Amendment of the Law
Debate between Angus Brendan MacNeil and Frank Dobson(9 years, 8 months ago)
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Frank Dobson (Holborn and St Pancras) (Lab)
Having been a Member of this House for 36 years, I suspect that I have listened to about 45 Budget statements, but I must say that I cannot remember one that was so self-congratulatory—the Chancellor of the Exchequer delivered it almost like a lap of honour. I must concede that he can claim one great success: he has been very effective in getting across the idea that the worldwide recession was created by the Labour party, not by the stupidities of the banking system worldwide, and that the British economy was in decline when this Government took over. The fact is that the economy was actually growing when they took over. It then went into decline and is only now creeping out. If we are now seeing a bigger than usual increase in output and growth, that is because we had fallen so low and are growing our way out of a very deep pit.
One of the things that the Tories promised before the previous general election was that there would be no rise in VAT, but their first Budget did just that.
Mr Angus Brendan MacNeil (Na h-Eileanan an Iar) (SNP)
Will the right hon. Gentleman give way?
Frank Dobson
No, because that would take up other Members’ time.
The Tories also promised to clear the deficit. The right hon. and learned Member for Rushcliffe (Mr Clarke) said that nobody can forecast that. Well, perhaps they cannot forecast it, but they did make that promise and they have not kept it; they have reduced the deficit by a third. They promised to reduce the national debt but, as my right hon. Friend the Member for Edinburgh South West (Mr Darling) pointed out, they have managed to reduce it by a fraction only by fiddling the books—that is as good a way of describing it as any. They said that they would rebalance the economy, but they have no more done that than the Liverpool captain rebalanced the membership of his team the other night. Then there is the claim that we are all in it together. Well, a lot of people have been dropped in it together, and they are not the rich people.
I would like to deal with something that, in a sense, has nothing directly to do with the Budget: taxation. The fact of the matter is that the House of Commons has had a pathetic record over the past 50 or 60 years when it comes to determining what the levels of taxation should be and how they should be applied. Time and again we have come up with a system that helps tax evasion and avoidance and lets people get away with late payment. It is no good simply blaming the civil service, because there has been a failure to deliver what every Government have said about people avoiding tax.
The problem is that the details of all taxation are formulated in secret with Treasury officials plus some experts, many of whom return to their day jobs in the private sector afterwards to pursue what they call “tax efficiency”. In other words, they exploit the loopholes in the taxation system that they helped formulate a year or two before. Years ago our predecessors decided to do away with secret treaties. I think that we now need to do away with secretly formulated taxation. I believe that in future the House of Commons should decide on the principle of a particular tax and then a Committee of the House should summon all the experts before it and decide on the detailed implementation so that we do not have the hole-and-corner fiddling and special pleading that has left us open to so much tax evasion and avoidance and late payment that people have been allowed to get away with.
If the House of Commons is to restore its reputation, we need to take our duty to check on the raising of taxation much more seriously than we have done. If we fail to do that, our reputation will continue to be low, because people expect that when Parliament passes a law, that law will work and it will do what Ministers said it would do. When we pass laws that do not do what Ministers said they would do, that undermines all of us, not just those Ministers. I think that the House of Commons has to take its duties in relation to taxation far more seriously in future, and I hope that it will.
Income Tax
Debate between Angus Brendan MacNeil and Frank Dobson(10 years ago)
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Frank Dobson
No, I will not, because others wish to speak.
Let me make it clear that the Labour Government did not bring down the top rate of income tax to benefit the richest and at the same time freeze the pay of nurses, freeze the pay of doctors and freeze the pay of teachers, while at the same time the bankers got their bonuses. At HSBC, which lost £27 billion in the credit crash, Barclays, which lost £8 billion, and Lloyds, which lost £5 billion, bankers’ bonuses have risen, in 2012 and since then. At HSBC, 239 people are currently receiving £1 million or more a year. The worst off received a £40,000 tax benefit, and most will have received £100,000. For example, Mr Stuart Gulliver, chief executive of HSBC, apparently receives £32,000 a week in what are described as “special allowances”. I do not even know whether he pays tax on those special allowances, but that means that he receives, each week, an amount that is close to the national average annual income that is over and above his pay, yet Members on the Government Benches object to the idea that he should pay 50p in the pound tax on that. All I can say is that, following his and his predecessor’s efforts, he obviously has to spend a lot of time trying to minimise the amount of money he has to set aside to pay off for swindling exchange rates and to pay off for the consequences of money laundering and what happened with LIBOR and, generally speaking, in organising an outfit that might be described as the tax avoiders’ alliance.
