Oral Answers to Questions

Andrew Love Excerpts

Tuesday 12th October 2010 Commons Chamber

[Mr Osborne]

Decisions on local government allocations are properly a matter for the Secretary of State for Communities and Local Government, but I make the observation that we face a series of tough decisions because of the economic mess that the Labour party left us. To date, it is living in complete denial: there is not one single suggestion from one single Labour Member on how to reduce the budget deficit, or even achieve the £44 billion of cuts on which Labour fought the last election.

[Mr Andrew Love (Edmonton) (Lab/Co-op)]

Can the Chancellor confirm or deny reports in the weekend press that he has given the Governor of the Bank of England the green light to increase quantitative easing, to deal with the policy that the Chancellor is pursuing on the deficit?

[Mr Osborne]

What I said at the weekend was that I would follow the exact same procedure that my predecessor, the right hon. Member for Edinburgh South West (Mr Darling), pursued when he was Chancellor of the Exchequer. The fact that that is regarded as something of a surprise by the Labour party shows how far it has departed from the centre ground of British politics.

Finance (No. 2) Bill

Andrew Love Excerpts

Monday 11th October 2010 Commons Chamber

[Ms Eagle]

Yes, I do think we have to keep a careful eye on what is going on elsewhere in the world. It is clear that the mantra that there is no alternative is simply not true.

[Mr Andrew Love (Edmonton) (Lab/Co-op)]

I add my support for my hon. Friend after her elevation to her new position. She mentioned quantitative easing, and she will no doubt have seen the widespread reports in the newspapers over the weekend that the Chancellor has given it a green light. Is that not his plan B, and his way of avoiding the so-called “difficult decisions” and passing them on to the Bank of England?

[Ms Eagle]

It certainly indicates that there is some nervousness and worry about the downturn in what the economic indicators say about the effect of measures that were announced with great fanfare in June.

Equitable Life (Payments) Bill

Andrew Love Excerpts

Tuesday 14th September 2010 Commons Chamber

[Stephen Timms (East Ham) (Lab)]

We very much welcome the fact that the Bill is before the House, and we shall not oppose it today. We will want to table amendments to the Bill in Committee, and this afternoon I will set out those that we have in mind. I hope that they will be widely welcomed across the House and that the Government will feel able to accept them.

However, let me first respond to the Minister’s speech. I have not previously spoken in the House on the subject of Equitable Life, so I have been able to come at the issue fresh. Let me begin by acknowledging the extent of the hardship and anxiety that all too many people have endured as a result of the failure of Equitable Life and the long process since. I want also to associate myself with the expressions of apology already made by my right hon. Friends for the contributions to that failure of successive Governments. Unlike me, the Minister has made numerous speeches in the House and elsewhere on the subject—many of them made while in opposition—but he is now the Minister. He is now supposed to be making decisions. Today, as the Prime Minister likes to say, the rubber hits the road, but the Government seem more interested in the lay-by. They have not yet made those decisions. Four months after this Government were elected and almost two months after the publication of Sir John Chadwick’s report, Equitable Life savers are still no nearer to knowing what payments they will receive.

Indeed, things are worse than that. It appears that the Minister, now safely elected, proposes to do precisely the opposite of what he said before the election that he would do. Not just he, but every Treasury Minister, signed the pledge drawn up by the Equitable Members Action Group, whose indefatigable campaigning he was right to draw attention to, and which will have won the respect of every Member. The Prime Minister, the Deputy Prime Minister and the Chancellor all signed the pledge, which committed each signatory to

“vote to set up a swift, simple, transparent and fair payment scheme—independent of government—as recommended by the Parliamentary Ombudsman.”

The previous Government took the view, which I share, that there are practical problems with the ombudsman’s recommendation. That is why we commissioned Sir John Chadwick to advise on a practical scheme. However, for EMAG, the position is clear: the ombudsman is right, the Chadwick recommendations are not. That is the issue that the Minister has failed to resolve.

[Mr Andrew Love (Edmonton) (Lab/Co-op)]

My constituent Mr Peter Waller—not a Labour supporter—wrote to me following the statement made to the House previously to say:

“Already, the Coalition government…are…showing shameful disregard to us, after so many Conservative and Lib Dem members signed a pre-election statement that we would get fair justice.”

Does that not sum up what this Government have done?

