Charter for Budget Responsibility

Graeme Morrice Excerpts

Tuesday 13th January 2015 Commons Chamber

[Graeme Morrice (Livingston) (Lab)]

You did!

[Steve Baker]

I am well aware of that, but it was necessary in the context of the hideous mess left by the hon. Gentleman’s party. It is always the same and this is the essence of the problem: there is no kindness whatsoever in making to those in need attractive promises that subsequently cannot be kept. That is not kind; it is cruel.

BMI Pension Fund Compensation

Graeme Morrice Excerpts

Wednesday 17th December 2014 Westminster Hall

[Graeme Morrice (Livingston) (Lab)]

Thank you, Mr Sanders, but it is pronounced “Morris”, although “Morreece” sounds quite posh. As always, it is a pleasure to serve under your chairmanship. I congratulate my hon. Friend the Member for Edinburgh North and Leith (Mark Lazarowicz) on securing this important debate.

This issue remains unresolved, and it requires the Government’s attention. I hope that, through the debate, we can make progress for the sake of those affected. The plight of members of the British Midland Airways Ltd pension and life assurance scheme was first brought to my attention by a constituent, Mr Euen Harper of West Calder, who was a pilot. He worked hard over a number of years and conscientiously paid contributions into his pension, but he now faces a set of devastating consequences.

My constituent first expressed deep concern about the scheme back in 2012, when it was placed in the Pension Protection Fund following the decision to sell BMI to the International Airlines Group—a decision that, it should be noted, was between two fully solvent international corporations. That decision has had profound and adverse impacts on the expected pensions of the scheme’s 3,700 members, including those of current pensioners and widows, and it continues to have negative repercussions today.

The most significant of those is the tax treatment of the pension compensation fund offered by BMI’s parent company, Lufthansa. Members not only had to deal with losses to the pensions they worked so hard for, but face being penalised twice by HMRC’s decision to tax the compensation. Jim Snee, chairman of the BMI pensions action group, summarised the scenario that members find themselves in:

“We’ve lost £10, Lufthansa have offered £3 in compensation and HMRC want to tax us on even that small relief!”

The general secretary of the British Air Line Pilots Association, Jim McAuslan, also makes an important point when he refers to it as a double whammy. The decision has added yet another devastating setback to the members’ continuing struggle. I sympathise entirely with those affected and applaud the persistent campaigning of the pilots union and the BMI pensions action group. Indeed, without the action taken by such groups, and the efforts made by hon. Members present this morning, those affected would not have a political voice.

Before making my final point in this brief contribution, it is important to touch on some of the wider issues arising from the BMI pension scheme scandal. While I recognise that this debate is focused on the tax treatment element, the terrible situation faced by members highlights the need for a review of how failed pension schemes are dealt with. It is the view of my constituent and of the chairman of the BMI pensions action group that it is too easy for corporate companies to escape their pension responsibilities. Indeed, a similar situation is currently being experienced by members of the Monarch Airlines pension scheme after it was placed into the Pension Protection Fund this year. It appears that a dangerous precedent is emerging, as it is becoming more common for big corporate bodies to dump their pension scheme obligations. The Government and the Pensions Regulator must do more to ensure that companies cannot manoeuvre their pension scheme responsibilities to the Pension Protection Fund. It is simply wrong that hard-working, innocent members of pension schemes are penalised and that their employers can walk away.

What is evident from my constituent’s story, and that of many others across the country, is the unfairness of the whole situation. The unfairness is most evident among those long-serving members of staff who were due to receive more than £27,000 a year and have now lost 80% of their pension savings. The unfairness means that any chance that members had of receiving a reasonable form of compensation for their grievance has now been dashed. While the compensation offered by Lufthansa is welcome and the tax treatment of compensation for pension cases can be complex, the decision to subject the compensation offered to members of the BMI scheme to income tax is a further blow. It is for that reason that the Government must intervene to get justice for members of the scheme. I ask that BMI pension scheme members are granted the justice of tax-free compensation. I therefore call on the Government to use the powers available to apply discretion in this case. In the same way that the Government granted Equitable Life scheme members tax relief as it was considered the right thing to do, so the Government must do the same in this instance and disapply the rules in light of the treatment of those affected. At the very least, that is what the members of the scheme deserve. I look forward to the Minister’s response.

Finally, I again thank my hon. Friend for raising this important topic. For the sake of all affected, I hope that the matter is resolved speedily.

