Oral Answers to Questions
Bim Afolami Excerpts(5 years, 5 months ago)
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Bim Afolami (Hitchin and Harpenden) (Con)
Mr Speaker
Order. I know that the hon. Gentleman was trying very hard, but—forgive me: I say this by way of kindly counsel to the hon. Gentleman, who is a new Member—questions must be about the policies of the Government, as the Clerk has just swivelled round to remind me, and not about the policies or tactics of the Opposition. We will leave that there, and come to Helen Goodman.
Finance (No. 3) Bill (Eighth sitting)
Bim Afolami Excerpts(5 years, 5 months ago)
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The Financial Secretary to the Treasury (Mel Stride)
Very good. There will be no singing of “The Red Flag” on this side, Mr Howarth.
Mel Stride
Maybe. It is a pleasure to serve under your chairmanship, Mr Howarth. I will turn briefly to points raised by the hon. Member for Stalybridge and Hyde.
Finance (No. 3) Bill (Fifth sitting)
Bim Afolami Excerpts(5 years, 5 months ago)
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Robert Jenrick
After that excellent start, I will continue. Clause 33 extends the life of the first-year allowances for electric vehicle charge points until April 2023. In the UK, the continued use of high-emission vehicles creates pollution and increases health issues. This measure was first introduced on 23 November 2016 to support the transition in the UK to cleaner vehicles with zero or ultra-low emissions. The measure allows businesses that invest in charge points to reduce their taxable profits by 100% of the cost of their investment in the year it is made. That provides accelerated tax relief compared with normal capital allowances, and so encourages greater investment in these assets. The allowance is currently due to expire in April 2019. The clause enables the first-year allowance to continue as part of the Government’s ambition for all new cars and vans to be zero emission by 2040.
Bim Afolami (Hitchin and Harpenden) (Con)
Yesterday evening, for some light relief, I was going through emails from constituents. One constituent runs a business that installs electric charging points. Will the Minister illustrate for the Committee how he thinks that business will flourish as a result of these measures?
Robert Jenrick
The Government have taken two measures, the first of which was in the last Budget. That created an electric charge point investment fund— £200 million of public investment—which is designed to spur an extra £200 million of private investment. A business such as the one my hon. Friend describes could be part of that. The measure could enable the business to partner with the public sector and gain the capital that it needs to develop, and will be able to take advantage of the allowance and invest early. There are now two opportunities for such a business to take advantage of tax reliefs and public investment in order to grow rapidly and enter the market.
Finance (No. 3) Bill (First sitting)
Bim Afolami Excerpts(5 years, 5 months ago)
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Peter Dowd
In speaking to amendment 8, I will also speak to amendments 9, 10 and 11, each of which we will press to a vote.
Clause 2 enacts the continued charging of corporation tax. As the explanatory note says, the clause
“charges corporation tax for the financial year beginning 1 April 2020 ...Parliament charges CT for each financial year. This clause charges CT for the financial year beginning 1 April 2020. The rate of CT for the financial year 2020 was set at 17% in Finance Act 2016 Part 2 section 46.”
As I indicated earlier, it is vital to hold the Government to account on the matter of their treatment of corporation tax. The Government have offered huge tax breaks to big business even during their continued programme of austerity, which only two weeks ago the special rapporteur described as causing “misery”. It is important to set that context in relation to our amendments. The Government have slashed—that is the word—the amount of corporation tax paid, with a commitment to continue to cut big company taxes further. By 2020, 11% will have been cut from the main rate.
The main rate of corporation tax applies to companies with profits over £300,000—these are not small family businesses, but big corporations of the sort that we have all come to know, because they play a significant part in our economy. There is no criticism of that, but there is a balance to be drawn.
The main rate started at 28% in April 2010. It was reduced by the former Chancellor to 26% in April 2011 and then was reduced again to 24% in 2012 and 23% in 2013, before reaching 20% in 2015. It was cut further, to 19%, in 2017 with a view to reaching 17% by 2020. As of last year, the Institute for Fiscal Studies found that, compared with 2010, those cuts were denying the country £16.5 billion a year in tax revenue. That will increase if the Government stay in power long enough to push the rate down to 17% by 2020.
The Government have already been criticised by tax experts about the matter, which to some extent takes us back to our debate about the ability to tease out the issues. For example, Bill Dodwell, the former head of tax policy at Deloitte—not a company considered to be particularly socialist—said:
“Nobody seems to welcome the cut to 17 per cent.”
The British Chambers of Commerce has called for a pause to the corporation tax giveaways. When corporations’ own trade associations are making that point, it indicates that something might not be quite right. If it is important that we are all in this together, we must all be in it together on this matter too, and corporations should not be outside that.
We seek to take stock of the Government’s policy, which many people describe as corporate welfare, in the context of eight painful years of austerity for some of the poorest in our society and following numerous criticisms of the corporation tax policy by those who will benefit from it. Will the Minister help us to understand the Government’s position by addressing those criticisms in turn? Perhaps the Government might wish to introduce a review of corporation tax changes since 2010, so that we can get to the bottom of this important matter. After all, in eight years under the Government, corporation tax giveaways are likely to amount to hundreds of billions of pounds, while the number of people in poverty has risen to 14 million. A review of the matter would also help us to compare the Government’s actions with Labour party policy, which is to reverse the cuts and invest the money elsewhere.
Let us have a review to tease out the issues, because £16.5 billion works out at more than £25.5 million per constituency in the UK. The combined total cut from the constituencies of Conservative members of this Committee amounts to £228 million; it is important that the figures are put in context, because that translates to a lot of schools and hospitals that they are prepared to sacrifice.
Along with the important matter of what has happened to corporation tax since 2010, we must also draw a link between the Government’s cuts to corporation tax and their wider programme. In our view, there has been economic mismanagement, but we are not necessarily here today to talk about that.
Bim Afolami (Hitchin and Harpenden) (Con)
The hon. Gentleman asserts figures such as £16.5 billion, but does he accept that the tax rate has a dynamic effect on the amount generated for the Exchequer? It is all very well to cite a number as a static figure and say, “Actually, Labour party policy will double the amount we get,” but does he accept that there is a relationship between the rate and the amount that the Exchequer generates because of increased economic growth?
Peter Dowd
The hon. Gentleman makes a fair point, which I will address later in my remarks, and which we can tease out across the Committee if we want.
For Members who do not know, labour productivity is calculated by dividing output by labour input. Output refers to gross value added, which is an estimate of the volume of goods and services by an industry, and in aggregate for the UK as a whole. Labour inputs are measured in terms of workers, jobs—“productivity jobs”—and hours worked, or “productivity hours”.