[Stephen Timms]

My hon. Friend is absolutely right. EMAG today is very angry indeed. When the Prime Minister, the Deputy Prime Minister, the Chancellor, every Treasury Minister, and the great majority of Government Members signed that pledge, EMAG thought that they meant it. Over the next couple of months, the Ministers and their hon. Friends behind them are going to find a lot of their constituents saying exactly what my hon. Friend’s constituent said, and wanting to know why Government Members have reneged on their pledge. They will have a great deal of explaining to do.

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[Stephen Timms]

The ombudsman has said that the Chadwick approach is no longer relevant because the Government have fully accepted her recommendation, yet the Government are saying that they accept that recommendation but that Chadwick is the building block for the future scheme. There is a fundamental contradiction in the Government’s policy.

[Mr Love]

If I were Brian Pomeroy or a member of the independent commission listening to today’s debate I would be confused, especially by the Minister’s contribution, because he is trying to support both the ombudsman’s report in principle and major parts of Chadwick’s report. What is absolutely clear from the debate so far is that the response from Front-Bench Members to all questions about what the compensation pot will be is that the needs of taxpayers must be taken into account. Does that not fundamentally contradict what they were saying before the election?

[Stephen Timms]

Yes, it does. Of course it is absolutely right that the needs of taxpayers must be considered, but Government Members signed the pledge that made no reference to that, which is why they have got themselves into such serious trouble.

Proposed Public Expenditure Cuts

Andrew Love Excerpts

Monday 13th September 2010 Commons Chamber

[Mr Osborne]

The answer is simple: there would be a catastrophic loss of confidence in Britain and an increase in market interest rates, which would hit every business and family. That would lead to an increase in unemployment, which is why we are not prepared to take the prescription offered by at least some of the people standing for the leadership of the Labour party.

[Mr Andrew Love (Edmonton) (Lab/Co-op)]

The Chancellor ought to read the International Monetary Fund report on that subject. The economy is slowing, business confidence and business investment are flat, and net trade is going through the floor rather than through the roof. In those circumstances, is it not folly of the first order to cut public expenditure? Is not the Chancellor threatening a double-dip recession—the very thing we do not need?

[Mr Osborne]

The people who are talking down the British economy are the Opposition. Since the hon. Gentleman mentioned the IMF, let me remind him what it said this weekend:

“Fiscal consolidation remains essential for strong, sustained growth over the medium term.”

PAYE Contributions

Andrew Love Excerpts

Wednesday 8th September 2010 Commons Chamber

[Mr Gauke]

First, I would say that people should wait until they receive a letter. When they receive one, if they are asked to pay money back they should go through the details carefully, and if they are concerned at that point, they should contact HMRC. They can be reassured that we are not demanding immediate payment, as there will be an opportunity either to spread it out over future months and years or at least to talk to HMRC about the details.

[Mr Andrew Love (Edmonton) (Lab/Co-op)]

How does the Minister respond to the reports in the national newspapers that certain accountants are suggesting that there is no need to pay back the money, and to the confusion that that will undoubtedly cause many people? He mentioned flexibility in the response to the problem, but are not fairness and consistency also very important, to ensure that everyone is treated exactly the same?

Equitable Life

Andrew Love Excerpts

Thursday 22nd July 2010 Commons Chamber

[Mr Hoban]

As I said in my statement, we need to look carefully at Sir John’s report and the basis on which he calculated losses, and we will feed that into the spending review process. However, I take on board my hon. Friend’s points.

[Mr Andrew Love (Edmonton) (Lab/Co-op)]

The hon. Gentleman’s failure to disclose the figure for the likely compensation today is unlikely to reassure Equitable pension holders. What they are looking for is a body to be set up that is both independent of the Treasury and totally transparent in delivering figures that they can trust. They are looking for him to expedite that so that payment will be made as soon as possible.

[Mr Hoban]

The hon. Gentleman should listen more carefully to statements given in the House. The independent commission is at arm’s length from the Treasury and will be responsible for designing the payment scheme. I would have thought his constituents would welcome that independence and transparency, which was not evident in the ideas put forward by his colleagues.

Oral Answers to Questions

Andrew Love Excerpts

Tuesday 13th July 2010 Commons Chamber

[Mr Gauke]

There are measures contained in the Finance Bill, which we are currently debating, that will reduce tax avoidance. We take the issue seriously, but the hon. Lady puts her finger on one of the problems. There were a number of structural difficulties in the tax system as it was left to us, one of which was the wide disparity between income tax rates and capital gains tax rates, and we have been able to do something about that.

