Finance Bill

Chris Leslie Excerpts

Tuesday 2nd July 2013 Commons Chamber

Brought up, and read the First time.

[Chris Leslie (Nottingham East) (Lab/Co-op)]

I beg to move, That the clause be read a Second time.

Hon. Members might not have spotted the announcement on this matter in the Chancellor’s Budget in March. It is a little-noticed provision that was buried on page 64 of the Red Book in the table that sets out whether individual policy decisions will mean a gain or a loss to the Exchequer. This decision did not hit the headlines and very few people spotted it. I should look back and see whether the Chancellor even referenced it in his Budget speech.

This little-known provision is the abolition of something called the stamp duty reserve tax. It is not quite the same as the stamp duty on share transactions that many hon. Members are familiar with. That is, for want of a better term, a financial transaction tax of 50 basis points or 0.5% on share transactions. The stamp duty reserve tax is the equivalent change that was introduced in schedule 19 to the Finance Act 1999. It is essentially a proxy for stamp duty on the return of units in unit trusts to the investment managers who deal in those transactions. If individuals buy units in unit trusts and then surrender or sell them back to the investment manager, a stamp duty of 0.5% has not unreasonably been paid.

The Chancellor, in his wisdom, has decided that that must go. He has decided to forgo the princely sum of £150 million in every financial year henceforth. I am afraid to tell hon. Members that there is a lot of this story to be told. The abolition of stamp duty reserve tax is essentially a decision by the Chancellor to give a tax cut to investment managers.

The new clause calls on the Chancellor, within six months of Royal Assent, to publish and lay before the House of Commons a report on the distributional impact of the change detailing who has benefited—whether it is the lower and middle-income households and families in all our constituencies or the privileged and wealthy investment managers.

[Mark Field (Cities of London and Westminster) (Con)]

Does the shadow Minister not recognise that the abolition of the reserve tax will be a great enhancement to the UK unit trust industry, which has been losing a lot of business to Switzerland, Singapore and elsewhere? Although he has characterised the beneficiaries as being very wealthy, this change will ensure that jobs are retained in this important industry, especially back-office and middle-office jobs, as it goes from strength to strength in the decades ahead.

[Chris Leslie]

I commend the hon. Gentleman for doing his duty to his constituents in the City of London. I confess that they probably will be right up there among the beneficiaries of this change. He is assiduous in speaking up for his constituents, but I am sure he would concede that they are not exactly typical of people in the rest of the country. The people who engage in investment trust transactions and unit trust arrangements may well benefit from this £150 million tax cut.

The Chancellor of the Exchequer was supposedly faced with difficult choices and cuts in the Budget. That he has chosen to give a tax cut of this order at this time is a reflection of his priorities, which are beyond understanding for many Opposition Members.

[Mark Field]

Would the shadow Minister be willing to extend his new clause to ensure that it takes into account what has happened since 1999 when the tax was instituted under the previous Labour Administration? More importantly, would that reflect Britain’s place in the world and what proportion of the global asset management industry was in Britain in 1999 and is still here today, compared with other countries? That may have a direct impact on why the Chancellor acted as he did in the Budget.

[Chris Leslie]

Times are tough, and for most people in the country life is getting harder. I confess, however, that I have not been lobbied by or seen those poor, unfortunate City investment managers knocking at my door, coming to my surgeries, or writing e-mails and saying, “Please, the one thing we need is the abolition of the stamp duty reserve tax. There is massive hardship among investment managers at this time, which demands a £150 million tax giveaway.” Frankly, I think the investment management community is doing reasonably well relative to the rest of the country. Moreover, I do not think that the City of London is uncompetitive. Indeed, all the evidence suggests the opposite and that the City continues to thrive and do exceptionally well—something like £5 trillion in funds is under the management of those investment managers affected by this tax change, and a tax cut of 150 million quid is small change to that community.

We are having this debate because we need to know why the Chancellor decided on this priority—cui bono would be the Latin adage. In whose interest is this? Who benefits from this change? I doubt it is my constituents in Nottingham East, and Government Members must forgive me if I am left with a slightly bitter taste in my mouth when we see the hardship caused by cuts to tax credits, the increase in VAT and the bedroom tax. The Chancellor says that individuals affected by those things must feel the pain and the squeeze, but when it comes to the City and the investment management community, I do not see how they are all in it together or sharing that anxiety.