The cuts to corporation tax have done nothing to improve our productivity. The hon. Member for Hitchin and Harpenden may wish to listen to that point, so I will repeat it: the cuts to corporation tax have done nothing to improve our productivity. That strikes at the heart of the Government’s failure on the issue. In fact, the economic statistics centre of excellence and the centre for macroeconomics at the National Institute of Economic and Social Research published a study this year of Britain’s very poor productivity. That brings us to the point that the hon. Gentleman raised, because one would assume that as a result of the tax cuts, more would be invested and productivity would rise—but that has not happened. The Government have argued that those corporations now receiving significant sums in tax cuts would invest in our economy and drive their business models forward, thus increasing UK productivity. Unfortunately, the 2018 paper shows that the billions of pounds of giveaways have not had a positive productivity effect. To deal with the point raised by the hon. Member for Hitchin and Harpenden, that paper says:
“Average annual…productivity growth was 2.5 percentage points lower during the period 2011-2015 than in the decade before the financial crisis…in 2007. We find that several years on from the financial crisis stagnation remains widespread across detailed industry divisions, pointing to economy-wide explanations for the puzzle. With some exceptions, labour productivity…lost…momentum in those industries that experienced strong growth before the crisis. Three fifths of the gap is accounted for by a few industries that together account for less than one fifth of market sector value added. In terms of why we observe continued stagnation, we find that capital shallowing has become increasingly important in explaining the labour productivity growth gap in service sectors, as the buoyancy of the UK labour market has not been sufficiently matched by investment…The collapse in labour productivity growth has been more pronounced in the UK than elsewhere”
notwithstanding those major cuts in corporation tax.
Peter Dowd
I do not want to introduce Gilbert and Sullivan, but the point is that it is a topsy-turvy world where cash for corporations equals productivity, when it does not, and cuts to welfare equal productivity, when they do not. It is not as simple as that and I am afraid that the Government’s rather one-dimensional approach does not work. That report shows that the billions handed to those big companies by the Government have not had the required effect on business investment to drive up productivity. The facts are there for everybody to see. No doubt, if we had had some experts here, we could have teased that out a bit more.
Bim Afolami
The hon. Gentleman has focused on domestic business investment, but would he not accept that having an attractive corporation tax regime and providing a business-friendly climate also helps with foreign direct investment? Britain is still a world leader in that.
Peter Dowd
Yes, but there is not necessarily a causal link there. The reality is—[Interruption.] Let me tease that out. The evidence does not suggest that, as I have tried to point out. The German economy is 35% more productive, because investment in it is significantly better than investment in this country’s economy. We are having a debate at the moment about the question of uncertainty in relation to Brexit, which is probably having a more significant effect than the hon. Gentleman suggests.
The bottom line is that the idea that cutting corporation tax per se will lead to growth in the economy has not proven to be the case. The economy is still flatlining, despite those cuts to corporation tax. The best part of half a billion pounds is still sitting in corporate bank accounts not being invested, despite corporate tax cuts.
Peter Dowd
My hon. Friend makes an important point: we have to have a balance. The massive cuts in corporation tax—sequentially, over several years—have not had the required effect. If they did, there is an argument to be had, but they have not. There does not appear to be any evidence that that is the case, so it begs the question why. If the Government are trying to make a rational case for it, they have singularly failed and it is time to have another look.
The Government once had a plan to tackle, for example, productivity in 2016 when they tried to maintain that there was an agenda beyond austerity, but that has not been the case. Sadly, the plan was not to reverse the corporation tax cuts and invest in the economy, but simply to push on. As a result, the plan was roundly criticised. The Business, Innovation and Skills Committee said
“we question whether the document has sufficient focus and clear, measurable objectives to be called a ‘plan’. This broad and expansive document represents more of an assortment of largely existing policies collected together in one place than a new plan for ambitious productivity growth.”
That plan was the best attempt so far and it has singularly failed. That is why we will continue to press the Government on the true cost of corporate giveaways both in terms of the tax forgone and their effectiveness.
Amendment 8 requires a review of the effects of corporation tax receipts of multinational companies compared with their UK-based revenue. That is a perfectly reasonable approach in the round—it is not just one-dimensional. The Financial Times reported last year that multinational companies avoided paying as much as £5.8 billion tax in 2016 by booking profits in overseas entities. It reported that that represented almost a quarter of the tax underpaid by large corporations last year. In addition to an apparent avoidance of tax, they also get a tax reduction. It is a great life if you can get it: do not pay tax and get rewarded with another tax cut. If only we could all do that, although I suspect none of us would want to.
Sadly, the situation does not seem to have improved under the Government’s plans, despite the warning signs. The Times reported two weeks ago that HMRC is now chasing £28 billion in unpaid taxes from multinationals. The Government’s response was to give them some more. It is a bizarre approach when they owe £28 billion, or when HMRC is chasing £28 billion. I assume colleagues in HMRC do not simply go around chasing £28 billion for the fun of it, and instead do it because there is a requirement and we need the tax, and importantly because companies should pay their fair share. That represents a 50% increase in avoidance over four years. While the Government give corporations tax cuts, the corporations appear to say, “Thank you very much; we will carry on doing what we usually do and avoid our taxes.”
The problem stems from transfer pricing, which refers to the charges made between different parts of a multinational business for goods, services or intangible assets, including intellectual property, for example. Tax rules provide that transactions between connected parties should be taxed as if they were on arm’s length terms. In recent years, multinationals have been accused of arranging their transfer pricing to minimise their tax liabilities in jurisdictions such as the United Kingdom, which accounts for billions of missing tax in the UK.
The Conservative party not only wants to give the wealthiest a tax break but it does not seem too bothered if they give it to others such as corporations that do not necessarily need it. Of course, as my hon. Friend the Member for Oxford East said, that rule applies only to powerful interests and not to the working single mother who pays in full every single month.
Bim Afolami
The hon. Gentleman uses the word “corporations” pejoratively and then mentions the hard-working single mother. Does he accept that the hard-working single mother might also run a small business? Why did the Labour manifesto commit to increasing corporation tax on small businesses as well as on multinationals?
Peter Dowd
I started my comments by welcoming the role that corporations play in our economy. My use of the word “corporations” was not in any sense pejorative. I have said nothing “pejorative” about corporations. I may have talked pejoratively about those corporations that avoid their tax and I think most other people would, too. Those corporations have a responsibility, and not just legally, to pay tax. I am not suggesting they are evading tax in that sense, but morally they are part of our community. They are part of one of the most stable countries in the world, with a rule of law next—[Interruption.] I am absolutely shocked that the hon. Gentleman is laughing at my assertion that we have one of the best processes for the rule of law in this country. I am sure he did not mean to laugh when I was praising the British constitution—I accept that he did not really mean it.
At the end of the day, the bottom line is that I have not at any time been pejorative, and nor would I wish to be pejorative, about corporations that play their part in society, that pay their taxes, that treat their workers properly and that treat their customers as their first port of call. I would not be pejorative about those corporations, but I will not stop criticising corporations that do not pay their fair share of tax.
To get back to the point, that is why the Government appear to be winding down the diverted profits tax rather than ramping up the pressure on companies that do not pay their way. The review demanded by amendment 8 would strike at the heart of the problem. For too long, the Government have sat idly by and watched the UK being fleeced by many big companies and the public are saying that enough is enough.
