Finance (No. 3) Bill

Debate between Chuka Umunna and Justine Greening

Committee: 1st sitting: House of Commons
Monday 19th November 2018 Commons Chamber

[Chuka Umunna]

I could not agree more with the hon. Lady.

I will finish by saying this: the reason we tabled the amendment, and why I think so many colleagues on all sides of the House supported it, is because ultimately it is an assertion of parliamentary sovereignty. If the House were denied this really important information in order to come to a considered informed view, it would make a mockery of the argument that says the reason for withdrawing from the European Union is to assert parliamentary sovereignty.

I did not expect to be in this position at the beginning of today. I am grateful to the Minister for making this important concession and for making the promise, at the Dispatch Box, that we will get the economic impact assessments that we sought to secure through the amendment. Given the firm commitment he has made to the Committee, I will not be pressing the amendment to a vote. I would like to take this opportunity to thank all Members who supported it. Ultimately, we have done this because we think it is important that our constituents understand why we make the big decision that we are going to have to make in the next few weeks.

[Justine Greening (Putney) (Con)]

I was a signatory to amendment 14 because I think that good policy making needs good evidence at its heart. That is what the amendment sought to do. I think we all recognise that the debate on our future relationship with the European Union has often been characterised by facts that have turned out not to be facts, and, far too often, by lofty ideals and phrases that have had little meaning to back them up in practice. It is now time, as we come to possibly the most crucial parliamentary debate in 50 or 60 years, for Members to have the information they need to be able to take an informed decision—and, dare I say, for members of the public to have the information they need to be able to convey to their own Members of Parliament what they think about that information and why they want their MP to vote accordingly.

I welcome the statement the Minister made at the beginning of this debate, in which he set out his plans to provide more information to the House. Along with the rest of the Treasury, he will play a vital role in ensuring that we have an informed debate. I was one of those MPs who earlier this year went to the Reading Room—I actually went three times—to wade through the Treasury analysis. I would like a similar level of detail so that, again, Members are able to analyse the impact of the three different choices facing our country, as the Prime Minister has now set out: whether we have the deal that she proposed, whether we leave effectively with no deal, or whether we keep the existing deal with the European Union. I would like a level of analysis that includes a sectoral split in relation to the different impacts of the different deals on different sectors, as well as a regional and geographical split, so that we, as Members of Parliament representing very different communities in very different parts of the country, can really understand what the geographical impact of Brexit and the options will be.

I would like the analysis perhaps to go beyond what we originally had from the Treasury, so that we can understand what the impact on GDP might be for employment and jobs. There will be many MPs who do not believe that unemployment is a price worth paying for some of the options on the table. I believe that MPs and communities have a right to be informed about the risks to local jobs before casting their votes in favour of different options. Of course, we need to see, for all the options, the impact on public finances, both in the short and longer terms. I know that the Minister has in mind a period of 15 years for forecasting. I think that that is absolutely necessary for us to see not just the immediate shorter-term effect, but the medium and longer-term structural impacts of any route forward on our economy.

Oral Answers to Questions

Debate between Chuka Umunna and Justine Greening

Tuesday 21st June 2011 Commons Chamber

[Justine Greening]

My hon. Friend is right to refer to the importance of the aviation sector. As he will know, the consultation on reform of air passenger duty closed last Friday, and we have received a number of different representations from stakeholders. He will be aware that this is partly about looking at what we can do to support regional airports, but we certainly do not want to do that at the expense of our other key airports in the south-east.

[Mr Chuka Umunna (Streatham) (Lab)]

Several figures have been cited about the number of jobs created over the past 12 months. What percentage of those jobs were created before the spending review and are arguably attributable to the last Government, and what percentage have been created since?

Air Passenger Duty

Debate between Chuka Umunna and Justine Greening

Thursday 20th January 2011 Commons Chamber

[Justine Greening]

I am grateful for that intervention. My hon. Friend points out the impact on local communities but, in a friendly way, I would challenge the point about contradictions. In terms of our tourism industry and our need for links with other countries to drive economic growth, this is very healthy. Our relationship with the Caribbean and the role that aviation plays in helping us to maintain that more broadly is particularly important, so we are not necessarily faced with an either/or choice.

