Oral Answers to Questions

Edward Leigh Excerpts

Monday 3rd November 2014 Commons Chamber

[Mr Harper]

I would very much like to help more. In the last financial year, 2013-14, we helped 35,000 individuals into Access to Work, which was 5,000 more than the previous year. That is a good start.

[Sir Edward Leigh (Gainsborough) (Con)]

It is all very well for Germany to lecture us on the importance of the free movement of workers in Europe, but that is what it is supposed to be about—workers. Because Germany has a contributory system, one cannot arrive there and claim benefits. Will the Secretary of State take action, sort this matter out, take on the European Commission and say that people have to contribute taxes for three years before they can claim benefits here?

[Mr Duncan Smith]

We have already taken action. We have closed many of the loopholes and tightened things up. Come Monday next week, nobody will be able to claim out-of-work benefit for more than three months, and after that people will have to leave the country. They will not get housing benefit, they have to be able to speak English and they have to show that they are resident here. And that is only the beginning.

Benefit Entitlement (Restriction) Bill

Edward Leigh Excerpts

Friday 17th January 2014 Commons Chamber

[Mr Christopher Chope (Christchurch) (Con)]

I beg to move, That the Bill be now Read a Second time.

It is a great privilege to serve under your chairmanship for the first time on a Friday, Madam Deputy Speaker.

This is one of a series of Bills presented, and for every week that has passed since it was first printed, it has become more relevant. There is tremendous public concern about this matter. The Bill would make

“provision to restrict the entitlement of non-UK citizens from the European Union and the European Economic Area to taxpayer-funded benefits.”

Last week, the front page of The Sunday Times carried a big headline reading, “Ban migrant welfare for two years”. Those were the words of the Secretary of State for Work and Pensions, who was quoted in the article as saying:

“Britain should be able to say to a migrant: ‘Demonstrate that you are committed to the country, that you are a resident and that you are here for a period of time and you are generally taking work and that you are contributing… At that particular point…it could be a year, it could be two years, after that, then we will consider you a resident of the UK’”.

Unfortunately, what my right hon. Friend says does not accord with EU law, so it was no surprise to read the brief on my Bill produced by the policy research unit, which referred to the quote from the Secretary of State, but then said:

“However, this is not Government policy. Sources close to Mr Duncan Smith stressed he was expressing an aspiration for the future, rather than spelling out a policy.”

That is the problem. Senior politicians, whether it be the Prime Minister, the Home Secretary, the Secretary of State for Work and Pensions or even the Deputy Prime Minister, can beat their chests and say, “The present state of affairs, with EU migrants coming here and sponging off our taxpayer-funded benefits system, is unacceptable”, but when one looks at the detail, one sees that despite their huffing and puffing, they cannot do anything about it, except perhaps for the first three months that somebody is here, which is no big deal. Once someone from another EU country has been here for more than three months, they effectively have as much access to our benefits system as you or me, Madam Deputy Speaker.

[Sir Edward Leigh (Gainsborough) (Con)]

Apparently, one reason we cannot do much about it, legally, is that we have a universal system, rather than a contributory system. The Bulgarian Prime Minister says that our Prime Minister is being nasty, but he is not. It is actually much more difficult to get benefits in a country such as Germany, so we are just being sensible, and if the only way we can deal with this problem is to move to a contributory system, perhaps we should. There is a desire among many countries, particularly Germany, Britain and other developed countries, to try to solve this problem. It is not about being nasty; it is about being sensible.

[Mr Chope]

I certainly agree that it is about being sensible, but I am not sure the solution lies in trying to change our benefits system. Surely, we, as a sovereign country, should be able to decide what benefits system we want for our own people and should not have to try to tailor it so that it cannot be abused under EU rules.

The bigger problem was referred to by Dominic Lawson also in an article in last week’s edition of The Sunday Times. He wrote that

“although the great majority of east European migrants are entrepreneurially seeking the much higher wages available in the richer nations, a proportion will be welfare tourists.”

