Finance (No. 2) Bill

Brooks Newmark Excerpts

Wednesday 17th April 2013 Commons Chamber

[Chris Leslie]

I know that Members of the European Parliament have debated some of these issues earlier this week; indeed, they have this week instituted a cap on the bonus level. We will need to reassess behaviour under that new arrangement, but I reiterate that we are confident that the revenue could be used for the purpose of helping the young unemployed.

[Mr Brooks Newmark (Braintree) (Con)]

rose—

[Chris Leslie]

I want the Government to do the same, and I challenge the hon. Gentleman to support us.

[Mr Newmark]

That will never happen.

I apologise for missing the Minister’s opening remarks, but I was so excited by the shadow Minister’s remarks that I wanted to intervene. I understand that mathematics is not a strong point when it comes to Labour party policy. We have heard from the Minister that bonuses have come down from approximately £11 billion to £1.6 billion. He is proposing a 130% tax on people who receive bonuses, in respect of the current statistics. We have heard from my hon. Friend the Member for Wyre Forest (Mark Garnier) that the shadow Minister has not thought about the implications for the reduction in take-home from achieving the changes he wants to bankers’ bonuses, which will reduce the money coming in for the Exchequer, which I suspect means that his numbers will not add up. The question I really want to put to him, however, is whether his proposed reduction in bonuses relates purely to cash. If not, is he saying that if employees are given shares, which might have a vesting period of more than five years, the vest for that period will be taxed? Is it about cash, or is it about cash plus shares?

[Chris Leslie]

I get the sense that the hon. Gentleman is starting an accountancy line, perhaps thinking how best to advise these bankers of ways around that nasty Labour Government’s bankers’ bonus tax. I am sure that whether it be in Bitcoins, gold or shares, bankers will be ingenious in how they pay and reward themselves. We have to get a grip of it, though, because however much they lavish rewards on themselves, the Exchequer needs to keep pace with the arrangement. I accept that this is a fluid situation, with policy and banker remuneration changing at the European level, but we must capture this particular issue and not adopt the lackadaisical attitude that the Treasury has adopted so far.

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[Chris Leslie]

Perhaps the hon. Gentleman will have a chapter in the pamphlet that the hon. Member for Bristol West (Stephen Williams) is writing; we would all be interested to read it. [Interruption.] From a sedentary position, I am offered a signed copy of that pamphlet. We are all interested in political memorabilia, and it would certainly be an historic document.

We wanted to retain the 50p top rate of income tax for this year. It should not have been cut, and we think that doing so is unfair. I know—well, I think I know—that in their heart of hearts, the Liberal Democrats do not really agree with the cut, which will of course apply to those earning £150,000 or more. We have to recognise the special responsibility that banks and banking executives have to wider society, given the massive cost to the taxpayer of the banking crisis and the resulting deficit, the consequences of which many of our constituents are still suffering. We still have not got justice for what happened in 2008, which is one reason why we think it important to take this step now.

[Mr Newmark]

Does the hon. Gentleman distinguish at all between those financial institutions over which the Government have some sense of control—a sense of public ownership—and which the taxpayer had to bail out, and those that did not need taxpayer support? Following that logic, if he really wants to have complete control of compensation and bonuses, does he therefore want to nationalise RBS?

[Chris Leslie]

No—that is a preposterous suggestion. The hon. Gentleman also needs to recognise that all banks have benefited from the implied guarantee of the taxpayer, even if they did not need to be bailed out. He knows very well that the whole banking sector has benefited for a long time, and continues to benefit, from the market expectation that, should a retail bank get into difficulty or become insolvent, the taxpayer will come to its rescue. That is an implied subsidy, for which the banks ought to compensate the taxpayer. That is part of the argument I am happy to make.

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[Geraint Davies]

That certainly would be a charitable way of putting it. If financial targets are set and are under-achieved, the Government clearly need to redouble their efforts to deliver those targets. We need to continue to focus on generating joined-up systems to ensure that the money that is available delivers economic outcomes such as opportunity and jobs. The amendment is designed to create imaginative ways of generating opportunity and jobs for the future by using the money that is recovered. We should join together to do that. It is a modest amendment that we should all agree on. We should work together to build a stronger Britain.

