Transatlantic Trade and Investment Partnership

Debate between Huw Irranca-Davies and Geraint Davies

Thursday 15th January 2015 Commons Chamber

[Geraint Davies]

I very much hope it will be, as I said, but I do not know, and that is the whole point. We do not know whether it will be mixed competence— in other words, we do not know whether it will be railroaded through without any ratification here before implementation, as was the case with the Peruvian and Colombian treaties. This has not been made up; this is the sort of lack of democracy that has already been railroaded through, and there is real fear that it will happen again. I say that because we face austerity in Europe in the aftermath of the banking crisis, and a Prime Minister who has naturally said that he can see the flashing red lights on the front of the global economy, and that he wants to put a rocket booster under TTIP. There is enormous pressure to have a quick deal.

I am in favour of trade. I think trade is good, and anyone with a rudimentary knowledge of economics—I like to think that the Minister has that—will know that the law of comparative advantage will normally generate the fruits of trade. Those fruits are meant to be something in the order of £93 billion per year for Europe, and £74 billion to the United States. Cecilia Malmström, the negotiator and commissioner on this, has said that there will be growth and jobs, although I realise that there is a lot of controversy and different figures are being thrown around. However, it is generally accepted that trade generates added value.

One question for us concerns where the fruits of trade go. Do they go to the many, or are they stockpiled offshore by multinational giants in untaxed profits? Fundamentally, we are talking about whether the trade deal will undermine our democracy, our public services, our rights, our health, our environment and so on.

[Huw Irranca-Davies (Ogmore) (Lab)]

Will my hon. Friend give way?

[Geraint Davies]

Briefly. I am aware of the time constraints.

[Huw Irranca-Davies]

I thank my hon. Friend for his generosity in giving way to so many interventions. The ripples of laughter from Government Members at somebody on the Opposition Benches supporting the free market are surprising. One area of TTIP is food and food production, the biggest manufacturing sector and employer in the UK. TTIP could have huge opportunities for the food sector, but only if it involves a race to the top in standards, protection of animal welfare and standards of food hygiene, and not a race to the bottom. Does my hon. Friend agree that we can support good competition and trade agreements, but we have to ensure that standards applied are good?

[Geraint Davies]

I completely agree. We certainly do not want to open the backdoor to genetically modified foods or cloned meat or “McClonie” burgers or whatever they happen to be. We want to keep standards up. This is part of getting all the detail right and having a proper level of scrutiny. I am not complaining about TTIP itself. It could be a vehicle to deliver prosperity and regulate globalisation. Globalisation is occurring and it needs regulation. Who better to engage with that than the most developed and civilised part of the world, which is of course Europe?

Finance (No. 2) Bill

Debate between Huw Irranca-Davies and Geraint Davies

Wednesday 17th April 2013 Commons Chamber

[Geraint Davies]

I will give way in a moment.

After all, one of the big issues that is waved around by the Government is, “We must get the welfare bill down and Labour will not do anything about it.” The flagship of that proposition is, “Housing benefit has doubled to £20 billion in the past 10 years. What is the Labour party going to do about that? We are going to introduce the empty bedroom tax.” In fact, 70% of that increase has come about through escalating private sector rents, and local councils being forced to use the private sector for people in need of housing, because not enough social housing is being built.

If we could somehow get the banks to build social houses, perhaps by allowing them to own partly some of those assets, and by doing so create jobs for people who would pay tax, people would have houses and the housing benefit bill per household would go down because rents would go down—housing benefit is linked to rent levels. We need to think about how to put this together, and part of that debate clearly relates to the banks. When there are obscene bonuses and the recipients are receiving tax cuts, it is not fair, certainly from where I stand, when I am seeing local unemployment up 42%.

[Huw Irranca-Davies]

Will my hon. Friend give way?

[Geraint Davies]

I will give way to my hon. Friend the Member for Sefton Central (Bill Esterson) first.

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[Geraint Davies]

I agree that part of the previous problem was the false assumption that the value of property would continue to escalate. Lenders would grant 110% mortgages on the presumption that, within a couple of years, the equity would catch up and there would not be negative equity. Therefore, borrowers would start with negative equity. The issue of sub-prime debt is a big problem.

