Finance (No. 3) Bill

Chris Williamson Excerpts

Tuesday 5th July 2011 Commons Chamber

[Stephen Williams]

I have spoken on platforms with Alison Wolf, and indeed launched a book with her during the previous Parliament. I think she would be surprised to hear the Labour Opposition citing her in support. Yes, the Government are phasing out some of the previous Government’s programmes, but they are being replaced by the Work programme, which brings together many people who can work with the long-term unemployed or unemployed young people. They have a holistic approach and are bringing social enterprises into the programme, which may be more successful than the many initiatives that took place under the previous Government. I repeat: youth unemployment just about reached 1 million just before the previous Government left office. It is not a new problem created by the present Government.

[Chris Williamson (Derby North) (Lab)]

But does the hon. Gentleman at least acknowledge that as a result of the measures brought in by the previous Government, through the future jobs fund, youth unemployment was falling? Surely, that is something we should celebrate, so was it not a mistake for Government Members to support the move that got rid of the future jobs fund, which was having such a positive impact on youth unemployment?

[Stephen Williams]

As I understand it, the future jobs fund was a temporary measure and it has now stopped. It is being replaced first by the Work programme, which will come in shortly, and by the Government’s investment to create hundreds of thousands of new youth apprenticeships. I hope that the hon. Gentleman has visited in his constituency, as I have in mine, the many employers—including, in my constituency, the city council—who are taking on apprentices for the first time to give those young people a chance. Indeed, the Government have increased the minimum wage some of those people receive; they have also increased the apprentice wage, which the previous Government did not do.

[Chris Williamson]

Of course we all celebrate the fact that some young people are getting apprenticeships. We obviously support anything that helps young people get into employment, because it is a waste of talent for people to languish on the dole, but as my hon. Friend the Member for Sefton Central (Bill Esterson) pointed out, the Government’s Wolf review said that those apprenticeships are not going to the youngest school leavers; they are going to an older cohort, so clearly the Government need to take additional measures to ensure that we do not have a whole generation of 16 and 17-year-olds who are simply thrown on the scrap heap.

[Stephen Williams]

I thank the hon. Gentleman for his rather long intervention. As well as the Work programme and investment in apprenticeships, the Government have a growth strategy to develop the new jobs of the future—into which, incidentally, the future jobs fund was not necessarily placing people. For instance, there are many initiatives in the green economy, with the green deal that has come along as well, that will help the young unemployed. I mentioned the situation to emphasise that the problem is not new. The previous Government struggled hard with it as well, as I pointed out in the previous Parliament. I have been consistent in what I have said across both Administrations.

The purpose of amendment 13 is to reintroduce, or at least to examine the case for reintroducing, the bonus tax that the Labour Chancellor introduced in 2009. As I recall, the purpose of that bonus tax was not to raise revenue, but to change behaviour. It was an attempt to persuade the banks that they should not be introducing bonuses at that time, when many of them were dependent on state funds to continue in existence. I also recall that the anticipated proceeds of that bonus tax were about £500 million. In fact, as we have heard on many occasions, it raised in gross terms more than six times that amount, so it did not change behaviour at all. It seems that the Labour party in opposition has switched the underlying purpose of a bonus tax.

I share the moral outrage that many people feel about the level of bonuses being paid by some institutions. I am a free market liberal, so I believe it is up to a company to decide its own remuneration package and justify it to its shareholders, but in the current climate, when many families around the country are facing difficulty, some of the decisions taken by remuneration committees in the City cross the threshold at which it is right that some of us in this place express moral outrage at what they have been doing.

The culture of people paying huge amounts of money to themselves is not a new phenomenon in this Parliament. I remember Lord Mandelson, before he became the Trade Secretary in the previous Parliament, saying that new Labour was “intensely relaxed” about people becoming filthy rich. The hon. Member for Nottingham East looks faintly embarrassed at my reminding him of that phrase, but when the Labour party was in government it encouraged that culture. We should not let Opposition Members forget that.

--- Later in debate ---

I am strongly in favour of a Robin Hood tax. It is time that the Government really took on the Sheriff of Nottingham and made sure that Robin Hood, Maid Marian and the rest of us win.

[Chris Williamson]

May I begin by entirely agreeing with what my hon. Friend the Member for Sefton Central (Bill Esterson) said about the amendment being wholly reasonable? It ought to command the support of Members on both sides of this Chamber. I hope that at least some Government Members will find it within themselves to support an amendment that will make a significant contribution to addressing the real challenges facing this country. My right hon. Friend the Member for Holborn and St Pancras (Frank Dobson) just referred to the eye-wateringly high bonuses that the City of London has enjoyed in what he described as an “austere” year. It is incredible to think that the City of London bankers’ bonuses amounted to £6 billion.

[Alison Seabeck]

May I, first, draw the House’s attention to my entry in the Register of Members’ Financial Interests in relation to an indirect interest of my right hon. Friend the Member for Greenwich and Woolwich (Mr Raynsford), as I should have done that earlier? My hon. Friend the Member for Derby North (Chris Williamson) mentions some enormous sums. Does he share my concern, and that of enough people around the country, about the huge contrast between those figures and the people who are desperate to find a home? The homelessness figures are rising, as we have learned from the Secretary of State for Communities and Local Government.

[Chris Williamson]

My hon. Friend makes an apposite point and she has done some excellent work to highlight the plight of people in our country who are struggling as a result of homelessness and having inadequate access to decent housing. It is a stain on our national character that in the 21st century, in one of the richest nations on earth, there can be the huge disparity to which she referred.

