Taxation of Pensions Bill

Debate between Debbie Abrahams and Cathy Jamieson

Wednesday 29th October 2014 Commons Chamber

[Debbie Abrahams]

Is my hon. Friend concerned about the question of the capacity to deliver the advice that the guidance guarantee is meant to supply? According to evidence that the Pension Schemes Bill Committee took last week, the figure is less than 25%. It is not just that poor advice might be given; there may be none at all.

[Cathy Jamieson]

My hon. Friend makes an important point, and I read with interest the transcript of the Committee’s evidence session. People need good-quality guidance to help them make the right choices. We must guard against mis-selling, for example—we cannot afford a repeat of the payment protection insurance scandal. We must prevent people from falling victim to exploitation and illegality. We know that pension liberation fraud has already endangered millions of pounds in savings, affecting many people. That is the reason why I am concerned about the way the Government have handled these reforms, which to some seem a bit rushed and haphazard.

Finance (No. 2) Bill

Debate between Debbie Abrahams and Cathy Jamieson

Wednesday 9th April 2014 Commons Chamber

[Cathy Jamieson]

I will come on to that point, and on to corporation tax, when I speak in more detail about why we want a review of the bank levy. I hope Government Members understand why we think it is important to have a review and to consider the implications. I started by saying that we are taking a relatively mild-mannered approach, with no demand, as is sometimes made, for something to happen immediately. We are saying, “Let’s look at the figures, let’s look at the implications, let’s look at what can be done in the round, and let’s have the Government do that work and bring it back for further discussion.”

To go back to the hon. Gentleman’s point, the figures compiled by the Labour party suggest that the cut to the 50p tax rate saw an estimated 2,714 bankers who earn more than £800,000 share a £98.5 million windfall—an average tax cut of £36,300 each. I just make that point in relation to the notion that the Treasury will somehow get the yield from that.

[Debbie Abrahams (Oldham East and Saddleworth) (Lab)]

Would my hon. Friend like to comment on why the gap—which I do not think, from their policies, Government Members understand—between the top and the bottom matters? Overwhelming evidence shows how harmful it is to society that the gap between rich and poor is increasing.

[Cathy Jamieson]

My hon. Friend makes an important point and it is important to recognise it. I made the point that this is not about bashing the bankers per se. The front-line staff who operate call centres and other places have not seen their living standards rise as quickly as they might have wished. Those on the minimum wage or the living wage, who aspire to improved employment opportunities if they were available; those on zero-hours contracts; those who work part time but would prefer to work full time; young people taking any job, even if it is a stop-gap until they find one that suits their qualifications and aspirations—they are the ones who find it most difficult to understand why the banks have not changed their culture. It appears to them that in some instances people were being rewarded not for success but for failure, and that they could not aspire to have their own success in their own jobs rewarded. It is also fair to say that in some ways the financial services sector was slightly better protected from the wage freezes and so on than manufacturing and other sectors in industry. I absolutely understand my hon. Friend’s point.

No Government Members are seeking to intervene at this point, so I can only assume that they heard what my hon. Friend said and agree that this is a very important point in considering how to take things forward. As she suggested, ordinary people, particularly young people, are still dealing with the legacy of the financial chaos caused by the banks, and with the cost of living crisis that has been made worse by the policies of this Government. To return to her point, real wages—I will say it again, even though I know it has been repeated on numerous occasions in the course of these debates—have fallen by £1,600 since 2010. That is a huge amount of money for those on the lowest incomes. That may not have an impact on those who received the average tax cut of £36,300, but it certainly has an impact on ordinary people who are trying to do the best for their families.

--- Later in debate ---

[Cathy Jamieson]

I have no difficulty with the idea of getting young people into any form of education, employment, traineeship and so on, but we have to ensure that that is available to the young people who are out of work for a lengthy period as a priority, because we know that the longer young people are away from the jobs market, the more difficult it is for them to get back in, and I do not see that the hon. Gentleman’s point is in any way incompatible with the idea of bringing forward a report to look in more detail at how this could work and how the funding would be used.

[Debbie Abrahams]

I should like to make a quick point about the evidence that links entry-type jobs to future career progression. That evidence is weak, so my hon. Friend is right to say that a sustained approach needs to be taken. Is she also aware that a Prince’s Trust report on long-term youth unemployment shows that one in five young people who are long-term unemployed feel that they have nothing worth living for? Long-term unemployment has a direct effect on finances, but it also affects how young people view themselves in society. The implications of that are—

Finance Bill

Debate between Debbie Abrahams and Cathy Jamieson

Monday 1st July 2013 Commons Chamber

[Cathy Jamieson]

Once again, my hon. Friend is absolutely correct. When we heard the spending review announcements last week, many members of the public recognised that this was a spending review brought forward not because it was part of some grand plan by the Government or something that they were always going to do, but because of the Government’s own failures on the economy—their failure to get the deficit down as promised; their failure to deal with borrowing; and, indeed, their failure to get growth back into the economy.

[Debbie Abrahams (Oldham East and Saddleworth) (Lab)]

I congratulate my hon. Friend on her excellent speech. Further to confirm her point so that everybody gets it, did not the Chancellor promise not to introduce another spending review before the next election, and is not the failure of his economic policies the reason why we needed to have that spending review?

[Cathy Jamieson]

My hon. Friend is absolutely correct. Many members of the public will not look at the Chancellor’s spending review as a success—it is not—and they will recognise that this Government have, as we said at the outset, cut too far and too fast, so that we have had all the pain and none of the gain that the Government promised. [Interruption.] Conservative Members can sit and sigh, make all sorts of side interventions, look at the ceiling, look to their feet or whatever else, but the harsh reality is that the constituents we all meet on a day-to-day basis know that their living standards are dropping. They know that the money in their purse does not go as far at the end of the week, because prices are rising at a time when wages have stagnated at best, and are dropping at worst.

To return to the new clause, the bankers earning £1 million or more a year will benefit from the combined tax cut at a cost of at least £34.6 million. As I said earlier, we can understand why the public are angry and why they do not feel that this Government are acting fairly. Given some of today’s comments, I suspect that many of the people watching this debate will gain the impression that the Government are not listening to them, that they have no understanding of the issues they face and that, sadly, in many instances, if not all, they do not actually care.

Our new clause is a relatively mild-mannered amendment—one of the sort that we proposed regularly in the Finance Bill Committee, asking the Government to look at the impact of the policies that they are introducing. In this particular instance, the new clause asks the Chancellor to consider the effect that his tax cut will have on the level of bonuses in the financial sector. There 30 million taxpayers in the UK—30 million people who go out to work every day and have to pay their way—yet they realise that the Chancellor has decided to cut taxes for the richest among them. There is no getting away from that. That tells you everything you need to know, Mr Speaker, about this Tory-led coalition. Never mind the rhetoric of “We’re all in it together”, and never mind the risible attempts to paint themselves as the party of fairness as they tried to do in the spending review, because when it comes down to it, the Tories and the Liberal Democrats are effectively topping up bank bonuses with a further tax cut. That is the reality of what is happening.

Labour Members believe that there is a better way. We have consistently said that we would use a tax on those massive bonuses to fund a jobs guarantee for every young person who has been out of work for a year or more. We would do that because the trends in long-term employment remain extremely worrying.