On amendment 9, the Government’s blind spot in respect of companies paying their share extends in particular to technology companies. It was reported in The Guardian this year that Amazon had halved its corporation tax despite posting record profits. The article speaks directly to the amendment by saying:
“The company, which has been locked in a race with Apple and Alphabet to be the world’s first trillion-dollar business, revealed that pre-tax profits at its UK business tripled from £24m in 2016 to £72m last year.
The figures were reported by Amazon UK Services, the company’s warehouse and logistics operation that employs more than two-thirds of its 27,000-plus UK workforce, in its annual financial filing to Companies House.
The company almost halved its declared UK corporation tax bill from £7.4m in 2016 to £4.5m last year. It received a tax credit of £1.3m from the UK authorities in 2016, and last year paid £1.7m tax on its profits.”
I do not have the evidence to hand, because time does not permit me to go into all the details, but it would be interesting to know how many of those 27,000 people are on tax credits themselves because the pay they get from that company is pretty low. There is an unacceptable triple-whammy for taxpayers. No. 1 is that some of those companies’ employees get tax credits because they do not get paid enough; No. 2 is that the companies are getting a corporation tax cut; and No. 3 is that they avoid paying their taxes where they can.
Will the Minister guarantee that Amazon will pay a full and reasonable share of tax on its operations next year? I suspect that he is not likely to commit to that suggestion even if he wanted to. What about other companies? Google paid only £50 million last year, despite total sales of £5.7 billion, which is worth repeating. Meanwhile, Facebook paid only £15.8 million in corporation tax, despite collecting a record £1.3 billion in sales. Its accounts show that while it increased its UK income by more than 50% in 2017, its pre-tax profits increased by only 6% to £62.7 million. The Silicon valley-based company’s UK taxable profits were reduced by a £444 million charge for unexplained “administrative expenses”, which is scandalous.
The Chancellor said that he would introduce a digital services tax in response to that flagrant attempt to undermine our tax base. Oddly, though, the tax seemed to bring in only £5 million in the first year and £275 million in the second. Perhaps the Financial Secretary could tell us where the rest is. That seems a pretty pathetic attempt to restore a level playing field in our tax system—the digital services tax is a drop in the ocean. What estimate has the Minister made of the total corporation tax lost to HMRC through avoidance by technology companies? What steps has he taken to work with other nations to deliver a comprehensive response? How many meetings has he had with the European Union since the Budget?
As the Minister knows, the European Union’s approach is much more comprehensive. A Commission press release set out its approach to digital taxation—it is therefore directly relevant to amendment 9. It demonstrates that the EU’s plans are far more developed than the UK’s. It is therefore important that we listen to them. The press release states:
“The Commission has proposed new rules to ensure that digital business activities are taxed in a fair and growth-friendly way in the EU. The measures would make the EU a global leader in designing tax laws fit for the modern economy and the digital age”,
which is what amendment 9 seeks to do. It continues:
“The recent boom in digital businesses, such as social media companies, collaborative platforms and online content providers, has made a great contribution to economic growth in the EU. But current tax rules were not designed to cater for those companies that are global, virtual or have little or no physical presence. The change has been dramatic: 9 of the world’s top 20 companies by market capitalisation are now digital, compared to 1 in 20 ten years ago. The challenge is to make the most of this trend, while ensuring that digital companies also contribute their fair share of tax. If not, there is a real risk to Member State public revenues: digital companies currently have an average effective tax rate half that of the traditional economy in the EU…Today’s proposals come as Member States seek permanent and lasting solutions to ensure a fair share of tax revenues from online activities”
as urgently as possible. Like the European Union, we are seeking to create an initiative
“to reform corporate tax rules so that profits are registered and taxed where businesses have significant interaction with users through digital channels. This forms the Commission’s preferred long-term solution.”
I would like the Government to consider a number of European Union proposals as part of the review, including an interim tax on certain revenue from digital tax activities. The Government could take that issue into account as part of the review, too. I hope they will look at it as well.
Finance (No. 3) Bill
Bim Afolami ExcerptsTuesday 20th November 2018
(5 years, 5 months ago)
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Anneliese Dodds
I am very grateful to my hon. Friend for her comments. In fact, I will go on to say both, because that is precisely our concern. So far, the Government have been incredibly vague about what commitments they will make on tax matters in relation to preventing avoidance and evasion. Furthermore, we have had some very, very unhelpful comments—to put it extremely mildly—from the Government about whether they might seek to undercut the rest of the EU on tax matters. I know that my hon. Friend follows these matters very closely, as she does money laundering matters, where I argue that we have not been clear enough about how we will collaborate with others into the future.
Our new clause 5 is directed at another Government blank spot: the distributional impact of their tax measures. It would require an equality impact assessment of the Government’s tax avoidance measures in relation to child poverty, household income levels, people with protected characteristics, and our nations and regions. That assessment is necessary because of the continuing leakage from our tax system owing to avoidance as well as evasion. Failure to deal with avoidance has put pressure on the rest of the tax system, which, as I have just mentioned, has been exacerbated by unnecessary tax cuts to the very best-off people and to profitable corporations. As many independent observers have noted, these tax cuts have tended to benefit the very best-off people and often men rather than women, while £4 out of every £5 cut from Government budgets has fallen on women’s shoulders. The Women’s Budget Group has shown how, out of all household types, lone mothers have been the hardest hit by cuts to services and tax and benefit changes, followed by lone fathers and single female pensioners. Among lone mothers, it is black and minority ethnic women who have lost the most.
Bim Afolami (Hitchin and Harpenden) (Con)
Is the hon. Lady suggesting that we should have differential tax rates for men, women and different ethnic groups?
Anneliese Dodds
I am grateful for the intervention, because it enables me to make the answer clear. Absolutely not. We are asking for something very simple. Sadly, it is something that this Government have not been willing to provide, which is the information about tax incidence. We do not have that information to the extent that the House needs. The process of analysis has been left to bodies such as the Women’s Budget Group and the Child Poverty Action Group. They have to crunch the data. That is an activity that should be carried out by Government, so that we as Members are able appropriately to scrutinise their policy and practice. We do not have that information at the moment.
Anneliese Dodds
I will press on for now.
Labour’s new clause 6 would require a review of the Government’s measures presented in this Finance Bill on tackling avoidance, evasion and the tax gap. It would enable us to consider whether the Government’s reactive approach is sufficient, when many of us suspect that it is anything but. Here we are reminded of one of the biggest gaps in this Bill. Despite much fanfare in the Budget, and indeed in the Minister’s comments just now, there is no digital services tax presented in this Finance Bill. Instead, there will be a consultation on the Government’s approach. Of course, even what is in that consultation is less stringent than European-level proposals, and it includes giant loopholes in its safe harbour and double threshold elements.