My first point relates to apprenticeships, the waste of talent in our country and the level of youth unemployment, which is still unacceptably high. I wish to discuss some personal experience and my concern that Bombardier, the last train-building company in our country, has today announced 1,429 redundancies at its Derby plant. It also made the point that its ability to provide apprenticeships for young people in the city of Derby has been considerably diminished. My real fear is that before the end of this year, unless the Government are persuaded to review things and to revise their decision in favour of the British train-building industry, the last remaining company that manufactures trains in our country will pull out of Great Britain altogether. The company will certainly be a shadow of its former self and its ability to provide apprenticeships will be almost completely eliminated.

It is, therefore, absolutely essential that hon. Members support the amendment proposing a tax on bankers’ bonuses, because it would enable the Government to earmark a proportion of that money to create job opportunities. My Front-Bench colleagues suggest that if £600 million of that £2 billion bonus money were used, almost 100,000 opportunities for getting young people into work could be created. Surely that ought to unite all of us. One would hope that even the bankers might consider that to be a reasonable use of the eye-wateringly high bonuses that they have enjoyed in this austere year.

The Government are under a moral obligation to support the amendment. I look directly at the Minister when I make that point, because he is under a moral obligation. I say that because one of the first decisions taken by those on the Government Benches was to scrap the future jobs fund. I can see him mouthing things because he knows what I am about to say. That fund did provide opportunities for our young people and it was making genuine inroads into youth unemployment in our country. The Government’s ability to tackle that is stuttering as a consequence of removing the future jobs fund.

This tax would make a mere pinprick on the standard of living of the bankers affected by it. The Government keep saying that we are all in it together, but if they genuinely believed that, surely those with the greatest resources should be giving a bigger contribution to those with almost no resources. As my hon. Friend the Member for Wirral South (Alison McGovern) said, if young people are unable to get a job at the start of their career, this follows them throughout their life. The Government have it within their gift to support the amendment, which would go some way to addressing that real concern, and I hope that they will take on board their moral obligation to support it.

My hon. Friend the Member for Sefton Central also mentioned that the Wolf review pointed out that some of the youngest of the unemployed in our country—the 16 to 18-year-olds—are struggling to find alternative employment. Although I applaud the Government’s attempts to deal with youth unemployment and their efforts on apprenticeships, their actions are clearly missing out a significant cohort and they should do more to address that situation. One of the other ways in which they could make a significant contribution would be by earmarking a proportion of this bonus tax for the building of 25,000 affordable homes. That would be a modest contribution, but we know that there is a huge demand for affordable housing in our country. Far too many people are living in inadequate accommodation, and there was an excellent exposé on Channel 4 last night about the growth in the number of Rachman-style landlords, who are afflicting parts of our country again.

In my view, we certainly need to do more to tackle that problem and one of the best ways to do that would be to build more decent affordable homes for people to live in. That would have not only the social benefit of providing good-quality homes for people who desperately need them but the added benefit of creating job opportunities and, dare I say, more apprenticeships for younger people, stimulating the economy. If young people are living in better, decent accommodation, their educational and health outcomes are beneficially affected. Whichever way one looks at such investment in affordable housing, through a modest tax on bankers’ bonuses, one can see that it would bring huge benefits to society. I hope that Members will find it within themselves to consider that and to support the amendment.

There is a great need to stimulate and support manufacturing industry and businesses across the piece. They are struggling: we know that the economy is flatlining, that the Government’s attempts at growing the economy are failing and that there is a need for a plan B.

[Mr Ben Wallace (Wyre and Preston North) (Con)]

I have listened carefully to the hon. Gentleman’s points about apprenticeships and youth unemployment. In my constituency, youth unemployment has fallen by 14%. For a similar reason, the aerospace industry and associated apprenticeships in his constituency are doing rather well under this Government. That is especially the case as regards foreign orders, such as those from China for Rolls-Royce engines and, in a case that affects my constituency, the expansion of British Aerospace abroad. That is the best way to create futures for young people. We should give them proper jobs through long-term investment in intellectual property and research and development tax credit, which the Government have expanded in the recent Budget. Does the hon. Gentleman not think that that is the best way to do it and should he not therefore support the Budget tonight?

[Chris Williamson]

I certainly do not support the Budget. Although I acknowledge that Rolls-Royce does some excellent work—we are fortunate, in that it is the largest employer in my constituency and provides huge opportunities for young people—the hon. Gentleman would do well to remember the support given by the previous Government to the aerospace industry. He would also do well to remember that one of this Government’s first decisions was to scrap the loan to Sheffield Forgemasters. I can see that he is screwing up his face and rolling his eyes—

[Madam Deputy Speaker (Dawn Primarolo)]

Order. I know that the hon. Gentleman was tempted down this line of argument by the intervention, but we are discussing the bank levy.

[Chris Williamson]

Thank you for your guidance, Madam Deputy Speaker. The point I am trying to make is that the resources realised as a consequence of supporting the amendment and introducing such a tax within the bank levy—or at least exploring the possibility and reporting back on how it might be used—could be used to support opportunities to create new employment for people in Sheffield through Sheffield Forgemasters and to generate more apprenticeships and opportunities for young people. I hope that the hon. Member for Wyre and Preston North (Mr Wallace) will reflect on those comments and join us in supporting the proposal made by my hon. Friends on the Front Bench about considering a tax on bankers’ bonuses.

I was going to talk about the fact that we know that the Government’s economic policies are failing and that the economy is flatlining. Opportunities are not being realised because of the Government’s blinkered approach, if I may put it that way. I ask Ministers to consider this proposal as an additional opportunity to support business and young people and to create opportunities in our country. Realising such aims has been made very difficult for Ministers because of the policies they have pursued.

We hear all the time from Government Members, particularly the Chancellor of the Exchequer, that we are living in austere times, that we all must tighten our belts and that we are all in it together. As I have said, the amendment provides an ideal opportunity for the Minister and for Government Members to demonstrate that they mean what they say when they make comments about all being in it together.