Budget Resolutions

Clive Efford Excerpts

Tuesday 12th March 2024 Commons Chamber

[Laura Trott]

I am sure the hon. Lady will be pleased to know that the average earner will be subject to the lowest effective tax rate since 1975.

[Clive Efford (Eltham) (Lab)]

Will the Minister give way?

[Laura Trott]

I am going to make a bit of progress.

Sadly, the Labour party is putting this in jeopardy. Labour Members have no plan to cut taxes, and cannot name a single one that they would cut. Instead, they are trying to pull the wool over the public’s eyes by pretending that they have refinanced their £28 billion a year plan to decarbonise. They themselves have said that their pledge costs £28 billion a year, and they are apparently not scaling their promises down. We all know what that means: more taxes for hard-working families. What the public and the House need to know is this: which tax will they raise to pay for the plan, and, if they are in government after the general election, will they stick to our spending plans as set out in the Budget? The British public deserve to know.

During this Parliament, total departmental spending has increased by 3.2% a year in real terms, and day-to-day departmental spending will grow at an average of 1% a year in real terms beyond the current spending review period. The Government are protecting the record increase in capital spending over this Parliament, which will deliver about £600 billion of public sector investment over the next five years. As announced in the Budget, we are also committing an additional £2.5 billion for the NHS in England in 2024-25, protecting day-to-day funding levels in real terms.

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[Clive Efford (Eltham) (Lab)]

Over the last 14 years, the Conservatives have clearly failed to act for the common good. Budgets are about choices, and they have consistently made the wrong ones.

We have the highest tax-raising Parliament since world war two. The Resolution Foundation says that the tax increases since 2019 will cost £3,900 per household, and that incomes will be lower at the next general election than in 2019. The year 2022-23 saw the biggest drop in year-on-year living standards since the Office for National Statistics began its work in the 1950s. Taxes are going up, not down, despite the protestations of the Tories. I have heard no apology for the fact that only a third of the Tories’ tax cuts in this Budget are funded by identified tax cuts elsewhere, with the majority coming from borrowing. We have heard nothing from the Conservative party about that fact. If the Minister wants to dispute it, perhaps he will take it up with the Resolution Foundation.

The Tories also made the wrong choice with their announcement that it is their desire to prioritise cutting national insurance and abolishing it completely. Given the state of our public services, that leaves them having to find £40 billion, which, in the absence of knowing how it will be funded, the Institute for Fiscal Studies described as a prospect not worth the paper it was written on. We still have the Conservatives’ irresponsible recklessness: the “Tory efficiency” in public services that they talk about is for the birds. How will we find those sorts of cuts to our crumbling public services? It is a return to the austerity that we had between 2010 and 2015, which brought our services to their current state. The Resolution Foundation says:

“The idea that such cuts can be delivered in the face of already faltering public services is a fiscal fiction.”

How did we get to this state? Nothing in our public services is better today than it was in 2010. We are a better country than the one the Tories have brought us to being.

Another choice that the Tories are making is to put up council tax. My council tax has gone up over 50% since 2010, and the fees and charges that are being imposed on local people are stealth taxes forced on them by the Government because they have starved local authorities of resources.

Budgets are about choices, including in education. Every school in my constituency has lower per-pupil funding than it had in 2010. My borough has had £33 million lower funding overall since 2010, which is £867 per pupil. These are the amounts needed to restore funding to 2010 levels. Why are the headteachers and governors I speak to in my constituency worrying about costs when we hear from the Government that they have never had it so good? It is about choice, and the Government have consistently made the wrong choices.

Before I finish, I want to make reference to the contaminated blood scandal. Justice for those infected and affected has been delayed unacceptably by the Government. Sir Brian Langstaff made it quite clear how compensation could be paid, and he published the details in April last year. We are nearly a year on, and we are no closer to those people being paid compensation. In fact, the Government are putting steps in place to delay compensation to beyond the general election. The only way these people will get justice is if there is a Labour Government, and the sooner the Prime Minister calls that election, the better for them and the better for the country. We need a Government who will make decisions in the common good and ensure that everyone benefits from the growth that we need in our economy. We are certainly not going to get it from the Conservatives.