The hon. Member for Walsall North (Eddie Hughes)—who is still in his place, which is fantastic—talked about the regime for intangible assets. He is absolutely right that we need tax authorities to deal with these issues more appropriately. When I think about the major strides that have been made on taxing profits arising out of those intangible assets, I think of the cases that have been taken by the European Commissioner for Competition against Starbucks and others. She showed, for example, that Starbucks’ intellectual property relating to its roasting processes was not based in the Netherlands, as it claimed, and that that was just a ruse to avoid tax.
Bim Afolami
Does the hon. Lady accept that, when we are dealing with the complexity of international tax treaties, judicial precedent and the rule of law, and given that those treaties and lots of judicial precedent were established at a time when we did not have multinationals in the way we do now, it is only prudent to consult properly before we put measures in place? Does she also accept that this Government have been a leader, according to the OECD and the IMF, in dealing with the problem that she outlines, and that she is not being fair at all?
Anneliese Dodds
I am grateful for the hon. Gentleman’s intervention. However, I am sorry to point out that he is slightly behind the times when it comes to the operation of tax treaties. Those are now multilateral, following the development of the OECD’s multilateral instrument, which aims to amend tax treaties for all signatories, including the UK, in a thorough manner.
Bim Afolami
I thank the hon. Lady for giving way again. The whole point is that this is all a work in progress, as she would accept.
Anneliese Dodds
That appears to be a slightly different point from the one the hon. Gentleman was making a moment ago. None the less, I agree that this is a work in progress. Sadly, our Government and Conservative Members in other jurisdictions have not always been promoting that process. I gently remind him that his colleagues in the European Parliament have consistently voted against measures that would increase tax transparency and have consistently not supported attempts to hold inquiries into, for example, the Panama papers and the Luxembourg leaks. I hope that, at some point, they will catch up with the need for more tax transparency and enforcement. Perhaps he could encourage them; that would be enormously helpful.
It is positive to see in this Finance Bill that the Government have adopted some of Labour’s proposed measures in our tax transparency and enforcement programme. They have finally seen the light on giving HMRC back preferred creditor status. They appear to be undertaking some action against umbrella agencies exploiting the employment allowance. They also appear to be looking towards creating an offshore property levy, although it is unclear to me, even following the Minister’s comments, how appropriately that will be targeted, given that it lacks the precision of Labour’s proposed oligarch property levy. But there are few additional measures in the Bill beyond what is already required by either the EU or the OECD, showing an abject lack of ambition and commitment from this Conservative Government.
Underlying all this, as the hon. Member for Glasgow South West (Chris Stephens) said, is the Government’s failure to appropriately staff HMRC to deal with tax avoidance and evasion and their determination to press ahead with its reorganisation, despite evidence that it is haemorrhaging experienced staff. Some additional money has been provided, which the Minister referred to in his speech. However, we still lack clarity on exactly where that money will go. The Government have committed to provide 5,000 additional customs staff. I still do not know where they will go. We are looking at a situation where, due to the regional reorganisation, there will not be a single HMRC hub along any of the south coast or beyond the central belt. Where customs officials will go is very unclear.
In addition, any additional money that is being provided by the Government, or at least much of it, will in any case just backfill what has been sucked out through the recruitment costs necessitated by the need to replace staff who have been lost due to the reorganisation process.
2019 Loan Charge
Bim Afolami Excerpts(5 years, 5 months ago)
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Peter Aldous (Waveney) (Con)
It is a pleasure to serve under your chairmanship, Mr Walker. I congratulate my hon. Friend the Member for Wycombe (Mr Baker) on securing this debate, which gives us the opportunity to highlight the devastating impact that the 2019 loan charge is having on many individuals.
My constituent who has been affected by the loan charge is at his wits’ end. His family life has been turned upside down and, as he sees it, he has no alternative but to declare himself bankrupt. He is not a wealthy man. He is not a professional footballer; he is an IT contractor. When he and others were made redundant by BT, they were introduced to financial advisers who set up these schemes for them. He and they acted in good faith, only following the advice given so as to be IR35 compliant.
I want to highlight two issues. My first concern is that HMRC is pursuing the easy targets—individuals who have acted in good faith, are not well off and do not have their own bespoke financial advisers and accountants. My understanding is that the Glasgow Rangers Football Club case, on which the 2019 loan charge is based, concluded that the tax liability fell on the employers. That raises the question why HMRC is not pursuing the client organisations, agencies and umbrella groups that have benefited significantly from setting up these arrangements.
Bim Afolami (Hitchin and Harpenden) (Con)
I agree with my hon. Friend’s focus on the individuals involved. Does he agree that the retrospective nature of the measure is not just a matter for the rule of law in the abstract, but that it undermines the trust of those people and their families and communities in our Government and our legal system, and will do so for generations to come?
Peter Aldous
I thank my hon. Friend for his intervention—he has a crystal ball, because he has foretold the next item in my speech.
The people affected have become a target. They are vulnerable people. They are not well paid and do not receive many of the benefits and protections that payroll employees do: sick pay, holiday pay and maternity and paternity leave. I would be grateful if my hon. Friend the Minister could advise us when he sums up the debate of whether the impact assessment has looked at the personal circumstances of the individuals who are being pursued, whether they are able to pay and what the impact will be on their lives.
My second point, which my hon. Friend the Member for Hitchin and Harpenden (Bim Afolami) foretold, is that the basis on which the 2019 loan charge has been introduced and many individuals are now being pursued is that it is retrospective. It undermines the cornerstone of taxation, which is that a Government should not seek to impose or increase a tax charge on income earned, gains realised or transactions concluded at a time before the legislation was announced.
The Economy
Bim Afolami Excerpts(6 years, 1 month ago)
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Elizabeth Truss
The figure that the hon. Lady has given is not correct. During the current spending review period, we are spending more per head on infrastructure in the north of England than in the south. In the longer term, there will be decisions to be made about which projects we fund in the north, but we are absolutely committed to ensuring that the north has its fair share of transport and infrastructure funding.
Since rail privatisation, the number of complaints has fallen by 75%, satisfaction has risen from 76% to 81%, and the days of waiting hours for a train and a stale sandwich from British Rail are long over.
Royal Mail was loss-making when it was in public ownership, sucking up resources that could have been spent on services such as the NHS. By contrast, it has been financially healthy in every year since privatisation. If Labour Members think that they could do a better job of running those services, they need to demonstrate how. On current form, I believe that their proposals would mean chaos and confusion, and if we include the £350 billion for the strategic investment board, they would also mean the addition of an eye-watering half a trillion pounds of debt to the UK balance sheet.
Bim Afolami (Hitchin and Harpenden) (Con)
My right hon. Friend is making a very powerful speech. Does she agree that the Government’s approach is about practically achieving the best outcomes for people, whereas Labour’s approach is ideologically driven and will lead the country into more debt and more borrowing?
Elizabeth Truss
My hon. Friend is absolutely right. Rather than giving people and businesses the ability to shape their own futures, Labour Members want to put power in the hands of vested interests such as the unions and big companies. They say that they want to get rid of the state aid rules. That would prevent competition from taking place properly, and the end result would be taxpayers, including small businesses and families, picking up the tab through higher taxes. Labour’s plan would mean less money for schools and hospitals, and more money diverted to loss-making businesses.
