Risk-based Exclusion

Debate between David Davis and Jacob Rees-Mogg

Monday 13th May 2024 Commons Chamber

[Sir Jacob Rees-Mogg]

I entirely agree with the hon. Gentleman: any exclusion must be a decision of the whole House. That is our most ancient constitutional right. The idea that it can be stopped by three people—even, Madam Deputy Speaker, one as distinguished as the Chairman of Ways and Means—is not in the spirit of our constitution.

[Sir David Davis]

Is the substance of what my right hon. Friend says that if we enacted this procedure, it would be subject to challenge in the courts?

[Sir Jacob Rees-Mogg]

I am saying that it would be ineffective because a right hon. or hon. Member would simply maintain the right to turn up. There would be no power to arrest that person when turning up, therefore what would we do next, and what would we do if a person so outraged by the allegation said, “Well, I’m going to call a by-election, stand for Parliament and be returned”?

A general election is coming in the next few months. What would we do if a Member subject to this procedure were reselected by his constituency association and returned? By ancient principle, a Member who is returned cannot then be barred for something that happened in the last Parliament. Are we going to start saying, “The people of constituency X have duly voted in somebody who we suspended in the last Session, and who we are going to re-suspend”? Just before the last general election, Keith Vaz was subject to a report that was not entirely in his favour. Everyone recognised that that suspension could not carry over a general election.

Budget Resolutions

Debate between David Davis and Jacob Rees-Mogg

Wednesday 6th March 2024 Commons Chamber

[Sir David Davis (Haltemprice and Howden) (Con)]

It is rather sad to follow that speech from the hon. Gentleman. I remind him that a one-in-75-year financial crisis, a one-in-a-century health crisis and a one-in-75-year international crisis in Europe, all contributed dramatically to the problems he outlined. Although I may be on the same side as him when dealing with the public school tendency in my party, I do not blame them.

[Sir Jacob Rees-Mogg (North East Somerset) (Con)]

On that point, will my right hon. Friend give way?

[Sir David Davis]

Of course, absolutely. Every opposition has its day.

[Sir Jacob Rees-Mogg]

I would just like to say that we are not all that bad.

[Sir David Davis]

I might return to that shortly.

The truth is, as my right hon. Friend the Member for Epsom and Ewell (Chris Grayling) said, the Chancellor has done a skilful job in dealing with an extraordinarily difficult backdrop. I think there are more things he could do—I will talk about that in a second—although much of that is down to the structure of Government decision making, rather than his fault. For example, as the Leader of the Opposition said, we are dealing with a world in which Putin has weaponised supply chains and destroyed the economic basis of our anti-inflation policy that has worked for the previous 10 years.

I understand the Chancellor’s caution and his desire to retain the confidence of the markets. Against that, it is remarkable that he has taken £20 billion out of national insurance, at about £900 a head for 27 million people and for another 2 million self-employed people. Frankly, people are underestimating the success the Government have had with inflation reduction and employment. For most of my time in this House, the idea of 800 new jobs a day, every day, for an entire Government’s tenure, would be extraordinary—that certainly did not happen under the previous Labour Government—so we have quite a lot to be happy about.

That said, if I had my way, I would not have gone for national insurance; I would have reduced income tax. Why? A lot of assertions have been made in the public domain, probably in relation to the Treasury, that national insurance is less inflationary than income tax. That is bogus nonsense. The only argument to support that is that cutting national insurance will pull tens of thousands more people into the employment pool, but so will cutting income tax. Because income tax applies to people above the age of 65, cutting it would also keep highly skilled and capable people, who we do not want to retire, in the workforce. I would have preferred an income tax cut rather than a national insurance cut, but that is what we have got and it is probably much better than we would have got from the Opposition.

