Finance (No. 2) Bill

Chris Leslie Excerpts

Tuesday 1st April 2014 Commons Chamber

[Danny Alexander]

It was because our first priority in business taxation was to bring down the very high, internationally uncompetitive headline rate of corporation tax. It was 28% when we came to office, and it will come down to 21% this year and 20% next year. We also chose to reverse the Labour Government’s planned increase in the small firms rate of corporation tax from 21% to 22%. Instead, we took it down to 20%. Those were the right priorities at the start of this Parliament, but given the present encouraging environment for investment, it is now important for the Government to put in place incentives to bring some of that investment forward.

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

My hon. Friend the Member for Edinburgh East (Sheila Gilmore) has made a pertinent point. The Government brought down investment allowances from, I think, £100,000 to £25,000—a significant reduction, which kicked in from April 2012. With hindsight, will the Chief Secretary to the Treasury admit that that was a mistake?

[Danny Alexander]

No.

The Bill also recognises that social enterprises have a role to play not only in growing the economy but in rebalancing the economy and in reforming public services. At present, public services are often ineligible for existing reliefs. The Bill introduces a new tax relief for investment in social enterprises at a rate of 30%, the same as for existing venture capital schemes. I believe that this will unlock up to £500 million of additional investment in social enterprises over the next five years. I hope that Members on both sides of the House will welcome that.

--- Later in debate ---

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

I beg to move,

That this House declines to give the Finance (No. 2) Bill a Second Reading because it fails to address the cost-of-living crisis which will see working people worse off at the end of this Parliament than at the beginning; because while working people are £1,600 a year worse off it prioritises a tax cut for millionaires of on average £100,000; because it offers a marriage tax allowance which will help only a third of married couples, rather than a 10 pence starting rate of tax which would help millions more families; and because it fails to set out measures to tackle rising energy bills, get young people into work, boost housing supply and help families with childcare costs within this Parliament.

You would not know it from hearing the Chief Secretary, Madam Deputy Speaker, but this Finance Bill is a massive missed opportunity when much more is needed. It has so many pages—the document I have in my hands is only half of it—yet it is a minor Bill when we need major reforms to address public concerns. The annuities changes diverted attention from the shortcomings of the rest of the Budget, and that short-term approach reflects the short-term ambitions of the Chancellor and the Government at large.

We will seek to improve the Bill in Committee, but it is important that we reflect on its contents and on those things that ought to have been in it but were not. That is why we propose that the House declines to give the Finance Bill a Second Reading this evening: it fails to address the cost of living crisis that, as my hon. Friends recognise, will leave working people worse off at the end of this Parliament than they were at the beginning, as the Office for Budget Responsibility has predicted. While working people are £1,600 a year worse off, it prioritises a tax cut for millionaires of typically about £100,000 and offers a marriage tax allowance that helps only a third of married couples rather than, for example, a 10p starting rate of income tax that would genuinely help millions more families. It also fails to set out measures to tackle rising energy bills, get young people into work, boost housing supply and help families with child care costs. Those are the priorities that we believe ought to be in the Bill but are not.

[Mr Reid]

The hon. Gentleman refers to the cost of living. Does he not understand that by next year, under his party’s policy, my constituents would have been paying 20p a litre more and those on the islands would have been paying 25p a litre more for their fuel than they are under this Government? That would have been a disaster for the cost of living of my constituents. Will he apologise to them for wanting to make the cost of fuel 25p a litre higher in their area?

[Chris Leslie]

We are not opposed to the measure that the hon. Gentleman mentions, but he ought to be straight with his constituents. That is only one aspect of the tax burden that they face. Of course, his constituents have suffered many other tax rises and cuts in benefits since the general election, and as we start to walk ourselves through the Bill we can explore some of his priorities. We just need to consider the first set of clauses, under which he will be voting to give millionaires—the richest in society—and those who are fortunate enough to earn £150,000 and above, which can of course involve significant amounts of money, a tax cut to 45p from the 50p rate that his Government abolished. He willingly went along with that.