One of the most intractable problems we face, which underpins the whole approach in the Treasury, is the unavoidable challenge of tackling the fiscal deficit. We are faced with that while also making sure that the tax measures in place work effectively and do not have the sort of negative impacts that we do not want or need them to have.

[Mr Umunna]

I should like to follow up the point about equity made by the hon. Member for Bedford (Richard Fuller), which I endorse. The key issue is the banding system, which was, admittedly, introduced by the previous Labour Government—I think one of the Minister’s predecessors referred to it as being rather rough and ready—and I would not necessarily endorse the form of APD that they put in place. The Minister says that the coalition Government have undertaken to review the system, but can she tell us when we can expect the results of the review? Obviously, the Budget will be on 23 March. Are the results of the review likely to be announced then or beforehand? That information would be useful to the industry and the many families who want to plan what they will be doing in the next few months.

[Justine Greening]

First, it would be wrong of me to pre-empt the Budget statement. What I can say—we have already been clear about this—is that any major change to air passenger duty will be subject to consultation. One thing that we have learned from looking at how this tax and others have been changed in the past is that we need a sensible tax-making policy that involves not just the Treasury thinking about the objectives it wants to achieve, but talking with stakeholders. There is a need to issue a consultation document to which people can respond and then draft legislation to make sure that the final legislation can achieve the aims we have agreed on and that have come out of the consultation.

I cannot give the hon. Member for Streatham any timings for all that, but I can tell him that we want to ensure that any reforms we bring forward will work as intended. He quoted a previous Minister saying that the system was rough and ready. We want to avoid making another change to APD that brings other problems we have not anticipated. Whatever we do in this area, it is impossible to get the perfect system, but we need to understand the pros and cons of any particular approach. We need to understand what the risks are and whether we can mitigate them. He is right to ask about timelines. The fact that we said in the previous Budget that we want to review and reform APD and that we have been working on that and meeting a variety of stakeholders to get their views shows that we want to do this in a thoughtful way rather than just announcing something that would be a surprise to the industry and to people who are trying to plan for their holidays.

Let me finish by saying that I recognise the urgency with which the hon. Member for Hackney North and Stoke Newington wants this area of tax policy to be changed. However, I think we are right to work out cautiously which path we want to go down. That is why we talked about reviewing the existing APD regime in the June Budget. As I have said, in the past few months I have met a variety of stakeholders, particularly from the Caribbean countries and the Caribbean Council in London. Those discussions have been very helpful and I have had a useful and detailed report from the Caribbean countries about their views on how we could reform APD. Obviously, we will look at that carefully. I am determined to make sure that we continue that constructive dialogue and I hope that in doing so we can ensure that wherever we end up with the reform of APD we will have done a better job of making sure that—

Finance (No.2) Bill

Debate between Chuka Umunna and Justine Greening

Monday 8th November 2010 Commons Chamber

[Justine Greening]

I will give way. I see that Labour Members have now perked up from when they were skimming over their past, as they were so clearly intent on doing. It is more difficult for them, is it not, to hear the failures of their Government being set out so clearly? Let us not forget that the last Prime Minister, back in 2007, described this as a golden age. He obviously felt that the regulatory system he had put in place was a great one, but that was subsequently proved not to be the case.

[Mr Umunna]

Does the Minister not accept that there was a move towards a light-touch regulatory model across the entire political system? I am well aware of this because I used to work in the industry myself, and I do not recall the Economic Secretary or any of her colleagues jumping up and down when the Financial Services and Markets Bill went through this House, complaining that it did not introduce stronger regulation. Secondly, did she, like me, hear the comments of the Governor of the Bank of England, Mervyn King, at the Treasury Committee this summer? He was asked whether, if the new regulatory model championed by the Minister had been adopted, the global financial crisis would have been averted—and he said no.

[Justine Greening]

If the hon. Gentleman checked the Hansard of our debates on the original tripartite regulatory system, he would see that we did raise concerns about the nature of that system. We were told that our warnings were wrong. It is not acceptable for Labour Members simply to wash their hands of the regulatory system that they now clearly feel absolutely failed.

In fact, we have to respond to the regulatory failures of the past by returning the role of supervising the banks to the body charged with the overall monitoring of the economy—the Bank of England. That is why we have also set up the Independent Commission on Banking to advise on the reforms necessary to ensure that we are better protected against another banking meltdown in the future.