[Mr Russell Brown (Dumfries and Galloway) (Lab)]

Yet again I am back on my old hobby-horse about the economy. If this measure is passed and people benefit from it, what will that do to the local economy? Will we see massive spending on our high streets? Will it help to regenerate the economy?

[Chris Leslie]

Dare I say that my hon. Friend knows the answer to his question? I do not think it will make a blind bit of difference to the success—or otherwise—of the investment management community, and I have seen no evidence from the Government that this measure is the thing that will transform the economy at this time, or make a massive difference to jobs and growth in society at large.

Let me put this in context: £150 million is a lot of money. In fact, it is exactly the same amount that the Chancellor cut from young mothers when he abolished the health in pregnancy grant—hon. Members will remember from the Chancellor’s first Budget that the health in pregnancy grant was given to mums-to-be to ensure they ate healthily and had a little help at that time. That was slashed; that had to go because £150 million had to be saved, yet in next year’s Budget the Chancellor is introducing a £150 million tax cut for the investment management community. That is about the same amount of money as was cut from the child tax credit supplement for one and two-year-olds in that original Budget. In fact, it is about the same amount of money that the pasty tax and the caravan tax were supposed to save—I am sure the Minister will remember that from the ill-fated omnishambles 2012 Budget. All the hassle that fell on the Chancellor’s shoulders at that time was due to saving £150 million. In that context, this is a strange choice by a strange Chancellor.

[Stephen Doughty]

My hon. Friend is making a strong point. Does he, like me, think that people will be bemused by this measure when the Government voted recently against a reasonable motion on an international financial transaction tax? When people see those two things, as well as the bedroom tax, what will they make of this Government?

[Chris Leslie]

We had that debate on a financial transaction tax a few weeks ago. I think we managed to extricate from the Minister, despite his reluctance, a suggestion that somehow, somewhere, buried in the Government, there was still some flicker of interest in a financial transaction tax. I am not sure whether it has been snuffed out by this particular measure. If this is the abolition of stamp duty on unit trust transactions, what will be next? What else will they give away to this particular set of fortunate investors? Will the Minister rule out plans to abolish the other financial transaction tax, the stamp duty on equity transactions? Do the Government have that long-standing financial transaction tax, which has been around for several hundred years, in their sights? Conservatives are second to none when it comes to defending the best interests of the wealthiest in society, and I take my hat off to the Minister for managing to slip this little one through in the Budget provisions without anybody really spotting it.

[Geraint Davies (Swansea West) (Lab/Co-op)]

My hon. Friend has already pointed out that this £150 million saving per year for the very richest should be compared with the bedroom tax saving of £450 million from the very poorest. The difference between the two measures is that the bedroom tax is hitting thousands upon thousands of the poorest people. The bedroom tax costs about £10 per week, and I have had people tell me that their disposable income is being reduced from £30 to £20 per week. With this tax, the £150 million saving is going to a very small number of people who will receive a large amount of money. These are the choices we face in Britain today. Does my hon. Friend think that that is disgraceful?

[Chris Leslie]

I am more disappointed that the Government think they can get away with it. I want very much to hear the Minister defend this decision. I am sure he will do so with gusto and alacrity, as ever, but I know that deep inside—the record will reflect that I am looking into his eyes—he realises that this is a completely daft idea. This is not a priority at this time. It is a crazy priority when the public are struggling, and I know that in his heart of hearts he agrees with me. It is not clear where this idea has come from. I saw something on the Deloitte website that said there had been many decades of lobbying in favour of this particular change. Perhaps the lobbying is something that the Treasury has eventually succumbed to.

When we line this measure up alongside other examples of largesse the Government have shown to those who are doing very well, it is notable. We cannot take it out of the context of the paucity of the bank levy, which was supposed to raise £2.5 billion in the previous financial year but did not. Last night, the Minister said that they will try to get £2.7 billion next year instead, but they are already £1.9 billion in arrears from the previous two financial years. It will be more than a decade before they are able to recoup the loss. It was notable last night that he did not say that he was certain that £2.5 billion would be brought in from financial years 2011-12 and 2012-13.