The reality is that Labour still has not learnt the lessons of its failings in 2010. It has not learnt that a Government with no control over public finances will damage the economy and damage public services. When Labour left office, we were devoting 45% of our national income to public spending, and we have seen the longest increase in debt since the Napoleonic wars. Labour just does not understand that allowing the state to get too big cuts out individual enterprise. It cuts out people’s incentive to take on risk, try new things and do new things. State-owned companies compete for space and resources with private companies, starving them of oxygen. What is worse is that what Labour is planning would have to be funded through higher taxes.
Under the last Labour Government, we saw public services that did not improve in terms of the outcomes for patients or students, but we also saw huge amounts of money squandered. The hon. Member for Stalybridge and Hyde (Jonathan Reynolds) is laughing. Is he laughing at the fact that in the international education league tables, the UK ended up 26th in mathematics? We saw no improvement, although vast amounts of money were squandered.
Through the fiscal discipline of the last eight years, we have reduced the deficit by three quarters to 2.3%, and we have reached the turning point of debt falling as a share of the economy in the coming financial years. Our efforts, needless to say, have been opposed at every turn by the Labour party, but they have restored confidence in our economy. They have boosted investment, and they have led to more jobs and growth. The Government’s concrete plan to get debt down has given us a competitive advantage. If businesses know that we can keep our house in order, they will base themselves here in the UK, creating highly skilled and well-paid jobs.
At the same time, we have ensured that our public services are improving through public sector reforms such as the introduction of academies and free schools, and programmes that have put more people into work. We are seeing record cancer survival rates, better school results and record employment levels, because we have made the decision to reform the way in which our public services work. Because of our stewardship of the economy, we are now able to target Government spending where it is needed and where we recognise that there are issues.
Alongside our national retraining programme, we are tripling the number of fully qualified computer science teachers, so that our young people are able to succeed in the modern economy. We are increasing infrastructure spending on things like transport, which the hon. Member for Colne Valley (Thelma Walker) mentioned, to a 40-year high, even though we are having to make difficult decisions elsewhere. Yesterday we struck a deal to give nurses and other NHS staff a 6.5% pay rise over three years in exchange for reform that will improve patient outcomes, to make sure we can continue to recruit high-quality people in the NHS. We can do that only because we have got control of the public finances and we have fixed the economy, measures that Labour opposed at every turn.
So let me be clear: if we had listened to Labour and let the public finances spin out of control, there would be no money to invest in public services, and there would be no money now for that NHS deal, so nurses would not get their well-deserved pay rise. It is Labour that put public services at risk by losing control of spending and crashing the economy. Conservatives are delivering a stronger economy, stronger public services and a pay rise for hard-working NHS staff.
We are not out of the woods yet, however. Debt and borrowing are still too high. Debt is forecast to peak at 85.6% of GDP in 2017-18, the highest it has been for 50 years. That leaves us vulnerable to economic shocks in the future that are by their nature hard to predict, but—worst of all—it places a burden on the next generation, because we are still spending £50 billion a year on interest payments, more than the combined amount we spend on the police and armed forces. So in order to ensure the UK’s economic resilience, improve sustainability and reduce the burden on future generations, we need to get our debt falling. However, even despite all these obvious facts that are all there in black and white, the Opposition continue to call for big spending announcements.
Bim Afolami
On debt interest repayments, will my right hon. Friend explain further how even a relatively modest rise in interest rates would make what is currently £50 billion of interest repayment completely unmanageable if Labour got in and we had a run on the pound?
Elizabeth Truss
My hon. Friend makes a good point, and the reality is that the Opposition are planning for a run on the pound; they have actually released documentation that suggests that this is a real risk should they get into power. I find that incredibly worrying.
As I mentioned, the Opposition have called for big spending announcements. That is fiscal fantasy land, and there are only two ways it could be achieved. First, we could borrow more and plunge ourselves further into debt, making us less resilient to any potential shocks that might happen to the economy. Secondly, we could increase taxes, which would be bad news for families, bad news for businesses and bad news for the economy.
The Opposition claim that they could just increase taxes on the highest earners. That is simply not true. The levels of taxation they are talking about for their plans for a state on steroids would lead to the highest taxes we have seen in peacetime history, and the people who would really suffer are ordinary working people struggling to get by, and struggling to get on the housing ladder. Those are the people who would be hammered by Labour’s tax increases.
Alongside our fiscal policy, we have a clear independent monetary policy and a macro prudential framework that has helped to bring inflation under control and promoted financial stability. We must remember what happens when the Government do not get this right: the banks had to be bailed out under the failure of Labour’s tripartite regimes. Our reforms, which included establishing the Financial Policy Committee in the Bank of England, have made sure we have the sound financial institutions that people can rely on. In 2017 the Bank of England tested the financial system against a scenario that was more severe than the global financial crisis, and our system had the capital to cope. Our independent monetary policy regime has also kept control of inflation, which is set to fall this year, easing pressure on living standards.
Ten years ago we were on the brink: we were teetering on the edge of a very serious crash, and public spending was out of control. Over the past eight years, and as a result of the policy decisions we have taken, we have seen a huge growth in the number of new businesses opening in this country; we have got more people, particularly the young, into employment; and we have put our public services on a sustainable footing.
We are getting our public finances back to black. This week’s economic news has been positive, but we are not complacent. We recognise that there is more work to do and we will continue to work hard to make sure our economy continues to grow, because as Britain prepares to leave the EU it is more important than ever that we unleash businesses and the people of Britain to fulfil their true potential.
Bim Afolami
I want to take the hon. Gentleman up on his point about personal debt levels. Does he agree that it is because this Government’s fiscal management has been so sensible—and recognised as such by the international markets—that interest rates have been kept low? This means that personal debt repayments are now lower on average than they were when the Labour party left office.
Peter Dowd
We lost our triple A rating under the hon. Gentleman’s Government, so I do not think he has any room to point the finger at anyone.
While stressed-out doctors and teachers go to work every day, the Government duck responsibility and parliamentary scrutiny at every opportunity. The Chief Secretary to the Treasury might call these hard-working people “blobs”, but every day they run our health service and educate our children. Rather than spending her time attacking workers and the professional classes, the blob snob Chief Secretary should instead focus her attention on lifting the public sector pay right across the board and stepping up and taking action on our schools.
Peter Dowd
Yes, and quite frankly, what the Government tend to do in these situations is stick their fingers in their ears. They do not want to hear these facts.
I know that the Chief Secretary to the Treasury has been much more active, particularly on our trade deficit in regard to dairy products and the interests of cheesemakers. This has led her to extol the virtues of “unfeta-ed” markets on so many occasions that I have begun to feel that I “camembert” it any more. It has become increasingly clear that the Government’s economic policy has more holes in it than a Swiss cheese. But there is a serious point here. During her seemingly endless public interventions, the Chief Secretary to the Treasury can only focus on a single theme. She has brought it back to us today, and I thank her for that. It is her belief that the state should continue to recede under permanent austerity. Schools, hospitals, social care, childcare, road maintenance, pollution standards and local government services more generally are all under the cosh, while her beloved market forces create new vape shops on every corner, and more misery.