I fear that the Government will say, “Oh no, we can’t possibly consider that.” That, alongside their failure to raise the money, would show that they do not have the focus to ensure that those with the broadest shoulders pay their way towards a more prosperous Britain. I fear that the Government will go back to the old Tory ways and say, “Let’s use this as an opportunity to crush the so-called undeserving poor” and pretend that there are workers and shirkers, whereas people just want to get out and get a job. Let us move forward and create a united Britain—a one nation Britain, dare I say—to create a future that works and a future that cares.

[Mr Newmark]

I apologise, Mr Amess, for popping out. I wanted to make sure that we had the right statistics at hand. I agree with the hon. Member for Swansea West (Geraint Davies) that those with the broadest shoulders should pay the largest amount of taxation. After the last Budget, notwithstanding the 5% cut, the top percentage of earners are paying more because of the other tax rises that we have brought in for them.

Unemployment is a tragedy for anyone who loses their job, and I am sorry for the individuals in the hon. Gentleman’s constituency who have in the past month lost their jobs. He spoke about the productivity puzzle, and I agree that that is a challenge. What is important to each of our constituents is surely that they have a job. The facts are that, year over year, unemployment is down by 71,000. Employment nationally is up 488,000 year over year. On jobseeker’s allowance, the figure that he looked to, year over year it is down by 60 people. That is not many, but the figure is down year over year in Swansea West.

[Geraint Davies]

In Swansea West jobseeker’s allowance numbers have grown by 40%. We have heard of employment levels going up and we have seen that overall output has not gone up, so there is the productivity puzzle, which is a kind way of saying that productivity—production per head—has gone down. All I am saying is that we should look at ways of giving people the tools to do the job, be it skills, building houses, or super-connectivity.

In the run-up to the Budget I got the business community in Swansea together to lobby the Chancellor to invest in a wi-fi cloud and super-connectivity for Swansea. Why should an inward investor come to the congestion and cost of London when they could hook up to the worldwide web in superfast time overlooking the wonderful Gower and the sun and sands of Swansea? That was worth while doing. We were not successful, and subsequently the biggest company in Wales, Admiral, wrote to the Chancellor pointing out that it is a global company and wants super-connectivity on a global basis to its clients and suppliers. That is the sort of investment that we want to make from the extraction from the excess profiteering of certain individuals in the banking community. The modest amendment would enable us to continue that dialogue with a view to taking action to deliver positive change for people who currently do not have enough opportunity.

[Geraint Davies]

That is completely right. Clearly, the economic model that must work is to have people making a contribution by being in work. There has been some debate about tax thresholds—with everyone saying how great they were—versus working families tax credit. Let us put ourselves in the position of someone starting a business who can only afford to employ someone for £10,000—£15,000 would not be viable; that is just the way that business works. Along comes working families tax credit, and a single mother, for example, can afford to work for £15,000, but not for £10,000. If the state makes up that difference, we end up with someone who can afford to work and make a contribution, and a business that is now viable. That is good. If that is simply stripped away and the tax threshold is increased to make it more worth while, it does not add up. That is one explanation for why we had such considerable job growth under the Labour party from 1997 to 2008.

Most people do not really understand working families tax credit. It is a way of integrating tax and benefits so that we cannot divide people into those in receipt of benefit and the workers, which is what Conservatives want to do for political reasons. They want to say that there are the workers and the shirkers and they are for the workers and the Labour party simply wants to support people sitting at home. That is the opposite of the truth. The Labour party is about enabling people to have pathways to prosperity through jobs. We should be using the fruits of engaging with the banking community, who make obscene amounts of money, and investing in skills and in communications, whether it be electrification of the railways or high speed rail, in wi-fi clouds, or in creating a global infrastructure in terms of R and D and our universities.

