Proportional Representation: House of Commons

Debate between Chuka Umunna and Nigel Evans

Tuesday 23rd April 2019 Westminster Hall

[Chuka Umunna (Streatham) (Change UK)]

I congratulate my hon. Friend the Member for Penistone and Stocksbridge (Angela Smith) on initiating this debate. I will try to make three quick points in the three minutes that I have.

First, while I do not want to repeat the points made in favour of proportional representation—hon. Members can take it as a given that I agree with them all—the big problem, which the hon. Member for East Dunbartonshire (Jo Swinson) mentioned, is that our system is a two-party system. It is essentially rigged in favour of two parties. That worked, one could argue, in a Britain of a different age, when our country was essentially divided between the interests of business and capital on the one hand, and the interests of labour on the other. We cannot divide up our country in that way in this day and age. I do not see how two political parties can possibly do justice to the modern tapestry that is Britain, and to the range of interests within it. Traditionally, the response to that argument has been that they are closed coalitions of interests in any event—that they are broad churches. They are not broad churches. I know, because I used to be a member of one. They are straining to keep those divisions and different interests in one place.

We therefore end up with the absurdity that on an issue as crucial as the national security of our country—“What would you do with the future of our nuclear deterrent?”—we have a whole group of people in the Labour party, which I know well, who are committed to retaining the nuclear deterrent, but a leadership and a potential Prime Minister saying that they will never use that nuclear deterrent. I use that simply to illustrate the unsustainability of the system, and how impossible it is for the two main parties in British politics to do the job in the way they used to.

Surely it is better and more honest to have open coalitions governing together. Perhaps each of the two main parties in this country should become two or even three parties. In practice they might govern together, but at least everybody would know where everybody stood and people would not have to pretend that they agreed with each other when they did not. It would make for an altogether more honest system of politics.

Secondly, the other problem with the system is that millions of people in this country vote for a party not because they want to, but because they think they have to in order to keep the other lot out, or because it is the least worst option. How can we go on with a system that forces people to make that kind of choice? If I am wrong about that and people do want to vote for those parties, why does poll after poll show that when we have the Leader of the Opposition, the Prime Minister and “Don’t know” lined up as the options available to people, “Don’t know” scores much more highly than any other option? Thirdly—

[Mr Nigel Evans (in the Chair)]

Order. I am sorry, but your three minutes is up. In fact, you have gone over the limit.

[Chuka Umunna]

Can I finish the sentence?

[Mr Nigel Evans (in the Chair)]

Go on, then.

[Chuka Umunna]

I am very grateful. Thirdly, to address the point about extremism, we can get around that in any system of proportional representation—as they do in Germany, where they know those dangers all too well—by having a threshold that parties must exceed in order to be able to stand in an election. That is all I wanted to say; I am grateful for your indulgence, Mr Evans.

Finance Bill

Debate between Chuka Umunna and Nigel Evans

Tuesday 20th July 2010 Commons Chamber

[Mr Umunna]

Of course, I agree with my hon. Friend. In addition, behind closed doors, some people in the Treasury share the pessimism about the state of our economy, with a leaked Treasury document showing an expected unemployment increase of 1.3 million over the next five years owing to the coalition Government’s economic policies. As well as the colossal human cost of those job losses, that will exacerbate the deficit by significantly increasing unemployment benefit payments, as I mentioned before, and cutting income tax and national insurance receipts significantly, but let me go on to the next point, as I wish to make some progress.

According to the Chief Secretary, the Bill will help to reduce the deficit and take action to eliminate the structural deficit, which is, of course, an obsession of the Government. We have already seen that their determination to do that could lead to the biggest cuts in Government spending that we have seen for many decades, but let us linger a little on the claim that the Bill is “responsible”. I have already explained how the coalition has sought to conflate public finances before the financial crash with the measures taken to mitigate the crash’s impact on hard-working ordinary people, but it is crucial that we establish what is “responsible” and what is not. The facts tell a very different story from that told by the coalition Government.

When Labour came to power, as the shadow Chief Secretary has said, public sector net debt was 42.5% of GDP. On the eve of the financial crisis, it was 36.5%, and interest payments had fallen from 3% to 1.6% of national income. A recent report by the IFS found that,

“the UK public finances were in better shape when the financial crisis began than they were when Labour came to power.”