[Mr Andrew Love (Edmonton) (Lab/Co-op)]

In introducing the Budget, the Chancellor justified the move to a 28% rate in the following terms:

“I asked the Treasury to examine what would have happened if we had increased the rate much further beyond 28%, and its dynamic analysis showed that that would have resulted in smaller total revenues.”—[Official Report, 22 June 2010; Vol. 512, c. 178.]

Can the hon. Gentleman justify that?

[Mr Gauke]

Yes, and had the hon. Gentleman been in the Chamber at about quarter past 10 last night, he would have heard me doing so at some length. The fact is that for every 1% by which the gap between income tax and capital gains tax is reduced, we get an extra £60 million from income tax. However, there is also a countervailing pressure, which is that fewer transactions are entered into. The analysis based on studies done in America and elsewhere shows that 28% is about the level at which we maximise revenue.

Finance Bill

Andrew Love Excerpts

Monday 12th July 2010 Commons Chamber

[John McDonnell]

The difference is clear with regard to legality and illegality. The technical implementation of tax legislation can be complex, so people can misunderstand which side of the fence they fall. During earlier debates in the House, the Denis Healey quote was cited that the difference is a prison wall. The implementation of measures to tackle tax evasion in particular is critical to the sound management of public finances and, obviously, to probity in the management of tax resources.

[Mr Andrew Love (Edmonton) (Lab/Co-op)]

Does my hon. Friend agree that avoidance and evasion are the same to the extent that, in the context of both, it will take a motivated and full work force at HMRC to deliver the benefits that the Government supposedly seek?

--- Later in debate ---

[John McDonnell]

Complication is certainly an issue. That is partly why I want the Chancellor to report to the House on the measures that will be used to tackle tax evasion and avoidance. We need a simplification of the process, but we also need to know how many staff the Government will employ for collection purposes.

[Mr Love]

I thank my hon. Friend for being so generous in giving way. Does he agree with the Institute for Fiscal Studies that the terms of the Budget are likely to make the tax system more complicated, rather than introducing the simplicity that the Government claim is one of the objectives of their Budget?

[John McDonnell]

Let me say as objectively as I can that I have not yet seen a Budget that simplified the taxation system, and I have been here for 13 years. I live in hope, which is why my amendment requests a further report that might indicate the path that the Government intend to take. I am merely a humble seeker for truth in this matter, as always.

I investigated various sources in my search for estimates of the tax gap. The latest HMRC estimate that I could find was £40 billion, but there is an element of uncertainty reflected in a reported memorandum circulated to staff in HMRC and the wider Treasury, asking people to come up with ideas for identifying and calculating the gap.

The HMRC estimate has been challenged by others. I chair a group called the Left Economics Advisory Panel, which brings together a number of Left economists including some who have been working with the Tax Justice Campaign. Over the years many Members will have worked with Richard Murphy and John Christensen, who are held in respect across parties because of the work they have undertaken in this sphere, and the advice that they have given to the Treasury and other organisations for a number of years. According to their estimate over the past year, the tax gap could be anything between £70 billion and £120 billion.

--- Later in debate ---

[John McDonnell]

That is an interesting point. Tax compliance should be a duty in law, so there should be a requirement on us all to pay our appropriate level of tax. Tax planning is perfectly consistent within the law and is appropriate for individuals and organisations in order to ensure that they pay the appropriate tax. However, such devices should not be used to avoid paying the rightful level of tax and certainly should not be used for the purposes of tax evasion, which is the illegal avoidance of tax.

As I was saying, my concern is that, just when we need staff to tackle tax evasion and avoidance, we are faced with the previous Government’s plan for a further 12,000 job cuts within HMRC. I urge the new Government to review the matter and to look again at the staffing level that will be required if we are seriously to address tax evasion and avoidance. That is another reason why my amendment calls on the Chancellor of the Exchequer to lay before us a report that sets out the measures he proposes to take

“to ensure the payment of tax which is due”.

In devising those measures, appropriate discussions will need to take place about the level of staffing and the qualifications and abilities required of such staff. Such factors will militate against the scale of job cuts that have taken place.

