Finance (No. 2) Bill

Gareth Snell Excerpts

Committee: 1st sitting: House of Commons
Monday 18th December 2017 Commons Chamber

[Peter Dowd]

I thank the hon. Gentleman for that history lesson.

[Gareth Snell (Stoke-on-Trent Central) (Lab/Co-op)]

If we are talking about the 1980s, let us remember that corporation tax spiked to over 50% in 1983 under a Conservative Government. Government Members are giving us lectures, but they should perhaps look at their own history rather than judging ours.

[Peter Dowd]

That is a fair comment.

The threshold was established despite Treasury officials considering it to be far too low. Under the original plans, the levy would have raised £3.9 billion a year—nearly £1.5 billion more than £2.6 billion—but the Government of the few ensured that the threshold remains low.

At 0.078% for short-term liabilities and 0.039% for long-term liabilities, the level set was—not to put too fine a point on it—an embarrassment when compared with that in other countries that introduced a similar levy. It was less than a third of France’s level, substantially smaller than Hungary’s, which was set at 0.53%, and even lower than that of the USA. They are all well-known Marxist countries.

In 2015, under pressure from the Minister’s and the Government’s chums, once more the then Chancellor cut the bank levy rate, and the current occupant of No. 11 has continued on that sojourn. In so doing, he has ensured that, by 2020, the UK’s biggest banks will have received a tax giveaway worth a whopping £4.7 billion. That is £4.7 billion that could have been spent on our public services—notably on children’s services, for example.

--- Later in debate ---

[Peter Dowd]

The only thing that is going to attract people over to France is the shambles that the Government have made of their Brexit negotiations. That is a significantly bigger factor than, for example, the banking levy.

[Gareth Snell]

France has a corporation tax rate of 33%, so I am not entirely sure the point the hon. and learned Lady was making is valid. Would my hon. Friend care to comment on that?

[Peter Dowd]

My hon. Friend is right on that. Other countries, including the United States, have a corporation tax of 36% and the German rate is higher than ours, so even if we went back to the 2010 level of 26% that we had under a Labour Government, we would still have the lowest rate of all our competitors. That is the reality. Interestingly, they are doing much better than we are, notwithstanding that higher level of corporation tax.

--- Later in debate ---

[Stephen Kerr]

I thank my hon. Friend for that useful intervention because I absolutely do remember that. The reason why those words might linger in mind longer is that they came from someone holding an office of state. Cabinet members at the time were positively encouraging those whom they considered their friends in the City to become increasingly reckless, as was the First Minister of Scotland, as I have mentioned.

[Gareth Snell]

Now that the hon. Gentleman has demonstrated that his memory is fully functioning, will he answer the question asked by my hon. Friend the Member for Wrexham (Ian C. Lucas)? Does he recall the comments made by the former Chancellor, who was shadow Chancellor at the time? It appears that the views of shadow Chancellors are quite important to Conservative Members.

[Stephen Kerr]

It might be a function of my age, but I must confess that I have no recollection of anything to which the hon. Member for Wrexham (Ian C. Lucas) referred. I apologise to the House for the lapse in my memory, but I am of an advanced age and it is perhaps a senior moment—I do not know.

I support the Bill and the plan that goes with the banking levy, which is a fair way to ensure that banks make a fair contribution to the tax system and that they make the right contribution to society. The changes proposed in the Bill are fair. They provide for a level playing field for all banks, whether domiciled in the UK or based outside it.

--- Later in debate ---

[Stephen Kerr]

I am in favour of some fair competition in retail banking. We need to consider many important issues in the context of the future of retail banking, especially how it appears in the heart of our communities.

RBS is closing its branch in Bridge of Allan, which happens where I live. In the past eight months alone, the Clydesdale bank, the Bank of Scotland and the TSB have all closed their branches, and now RBS is, too. That leaves the post office on Fountain Road as the only place where anyone will be able to do any over-the-counter banking.

[Gareth Snell]

Given that the Government are the major shareholder in one of the banks to which the hon. Gentleman referred that has closed and left his community devoid of proper facilities, does he not agree that it is time for the Government to step in and use their shareholder clout to ensure that bank branches stay open?

--- Later in debate ---

we all have to reflect on the fact that it was the very crash in the financial system in 2008—that most epic of crashes—that brought us to this point in the first place, that cost so much and that put such a huge burden on the national debt and the taxpayers of the future.

[Gareth Snell]

I am very interested to hear the hon. Gentleman give us his rhetoric about history. What, at the time, were the suggestions from the Conservative party in terms of dealing with the impending crash? Anecdotally, I know that chief execs of banks were talking about money running out at cashpoints. What would the Conservative party have done differently in 2008 from what happened under the Labour Government?