By contrast, Germany’s indebtedness amounted to 65% of national income in 2007. In France, the figure was 63.8%; in Italy, 103.5%; and Japan ran consistent deficits, with the result that it owed 167.6% of national income by 2007. In short, the UK Government’s borrowing at that time was not of the order suggested by the Conservative party and certainly did not by any stretch of the imagination cause the economic crisis that followed.

That crisis, of course, caused the world economy to contract for the first time since the second world war. As I said, that called for decisive fiscal expansion—for billions to be injected into failing banks and into a flagging economy. How lucky we were that the then Government intervened. I for one refuse to apologise to Government Members for the bold action that the Labour party took to keep people in work, to ensure that they could still take money out of the ATM cash machines in the wall and to prevent the recession from mushrooming into a catastrophic depression.

Let it be said loud and clear that responsibility was what the previous Government did, but irresponsibility is pinning the blame for the size of the public sector debt on the previous Government and using that as a reason to hack off chunks of the public sector through spending cuts. Will Hutton, whom the Government have just appointed to head up their commission on high pay in the public sector, hit the nail on the head when he wrote in October that it was not the Labour Government

“that got us into this mess…What got us into this mess above all was the 30-year rise of Big Finance”.

However, the same people who insist that the previous Government got us into this mess propose in the Bill a corporation tax cut that will gift millions to big finance—that is what I call irresponsible.

Let me finish by examining the claim around which much of the Budget debate has revolved: that this was an “unavoidable” Budget, thus making the Finance Bill unavoidable, too. The two parties in government have made a set of choices that, I dare to venture, predate the economic crisis by a number of years. The game plan on which the Budget was based was disclosed long ago in the 2005 Conservative manifesto, the author of which happens to be the new occupant of No. 10 Downing street. The Conservatives pledged in their manifesto to slash 250,000 public sector jobs and to abolish 168 public bodies. Back then, Howard Flight, the party’s deputy chairman, was secretly recorded saying that the cuts publicly advocated by his party were a fraction of those planned. He said that the actual plans had been recalibrated into something that would be “politically acceptable” and that his party

“had to win an election first”,

but that afterwards

“you can actually get on with what needs to be done.”

We therefore cannot say that we were not warned, although people’s surprise that the Conservatives have been joined in their venture by the Liberal Democrats is wholly understandable.

Given all the shifting political sands and hidden agendas, the game of choices necessitates an eagle eye, because what stands out from the Bill and the Government’s general economic policies is not just the unfair VAT rise and the corporation tax gift to the City, as well as the disingenuous rhetoric with which they are presented, but what is absent from the Budget and the Finance Bill. Where, for example, is the plan to make the financial services sector bear its fair share of the burden? The Wall Street Journal said that the City should

“count itself lucky with the coalition government's emergency budget”.

Of course, the Government will introduce a bank levy that is forecast to raise about £2 billion, but that is a pin-prick when one considers the vast profits made in the sector. Even the IMF has proposed that the levy should raise £6 billion a year if we are properly to curb the “reckless behaviour” of the people in the industry. That additional £4 billion a year could—

[Mr Deputy Speaker (Mr Nigel Evans)]

Order. The hon. Gentleman’s speech is going wider than the Finance Bill itself, so will he please direct his comments to the Bill?

[Mr Umunna]

I was actually reaching the end of my speech, Mr Deputy Speaker. The key point that I am trying to make is that there is an alternative: a deficit reduction strategy that is based on growth and fair tax rises, as opposed to the scorched earth policy being pursued by the two parties in government. The alternative is similar to the strategy that President Obama is pursuing in the US which, in vain, he is trying to persuade our Prime Minister to follow. The alternative is to go for a more sensible timetable for deficit reduction, because as Roger Bootle of Capital Economics said last week before the Treasury Committee,

“In straightforward economic terms, I am not sure it would make a great deal of difference if the adjustment were over a longer period.”

The alternative is to avoid the overwhelmingly avoidable measures presented in this Bill—not least the VAT rise—that ultimately hit the poorest hardest. I assert that the Bill is four things: avoidable, unfair, damaging to business and deeply irresponsible.