He then referred to the

“point made many years ago by Milton Friedman, who believed in open borders: he asserted that you can have a generous welfare state or open borders, but not both…There is no doubt that free and open immigration is the right policy in a libertarian state, but in a welfare state, it is a different story; the supply of immigrants will become infinite.”

Indeed, that is the concern of people in this country—that the supply of immigrants is becoming infinite. We look in the Government statistics for the numbers, but again we find that they fudge the figures and do not even collect the raw material.

--- Later in debate ---

[Mr Chope]

As I shall go on to discuss, the problem is that EU law in this area is evolving and changing. That is largely being done through regulation, but it is also occurring through decisions taken by the unelected judges in the European Court of Justice in Luxembourg. They are, in effect, giving an interpretation of what was originally a free movement directive—everybody would have gone along with that, because one core element in the European Economic Community was that people should be able to go from one country to another and take up employment there. Following the successive treaties, directives and regulations, the interpretation now is of people having a right to go to claim benefits in any country in the European Union once they have been there for more than three months.

[Sir Edward Leigh]

We are told that this proposal is against European law, but clearly the law is evolving. In any event, people cannot claim benefits in a place such as Germany unless they have been there for a considerable time. So why do the Government indulge in the politics of the pre-emptive cringe, kowtowing before what the European Commission might say in the future? Why do we not just say, “You cannot get a benefit for 12 months” and see whether it takes us to court? We could argue about it for years, so I do not know why we do not just stand firm on this.

[Mr Chope]

My hon. Friend makes a good point. Indeed, he will see that clauses 2, 3 and 4 of the Bill state:

“Notwithstanding…the European Communities Act 1972”.

In other words, the Bill would ensure that we were able to decide these things for ourselves, as a sovereign legislature, and override European Union law. My hon. Friend’s point was, in a sense, echoed by the Secretary of State for Work and Pensions in an article in The Sunday Times to which I referred earlier. It states that he

“added that reforming benefits was part of a wider move towards no longer automatically accepting rulings from the European Commission and courts.”

He welcomed the comments by Lord Judge, the former lord chief justice, that ‘we shouldn’t always assume straight away that anything that comes legally out of Europe we have to impose’ and said he was optimistic that there was the ‘beginning of a twitch with the Supreme Court”.

My Bill is designed to go a bit further than a twitch; it is designed to ensure that we change our law. If we suffer infraction proceedings in the European Court of Justice, one thing is certain: they are unlikely to reach a conclusion until you and I are in our dotage, Madam Deputy Speaker. The ECJ involves a very long-winded process, and because it is so long-winded, the French Government, for example, will deliberately defy EU law in the knowledge that any sanctions arising from their defiance will not be apparent until many, many years later.

--- Later in debate ---

[Mr Chope]

I agree with my hon. Friend. I signed that letter, as far as I know. I certainly support its content, and I am sure that if it were suggested that I had signed the letter when I had not, one of the Whips would have come to tell me about it.

[Sir Edward Leigh]

It was suggested that our proposal that Parliament should have a right to veto European legislation is contrary to European law, but it is interesting that a member of the German Bundestag said on the “Today” programme that, in his opinion, such a veto is not contrary to European law because the German supreme court can apparently strike down legislation that is contrary to the German constitution. So the proposal contained in the letter from our hon. Friend the Member for Harwich and North Essex (Mr Jenkin) is eminently sensible, and we could do it. We should at least include the proposal in our manifesto.

[Mr Chope]

I agree with my hon. Friend. If the Government were more open with the people about the fact that they have no scope under existing law to do anything about the people’s concerns on other European Union citizens’ access to our taxpayer-funded benefits, that would help the Government to make the case for a completely fresh arrangement with the European Union. At the moment, we are deluding ourselves and the people in thinking that we can address those very serious concerns.

