Finance (No. 2) Bill

Anthony Browne Excerpts

Report stage
Wednesday 2nd February 2022 Commons Chamber

[James Murray (Ealing North) (Lab/Co-op)]

Any member of the public hearing that the Government were today voting their Finance Bill through the House of Commons might expect such a Bill to do something to help with the cost of living crisis facing families up and down this country. Our new clause 6 makes this simple point. It asks the Government to set out how the measures in the Bill will affect household finances, the amount of tax working people are paying, and the rate of growth in the economy in the coming year.

I suspect that Ministers will want to avoid our new clause 6 because they know what the answers will be. The truth is that whether through this Bill or any other means, the Government are letting energy bills soar, refusing to cancel their national insurance hike, and failing to set out a plan for growth. The Conservatives’ failure to grow the economy over the last decade, and their inability to plan for growth in the future, has left them with no choice but to raise taxes. This low-growth, high-tax approach to the economy has become the hallmark of these Conservatives in power.

Let me make it clear why our new clause 6 might make such difficult reading for Conservative Members. People see their energy bills going up and about to soar, inflation at its highest rate in decades, and their wages falling in real terms—and what do the Tories do? They raise national insurance by £274 for a typical full-time worker. It is the worst possible tax rise at the worst possible time. We warned that it was wrong when the Government pushed it through Parliament last year. Our arguments have only got stronger since then, so instead of digging in, the Chancellor and the Prime Minister should do the right thing and scrap this tax hike on working people and their jobs. Despite calls on the Government from all sides, they are so far refusing to budge. In this Bill, they offer no relief to working people, who face soaring prices and tax bills. They have managed to find time, however, to put into law a tax cut for banks, as we see in clause 6.

Clause 6, which our amendment 35 seeks to delete, would see the rate of the banking corporation tax surcharge fall from 8% to 3%, with the allowance for the charge raised from £25 million to £100 million. That will cost the public finances £1 billion a year by the end of this Parliament. Throughout the passage of the Bill, the Financial Secretary to the Treasury has used smoke and mirrors desperately to pretend that the Government are not cutting taxes for banks. She has tried to hide this tax cut under a separate change to corporation tax that may never even come to pass.

[Anthony Browne (South Cambridgeshire) (Con)]

Including corporation tax and the surcharge, the taxation of banks is currently at 27%. After this legislation, it will be 28%. Does the hon. Member agree that 28% is higher than 27%, and therefore taxes on banks are actually going to rise, not go down?

[James Murray]

It is the same tired doublespeak by Government Members trying to hide this tax cut for banks. However they try to present it, in this Bill the banking surcharge is cut from 8% to 3%; it is there in the policy costings from the Treasury that the measure will cost the public purse £1 billion a year by the end of this Parliament. If Government Members do not like this tax cut, they can simply vote with us to delete it at the end of Report, rather than pretend it does not exist.

[Anthony Browne]

Will the hon. Member give way?

[James Murray]

No, I am going to make some progress.

The truth is that this tax cut is going ahead at a time when bankers’ earnings are on the rise, with investment banks’ profits soaring off the back of a wave of takeovers and mergers caused by the pandemic. The UK arm of Goldman Sachs—a business that the Chancellor will know well—boosted its pay by more than a third last year, Barclays is set to raise bonus payments by more than 25% in its corporate investment bank, and boutique banks in the City are expected to do especially well, as they are exempt from rules that limit bonuses.

These measures show just how out of touch this Government and this Chancellor are: they are championing a tax cut for banks while ignoring calls from the TUC, the Federation of Small Businesses, the Institute of Directors, Labour MPs, some on their own side, and the British public, to abandon their tax cut on working people and their jobs. If Ministers are still refusing to listen, today we are giving their Back Benchers an opportunity to say, “Enough is enough.” They can vote with us tonight to cancel the banking tax cut and make the Government think again.

The national insurance hike is wrong because it threatens people’s financial security. I will now turn to other aspects of the Bill that relate to wider economic security and the threat of economic crime.