As well as the personal allowance change that Government Members often trumpet, we should have a 10p starting rate of tax. Government Members have supported at least 24 tax rises and principally the change to VAT, which has taken hundreds of pounds from the constituents of the hon. Member for Argyll and Bute (Mr Reid), perhaps by stealth. Perhaps they have not petitioned his constituency office and perhaps, with that little wry smile on his face, he has been counting the coins that he has been taking by stealth from the wallets and purses of his constituents, but that is a significant amount of money and he should be honest with his constituents about the VAT increase, the so-called granny tax, the child benefit reductions, the tax credit cuts and all the other changes.

[Mr Reid]

rose—

[Chris Leslie]

Perhaps the hon. Gentleman would like to take the opportunity to tell the full story.

[Mr Reid]

I am grateful to the hon. Gentleman for giving way again. What is Labour’s policy on VAT? If Labour is elected, is the plan to keep it at 20p or will his party promise to reduce it?

[Chris Leslie]

I love it when Liberal Democrats start talking about VAT. Of course, the hon. Gentleman promised to oppose the VAT bombshell, and my hon. Friends will remember the picture. I do not know whether he was driving the van that went round Parliament square at the time; perhaps the Chief Secretary was in the driving seat. Yet the hon. Gentleman has the temerity to ask what our position is on VAT. I cannot promise to get rid of the VAT increase that they have put in place, contrary to the manifesto on which he stood—yet another Liberal Democrat broken promise. When Labour makes promises in our manifesto at the next general election, we will make sure that they are fully funded and that the sums add up. If we do make promises, everybody will be clear where the money will come from—[Laughter.] Government Members do not like that idea, because it is so foreign to them. They are so used to making promises that they do not recognise the concept of trying to be honest and straight with the electorate.

[Charlie Elphicke]

Will the hon. Gentleman give way?

[Chris Leslie]

I will give way to the hon. Gentleman in a moment, but I ask him to bear it in mind that it is important to be open with his constituents about the full picture of what has been happening with tax and benefit changes. He needs to answer a question prompted by the independent Institute for Fiscal Studies, which has calculated the impact of all the tax and benefit changes since 2010 on his constituents. Its conclusion is that the typical household is £900 worse off after those tax rises and cuts to benefits and tax credits. Does he disagree with the analysis of the independent IFS?

[Charlie Elphicke]

The hon. Gentleman says that his pledges will be fully funded come the manifesto, but does he not accept that the fact that the Opposition have so far spent the bankers bonus tax more than 10 times does not give this House or the people of this country much confidence that they will be able to add up when we get to manifesto time?

[Chris Leslie]

I shall have to send some details to the hon. Gentleman, because he is obviously not fully aware of the situation. I would never accuse him of misleading the House, as that would be unparliamentary, but perhaps he is unintentionally giving an impression that is not correct. We have said that we would repeat the bank bonus tax, which was very successful in 2009 and raised a significant amount of money, and spend it on starter jobs for the long-term unemployed. He should know about long-term youth unemployment because in Dover it has rocketed since he was elected.

[Ian Austin (Dudley North) (Lab)]

The jobs going to young people will be particularly welcome in the black country, where long-term youth unemployment is twice as high as it is across the country as a whole. To tackle the issue of plans adding up at the next election, would it not be simple for the Government to follow our proposal to subject our plans to independent scrutiny by the Office for Budget Responsibility? Why does my hon. Friend think they will not agree to that? Does he think that perhaps the Liberal Democrats in the coalition do not want to do that because it would show that their plans do not add up, as they did not at the last election, when they made a series of promises that they were unable to keep?

[Chris Leslie]

I am grateful to my hon. Friend for addressing that point. Yes, such transparency would help a great deal. Let us elevate the level of public debate and allow an independent assessment of those policy costings. The public can then decide for themselves and make a judgment about the relative merits of the various policies in the manifestos of the major political parties. I know that in his heart the Chief Secretary to the Treasury agrees. I know that he realises that the Chancellor is standing in the way because the Chancellor wants to run the general election campaign by means of smears and falsehoods, giving a false impression of the policies of the other political parties. We must grow up and raise the standard of debate. Let the OBR be the judge of these things. Ministers can talk among themselves and perhaps negotiate concessions so that when we come to the Committee stage of the Bill, we may be able to reach cross-party agreement on that point.

[Charlie Elphicke]

rose—

[Chris Leslie]

I forgot to give way to the hon. Gentleman. Long-term youth unemployment has gone up in Dover by 125% since he has been its Member of Parliament.