When my hon. Friends and I launched our Bills after the Queen’s Speech, the noble Lord Ashcroft commissioned a survey of the popularity of the proposed measures. I remind my hon. Friend the Minister that the proposal in clause 1 to record the nationality of everyone with a national insurance number or on benefits received the support of 71% of the sample, with only 8% of people against the proposal and 21% undecided. On the proposal to restrict welfare benefits to UK citizens only, which is effectively the rest of the Bill, 74% were in favour, with another 13% undecided.

I hope the Minister will realise that he should not be in any doubt, if there is any doubt, about the public demand for the measure. At the moment, the public are demanding the measure and the Government are not saying, “No we can’t do it because we are tied by European Union law. We therefore have to change the European Union law or get out of the European Union.” The Government are pretending that they have freedom and flexibility to act under European Union law when they do not. I suppose no one really wants to admit impotence, least of all a Government, but that is their situation in the face of the evolving European Union law in this field.

I will not address in great detail the way in which European Union law has evolved, but I hope that my hon. Friend the Minister will answer some of the questions I asked in the debate on 5 June 2013 that were never answered. I asked:

“Does the Minister agree with the basic proposition that if someone from another European country decides to move to the United Kingdom, they should not expect to receive taxpayer-funded assistance for their housing, health care, education or living expenses?”—[Official Report, 5 June 2013; Vol. 563, c. 256WH.]

If the answer is that the Minister does not agree, let us have it on the record. It is no good ducking these questions. If a non-British EU national cannot afford to live in the United Kingdom without recourse to taxpayer-funded services, should not that person return to his own EU country rather than relying on UK taxpayer handouts? If the Government do not agree with that they should say so and then we can have a proper debate. I am sure we will then get even more letters than we do at the moment from UK Independence party supporters saying how out of the touch the Government are with the feelings of the people—but that is only an aside, Madam Deputy Speaker.

I hope that we will get some answers to those questions and will move away from the very carefully worded statements that on close analysis mean absolutely nothing, such as, “People will not be allowed to have benefits subject to their European Union rights.” Since their European Union rights give them access to almost all benefits, I submit that such a statement is without any value.

In essence, what happened was that we joined the European Economic Community, the fundamentals of which include freedom of movement, but over a period of time freedom of movement has been extended by treaty, directive, regulation and case law into areas that nobody could ever have contemplated. None of those extensions was discussed with the British people and hardly any of them were discussed with our Parliament.

The legal annexe, which is a scholarly document, spells out in frightening detail the extent to which the European Court of Justice has extended the scope of the various directives. For example, paragraph 47 states:

“In the case of Metock”

in 2008, the European Court of Justice made it clear that the free movement directive

“should not be interpreted restrictively and that its objectives must not be interpreted so as to deprive them of their effectiveness. The particular impact of the case in terms of the UK’s competence was its clear assertion that a member state should not be imposing additional requirements on those seeking to rely on free movement rights in addition to those set out in the existing legislation”.

The European Court of Justice is extending the law because it has direct application and because of the so-called shares of competence, which effectively mean that if the European Union legislates in this area it is not open to the UK Parliament or the UK Government to legislate in conflict with that.

Through the process of treating people from other countries in Europe who come to the United Kingdom as equals, we are moving inexorably towards the ever-closer union whereby people would not be citizens of an individual country but would just be citizens of the European Union. That is the agenda. When one sees the European Court of Justice’s interpretation of the various expressions in the legislation, one can see exactly what the threats on the horizon are and that they go beyond those that we have already witnessed.

Mesothelioma Bill [Lords]

Edward Leigh Excerpts

Tuesday 7th January 2014 Commons Chamber

Our priority—apart from publishing the regulations, which we hope to do tomorrow—is to address this matter. I will meet a Justice Minister, and we will find a vehicle to simplify the way in which the employment records are obtained for those who are making claims on the mesothelioma fund, so that we can do exactly what it says on the tin. What we have wanted to do all along is secure a speedy resolution for those who need access to the fund because they have no other recourse, and it is imperative for the House and Ministers to ensure that that happens. I hope the hon. Lady accepts that we are working very hard, and are also asking for legal opinions on whether we can take some action between now and the passing of the Bill.