UK Economy

Clive Efford Excerpts

Monday 19th February 2024 Commons Chamber

[Bim Afolami]

The right hon. Lady is right that many people have had very challenging times over the last couple of years. Let me correct something that I previously said to the House: the increase in real household incomes since 2010 is actually 8%, while the increase in GDP per capita is 12%. I wanted to put that on the record. As for taxes, I cannot speculate about what will happen at the next fiscal event.

[Clive Efford (Eltham) (Lab)]

According to the forecast, in five years’ time debt will be higher than it is now. Is this a reasonable time to be talking about tax cuts, and does their doing so not suggest that the Government have learnt nothing from the Budget of September 2022?

[Bim Afolami]

I assure the hon. Gentleman that this Chancellor and this Government are very different from those in September 2022 to which he refers. As for debt, I repeat that we are keeping to our fiscal rule, which is and has always been that debt will be falling in the fifth year of the forecast—falling, once we exclude the Bank of England. That has always been our position, and it will continue to be the case.

Oral Answers to Questions

Clive Efford Excerpts

Tuesday 6th February 2024 Commons Chamber

[Paul Girvan (South Antrim) (DUP)]

11. Whether he has had recent discussions with Cabinet colleagues on funding for a UK-wide infected blood compensation scheme.

[Clive Efford (Eltham) (Lab)]

13. Whether he has had discussions with Cabinet colleagues on the potential cost to the Exchequer of compensation for people infected and affected by contaminated blood and blood products.

[The Chief Secretary to the Treasury (Laura Trott)]

This is an appalling tragedy, and my thoughts remain with all those affected. We understand the strength of feeling, and the need for action. The Government have accepted the moral case for compensation, and have acknowledged that justice needs to be delivered for victims. As such, the Government intend to respond in full to Sir Brian Langstaff’s recommendations for wider compensation following the publication of the inquiry’s final report in May this year.

[Laura Trott]

I know that the hon. Gentleman has a lifelong friend who has suffered from this terrible tragedy, and I can reassure him that we are determined to do right by the victims and those who have tragically lost their loved ones. The victims of the infected blood scandal deserve justice and recognition. On his question on timing, Governments of all colours have failed to sort this out, but I am pleased that the interim payments at least have been paid. As I have said, the Government are committed to the moral case for compensation and we are expecting the final report very soon. We will move as quickly as possible afterwards.

[Clive Efford]

We have had Sir Brian Langstaff’s recommendations since April 2023. Mrs Dorricott, the wife of the Chancellor’s constituent Mike, told the inquiry that the Chancellor, when he was Health Secretary, told Mr Dorricott:

“Don’t worry about this, we’ll sort it.”

He is now the Chancellor, with his hands on the purse strings, so will he now—through his colleague the Chief Secretary to the Treasury—confirm that the Government have identified the contingencies to pay the compensation to the people hit by the infected blood scandal?

[Laura Trott]

I can confirm that we are working with the Cabinet Office and the Department of Health and Social Care to ensure that we can respond as quickly as possible once the inquiry reports.

Autumn Statement

Clive Efford Excerpts

Wednesday 22nd November 2023 Commons Chamber

[Jeremy Hunt]

I commit to my right hon. Friend that I will not just continue to engage with the sector, but continue to enjoy the odd glass of Penderyn, which is my favourite whisky.

[Clive Efford (Eltham) (Lab)]

Can the Chancellor confirm that, after today’s tax cuts, we will still have the highest tax burden for 70 years—up £4,000 per household on pre-pandemic levels—when we go into the next general election?

[Jeremy Hunt]

What I can confirm is that after today’s measures we will have the lowest income tax burden for someone on average pay in the G7—lower than Japan, America, France, Germany, Italy and Canada.

Oral Answers to Questions

Clive Efford Excerpts

Tuesday 20th June 2023 Commons Chamber

[Andrew Griffith]

My right hon. Friend is absolutely right. I was pleased to join him in a Westminster Hall debate about the regulation of the cryptoassets sector. I commend the work done in this House by the crypto and digital assets all-party parliamentary group. He might join me in welcoming the decision by Andreessen Horowitz, one of the world’s largest technology companies, to locate its only international office outside of San Francisco here in the UK and to run its 2024 cryptoassets school here.

[Clive Efford (Eltham) (Lab)]

In 2016, Exercise Cygnus tested the country’s preparedness for a pandemic. Was the Government’s response at that time adequate, and what can the Chancellor do in his current role to make sure that we are properly prepared in the future?

