Finance (No. 2) Bill

Alex Burghart Excerpts

2nd reading: House of Commons
Monday 11th December 2017 Commons Chamber

[Peter Dowd]

The hon. Member for Aldershot (Leo Docherty) might not like the answer that I gave to his question, but I have referred him to the documentation. If the hon. Lady is incapable of going to the internet and looking up the facts and figures, it is not for me to do that for her. The bottom line is that there is nothing in the Bill for public sector workers, who head into the new year with their wages continuing to fall and the cap sticking.

[Alex Burghart (Brentwood and Ongar) (Con)]

Will the hon. Gentleman give way?

[Peter Dowd]

No; I am going to make some progress. Public sector wages are now at their lowest level as against private sector pay for 20 years. Nor is there anything to address the botched roll-out of universal credit, which will cause real suffering to families this Christmas. Similarly, the Bill contains no measures to redress the disproportionate effect of austerity on women, and particularly on black and minority ethnic women. Instead, the Bill proposes a stamp duty cut that will, according to OBR analysis, increase house prices; and it fails to introduce measures to encourage the building of affordable homes to address the housing crisis.

The Bill includes plans to continue with the Government’s 2015 bank levy cut. It goes further, as the Minister seemed proudly to proclaim, by exempting all foreign banks from the levy and ensuring that from 2021, all banks will only have to pay the levy based on their UK balance sheets.

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[Dr Johnson]

I certainly will. As a children’s doctor, I have seen a dramatic increase in the number of young people who are admitted to hospital because they have taken an overdose or self-harmed. When I was a very junior doctor, a senior house officer, a young person would be admitted on a Friday—it was usually on a Friday—who had been in such severe mental distress that he or she had taken an overdose or self-harmed in some other way. Now it is normal to see children—sometimes several—admitted to the ward every day with similar symptoms. This investment cannot come soon enough to ensure that every one of those young people is given the best possible care. As my hon. Friend said, we must ensure that it is translated into care that makes people feel better.

We must bear in mind that care is not just provided by frontline staff. People often say that we need to get rid of managers and administration, but we should not forget that secretarial support for clinicians is particularly important. None of us wants letters to be sent by secretaries weeks after they were dictated, which is something that I have experienced during my clinical career.

We need to measure outcomes. It is important for us to know how many patients we have treated, how effective their treatments were, and how long people are waiting so that we know how best to direct the funds that we have to the areas that will make the greatest difference to our constituents. We also need to avoid spending large amounts on recording and measuring so that we can spend it on treating and diagnosing.

With the advent of GP at Hand, digital taxation and online access to the Driver and Vehicle Licensing Agency, more and more of our life has entered the online world, so I welcome the Government’s investment in technology of £500 million to ensure that our economy is fit for the future. They have invested in artificial intelligence and 5G, for instance.

[Alex Burghart]

Given my hon. Friend’s experience of the NHS, I should be interested to hear how that £500 million investment in future technologies could benefit the health service in the future.

[Dr Johnson]

I shall give an example from my constituency. United Lincolnshire Hospitals NHS Trust is considering setting up a body to look at how best to deliver rural care, examining ideas such as using Skype to have consultations with people who might otherwise have to travel a long distance. There are also the possibilities of using telemedicine to monitor patients’ blood pressure, for example, while they are in the community. In such ways, we can ensure that we deliver the best possible care using very modern technology.

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[Dr Johnson]

It certainly does sound horrific. Spending money might sound lovely now, but we would be spending the money of our children, and it is they who would suffer for it.

[Alex Burghart]

We were asked earlier to look things up on the internet, so I looked up something about universal credit. It turns out that £2 billion has been set aside for universal credit but, according to the shadow Secretary of State for Work and Pensions, the £1.5 billion set aside by the Chancellor in the Budget represents only £1 in £10 that needs to be put in, therefore creating a £13.5 billion black hole. Does my hon. Friend agree that that is unacceptable?

[Dr Johnson]

I do, and that is why I will be supporting the Finance Bill today. It is good for my constituents and it will ensure that we have an economy that is fit for the future.

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[Rachel Maclean]

My hon. Friend is absolutely correct. Matthew Taylor has clearly stated that banning zero-hours contracts is completely the wrong thing to do. The Conservative party wants everybody to have good work in a decent job with secure working conditions, which is why we commissioned Matthew Taylor to carry out his report. As my hon. Friend, a fellow member of the Business, Energy and Industrial Strategy Committee, says, this is an incredibly important issue. The Taylor report is a detailed piece of work that looks at the rights of employees, the self-employed and workers to make sure that everybody’s rights are protected, because no business should be afraid of treating people well and giving people a decent job. That is what this Government are doing.