[Charlie Elphicke]

Long-term youth unemployment did go up in my constituency by 300%, and in the hon. Gentleman’s constituency by 400%—in the previous Parliament. Will he welcome the fact that long-term youth unemployment in my constituency has fallen by 22% in the past year and in his constituency by 15%?

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[Chris Leslie]

If the hon. Gentleman wants to trade statistics, I am more than happy to do so. In my constituency there is a significant problem with unemployment, long-term youth unemployment and youth unemployment generally, and it has worsened significantly since the general election. He talks about the past 12 months. Let us hope we are turning a corner in aggregate levels of unemployment because it is about time that happened. The tax and benefit changes and their impact on our constituents are very significant indeed. I hope to have an opportunity to focus on a few of them.

[Mr Kevan Jones]

I asked the Chief Secretary to the Treasury whether he could remember any time when the Liberal Democrats opposed the Labour Government’s spending commitments. Does my hon. Friend agree that Conservative Members have amnesia, in that they agreed to our spending targets right up until the banking crash in late 2008? If at that time we had followed the proposals of the present Chancellor of the Exchequer and the present Prime Minister in relation to things such as Northern Rock, that crisis would have been a lot worse.

[Chris Leslie]

Trying to get inside the heads of the Liberal Democrats could take quite a long time. The Chief Secretary is enjoying being at close quarters with the Conservative party a little bit too much. The Conservatives have captured him—it is called capture bonding. Sometimes he even starts to view the abuse or the lack of it as rewarding. That is not coalition; that is Stockholm syndrome.

[Guy Opperman]

May I return to the issue of the regions? Does the hon. Gentleman agree or disagree with the interpretation of the north-east chamber of commerce and the Trinity Mirror-owned Newcastle Journal, which welcomed the broad thrust of the Budget’s job-creating policies, its help for small and medium-sized firms and apprenticeships, reform of air passenger duty and general relief for energy-intensive industries?

[Chris Leslie]

We should be cutting business rates for small and medium-sized enterprises. I am very surprised that the Government are focusing their help predominantly on the 2% of the largest multinationals—the big firms—and not doing, in my view, sufficient for that 98% of British business, the small and medium-sized enterprises. They will be the backbone of a recovery and we have to do much more to support them.

It is a shame that in the Bill the Government are choosing to go to that 20% rate in April 2015. We could instead use that resource and focus it on the multiplicity of small firms. They should be getting a cut in business rates. We calculate that it would deliver an average tax cut of at least £400 for 1.5 million properties through the business rates system, benefiting small and medium-sized enterprises, which after all are the backbone of the economy. They provide the dynamism to get the growth going, which we so desperately need.

[Richard Benyon (Newbury) (Con)]

I know it is the Opposition’s job to oppose, but does the hon. Gentleman wonder whether sometimes this is not good politics? He will be getting the same message from his chamber of commerce as I am getting from mine, as well as from hard-working families who are benefiting from the Budget, pensioners and people on low incomes? Instead of the reasoned amendment, surely there is something that he can welcome in this remarkably popular Budget—go on, have a go.

[Chris Leslie]

It is simple. It is easy to do a Budget in which the Chancellor gives a few little things back, such as that penny off a pint of beer—buy 300 pints, get one free—and we are supposed to be grateful for such generosity. The hon. Gentleman should be advising his constituents to check their wallets. The thing about this Chancellor is that he takes far more with the other hand than he gives in the first place. That is his fundamental problem.

[Several hon. Members]

rose—

[Chris Leslie]

Before I give way, let us look at what is happening in the new tax year that is about to begin. I urge my hon. Friends to think, for example, about the change hitting some of the poorest households in our constituencies, homes on the lowest incomes, which will see council tax support withdrawn at a significant level in the new financial year. Some have called this poll tax mark 2, with the poorest and most vulnerable households, carers, single parents and the disabled seeing their bills go up by 120%. The Government impose these tax rises in a stealthy way by saying, “Local government, we will devolve it down to you. It’s your responsibility”, but nobody is fooled by their techniques. Look at the squeezed middle and the extra tax those people are paying.

[Mark Field]

rose—

[Chris Leslie]

Before I give way to the hon. Gentleman, he can tell me this: I think about 2 million more people are being sucked into the 40p rate of income tax. I heard that that caused consternation among Members on the Government Benches. From this April, at a number of levels, people will lose out significantly.