Bim Afolami
To be more accurate, was not the Chief Secretary to the Treasury actually talking about a percentage of the total GDP of the state, and not the quantum amount? The heart of her argument was that if we continue to grow the economy as we are doing, we will have much more money for our public services. That was the real core of the point she was making.
Peter Dowd
Look, the reality is that the economy is not growing to the level it should be, because this Government are not investing in it. Actually, something like 50% of the growth in the economy is going to the most well-off 10%, and that is not reasonable. It is not fair. I ask the hon. Gentleman to bear those figures in mind. It is not simply a question of the growth in the economy; it is a question of where that growth goes and whether it is being shared out reasonably.
Peter Dowd
I know; I was busy here. The hon. Member for Ochil and South Perthshire (Luke Graham) makes a point about exports, but we have seen the biggest devaluation in the pound for as long as anyone can remember, and I suspect that that has had something to do with it. It is hardly down to the policies of the Government; it is an unexpected consequence.
Let us move on to something released today. Her Majesty’s Inspectorate of Constabulary and Fire and Rescue Services yet again reports huge pressures on police forces, with emergency services responding not in seconds, minutes or even hours, but days. The “golden hour” is being stretched to up to a week—there is an achievement by this Government from a strong economy! It comes in the wake of the UK Statistics Authority having to correct the Prime Minister’s imaginative—not a word that we often use in association with the Prime Minister—use of police funding figures. I cannot see much cause to celebrate the current state of the economy after eight years of Tory austerity.
Britain continues to have astonishingly low levels of productivity compared with other G7 countries, which is a direct result of this Government’s failure to invest productively and proactively in the economy. Bizarrely, however, the Chief Secretary wants to celebrate—she did it again today—the poorly paid, precarious labour market that has fostered unproductive business models, which rely on exploitation instead of innovation and investment. For example, much of her Policy Exchange speech was spent singing the praises of Uber, as she did again today, but Uber’s labour practices and poor track record on safety have made it the subject of an investigation by Transport for London. She sits in awe of some large corporations that use every opportunity to dodge their taxes. Yesterday, we heard about Facebook misusing people’s personal data for profit. Is that the sort of country we want to live in? Of course it is not. Is that the sort of company that the Chief Secretary thinks is marvellous, wonderful and a model?
The Labour party embraces the opportunities of a fourth industrial revolution that empowers working people to take control of their own lives, yet the Conservative party wants to return to the practices of the first industrial revolution, when the world was dominated by the interests of the few. It is strange that the Chief Secretary talks about freedoms while advocating a society in which the broad mass of citizens are denied basic rights. For example, how has the slashing of public services, while tax breaks are being handed to big corporations, made us freer? It has only trapped people in poverty and poor health.
Bim Afolami
The hon. Gentleman’s speech illustrates the big dividing line between the two sides of the House. The Chief Secretary is concerned with people and consumers having access to high-quality, well-paying jobs and high-quality public services; the Opposition and the hon. Gentleman are obsessed with vested interests and the producers, many of which are not providing a good service to the British people.
Peter Dowd
Things are not going very well on that basis, but the bottom line is that that is the Tories’ one-dimensional approach to things. Producers and consumers often interact. The person who works in the factory is a consumer and a producer. This goes to the heart of why the Tories just do not get it. They are the one-dimensional party.
The Government’s entire economic strategy has been the transfer of private losses on to the public sector through austerity, using the state to pay for the losses built up by their donors. In other words, the Chief Secretary’s free, lightly regulated markets have ended up costing us all a good deal, and she now wants to expand that even further at greater expense to us all. Her Government’s economic strategy has left us buckling under huge national debt, with public services in crisis. It has left us with NHS trusts ending this financial year with a £1 billion deficit, and we have seen capital transfer to revenue for about the past four years, which is hardly the sign of a strong economy.
Oral Answers to Questions
Bim Afolami Excerpts(6 years, 2 months ago)
Commons ChamberRead Full debate Read Hansard Text Read Debate Ministerial Extracts
Elizabeth Truss
We have given the NHS a sustainable settlement. It received an additional £6.3 billion, but it is also important that we reform our healthcare services, that we put in place sustainable transformation plans, and that we are investing in capital and new technology and making sure that we use our fantastic frontline workers—nurses and doctors—in the best way possible.
Bim Afolami (Hitchin and Harpenden) (Con)
As the Chancellor knows, investment in infrastructure is key to ensuring that we can build the thousands of homes that this country needs. Will the Chancellor agree to meet me, other Hertfordshire MPs and the leader of Hertfordshire County Council to discuss how we might be able to do that in Hertfordshire, where we need to deliver about 100,000 new homes?
Mr Philip Hammond
Yes, I am always delighted to meet my hon. Friend and his colleagues. Hertfordshire is one of the high-pressure housing areas, where it is absolutely essential that we deliver additional housing if we are to improve affordability.
Finance (No. 2) Bill
Bim Afolami ExcerptsWednesday 21st February 2018
(6 years, 2 months ago)
Commons ChamberRead Full debate Finance Act 2018 View all Finance Act 2018 Debates Read Hansard Text Read Debate Ministerial Extracts Amendment Paper: Consideration of Bill Amendments as at 21 February 2018 - (21 Feb 2018)
Helen Whately
I am not surprised by the hon. Lady’s intervention. The point is that there is a thorough impact analysis of the Budget. Where does it get us if we endlessly go around these things, again and again?
Bim Afolami (Hitchin and Harpenden) (Con)
If we compare 2003 to 2006 under the Labour Government with 2013 to 2016, we will see that the number of women in business and entrepreneurship has grown by more than 40%. Does my hon. Friend agree that that shows the Government’s commitment to women in business?
Helen Whately
Another very well-informed point from a colleague about the great progress that women are making in the workplace with the support of this Government.
The headline point that I was keen to make is that this Government have a track record in reducing inequality. I am keen to ensure that we base what we say on the track record—the track record of improving the lives of people on the lowest incomes and of reducing inequality.
Stephen McPartland
The hon. Lady makes a very earnest point, but I cannot accept those figures.
A huge amount of money has gone into social care. At the moment, there are people in my constituency on fixed and low incomes who are very disappointed about the 3% that is going to be levied on their council tax for social care, because that will have a negative impact on their income, although it helps other sections of society and is the right thing to do. This new clause is about academics and economists as opposed to helping real people on the ground on a day-to-day basis. Some Labour Members are shaking their heads, but they got involved in politics for the same reason that I did, which is to help people to get on in life and achieve the best that they can. That is why I am a Conservative and why most people in this Chamber are Conservatives.