Finance Bill

Graeme Morrice Excerpts

Tuesday 1st July 2014 Commons Chamber

[Graeme Morrice (Livingston) (Lab)]

The right hon. Gentleman said earlier that if the top rate of tax was too high people would leave—I presume he meant that they would leave the country. How many rich people have returned to the country as a result of the top rate being reduced from 50p to 45p?

[Mr Redwood]

We will be able to answer that question in due course, because these are still early days, but there are encouraging signs that more revenue is coming in from the rich. We will know the results of the latest experiment later, but we know fully the results of the 1980s tax cuts. They were clear enough to convince not only all sensible Conservative MPs at the time, who were happy to vote for the tax cuts and kept them throughout their period in office, but, more importantly, the long-running Chancellor of the Exchequer who took office in 1997 and held it for a decade before becoming Prime Minister. He is not an easy man to convince to be nice to the rich. I think that he decided to run with that tax rate because he was entirely convinced that he would get more money out of the rich at 40% than he would at 83% or 60%.

The Economy and Living Standards

Graeme Morrice Excerpts

Thursday 12th June 2014 Commons Chamber

[Graeme Morrice (Livingston) (Lab)]

The past four years have been a very tough time for a great number of my constituents and many other people across the country. Since the financial crisis of 2008 and the bold and decisive action taken by the previous Government to prevent the collapse of the banking system, the value of our economy, and with it the living standards of the majority of our fellow citizens, has fallen dramatically. Though some might attempt to point score over the causes of our economic situation, it is fundamental that Members recognise right from the start the very human cost of its consequences.

Whereas Government Members might wish to gloat over indications of some partial recovery, they either completely ignore or are simply too out of touch to recognise that the real value of wages has plummeted for most people while their cost of living has gone through the roof. When Shelter estimates that 4 million families are only one month’s pay packet away from poverty and not being able to keep a roof over their heads, the cost of living crisis that has taken hold in Britain today should be of real concern to us all.

Over the course of this Parliament, the Bills contained in successive Queen’s Speeches have done little to address the plight of those who struggle the most. This, the final Queen’s Speech before the election, is yet another missed opportunity to assist those in greatest need in society. When we look at the problems that working people face daily and the Government’s inaction, we can only agree that we have a coalition Government in zombie mode, oblivious to reality. Government Members may boast about the number of new jobs being created in the private sector, but that hardly compensates for the many thousands of jobs lost in the public sector due to Government cuts. Private sector job creation is welcome, but many of those jobs are insecure, being low-paid, part-time, casual or on zero-hours contracts, where people continue to live day to day.

The official unemployment count might be reducing, but the cost to the public purse of in-work benefits is increasing—hardly the high-value wage economy that is needed to guarantee the country’s long-term sustainable recovery and hardly a successful economic plan. The Government have cast aside ordinary working people and are on the side of exploitative employers, who cheer from the sidelines as reports such as Beecroft’s try to strip back employment rights, the minimum wage and safety at work. The Government are trying to line the pockets of the richest, in the hope that some of the crumbs will fall from the table. I am aware that we are very short of time, so on that point I will sit down.

HMRC Inquiry Centre Closures

Graeme Morrice Excerpts

Tuesday 4th March 2014 Westminster Hall

[Ian Lavery]

I fully agree, and I am sure my hon. Friend will agree that closing 280-odd offices—the service is provided up and down the country—will cause huge problems, mainly for people who are least well off but also, of course, for the staff themselves.

[Graeme Morrice (Livingston) (Lab)]

I congratulate my hon. Friend on securing this important debate. He will be aware that my constituency has an inquiry centre due for closure. I have been approached by constituents and members of PCS expressing concerns related to job losses and the impact that they could have on members of the public, particularly the most vulnerable. Does he agree that if the Government are serious about addressing the problem of underpaid and undercollected tax, the proposed closure programme is the wrong way to go about it?

[Ian Lavery]

I agree that the Government are going about it in entirely the wrong way. PCS, the union representing the HMRC workers, has agreed with HMRC that all members should have the opportunity for a formal one-to-one to help them consider their options. However, HMRC has withdrawn from that agreement in an attempt to pressure people into making decisions without information about applying for jobs and voluntary exits. That shows contempt for staff and puts huge pressure on people to leave by demoralising the work force.

Currency in Scotland after 2014

Graeme Morrice Excerpts

Wednesday 12th February 2014 Westminster Hall

[Ian Murray (Edinburgh South) (Lab)]

It is a great pleasure to serve under your chairmanship for the first time, Mrs Riordan, for a very important debate. Over the past couple of weeks, we have seen a watershed in the referendum debate in Scotland. The Governor of the Bank of England’s non-partisan and technical intervention on the currency has been critical in debunking the false assertions that the Scottish National party has been peddling about keeping and using the pound. I will come back to those revelations later and to some of the latest news on that issue.