[Mark Field]

I will ask the questions rather than answer them, if the shadow Minister does not mind. He implores us to look at the Bill in a balanced way. We have heard statements about tax cuts for millionaires time and again over the past year and again today in the House. Does he recognise that the top 1% of British citizens are now paying the highest share of income tax that they have ever paid in the history of that tax—some 30%? Purists such as me have at times been mildly critical of the inconsistency of elements of the welfare and tax changes that have been made even during this coalition Government, but we have gained a hell of a lot of social cohesion in this country—

[Mark Field]

—in marked contrast to many other European nations, and the Government should be congratulated on that.

[Chris Leslie]

I do not think it helps with social cohesion to move from the 50p to the 45p rate. That sends a very bad signal, and I know that Members on the Government Benches will feel that in their constituencies, especially when the Government are jacking up taxes and reducing tax credits and other help for some of the poorest in society, while giving that very generous tax cut—typically £107,000—to the average millionaire at the top of the scale. I do not think a 50p rate is unreasonable.

It is unreasonable for Government Members to say that a 50p rate does not raise any money—“we cannot possibly do it”. If it is telegraphed to that set of high earners at the point at which a 50p rate comes into effect that it will be going in a year or two anyway, of course they can stave off the point at which they draw down their dividend from their personal service company. Everybody knows how they managed to avoid paying that 50p rate. They waited until the new tax year ticked over, then they paid the lower rate. It was very simple, which is why in the statistics we suddenly saw bonus payments go through the roof, sky high, at the point when the 50p rate fell to the 45p rate. We should have been allowed a proper assessment of what happened at that point.

[Jonathan Edwards]

I am listening intently to what the hon. Gentleman says and I agree with the point he makes, but will he explain why the Labour party proposes only a temporary return to the 50p rate, rather than a permanent return?

[Chris Leslie]

We have said that a 50p rate needs to be the policy for the next Parliament. We make judgments in manifestos from one Parliament to the next. Tax policy should never be written in perpetuity. We have said that while the deficit is likely to be as high as it is, the 50p rate is justified. The hon. Member for Cities of London and Westminster (Mark Field) talked about social cohesion. While the process of deficit reduction will now have to continue well into the next Parliament, when it was not expected, the 50p rate is perfectly justified for good social cohesion reasons.

[Jacob Rees-Mogg]

Will the hon. Gentleman give way?

[Chris Leslie]

How could I resist the hon. Member for North East Somerset (Jacob Rees-Mogg)?

[Jacob Rees-Mogg]

I am extremely grateful on behalf of North East Somerset to the hon. Gentleman for giving way to me. Is he therefore saying that he believes that the 50p rate is a good thing in and of itself for the symbolism that it brings to bear, even if it does not raise any money?

[Chris Leslie]

I think it will raise a significant sum to help to alleviate the burden on lower and middle earners, and that is why it is important to have it. If it is there for not just a temporary period, but for a significant period, it would settle and be an important part of the tax system. But generally speaking, of course we all want all taxes to come to a lower level. I do not want to see taxes higher than they need be, but the hon. Gentleman has to understand that the context will be, I am told, a potential £75 billion deficit to be inherited by the next Government—I hope the next Labour Government—a significant amount of borrowing, hanging around the necks of whoever wins the general election, made worse by the fact that the Government promised that it would have been eradicated altogether.

[Richard Harrington (Watford) (Con)]

I want to probe the hon. Gentleman further on his answer to my hon. Friend the Member for North East Somerset (Jacob Rees-Mogg). Does it mean that he believes that the last Labour Government made a mistake by not raising the top tax rate to 50% for most of the 13 years that they were in power, and that they should indeed have done so?

[Chris Leslie]

I know that Government Members like to expunge history from their memory banks, but there was a global banking crisis—I know this is a shock to some of them—which, from 2008 onwards, caused significant fiscal impact, which reduced revenues into the Exchequer and meant that tax rates had to be reappraised. It was at that point that the 50p rate was felt necessary, as one of the measures of fairness that we needed to put in place. I am proud that that Government took that step. It was not universally popular, as I know from Government Members, but necessary in order to help to reduce the deficit, whereas the Government chose to raise VAT and pull the rug from underneath growth that was beginning to come through in 2010.