We have heard a lot of talk about the reduction in corporation tax from 21% to 20%, but that makes no difference to multinationals if the comparators are France at 33%, Germany at 29% and the USA at 40%. We are already competitive. But that 1% reduction is a 5% reduction in our tax yield from corporation tax. Would it not be better to spend that on helping universities to grow with industry? There is a good example of that in Swansea, which could be the fruits of what we are talking about today, where the second campus is being underpinned by £250 million from the European Investment Bank, and where Tata Steel, BP, other multinationals and the Welsh Government are engaged. Research shows that that sort of cluster of R and D attracts more and more big business and jobs, rather than just a marginal bit of corporation tax. We need to think cleverly about how to generate R and D engines. Brazil, for example, is spending £5.3 billion from development banks on getting into the global field of biotech. China and other countries are making similar investments. That is the way to organise ourselves in a joined-up way, rather than the laissez faire social and economic Darwinism of the Tories, where we see the weakest die and the greediest become more bloated as they exploit the world.

[Mr Newmark]

rose—

[Geraint Davies]

On that point, I will take an intervention from the hon. Gentleman.

[Mr Newmark]

I am enjoying the hon. Gentleman’s fascinating speech, and a philosophical divide is clearly developing. Does he really believe that it is best for a company to pay an extra 1% to Government, because they know how best to spend that money to create jobs? Or is it best to leave it with the company? Let us leave bankers aside, because I know that one is obsessed with those. Let us talk about the Tatas of the world, the manufacturers who historically have done a great job in Wales in creating jobs. Does the hon. Gentleman believe that it is best that that 1% extra goes to Government, because they are in a better position to create those jobs, than a company such as Tata, which would take that extra 1% and use it efficiently for R and D or job creation?

Budget Resolutions and Economic Situation

Brooks Newmark Excerpts

Thursday 21st March 2013 Commons Chamber

[Vince Cable]

We seem to have forgotten, but I think Philip Snowden was the first Labour Chancellor—[Interruption.] Indeed, there have been many others.

[Mr Brooks Newmark (Braintree) (Con)]

My right hon. Friend mentioned a study by the Institute for Fiscal Studies, but the IFS also noted that under the shadow Chancellor’s plan B, the extra cost of borrowing would be another £200 billion. That surely cannot be good for UK plc.

[Vince Cable]

The hon. Gentleman has obviously found another version of plan B that I did not discover in my search, but I am sure he is right.

Let us consider what has caused this slow-down, which the shadow Chancellor blames on Government policy. The OBR was clear and explicit and stated that the downward revision in our forecast for 2012 is largely accounted for by a reduction in the contribution of net trade. We are operating in a difficult international context—particularly in the eurozone, which accounts for half our exports—and that largely explains the slow-down that has occurred, and the consequential impact on Government debt and borrowing.

We are giving overriding priority to developing British trade in those markets that have been neglected for many years. Over the past two years, led by the Prime Minister, I and other Ministers have gone back time and again to people in the big emerging economies to promote exports and inward investment. That is why our exports to Brazil and India have increased by more than half, and by approximately 100% to China and 130% to Russia. That diversification of our export base is fundamental to getting us out of this crisis. That is what we are doing, and we are succeeding.

Cyprus

Brooks Newmark Excerpts

Monday 18th March 2013 Commons Chamber

[Greg Clark]

As I said, we need to get resolution arrangements in place, but the ECB and the spokesmen for different members of the eurozone have been clear that the decision to impose this kind of levy was taken by the Cypriot Government with the eurozone. They could have done it in different ways, but that is the mechanism they chose.

[Mr Brooks Newmark (Braintree) (Con)]

Although it is absolutely right that the Government should support our armed forces personnel, I share the sense of moral outrage expressed by the hon. Member for Brighton, Pavilion (Caroline Lucas) that ordinary pensioners who have retired to Cyprus, who are citizens of ours and who do not think of themselves as members of the eurozone but as British citizens, will feel abandoned. Will the Minister assure me that he will fight hard, particularly for those pensioners who have less than €100,000 on deposit, to try to protect their money?