We can sum up the Governor’s intervention by reflecting on a quote from renowned economist Keynes:

“He who controls the currency controls the country”.

And which eminent economist said that a country without its own currency is a country not only without a steering wheel, but also without brakes? No, it was not Keynes, Adam Smith, or even Marx, but the lesser-known SNP Education Secretary, Mike Russell. There is little doubt that the Governor was saying exactly that when he stated:

“It is no coincidence that effective currency unions tend to have centralised fiscal authorities whose spending is a sizeable share of GDP.”

He went on to say:

“In short, a durable, successful currency union requires some ceding of national sovereignty.”

The central message of the Governor’s speech, of course, was that currency union requires fiscal, economic and political union to avoid financial crisis.

[Graeme Morrice (Livingston) (Lab)]

I congratulate my hon. Friend on securing this important debate. As he will know, the Select Committee on Scottish Affairs, of which I am a member, has conducted an inquiry into the consequences of Scottish separatism. Last week, we were taking evidence from a number of eminent academics. One in particular, Professor MacDonald of the university of Glasgow, who is an expert in economics, said, in the context of price shocks regarding Scottish oil production:

“If you had a separate currency, your exchange rate would take up the adjustment, but, of course, if you are part of a monetary union, you won’t have that…That, for me, is one of the key deciding issues as to why, whatever we want to call it, a currency union or a monetary union would not work.”

Does my hon. Friend agree with that assessment?

[Ian Murray]

I do, and I think that is the assessment that many economists, academics and politicians have been making over the past few weeks. The Governor of the Bank of England made the very same assessment, and the Scottish Affairs Committee deserves great credit for the amount of work they are putting in on the issue.

Let me go back to the central message of the Governor’s speech. He said that currency union requires fiscal, economic and political union to avoid financial crisis. It is precisely that fiscal, economic and political union that the SNP seeks to dismantle with its obsession with independence. When the First Minister met the Governor of the Bank of England a few weeks ago, there was one person in that room who would control Scotland’s fiscal, monetary and spending policies in a currency union after independence, and it was not the First Minister.

A key test that the Governor set for any currency union is that a centralised fiscal authority would need to control about 25% of that fiscal union’s GDP. That is about 50% of the spending in Scotland. The SNP immediately responded by saying that they would have 100% control over taxes and spending in an independent Scotland, so by default, it is the SNP that has ruled out a currency union by completely ignoring the central warning of the Governor’s full analysis.

We do not have to look too far back into history to see that the Governor was correct. The euro created sovereign debt crises, financial fragmentation and large divergences in economic performance. That clearly illustrates the risks and challenges of creating and maintaining a formal currency union across different states with differing economies.

Scotch Whisky Excise Duty

Graeme Morrice Excerpts

Wednesday 8th January 2014 Westminster Hall

[Mr Donohoe]

It is a pleasure to see you back in the Chair this afternoon, Mrs Main. It is just a pity that you do not have a glass of whisky in your hand, with which, at this time of the year, we would share a toast. Water will have to do, I am afraid.

It is quite incredible that we should have to have this debate, particularly in this very important year for the Scots, who are voting on whether to remain in the United Kingdom or to have a separate Government in Scotland. I shall pose a question: can anybody tell me how much taxation there is on a bottle of whisky that costs about £12.70?

[Graeme Morrice (Livingston) (Lab)]

It is 80%.

[Mr Donohoe]

On a bottle of whisky that costs £12.70, more than £10 is tax, including VAT. That is the level of taxation placed on our best industry in Scotland.

--- Later in debate ---

[Nicky Morgan]

The hon. Gentleman’s pub sounds as though it was a very interesting place, and I am very happy to listen to representations on the figures.

The hon. Gentleman asked about the impact of Budget 2013 on pubs. The British Beer and Pub Association survey showed that, following a reduction in beer duty, 76% of the pubs would increase investment and 61% would employ more staff. That is why this reduction was targeted particularly at pubs. That is not to say that I have not listened to the hon. Gentleman’s arguments.

Given the Government’s commitment to ensuring sustainable public finances, it was not possible to end the escalator on all alcoholic products, so they made a targeted reduction in beer duty. The hon. Gentleman asked whether the Government had failed to consider other alcohol duties. I was not in the Treasury at that point, but I do not think that that was so. However, the decision to reduce the duty on beer was taken in 2013.

I have heard the views of hon. Members and I assure them that I will consider these as part of the Budget process.

