Finance (No. 4) Bill

Brandon Lewis Excerpts

Wednesday 18th April 2012 Commons Chamber

[Owen Smith]

No, the hon. Gentleman has just heard my answer. Throughout this Parliament, we would not have done that. No tax rate is set in stone for ever, but the question of whether we would reverse that decision is irrelevant because we are not in government. You lot are, and you cut it, but that would not have been our priority. Neither was it the priority of the present Chancellor just 18 months ago. When we introduced the 50p rate, we said that we wanted those with the broadest shoulders to pay the most, in order to deal with the global turmoil—[Interruption.] Members should just listen for a moment. When he was shadow Chancellor, the present Chancellor said that he agreed with us. In October 2009, he said that

“we could not even think of abolishing the 50p rate on the rich while at the same time I am asking many of our public sector workers to accept a pay freeze to protect their jobs. I think we can all agree that would be grossly unfair.”

I still agree with that.

[Brandon Lewis (Great Yarmouth) (Con)]

rose—

[Kwasi Kwarteng]

rose—

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[Owen Smith]

I am not sure that he is a dilettante, but I certainly think he does not pay terribly much attention to details. Had he paid attention to details, he would not have said what he did earlier today in Prime Minister’s questions, when he told the House that the 50p rate had raised next to nothing, only to have his Exchequer Secretary confirm just a few hours later that the actual amount it had raised was £700 million. By my way of looking at it, in a period of fiscal austerity £700 million is not nothing, it is rather a large chunk of change. Certainly the £3 billion that we might lose over an extended period is a very large chunk of change.

I do not know how the Government continue to argue that we are all in it together, when they have given a tax cut to 14,000 millionaires, or how—this is a political point—they can continue to say that the only thing that matters economically is to cut the deficit. They have chosen to forgo a lot of money next year. Let us call it £700 million, but it will be far more. They have done that to give a tax cut to millionaires, so how on earth can they continue to say that only thing they care about is cutting the deficit?

[Brandon Lewis]

Does the hon. Gentleman agree that it was a mistake to introduce a bonus tax that was not only a one-off, but that was set up so that it would encourage people to pay less and therefore reduce the amount of money going to the Exchequer, as opposed to introducing an ongoing levy that will continually bring money into the Exchequer and therefore benefit the country?

[Owen Smith]

One needs to consider these things in the round. We have heard repeatedly from the Government that they will take more money from the rich than the previous Government and do more on tax avoidance, but none of those claims stands up to scrutiny. The previous eight Labour Budgets did more on tax avoidance than the current Government—those are not my numbers, but those of the IFS. The notion that the rich in this country are paying five times more than the poorest is clearly fallacious.

[Brandon Lewis]

Will the hon. Gentleman clarify what he said because he has not answered my point, which was not about tax evasion? Does he agree that an ongoing bank levy will raise more money than a one-off tax would have done?

[Owen Smith]

If Labour had won the election, it may have changed its view and continued the bank bonus tax. The Opposition certainly believe that Government ought to impose a bank bonus tax in addition to the current levy—[Interruption.] Well, the bonus tax was introduced for a one-off period, but I think a Labour Government would have continued it based on our priorities and values that we described in respect of the 50p rate. We would not have thought it right at this juncture, in a period of fiscal austerity, either to give a big benefit to the wealthiest individuals or to ask the wealthiest corporations to pay a lesser amount.

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[Nigel Mills (Amber Valley) (Con)]

rose—

[Brandon Lewis]

rose—

[Owen Smith]

I shall keep going for a moment.

That is before we consider the actual tax cuts being introduced in the year-on-year reductions in corporation tax and the other changes to the controlled foreign companies legislation.

--- Later in debate ---

[Owen Smith]

At the risk of stepping off-piste again and incurring your wrath, Sir Roger, all I would say is that that is another example of this Government’s incompetence. A year ago they were trying to squeeze the oil and gas companies by introducing new taxes on them. Then the Government were lobbied like billy-o for a year, and what have they done? They have effectively reversed the position. They have introduced a slightly different measure, but bluntly, they have taken money from one pocket and put it back in the other. If the Government had been a little more competent, if they had shown a little more foresight and if they had thought things through a little, as they so clearly have not done with this desperate Budget, they might not have made those mistakes.

[Brandon Lewis]

To return to the bank levy, the hon. Gentleman has referred again to the potential reintroduction of the bank bonus tax. Bearing in mind that the right hon. Member for Edinburgh South West (Mr Darling) said that it could only ever be a one-off, is the hon. Gentleman saying that the previous Chancellor was wrong, or will he say how many times something has to be reintroduced before it is no longer a one-off? I am just curious.

[Owen Smith]

I am saying that Chancellors have to keep things under review. In a period of fiscal austerity such as we are in right now, I am confident that a Labour Chancellor—particularly one as knowledgeable and shrewd as my right hon. Friend the Member for Edinburgh South West (Mr Darling)—would have found ways to try to exact a fair return and a fair set of receipts for the Revenue from the bankers, who, we must all remember, were complicit at least to some degree in some of the problems that we have faced over the last few years.

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[Cathy Jamieson]

I am sure that the pasty industry is looking on as we speak and will want to know exactly which MPs have gone and sampled the local delicacies in whichever part of the UK they happen to live.

Those weeks of torrid headlines have led us to the current situation. There is now a pasty petition, and there has apparently been a pasty summit, while Greggs is planning a pasty protest march on Downing street to plead with the Prime Minister to step in personally and kill off the hated pasty tax.

[Brandon Lewis]

rose—

[Ed Balls (Morley and Outwood) (Lab/Co-op)]

You’ve had too many pasties.

[Brandon Lewis]

The shadow Chancellor is quite right. Does the hon. Lady not agree that in removing this VAT anomaly, it is only fair to protect the interests of the fish and chip mongers in places such as Great Yarmouth?

[Cathy Jamieson]

The interests of fish and chip shops have been raised on a number of occasions in this debate, and I am sure that plenty of people will want to patronise those local establishments. However, that does not get us away from the fact that the introduction of this measure has been an absolute shambles.

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[Mr MacNeil]

It is not unusual to see Labour once again abandoning principle in its arguments. Surely we should be looking to allow Scotland to compete with other countries in the world. I hope that the hon. Gentleman would reflect on that.

[Brandon Lewis]

I appreciate the hon. Gentleman’s generosity in giving way. Does he not accept, however, that there is a simple logistical and geographical difference between Scotland, which is linked with England and its airports, and Northern Ireland, which is obviously competing with a fellow European Union member state? That alone is a big difference.

[Mr MacNeil]

As I have pointed out, our proposal would benefit the south-east of England as well as Scotland. Surely the hon. Gentleman can see that, given what Conservatives say about taxation.