[Jeremy Hunt]

I am looking forward to answering questions about that tomorrow afternoon at the covid inquiry. We did what was recommended following Exercise Cygnus. Certainly, Ministers did what they were advised to do, but the operation was focused on pandemic flu. The question that we must ask ourselves is why we did not have a broader focus on the different types of pandemic that could have happened, such as covid.

Mortgage Market

Clive Efford Excerpts

Tuesday 13th June 2023 Commons Chamber

[Andrew Griffith]

I am deeply intrigued by the concept that the hon. Lady’s constituents have hitherto been moving to the neighbouring Conservative-held seat of Mid Bedfordshire. Perhaps they recognise the better economic potential—the better opportunity to bring down rates as a result of our making the tough choices. Perhaps they welcome the sheer amount of support that we have provided for homebuyers. I wish her constituents well and hope that those who have moved to Mid Bedfordshire enjoy their next Conservative Member of Parliament.

[Clive Efford (Eltham) (Lab)]

The Minister claims that the current economic climate is down to the world economic situation, but in the next breath he claims that if, at some unspecified date in the future, things get better, that would be down to the Government. Over the recent period, mortgage borrowers have contributed an extra £1 billion in interest rates. Over the next couple of years, they are predicted to contribute £9 billion. The previous Prime Minister has apologised for her contribution to that, so why will he not do the same?

[Andrew Griffith]

In fairness, it is absolutely the case that these are largely international factors. The job of the Government is to control the variables within their control. The primary thing that they can do is not to come forward with greater unfunded spending promises as that would put more pressure on the public purse and would lead to interest rates and inflation being higher for longer. That is what is within our controllable domain and that is what we are focused on. I am not worried about where the credit accrues or otherwise; what I am worried about is trying to reduce interest rates for ordinary people at the earliest opportunity.

IMF Economic Outlook

Clive Efford Excerpts

Tuesday 31st January 2023 Commons Chamber

[James Cartlidge]

The hon. Gentleman mentions defence, but he might want to explain to his constituents why, at the last general election, he backed the right hon. Member for Islington North (Jeremy Corbyn), whose policy would have had us leave NATO and undermine the nuclear deterrent.

We have stood by the people of Ukraine in the face of a real war. We have not deployed into the theatre, but we have done everything possible short of that, including training the Ukrainian army since 2015. So yes, I will tell the hon. Gentleman’s constituents the truth: they should be proud of what this country is doing for the people of Ukraine.

[Clive Efford (Eltham) (Lab)]

I wonder whether the Minister thinks that the sanctions against Russia are having the desired effect. If he thinks that they are, as I suspect he does, can he explain why the IMF predicts that Russia will fare much better than us?

[James Cartlidge]

I am happy, once again, to refer to what the IMF said. At this morning’s press conference, Pierre-Olivier Gourinchas, the IMF’s economic counsellor, confirmed

“the good news: the UK economy has actually done relatively well in the last year. We’ve revised”

growth

“upwards to 4.1%...that’s one of the highest growth rates in Europe”.

Wagner Group: Sanctions Regime

Clive Efford Excerpts

Wednesday 25th January 2023 Commons Chamber

[James Cartlidge]

Yes.

[Clive Efford (Eltham) (Lab)]

The approach the Government are taking, case by case they will not deal with specifics, is just an excuse not to answer questions on specific examples that we raise in this House. I know that the bar is very high, but there can be few of Putin’s allies more notorious than Yevgeny Prigozhin. How can the Minister come to the Dispatch Box and say that the decisions were made by a civil servant? How can there be no red flag on the file of someone of such notoriety to say, “Speak to a Minister”? When are you going to get on and do the job you were put there for?

[James Cartlidge]

The reason that we do not comment on individual cases is well-established. I expect that it would be exactly the same under any other Government. To be clear, the UK sanctions regulations do not exclude payments for any particular legal services from that permission. Excluding such payments can give rise to issues about access to justice. OFSI does not consider it appropriate for HM Treasury to effectively decide whether a case has sufficient merit to be permitted to proceed by deciding whether to issue a licence permitting legal fees to be paid. Such an approach would raise considerable legal concerns.