[Alex Burghart]

My hon. Friend is being extraordinarily generous with her time. Like her, I enjoyed the speech of the hon. Member for Bootle (Peter Dowd), although I did not agree with all of it. He says that there is nothing in the Bill for low-paid workers. Perhaps my hon. Friend would like to remind him that there is a tax cut for 31 million workers, from which low-paid workers will benefit.

[Rachel Maclean]

My hon. Friend is absolutely right. He reminds us that, in fact, there are a lot of measures in the Bill that will help low-paid workers in our country. He mentions the tax cut and how people are being taken out of tax, but what he did not say is that the increase in the personal allowance next year will mean that, in 2018-19, a typical taxpayer will pay at least £1,075 less tax than in 2010-11.

I should explain to Labour Members that taking someone out of tax is the same as giving them a pay rise, because they get to keep more of their money. [Interruption.] The hon. Member for Bootle is laughing—perhaps he would like to intervene.

Finance (No. 2) Bill

Alex Burghart Excerpts

Committee: 1st sitting: House of Commons
Monday 18th December 2017 Commons Chamber

[Mel Stride]

As the hon. Gentleman will know, the Bank of England carries out stress tests on our banking system. In the latest round, the banks came through very strongly—not a single one failed. The tests stress the system to a greater extent than the effect of the last financial crash in 2008, so we can be certain that the measures the Government have put in place, the operation of the independence of the Bank of England and carrying those things through are having the desired effect that he rightly seeks.

[Alex Burghart (Brentwood and Ongar) (Con)]

After 2008, a bank levy was needed because there was not much profitability in the banks to enable their assets to be taxed, but as we have improved regulation it is now worth moving to tax their profitability. Does the Minister agree that this is the right time to make this shift in raising revenue?

[Mel Stride]

My hon. Friend is entirely right. The Government since 2015, and the coalition Government, oversaw the restoration of the banking sector to a healthy central part of our economy. He is absolutely right. The shift from the bank levy to the taxation of profits which was introduced on 1 January 2016 indicated that the risks themselves were diminishing under our stewardship, and that our banking sector was profitable enough to bring in considerably more tax revenue. Since 2010, under Conservative Chancellors, we have secured more than £44 billion in additional tax—I stress the word “additional”—from the banks, over and above the tax that we would be applying to them were they non-financial businesses.

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[Alex Burghart]

Does the hon. Gentleman regret the fact that his party opposed the bank levy when this Government introduced it in 2011?

[Peter Dowd]

I will come to that in due course as well, if I may. I am beginning to think that my staff have been leaking my notes. I shall have to have words with them.

Last week, in true one nation mode, the right hon. and learned Member for Beaconsfield (Mr Grieve), among others, gave the Brexit Front Benchers every opportunity to acquiesce to his reasonable requests. In effect, he tried to give them a “get out of jail” card, but they could not take yes for an answer, and the remnants of the Government’s credibility went down the pan. There is a civil war going on within the Government, and this goes to the heart of the matter. The Government are throwing everything into the mix to try to distract us from the civil war that is going on in the Tory party.

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[Peter Dowd]

As ever, my hon. Friend makes a reasonable point. The Government are so lacking in confidence that they are gerrymandering Public Bill Committees to reflect their control-freakery. We have to ask ourselves how long the Government can treat the House with such disdain. It is the kind of disdain that saw the Government ensure that there was no amendment of the law resolution, which has deliberately restricted the scope of the Bill and effectively limited parliamentary scrutiny and debate. [Interruption.] A Whip says from a sedentary position that that has happened before, but the procedure is used rarely and not in these circumstances. It is the Government’s control-freakery and fear of scrutiny that makes them do such outrageous and virtually unprecedented things.

Perhaps if the Bill set out a bold plan—let us call it a long-term economic plan—to get the economy back on track, we could all put up with the Government’s guileful procedural gymnastics. However, as I said on Second Reading, there is little in the Bill to solve the growing problems facing our economy—from sluggish growth and slow productivity to a lack of investment in our infrastructure and our people. The Government have instead decided to dedicate their efforts to offering the banks another tax break by further limiting the scope of the bank levy, ensuring that from 2020 UK banks will pay the levy only on their UK balance sheets, not their overseas activities. It is the same old Tories looking after the same old interests.

[Alex Burghart]

rose—

[Leo Docherty]

rose—

[Peter Dowd]

I will give way.

[Alex Burghart]

I am very grateful. I want to give the shadow Minister another opportunity to answer the question. Does he regret his party’s decision to vote against the bank levy in 2011?

[Peter Dowd]

I will come to that in a moment. In future, if two hon. Members want to make an intervention at the same time, they should perhaps have a ballot.