[James Cartlidge]

I would say three things. First, the hon. Gentleman talked earlier about the shadow Chancellor, but I have to go back and quote the City Minister at the time—Ed Balls—who said in 2006:

“nothing should be done to put at risk a light-touch, risk-based regulatory regime”.

[Gareth Snell]

If we are going to trade quotes across the Chamber, the then Member for Witney, who was the leader of the Conservative party at the time, said:

“I want to give you…less regulation.”

If we are talking about regulation and the state of the banks at the time, the Conservative party is as culpable as anybody else.

--- Later in debate ---

[Rosie Duffield]

I thank my hon. Friend the Member for Wirral South (Alison McGovern) for her intervention, but in the light of your comments, Mr Owen, I shall continue with my speech.

These parents and children will no longer be able to meet or play together, and the children will be unable to socialise with children their own age in a safe, well-equipped space. Loneliness is a—[Interruption.] This is about real cuts to real people, affecting their lives.

The problem of loneliness has been much talked about lately. New parents often experience feelings of isolation and can lack confidence, and that is especially the case for parents who have recently moved to a new area or do not have English as their first language. It goes without saying that they are helped enormously by being able to meet others in similar circumstances, sharing their common fears and trepidation at a time of huge life change. Taking away a lifeline such as Sure Start cuts them off from friends, health advice, skills sharing and their communities.

[Gareth Snell]

My hon. Friend is setting out in her excellent speech exactly the same point as that made by my hon. Friend the Member for Bristol South (Karin Smyth): reducing the bank levy will have a direct impact on community services. Could the services she has mentioned be saved if the Government were to drop their plans to cut the bank levy?

[Rosie Duffield]

Absolutely. We have heard a lot about Marxism and some filibustering speeches, but the real people watching today are interested in cuts to services such as children’s services. That is why I am speaking about them.

We know that two thirds of councillors from 101 local authorities that were surveyed said that not enough money was available to provide universal services such as children’s centres and youth clubs. How does the short-sighted and drastic cutting of the funding that children’s services need help the children and families of tomorrow? This short-term, household budget-style approach will leave a generation of communities bereft, isolated and without the many essential services that are so needed by parents and children.

--- Later in debate ---

[Mel Stride]

My hon. Friend is entirely right. The point about up-front costs—alongside the costs of conveyancing, surveyors and so on—is a critical one, particularly for young people getting on to the housing ladder.

[Gareth Snell]

Average wages in Stoke-on-Trent are £100 a week lower than the national average, and the average house price is only £123,282, so will the Minister tell me the tangible benefits of lifting the stamp duty threshold to £300,000 for my constituents in Stoke-on-Trent?

--- Later in debate ---

[Alison McGovern]

Will the Minister give way?

[Gareth Snell]

Will the Minister give way?

[Mel Stride]

I will make a little progress, if I may.

The Budget announced an ambitious package of new policies to tackle the housing challenge, including planning reform; spending; and a new agency, Homes England, to intervene more actively in the land market. Together with the reforms in the housing White Paper, the housing package announced in the Budget means that we are on track to raise annual housing supply by the end of this Parliament to its highest level since 1970 and to 300,000 a year on average by the mid-2020s. That means that housing supply is on track to be higher over the 2020s than in any previous decade. However, it will take time to build these new homes, and the Government want to act now to help those young people who are aspiring to take their first step on to the housing ladder. That is why the Bill permanently abolishes stamp duty for first-time buyers purchasing a property for £300,000 or less. First-time buyers purchasing a house that is between £300,000 and £500,000 will save £5,000. To ensure that this relief is targeted at those who need it most, purchases above £500,000 will not benefit from the relief.

--- Later in debate ---

[Gareth Snell]

I thank the Minister for taking a second intervention from me. To my earlier point, though, there are fewer than 15 properties currently on the market in Stoke-on-Trent between the value of £250,000 and £300,000. I say again: the average wage in Stoke-on-Trent is £100 a week less than the national average. How will young people in Stoke-on-Trent benefit, when the housing supply does not exist and the wage level will simply not allow them to purchase a property of that value?

[Mel Stride]

The figures the hon. Gentleman chose to use were, I think, a range between £250,000 and £300,000, and he says there are 15 properties in that category. Of course, stamp duty kicks in at £125,000, so it is the range from £125,000 to £300,000 that we would actually be considering in that example.

First-time buyers are typically more cash-constrained than other buyers, and stamp duty requires cash up front, on top of a deposit and conveyancing fees, for purchases over £125,000. The Government think it is right to reduce the up-front costs that first-time buyers need to pay, giving them an advantage over the rest of the market.

