Finance Bill

Debate between Clive Efford and Matt Rodda

2nd reading
Monday 28th November 2022 Commons Chamber

[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.

UK Energy Costs

Debate between Clive Efford and Matt Rodda

Thursday 8th September 2022 Commons Chamber

[Clive Efford (Eltham) (Lab)]

Although the solutions to this crisis may sound complicated in this debate, the choice is straightforward for the Government: who pays at the end of the day? Let us be clear what a windfall tax is. It does not tax profits that energy companies had planned for and could have expected in all reason. This windfall has come about, as the Government have said themselves, as a consequence of what is happening in Ukraine and the aggression by Putin. The question that I have and my constituents will have is: how can the Government reasonably come to a conclusion that it is okay for those energy companies to make these huge profits on the back of that aggression by Putin?

No matter what we do over the windfall tax, there will be a cost to the taxpayer because the Government are under pressure in other areas of expenditure. We only have to look at the newspapers today to see how, yet again, the number of people waiting for operations in the NHS has gone up to 6.8 million; and how the cost of living is forcing teaching assistants to question whether they can commit themselves to supporting children in schools or should move to higher-paid jobs, such as in supermarkets. Everywhere we look, the Government are under pressure over public expenditure on our vital public services. Yet they are prepared to wave aside the potential to pay for these increases through a windfall tax.

[Matt Rodda (Reading East) (Lab)]

I am grateful that my hon. Friend mentions teaching assistants because one contacted me recently. Many low-paid workers and others on moderate incomes be staggered by the Government’s decision to put the interests of energy companies ahead of those of normal families.

[Clive Efford]

Absolutely. My hon. Friend is absolutely right. The Government are morally wrong to turn their back on a windfall tax when they are clearly under financial pressure in other areas of public expenditure.

In my brief contribution, I want to raise one specific issue relating to my constituency. I have a craft bakery that has survived for 100 years and is about to celebrate its centenary. It has been run by six generations of the same family. It kept feeding people in my constituency—I was not the MP at the time, I hasten to add—during the second world war, so even the Luftwaffe could not shut down this bakery. It employs 20 members of staff, in an industry where energy use is really heavy, and faces cost increases of 300% or 400%, so it is trying to renegotiate its energy contracts. As the statement published by the Government says—I have it here; on such an important crisis, its sheer length is 200 words—there will be assistance for businesses equivalent to that given to individuals, guaranteed “for six months”. The Prime Minister said—I wrote these words down—that businesses would be given some idea of what assistance they will get “within three months”, but they are negotiating now. We had no clarity from the Prime Minister in her statement. It was as though she was making a Queen’s Speech—“My Government will”—but she gave us no detail on what Ministers will be doing.

One thing I want a guarantee on is that, if we are to get a financial statement from the Government next week or before the conference recess, we will have a proper debate in this Chamber, as we are required to have. Or will the Government avoid scrutiny—as has been a repeated action—yet again?