[Greg Clark]

Yes, but discussions and negotiations are taking place between Cyprus and the eurozone—and, indeed, in the Cypriot Parliament—on whether the proposals that were agreed over the weekend will be enacted. We have some way to go before we get to that stage and I will, of course, update the House if and when we get to that final stage.

Economic Policy

Brooks Newmark Excerpts

Monday 25th February 2013 Commons Chamber

[Mr Osborne]

There seems to be amnesia about Labour’s 13 years in office. The hon. Gentleman talks about a double-dip recession. The first recession was a 6% contraction in our economic activity while he was supporting a Labour Government, with a 12% budget deficit, a higher rate of unemployment and more youth unemployment than we have today. We are sorting out these problems. Of course it takes time, but, frankly, the prescription of the hon. Gentleman and other Labour Members would put us right back in the mess that they left this Government with.

[Mr Brooks Newmark (Braintree) (Con)]

Does the Chancellor agree that the only two countries that have maintained their triple A credit rating across the board—Canada and Germany—are the two countries that fixed the roof while the sun was shining?

[Mr Osborne]

My hon. Friend is absolutely right. Germany and Canada went into the financial crisis with the two lowest structural deficits of the G7, and the United Kingdom went into the financial crisis with the highest structural deficit in the G7—5%. That was confirmed recently by the International Monetary Fund. I think that, quite extraordinarily, the only person in Britain who still denies that we had a structural deficit is the shadow Chancellor. The former Chancellor accepts it and the former Prime Minister, Tony Blair, accepts it; only the shadow Chancellor does not accept it. He cannot accept it because that would mean admitting he got it wrong, and if he admitted he got it wrong, people would not put him in charge again.

Banking Reform

Brooks Newmark Excerpts

Monday 4th February 2013 Commons Chamber

[Greg Clark]

It is the hon. Lady’s objective that banks should serve businesses and their customers, and that is precisely what Sir John Vickers has in mind. That is the purpose of the exercise, and it is exactly what I want to achieve. Any ring-fenced bank that strays from that purpose and neglects its core customers—its retail depositors and the other people who bank with it—by taking their money and playing with it in the casino will be broken up.

[Mr Brooks Newmark (Braintree) (Con)]

I welcome the points the Chancellor made this morning on facilitating account switching, which I think will be most welcome to all our constituents. Will the Minister outline in a little more detail how this will work?

[Greg Clark]

I will certainly pass on my hon. Friend’s comments to my right hon. Friend the Chancellor. What we are saying when it comes to the regulation of payment systems is that, through the Bill, we will set up a regulatory responsibility to promote competition on the part of the regulator of payment systems. One thing regulators will want to look at is how they can quickly make accounts portable between customers. That, however, is only one of the innovations that could be made. I mentioned in my response to the urgent question the requirement to speed up the clearing of cheques. My hon. Friend will recall that the Payments Council once introduced a statement—almost ex cathedra—to the effect that cheques would be abolished in future. What kind of contempt for the consumer does that show? It should not happen again, and it will not happen again.

Oral Answers to Questions

Brooks Newmark Excerpts

Tuesday 29th January 2013 Commons Chamber

[Jessica Lee (Erewash) (Con)]

1. What fiscal steps he is taking to encourage private sector job creation.

[Mr Brooks Newmark (Braintree) (Con)]

6. What fiscal steps he is taking to encourage private sector job creation.

[The Chancellor of the Exchequer (Mr George Osborne)]

More than 1 million private sector jobs have been created since the first quarter of 2010 and employment is at a record high. We are supporting more job creation by further reducing the rate of corporation tax to 21%, and since 1 January we have been helping businesses large and small to invest, with a temporary tenfold increase in the annual investment allowance. We can afford these tax reductions in part because we are taking tough action on tax evasion. I can confirm to the House that last night Her Majesty’s Revenue and Customs received £340 million from the Swiss Government, a first instalment of the deal we have struck, and the first time in our history that money due in taxes has flowed from Switzerland to the UK, instead of the other way round.