[Sir Edward Leigh (Gainsborough) (Con)]

Could the matter eventually be dealt with by means of delegated legislation?

[Mike Penning]

I understand that that is possible. It could also be dealt with through a deregulation Bill. In any event, we will find the necessary vehicle. As I have said, the Ministry of Justice does not want the courts to be clogged up with requests for court orders, and the matter will be resolved.

Mesothelioma Bill [Lords]

Edward Leigh Excerpts

Monday 2nd December 2013 Commons Chamber

[Kate Green]

I hope that collectively the House can strengthen the Minister’s arm and send a strong message to the industry that we do not consider the scheme to be good enough yet and that we expect and demand improvements.

[Sir Edward Leigh (Gainsborough) (Con)]

Obviously, we want to try to help people who are suffering—everybody has accepted that—but these are complex areas. The hon. Lady has spent much of her speech attacking the insurance industry, which might be fair enough, but it rather raises the question: what was going on during the 13 years Labour was in power?

[Kate Green]

First, the hon. Gentleman might have missed the history I just rehearsed of the legislative process to date, and secondly, he is right that the condition and the legal circumstances surrounding it have been extremely complicated—there has been considerable litigation in this area, not just in the UK but internationally. I share his frustration that it has taken so many years to bring justice to victims, but it is not true that no efforts were being made. In particular, as colleagues have noted, in making what progress has been made, we have been powerfully supported by our colleagues in the trade union movement, so there has certainly not been utter indolence when it comes to securing justice for victims.

Oral Answers to Questions

Edward Leigh Excerpts

Monday 11th March 2013 Commons Chamber

[Mr Duncan Smith]

The right hon. Gentleman knows very well that when Ministers make regulations, they take the fullest advice possible. That advice came to us; it was checked and it said that the regulations were fine. The High Court upheld them. It was the Appeal Court that decided that an element of that was not correct.

I do not wish to make this a political issue, and I take full responsibility for everything that goes on in my Department. I accept that we wish we were not in this position, but if the right hon. Gentleman supports the idea that people who have been mandated to do work, should take jobs and do work experience once they have volunteered without messing around otherwise they lose their benefit, I hope that we can look forward to his supporting the legislation that will ensure that we do not have to pay out money against a judgment that we never anticipated.

[Mr Edward Leigh (Gainsborough) (Con)]

T4. Is the Secretary of State aware that Conservative Members support his courage and his battles in trying to reduce the crippling burden of the social security budget? In particular, may I commend his quiet courtesy this weekend in reminding the Archbishop of Canterbury that trapping people in dependency is not necessarily a Christian response? What the Secretary of State is doing is a good and positive way of making work pay.

[Mr Duncan Smith]

I am grateful to my hon. Friend. I have no issue whatever with the Church of England and the bishops saying whatever they believe. It is right and proper that they should argue with us and put pressure on us on a variety of issues. However, I do not agree that the way to get children out of poverty is to keep transferring more and more money to keeping people out of work. The reality is that we are having to reform a system that became completely out of control under the last Government and get in place a system that gets people back to work, because being in work is how people get their children out of poverty.

Romanians and Bulgarians (Benefits)

Edward Leigh Excerpts

Tuesday 5th March 2013 Commons Chamber

[Mr Duncan Smith]

As the hon. Lady knows, given my track record, I bow to nobody in my scepticism about many of these treaties. Under the Prime Minister, we have made it clear that, should my party get elected into government next time round, a very serious renegotiation will take place, with the option of an in-out referendum. Personally, I think that is exactly the right position. This is one of the key areas over which we want to get back a lot of control, and only my right hon. Friend the Prime Minister has been bold enough to say we will do that, and test ourselves against that.