While I am talking about income tax, I want to make one point en passant. At every Budget, I have raised the question of IR35, which is oppressive on small businesses and the self-employed. It drives people out of the country; the Public Accounts Committee is looking into that issue and I hope it will come up with a conclusion some time soon. I will keep at the Government to deal with IR35 and the related issue of the loan charge. Frankly, His Majesty’s Revenue and Customs is behaving in a barbaric manner, reminiscent of the Post Office, so I will continue to raise that issue.

I want to raise a number of structural matters. My right hon. Friend the Member for Wokingham (John Redwood) made the point I was going to make about the Bank of England. The current structure of the Bank of England, its guidelines and its rules, are flawed in a big way. They handicap the way Government can operate on fiscal policy and on inflation. We need to address that and my right hon. Friend made a good point about that.

There is also the issue of the OBR. George Osborne created the circumstance under which the OBR almost sets the guidelines and the fiscal rules for the Government. The Government are then terrified of what the markets will do if they do not follow the OBR’s attitude. I understand the Prime Minister has a picture of Nigel Lawson in his study. He ought to read Lawson, because Lawson’s view on economic forecasts of any sort was that they are pseudo-technical nonsense. He did not believe in forecasts and we would do well to learn from him. The whole British establishment is suffering from a collective delusion about the amount of authority that rests with OBR forecasts—in fact, with all Government forecasts.

Let me give the House an example. The Bank of England’s forecasts failed to predict the worst inflation crisis in modern times. In 2022, the OBR’s UK borrowing forecast was more than £100 billion—I repeat £100 billion—off the mark. Last year, the Office for National Statistics—not in forecasting, but just in measuring—announced revisions that added £50 billion to the size of the British economy. Panmure Gordon turned round and said that it had completely rewritten the story of post-covid Britain, which it had. A new report on the OBR has suggested that, since 2010, the combined total of the OBR’s errors in growth forecasts aggregates to over £500 billion, and its errors in forecasting public sector debt accumulate to more than £600 billion: this is the mechanism that Chancellors are using to decide how much tax they can afford to cut. To remind people, the fiscal rule is that there should be a reduction in the percentage in 2029—that is the difference between two guesses. It is not a rational way to run an economy.

--- Later in debate ---

[Sir Jacob Rees-Mogg (North East Somerset) (Con)]

It is a pleasure to follow the right hon. Member for East Antrim (Sammy Wilson), and particularly my right hon. Friend the Member for Haltemprice and Howden (Sir David Davis), who made an important speech, particularly as regards the OBR. It was telling that the Chancellor started his speech by pointing out, at least inadvertently—it was not a deliberate attack—how many things the OBR has got wrong. That is a real problem for policymaking, because we treat the forecasts as if they were holy writ, authoritative and right. We make decisions on comparatively small amounts, assuming that the forecasts are fundamentally right, and that everything will add up—but of course it does not.

Let us look at the increase from £85,000 to £90,000 in the VAT threshold. That is an absolutely splendid and fundamentally good policy. It makes life easier for small businesses, is thoroughly welcome, and costs £150 million, or 0.01% of a Budget of £1.216 trillion. The cost is utterly trivial, yet the Government do not go further, saying that they cannot afford to. Of course they can. That amount is a rounding error, when we consider the total of what the Government do.

Unfortunately, that is the problem with the whole approach. As far as it goes, it is perfectly good. The economic circumstances have been tricky, and we spent £400 billion on support during covid, which was the right thing to do; but rather than nickel and diming, as is happening, we need to look at the fundamentals of our tax and spend policy. That £1.216 trillion is 44.5% of GDP that we are spending. That is too much. It is more than the country can afford; that is the starting point. It means that we are taxing too much.

A report in The Daily Telegraph states that we will not quite reach the figure for tax as a percentage of GDP that we did in 1948. We will just swerve having our highest level of tax in the post-war period, but that figure shows that we are spending too much. We need to get spending under control, so it was a pity that the Chancellor stuck with the 1% real-terms increase in public expenditure. We should be making public expenditure flat in real terms, and we need to recognise that the best way to afford public expenditure is through economic growth.