--- Later in debate ---

[Jonathan Reynolds]

I commend the hon. and learned Lady for googling that so fast. I do not think that Andy Burnham’s resolution to tackle homelessness should be laughed at; it is admirable. As someone who has lived in Greater Manchester for nearly 20 years now, I see the scale of the social and urban decay on the streets around us. Anyone who travels to Manchester and moves a short distance in any direction from Manchester Piccadilly station will see what an appalling state of affairs we have reached. It is simply the case that every time the Conservatives are in power, they increase homelessness. For me, that is the most visible sign of a Conservative Government in office, and I commend any politician—Andy Burnham is leading on this for us in Greater Manchester—who makes the difference.

[Gareth Snell]

The shadow Minister is making an excellent contribution. I want to point out, as he has in relation to Andy Burnham in Greater Manchester, that continual cuts to local government are forcing many local authorities to disinvest in their homelessness prevention services. For example, Stoke-on-Trent—a Conservative-run council—is cutting £1 million out of its homelessness prevention budget in the next five years. What does he say about such a situation, and what does he think could solve it?

[Jonathan Reynolds]

I agree with the point my hon. Friend has made. The fact is that we know the impact that a series of Government measures have had, and we can reverse or improve on them. Fundamentally, we can change the availability of housing stock, but we can also create a policy framework that prevents people from being made homeless in the first place, and that is what we need to do.

--- Later in debate ---

[Mr Jones]

They are indeed. My hon. Friend the Member for Ipswich (Sandy Martin) mentioned the example of Persimmon earlier. Many of those companies are no longer housebuilders in the traditional sense. They are employment agents who employ contractors to do things. In my constituency, some of the complaints about new builds are pretty horrendous, and I think that that experience is shared across the House.

[Gareth Snell]

Where private developers are developing houses, they are all too often quick to run to the district valuer to argue that affordable and social housing makes development schemes unaffordable, so fewer affordable social houses are being built through private development.

[Mr Jones]

My hon. Friend makes a good point. Added to that is the fact that the definition of “affordable” in London is completely out of reach for most people.

The Government have this one idea that we are going to solve our housing problem through the private sector. I accept that it has a part to play, but the social sector, meaning both councils and very good housing associations, could step up to the mark and actually provide houses where we need them. If we look at the amount of money that is going into the subsidy, as mentioned by my hon. Friend the Member for Wirral South, we would not even have to spend money directly on social housing. We could provide new housing by just underwriting the debt of some of the social housing providers. In my area, Derwentside Homes and Cestria have now come together as an organisation called Karbon—I emphasise the k for the Hansard reporters, but I think it is a stupid name—which has been able to do small-scale developments by borrowing against its assets. If it had Government support for that borrowing, it could do a lot more.

Helping local authorities to take a share in things by putting land into deals or by setting up their own corporations of social landlords and councils could lead to the development of the houses that we need. Social housing is not a static model. People think that social houses are just for rent, but Karbon has a good subsidiary called Prince Bishops Homes, which allows people to start by renting and then, as their circumstances change, purchase the house and convert their rental into a mortgage. We need to look at schemes like that. Are they expensive in terms of what my hon. Friend the Member for Wirral South referred to? No, I do not think they are, and they will provide housing where we need it. I accept the particular pressure on housing in London, but there is pressure everywhere, not just from first-time buyers, but people who want to rent for the first time.

If the Government put their ideological baggage away and said, “Are we actually going to do what we say and produce the houses that people need?” they could do things in a different way. The Minister can talk about 300,000, half a million or a million homes—I say the same to my Front-Bench team—and it is fine to pluck figures out of thin air, but delivering them is a different thing altogether. If we look back at the history of housing in this country, we only actually build large numbers of houses when we have direct Government intervention, and we need that direct intervention now. It is easy for the Government to argue that the previous Labour Government failed here, but we did not. We actually transformed a lot of social housing. Two housing associations in my constituency received over £100 million to bring their stock of homes up to a decent standard, which was transformative for residents and tenants. Houses with 40-year-old bathrooms had them changed. There were new rooms, new central heating systems, new kitchens and more energy-efficient measures. I am not going to shy away from talking about what the Labour Government did when we were in power to change the lives of many people in this country.

Turning to land banking, there is evidence that certain companies are using land banks. In some cases, companies submit planning applications and then just sit on the land. I welcome any approach to deal with that, but we need to be a bit more imaginative about allowing local government to be a bit more forceful with their planning powers. When Labour was in government, I was a huge critic of something called the regional spatial strategy, describing it once as Soviet-style five-year planning. It was too blunt an instrument.

We need to allow Country Durham and other areas like mine to expand housing, because we are increasingly becoming commuter belt for Tyneside and Teesside. Somehow restricting the allocation of housing to the urban conurbations fails to understand that, without new houses, a lot of villages and communities in my constituency will struggle to survive. More powers should be given to local authorities not only to form local plans but to implement them, too.