[Mr Edward Leigh (Gainsborough) (Con)]

I love the Secretary of State, but frankly his answer was so long and complicated that one would need a degree in social security to understand it—I did not understand it. As a recent by-election showed, the people are hurting and they want a clear answer from the Government. Why do the Government not do as my right hon. Friend the Member for Wokingham (Mr Redwood) and the right hon. Member for Birkenhead (Mr Field) suggested and either move to a contributory system or say, “We will not pay you benefits until you have stayed here for a number of years”? If the European Court sues us, bring it on, and that will make our case for renegotiation.

[Mr Duncan Smith]

I am always grateful for my hon. Friend’s support in these matters. I recall that he used to be in a Government busy voting for the Maastricht treaty when I was rebelling against it, so, with respect, I will do whatever I can and I do not bow before anybody in my determination to say no to the European Commission.

Housing Benefit (Under-occupancy Penalty)

Edward Leigh Excerpts

Wednesday 27th February 2013 Commons Chamber

[Mr Edward Leigh (Gainsborough) (Con)]

We need to publicise that more. A family came to see me recently in my surgery. The husband is profoundly deaf and his wife has an open permanent wound in her intestine, so they need separate bedrooms, but nobody told them the fund was available. They are therefore very worried. We need more education, so that disabled and vulnerable people are better informed about what is going on.

[Kris Hopkins]

What my hon. Friend says is true. We need to ensure that the facts about this legislation are put out there and that vulnerable people are not misled by some of the interesting conversations that are going on.

Oral Answers to Questions

Edward Leigh Excerpts

Monday 5th November 2012 Commons Chamber

[Mr Hoban]

I think we all believe that it is important that where lone parents can work, they should work, because that helps to boost their income and that of their family. Guidance is given to personal advisers on jobseeker’s allowance to ensure that the sanctions regime is applied appropriately to lone parents, as in the case of all jobseekers.

[Mr Edward Leigh (Gainsborough) (Con)]

What, hitherto, has been the fraud and error rate in child benefit?

[Mr Duncan Smith]

It would be pretty negligible because it is paid to everybody, and it would therefore be impossible to figure it out. Across the board in the Department for Work and Pensions, we are beginning to see a downward pressure on fraud and error. My hon. Friend will be pleased to see that over the next few years we will be saving considerable amounts of money.

Universal Credit and Welfare Reform

Edward Leigh Excerpts

Tuesday 11th September 2012 Commons Chamber

[Mr Duncan Smith]

If the hon. Gentleman will forgive me, I said I would give way to my hon. Friend the Member for Gainsborough.

[Mr Edward Leigh (Gainsborough) (Con)]

The problem with IT systems in the public sector, rather than the private sector, is the sheer scale of numbers—8 million households will use the new system—the complexity of the issues and the lifestyle of the recipients. I saw more failed Government IT systems in my time on the Public Accounts Committee than I have had hot breakfasts. I beg the Secretary of State to be cautious, to test and re-test, to pilot and re-pilot, and not to believe a word spoken to him by IT companies or his civil servants.

[Mr Duncan Smith]

My hon. Friend was an excellent Chairman of the Public Accounts Committee—he is highly respected among Members on both sides of the House—and I absolutely agree with him. That is how I see my role. One thing I have done is brought into the system a red team, whose job is to go through and doubt everything I am told, and to ask questions. Being a sceptic and not believing are part of the process of delivering. I absolutely understand that. We are involving others in the process—that is our purpose.

Amendment of the Law

Edward Leigh Excerpts

Tuesday 29th March 2011 Commons Chamber

[Mr Peter Lilley (Hitchin and Harpenden) (Con)]

I congratulate my right hon. Friend the Chancellor on sticking to his plan to reduce the Budget deficit. Far from these cuts being too much, too deep, too soon, I believe that what he has proposed is the minimum over the longest credible period that we can reasonably expect will enable us to avoid the sort of financial crisis that has hit many neighbouring countries.