I will put the bank levy to one side. After all, what is a couple of billion pounds between friends? The Government refuse to repeat the bank bonus tax, despite the fact that financial services bonuses leapt by 64% in the first month of this year, when all those who benefited from the reduction in the additional top rate of tax—earnings over £150,000 were taxed at the 50p rate, but from, I think, 6 April they were taxed at the 45p rate—rushed out all those bonus payments. Of course, those individuals found ways and means to avoid the higher rate of tax, as the Government helpfully flagged the change up for them far in advance.

[Geraint Davies]

Does that not contrast sharply with the 2 million people in Britain who are on payday loans? They could each be given £70 with that £150 million. They are desperate for the money, but instead these tens and hundreds of thousands of pounds are all focused on, again, the very rich. Does that not speak volumes about the cruel values of the Tories?

[Chris Leslie]

The point is the context in which these things arrive from the Government. Perhaps it is our fault that we have not successfully flagged up for the wider country what exactly is happening in the Budget or what will happen in future Finance Bills; but for the time being, it is incumbent on the Minister to do at least this one thing: let us have the distributional analysis showing who benefits from the change. Which deciles, in terms of the affluence of society, will gain the most from this £150 million tax cut? The case for it has not been made. It has not been high on the public agenda. There is no problem in the City or the investment management community of such significance that it merits this intervention by the Chancellor, at the expense of the health in pregnancy grant or the cuts to tax credits that merited the pasty tax and the caravan tax.

This £150 million tax cut is an incredibly important totem of the Chancellor’s priorities. It is a sign that he does not care about the fact that most people—the typical family—will be paying an extra £891 this year because of the tax and benefit changes made since 2010. Those who have found themselves pushed into greater deprivation and poverty will look at the decision and be absolutely disgusted that this is the Government’s priority now. This change has no justification. The Minister has not made the case for it. We need more information about who benefits from the arrangement.

All that comes on top of the Government’s giveaway on the bank levy, their failure to repeat the bonus tax, the millionaires’ tax cut from 50p to 45p and other changes hidden in the Bill, such as making the additional tier 1 debt coupon tax deductible for the banks, which The Times described thus: “Chancellor to the banks’ rescue with secret £1 billion tax break”. Lots of people will have questions, although not necessarily about this Minister’s priorities. He is doing the best of a bad job and having to cope with the hand he has been dealt. He is, I am sure, a decent and honourable chap, but when he goes home this evening, turns on the television and sees the hardship afflicting families up and down the country, I would ask him to keep in mind whether making a tax cut of £150 million for those investment managers was the right call to make at this point in the economic cycle, such as there is a cycle involved.

[Mr Russell Brown]

I come very much from the school that says that if someone is under a bit of pressure and struggling, it is only right for the Government to try to step in, but I am amazed by the figures. In 2011, the UK fund management industry was up 5%, after double-digit growth in the previous two years. The industry is not struggling. Why on earth should we consider giving even more money to people who, at the end of the day, are not in desperate need?

[Chris Leslie]

That is the £150 million question. The tax cut is £150 million in the key years, but it goes up to £160 million in financial year 2017-18. It gets greater and greater as time goes on. If we roll all the numbers together, as the Chief Secretary to the Treasury is wont to do when presenting figures in the Budget, we get a total of £600 million of tax cuts in this area in the Red Book. I am sure that you could think of a good use for £600 million, Mr Deputy Speaker. At the very least, we want a distributional impact assessment. We want to know who will benefit from the measures, and it is incumbent on the Minister to tell the House the facts.

[Geraint Davies]

I have been provoked to stand up and speak on this outrageous stealth tax, which is an attempt to subsidise the very richest in a clandestine way. If hon. Members had known about the £145 million being crept into the back pockets of the very richest people in the City, the Chamber would have been full of Members speaking in protest, as I am doing now.

The direction of travel in the Budget and the spending review continues unabated. It consists of blaming the poorest for the bankers’ errors, punishing them with cuts in public service jobs and wages and cuts in welfare benefits, particularly outside London and the south-east—and especially in Wales—then pumping all the infrastructure growth opportunities into London and the south-east, to line the pockets of the very richest, many of whom were responsible for the disaster in the first place.