We have heard talk of behavioural change reducing the possible income from a 50p rate of tax, but these bankers are really good at behavioural change. They do nothing else. They organise all the way around the world, helping people to avoid tax. With the exception of Lloyds, more than 30% of the subsidiary companies of these banks—in some cases these companies exceed more than 1,000 in number—are located in tax havens, and they are not located in tax havens just because the weather is better; it is because they are involved in promoting tax avoidance.
Bankers also say that their pay is a compensation package. I have checked the Oxford dictionary and compensation means recompense for loss, injury or suffering. What have any of these bankers experienced in the way of loss, injury or suffering? It is the rest of us who have had to experience loss, injury or suffering as a result of their stupidity leading up to the financial crisis. Their incompetence and greed inflicted loss, injury or suffering on the rest of us. I thought at one point that it was a perversion of language to use the word compensation in such circumstances, but I actually believe it is a perversion of mindset. They have obviously concluded that they should be compensated for inflicting loss, injury and suffering on the rest of us.
Mr Angus Brendan MacNeil (Na h-Eileanan an Iar) (SNP)
Will the right hon. Gentleman give way?
Frank Dobson
No, as I shall finish shortly.
None of these people would have any difficulty finding an extra 5p or even 10p in the pound on their income tax.
Water Industry
Debate between Angus Brendan MacNeil and Frank Dobson(11 years ago)
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Frank Dobson
In 1995, 826 million gallons of water per day were leaking out of the water companies’ pipes. According to my calculations, that is 3,755 million litres per day. The companies now proudly proclaim that they are dealing with the leaks. They have got the figure down to the apparently minuscule 2,910 million litres per day. Once they had to admit they were getting it wrong, we could see that it was a farcical record. Frankly, they simply deserve—I do not know; perhaps total abuse is the word—for their failure, and so does the system that regulates them, and the Ministers and civil servants who are also involved.
During the recent period water companies have increased charges; under the Labour Government charges went down at first then gradually crept up again. One thing that has not gone down, of course, is the huge dividends that the water companies have been paying. Since privatisation, they have paid out £37 billion in dividends. As the hon. Member for Dover (Charlie Elphicke) pointed out, that is 21% of gross value added compared with comparable parts of the private non-financial sector, which come in at about 11% of gross value added.
Look at the figures for individual water companies: Severn Trent Water has paid £6.2 billion in dividends; Thames Water has paid out £6.3 billion; United Utilities in the north-west paid out £7.3 billion; and Anglian Water has paid out £6 billion. Then there is tax avoidance and, as the hon. Member for Dover pointed out, a large amount of that is the product of manipulation of the companies’ borrowing, to the infinite benefit of their foreign owners in particular, more so than to their British owners.
Then there is the bosses’ pay. Some of them are being paid more than £1 million a year for collecting rainwater and sending it down a pipe. I understand the Health Secretary suggested that some managers in the national health service might be overpaid. It may be the case that some are, but let us consider Leeds Teaching Hospitals NHS Trust, for example—two teaching hospitals, 12,000 staff and 1,200 doctors to manage. I do not think anybody in the world would think that the person responsible for managing that, who gets about £250,000 a year, does not have a rather more complex task than someone who collects rainwater and sends it down a pipe. We must get some sense of proportion.
Mr Angus Brendan MacNeil (Na h-Eileanan an Iar) (SNP)
Has the right hon. Gentleman made any assessment of the effect on bills if there were not the excesses of bonuses, payments and dividends that he detailed earlier?
Frank Dobson
I cannot really do that as I have only just come back to looking at the water industry from the time when I tried to make life difficult for it, with some success. “Hammer the customers for the profiteers” is the motto of the water industry. We have higher charges, and now water companies want to install compulsory water meters everywhere. That is basically their policy, and a lot of people who I think ought to know better have been going along with that.
It costs about £250 to supply and install a water meter, and they have about 15 years of life before the grit and impurities in the water make them not do their job accurately. If it is a smart meter I understand that the situation is even worse. It costs about £50 to install a new meter if one has previously been installed. I think there are more than 10 million unmetered households, so at £250 a throw—according to my calculations—that is £2.5 billion. Does anybody think that investing in water meters is the best way of spending £2.5 billion? Even if they do, I certainly do not.
Another thing is that, as soon as anything goes wrong, the companies come rushing to the taxpayer to bail them out. South West Water could not cope with the problems it faced, particularly its sewerage problems and ended up getting a leg-up from the taxpayer.