Returning briefly to the welfare system, as that is my area of expertise, we want a system that works. When we look at universal credit, the Treasury’s distributional analysis provides an analysis of the cumulative impact on welfare and public services. My view is very much about developing policies to help people get on in life. New clause 9 is just about providing some information on what has affected people in the past over a number of years, and by the time we are focused on the next Budget or other fiscal event, things have moved forward again.
Bim Afolami
My hon. Friend is making, as I think everybody knows, a very powerful speech. Does he agree that new clause 9 is indicative of the fundamental difference between Labour Members and Conservative Members? We care about action and doing things and improving people’s lives; they want more analysis.
Stephen McPartland
My hon. Friend makes a very powerful point. We can see why he was selected to be the Member of Parliament for Hitchin and Harpenden. He stands up for his constituency incredibly well, as does my right hon. and learned Friend the Member for North East Hertfordshire (Sir Oliver Heald). I am proud that we have three Hertfordshire MPs who are speaking in this debate because we are interested in helping people to get on in life. As a result, we have incredibly low unemployment in our areas.
Finance (No. 2) Bill
Bim Afolami ExcerptsTuesday 19th December 2017
(6 years, 4 months ago)
Commons ChamberRead Full debate Finance Act 2018 View all Finance Act 2018 Debates Read Hansard Text Read Debate Ministerial Extracts Amendment Paper: Committee of the whole House Amendments as at 19 December 2017 - (19 Dec 2017)
Laura Pidcock
It is heartbreaking. Of course we want to keep as many of those brilliant young people in my constituency as possible, with the education they have received being put back into infrastructure and a rich economy, but the long-term employment just is not there.
New clause 6 would also address gender inequality, because it is women in my constituency and right across the country who have borne the brunt of inequality, as most women always do. Women, particularly working-class women, suffer structural inequality throughout their lives. On average, women earn less than men, have lower incomes over their lifetime and are more likely to be living in poverty. As has been mentioned, women are therefore less likely than men to benefit from cuts to income tax, and are more likely to lose out because of cuts to social security benefits and public services.
In conclusion, I urge Members to support new clause 6 and I call on the Government to carry out equality impact assessments so that my constituents can see, in black and white, the hard facts and the truth. If the Government are so proud of their achievements, why are they not shouting them from the rooftops so that they can receive full credit? Why not let everybody know what Government policy has achieved? Unfortunately, Opposition Members know that the facts will tell the truth and reveal that the Government do not care one jot about my region and that they are happy for wages to stagnate and for people to experience poorer lives with all the consequences that that entails. People in my constituency work extremely hard, and they definitely deserve much better. Please support the new clause so that we can see what the Government are actually doing to our region.
Bim Afolami (Hitchin and Harpenden) (Con)
I rise to respond to some of the points that have been made by Opposition Members. I shall start with what the hon. Member for North West Durham (Laura Pidcock) said about the Government, or the Conservative party, talking about how work is the best route out of poverty. Do correct me if I have misquoted you, but you went on to say that the work in our economy at the moment exacerbates poverty. You felt that it is currently not the best route out of poverty. Is that correct?
The Temporary Chair (Albert Owen)
Order. Is the hon. Member for Hitchin and Harpenden (Bim Afolami) referring to me, because he is saying “you”? He should refer to the hon. Lady, and if he wishes to take an intervention, he must sit down.
Laura Pidcock
In my speech I was talking about precarious work. In debates on universal credit, Government Members talk about it getting people into work faster, but we know that the system is for people who are in work and that they receive a top-up payment because their pay is low. I meet many people in my constituency, including social care workers who do not get paid for their mileage. They are working, say, 14 hours a day and getting paid for six hours. That entrenches their poverty because they do not have a proper contract and they are not being paid a fair rate, but they have all the outgoings that they would have if they were not receiving state help.
Bim Afolami
Whether it is in respect of the Bill, the new clause or what we are discussing now, the important thing is that it is of course the Government’s intention to create more better-paying jobs. That is what the Treasury team and everybody across Government strive to do every single day. That is not to say that every single person in this country is currently at the level of prosperity we would like, but that is the aim of all the activity that is coming out of the Bill and out of the Treasury.
Stella Creasy
If that is the aim, what data are the Government collecting to be sure that they are achieving it and to find out whether there are any variations? That is what we are talking about. The issue is not the policy, but whether it is having an impact and whether we can understand that impact. Does the hon. Gentleman understand that?
Bim Afolami
I do indeed understand that. There is currently so much data, much of which has already been talked about by Opposition Members, on regional disparities, and on disparities of race and age, and between urban and rural areas. There is so much data, so Government policy must aim to bear it all in mind, which is what Ministers do.
Sarah Champion
I am grateful to the hon. Gentleman for his generosity in taking interventions. We need to hear a few facts. The data that he is talking about, which we are citing as evidence of why this is so important, is being collected by charities and the House of Commons Library. With respect to both the duty of care and the provisions of the Equality Act 2010, this work should be done by the Government. That is what we are asking for.
Bim Afolami
If the hon. Lady will permit me, I will make a bit of progress and then I will respond to her remarks in the fullness of my speech.
It is important to make my next point in relation to new clause 6 clear. We have heard Opposition Members say that women, or certain members of ethnic minorities, are more likely to be lower paid than other members of society. By taking the lowest paid people out of tax and increasing the national living wage, we are benefiting those groups of people who might suffer from low earnings. In addition—
Ian Mearns
When Government Members talk about, and celebrate, the fact that people are being taken out of income tax altogether, what they are doing is celebrating an economy of low pay. They are celebrating an economy where people are being paid so little that they are just above, or just at, the income tax threshold. For me, that underlines what it is actually like out there in constituencies such as mine in Gateshead.
Bim Afolami
I am afraid that the hon. Gentleman is mistaken. It is not celebrating low pay to say that people who are currently earning lower amounts should take home more of their money. That is not a celebration; it is about making their lives, every day and every week, that bit easier. It is worth saying that taking the lowest paid people out of tax and raising the national living wage is having significant benefits for many of the people—
Stella Creasy
The hon. Gentleman is being very generous with his time. I think he may have missed one of the points that we are making. For example, when the Government raise the tax threshold, 66% of the people who do not benefit—because they do not earn enough—are women. Seventy three per cent. of the people who benefit from a rise in the higher income rate threshold are men. What he is talking about and what we are talking about are two different things. We are talking about the differential impact of policy, and asking the Government to do the sums that are currently being done in the charitable sector, so that we can make better policy. Surely he wants those sorts of policies to have an equal benefit, but at the moment they do not, because we do not have equal pay.
Bim Afolami
I believe that all policy in this area, or, frankly, in any area, should be set to make sure that we are trying to generate as innovative, dynamic and successful an economy as possible. The hon. Member for Walthamstow (Stella Creasy) mentioned cutting corporation tax in her speech. She thought that that effectively benefited more men than women because men are more likely to be shareholders than women. The way we should deal with that, in my view, is to encourage more women to be entrepreneurs. We should work to make sure that women have access to being shareholders and that women have more ability to reap the benefits of that—
Jim McMahon (Oldham West and Royton) (Lab/Co-op)
Will the hon. Gentleman give way?