[Graeme Morrice]

I congratulate my hon. Friend the Member for Central Ayrshire (Mr Donohoe) on securing this debate. The Minister may not be aware that there is a considerable number of whisky producers in my constituency, including the North British Distillery in West Calder, Glenmorangie and Glen Turner in Livingston, and Ian MacLeod Distillers in Broxburn. This last wrote to me recently to express concern about the fact that, in the past five years, while we have seen a 44% increase in taxation on whisky, there has been a 12% reduction in UK sales.

[Mrs Anne Main (in the Chair)]

Order. Interventions must be brief.

[Graeme Morrice]

Given the current 80% taxation on whisky, will the Minister seriously consider approaching the Chancellor before the March Budget—

[Mrs Anne Main (in the Chair)]

Order. The Minister.

[Graeme Morrice]

To look at freezing alcohol duty and at the abolition of the duty escalator?

[Mrs Anne Main (in the Chair)]

Order. Minister.

Oral Answers to Questions

Graeme Morrice Excerpts

Tuesday 10th September 2013 Commons Chamber

[Mr Osborne]

My hon. Friend is absolutely right that wage restraint in the private sector and the public sector has helped preserve jobs during the economic shock that we experienced under the previous Government. That is partly a credit to the labour market flexibility of the policies that previous Governments introduced in the 1980s and early 1990s and the last Government did not reverse. The wage restraint has helped us preserve more jobs than would otherwise have been the case in the public sector, which is why at least until recently it was supported by the Labour party.

[Graeme Morrice (Livingston) (Lab)]

23. Will the Chancellor confirm, however, that after three years of flatlining growth and with prices still rising faster than wages, working people are on average £1,500 a year worse off than in 2010?

[Mr Osborne]

People have been helped with their low mortgage rates which our credible economic policy is delivering. They are helped by the increase in the personal allowance—£600 this year, £700 next year. They will be helped by our tax-free child care, but above all they are helped by an economy that is turning the corner. The worst thing for living standards, the worst thing for household incomes, would be a return to the disastrous economic policies of the Labour party.

Economic Growth

Graeme Morrice Excerpts

Wednesday 15th May 2013 Commons Chamber

[Graeme Morrice (Livingston) (Lab)]

l have to say that, having listened to the Queen’s Speech last week and the Chancellor today, I am still more convinced that, sadly, the Government’s remarkably thin legislative programme is a further reminder that this is a Government out of ideas, out of touch and just watching the clock tick until the next election.

How many signs have the electorate got to send before the Government recognise what is very much evident: that they have got it horribly wrong and need to think again before it is too late? The Government’s measures do not go anywhere near far enough in tackling the desperate and growing crisis facing the country. Populist slogans and easy mantras might satisfy narrow partisan audiences, but they do not fulfil the responsibility of government.

Nowhere is the Government’s insubstantial approach more evident than on their stance on economic growth. That is a matter of great regret. This is the Government’s third Queen’s Speech since the general election and all we have had is three years of failure: low growth, falling living standards and rising borrowing. Despite even manifestly failing their own tests for economic success, the Prime Minister and his Government are ploughing on regardless with a failed economic plan.

While the Government scrabble around for a coherent agenda, I warmly endorse the overall stance of my right hon. Friend the Member for Doncaster North (Edward Miliband), who has set out what would be in our Queen’s Speech: six Bills with a relentless focus on the economy, clearly demonstrating that growth and jobs are our No. 1 priority. It is sad to see the cavernous gap between the perfectly sensible and laudable proposals outlined in the Opposition’s alternative plans, and the half-hearted and half-baked measures from the Government.

In reality, the coalition has reached the limits of what the parties can achieve together, so all we get is this minimalist approach with only 15 Bills proposed. What was left out was almost as revealing as what was left in. With just two years to go, the Government have no answers and nothing to say on tackling the crisis in youth unemployment; nothing to back small businesses struggling to get credit; nothing on living standards at a time when families’ energy and other household bills are rising out of reach; nothing on housing at a time when new home completions are at their lowest level since the 1920s; nothing to stop the undercutting of wages by tackling the exploitation of immigrant labour; and nothing on growth.

I would have liked from the Government a substantial infrastructure programme for social housing. Getting house building moving again, along with home improvements, is one of the biggest catalysts to growth. We also needed something for young people and jobs. We cannot force people into a framework that says, “Work is better for you than welfare,” if there is no work to go into. A jobs Bill would get the 17,000 Scots, for instance, who have been unemployed for more than two years back to work. I want to see cheaper energy too. People are paying too much for their gas and electricity, and living standards are being squeezed. An energy Bill could have tackled rip-off energy companies and ensured that Scotland’s 400,000 over-75s were put on the lowest tariffs.