The Government are allegedly trying to balance the books, but they are dismally failing to do so. They have decided to sack 600,000 public sector workers. This is having a disproportionate effect in certain parts of the country. Many parts of Wales, for example, are 50% more likely to have public sector workers than London, and it is in those areas that the cuts are biting deepest. Meanwhile, the money is going to places such as London, where the cuts are not so deep, not only in infrastructure investment but in measures such as this one. We are talking about getting rid of stamp duty on transactions in the City of London, where a small community of people will benefit from that tax cut of £145 million a year, and rising.

We must set against that the fact that 2 million people are already using payday loans. Dividing the £145 million between those 2 million people would give them about £70 each. Only today, I have been talking to colleagues in Swansea about the emerging problem on our council estates, and on estates generally, of companies setting up shop to take advantage of people in dire need by offering them payday loans. At the same time as the Chancellor announced this cut in stamp duty, he asked the newly unemployed to wait an extra week before receiving their money. That will of course feed the stomachs of the payday loan sharks. Those sharks are not just the well-known wonga people; they are also the new, smaller operations setting up in very poor communities. They hire people in the community, on a commission basis, to persuade their neighbours to take out loans at exorbitant rates of interest that they cannot afford. They then harass them by phoning them in the middle of the night or following them into the supermarket, for example, until they repay the loan. That is the cruel reality of Tory Britain today.

Alongside that reality, we have this ghastly attempt to give another £145 million to some of the richest people in the banking community, who were part of the problem in the first place. The alleged justification is to make the City of London more competitive. It appears that these whizz kid City folk, with their red braces, zoom up in their Rolls-Royces to see their old Etonian friends, such as Ministers, and look in awe at them and say, “Have another champers, will you, Minister?” and all that sort of stuff.

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[Greg Clark]

This has been an astonishing debate. I have a lot of time for the hon. Member for Nottingham East (Chris Leslie), but he must have been pretty dozy in recent months if he thinks that this is a Budget measure that has emerged by stealth having hitherto been hidden from view, because it was given considerable prominence in the Chancellor’s Budget speech. The Chancellor said, in the Chamber,

“I also want Britain to be the place where people raise money and invest. Financial services are about much more than banking. In places such as Edinburgh and London we have a world-beating asset management industry, but they are losing business to other places in Europe. We act now with a package of measures to reverse that decline, and we will abolish the schedule 19 tax, which is payable only by UK-domiciled funds.”—[Official Report, 20 March 2013; Vol. 560, c. 939.]

However, the measure did not only feature in the Chancellor’s Budget speech. It was the subject of a press conference, and received quite a lot of publicity on the money pages. I should have thought that the shadow Financial Secretary would be aware of that, and would know what a good reception the proposal was given in the very important financial services industry.

Many misconceptions need to be cleared up. The hon. Member for Swansea West (Geraint Davies) talked about banking, but this measure has nothing whatever to do with banking. A regrettable consequence of what has happened in recent years is that the financial services sector as a whole has too often been equated with the banking industry and associated with its frequently catastrophic misjudgments and regulatory failures, and people have been tainted unfairly by that association. Just as there are hundreds of thousands of ordinary working people employed by banks who bear no responsibility for—indeed, are sickened by—some of the misdeeds that were committed by those at the top before and during the crisis, there are people who work hard for a living elsewhere in financial services, who contribute to our national income, the taxes that pay for our public services and our foreign exchange earnings, and who have certainly not put taxpayers' funds at risk in the way that characterised the worst excesses of the banking industry.

The investment management industry in this country is a case in point. It employs 30,000 people across the United Kingdom, mostly in areas such as administration, IT and legal services. At least 10,000 of these people, who are directly employed in the sector—I am not talking about those who are ancillary to it—are based outside London and the south-east. A large number of them are concentrated in Scotland—I should have thought that the hon. Member for Dumfries and Galloway (Mr Brown) would be aware of that—and in the north-west and the north midlands. In fact, 12% of the asset management industry is in Scotland. I am amazed that the hon. Member for Nottingham East—not just as shadow Financial Secretary, but as a Nottingham Member of Parliament—did not recognise the important contribution made by investment management in his city. He should be aware that the professional services sector in Nottingham is an important component of the city’s economy.