A matter for rejoicing—I know that the people in North East Somerset will be delighted, and the Chancellor mentioned this—is that at least the OBR and the Treasury have been willing to look at a particular tax to see if cutting it makes things better: the tax cut from 28% to 24% on property. I own property—I refer to my entry in the Register of Members’ Financial Interests—so the change may be beneficial to me, but moreover it shows that Laffer works when even the Treasury and the OBR come round to thinking about it.

Where else could that be done? The hon. Member for Solihull (Julian Knight) mentioned the tourist tax. It is the easiest tax for the Government to have got rid of. We know—all the evidence is there—that it costs the economy and the Treasury money, yet the Treasury ploughs ahead with the obstinate view that a tax rate produces a set amount of tax, which we know to be false. Go back to 1979, when 98% tax rates raised much less money than 40% tax rates ultimately did. That is why I am not at all keen on the attack on non-doms.

The OBR forecast expects 350,000 immigrants, net, to come to this country every year up to 2028-29. That is built into its forecasts. We need to get control of that. On the one hand, we need to get control of people coming in and undercutting the British workforce, lowering wages in areas such as social care. On the other hand, we want as many billionaires as are willing to come, because they are small in number yet contribute very largely to the economy. Attacking them, and making things harder for them, might be a means of stealing the Labour party’s clothes, but it is not good economic policy.

[Sir David Davis]

Doubly so, because post Brexit, other countries—France in particular—have actively set out to drag those billionaires into their country.

[Sir Jacob Rees-Mogg]

France, Italy and Portugal, our oldest ally. Yes, absolutely, other countries are competing for the very rich, who will go to those countries, rather than coming here.

I am also not in favour of the extra tax on oil companies. We need more oil and gas. One of the reasons why our productivity has been low and our economy stagnant, compared with the United States, is our much higher energy prices. We need to wean ourselves from the green ideology, which is making us cold and poor, and is one of the biggest factors to undermine economic growth in the past 15 years. We should not be attacking the oil companies; we should be welcoming and encouraging them.

The time limit is very tight, but there is good news that Members will like: time on the Finance Bill is unlimited, so I look forward to resuming my comments on Second Reading.

Retained EU Law (Revocation and Reform) Bill

Debate between David Davis and Jacob Rees-Mogg

Report stage
Wednesday 18th January 2023 Commons Chamber

[Mr Davis]

If the hon. Lady had given me 30 seconds, I would have made exactly that point. I agree with her. This morning, or last night, we had No. 10 rushing to brief the papers and to write to us saying that the Bill will not remove existing rights and protections, which is plainly not true, and that it will not impinge on environmental rights and so on. That demonstrates what a great hole there is in the middle of this legislation. If those matters were covered in the law, we would not need to have that assurance. All of the non-governmental organisations that are concerned—I do not agree with all of them—would not have had to have their say either.

[Mr Rees-Mogg]

I am very grateful to my right hon. Friend for giving way, because I, too, am very much in favour of parliamentary scrutiny and things being done properly. Everything that is covered by this Bill came in by a secondary measure and therefore it is proportional. Primary legislation is not within the scope of the Bill. If anything that came out of Europe came through in primary legislation, it will have to go through consideration on the Floor of the House. Unless my right hon. Friend is against secondary legislation altogether, I do not quite understand why he finds this Bill so shocking.

[Mr Davis]

I am sorry, but two wrongs do not make a right. The reason why I did not like the European Union was precisely what my right hon. Friend has just described. We had things almost de facto imposed on us. We went down an SI-type route to do things that I thought were important enough to justify discussion on the Floor of the House. The depletion of debate on the Floor of the House, mostly in the years before he came into the House, was one reason I was a Brexiteer.