--- Later in debate ---

[Justine Greening]

I am sure that the hon. Gentleman is following my comments closely. I was setting out the context for the situation in which we find ourselves. I have pointed to serious regulatory failure, which needs to be sorted out, and the fact that we have inherited a huge fiscal deficit, which also needs to be sorted out. In that context, we should recall that the previous Government had said that they would not introduce a bank levy at the national level and that they wanted international agreement before any such levy were put into place. At that time, we argued that we should get on with that, as a Government, and not necessarily wait for international agreement. The Labour Government rejected that.

In our first Budget, we decided to introduce a permanent levy on banks, which we expect to generate about £2.5 billion of revenue each year. The levy reflects the potential risks that banks pose to the UK’s financial system and the wider economy, and it will ensure that banks make an appropriate contribution to deficit reduction that balances fairness with the competitiveness of the UK banking sector. It is also intended to encourage banks to move away from risky funding models that threaten the stability of the financial sector.

We were the first country in the G20 to take such action—the hon. Member for Streatham (Mr Umunna) talked about leadership, and I think this is leadership—and we have been joined by France and Germany, which made announcements on bank levies in June. Germany’s plans for its bank levy have been before Parliament there, while France outlined the details of its bank levy at its budget in September. Hungary, Portugal and Austria have since also outlined plans to introduce bank levies, while Sweden has already introduced a levy. Our bank levy is a permanent one and a regular source of revenue—unlike the one-off bonus tax of the previous Administration.

[Mr Umunna]

What does the Minister say to the International Monetary Fund? I have already mentioned the IMF’s views on the level at which this levy should be imposed. Conservative Members are fond of quoting the IMF to us time and again, yet the IMF takes the view that at least £6 billion a year can be raised from this levy. Does she agree with the IMF and, if not, why does she think it is wrong?

[Justine Greening]

The IMF has expressed its own views around levels of taxation. In the broader international context, which the hon. Member for Nottingham East (Chris Leslie) mentioned, there are questions about the introduction of a financial transaction tax and a financial activities tax. Unlike the hon. Gentleman’s party, we were prepared to introduce a bank levy nationally, but there are also discussions taking place about international measures that might be taken.

In fact, over and above the bank levy, the Government are taking a tougher approach to tackling tax avoidance by the banks. Prior to the spending review, only four of the top 15 banks had adopted the previous Government’s code of practice. We have asked Her Majesty’s Revenue and Customs to work with banks to make sure they adopt and implement the code by the end of this month, thereby making the commitment to comply with both the letter and the spirit of the law, and not to engage in or promote tax avoidance.

New clause 3 provides:

“The Treasury shall publish a report before the 2011 Budget examining the level of taxation on the banking and financial services industry.”

We have had some sort of rationale for it, but I have to say that I see little merit in making such a report in isolation. The report itself would be no substitute for the overall strategy for improved regulation and the complementary bank levy ensuring banks make a contribution in respect of the risk they pose to the financial system and wider economy. As set out in the spending review, the Government will continue to monitor tax receipts from the banking sector to ensure that banks make a fair and growing contribution to the public finances as the economy recovers.

In addition, there are, of course, already statistics available on the amount of tax revenue derived from the financial services sector. Historical figures for corporation tax receipts paid by several broadly defined business sectors are regularly updated and published on the HMRC national statistics website. To improve predictability, it is important that the Government provide clarity on the direction of tax policy, and the vehicle through which that is best delivered is the Budget itself. The new clause would require the Government to produce a superfluous report in advance of the Budget and therefore in advance of any announcements that the Chancellor might wish to make about tax policy generally that might impact on the banking and financial services industries.

The Opposition want a report on the banking industry. What the Government want, and what we have, is a strategy to ensure that the financial services sector pays its fair share. We have been clear about what we want to achieve, not only through the bank levy but through the code of practice, and by fixing the banks’ ineffective regulatory system—the system established by the last Government, who let our country down so badly. The new clause does nothing to support those aims, and I ask the hon. Member for Nottingham East to withdraw it. If he is not willing to do so, an apology to the British people for the mess of a regulatory scheme that he left behind would not go amiss.