[Chris Leslie]

The Financial Secretary is characterising the Opposition as if we were somehow denigrating the investment management community. Far from it. We are simply asking this question: where is the hardship that justifies £150 million of generosity from the taxpayer at this point in time?

[Greg Clark]

I shall come to that. The hon. Gentleman professed not to recognise the problem that existed. As I have said, given the position that he enjoys, I would expect him to be aware of the long-standing damage to the competitiveness of an industry that employs people in his constituency. There are some very distinguished firms in his constituency. The Nottingham office of Brewin Dolphin has been there for 150 years, and I think that it is a vital component of our regional economy. These are valuable jobs, and they exist throughout the country.

The British investment management industry has a strong reputation internationally, yet—here we come to the reason for the reform—since 2000, countries such as Luxembourg and Ireland have increased their market share of domiciled funds dramatically in comparison with the United Kingdom. In fact, the UK’s share of EU domiciled funds has dwindled to less than half that of Luxembourg and has been overtaken by Ireland.

What is the reason for that? It cannot be because the reputation of British fund management has declined, as many of the funds domiciled elsewhere in Europe are in fact managed remotely by fund managers within the UK. It cannot be because the fundamental competitiveness of UK financial services has declined, because we have maintained, and very often increased, our market share in other parts of the financial services industry. For example, twice as many euros are traded in the UK than in the entire eurozone. One of the principal reasons for this competitive decline is a consequence—unintended, I am sure—of a change in the tax system that was made in 1999, and whose effect everyone agrees has been deleterious.

Schedule 19 to the Finance Act 1999 imposed a special stamp duty reserve tax—SDRT—on the investment management industry when fund managers match investors leaving a fund and surrendering their units with those joining the fund and purchasing the units. Because the fund manager is not buying any UK shares, no stamp duty reserve tax is payable, but schedule 19 imposes a tax of 0.5% on the fund manager, as if the shares have been bought. Of course, whenever a fund manager buys UK shares within a fund, full stamp duty is paid. As well as being complex and burdensome—requiring frequent tax calculations and returns to be sent to HMRC—there is a major flaw with schedule 19. Anyone who does not wish to pay schedule 19 can simply invest in otherwise identical funds, have them managed by a UK fund manager, but have them domiciled elsewhere, and that is what has happened in recent years. Such a non-UK fund could hold exactly the same equities as a UK fund, and that is happening in large numbers. It could be managed by a UK fund manager, but the investor would—by investing in a fund in Luxembourg or Ireland, for instance—not need to pay schedule 19.

Why should this matter? [Interruption.] I think the shadow Chief Secretary should take an interest, since he was not aware of the problem to which this is the solution. What are the advantages of having funds domiciled in the UK? First, there are advantages in terms of jobs, particularly in the regional economy. While fund managers can operate from anywhere, most jobs in fund management come from ancillary services and the professional services associated with them. These are high-value jobs in IT, legal services and accountancy support, and they are typically in the jurisdictions in which the funds are domiciled.

Secondly, there are advantages in terms of tax revenue. Although schedule 19 imposes SDRT on fund managers matching investors for UK funds, the Exchequer would be advantaged by having more funds domiciled in the UK, as that would involve the paying of income tax, national insurance, VAT, business rates and other taxes by people who would be employed here, rather than in Luxembourg, Ireland and other countries, and corporation tax by the companies supplying ancillary services.

Finally, who pays? It is pensioners who pay. Schedule 19 does not come out of the pay of fund managers. It is a cost of business that is invariably passed on to UK investors. It comes out of the returns and lessens the funds that are otherwise available.

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[Greg Clark]

I want to conclude now. I hope that the House will welcome, as commentators universally have, a significant boost to the competitiveness of a very important sector for jobs in every part of the United Kingdom. I hope that, having had the explanation, the hon. Member for Nottingham East will feel willing to withdraw the new clause and await the formal consultation, which will accompany next year’s Finance Bill.