On another issue, but one that has certainly been close to the hearts of several Members over the past two years, such measures will need to take into account not just staffing levels but staff location. The closure in recent times of local tax offices has reduced HMRC’s ability to respond to tax evasion and tax avoidance on the basis of local knowledge, and to assist local companies and individuals in proper tax planning so that they can comply with the law. I request that any report that the Chancellor introduces deal with the implications of the closure of local tax offices and, therefore, the appropriate location of the staff themselves.

I have tabled two amendments, the first of which, amendment 11, deals with corporation tax.

[Mr Love]

Does my hon. Friend agree that any such report dealing with HMRC must also deal with the difficulties that arose on the amalgamation of Revenue and Customs because of the very different cultures within those organisations? We really must address those difficulties, which still reverberate around the organisation, even at this late stage.

[John McDonnell]

I appreciate the point that my hon. Friend makes. I accept that there have been issues relating to a new department settling down over time, but I want to pay tribute to the staff involved for the excellent job they have done in the set-up of the new organisation, for the flexible way they have worked and for the co-operation that has worked across past agencies as they have come together. I accept that that might be an issue and it could be referred to.

I will not repeat the same speech when we deal with amendment 12.

--- Later in debate ---

[Mr Redwood]

I do not want to get drawn into the moral issue of deprecating or not deprecating: what I am interested in is the efficiency of revenue collection and the clarity of the law for the people having to meet it. It is the job of this House to have a clear tax law that people have to follow, and we often have these debates to try to carry out that task. Sometimes tax law is so complicated, or people outside this House are so ingenious, that there are ways round it that I might disagree with and the right hon. Gentleman will often disagree with, and that is when we come back to legislate again. We say, “We haven’t done our job well enough. People are avoiding tax more easily than we would like them to be able to, and so we’re going to add another complication”—or sometimes even a simplification or clarification—“to the tax law to try to capture that.” That is the job of this House. The shadow spokesman and I will sometimes agree that an avoidance scheme goes too far and we need to legislate to stop it; on other occasions, we will disagree. I will say, “That’s perfectly rational tax planning—don’t be such a party pooper”, he will say, “I don’t like people getting away with that kind of thing”, and we will have our disagreements.

[Mr Love]

Given the thrust of the right hon. Gentleman’s remarks, does he agree with my hon. Friend the Member for Hayes and Harlington (John McDonnell) that cutting the number of HMRC employees by 10,000 might not assist in the process that he is outlining of ensuring that those who take part in avoidance are brought to book?

--- Later in debate ---

[Clive Efford]

The point, on which I believe we are all in agreement, is that everyone should pay the tax that they are due to pay. Amendment 11 proposes not that corporation tax should be raised or reduced, but that it should be paid, that the Government ought to take action to ensure that companies that are liable to pay it do so, and that the House should have the role of providing a check and balance to ensure that the Government are carrying out that function.

[Mr Love]

Does my hon. Friend believe that there is a tax gap, as I think all Opposition Members do? Whether the gap is £40 billion, £60 billion or £100 billion, it is very significant, and we ought to turn our minds in this Budget to doing something about it.

[Clive Efford]

I could not agree more. If I were to start listing some of the harsher items in the Budget, such as the £1.9 billion that the Government are trying to take out of housing benefit or the overall £11 billion from the welfare budget, I would risk incurring your wrath, Mr Amess. I would also risk that if I were to point out some of the actions of the previous Government in relation to the medical tests that disability living allowance claimants were forced to go through. The coalition Government, supported by the Liberal Democrats, tell us that things will become even harsher for DLA claimants, so our discussion of minimising avoidance of corporation tax is absolutely relevant.

--- Later in debate ---

[Gavin Williamson]

I am obviously far below the pay grade of my hon. Friends on the Front Bench, but I am sure that they have great plans to make the tax system much fairer and more equal, right across the board.

One important thing that my hon. Friends have done is reduce corporation tax, which will help so many businesses. Most importantly, they have helped small businesses—it is often small businesses that have had the most difficult time over the past few years—which is something that I warmly welcome.

[Mr Love]

On small businesses, is there not some concern that unincorporated individuals will now incorporate because of the reduction in the small business tax rate, which will cause avoidance by another route?

[Gavin Williamson]

The hon. Gentleman makes an interesting point, although more people becoming incorporated as limited companies will reduce the amount of tax avoidance from which people could perhaps benefit as sole traders.