I want to continue to scrutinise some of the details in the Finance Bill, because it contains a number of troubling changes. On capital allowances, my hon. Friends intervened on the Chief Secretary, and I also asked whether he thought it was a mistake that when taking office the Government reduced capital allowances—investment allowances—for businesses from £100,000 to £25,000. Yes, they are going back up again, but yet again we see more chopping and changing, more inconsistency; temporary measures, not giving the stability to business that it needs to plan for the long term. The Chief Secretary says that it was not a mistake that they should go down and now they are going up, but that, I am afraid, is typical of Liberal Democrats who like to face both ways on these matters.

In chapter 2 we have the married couple’s tax allowance. The Chief Secretary is deep in conversation, but I want to give way to him in a moment specifically on the issue of the married couple’s tax allowance. [Interruption.] From a sedentary position, he says that he will not intervene, but this is a critical point because I am not quite clear on his view of the married couple’s tax allowance. The Chancellor was apparently in a little bit of doubt about it, but the pressures from Conservative Back Benchers were such that they needed this transferrable allowance, which will help only about a third of married couples because it is available only to couples where one person is in work but the other does not use all their tax-free allowance. There are a number of other ways in which that amount of money could have been allocated. He could have decided to do it through the personal allowance—I know he is keen on that policy—perhaps a 10p starting rate of tax. Does the Chief Secretary agree with the implementation of the married couple’s tax allowance? This is his opportunity to set out the Liberal Democrat attitude to these things. I will give way to him. The record will have to show that, for whatever reason, the Chief Secretary does not want to stand up and sing the praises of the married couple’s tax allowance in this particular agenda. Yet again, he is stifled by his capture by the Conservative party, unwilling to speak his true mind on these issues.

On the employment measures in the Bill, such as they are, yesterday the Chancellor was full of rhetoric about full employment, yet the Government have come forward with no new policies to deliver this. The number of young people out of work for 12 months or more has nearly doubled since the Chancellor and Chief Secretary came to office, and we have a record number of people who want to work full time but are being forced to work part time, a Work programme that is so spectacularly unsuccessful that people are more likely to go back to the jobcentre than find work, and only 5% of disabled people on the Work programme have found work through that programme. We clearly need compulsory starter jobs for the long-term unemployed to help them to repair their CVs and to get back into work and on to the ladder to a long, sustainable career.

[Stephen Doughty]

I agree with my hon. Friend on the compulsory jobs guarantee, and it is a great shame that we do not see such a measure in the Bill. Does he agree that there is a massive contrast between this Government when they took office and cancelled the future jobs fund, and the Welsh Labour Government in Cardiff who introduced the Jobs Growth Wales scheme, which has now seen nearly 12,000 people across Wales benefiting, and one of the lower rates of unemployment in the UK because of that measure?

[Chris Leslie]

Conservative Members love to bash what is going on in Wales. They have an anti-Welsh attitude to these things, but it is one of the great success stories of devolution, making sure that they focus on a meaningful back-to-work scheme, particularly for those who have been out of work for a prolonged period. That is what we need to have, and I wish Ministers would learn from that.

Chapter 4 deals with annuities and pensions. Obviously, as we have said, in general those annuity changes are to be welcomed. Annuities are an outdated product and they failed too many pensioners, but it is important to reiterate the tests that we have. What sort of advice or comprehensive guidance will be put in place for those reaching retirement and potentially having to make calculations of income perhaps over a third of their lifetime to come, and what will happen to the annuities market for those who do wish to purchase such a product to have a steady stream of income in perpetuity?

[Mr Kevan Jones]

Does my hon. Friend also think that the Government should publish their modelling on the proposal to see what effect it will have, not only on the annuities market but on the cost to the taxpayer in the long term, in terms of matters such as housing benefit and future care costs? Producing that modelling and making it transparent for all would allow people to see whether the policy will have a long-term implication for the taxpayer.

[Chris Leslie]

It is vital that we have serious consultation on those measures. We support flexibility in principle, but the changes cannot be made without taking into account the wider implications, so it is important that we have that level of information and analysis in the Treasury projections. I do not know whether the Government were motivated by the desire to benefit the population more broadly or by the short-term opportunity, following the annuities changes, to bring in a vast amount of tax revenue from pensioners much earlier than would otherwise have been the case. All I know is that the Chancellor used the annuities issue to provide a veneer of long-termism over what was otherwise an exceptionally short-term Budget and what is an exceptionally short-term Finance Bill.