Russia: UK Companies

Clive Efford Excerpts

Wednesday 7th December 2022 Commons Chamber

[James Cartlidge]

My hon. Friend makes an excellent point. As I said, not only have we banned the import of Russian oil and oil products into our markets but, in conjunction with other parties, we have prohibited UK ships and services from the maritime transportation of Russian oil unless the price paid is at or below $60—in other words, the onward trade from within our respective jurisdictions. Effectively, he also makes an important wider point about the amount of money that has been spent in Europe on Russian energy historically. There has to be a long-term answer to that. Ultimately, we as a country, and with our European and G7 partners, have to wean ourselves off all forms of Russian energy. The way we do that, as he knows—he represents a Cumbrian constituency—is by investing in nuclear and UK energy production, as well as by living up to our net zero commitments and driving up even further our offshore wind capacity, which, I am proud to say as an East Anglian MP, is the largest array of offshore capacity in Europe.

[Clive Efford (Eltham) (Lab)]

Should not the position of the Government be that UK companies must not profit from activities that sustain Putin’s war? And having said that, should the Government not say to those companies, “Where you do profit, we will use all the powers at our disposal to sequester those funds and make them available for the regeneration of Ukraine”?

[James Cartlidge]

We have set out precisely that with the commitments that the Prime Minister made in March, when he was Chancellor, on the desire to see businesses divesting from Russia. The hon. Member for Eltham (Clive Efford) is aware that there have been many high-profile public cases of firms divesting, and other colleagues have spoken of companies in their constituency. They all use the phrase that the shadow Minister used, which is “doing the right thing,” and I totally agree. Ultimately, that is why we have our very strong sanctions regime.

Finance Bill

Clive Efford Excerpts

2nd reading
Monday 28th November 2022 Commons Chamber

[James Cartlidge]

The hon. Gentleman is right to raise further education. We also announced in the statement that there will be a review by Michael Barber looking at the many positive initiatives that the Government have in place for training and increasing technical and vocational skills—T-levels, for example. We want to see maximum support for such schemes, so we will be reviewing them to ensure that we deliver them as effectively as possible. He makes an important point.

I turn to the measures on personal taxation. We know that difficult decisions are needed to ensure that the tax system supports strong public finances. To begin with, we are asking those with the broadest shoulders to carry the most weight. The Government are therefore reducing the threshold at which the 45p rate becomes payable from £150,000 to £125,140.

[Clive Efford (Eltham) (Lab)]

What consideration have the Government given to taxation of those who benefited during covid? The National Audit Office states that the Government invested £368 billion in the economy through furlough and various other pieces of support, but the people who received that money passed it on. Far from trickling down, the money has trickled up. During covid, the number of billionaires and millionaires increased to record levels in the UK. They have clearly benefited extraordinarily well from Government investment. Why are we not following the money?

[James Cartlidge]

The hon. Gentleman makes an interesting point. I, for one, would never resent the fact that someone is successful in life, particularly because of starting a business, working hard, investing in this country and creating wealth. We should always celebrate that. He says, however, that the money and expenditure during covid did not trickle down. On the contrary, speaking from my experience out in my constituency, businesses still express to me their gratitude for the grants and loans, for the £400 billion of support that we put in place that helped to carry the country through the pandemic—

[Clive Efford]

rose—

[James Cartlidge]

I will finish this point; the hon. Gentleman is welcome to come back at me on it. He will recall the estimates at the start of the pandemic that unemployment would be 2 million higher than it turned out to be. That is an entire depression’s-worth of unemployment that we saved through our measures, and he should be grateful.

[Clive Efford]

I absolutely agree with everything that the Minister just said, but the truth is that the money paid to people in furlough and to small businesses was passed on. That money was used to repay loans, to pay rent and to pay the lease. People have paid their mortgages. The people who received that money at the end of the day were those who were already wealthy, as the figures show. We should follow the money. We should not squeeze those people until the pips squeak, but we should make them pay their fair share.

[James Cartlidge]

By any objective assessment, that enormous support helped our country through one of the toughest challenges that we have ever faced—the biggest crisis outside war in recent memory. We have, of course, moved straight into another one. Across the House, there is recognition that the £400 billion of extra support that we put in place has benefited the country.

The hon. Gentleman talks about business costs. Of course, businesses had costs that we had to help them with, but to protect public health, steps were taken to close parts of the economy. We faced an extraordinary contraction. To avoid that, the Government had to step in and, in so doing, we lost 2 million jobs fewer than were predicted to go.

[Clive Efford]

Will the Minister give way?