Bim Afolami
If I may, I would like to make a bit of progress.
As the evidence has shown, cutting corporation tax increases, rather than decreases, the tax take going to the Exchequer. If that shows this country to be a better and more dynamic place in which to set up and start a business, that will benefit all people in this country. That is the approach that the Government should take. If we want to improve the performance of the British economy and if there happen to be more men than women who are shareholders, it is no answer to say that we should therefore not take action to improve the activity of the British economy.
Stella Creasy
I have a very simple question for the hon. Gentleman, although I appreciate that he is getting some assistance from the hon. Member for Spelthorne (Kwasi Kwarteng): can he produce the data to prove that men and women will benefit equally from the changes to corporation tax?
Bim Afolami
I do not have the data now to be able to respond to the hon. Lady. What I do know is that Conservative Members will never take lectures from the Labour party; we have our second female Prime Minister, the gender pay gap is the lowest on record, and this Government have done more for childcare and support for families than the Labour Government ever did. The idea that this Government should take lectures on this issue from Labour Members is disgraceful.
Laura Pidcock
The hon. Gentleman is celebrating two female Prime Ministers somehow drastically pulling every single woman out of poverty. That is not the answer. We need structural change and the evidence to tell us whether women are equal, not the tokenism of two female leaders. Margaret Thatcher did not do much to pull women in my community out of poverty.
Dawn Butler
I am sure that the hon. Members around the hon. Gentleman are trying to get him to stop talking, but Labour Members do not mind. It is actually nice to see you go through your journey of trying to put the pieces together and understand the problems we are talking about. You cannot justify any of your statements because you have no data.
The Temporary Chair
Order. That was a very long intervention with too many “yous”. Let us get used to the parliamentary language and have a proper debate.
Bim Afolami
I will conclude my remarks by saying that it is important when we talk about these issues—in this House or outside—always to remember that improving the performance of the health service, the economy or anything relating to Government policy will benefit everybody in this country, if we make the right judgments and the right policy.
Jim McMahon
Well, well, well. When it comes to naivety, there is a very fine line; it can often be endearing before it eventually becomes quite offensive. And I did find the speech of the hon. Member for Hitchin and Harpenden (Bim Afolami) offensive. It began in the spirit of naivety. I could see that he was nervous at the beginning of his contribution—quite rightly, it turned out, towards the end—because he did not have the data that was being presented.
The debate went on and Labour Members presented the data, but rather than actually taking account of it, the hon. Gentleman continued, in a very odd way, to try to defend what most reasonable people would say is a quite indefensible position. He was essentially saying, “Listen—if men are doing okay, surely women will eventually do okay too.” I am not sure whether the solution he came up with to the shareholder conundrum was for women to find wealthy husbands who are shareholders, as if that might somehow lift them out of poverty and allow them to be the beneficiaries of the cuts in corporation tax.
Jim McMahon
How dare the hon. Gentleman suggest that the 114 people working in that factory in Oldham were not in proper employment? They were producing, they were manufacturing, they were selling, and people wanted to buy the goods because they were of a high quality. It was not a handout or a giveaway. They were not sympathy cases: they were people who were working hard in a supported environment to produce something that people wanted to buy.
In some ways, this is the problem that we face. When the problem is so disconnected and not part of the everyday experience of Conservative Members, it is easy for them to ignore it. I cannot ignore it. When I go back to Oldham West and Royton, it is my community. I see the impact of cuts, of austerity, and of suppressed wages. I see the hollowing out of our employment structure. All right, people at the top are doing very well, and there are more jobs at the bottom, but the middle has been completely taken out. People talk about an economy that will support people into better employment, while 8 million adults and children are living in poverty in working households.
That is the economy we have in this country, because the routes of progression in employment simply do not exist. We are happy to be the bargain basement employment capital of Europe in this new relationship—let us be honest. Providing that the bankers and the insurance services are all right, we really do not care what it means for the rest of the economy as long as there are people working at Costa Coffee to serve the coffee in the morning. That is what the Government really believe. It is okay hon. Members shaking their heads, but where has the investment in our key industries gone? We need investment in manufacturing and engineering, creating jobs that produce things that people want to buy, pay decent wages, and support people into a lifelong career so that at the end of it they have a decent pension.
Speaking of pensions, what did the Government do in the autumn statement for the WASPI women? These women have worked and contributed all their lives, doing everything that was asked of them by Government. At the last minute, planning for their future, they were left cut adrift, and when they came to the Government to ask for support, the Government turned away.
Jim McMahon
I absolutely give way to the hon. Gentleman if he can justify that.
Bim Afolami
Would the hon. Gentleman welcome anything at all in the Government’s recently announced industrial strategy, which was, in many respects, targeted towards some of the poorer communities in this country?
Jim McMahon
I am going to give the hon. Gentleman a real answer on this point and not just grandstand, because it is important. I will explain the problem with the industrial strategy as it stands. For a town like Oldham, it is absolutely critical that the UK has an industrial strategy that holds water—that is forward thinking, ambitious, and has a framework of funding to support growth. I would welcome an industrial strategy that did that, and I think that when it started, that is what it tried to do. The problem is that something fairly dramatic has happened in the meantime, and that is Brexit. What I would have expected the Government to do in the context of the referendum result is not just to dominate Parliament’s time with the transitional and transactional relationships with Europe now and when we leave. I would have expected the Government of the day to produce a real, compelling vision of what type of Britain there is going to be when we leave the European Union. That has not taken place. The domestic legislation coming through this place is non-existent. Money is being taken out of vital public services that would be the foundation for the type of industrial strategy that is being talked about. Money is being taken away from our education and skills system, which would be the starting point for any investment strategy in our economy, particularly in manufacturing and engineering.
So would I welcome anything in the industrial strategy? I would simply welcome the principle of an industrial strategy, but it cannot be done on the cheap. We have seen—let us be honest about this; it transcends different Governments—a complete turning away from UK manufacturing and engineering, at the cost of the communities that people in this place represent. In order to replace that with a forward-thinking industrial strategy, the resources then have to follow, and we have not seen that—we have seen the opposite. Money has been taken away from our Sure Start centres and from our schools. Our colleges are chronically underfunded, with many on estates that are crumbling, struggling to keep up even with basic maintenance. Our apprenticeship system is in tatters since the introduction of the apprenticeship levy. All these things matter if we have a forward view about what type of country Britain can be.
The new clauses are important in that context because if we want to create, after Brexit, an inclusive and fair Britain that allows everybody to benefit, we have to make an honest assessment of where Britain is today. We are not in a good place. Our economy is shot. Our job market has been hollowed out, and the good, well-paid jobs in the middle have been taken away. Our housing stock is not fit for purpose and we are investing £9 billion a year into the pockets of private landlords, although we know that 40% of that stock does not even meet the decent homes standard. Those are the really important issues that Members need to think about. If they do not take proper account of what the information tells us, how on earth can we collectively make informed decisions that send us in a different direction?