(11 years, 4 months ago)
Commons ChamberThe link is that some would argue that a mansion tax would be oppressive on people who may live in a house that is valued at more than £2 million, but have a very low income, and they should not be expected to find that payment. As has been suggested to my constituent and others, such people may wish to consider taking in a lodger, releasing some of their equity or downsizing. I suspect that downsizing with that type of property would be easy. I would hope, therefore, that such arguments would not be made against a mansion tax. I hope that the Government will support the new clause, because if their arguments are as strong as they say, they will be able to disprove our case very quickly.
I feel as though this is part two of my speech. I listen to Government Members, and I hear the sound of the creation of two Britains. We have the Britain of the elite who are protected by the Government, who bring about tax cuts for the most affluent in our society. Then we have the other Britain—people who are playing by the rules but have seen their benefits squeezed, their tax credits cut and their council tax benefits cut. When they go shopping, their bills have increased because of the VAT increase. Nor is this society encouraging work, because work does not pay. Those people in work can be reliant on the benefits system, but the policies of the coalition Government are skewed against them—the vast majority of people in this country who are playing by the rules and want something better from their lives.
I feel sorry for the hon. Member for Eastleigh (Mike Thornton), who has not been a Member for very long. He is in his place alone as we challenge the Liberal Democrats on their approach to the mansion tax. As on tuition fees, VAT, tax avoidance and the tax cut for the most affluent, what they said in opposition, when they sat on this side of the House with no hope of being in government, was a different kettle of fish from what they say in government.
I can never clear my mind of the image of the Deputy Prime Minister, in a party political broadcast, implying—I do not wish to use unparliamentary language—that anyone who was not a Liberal Democrat was a teller of mistruths. Students remember that party political broadcast saying that tuition fees would not go up under any Liberal Democrat Government. It was a different matter when they found themselves in government.
In February, the Deputy Prime Minister said:
“I continue to believe we should ask for what would be a modest contribution from the very wealthy, either in the form of a Mansion tax—a 1% levy on properties worth more than £2m—applied just to the value over and above £2m; my preferred option. Or, alternatively, we could introduce new council tax bands at the top end, again, affecting properties worth over £2m…Nothing could do more to demonstrate a commitment to greater fairness in our tax system. I will continue to make this argument, in this Coalition and beyond. My approach is simple: taxes on mansions; tax cuts for millions.”
What did the Deputy Prime Minister do in the coalition? Did he sit there and fight for a mansion tax? No, the evidence—and we have to go on the evidence—is against it. In every major decision that the coalition has made, many of them unpopular, the Deputy Prime Minister has been found wanting. Let me explain something to the hon. Member for Eastleigh, who, in fairness, is the only Liberal Democrat Member who has sat through this entire debate. If that is who his leader is—if that is what his leader is about—he should ask whether the Deputy Prime Minister is equipped to lead the Liberal Democrats into the next election.
(13 years, 10 months ago)
Westminster HallWestminster Hall is an alternative Chamber for MPs to hold debates, named after the adjoining Westminster Hall.
Each debate is chaired by an MP from the Panel of Chairs, rather than the Speaker or Deputy Speaker. A Government Minister will give the final speech, and no votes may be called on the debate topic.
This information is provided by Parallel Parliament and does not comprise part of the offical record
It is a great pleasure to serve under your chairmanship, Mr Hood.
I am extremely grateful for the opportunity to introduce this debate. The stimulus for requesting it came from a report published in November 2010 by Citizens Advice Scotland—the umbrella group for citizens advice bureaux in Scotland—called, “Banking on the basics”. It was based on a survey that it carried out and the experiences of the many bureaux in the country. Many of the points and recommendations in the report are echoed in the report of the Financial Inclusion Taskforce, “Banking services and poorer households”, which was published in December 2010. It addressed the subject on a UK-wide level. Clearly, the issues are similar north and south of the border.
One of the relatively unsung but important pieces of work done by the Labour Government after 1997 was the detailed research, analysis and, most important, development of action plans to tackle poverty, deprivation and social exclusion. Outwith some of the political knockabout that sometimes takes place, I hope that we can all agree that it is only long-term, painstaking work of that kind that will make a real difference. It has to be sustained over a long period—we will not necessarily get instant results.
One of the strengths of the work was how it was spread across Government Departments, including the Treasury. It was not simply sidelined into the kind of Department that normally deals with poverty and deprivation. In 1999, Treasury policy action team 14 made its report on access to financial services, and from that flowed, among many other things, the basic bank account proposal.
Why is access to banking so important in this context? First, it helps people to manage their budgets more effectively and cheaply. Operating in cash is extremely expensive; for example, those who cannot pay fuel bills by direct debit pay a higher tariff, especially if they use prepayment meters. Buying essential household goods through catalogues, and mechanisms such as rent to buy are also extremely expensive. A useful report which highlights some of the issues for poorer families came out just this week from Save the Children.
Basic bank accounts also serve as a gateway to other mainstream financial services, including savings, insurance and credit, so people can make the journey from the basic bank account to other elements of financial inclusion in due course. Increasingly, many employers want to pay wages into a bank account. A number of bureaux survey respondents in the CAS report had encountered difficulties entering employment because of that. They could not get a bank account, or, if they got cheques, they encountered high bank charges to have them cashed.
Clearly, becoming “banked” will not in itself overcome poverty and deprivation, but it forms an important part of the jigsaw of policies and actions that are needed. There has been considerable progress. The goal of halving the number of the “unbanked” was met by 2009. Treasury figures for the UK in December 2010 show that the proportion of adults living in a household without access to a current, basic or savings account reduced from 4% in 2002-03 to 2% in 2008-09. The corresponding figures for Scotland show a fall from 6% to 3% over the same period.
The unbanked remain largely concentrated in the most deprived areas, and among certain groups: the retired, those who are of working age but in poor health and lone parents. Fairly significantly, in terms of access routes, 54% of the unbanked were council or housing association tenants. Only 16% of those with bank accounts fall into that category. I mention that partly because I think that that is a way in which some of the access routes could be enabled.
That still leaves a substantial number of unbanked adults. The CAS survey showed that two thirds of those who did not have access to a bank account had tried to open one. It is sometimes argued that the remaining unbanked do not want bank accounts.
I have listened to my hon. Friend. From my experience working in a bank—I worked for a bank 10 years ago, when the basic bank account was introduced—I have to say that the attitude of some bank workers was appalling. The basic bank account does not credit score, so they could not sell products, and they treated many people with basic bank accounts as second-class citizens. Does she agree that that is an absolute scandal in this day and age?
I certainly agree. I shall speak later about how we can move this forward, and one way is by improving the practices of some banks in that regard.
There are several main reasons why people cannot access basic bank accounts, of which that may well be one. Another is having a poor credit history or, indeed, no credit history. I shall quote one example from the CAS survey:
“I had a full driving licence but never had a bill in my name as I live with my mum and dad. I am 28 years old and can’t get a bank account.”
There are people who have not taken any credit in the past and do not have a record.