[Chris Leslie]

You have to hand it to the Financial Secretary, because he managed to keep a straight face throughout that, but I can almost hear the thumping of those trading desks across the City of London as people are delighted at the largesse of a £150 million tax giveaway to those poor, downtrodden investment managers, who really need that helping hand just now. That £150 million is the same amount as the Government saved when they abolished the health in pregnancy grant—that was not a priority; making sure that they abolish stamp duty reserve tax on unit trust transactions is where that £150 million had to go. That is completely crazy. They cannot even agree to a distributional analysis because they know that it is the wealthiest in the society who benefit from this. Therefore, we shall be pushing new clause 11 to a Division.

Question put, That the clause be read a Second time.

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[Madam Deputy Speaker (Dawn Primarolo)]

Order. Mr Leslie, please ensure that you leave time in the debate, which will end at 8.19 pm, for the Minister and perhaps some Back Benchers as well.

[Chris Leslie]

I will be very brief. I want first to pay tribute to the hon. Member for East Worthing and Shoreham (Tim Loughton). I have to hand it to him: he has got the Government jumping around and on the run on this issue. However, I am afraid that the Opposition are not convinced that the millions of people who are separated, divorced, or indeed widowed, would benefit from this policy, let alone those married couples where both partners work. I am all in favour of marriage, and Mrs Leslie might at first glance like the idea of the £150 give-away, but because she works and earns above the personal allowance, it would not be of benefit in our circumstances.

[Sir Edward Leigh]

Will the hon. Gentleman give way on that point?

[Chris Leslie]

I would rather hear from the Minister.

I think that the right hon. and learned Member for Rushcliffe (Mr Clarke) was right when he called this policy social engineering. He said that when he joined the Conservative party it was opposed to it. The hon. Member for East Worthing and Shoreham seems to have got a commitment that something will be done in the autumn, and we will hear what that happens to be in a moment. In a nutshell, the Opposition’s view is that if there is to be a tax break, it should be for all families, not just a select few, and for all households on lower and middle incomes. That is where tax breaks ought to be focused. I want to hear what the Minister has to say.

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[Chris Leslie]

I agree with the Minister about one thing—it was certainly a long and well-scrutinised Bill. To elaborate on that brief moment of cross-party agreement, I, too, pay tribute to all Members who served on the Committee, the Clerks, and the officials who helped pull together a substantial legislative moment in the parliamentary calendar—albeit that the Bill does not do much to help the economy or do much good for the country at large. I am afraid the Bill offers just more of the same: carrying on regardless of the urgent need for action to stimulate our economy.

We know that the Chancellor, scarred as he was from the omnishambles Budget in 2012, decided to go in the opposite direction this year and produce a Budget that contained so little of any import or substance that the Government’s Office for Budget Responsibility said on page 42 of its Budget report, that the Bill would have

“no impact on the level of GDP at the end of the forecast horizon…these measures reduce GDP growth”

in 2013. It is a Finance Bill that sees the economy moving backwards.

This is in the context of a great deal of humiliation for the Chancellor, including the downgrading by not just one but two credit rating agencies. The cherished prize that was supposed to be at the heart of the Government’s strategy—retaining and defending that benchmark triple A status—is gone. Then, of course, as we saw in the most recent figures, there was the humiliation of a rising deficit, not a fall in levels of borrowing.

This Finance Bill has its priorities all wrong. The lowlights include there being little on growth, but yet persisting with the cut to the top rate of income tax. It means that the fortunate 13,000 people who earn more than £1 million a year will get a lovely, juicy tax cut of £100,000, while typical families will be £891 worse off this year on average because of the changes to tax and benefits introduced since 2010. There are failures in a number of different ways, but it has been particularly piquant this evening to focus on the Government’s largesse and the City tax cut to the stamp duty reserve tax that gives £150 million to the investment manager community.

[Richard Fuller (Bedford) (Con)]

rose—

[Chris Leslie]

I am not sure whether the hon. Gentleman is a former investment manager, but I wonder what his view is of that change.

[Richard Fuller]

I am grateful for the shadow Minister’s indulgence in allowing me to intervene, and to answer his question, no I am not. The hon. Gentleman mentioned the cut to the top rate of tax and the house tax that Labour wants to introduce. Yesterday, I sat through the debate on Report, and the Opposition Front-Bench speaker was unable to say whether, if Labour get into government in 2015, it would increase the rate of tax and introduce a house tax. For the record, will the hon. Gentleman say whether that is the intention of the Labour party, or is it again just fine words but no real meat?