We have approached this issue in a different way in other respects. Let us imagine that we are talking about 4,000 pieces of law, regulations or whatever. In truth, probably 90% of that may be clunky and may not work very well, but there is one thing in the Bill that I approve of, which is dealing with the superiority of European law—taking those priorities out of it. That is sensible. Once we have dealt with that, things will broadly work and will not justify a rush at this exercise. Let me explain very briefly what I think the consequences of that will be. I said that it is not democratic, but it will also be inefficient and possibly incompetent. I give the House, as a demonstration of this, what we did on 3 March 2020. You may remember, Mr Deputy Speaker, that that was the day that we gave the Government all sorts of powers under the emergency Coronavirus Act 2020. If we look, we can see how many errors were made in governing the country over the next six months, until we corrected that Act. If we do not bring a Minister to that Dispatch Box to justify what they are doing, the quality of the decision goes down, and that is dangerous when we are talking about measures as important as these.

The right approach is the one that we have actually taken in some areas. For example, we are rewriting the General Data Protection Regulation under a digital Bill. We are rewriting Solvency II and other financial measures under primary legislation, and the same is true for some procurement work. We should be doing similar things with some other software elements and biomedical rules. That is the way to do it: pick off the 10% or the 5% that really matter—that make 100% of the difference—and do that properly, on the Floor of the House, and not by remote control on a ministerial diktat in an SI Committee upstairs.

Business of the House

Debate between David Davis and Jacob Rees-Mogg

Thursday 8th July 2021 Commons Chamber

[Mr David Davis (Haltemprice and Howden) (Con)]

My right hon. Friend recommended reading “Erskine May”. I happen to have the 25th edition of “Erskine May” with me. Of course, what it makes clear is quite how difficult it is to amend an estimate, so much so that the last time that one was successfully amended was one century ago; he may remember—it was 1921. It makes it very clear that the Crown’s prerogative on the monopoly of financial initiative means that the only thing we can do in this House, unless the Crown acts differently, is to cut the bill, not increase it.

My right hon. Friend’s argument to the House is that we should do away with all the aid in order to get more aid. I am not quite sure that the public—or, indeed, the ambassadors, with their redundancy notices—would have quite understood that. It is rather sad that the Government are playing such games with this very, very important issue.

My right hon. Friend is a kindly man and he will know that, unlike most of the debates he is asked for, every day that goes by without this debate means that more people go without aid, particularly in places such as Yemen, where there is a famine right now. In the words of the United Nations Secretary-General, the ex-Prime Minister of Portugal, António Guterres, under famine conditions

“cutting aid is a death sentence.”

Can we please have this debate as soon as possible, so that we can change the Government’s policy for the better?

[Mr Rees-Mogg]

The problem with pre-prepared questions is that they miss out what has been said before, so I will reiterate it: had the estimate been voted down, not amended—I did not mention amending—the Government would have had to come forward with a new estimate by early August, otherwise the money would run out. It is a very straightforward mechanism that my right hon. Friend failed to use. That is rather surprising, when he is such an experienced parliamentarian. He has been in the House much longer than I have, as has my right hon. Friend the Member for Sutton Coldfield (Mr Mitchell).

Our overseas aid budget must be what we as a nation can afford. We had our largest peacetime deficit in the last financial year because of the covid crisis. We cannot afford to be as generous as we once were, but we must ensure that the money we spend is spent as wisely as possible and on the alleviation of disasters, which is a fundamentally important part of our overseas aid budget.

Proceedings During the Pandemic (No. 4)

Debate between David Davis and Jacob Rees-Mogg

Wednesday 2nd September 2020 Commons Chamber

[Mr Rees-Mogg]

I am very keen that more Members should be present, and I would say that these motions are permissive—they are not compulsory; people do not have to appear remotely. However, it seems sensible to keep the opportunity for remote participation, because some Members may prefer to appear remotely if the area they represent is in a local lockdown. They would not be obliged to, because there is an absolute right to attend Parliament, but they may prefer that in those circumstances, and that ought to be facilitated. It ought to continue until we are confident that there will not be further local lockdowns. That is a reasonable position to have. It may be that the House will think that it should be more tightly drawn, but I do not think that is the consensus of the House at the moment. Members do not have to appear remotely, and I certainly encourage them to be here in person.