--- Later in debate ---

[Chris Leslie]

I could not agree more. It would not be in order to stray too far from the topic of corporation tax, but it is important that we see this change in context. It appears that the Chancellor press-released the fact that he was taking, in some brave measure, an amount of money from the banks through the banking levy, but failed to publicise that he was also giving that back with the other hand through the reduction in the corporation tax rate.

We are talking about significant and serious amounts of money, and the Minister ought not to be so careless with this revenue as it is needed to repair our deficit and to protect our public services. I am very surprised that the Treasury did not take action to plug this loss of revenue, but chose instead to apply the reduction in corporation tax across the board.

We must not forget that the banks have already benefited from an enormous amount of largesse from the taxpayer more widely. The Royal Bank of Scotland and Lloyds Banking Group had £76 billion of their shares bought by the taxpayer. The Bank of England had to be indemnified against losses incurred in providing more than £200 billion of liquidity support. There have been guarantees of up to £250 billion of wholesale borrowing by the banks to strengthen liquidity. Also, £40 billion of loans and other funds were made to Bradford & Bingley and the Financial Services Compensation Scheme. There was insurance cover of more than £280 billion for bank assets as well. These changes were not unnecessary at the time; they were absolutely vital as a way of ensuring that our banking system—our credit system—did not collapse entirely.

Had the coalition parties been in power at that time they would have had to fulfil exactly those same commitments, assurances and undertakings to make sure that our banking system did not collapse. That is why it infuriates so many members of the public to hear Members on the Government Benches claiming that that was a partisan cause or that our spending such a large share of our national income on public services is the real cause of our deficit, when in fact responsibility lies squarely at the feet of our banking sector.

[Mr Love]

May I correct something my hon. Friend has said? Most of the measures the previous Government introduced to safeguard the financial system were in fact opposed at the time by the Conservative party, although it appears to have changed its mind. I also want to ask about the public concerns about the widespread reports from banking spokespersons in respect of this supposed levy. They are suggesting that there will be an opportunity during the consultation to weaken the legislation and reduce the amount of tax they pay. Does my hon. Friend deprecate such projects, and will he try to ensure that the Government stand firm against any such thing?

[Chris Leslie]

That is entirely so. Those with significant financial wherewithal—the corporate advisers, the consultants, the accountants—are always exceptionally adept at lobbying Ministers and making their points in their detailed ways, often with the general public entirely unaware that such measures are being put in place to their advantage. Clearly, the banks have been very aggressive in lobbying for these changes. It appears they may well have been successful in watering down the banking levy, while at the same time gaining benefit from this corporation tax change.

The Minister may argue, “Ah well, some of our banks made very significant losses in previous financial years, and because of the complexities of our corporation tax law, companies have certain rights to recoup some of those losses from the corporation tax they paid previously.” In my view, the banks should also be excluded from making such claims—or at least, their ability to do so should be lessened. I was unable to frame my amendment in that way—that takes a certain level of drafting—but we must ensure that the Treasury does not allow the exceptionally clever and highly paid advisers whom the banks can employ to find their way round the provisions and take even more money from the taxpayer.

Finance Bill

Andrew Love Excerpts

Tuesday 6th July 2010 Commons Chamber

[Danny Alexander]

The hon. Gentleman is clearly not as much of an apprentice in this House as he claims to be. The gap between rich and poor got wider during the previous Government’s term.

The measures in the Budget have already had an impact on the credibility of and confidence in the British economy. As the director general of the CBI, for example, has said:

“This budget is the UK's first important step on the long journey back to economic health.”

The Fitch rating agency said:

“The path of deficit reduction and public debt projections set out in”

the

“Budget statement are materially stronger than that set out in the March 2010 Budget.”

On fairness, the chief executive of Barnardo’s said:

“we recognise the Government has done what it can to protect the most vulnerable.”

[Mr Andrew Love (Edmonton) (Lab/Co-op)]

Will the right hon. Gentleman give way?

[Danny Alexander]

I will make some progress and give way to the hon. Gentleman later.

The Bill shows how the Government will carry out Britain’s unavoidable deficit reduction plan in a way that strengthens and unites the country. The Budget and the Bill stand for three things. The first is responsibility—taking action to eliminate the structural deficit. The second is freedom—helping the businesses on which we all rely to rebuild our broken economy. The third is fairness—protecting the most vulnerable, while ensuring the contribution of all. Those principles are at the centre of the Bill before the House today and I shall address each in some detail shortly.