I want to address an illusion. The right hon. Member for Birmingham, Hodge Hill (Mr Byrne), whom it is normally a privilege to follow, based his speech on it, and it permeated the speech of the Leader of the Opposition at the weekend when he addressed the large rally on cuts. It is the illusion that we can have something for nothing. We live in a world of finite resources. If we spend more on one thing, we have to spend less on another. If we spend more now, we must expect to spend less—substantially less—in future, when we repay our debts with compound interest. The Opposition do not seem to realise that. I would be more than happy to engage in debate with either of them if when they advocated the restoration of spending in one area, they simultaneously spelt out the additional cut they intended to propose in another area of spending, but they never do so and the right hon. Member for Birmingham, Hodge Hill did not do so today. As long as hon. Members refuse to spell out alternative cuts to those that they reject, rational debate in this place is simply impossible.

Mr Deputy Speaker, I know that you are well aware that the ancient states of the Peloponnese resolved these problems by rules of debate that required those advocating increased spending on programmes that would require extra taxation or more borrowing to stand up in the public forum on a platform and argue their case with a noose around their neck. If they succeeded in persuading their fellow citizens of the need for increased spending and taxation, the noose was removed, but if they failed, the platform was removed. I understand that this healthy discipline meant that those states remained solvent for centuries on end.

[Mr Edward Leigh (Gainsborough) (Con)]

The slight problem with that is that if we had a similar system here, under whichever Government, there would be no Members of Parliament left.

[Mr Lilley]

That is slightly unworthy of a former Chairman of the Public Accounts Committee, who at least would remain, if in solitary glory.

A related illusion that the Opposition purvey is the call, frequently made by the Leader of the Opposition, for the Government to prepare a plan B in case the economic road gets rocky—a plan B would, by implication, involve higher spending and borrowing. Of course it is a bit rich for the Leader of the Opposition to ask for a plan B, given that he has not yet spelt out a plan A, but the reality is that if we abandon the plan set out by the Chancellor, we will get a plan B, but it will not come from the Opposition or from my right hon. Friend the Chancellor—it will come from the savers and pension funds whose money we would need to borrow to finance that increased borrowing. If we did bottle out of what we have proposed, they would demand deeper cuts over a shorter period and they would require us to pay a higher rate of interest. The net result would not just be deeper cuts in the public sector, as we have seen the markets impose on Portugal, Greece and Ireland; those higher interest rates would kill off and abort the recovery in the private sector on which we depend to create the jobs to take up the people not employed in the public sector. So it would be a disaster for this country if we were to go down that route.

The third illusion that some Labour Members purvey—perhaps the more honest elements among them—is the belief that we could avoid public spending cuts if we were prepared to put up taxation. But who would pay those higher taxes? Ultimately, taxes are always paid by individuals and if the squeezed middle are not going to pay them—they have been precluded from bearing a higher burden of taxation by the Leader of the Opposition —either the poor or the rich must do so. I would not put it beyond a party that sought to double the burden of taxation on the lowest paid by removing the 10p tax rate to seek extra revenues from the very poor, but that would not yield much money so Labour must look to the very rich for it. I just remind Labour Members that if they read the Red Book, they will see that the top 1% of income tax payers in the coming year are expected to pay no less than a quarter of the entire revenues of income tax—last year, the top 5% paid more than half of all income tax. We are reaching the point at which any further burden of taxation on those people would kill the goose that lays the golden eggs. In the words of my old friend, the sadly now deceased Lord Harris of High Cross, punitive taxes beyond a certain point do not redistribute income, they redistribute people. We have reached that point and we would go beyond it if we accepted the advice of the Opposition.

I urge my hon. Friends to support the Chancellor and my right hon. Friend the Secretary of State in what he is doing at the Department for Work and Pensions and to ignore the blandishments and illusions of the other side.

--- Later in debate ---

[Mr Edward Leigh (Gainsborough) (Con)]

It is a pleasure to follow the hon. Member for Newcastle upon Tyne North (Catherine McKinnell), and her comments about the importance of apprenticeships are right, of course. I want in particular, however, to congratulate the right hon. Member for Birkenhead (Mr Field). In the past he chaired the Select Committee on Social Security, and I was proud to serve on it with him. He gave the best speech of the debate—with the exception, of course, of the contribution from the Secretary of State; I will be in trouble if I do not say that. The right hon. Gentleman was realistic about the position we are in. I do not want to say a great deal about the structural deficit; we all know it is there, and how much it is. We all know the political imperative behind the Labour party campaign against the cuts. We also all understand that it is in the interests of the Government to play up that campaign because it makes them look stronger and more determined. It is therefore in the interests of both parties to talk about this topic in that way.