[Mr David Davis]

I do not think for a moment that we should do away with the ability of vulnerable Members to take part remotely, be it through voting or taking part in debate—it is too soon for that. There is no doubt about that. However, I wish to come back to the point about spontaneity and controversy in this House. Everything my right hon. Friend said before, resting on Public Health England and other “august” authorities, depended on ignoring what my hon. Friend the Member for Christchurch (Sir Christopher Chope) and I have said about testing. If this House undertakes proper testing—it is now technically possible to test, in 90 minutes, every Member of the House every day, if need be—this House could return to being what it was before, in short order.

[Mr Rees-Mogg]

The problem with testing is that it tells us only whether someone has this virus; it does not tell us whether someone is in the process of developing it. Therefore, as I understand it—I am not pretending to be the Health Secretary—if someone tests negative in the morning, they may, none the less, have caught it the night before and be positive by the vote at 10 pm. Therefore, much as I wish that what my right hon. Friend was saying were the case, I do not think it is as straightforward as that.

Business of the House

Debate between David Davis and Jacob Rees-Mogg

Thursday 19th March 2020 Commons Chamber

[Mr Rees-Mogg]

I am grateful to the hon. Gentleman for the tone and the interest of his proposals. Everybody is open to ideas as to how things might be done differently and what the needs are on attendance. Mr Speaker received a letter from the Chair of the Procedure Committee, my right hon. Friend the Member for Staffordshire Moorlands (Karen Bradley), that sets out options for how Select Committees may be able to carry on with their important business without meeting in person. Parliament will consider what steps can reasonably be taken to allow things to be done remotely. It may be difficult to recreate the Chamber remotely, but there are certainly options with Select Committees and they are being considered.

The Government share the hon. Gentleman’s concern about people profiteering from the crisis and are aware that some people are behaving extremely well and others are using this as an opportunity. One has heard stories of people charging exorbitant prices for hand sanitiser, loo roll and so on, so the Government are aware of the issue and will act if necessary. As yet, it does not seem to be so widespread a problem as to require Government action, but we are not ignoring the point.

On universal basic income, the Government are willing to consider all ideas. Lots of ideas are coming in. The priority is to proceed with things that can be implemented rapidly and for which systems already exist. It may prove difficult to introduce entirely new systems, but I am sure that the Prime Minister, having said that he is open to meetings on this matter, will prove open to meetings on this matter.

As regards the week after next, the House voted for the recess dates, but it can obviously vote for new recess dates. We want to maintain flexibility, because I cannot make an absolute guarantee that all the emergency legislation that could possibly have been thought of is in the Bill coming before the House today. There may be other things that we need to legislate on, and there is also a demand for scrutiny, so we have to get the balance right. Nothing will be done without consulting the Opposition parties—I emphasise the plural.

[Mr David Davis (Haltemprice and Howden) (Con)]

The Opposition have a serious point in terms of the duration of the debate on the emergency legislation, given that it appears that we will debate it only for one day. There is a qualitative difference between a single-day debate on major legislation and even a two-day debate. I know that the upper House has different constitutional arrangements, but can the Leader of the House tell us how much time he expects it to spend considering the legislation, before it sends it back to us?

[Mr Rees-Mogg]

I note my right hon. Friend’s point, of which the Government are aware. The Bill needs to progress with support in this House. Emergency legislation is best done and tends to go through successfully only when there is widespread consensus, so his point is important. Unfortunately, I cannot say what proceedings will be in the other place, and I do not think it would be right for me to try; it would be slightly impertinent of me to say what their lordships will do.