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[Peter Dowd]

We discussed this issue last week, but the bottom line is that we are here to talk about the tax policies of the Government, not the Labour party. I suggest that the hon. Gentleman reads “Funding Britain’s Future”, which we call the grey book. As I said to one of his colleagues last week, I am not his research assistant. The Independent Parliamentary Standards Authority provides the hon. Gentleman with enough money to employ his own research assistant, so he should not need a shadow Minister to do his research for him.

Labour’s position on the bank levy has been clear. We have consistently argued for a higher bank levy and pointed out that the levy, introduced in 2011, would raise substantially less then Labour’s bankers’ bonus tax. In short, we have always stood against the Government’s divisive austerity agenda. That was why we voted against the 2011 Finance Bill, which introduced the bank levy along with cuts to corporation tax and tax giveaways for the most well-off. That was also why we voiced our concern in 2015 over the Government’s cuts to the bank levy and the introduction of a corporation tax surcharge. It is why we will vote against the measures in the Bill.

[Alex Burghart]

Given the hon. Gentleman’s love of punishingly high corporation tax, does he not regret supporting the corporation tax surcharge on banks in 2015, when he was in the House?

[Peter Dowd]

No matter how many times Government Members ask rather tangential questions, I will not be drawn down that particular avenue, much as I would love to have that debate with the hon. Gentleman. The bottom line is that we have always stood against this Government introducing austerity measures at the same time as giving banks a tax cut. That is what it comes down to.

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[Peter Dowd]

Yes, because the sector returned to profitability after a Labour Government supported it throughout. That is why the sector has returned to profitability. Ultimately, if a Labour Government had not gone in and supported the sector, there would have been no banks, no profits and no tax whatsoever. I remind the hon. Gentleman of that one.

[Alex Burghart]

I am enjoying the hon. Gentleman’s potted Marxist history of the past 10 years. There seems to be a little bit of history that he has forgotten, which is of course the lax and inappropriate regulatory regime that the Labour party introduced under Ed Balls. That regime contributed to the terrible state in which our banking sector was left after 2008. Perhaps the hon. Gentleman would like to remind the Committee and his party of that.

[Peter Dowd]

First, we did not regulate the banks in the United States, where it all started. I ask the hon. Gentleman—I have said this a number of times—to go and look at “Freeing Britain to Compete,” the document produced by the right hon. Member for Wokingham (John Redwood) for the shadow Cabinet in, surprisingly, August 2007.

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[Peter Dowd]

I suggest that the hon. Gentleman goes back and reads Hansard when it is printed to see exactly what I said.

Once we can see the true costs of the Government’s policies, we can grasp the extent of the choices they have been making and how they have favoured a small, wealthy group over the many citizens of this country time and again. Let us look at the example of children’s services. Only a week before the Budget, the chief executive of Action for Children, Sir Tony Hawkhead, described the “devastating cost” of cuts to children’s services, which he said have been left on a “dangerous and unstable” footing. These prevention and protection services are vital to provide proper care for our nation’s children, and the banking levy could help with that, yet we have seen deep cuts of 55% of funding for local government and a gap of £2 billion in funding by 2020.

There is widespread talk and reports of local councils having to seek permission from the Government to raise council tax to cover the costs, in effect, of cuts to the bank levy—this money may have been available for children. So cuts to bankers and council tax up seems to be what we are being told today. As these services have been decimated over the past seven years, we have seen a doubling of serious child protection cases and twice the number of children put into care protection plans. Last year, 70,000 children were placed into care. The support for foster care, adoption and Sure Start children’s centres has all been reduced. Youth centres are closing and parenting classes are being axed. Short breaks for disabled children, provided by local councils to give their parents a little respite from full-time care, are being taken away and are under strain.

Taken together, those cuts mean that some of the most vulnerable children in our country are paying the price for seven years of failing economic strategy. When are the Government going to change their strategy? It is still shocking to see the Government put the needs of others ahead of those of our youngest citizens, who are picking up the bill for austerity

[Alex Burghart]

Will the hon. Gentleman not acknowledge that, as we have reduced the rate of corporation tax, so revenues have increased and there is now more money to spend on public services than there would otherwise have been? Does he not acknowledge that there is a real risk that, if his party were to increase corporation tax rates, there would be less money coming in, and cuts to public services and so on would be on his party’s head?

[Peter Dowd]

In short, no. The Institute for Fiscal Studies has made no link whatsoever between the rate of corporation tax and tax take. This is one of these myths that have been presented to the House time after time, which in the main we have tried to ignore, but at some point we have say that it is complete and utter claptrap, not to put too fine a point on it.

The banking surcharge, supposedly introduced to compensate the taxpayer for this levy loss, will not come close to making good the difference. The Chancellor still has a choice though: he could reverse the cut to the bank levy and end the crisis in our children’s services instead.

It is increasingly clear that the oldest political party has run out of steam.