--- Later in debate ---

[Danny Alexander]

No, I am going to move on.

Let me turn to the first of the measures in the Bill. Given that the structural deficit is some £12 billion larger than the previous Government told us, we have to make difficult choices—whether to fill the black hole with yet more spending cuts or increase taxes. Further spending cuts would have made it impossible for the Government to protect the country’s most essential services in the spending review. The only other option would have been to raise taxes on companies or on personal income, reducing the rewards for work at a time when hard work and endeavour must lead the recovery.

The VAT rise is unavoidable. As I said in the Budget debate, it is Labour’s inheritance tax. Clause 3 increases the standard rate of VAT from 17.5% to 20% from 4 January 2011. Everyday essentials such as food and children’s clothing, as well as newspapers and printed books, will remain zero-rated throughout the Parliament, protecting those on lower and middle incomes. Domestic consumption of fuel and power will remain subject to VAT at 5%.

[Mr Love]

rose—

[Danny Alexander]

I shall give way to the hon. Gentleman, as I did not do so earlier.

[Mr Love]

Can the right hon. Gentleman point to any indication in the manifesto of either coalition party that there would be a VAT increase of the type he has just suggested?

[Danny Alexander]

No party proposed an increase in VAT at the election, and no party ruled one out. The Liberal Democrat manifesto—[Interruption.] If Opposition Members will listen, I will explain the situation. In the Liberal Democrat manifesto, we made it clear that we would seek to reduce the deficit through spending measures alone, unless, on grounds of fairness, it was necessary to increase taxes. That was a clear statement in our election manifesto. The rationale that I have just set out is based on the decision that we made. We felt that, given the £12 billion of extra structural deficit left us by the previous Government, the right decision was a rise in VAT rather than increased spending cuts.

--- Later in debate ---

[Danny Alexander]

If the matter that the hon. Gentleman mentions is a constituency case, I suggest that he write to my hon. Friend the Financial Secretary, who will be able to address the matter in detail.

[Mr Love]

Will the right hon. Gentleman give way?

[Danny Alexander]

I will, on grounds of fairness.

[Mr Love]

I thank the right hon. Gentleman. With regard to the triple lock, does he accept that under the rules setting out an increase of 2.5% or RPI, pensioners will lose out for the first two years? They will actually have a cut rather than an increase.

[Danny Alexander]

No, I do not accept that. In fact, the increase next year will be protected. According to the forecasts for average earnings, the increase in the following year, 2012-13, would have been 2.4%, so our floor of 2.5% will ensure that the increase in the second year is higher than that forecast by the previous Government.

[Mr Love]

Will the right hon. Gentleman give way?

[Danny Alexander]

Once more, then I will press on.

[Mr Love]

May I urge the right hon. Gentleman to look at the figures? I understand that under RPI, in both years the increase would be 3.1%. Are pensioners not going to lose out?

[Danny Alexander]

I have looked at the figures, and I stand by my previous answer.

--- Later in debate ---

[Mr Meacher]

rose—

[Mr Love]

rose—

[Mr Redwood]

I am going to conclude, because many people wish to participate in this debate. Labour Members may want to be here until 3 o’clock in the morning, but they never used to when they were in the dock and did not allow us the time to debate these things properly.

The Budget is a necessary evil to clear up the mess inherited from the previous Government. This is a necessary task to instil confidence and to avoid interest rates going through the roof. Labour Members should look at what has happened in Ireland. Ireland had extremely big cuts—bigger, I am pleased to say, than those in this Budget. In the last quarter, the Irish economy started to grow extremely well, which is exactly what Labour Members are predicting cannot happen if one starts to get control of public spending.

I urge the Government and the whole public sector to work strongly together to ensure that these modest increases in cash spending translate into maintained and improved public services, as they can if we take the right action over pay rates, efficiency levels, improved process, investment in technology and so forth. I hope that we will get the banks working better by creating a more competitive environment so that we can then have the investment we need in the private sector to fill the gap and create the jobs. This is a doable task and a feasible profile, and it is backed by the independent forecaster. We need to be very sure that we are going to pump everything into that task, because recovery is what we all want.

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[Mr Jones]

He did. We are now to have all stages on the Floor of the House, which I greatly welcome. I look forward to exploring the Bill in depth in the next few weeks, as I am sure many other Labour Members do.

[Mr Love]

Does my hon. Friend agree that all the damage that we know will be done will come in this Finance Bill?

