Finance (No. 2) Bill

Debate between Geraint Davies and Andy McDonald

Thursday 18th April 2013 Commons Chamber

[Andy McDonald]

My hon. Friend makes a telling point and I would not want to diminish the importance of what I am saying by qualifying what he said about despair. As in his constituency, this Friday we will have a wonderful demonstration of generosity in my constituency with the same sort of event—a trolley push. My point, however, which I wish to reinforce, is that there is such a spirit of determination and people are so resilient that they will not be beaten by this situation. However, they will come through it not because of this Government but despite them.

While tax cuts are being handed out to millionaires, 40% of children in my constituency are living in poverty. I cannot see how fairness and the apparent principles of a big society are influencing or informing this Government’s policies one iota. I do not wish to dwell too much on the negativity, but it is unavoidable given that my constituency is the second worst in the country for long-term unemployment. We are asking for fair treatment. North-east England is the only net exporting region in the country; our contribution to the national economy is massive but the people see little of the benefits. It is about fairness.

The Prime Minister and Chancellor have repeatedly said that those with the broadest shoulders should bear the largest load. They claim that the 45p tax rate raises more revenue, but one data point is totally unreliable, as has been exposed in the Chamber today. It is also clear that the richest will arrange their affairs, especially when such a reduction was so well telegraphed. The richest have benefited most from our society, and the amount of tax they pay is proportionately more than their numbers, but proportionately less than their wealth. Relative to their income, the Chancellor’s biggest tax rise—that on VAT—hurts those at the bottom most. The rich still do very well, with company directors getting inflation-busting pay increases, and bank executives getting huge bonuses, which the Prime Minister went to Brussels to defend.

[Geraint Davies (Swansea West) (Lab/Co-op)]

The Committee may already know, and people will be interested to hear that, in the past two years, pay increases for the top 10% were on average 5.5% in both years. The top 10% have increased their pay by 11%. The Government claim that the rich are making a greater contribution, but they have very thick wallets to start with and, frankly, are sitting comfortably.

[Andy McDonald]

That is exactly right. I was going to make that point another way and say that company directors of the FTSE 100 received on average a 50% pay rise in 2011—Income Data Service provided that information. The well-off enjoy the benefits of many interesting incentive schemes that are not available to ordinary working people such as Mrs O’Reilly or Mr Hussain in my constituency, where the average income for a full-time employee is less than £500.

--- Later in debate ---

[Geraint Davies]

I am grateful to my hon. Friend for his enormous generosity in giving way. I have a schedule from a constituent that details his personal means. Until the beginning of this month he had £21.25 a week left for food and clothing after paying his utility bills and allowing £6 for bus fares. After the introduction of the empty bedroom tax, which will cost £10.31, he will end up with under £11 a week for food. Some problem could happen along the lines mentioned by my hon. Friend, but assuming that nothing else is needed, he will have just £11 a week. We would not want that desperate situation to happen in a developing country, let alone in Britain. How can we justify giving money to the richest when people are in despair and poverty?

[Andy McDonald]

I absolutely agree. People are getting down to the pennies, not the pounds, yet this month multimillionaires will get an extra £2,000 a week. We should be thoroughly ashamed of delivering that to our people. I sometimes wonder what on earth we mean by patriotism in our land. We can wave our flags and hold the necessary ceremonial events, but where do the people come in? For my money, patriotism must be about our people. We sometimes lose sight of that and get confused by the panoply and array of colourful images of patriotism that do not go to the heart of the living and working conditions of our people.

[Geraint Davies]

My hon. Friend mentions patriotism, which reminds me of yesterday’s great spectacle of Baroness Thatcher’s funeral, which many people would have enjoyed watching on television. However, let us not forget that that £10 million would have kept my constituent going on his previous income for 10,000 years, and on his new income for 20,000 years. Is that not a disgrace?