Tax Fairness

Andrew Gwynne Excerpts

Tuesday 12th March 2013 Commons Chamber

[Mr Russell Brown (Dumfries and Galloway) (Lab)]

I apologise for the fact that, as I indicated to you, Mr Deputy Speaker, I shall need to leave the Chamber at about 2.30 pm, although I shall return, so thank you for calling me now.

I support the motion, the fundamentals of which simply call

“on the Government to bring forward proposals for”

a mansion tax “at the earliest opportunity”. It is a proposal—nothing more, nothing less—that I should have thought the junior coalition partner supported.

I should like to remind the House, especially the Liberal Democrats, of a speech on tax and fairness delivered last month by the Deputy Prime Minister, in which he said:

“I continue to believe we should ask for what would be a modest contribution from the very wealthy, either in the form of a Mansion tax—a 1% levy on properties worth more than £2m—applied just to the value over and above £2m; my preferred option. Or, alternatively, we could introduce new council tax bands at the top end, again, affecting properties worth over £2m. . . Nothing could do more to demonstrate a commitment to greater fairness in our tax system. I will continue to make this argument, in this Coalition and beyond. My approach is simple: taxes on mansions; tax cuts for millions.”

Only time will tell whether there is the slightest hint of sincerity in those words.

We are debating the issue today only because our nation’s economic uncertainty and problems mean it is right that we do so. What is the current problem? It is squeezed living standards and a flatlining economy. Families are working harder for longer and for less, yet almost daily they witness prices going up and up. The talents of millions of our young people are being wasted and small businesses, which will drive our economy, are being held back by banks and a Government who are not on their side.

Yesterday evening I met representatives of a number of small and medium-sized enterprises based in the London area. They told me and other Labour Members that banks need to work for them and not against them, which has been their experience of the past two or three years: banks are not lending to the most entrepreneurial businesses, and in their eyes everything is going backwards. The economy is not growing and has flatlined over the past two years, and the deficit is going up. Government borrowing is increasing as a result of economic failure. Those of us who watched closely in the ’80s and early ’90s saw what economic failure did to the nation. We are witnessing nothing short of trickle-down economics: the middle is being squeezed and almost daily there is a race to the bottom.

The Government’s economic vision is of a race to the bottom in wages and skills, rewarding only those at the very top and leaving everyone else squeezed as never before. Next week taxes will be cut by an average of £100,000 for 13,000 people earning more than £1 million, yet millions of working families will be asked to pay more as their tax credits are cut.

The Government refuse to stand up to the energy and train companies that are squeezing family budgets. Debates have been held in the House over a prolonged period, but nothing has been done to protect some of our poorest families and communities.

[Andrew Gwynne (Denton and Reddish) (Lab)]

From listening to everything said by Members on the Government Benches one would think that everything in the garden was rosy, but my hon. Friend makes a point that has been echoed by research from the Institute for Fiscal Studies: that under the measures in the Government’s autumn statement the poorest 40% in society are losing much more than the richest tenth.

[Mr Brown]

My hon. Friend is correct: the figures given by the IFS are there for all to see and cannot be disputed. We are seeing real pain and suffering, hard as never before, in many communities. I am sure that constituents of hon. Members on both sides of the House are looking to their MPs for guidance and support. I fear in particular for young families. Those of us who are slightly more senior in years know what it is like to be told that we have to tighten our belts, but younger families find it difficult to cope with such comments.

Over the past two years the Government’s approach has been shown to be not working, but Labour Members know that it can never work. Prosperity will be achieved only when everyone plays their part in building the economy—a recovery made by many, not just a few at the top who believe they are aiding some recovery. That is the lesson of history. In the industrial revolution, which I know was way back, it was those who went down the mines, spun the cotton, built ships and constructed bridges who drove the economy forward. The nation is crying out for a fairer tax system, which we will put at the heart of our new priorities. As well as cancelling the millionaires’ tax cut and the changes to tax credits this April, a Labour Budget would tax houses worth more than £2 million and use the money gathered to cut taxes for working people. A fairer tax system would send a message about how Britain will succeed in the years ahead that says: “When you play your part and make your contribution to the economy, you will be rewarded.”

The Labour party would tackle vested interests. We need to act when working people are paying more than they should. We have said that we would break the stranglehold of the big six energy companies, stop the price rip-offs of the train companies on the most popular routes and cap the interest on payday loans.

Our country has to change. We must end the culture that says that university is always best and that vocational education is second class. That simply is not true. We see the need to create a new technical baccalaureate to complement A-levels. We see the need to give employers, for the first time ever, control of the money for training. We see the demand for Britain’s employers to step up and offer real apprenticeships and proper training.

Today, we are increasingly two nations with high-skilled, high-paid jobs for those at the very top, but low-skilled, low-paid jobs that involve long hours for too many people. A one nation economy needs to support businesses that create sustainable middle-income jobs by introducing a modern industrial policy.