Finance (No. 2) Bill

Debate between Andrew Gwynne and Geraint Davies

Wednesday 17th April 2013 Commons Chamber

[Geraint Davies]

That is right, and there would be widespread support for that across our communities and probably in the banking community. People are taking home an extra £1 million and asking themselves whether they should be paying income tax at 45p or 50p, at a time when we hear cases of people earning, say, £20 a week. As I mentioned at Prime Minister’s Question Time, a constituent who recently came to me was a chronically ill man who had £20 a week after paying his utility bills and his bus fare. This month he is down to about £14 a week due to benefit cuts. If such cases were brought to the attention of some of those wondering whether to buy their second yacht, I do not think they would mind paying a little more.

It has been insinuated that a 50p rate would discourage such people and be so painful for them that they would all get in their yachts and go off and live somewhere else, but in Britain today many people already pay more than 50p. Anyone who is earning more than £32,000 and less than £42,000 is paying 40% tax plus 12% national insurance. That is 52%. The only reason that they have to pay more than 50p and the millionaires do not is that they do not have their own personal accountants. That is not fair, is it?

These are sustainable levels of marginal taxation and it is right that they should be paid. It is right that members of the banking community, who have their backs covered, should pay more than their fair share. It is also right that the Government should get their act together to stop abuse by many members of that community who are taking the mickey.

Yesterday I had a meeting with a lawyer who specialises in giving advice to people facing charges of insider dealing and the like from the Financial Services Authority, which is now the Financial Conduct Authority. We were talking enormous amounts of money that people are trying to avoid paying. The point that she made to me is that the people in the FSA, now the FCA, do not have the resources and the clout, and have to deal with dozens of cases, while the defence lawyers deal with only a few cases because the amounts of money are so great. What is more—the Minister might want to do something about this—there is no system of precedent.

If the FSA says to a bank, “You have committed this offence and we are going to charge you £1 million”, which is small change for a bank, the FSA cannot set a precedent. The banking community knows that, if they do it, they will be charged; the FSA has to rehearse the same action again and again. I hope the Minister will look into this as it comes from the horse’s mouth—from people who are giving advice to people who are being defended. They also poach staff from the FSA or the FCA to work for them. They say, “We’ll give you three times as much. You’ve been charging us and you’re very good at it. You’re not paid enough for your success. Come over to our side. Have some of our bonus and we can do some insider dealing. The people at the Exchequer are making cuts at the tax office to save money, so we can have more.”

[Andrew Gwynne]

My hon. Friend should be a little more charitable towards the Government. There has been a thread of consistency in their approach. Had he been present for the first debate, he would have heard my hon. Friend the Member for Nottingham East (Chris Leslie) say from the Front Bench that the Prime Minister promised that under the Government’s New Buy scheme, 100,000 families would be helped and only 1,500 families were eventually helped through that scheme. In this debate we heard that the Prime Minister said that £2.5 billion would be raised by the bank levy, whereas we heard from my hon. Friend on the Front Bench that £1.1 billion was raised. Is there not a degree of consistency here? The Government are consistently incompetent.

[Geraint Davies]

That certainly would be a charitable way of putting it. If financial targets are set and are under-achieved, the Government clearly need to redouble their efforts to deliver those targets. We need to continue to focus on generating joined-up systems to ensure that the money that is available delivers economic outcomes such as opportunity and jobs. The amendment is designed to create imaginative ways of generating opportunity and jobs for the future by using the money that is recovered. We should join together to do that. It is a modest amendment that we should all agree on. We should work together to build a stronger Britain.

I fear that the Government will say, “Oh no, we can’t possibly consider that.” That, alongside their failure to raise the money, would show that they do not have the focus to ensure that those with the broadest shoulders pay their way towards a more prosperous Britain. I fear that the Government will go back to the old Tory ways and say, “Let’s use this as an opportunity to crush the so-called undeserving poor” and pretend that there are workers and shirkers, whereas people just want to get out and get a job. Let us move forward and create a united Britain—a one nation Britain, dare I say—to create a future that works and a future that cares.