Clauses 112 and 113 deal with the old question of the bank levy. My hon. Friends will be familiar with the Government’s track record on the bank levy. We will scrutinise those clauses very closely indeed, because The Daily Telegraph, among others, has reported that they could mean a secret tax cut for the banks. Last year Barclays paid £504 million in levy charges and HSBC paid £544 million—the most of any bank. But under the draft proposals the Chief Secretary is bringing forward in the Bill, Barclays’s bill would have been £129 million lower and HSBC’s would have been £169 million lower. What is going on? Given that the levy was supposed to catch up with the lack of collection in previous years—it was supposed to increase by 20% this year—it seems very strange that these clauses might give the banks a very significant saving indeed.

The purpose of the bank levy, of course, was to allow the Government to take £2.5 billion every tax year. It was an unusual tax because they set the amount of revenue to be raised and the methodology revolved around that. In its first year, the levy brought in £1.8 billion, which was a significant shortfall. Things got worse the next year, because in 2012-13 it raised just £1.6 billion. My hon. Friends know the attitude Her Majesty’s Revenue and Customs takes to our constituents if an amount of tax they are asked to pay is not forthcoming, but that is not the case when it comes to the banks. It has gone soft in collecting the money the levy was supposed to raise.

We read in the small print of the Office for Budget Responsibility’s report that accompanied the Budget that in 2013-14, for the third year running, the bank levy is projected to raise only £2.3 billion, which falls short yet again. The combined shortfall from the past three years is now a very significant £1.8 billion. We could pay the salaries of 60,000 nurses with that sum.

[Mark Field]

rose—

[Chris Leslie]

It is a very significant sum of money, and I am sure that the hon. Gentleman will have something to say about that.

[Mark Field]

I certainly do. The hon. Gentleman must also recognise the importance of banks lending into the real economy, particularly as the recovery takes hold. Does he not recognise that if we are to ensure that banks are properly capitalised again, repeated demands for an ever-larger banking levy—it is already the largest it has ever been, even before 2010—could be diametrically opposed to the long-term interests of the British economy? In other words, it could hinder efforts to get the banks lending again.

[Chris Leslie]

Of course the banking sector is very important. It has been dysfunctional for a prolonged period. Net lending to business has fallen consistently throughout this Government’s time in office. But I have to tell the hon. Gentleman that when the Treasury said that the levy would raise £2.5 billion, it should have got that money in. All our constituents are paying more in tax and have lost out significantly because that money has not been forthcoming from the banks, which after all owe a little bit back to the taxpayer for the bail-out that followed their reckless lending decisions in previous years.

The very least we should do is ensure that we have a functioning bank levy that brings in the expected sums. We would ensure that it raises a further £800 million. We would use that money to expand free child care places for working parents of three and four-years olds by extending free nursery care from 15 to 25 hours a week. That would also be a good way of helping parents to get back into the labour market and to get the jobs they need. A 15-hour arrangement—three hours a day—for child care does not give a parent looking after a youngster the opportunity to get into work, but 25 hours a week would make a significant difference. We could do that through a reasonable and modest change to the bank levy.

[Jacob Rees-Mogg]

Following the point made by my hon. Friend the Member for Cities of London and Westminster (Mark Field), does the hon. Gentleman recognise that an £800 million additional bank levy would reduce the ability of the banks to lend into the real economy by between £8 billion and £12 billion?

[Chris Leslie]

I disagree with the hon. Gentleman on that point, not least because the shortfall in the amount the Treasury said it would raise from the levy has been so much larger than £800 million. I think he needs to speak with Ministers. If he disagrees with £2.5 billion, he needs to tell them now. The Exchequer Secretary is in the Chamber, because he is the one—unbelievably—who was responsible for designing the bank levy. He must be massively embarrassed by its total failure. Why has it raised so little? How does he explain the shortfall? I will give way to him if he wishes to offer an explanation.

[The Exchequer Secretary to the Treasury (Mr David Gauke)]

indicated dissent.

[Charlie Elphicke]

rose—

[Chris Leslie]

No, nothing is forthcoming. Perhaps the hon. Member for Dover (Charlie Elphicke) can help us on that.

