UK Steel Industry
Debate between Angela Eagle and Geraint Davies
Geraint Davies (Swansea West) (Lab/Co-op)
Does my hon. Friend share my concern that certain major procurement projects, such as High Speed 2 and nuclear, are being given to the Chinese? My fear is that they will naturally want to use Chinese steel. Also, if these were British companies, they would be paying British corporation tax, national insurance and income tax, and would be developing supply chains and export capacity. Does my hon. Friend share my fear that there is no proper joined-up industrial strategy to protect our jobs and our future?
Ms Eagle
I agree with my hon. Friend, and when we see the Chancellor travelling around China and asking the Chinese to bid for all these contracts, it is hard to avoid realising what is happening.
Business rates represent a far higher cost for UK steel producers. There had been reports that the Government were planning to exempt plant and machinery from business rates, which EEF has described as a “tax on investment”. The Chancellor reportedly even costed this change with a view to including it in his now infamous Budget last month before dropping it at the last minute. It seems that the measure, which would have significantly improved the future prospects of the industry, was sacrificed in pursuit of his economically illiterate and increasingly unachievable surplus target.
I said earlier that part of the problem is ideology. Labour has been calling for a modern and intelligent industrial strategy, and I am pleased to say that in yesterday’s statement the Business Secretary actually uttered the words “industrial strategy” for the first time. Now that that Rubicon has been crossed, all we need is action to match the words. Today, let us spare a thought for the thousands of steelworkers whose futures hang in the balance. The Government ignored the warning signs for far too long, and now they must act to find a suitable buyer, and to work with the steel producers, the workforce, and the clients and customers to ensure that the industry is placed on an even keel. The cost of failure, both economically and socially, is unthinkable. We need urgent action to save our steel.
Steel Industry
Debate between Angela Eagle and Geraint Davies(9 years ago)
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Geraint Davies (Swansea West) (Lab/Co-op)
On the EU helping out, does my hon. Friend agree that there is a strong case for carbon tariffs from the EU so that we do not displace clean steel produced in Britain with dirty steel produced in China and elsewhere?
Ms Eagle
My hon. Friend’s practical suggestion should be considered with great seriousness not only by the Government but by the EU.
The steel summit in Rotherham was convened only following the Backbench Business Committee debate, and it ended with more job losses and no significant Government announcements. Far from keeping the House informed as the crisis has unfolded, the Government have had to be dragged kicking and screaming to the House to answer urgent question after urgent question.
Steel is an energy intensive industry that inevitably results in extra costs being placed on it for environmental reasons, but the Government have the power to lower energy costs for steel producers through implementing the energy intensive industry compensation package immediately.
Trade Union Bill
Debate between Angela Eagle and Geraint Davies(9 years, 1 month ago)
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Ms Angela Eagle (Wallasey) (Lab)
Third time lucky, Mr Speaker.
I thank the Secretary of State for his gracious welcome, and especially for the timing of today’s Second Reading debate on this Bill, which he has arranged for maximum convenience. I hope he will continue to be so accommodating as we go forward and I oppose him from the Dispatch Box.
Let me begin by drawing the attention of the House to my entries in the Register of Members’ Financial Interests which, in the interests of transparency, I declared earlier than was technically necessary. I was especially pleased to win the nominations of Unison, the Union of Construction, Allied Trades and Technicians, the Communication Workers Union, the Transport Salaried Staffs Association and the recommendation of Unite in the recent contest to be deputy leader of the Labour party—hon. Members can see where that got me. As the register shows, my campaign was supported by donations in cash and kind from some of the unions affiliated to the Labour party.
I also want to make a second declaration: I am a lifelong and proud trade unionist. I believe in social partnership at work, and that the right of trade unions to exist and represent their members at work is a key liberty in any democracy. I am dismayed that we have a Government who believe in attacking trade unions, rather than working with them in the spirit of social partnership to improve economic efficiency and productivity in our country.
Geraint Davies (Swansea West) (Lab/Co-op)
My hon. Friend will know that in recent years, the average trade unionist has been on strike for one day in 15 years. In sharp contrast, the export of goods last month was down to its lowest level since 2010. Does she agree that the focus should be on collaboration across industry and trade unions to raise productivity and wages, whereas the Bill will get people on the streets and force conflict?
Fuel Prices and the Cost of Living
Debate between Angela Eagle and Geraint Davies(13 years, 7 months ago)
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Finance Bill
Debate between Angela Eagle and Geraint Davies(14 years, 3 months ago)
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Geraint Davies
In terms of the public finances, £3.6 billion is a massive amount to be raised in a very tight period, so given that there is so much uncertainty and change around the Government’s proposals, does my hon. Friend accept that they present an enormous risk? From the viewpoint of the industry, it appears that the Government are playing fast and loose and are undermining the confidence of the financial markets and credit rating organisations in their capability to manage our economy or their finances.
