Finance (No. 2) Bill

Grahame Morris Excerpts

2nd reading: House of Commons
Monday 11th December 2017 Commons Chamber

[Mel Stride]

At the heart of the hon. Gentleman’s point rests the notion, which I agree with, that we expect the banks to pay their fair share and recognise that they received bail-outs some years ago, and tax policy towards the banks has been geared towards making sure that they make a fair and proportionate contribution to our tax take.

The hon. Gentleman mentioned the importance of competition in the banking sector, and I wholeheartedly agree with him on that, which is one reason why we are keen to ensure that as many banks as possible are headquartered in our jurisdiction rather than in others. That goes to the heart of the changes in the Bill to ensure that banks domiciled here are not penalised by being charged on capital assets held overseas—a situation that does not pertain to overseas banks that operate in our jurisdiction.

We have included an 8% surcharge on banks’ profits over £25 million. The package will help to sustain tax revenues from the banking sector in the long term, and it is forecast to raise an additional £4.6 billion over the current scorecard period.

The Bill continues the Government’s already vigorous efforts to crack down on tax avoidance, tax evasion and non-compliance. Since 2010, the Government have introduced over 100 avoidance and evasion measures, securing and protecting over £160 billion of additional tax revenue. This has helped reduce the UK’s tax gap to a record low of 6%, which is one of the lowest in the world.

[Grahame Morris (Easington) (Lab)]

The Financial Secretary says that it is a record low tax gap, but it does not take account of the vast treasure trove unearthed by the Bureau of Investigative Journalism in the Paradise papers or of other vast sums of wealth, on which we have no idea how much tax is actually due. So the figure he gave is not really correct, is it?

[Mel Stride]

I am afraid I have to dissent from that view. The simple fact is that the International Monetary Fund has identified the tax gap measure as one of the most robust measures of its kind in the world. At 6%, our gap is among the lowest in the world, and it is the lowest we have had in our history since we have been measuring the tax gap. If we had the same tax gap today as we had under the previous Labour Government, we would be out of pocket to the tune of £12.5 billion a year—enough to fund every policeman and policewoman in England and Wales.

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[Peter Dowd]

The Chancellor did not know what the unemployment figure was the other day. Let us put it like this: no matter how many people are in work, the bottom line is that it is not right that they should have low and stagnant wages, poor terms and conditions, zero-hours contracts or insecure work. The Government should be dealing not just with the employment rate, but with terms, conditions and wages.

[Grahame Morris]

Does my hon. Friend agree that the WASPI women, who had expected to retire at age 60 and who are being compelled to work for another six years, are also furious and feel terribly let down by the Government?

[Peter Dowd]

My hon. Friend makes an excellent point. The Government have reached the stage where they blame anyone they can. The gaffe-prone Chancellor has blamed disabled people for bringing down the productivity rate. He is so out of touch that such comments are water off a duck’s back to him.

As the Minister said, this is the third Finance Bill of the year. All three of them have failed to address the challenge that our economy faces.

--- Later in debate ---

[Grahame Morris (Easington) (Lab)]

I am pleased to be able to speak in this important debate, and to follow the hon. Member for Faversham and Mid Kent (Helen Whately). I am speaking in support of Labour’s reasoned amendment, setting out our opposition to the Finance Bill. That includes our opposition to the £4.7 billion reduction in the banking levy while children’s services are cut, the lack of adequate equality impact assessments, the lack of provision for lifting the public sector pay cap, and the lack of provision for addressing the funding crisis in social care and our NHS. I also oppose what I see as a lack of concrete action to tackle tax avoidance and evasion properly.

There are a number of areas that I will not be able to cover, but I did not want to make a contribution without mentioning the Women Against State Pension Inequality. We in the Opposition want justice for the WASPI women. I am sorry that the Under-Secretary of State for Work and Pensions, the hon. Member for Hexham (Guy Opperman), is no longer in his place, because there will be an opportunity for the Government to do something about the matter on Thursday, after the Backbench Business Committee debate.

I am concerned that the Budget does not do enough for disabled people. I am concerned about stagnant pay and the failure to provide resources to lift the pay cap. I am concerned about the failure to provide resources for local government and the funding of our police and fire services. On housing, the hon. Member for Faversham and Mid Kent said that Labour were not proposing any concrete, tangible solutions. I have been around for a few years, and I can look back at what works. Legitimate concerns have been expressed about the stamp duty proposals, which are feared to be the wrong solution. My understanding is that 40% of council houses that were sold under the right to buy are now in private ownership and, on average, rents in the private sector are twice those for council houses in the social housing sector. That costs this nation £10 billion—not as a one-off, but each and every year.