[Charlie Elphicke]

The hon. Gentleman referred to the article in The Daily Telegraph but did not explain it fully to the House. It shows that the Chancellor is keen to see foreign banks paying a fair share of the levy. It is not about letting off the major clearers; it is about ensuring that all banks in the UK pay a fair share. Surely that is right.

[Chris Leslie]

That is a very interesting explanation. There is a shift in policy, which is to let certain banks off the hook when it comes to the bank levy. Perhaps the hon. Gentleman is right and that is a strategy. I have given the Minister an opportunity to explain what exactly the Government’s plan is, but he will not put it on the record. We will have to explore that in more depth in Committee.

While we are on the financial services sector, let us look at what the Government are doing in clause 107, which relates to stamp duty reserve tax. My hon. Friends might begin to wonder what that is all about, especially when we say that it is known as the schedule 19 charge, which refers to the 1999 Finance Bill. Many people think, “Oh well, we’ll see what comes of these taxes.” But the schedule 19 charge, set out in clause 107 of this Bill, seeks—this is the priority of these Conservative and crypto-Conservative Members—to give a tax cut of £145 million to the investment management industry by abolishing stamp duty reserve tax. At the same time, my hon. Friends’ constituents are having to cope with the bedroom tax, extra council tax charges and the VAT increase. Despite the hardships they are facing, the priority of the Chief Secretary and the Exchequer Secretary is to give away £145 million by abolishing stamp duty reserve tax. I know that they have been lobbied heavily on that.

We will oppose that change, because we think that the Government should be using that resource to help scrap the bedroom tax, if indeed it is raising any money—I have my doubts about that. The National Housing Federation states that it might well be costing more than the Government planned. We certainly should not be giving away that money, especially at a time when the investment management industry, which holds £5.4 trillion in collective funds, increased its holdings by about 7% in 2013. I do not think that £145 million is an unreasonable sum to ask from a sector that has been doing very well in recent years. We should be making sure that we pursue a fair policy and so will oppose that clause.

We then come to the Bill’s tax avoidance measures. We know that the Government have a bad record on that—[Interruption.] Well, they do. The oh-so-successful Exchequer Secretary, who cannot even manage to get the amounts of money he promised from the banks, cannot manage to get from the Swiss the £5 billion he promises through the Swiss tax deal. The Chief Secretary stood up a moment ago and said that he would get only £1.7 billion. We had a deal with the Liechtenstein Government, which we projected would bring in £2 billion; in fact, it has brought in £2.5 billion. When we have tax deals with tax havens, they work. However, when the Exchequer Secretary gets his fingers on these things, it is amazing how it all goes wrong—it is his reverse Midas touch.

The Government have fallen into bad habits in pencilling into the Red Book projections of revenues from the avoidance measures that involve what the OBR calls particularly uncertain assumptions. The Government are, of course, quick to spend the projected money; Paul Johnson from the Institute for Fiscal Studies calls such moves the Chancellor’s manoeuvres, always relying on revenues that are by nature uncertain. It is important that we scrutinise whether the supposed tax avoidance deals will deliver what the Government say.

Rather than the measures in the Bill, we need action to deliver starter jobs, guaranteed for the long-term unemployed. The number of young people out of work for a year or more has doubled and we need compulsory starter jobs for those who have suffered unemployment, which is a scourge not just on society but on their career prospects. We need action on child care. Free child care should be extended from 15 to 25 hours, paid for through a proper collection of the bank levy.

We need a help to build scheme to counter-balance the Help to Buy scheme. There is a serious risk—as the Chief Secretary knows, even the Governor of the Bank of England has concerns about these things—of a lop-sided recovery unless we match the boosting of demand with the boosting of supply. A help to build scheme particularly focused on ensuring that small and medium-sized construction companies can do better is one way to make a big difference.

[Guy Opperman]

Is the hon. Gentleman aware that in the north-east, the Help to Buy scheme is absolutely transforming the housing market? In Humbles Wood in Prudhoe, a housing development in my area, 90% of new purchases have been through Help to Buy. That must be good news that the hon. Gentleman wants to welcome.

