Finance Bill

David Wright Excerpts

Monday 1st July 2013 Commons Chamber

[Chris Leslie]

I am not sure how many elderly people would find themselves in that predicament, but such circumstances ought to be dealt with in the design of a mansion tax. The hon. Gentleman will therefore see the logic of our new clause, which seeks to encourage the Chancellor to introduce proposals within six months. Let us look at the design of them, and think about those rare circumstances in which someone might be living in a £2 million property but have no means by which to pay an annual levy. I imagine that that would be quite rare—it is perhaps quite difficult to believe—but such circumstances might exist. I am convinced that the hon. Gentleman’s Liberal Democrat colleagues have thought through all those points when they drew up their carefully crafted proposals. Perhaps there are channels between the coalition parties that we are not party to, and perhaps they exchange information on these matters. I am sure that such a tax could be designed correctly, if not by the Chancellor then by the Office for Budget Responsibility, if that would be a better way of doing it.

[David Wright (Telford) (Lab)]

Is my hon. Friend as puzzled as I am by the Government’s opposition to this proposal? During the previous debate on the top rate of tax, the Minister and Government Back Benchers were suggesting that our proposal would not deliver revenue because people would avoid the tax system. They suggested that a higher rate system would not generate income, but they now seem to be opposed to a proposal for a tax on a fixed asset, which presumably would not move. My hon. Friend is making a valuable contribution and I hope that some Members on the Government Benches will join us in the Lobby later.

[Chris Leslie]

It is the oft-trotted-out claim of the Liberal Democrats that they are there to temper the worst excesses of the Conservative party, and perhaps they do exercise such influence. We all know that the Conservatives are there to defend the wealth of the very wealthiest in society—that is a given—but we want to see whether the Liberal Democrats in the coalition have managed to bend that ideology a little more towards the centre ground of politics and towards the space in which most people would agree that those with the greatest assets and wealth should make a fairer contribution. That would be a good thing to do.

--- Later in debate ---

[Chris Evans]

I feel as though this is part two of my speech. I listen to Government Members, and I hear the sound of the creation of two Britains. We have the Britain of the elite who are protected by the Government, who bring about tax cuts for the most affluent in our society. Then we have the other Britain—people who are playing by the rules but have seen their benefits squeezed, their tax credits cut and their council tax benefits cut. When they go shopping, their bills have increased because of the VAT increase. Nor is this society encouraging work, because work does not pay. Those people in work can be reliant on the benefits system, but the policies of the coalition Government are skewed against them—the vast majority of people in this country who are playing by the rules and want something better from their lives.

I feel sorry for the hon. Member for Eastleigh (Mike Thornton), who has not been a Member for very long. He is in his place alone as we challenge the Liberal Democrats on their approach to the mansion tax. As on tuition fees, VAT, tax avoidance and the tax cut for the most affluent, what they said in opposition, when they sat on this side of the House with no hope of being in government, was a different kettle of fish from what they say in government.

I can never clear my mind of the image of the Deputy Prime Minister, in a party political broadcast, implying—I do not wish to use unparliamentary language—that anyone who was not a Liberal Democrat was a teller of mistruths. Students remember that party political broadcast saying that tuition fees would not go up under any Liberal Democrat Government. It was a different matter when they found themselves in government.

In February, the Deputy Prime Minister said:

“I continue to believe we should ask for what would be a modest contribution from the very wealthy, either in the form of a Mansion tax—a 1% levy on properties worth more than £2m—applied just to the value over and above £2m; my preferred option. Or, alternatively, we could introduce new council tax bands at the top end, again, affecting properties worth over £2m…Nothing could do more to demonstrate a commitment to greater fairness in our tax system. I will continue to make this argument, in this Coalition and beyond. My approach is simple: taxes on mansions; tax cuts for millions.”