Surely a sensible person would say that in those circumstances, we should be building many more social houses. The Government’s target is, I believe, about 200,000 or 250,000 houses a year—[Interruption.] It is 300,000; I am grateful for that sedentary intervention. The last time we got anywhere near that was in 1973. As I am sure Members will recall, that is the year that Sunderland won the FA cup. Ian Porterfield scored the goal, and Jimmy Montgomery made a marvellous double save from Trevor Cherry and Peter Lorimer. In 1973, 100,000 council houses were built. That is the scale and magnitude of the challenge we face, and the Government should take that into account.

Like several of my hon. Friends, I want to concentrate, in the short time I have, on making the case for more investment in integrated transport networks, particularly in the north-east—we have heard about the north-west; I want to put the case for the north-east. The Budget is the time when the Government make political choices, and they should be held to account. I acknowledge that the Government have announced an investment in the Metro on Tyneside, which is certainly important, but the Metro is 40 years old, and the investment is to replace the rolling stock.

I represent the constituency of Easington, and I would love to see the Metro extended to the hinterland of Tyne and Wear, providing opportunities for expansion to towns such as Seaham and Peterlee in my constituency. That would naturally promote economic growth in the north, help to join up communities, and allow access to jobs in places such as Sunderland, Gateshead and Newcastle.

I know that Ministers like to have an evidence base, and I draw their attention to an excellent Library publication, “Transport Spending by Region”, published just last month. It gives transport spending totals overall, with the margin of discrepancy, with population factored in, between investment in the north-east and London. Overall, there is 10 times more investment in London and four times more in the south-east than in the north-east, while for railways there is 20 times more investment in London and five times more in the south-east. They say there is a big investment in the Metro system, but we have to recognise that, in the five years from 2011 to 2016, there has been a massive lack of investment. We have had terrible under-investment during that period.

[Kevin Hollinrake]

The hon. Gentleman makes a very good point about the disparity in investment, but he might be interested to know that the moneys from central Government are very similar across the country. What lies behind those figures is the ability of London to leverage in private sector and local authority investment, because those local authorities also get a much better deal.

[Grahame Morris]

I thank the hon. Gentleman for his intervention; I am sure that what he says is true. I have had conversations about the nature of the very large-scale transport infrastructure investments that are, in effect, self-funding, and I think we should apply those principles. I was a great fan of the documentaries about opening up the west with the railways, in which Michael Portillo argued that investment was not put into the existing cities on the east coast, but into the west, to open it up and bring in jobs and investment. There is an enormous case for doing that.

I want to speak briefly about the A19, which is vital to the economic health and wellbeing of my constituency. However, it is a dangerous road, and at this time of year it is a nightmare for people travelling on it. I want the Government to future-proof our regional transport infrastructure. There are multiple housing developments in my constituency, which will create tens of thousands of more vehicles and journeys in my area. We want to encourage new businesses to locate on the A19 corridor, but the road is already too dangerous and not fit for purpose.

If Ministers do not believe me—I do not have a Library paper to support this—I urge them to google the A19, and they will find a whole list of terrible headlines. One, about an “11-CAR pileup on the A19”, is from the Daily Mail. They may be more inclined to believe that newspaper than the Sunderland Echo, which has reported this afternoon that the A19 has reopened after a six-vehicle crash near Seaham in my constituency brought traffic to a standstill. They will find a whole list of accidents and crashes.

The Government need to future-proof our transport infrastructure, and the Budget is an opportunity to do that. There is the possibility of investment north of Nissan, linked to the automotive hub, and in my constituency, preparatory work has begun on a 55-acre industrial park, the Jade Park development, adjacent to the A19. I welcome the fact that that will bring new, bespoke manufacturing jobs and a variety of others, but the failure of the A19 will make it more difficult to attract future businesses. If we are to accommodate new developments, I urge the Government to use the Budget to take action.

The A19 is one of the principal economic drivers in my constituency. It is vital for manufacturing, export-focused businesses such as Caterpillar, NSK and, until it closes the week before Christmas, Walkers crisps. The lack of investment, maintenance and upgrading of that vital economic highway is holding back business in my constituency. I have raised the issue several times: I have tabled questions and even an early-day motion, but we need the Government to recognise the problem. They need foresight; they need to realise the value of investment, try to future-proof our economy, and support our regional development.