[Chris Leslie]

We do not oppose the Help to Buy scheme unless it is not accompanied by a help to build scheme. The supply of housing is key. Housing policy must revolve around affordability. We now have the lowest level of house building since the 1920s; the Government cannot just turn a blind eye to that problem. Affordability has to be at the heart of our approach. It is all very well helping people on to ever-higher mortgages chasing ever higher prices, but unless something is done to supply new buildings, we will not deal with the problem of affordability.

[Mr Kevan Jones]

I am not sure what nirvana the hon. Member for Hexham (Guy Opperman) lives in if he thinks that the housing market in the north-east is booming. Average house prices in the north-east are still £5,000 lower than in 2008; that compares with an increase of about £77,000 in London. The hon. Gentleman also fails to recognise that 16% of people in the north-east are still in negative equity. The idea that somehow the housing market in the north-east is booming is wrong. We have a two-speed Britain—a booming south-east and London, and a stagnating north.

[Chris Leslie]

For all the Government’s talk of a balanced, sustainable recovery, we see no action. Most of our constituents and most businesses would recognise that supply and demand have to be part of the picture. Everybody recognises that except, it seems, for the Chancellor and Chief Secretary, who do not recognise the fundamental problem in their approach.

There needed to be tough decisions, such as the 50p rate, in the Bill to make sure that there was fairness in dealing with the deficit and that we tackled the Government’s failure to keep their promise about balancing the books. That has not come to fruition. We need to help with business rates; we should be cutting them rather than simply focusing help on 2% of companies.

The Government are not ensuring a sustainable and balanced recovery. Consumers are having to dip into their savings at an alarming and increasing rate. The OBR even predicts that growth may well slow in future, when those savings run out. Exports are not predicted to contribute a thing to the economy for the next five years and nothing in the Budget tackles the country’s productivity crisis that has emerged in recent years.

Instead, the Exchequer Secretary and Chief Secretary have convinced themselves that cutting public services and raising taxes have helped economic growth. They believe their own propaganda about expansionary fiscal contraction, which was the philosophy of the right in British politics. It used to be the opposite of the Liberal Democrats’ view, but of course they have now bought into the concept.

[David Rutley (Macclesfield) (Con)]

The hon. Gentleman does not want to take this point from Government Front Benchers, but I have just been to the annual conference of the British Chambers of Commerce and it is absolutely delighted by the Bill and the Budget, which will help its businesses across the country. Will the hon. Gentleman join it in welcoming the Bill?

[Chris Leslie]

No, because the Bill could be significantly improved. I have given a number of ways in which it should be doing more for small businesses, for fairness in society and for the hon. Gentleman’s constituents. I think he will pay the price when the election arrives. He is under the impression that fiscal contraction is how growth materialises, but he needs to realise that growth is coming despite, not because of, the Government. I am afraid that they have still not learned that lesson.

The Conservatives and Liberal Democrats are desperate for people not to spot their broken promise on borrowing and the deficit. Three years of economic stagnation will leave the next Government with a budget deficit of £75 billion. It is astonishing that in his Budget speech, the Chancellor had the nerve to stand there and say:

“as a nation we are getting on top of our debts”—[Official Report, 19 March 2014; Vol. 577, c. 781.]

The Government have added a third to the national debt, which now stands at £1.2 trillion. What a nerve the Chancellor showed! He promised to stop adding to the national debt, but has borrowed more in the past four years than the last Government did in 13 years.

The Bill is bereft of the measures that we need to make sure that the recovery is sustained and shared by all. It has nothing new to tackle long-term youth unemployment, nothing to secure an energy price freeze and nothing to bring forward real help now for working parents who need extended child care. It has nothing new on infrastructure investment, which is still lagging behind, and nothing to address the wages crisis that leaves the typical person £1,600 worse off than in 2010. The Bill is not just a missed opportunity; it is so wide of the mark that it misses the point altogether. It is designed to help Ministers limp from here to election day. It falls short and is not good enough.

We would urge Ministers to go back to the drawing board, but it is increasingly clear that they do not even have a drawing board. I urge my hon. Friends to support the reasoned amendment. We will try our hardest to secure improvements to the Bill in Committee. This is a minor Finance Bill from a Government out of ideas. They delayed the Queen’s Speech because they do not have enough to put in it. The Bill should address the cost of living pressures faced by the majority and it should set a long-term ambition for a recovery built to last and felt by all. The country deserves a better Finance Bill than this.