[Jonathan Edwards (Carmarthen East and Dinefwr) (Ind)]

Will the Minister give way?

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[James Cartlidge]

The hon. Gentleman makes an interesting suggestion. He will not be surprised to hear that I do not announce new tax bands from the Dispatch Box on Second Reading of a Finance Bill. I can confirm, however, that those earning £150,000 or more will pay just over £1,200 more in tax every year. That is the precise figure.

For the final time, I give way to the hon. Member for Eltham.

[Clive Efford]

Any Government would have given the support that the Government gave at that time, so I accept everything that the Minister said about that, but where is the money now? There has been £368 billion paid into the economy. Who has it now? Who benefited from it? Should we not follow that money and make those with the broadest shoulders contribute?

[James Cartlidge]

The furlough scheme, on its own, protected 11.5 million jobs. Does the hon. Gentleman seriously think that the Government should expand some extraordinary array of resource to find out what those 11.5 million people did with the money that kept them in work when they could have been looking at unemployment, and we could have been facing the most staggering economic depression in our history? We avoided that and, instead, we reduced unemployment by 2 million more than was expected. We avoided that cut in jobs, which would have been absolutely devastating for communities across the country, and we should all be grateful.

--- Later in debate ---

[Clive Efford (Eltham) (Lab)]

I was struck by a quote I read a while back of the head of the Institute for Public Policy Research centre for economic justice, as it sums up the problem we face as a country:

“There is a massive structural flaw in the economy that whatever the economic shock the wealthier get wealthier. If we’re going to get the whole economy into recovery, and leave no one and nowhere behind, we need to change this. Societies that are so unequal are bad for everyone and policymakers need to address this dangerous gap, or risk people losing trust in our economy and democracy.”

At the core of that problem is the way we treat wealth in our taxation system. In an earlier intervention on the Minister I mentioned that the National Audit Office says that the total the Government invested in the economy during covid was £368 billion, which is roughly equivalent to £5,600 per head. Whichever Government had been in office at the time would have done something similar; they would have introduced a furlough scheme and helped businesses. That happened under the last Labour Government when there were crises: we stepped in on foot and mouth and the banking crisis, so forms of assistance were put in place. I therefore accept the assistance that the Government put in place, and I am not arguing about it, but it is ridiculous for the Government to argue that that money was paid and is now in the bank accounts of the people who received money during furlough or of the businesses who received assistance. It was paid to those individuals and businesses and it was used, and it has therefore moved on in the economy. That is £368 billion that has gone into the economy, and my question is: where is it now?

Most analyses of what happened in covid that are worth reading find that the wealthiest did extremely well during covid, so my question to the Government—and I would ask this of any Government—is this: what do we do about that? These people were already wealthy and now they are getting even more wealthy, which will drive the inequality the Government themselves say they want to deal with through levelling up.

[Matt Rodda (Reading East) (Lab)]

My hon. Friend is making an excellent speech. Is he, like me, thinking about all the people who wrongly profited from selling personal protective equipment to the Government and the lack of proper assessment of some of those offers of help and the lack of proper procurement processes being followed? Does he agree that many ordinary members of the public and NHS staff found that quite wrong?

[Clive Efford]

My hon. Friend’s intervention speaks for itself and I absolutely agree; that is an example of where this Government go wrong by treating the wealthy differently from others.

During covid, the number of millionaires and billionaires grew; we have the highest number of billionaires ever in The Times rich list and their combined income during that period grew by one fifth. So we can clearly see that inequality has been turbocharged by the money the Government put into the economy. I do not criticise the Government for putting that money in, but I do ask: where is that money now, where are the people who have benefitted most from it, and should they not, with their broad shoulders, bear more of the burden?

We have consistently had low growth over the last 12 years under Conservative Governments. The Resolution Foundation’s recent report “Stagnation Nation?” found that in each decade from the 1970s real wages rose by an average of 33% until 2007, but that that fell to below zero in the 2010s. So today average household incomes are 16% lower in the UK than in Germany and 9% lower than in France, having been higher than both in 2007. Under the Conservatives there has been a consistent shift of wealth from average household incomes to the wealthiest in the country. The policies they have pursued have been driving inequality, and my point is that until we reform how the taxation system deals with wealth we will not address that growing divide between those at the bottom and those at the top. This Finance Bill completely fails to address that problem.