[Mr Jones]

It will, and I shall refer to that later. It will affect many people in my constituency, including some of the poorest.

In introducing his Budget, the Chancellor said:

“This emergency Budget deals decisively with our country’s record debts. It pays for the past, and it plans for the future. It supports a strong, enterprise-led recovery, it rewards work and it protects the most vulnerable in our society. Yes, it is tough, but it is also fair.”—[Official Report, 22 June 2010; Vol. 512, c. 166.]

His apprentice, in the form of the Chief Secretary to the Treasury, came before us today. He is wheeled out every time the Conservative party wants to do a nasty deed. I would have thought that he would wake up to the fact that the Conservatives use him and the Liberal Democrats as a shield.

--- Later in debate ---

[Mr Jones]

The Liberal Democrats do say one thing and do another. As I say, that will come as a great shock to the hon. Gentleman, but let us be honest, anyone who has fought Liberal Democrats in local government is used to them saying one thing and doing another locally, as well as nationally.

[Mr Love]

Does my hon. Friend agree that the biggest shock of all was the statements made by the Chancellor immediately before the Budget to the effect that he had no plans to raise VAT?

[Mr Jones]

Yes, we have been asked directly whether this came suddenly as a shock. The hon. Member for Na h-Eileanan an Iar (Mr MacNeil) has just raised the very clear point that the actual size of the deficit was smaller than projected. No, this is a coalition deal, as we all know, by the push-me, pull-me coalition. We obviously have two leaders who can hardly be told apart in terms of political objectives, and we have some very unhappy individuals, such as the hon. Member for St Ives (Andrew George). When he made his speech trying to justify this in the House last week, he looked very uncomfortable. I feel for him; all I would say is that if he feels so unhappy, he should come and join us.

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[Andrew George]

I want to draw my remarks to a close.

[Mr Love]

You haven’t said anything yet.

[Andrew George]

The hon. Gentleman has obviously not been listening. He is incapable of listening to anything.

We require honest and transparent information from the Treasury to help us reach a conclusion about the VAT measure’s other impacts. I hope that Treasury Ministers will revisit the issue, perhaps having undertaken further modelling and commissioned further studies on its impact on low income families, charities and businesses. I hope that they will be prepared to revise their position, if necessary during the Bill’s passage.

Several hon. Members have mentioned the rural fuel derogation and the opportunity for that to be introduced. The Chief Secretary promised to go away and make some further inquiries about that. I encourage members of the Treasury Bench to examine that carefully because the impact on rural areas will clearly be significant. The Chief Secretary made a commitment this evening to undertake further studies.

Financial Services Regulation

Andrew Love Excerpts

Wednesday 16th June 2010 Commons Chamber

[Mr Osborne]

I am surprised, and I am not sure whether the shadow Chancellor is committing his party for the rest of this Parliament to be against reform of the structure of banking. I see quite a lot of heads shaking, so perhaps he is not. We shall wait and see. It is worth noting that on 8 June Lord Young of Norwood Green, a Minister at the Department for Business, Innovation and Skills in the last Government, referred to

“the tripartite relationship that was supposed to identify and regulate the systemic risk in British banking—a relationship that we all know failed somewhat spectacularly.”—[Official Report, House of Lords, 8 June 2010; Vol. 719, c. 630.]

[Mr Andrew Love (Edmonton) (Lab/Co-op)]

Given the continuing difficulties in the banking sector, does the right hon. Gentleman accept that the proposals he is putting to the House today will lead to greater uncertainty and greater blight in the financial services sector, and make it more difficult for banks and financial institutions to recover?

[Mr Osborne]

No, I do not accept that. We cannot ignore in this House that a debate is raging not just in our country but across the world about the structure of the banking industry and the best way to regulate it. The hon. Gentleman may have decided that he has all the answers and the Labour party may have decided that the system it established 13 years ago was the right system and we should stick with it, but I think we should be more open. We should have a process that brings that debate to a conclusion. Tonight I am going to the Mansion House dinner, as I believe the shadow Chancellor is too. I have sat at Mansion House dinners as shadow Chancellor and listened as the Governor of the Bank of England said something completely different from what the Chancellor of the Exchequer said on the same occasion. We have to resolve the debate, so we have to set up a process that resolves it, and I believe that an independent commission in which everyone can engage, including Members of the House, is the right approach.