What did the Deputy Prime Minister do in the coalition? Did he sit there and fight for a mansion tax? No, the evidence—and we have to go on the evidence—is against it. In every major decision that the coalition has made, many of them unpopular, the Deputy Prime Minister has been found wanting. Let me explain something to the hon. Member for Eastleigh, who, in fairness, is the only Liberal Democrat Member who has sat through this entire debate. If that is who his leader is—if that is what his leader is about—he should ask whether the Deputy Prime Minister is equipped to lead the Liberal Democrats into the next election.

[David Wright]

It gets even worse for the Liberal Democrats. Not only did the Deputy Prime Minister say in that discussion point that he was a supporter of the mansion tax, but the Business Secretary went on to say to the BBC in March this year:

“Nick Clegg and I are very strong supporters of the mansion tax”.

I am really pleased to hear that, and I am sure my hon. Friend will be, too. I await to see how they will vote in the Lobby this evening.

[Chris Evans]

I, too, hope to see them in the Lobby, but I am sure that they will not be there. That is the wonderful thing about the Liberal Democrats: it is the only party that can support something—have the bare-faced cheek to stand up in favour of something—and then vote for the exact opposite in the Division Lobby. That is what the Liberal Democrats should remember: in the marginal seats that they need to hold on to, they will be judged on their priorities—[Interruption.] Does the hon. Member for Eastleigh want me to give way to him, or is he happy to listen? [Interruption.] Indeed, we do not usually hear from a Liberal Democrat.

The Liberal Democrats will be judged on their priorities, and their priorities have not been what they said they would be. They are not for the students; they are not for the elderly; they are not for the poorest paid in society: they are simply there to prop up this coalition Government. They are becoming nothing but voting fodder for this Tory Administration. I notice that the Tory Members were nodding when I said that. If any further proof were required about who is in the senior part of—

--- Later in debate ---

[Chris Evans]

Yes, I do. I think this is a win-win situation for everyone. Yes, I have said that we got the 10p tax wrong, but I think a lot of employers would welcome a 10p tax rate. As I have said here before, Opposition Members agree that work is the only way out of poverty, and a mansion tax could provide a way forward on that.

The new clause deals with a mansion tax. Labour has often been accused of having no policies and of not setting out our policies or of not being forthcoming enough, but we have said that we need to introduce a mansion tax to bring about a 10p tax cut and bring some fairness into society. Fair taxation should not be a Labour issue, a Tory issue or a Lib Dem issue; it should be across party. Fair taxation should interest us all, but without a fairer and less complex system, we cannot hope to achieve what we want, which is to see more people in work, paying their taxes and bringing down the deficit that way. With that, and after a number of interventions from you, Mr Deputy Speaker, I shall sit down.

[David Wright]

I was in the Chamber at the opening of the debate, and I would like to make a brief contribution on this subject. I am keen to see us move the debate forward a little on the issue of progressive taxation. My hon. Friend the Member for Islwyn (Chris Evans) was right to say that the Labour party was wrong to abandon the 10p tax rate before the last election, as it caused a good deal of concern in constituencies right across the country. It is important that we reassess that policy position now.

It is useful that we are matching the commitment to reintroduce the 10p band with a proposal for a mansion tax, linking the two objectives, and I am particularly supportive of the mansion tax. As we heard in an earlier segment of the debate, one of the key issues is tax avoidance, and Government Members made great play of the fact that the higher rate of income tax introduced at the end of the last Labour Government was not going to deliver much revenue because people would attempt to avoid it. I can understand that argument, but I think they are wrong, because we did not have a long enough period to see it work though, and not enough time was given to allow the new top rate we brought in to bed down.

One thing that can be said of the mansion tax is that one can with certainty ensure that income is being delivered for the Exchequer. Clearly, by their very nature, properties do not move. Some Members have referred to the possibility of revaluation of the council tax base. I do not think that there should be a broad revaluation in England at this stage, but I do think that it would be logical to apply a mansion tax to the largest properties in the country, given the need to generate a tax system that is fair and progressive.