdrop that the Government inherited, we have made significant progress. We have already introduced a further cut in the rate of corporation tax that will give us the lowest rate in the G7, the fourth lowest rate in the G20, and the lowest rate that this country has ever known. By next year, the Government will have cut corporation tax by 6%, helping to make the UK the most competitive country in the G20. According to the OBR’s assessment of the Budget, the reduction will increase the level of business investment by about 1% by the end of the forecast period. That is equivalent to an increase in the total amount of business investment of £3.4 billion between now and 2016.

Many businesses have seen that we are, as promised, open for business. WPP and others have recently announced that they are considering returning to the UK, or that they wish to set up business here. I am delighted to say that Rowan and Lancashire have already come here, and once the CFC rules are in place in 2013, we shall be looking for more businesses to follow them. Following the Bill’s publication in March, one of the big four advisory firms announced that it was engaged in discussions with between 10 and 15 multinational companies that were considering locating substantial operations in Britain as a result of corporate tax reforms. The CBI has commented that these much-needed changes

“will help make the UK a more attractive place for companies to invest, do business and create jobs.”

The Government aim to create a tax system that is easy to understand and with which it is easy to comply, and the Bill contributes to that. It provides real help for families and business. It raises the personal allowance to £8,105—which, curiously, was not mentioned very frequently in Committee—and, combined with the further increase of £1,100 next year, will mean a tax cut for 24 million people and 2 million people being taken out of income tax altogether.

--- Later in debate ---

[Rachel Reeves (Leeds West) (Lab)]

I thank my hon. Friends the Members for Pontypridd (Owen Smith), for Newcastle upon Tyne North (Catherine McKinnell) and for Kilmarnock and Loudoun (Cathy Jamieson) and others for serving on the Public Bill Committee with me over the past several weeks. I also thank our able Chairs for supervising us during that process and the Commons Clerks for their advice and assistance throughout the process in Committee and in the House.

The Bill has been on quite a journey since it was first presented to the House just a few months ago. I fear that the Exchequer Secretary spoke too soon last December when he announced that

“the Government’s more open, predictable and simple approach to tax policy making is working well.”

He said that by publishing tax legislation in draft form first,

“we are giving greater certainty and stability to taxpayers and businesses”.

I do not think that taxpayers and businesses, or indeed Members of this House, realised that the Finance Bill itself was still only a draft when it was published in March. This Finance Bill has been through so many stages of crossing out and rewriting that it would have been easier for the Government to have scrapped it and started again, perhaps with some measures that would have supported jobs and growth.

As we have heard throughout the Committee and Report stages, the Budget has been a total and utter shambles. When we first saw this Bill back in March, it contained provisions to raise VAT on hot food, on static caravans and on improvements to listed buildings.

[Mr Reid]

What was in the Budget back in March was a consultation exercise on VAT on static caravans and so on. I am glad that after that exercise the Government listened and amended their proposals, but it was a consultation. This Government, unlike the previous one, listen to what people say in consultations.

[Rachel Reeves]

That is the first time I have heard a Finance Bill being called a consultation—I do not even know where to start.

The Budget in March also included a 3p rise in fuel duty in August and limits on charitable donations. All this was necessary, we were told, to deal with the deficit. Yet the Bill before us, as we reach Third Reading, contains none of those measures. We have had a series of abrupt reversals that, according to one estimate, will cost the Exchequer nearly £700 million.

Opposition Members argued that these measures were misconceived from the start, and that adding to the costs faced by families and small business at this time would make it even harder for our economy to climb out of the recession that this Government have dug us into. But it must be a matter of regret that so much uncertainty and confusion has been created for those affected, doing real damage to businesses, charities, pensioners and families, and that at a time of tight public finances the Government’s financial and fiscal planning seems to be in such disarray, with no one at all clear what the Government’s priorities actually are.

Despite the Government’s belated change of heart on those matters, the Bill remains a deeply flawed, unfair and utterly inadequate response to the problems facing our country today and that is why the Opposition will vote against it this evening. The Bill still offends against the most basic principles of fairness by giving priority to a reckless and irresponsible tax cut worth tens of thousands of pounds for a few thousand millionaires while at the same time asking millions of ordinary people who are already under pressure from rising prices, falling wages and cuts to tax credits and benefits to make further sacrifices and endure further hardship.