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[Mr Osborne]

My hon. Friend is right, and I am glad she welcomes the deal we have struck with Switzerland—a deal, by the way, rejected by the previous Government. Apprenticeships are vital in helping to create that skilled work force. More than 1 million people have started apprenticeships since 2010 and in her constituency alone there has been a 42% increase. I am delighted that successful businesses in her constituency are helping to train the work force of tomorrow.

[Mr Newmark]

Does my right hon. Friend agree that the Government’s generous tax incentives provided by the seed enterprise investment scheme not only stimulate investment by angel investors for start-ups, but help create jobs in the private sector?

[Mr Osborne]

I do agree. The seed enterprise investment scheme has succeeded in getting money into start-up businesses and we currently have the fastest rate of business creation in our history. I take this opportunity to thank my hon. Friend for all the work he has done, going around the country promoting the scheme.

Points of Order

Brooks Newmark Excerpts

Tuesday 11th December 2012 Commons Chamber

[Mr Speaker]

The right hon. Member for Morley and Outwood (Ed Balls) is itching to raise a further point of order, but I ask him to hear what I have to say first. This cannot be a debate; there are a couple of points of order to which I am giving a reply. My response, whether Members like it or not, is as follows.

First, I feel sure that the Chancellor of the Exchequer intended to be helpful to the House. It is not for me to impugn motives, and I do not do so. However, was it a good idea to handle this matter via the device of topical questions in the way that it was done? The answer is no, it could have been better done. I am sure that the hon. Member for Braintree (Mr Newmark) was doing his best, according to his own lights, but it was unwise to deal with it in that way.

Secondly, I simply make the point—[Interruption.] It may be topical, but that does not necessarily mean that it should be raised at topical questions. My understanding, which is very easily explained, is that although something is a topical matter, it does not mean that it should be the subject of a topical question if the Government have tabled a written—

[Mr Brooks Newmark (Braintree) (Con)]

rose—

[Mr Speaker]

No, I do not require any assistance from the hon. Gentleman. He should do his own job to the best of his ability. I am giving a verdict on the matter.

The Government have laid a written ministerial statement. If they had wanted to make an oral statement, they could have made one. They did not do so, but made a written ministerial statement. I repeat: I am sure that the Chancellor meant well. That is the kindest thing, in the circumstances, that I can reasonably say. There is nothing further to be said on this matter now, but we may well return to it.

Oral Answers to Questions

Brooks Newmark Excerpts

Tuesday 11th December 2012 Commons Chamber

[Danny Alexander]

The future jobs fund was a massively expensive programme that saw more than half of participants return to benefit after completing it, and it was largely in the public sector. Of course I welcome the scheme that the hon. Gentleman mentioned; if it has created a job in his constituency, that is welcome. The truth is, though, that the biggest problem we have in this country is clearing up the mess that Labour left, and that is why we have to find better, more efficient ways of doing things.

[Mr Brooks Newmark (Braintree) (Con)]

The Treasury has today made a written statement alerting Parliament to a newly discovered error made by Northern Rock—an error made, I hasten to add, under the previous Government, starting in 2008—that could cost the taxpayer hundreds of millions of pounds. Does my right hon. Friend agree that this is yet another example of the previous Government’s total failure to regulate the banking system properly costing this country dearly? Could he—[Interruption.]

[Mr Speaker]

Order. May I gently explain to the hon. Gentleman two things? First, topical questions are supposed to be brief, and secondly, they are supposed to relate to the policy of the current Government, not that of the previous one. A short one-sentence reply will, I am sure, suffice—no?