[Chris Leslie]

Fortunately for the hon. Gentleman, but unfortunately for the rest of us, there are still two years of this Parliament to go. He has probably two years of employment left in his parliamentary career and although we think there should be a Labour Member in his seat, we will miss him.

In two years’ time, we will set out the detail in our manifesto. When the Conservatives are in opposition after the general election, we hope to implement a radical manifesto that actually does something to benefit our economy. Today, we would implement a mansion tax that would raise a significant sum that we would give away as a tax cut for lower and middle-income households with a new 10p band of income tax. Government Members struggle with this, but we will judge what needs to be in the manifesto in two years’ time when we can judge the needs of the economy.

Government Members think they already know what their fate will be in 2015, hence the Chancellor coming forward with his cuts programme for 2015 when any responsible Chancellor would be rolling his sleeves up this summer and getting on with bringing forward capital infrastructure investment and doing something to stimulate the economy now. There is nothing in the Budget, nothing in the spending review and, more to the point, nothing in the Finance Bill to help growth. Indeed, the most interesting measures are conspicuous by their absence. There is no mansion tax, although there is provision for an annual tax on enveloped dwellings, which usefully illustrates that it is feasible to move in that direction.

[Lady Hermon]

In an earlier intervention on the Minister I asked about air passenger duty. In the context of Northern Ireland, would the hon. Gentleman and his colleagues agree to reduce air passenger duty? Rebalancing the economy in Northern Ireland will be difficult to do if this matter is not addressed. Where do the Opposition stand on reducing air passenger duty more generally?

[Chris Leslie]

I am sorry that we did not have the opportunity to consider this matter on Report. I think it was given some consideration in Committee. I think we are still waiting for the Government’s review to come to fruition—I am happy to give way to the Minister if he wants to confirm that—and we need to see the evidence. If we feel that any changes in tax and in spending are necessary, we want to spell out clearly where we would get the resources to pay for them. The fact that the Government have ignored not just our advice—[Interruption.]

[Madam Deputy Speaker (Dawn Primarolo)]

Order. Can we stop the chuntering from Front Bench to Front Bench while someone is trying to speak? Minister, you were listened to in silence and with proper courtesy, so it would be good if you showed that same courtesy to the shadow Minister. Perhaps Ministers and shadow Ministers could pay attention rather than shout at each other.

[Chris Leslie]

Madam Deputy Speaker, I am grateful for your protection from the sedentary chuntering of Government Members. They ignore anything they hear, not just from the Opposition but from the International Monetary Fund, which has pointed out that this has been the slowest recovery for a century. There has been barely 1% growth since the 2010 spending review, and the Chancellor predicted there would be 6% growth by now. Living standards have fallen and many families are finding it difficult to make ends meet. Life is much harder.

[Mel Stride]

The hon. Gentleman mentions the important pursuit of growth. Will he enlighten the House on what happened to his party’s five-point plan for growth, including his commitment to a reduction in VAT?

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[Chris Leslie]

We are desperately keen for the Government to bring forward any measures—whether measures on VAT or bringing forward capital infrastructure—that would stimulate growth. Any Chancellor worth his or her salt would have used last week’s statement in the House to make at least a passing reference to the importance of growth in the economy, but there was absolutely nothing, and the same goes for this Bill.

The problem is not just the neglect of growth and living standards; it is the Government’s failures on borrowing and the deficit, which should be to their shame. They have been totally unable to deliver the promises they made on deficit reduction. [Interruption.] The Minister of State, Northern Ireland Office can tell his constituents that the deficit was £118.5 billion in 2011-12 and £118.7 billion in 2012-13. Even he, with all his skill and acumen, can tell that that is an increase in the level of borrowing from that year to this. No wonder the Government find it an uncomfortable fact that they have failed on their promise and are not on course to balance the books in 2015 as they said they would. That was their solemn promise to the electorate. It is a busted flush.

This Bill is a reflection of the fact that the Government have no answers. They do not know where to go on this issue. It is time we had a Finance Bill to boost the economy, instead of the Government neglecting their duties to achieve strong and sustained economic growth. This Bill is bereft of the bold measures we need to kick-start Britain’s economy. The country deserves better. We oppose a Third Reading of this Bill.