The right hon. Gentleman highlighted a point that I want to emphasise too: we have yet to turn the tide against the culture of spending and the fix of borrowing. We are going to borrow £485 billion over five years. That is more than our total public debt in 1997. The annual interest repayment on the UK debt for last year alone was £42 billion. I know the public cannot visualise what £42 billion is, but if we consider that we are spending more on simply repaying the interest on our debt than the entire amount we spend on educating our children, that should bring home the scale of the crisis facing us.

I am not a very party political person, so I am not very good at apportioning blame. We all know the last Government had to go through a massive international crisis, but we also all know that there was an underlying structural deficit that they did not deal with. The key question, however, is: what are we going to do now? I want to take as my text what the TUC has been talking about, because I would like to bring a few Opposition Members with me. The TUC asks how we are going to deal with this deficit without making cuts in public services, and it says there is £13 billion-worth of tax avoidance by individuals and £12 billion-worth of tax avoidance by corporations. Let us assume for a moment that that is true. How are we going to deal with it? If we follow the TUC line, the only way in which we can deal with it is through a radical simplification of how tax is raised and how the Government spend it.

The Chancellor made one historic announcement that has not been discussed much today, on the merging of national insurance and income tax. I urge him to continue with that theme, despite the siren voices that we have already heard, including that of a former Chancellor, who has said that it will result in winners and losers. The Chancellor must embark on this essential crusade. It may take many years, but it is vital, because simplification of the entire tax system lies at the heart of how we are going to deal with the deficit, with tax avoidance and with tax evasion.

The UK tax code has more than doubled in size since 1997 and it is now the world’s largest, recently surpassing even that of India. The only way to achieve simplicity in taxation is through a gradual move towards a much flatter rate of tax for both personal and corporate income, while eliminating the complicated system of loopholes, deductions and exemptions. Thus we would, eventually, have a system whereby we would set a single exemption for individuals, so that low-income earners would pay tax only if they earned more than a determined level of income. Many countries have already taken such an approach, including nine in eastern Europe, Hong Kong and Russia, the largest country in the world.

On defending the poor, I say to the right hon. Member for Birkenhead that it is not in the interests of the poor to have a so-called “progressive” income-based tax system. Such a system is structurally biased against them because they do not have the same access as the wealthy do to accountants and lawyers, and so cannot be instructed by them in the complex methods of tax avoidance. The poor are also caught in the poverty and unemployment trap. Many scenarios and Treasury models can be used, but it is estimated that if we had a flat tax rate of 22% with a £15,000 tax-free allowance, about 10 million of the poorest taxpayers would see their entire income tax burden disappear.

I know that people will say that the wealthy must pay more, but every time the top tax rate has been significantly reduced anywhere in the world, the wealthy have increased the proportion of tax income that they contribute. Under Mrs Thatcher’s Government, the top tax rate declined from 83% in 1979 to 40% in 1990, but high-earning individuals paid 35% of the total in 1979 compared with 42% in 1990. So it makes sense to have a much flatter rate of taxation—it makes sense for the economy and for the poorest in society, and it makes sense in terms of re-creating a sense of enterprise in the nation.

Once we dramatically simplify the tax system and get rid of all those loopholes and deductions, we will be able to explain the whole Budget process so much more easily to Parliament. At the moment, the Budget process is largely incomprehensible. I have been involved in the “Clear line of sight” project, and we want to simplify the whole process so that we know, line by line, what we are spending on behalf of taxpayers and how we are trying to get the nation moving forward again. I urge the Chancellor to be vigorous and brave in this debate.

[Several hon. Members]

rose—