One of the flagship proposals of the current Budget is for the state to come in and subsidise deposits by lending up to four fifths of the 25% deposit. There are people in the financial community who are thinking, quite reasonably, “Hold on; this could be the start of another sub-prime debt problem.” The problem we have is that people cannot afford to save the deposit that would enable them to become an owner-occupier. They are paying a rent that is too high because there are not enough houses, so they cannot save the deposit. There is a logic that asks, “Can we help them with that deposit?” I agree with that logic that far, but we must be very careful. People have said, “Oh well, no one is taking up the offer,” but if this suddenly becomes a very significant amount of money and it is not properly balanced as a risk, we could be going down the path that started the problem in the first place.

That said, ultimately communities are desperately in need of houses. Historically, council houses were invented because the marketplace was failing to deliver affordable, quality housing for very large parts of the community, and we had Rachmanism. I fear, actually, that we are witnessing the start of its re-emergence. So investing in assets in which people can have stable family lives, as a platform to get jobs, is good. We will not solve the problem today, but part of this debate is clearly about reviewing whether we can do some extraction from the banking community. That community have just been given back a lot of money, they have been causing many of the problems and there is a risk premium. They should be paying back to the taxpayers who are covering their back. Then we can think creatively about how to engage the banking community in small business development, housing development and so on.

[Huw Irranca-Davies]

Will my hon. Friend give way?

[Geraint Davies]

Yes. I am sorry: I had almost forgotten.

[Huw Irranca-Davies]

Conservative Members have asked whether this is a tax-raising scheme or a scheme to create jobs and homes. I put it to my hon. Friend that I am bemused as to why it cannot be both. Surely a scheme that takes from where there is disproportionate wealth and redistributes, not simply in terms of cash in pocket, but into jobs, and taxes paid by people in those jobs, has such a glorious splendour about it that I struggle to see the dilemma.

[Geraint Davies]

That is precisely right, because the creative challenge is how to get the banking community to invest in jobs and small business, and one way is to take some money from them and create some jobs and small businesses. If they cannot work out how to do it, that seems a reasonable thing to do.

[Geraint Davies]

Yes. Well, obviously, we clearly need to look at aggregate sums, but what is being debated here is—[Interruption.] What is being debated here is, is whether it is right that a community of people—I am talking particularly about people in the upper echelons of the banking community—who are making obscene bonuses should be given more and more money for doing no more work and having the taxpayers covering their backs in terms of risk, at a time when we are seeing an escalation of unemployment in various communities, including some that I represent, and when the very poorest are being asked to deal with obscene levels of pain in order to reduce the deficit problem.

[Huw Irranca-Davies]

May I suggest, through my hon. Friend, by way of riposte, that the cruel deception that is being perpetrated is that there is a lack of ingenuity within the Treasury that could extricate some of the undeserved wealth and redistribute it to put people in jobs? I fail to agree that there is a lack of expertise or resourcefulness there; that is an admission of supineness, of surrender. We should be looking for imaginative ways, like the amendment before us, to get people back to work, by taxing those who are disproportionately wealthy and undeserving.

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[Geraint Davies]

I will give way in a moment.

I went to visit UK Trade & Investment, which has 83 offices around the world. Its mission is to market Britain for trade and inward investment. I was in its office in Dusseldorf and it told me that typically it would market Britain as a great place to come to—a low-tax, stable society with a platform into various markets, a skills base and great universities.

For example, a German distiller might come along and say that it wanted to set up a factory in Britain. That would go on to UKTI’s computer platform and the RDAs would then bid for it, saying, “We want that in Yorkshire” or “We want that in Lancashire” and setting out their case. Immediately after the RDAs were destroyed, there was a queue of companies looking to invest in Britain through UKTI, but there was no one to bid for that investment. It was crazy to destroy them, especially at a time when we want growth and regional balance.

The Government said the RDAs were too expensive, but now they ask why we have growing unemployment, zero growth and increased housing benefit costs in London. It is because rents are going up, we are not building houses and we do not have regional balance. Therefore, the amendment is partly about thinking of creative ways to move forward and engage the banking community in a sustainable growth plan that has a regional dimension.

[Huw Irranca-Davies]

Does my hon. Friend agree that the life sciences cluster at Swansea university, which brings together the best of the private sector, with micro-businesses, small and medium-sized enterprises and technological innovation, is working also because the project is supported by local and national Government in Wales? It is not about one or the other; it is about both. I have visited a company in Maesteg, at the top of the Llynfi valley, a former coal mining area, which is investing in life sciences. Does he also agree that the sort of intervention that that company would love to see is in a jobs guarantee to help it increase its manufacturing base? That is the sort of clever intervention the state can make to grow SMEs and micro-businesses, not just the Tatas of this world.