This is an uninspired, non-responsive Government who are too dogmatic to admit that they are on the wrong track. They are burying their heads in the sand while our economy struggles and the public suffer. This absentee Prime Minister has no ambition and little drive to change the country for the better. I said at the outset that I thought the Government’s approach might appease some, but now I am not even sure about that. The British people deserve better. They want leadership and decisive action, but all we seem to have is a Prime Minster who used to “agree with Nick”, but who is now “agreeing with Nige”, and, as we have witnessed, a Tory party reverting to type with its obsession with retreating from Europe at the expense of everything else.

I appeal to Government Members to wake up and smell the coffee; to consider the evidence and listen to our constituents, including hard-pressed working families struggling to make ends meet and the most vulnerable in society; and to devote this time to getting people back to work, getting our economy growing again and bringing the change our country needs. If they will not do that, we will.

amendment of the law

Graeme Morrice Excerpts

Monday 25th March 2013 Commons Chamber

[Graeme Morrice (Livingston) (Lab)]

I welcome the opportunity to speak in this important debate, because the Budget last week revealed the true scale of the Government’s economic failure. As the next election grows closer, the Chancellor faced a test. He needed to boost household incomes and help cut the cost of essentials, but neither of those was forthcoming and his Budget failed to do enough for low-income households.

With an eye fixed firmly on the next general election, the Chancellor is pinning his hopes on a housing boom. His make-or-break blueprint for rebuilding the economy is unlikely to make a difference to the nation’s finances, as the focus has clearly shifted towards manifesto writing, positioning and early electioneering ahead of 2015. More than ever, taxpayers will now underwrite the mortgages of hundreds of thousands of home buyers, and take stakes in newly built houses in a multi-billion pound attempt to stimulate the struggling economy. However, he risks causing another unsustainable boom in the housing market, putting billions of pounds of taxpayers’ money at risk and offering little hope to hard-pressed working families who are struggling to get on the housing ladder for the first time.

We face the biggest housing crisis in a generation, but the Government’s housing and economic policies will make it worse by stoking house prices rather than helping families find a home. The Government have insisted that homes sold through the right to buy scheme will be replaced with more affordable housing on a one-for-one basis, but the Budget included £4.5 billion of funding for housing, with only £225 million of that to be spent on affordable homes. If we do not tackle the fact that we are still not building enough homes, we will create another housing bubble that will continue to push house prices out of reach of the majority.

Not only is the Chancellor pressing ahead with a tax cut for millionaires, it now seems that his mortgage scheme will help people, no matter how high their income, to buy a subsidised second home worth up to £600,000. Surely people struggling to get a mortgage, and those who want to own their first home, must be the priority for help, rather than the small number who can afford to buy a second home. If the Government concentrated at least some effort on collecting taxes from international corporations that operate in this country, and closing some of the loopholes in the tax system, there would be more money to go around.

With the coalition’s axe in full swing, I am appalled that the Government place so much effort on reforming the benefits system and punishing the sick and most vulnerable in our society, while those at the very top have seen their incomes rise as never before. The financial sector is at the heart of the economy. Huge, multi-million pound payouts to “banksters”, while citizens cannot even afford to feed themselves, undermine any efforts to break with the past and are a timely reminder that the country is being run by the rich for the rich. As the rest of the country faces austerity, just an hour after the Chancellor delivered his Budget speech, Barclays bank paid nine fat cat bosses £40 million in share payments. That makes a complete mockery of claims that banks are cleaning up their act when it comes to their bonus culture.

At exactly the same time as the bedroom tax comes into force, the Government are prepared to give 13,000 millionaires, including the Prime Minister and the Chancellor, a tax cut of £100,000—£3 billion in total a year—while more than half a million households that are home to a disabled person will lose £700. That is simply not right.

[Mr Leigh]

Does the hon. Gentleman not agree with the Mandelson-Blair approach that the way forward for the Labour party is not to worry about how public services are funded, but to let the rich go on funding those services through taxation? What is wrong with that?

[Graeme Morrice]

The hon. Gentleman clearly indicates how his Government have got their priorities wrong.

It is time for this Government to recognise what is very much evident: that they have got this horribly wrong and need to think again before it is too late. We need a lasting change of direction by the Government, to one that demonstrates compassion, puts ordinary people first, and recognises the right priorities, or —ideally—a change of Government itself.