Autumn Statement

Brooks Newmark Excerpts

Wednesday 5th December 2012 Commons Chamber

[Mr Osborne]

First, I thank the hon. Gentleman for his support of our decision to provide ultra-fast broadband to Derry/Londonderry, and I congratulate the city on a very good bid, which competed against other bids across the UK. He is also right to say that we are helping the Northern Ireland energy sector with decisions on the carbon price floor, which I did not have space in my statement to announce, but they are in the book. I am glad that he acknowledges those aspects. More broadly, Northern Ireland and the rest of the UK will benefit when we help people who work hard and want to get on with the personal allowance and when we help small businesses and motorists with the fuel duty. We are doing all these things and are making sure that they apply to Northern Ireland as well.

[Mr Brooks Newmark (Braintree) (Con)]

Given that income tax has been cut for 25 million people, the income tax of people on the minimum wage has been cut in half and up to 2 million people have been taken out of tax altogether, does my right hon. Friend agree that our Government, and indeed our party, are on the side of ordinary working men and women?

[Mr Osborne]

I entirely agree with my hon. Friend. We have made difficult decisions on welfare uprating—we have asked the rich to pay more—but, as I have said, we have done that not only to help to deal with the deficit, but to help people who work hard and want to get on. That is precisely what we have done today

Banking Union and Economic and Monetary Union

Brooks Newmark Excerpts

Tuesday 6th November 2012 Commons Chamber

[Mr Brooks Newmark (Braintree) (Con)]

I am delighted to follow my hon. Friend the Member for North East Somerset (Jacob Rees-Mogg), who is perhaps one of the most articulate Members on the Government Benches. I am not going to argue the whys and wherefores of whether we should bring financial regulation back to this country. That is an important question, and I totally agree with my hon. Friend the Member for South Northamptonshire (Andrea Leadsom) on it, but I am going to argue on the narrow question before us—namely, the substantive motion and the amendment.

As a non-eurozone member, we will not be participating in European banking unification. I agree, however, that we need to ensure that the measures taken by our European partners do not adversely affect British interests, particularly in the banking and financial services sector, given its importance to UK plc. The City of London is the pre-eminent financial services centre not only in Europe but in the world, and we want it to remain so. Remaining globally competitive is critical to the United Kingdom and to the eurozone, and it is important that the single supervisory mechanism for the eurozone should function effectively. As long as we remain outside the eurozone, the mechanism will be aimed primarily at eurozone banks and not at our own financial institutions. As many colleagues have pointed out, however, there could be unintended consequences at some future date that could have an impact on us.

The Minister has given us assurances today that the Government will seek to secure sufficient changes to the European Banking Authority voting arrangements to protect the interests of member states, such as the UK, that are not members of the eurozone and that do not choose to enter into the proposed co-operation arrangements. I am therefore happy to support the Government’s substantive motion.

My hon. Friend the Member for Stone (Mr Cash) has tabled an amendment to the motion. I congratulate him on his leadership of the European Scrutiny Committee and on his tenacity, perspicacity and overall determination to protect Britain’s interests. He has always been a strong defender of our interests and I congratulate him on that. In fact, I wholly endorse the opening line of his amendment, in which he welcomes

“the Government’s desire to seek safeguards for the UK”,

and the reasonable tone that he adopts in asking the Government to use their best endeavours. That is reasonable, and it is not didactic. I have a problem with the second part of my hon. Friend’s amendment, however, in which he calls on the Government to use their veto to

“ensure that the powers of the Governing Council of the European Central Bank are not unlawfully delegated to the Single Supervisory Mechanism without an amendment of the treaties”.

We have heard from the Minister’s mouth today that we will not proceed unless the arrangements are legally robust. I have had no insights into the matter, and I agree with my hon. Friend the Member for North East Somerset that it would be good to see the leaked document, but, unlike many others, I have not had the privilege of doing so. I fear, therefore, that the amendment is somewhat tautological, if not unnecessary, in that the Government would neither support an illegal arrangement nor table a motion that was not in order. I will therefore put my faith in the Minister’s assertion that there is nothing illegal about the proposed arrangements and that he would not waste Parliament’s time by proposing anything that was illegal. I will therefore support the Government’s motion and vote against the well meant but unnecessary amendment that my hon. Friend the Member for Stone has put before us today.

[Several hon. Members]

rose—