[Geraint Davies]

I completely agree. There are clearly certain growth markets within the global market environment, and life sciences is one that is of great interest in Swansea, as are biotech and green technologies and all the rest of it. What the public sector can allow is a critical mass of research that benefits from economies of scale and a shared risk that would not be taken by individual operators, and that can attract inward investors. What we want is a benign partnership, as we have in Wales, with a Labour Government and local authorities working with universities, perhaps on a city-region basis, which is the future, to deliver benefits for all. That is what we want, rather than the laissez-faire approach.

I will have to bring my comments to a close in a moment, because obviously other Members wish to speak, but I promised first to give way to the hon. Member for Stroud (Neil Carmichael).

Parliamentary Voting System and Constituencies Bill

Debate between Huw Irranca-Davies and Geraint Davies

Tuesday 2nd November 2010 Commons Chamber

[Geraint Davies]

If we had the traditional Sky debate, with the three leaders—or two leaders, now—and ignoring the nationalists, during Assembly elections, they would be even more annoyed, and they would have reason to be so. Indeed, they might even intervene.

[Huw Irranca-Davies]

Does my hon. Friend agree that this is not a question of underestimating the capacity of the electorate to make well-informed decisions on myriad voting papers and through different voting methods on any particular date? It is actually a question of overestimating the capacity of party workers to elucidate two or three different arguments at one time on the doorstep. This will lead to a dumbing down of the message from us to the electorate—

[Huw Irranca-Davies]

It could happen, unless Ministers have some secret plan and a network of workers who can explain two or three different messages on the doorstep. I do not have such an army of people.

[Geraint Davies]

The difficulty that we all have, as elected Members, is inspiring people who understand the issues to come out and vote one way or another. If there is general confusion, it will not engender confidence in the whole system.

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[Geraint Davies]

I wish that we had enough party workers for that to happen. However, theoretically, the people campaigning in elections in an area may not agree on AV. In my city, we have several MPs, and it is possible that one of them—say, me—might not agree with AV, but another Labour MP might agree with it. If it was reported that Labour was in favour of AV, I would say that I was not in favour of it. All those problems will be superimposed on the Assembly and parliamentary votes, alongside shifted boundaries and some people losing their postal votes, leading to mass confusion and excessive cost.

[Huw Irranca-Davies]

Moving from policy, the mechanics of the proposal and the possible conjunction of elections, we have all been in the homes of elderly people who perhaps have difficulties filling in forms. We have rightly tightened the rules on the ability of politicians such as me to influence those decisions in any way, although we can try to help with guidance. On that basis, does my hon. Friend share my worry that, one way or the other, we could see a lot more spoilt ballot papers in those elections? If so, has he heard anything in any of these discussions about an increase in resources for electoral registration officers?

[Geraint Davies]

I certainly agree that it is very likely that the number of spoilt ballot papers will increase. We all know that some spoilt ballot papers—a very small proportion—are intentionally spoilt. People write a load of rubbish, which is clearly intentional. However, with the extra complexity, my judgment is that people will think that they have voted one way, but then change their minds and cross something out. Obviously the returning officer will say, “Well, that’s not a valid vote,” but if there are large numbers of such votes in those polls, which might have large or small turnouts—these are difficult things to judge—that will be unfortunate.

I have a concern, in that people have talked about the electorate as if they were a homogenous group, but in certain areas there will be less educational opportunity, inter-generational poverty and a lack of capability to fill in lots of forms, along with under-registration. When those factors are overlaid, it shows a built-in institutionalised discrimination against people who may be poorer or may have had fewer educational opportunities, and who may therefore be more likely either not to participate or to end up spoiling their ballot papers, and democracy would be the poorer for it.

I am sure that the Minister will respond to the point about the financial facilities made available to cope with the extra administration. Clearly there will be an enormous burden on local authorities. I know that the Boundary Commission for Wales has been given £1.9 million for redrawing the boundaries, as opposed to administering the election. Let us remember that only 3 million people live in Wales, yet an extra £1.9 million has been given for starters. When we aggregate that, adding the legal costs and so on, the sum involved will be enormous. Some of these proposals were sold to the media in the name of addressing all these costly MPs buying duck houses, or whatever they are supposed to have done, but the reality is that the cost of change will completely dwarf the savings on MPs. It is completely ridiculous. We are spending millions and millions of pounds setting up administrative complexity. Effective democracy will fall on its face, leading to legal challenges and a fall in confidence in the system, all of which is being railroaded through by a party that does not seem to care.