The Bill breaks a promise that the Chancellor made in the Budget last year to Britain’s pensioners that their age-related allowance would rise in line with inflation for the rest of this Parliament and instead imposes a stealth tax that will hit 4.5 million people over the age of 65, all of whom live on modest pension savings. The Bill is breaking the principle of universal child benefit and still means that one-earner families will lose thousands of pounds a year while a two-earner family on almost twice as much will keep all their benefit. It is a botched, half-baked measure dreamt up for a party conference speech but the measures are described by the Institute of Chartered Accountants in England and Wales as a “policy disaster” that are

“in danger of becoming a practical disaster when they come into effect”.

We have raised a number of other concerns about the Bill, such as the controlled foreign companies changes and the impact that they will have on developing countries. What is most wrong with the Bill, however, is that it represents a massive missed opportunity to end the recession and get our economy working for ordinary working families, pensioners, businesses and young people. It could have been a Bill that took the tough decisions necessary to ensure that those who could make a fair contribution to deficit reduction did so, so that those hit hardest by the current crisis were not put under even more pressure.

It could have been a Bill that cut VAT, giving immediate relief to hard-pressed families and giving our economy the stimulus it needs to get growth under way again and to make unemployment fall. It could have been a Bill that redirected money wasted on excessive bank bonuses and put those resources to better use, helping young people get back to work and constructing new affordable homes.

--- Later in debate ---

[Bill Esterson]

I am not sure what that has to do with what I was talking about. Perhaps the hon. Gentleman can agree with me that what we need is action from this Government—action to help young people find jobs.

The hon. Member for Dover (Charlie Elphicke), who is no longer here, mentioned several times the fact that the banks are not lending and said that that is the problem, but he forgot to say that the reason the banks are not lending is that they have no confidence in this Government—the Government who have pushed us back into a double-dip recession so that we are now one of only two countries in Europe in that position, the other being Italy. That lack of confidence is why banks would rather shore up their own position—and, of course, pay exorbitant bonuses to their top executives. The banks are not lending to the small businesses that need the money to create the jobs and drive the growth that is needed. Unless the banks start to do that, the Government need to step in.

That is why the proposal from Labour is so important. It is why repeating the bankers’ bonus tax would make so much difference to young people and to this country as a whole. But what did we get from this Government? The cut in the 50p tax rate. Three hundred thousand of the wealthiest people in the country will benefit from a tax cut paid for by the rest of us, particularly the poorest and pensioners through the granny tax. That is the reality of the Government’s proposal, which they are pushing through tonight. That is why we should oppose the Bill.

What I expected was an end to the sort of heckling we have heard from Ministers, who clearly enjoy the prospect of young people being out of work. I would like to think that that is not what they really think. I had hoped for a degree of fairness from the Government—perhaps I was being unreasonably optimistic. There is nothing fair in 300,000 of the wealthiest—

[Mr Reid]

Will the hon. Gentleman give way?

[Bill Esterson]

The hon. Gentleman keeps coming back for more—I am intrigued.

[Mr Reid]

The fair thing in the Budget is that the personal allowance for income tax is being raised by a record amount, taking a large number of low-paid people out of paying tax altogether and giving a tax cut to many more. That is what makes this Budget fair.

[Bill Esterson]

If it were true that it helps the poorest people in our society, perhaps the hon. Gentleman would have a point, but it does not help many of the very poorest and it does not help those young people I was talking about who cannot find a job because the Government will not take action and because they cut the future jobs fund when they first came into office.

What we really needed from this Government was a Budget of fairness. Instead, we got that tax cut. What they should be doing is repeating Labour’s bankers’ bonus tax, which raised £3.5 billion—[Interruption.] Government Members do not have to take my word for it; they can take the word of the independent Office for Budget Responsibility, which they themselves set up. They are even questioning their own organisation’s figures. That £3.5 billion was nearly twice as much as the £1.8 billion raised by the bank levy. The bank levy is a start, but the Government could repeat the bank bonus tax and use the money to get young people back to work and the housing industry going. The temporary VAT cut would help small businesses that cannot get loans from the banks.

I know that people want to get home. [Hon. Members: “Hurrah!”] Always happy to oblige. We have had a Budget for the wealthiest in our society. The Bill gives help to the top 300,000 earners, but does nothing for young people or those out of work.