Ms Eagle
My hon. Friend raises an extremely important point and I obviously look forward to the contribution that he will make to our debate in due course. If he looks at the amendment he will see that the point of it is to try to get more detail about what is in the Government’s mind. The time scale for putting the provisions in place is extremely short in relation to the beginning of the new financial year—a point to which I shall return.
The amendment would provide that an order that completely repealed all the paving legislation and all the work to put into effect the higher earnings charge would not be allowed until Parliament has more idea of at least the outline for the proposed replacement arrangements. There are some coy little hints in the Red Book but not much else to go on—certainly no detail—if we are to repeal an already organised charge that has been well consulted on. The amendment also provides for a distributional analysis to show
“the likely impact of the proposed replacement arrangement; and…the revenue implications of the proposed replacement arrangement.”
I accept that the Government have said that they want to replicate the yield, but as my hon. Friend correctly pointed out, the yield is not an insubstantial amount and it rises quickly. In the tax year 2012-13, a yield of fully £3.6 billion for the replacement measure is already on the Budget scorecard.
The planned yield is a considerable sum and the Government need to reassure us that they are not putting it at risk by ripping up all the work that has been done to implement the original policy since it was announced in 2009. There are clear dangers in destroying all that work, wiping it off the statute book and starting again from scratch so close to when the change is meant to come in, not least because of the tight time scales as we approach the start of the financial year 2011-12, when collection of the revenue is meant to begin. The Red Book states:
“The Government wishes to engage employers, pension schemes, experts and other interested parties to determine the best design of a regime.”
That does not fill me with confidence that the Government have the first clue about how their policy intent can be changed into an actual tax change. It is a complex area and they have only a small period to get the measure right.
I assume that the powers will have to be legislated for in the September Finance Bill; perhaps the Economic Secretary can tell me when she replies to the debate. There is not much time—probably only the summer—so I hope she will have a holiday, but I am not sure quite how that will turn out if she is put in charge of sorting out the proposals in an appropriate time. Her officials could get no break at all. To be honest, as they contemplate their second or third Finance Bill of the year, her officials will probably need a break as much as she does. While there is not a lot of time left, there is an awful lot of yield at stake if the Government get this wrong, and that is what we are exploring through amendment 60.
Ms Eagle
There are issues of process on which I would appreciate the hon. Lady’s enlightenment in her response to the debate.
There is also an issue about the backstop position. The hon. Lady says that draft clauses might be brought forward, and, although I am sorry to go on about process, it is important when it comes to tax changes. We gave ourselves close to two years to do all the work to introduce the higher rate relief charge, because it was such a difficult and complex area. We wanted to ensure that those who were liable to pay had plenty of time to plan, understand their liabilities—even if they did not like them, which they rarely do in my experience—and get to know the system, so that there was certainty about it. It now seems clear that there is a degree of uncertainty, which those who would have been particularly badly hit by the high charges, the very richest in our society, might welcome. However, we felt that they should shoulder a fairer burden of the necessary fiscal consolidation, because they had done so well during the good times.
If the Government are serious about protecting the yield, there has to be a trade-off with fairness. The Government have hinted at using the annual allowances as a way of raising that money, rather than our way, and if they introduce that change those on incomes of less than £130,000 will be dragged into the tax net. We wished to avoid that with our solution, so, if the reduction in annual allowances that the Government are considering turns out to be their final decision, in response to the debate will the hon. Lady tell us how many people it will affect? The Government have hinted that that is their preferred way, but our amendment would ensure a distributional analysis of the measure’s effect. Given that we legislated for a particular approach to raising that yield, and given that the Treasury did a great deal of work on developing that system, it would be entirely appropriate for the Treasury to produce some comparisons between that and the preferred approach at which the hon. Lady and, certainly, the Red Book have hinted. How great will the sudden tax liability be of people who earned less than £130,000 a year and would not have been affected had our approach to raising the yield gone ahead? How low down the income scale will the restrictions on tax relief go?
Geraint Davies
For clarity, does my hon. Friend agree that the Government’s proposal consists of a multi-billion-pound giveaway for the richest 2% of people in this country at a time when the rest of the country faces massive financial penalties due to the actions of international bankers? Those very bankers will be given the extra bonus by this Government, and that is an absolute disgrace.
Ms Eagle
Again, my hon. Friend makes an important point in his characteristically acerbic way. I was going to ask the Minister, in a slightly more polite way, how much of the income that the very richest would have paid will now be paid, under the new plans, by those on lower incomes. I hope she can give us that figure.
The key issue with annual investment allowances is that they drag people into paying the extra tax regardless of income. For example, a modest earner might receive a bequest from a deceased relative and make a big payment into a pension, and under our system they would have been able to pay in up to £225,000 without incurring tax. Alternatively, a modest earner might receive a redundancy payment and wish to put it away, and we clearly want to encourage that if they do not have a pension. If the hon. Lady’s system is to be of the sort hinted at in the Red Book, that person would be much more affected, regardless of their ordinary income; they would be deterred from putting anything other than the annual investment allowance into a pension fund because of the nature of the tax. I hope she will at least admit that that is an implication. Has she any numbers that relate to this issue?