Finance (No. 2) Bill

Debate between Jacob Rees-Mogg and Peter Dowd

2nd reading: House of Commons
Tuesday 18th April 2017 Commons Chamber

[Peter Dowd]

If that is what the hon. Gentleman sees, I suggest that he needs to take off his rose-tinted spectacles.

We are all aware that the only Conservative idea for the shape of a post-Brexit economy is to turn our once pride-worthy economy into a bargain basement tax haven. That is what the Conservatives want. We have had seven years of slogans from this Government, but we still have no evidence that their negotiations on Europe amount to anything more than something written on the back of a fag packet. They are non-existent, and they have been non-existent for the two or three years since the announcement of the referendum, other than their preparation to sell us down the river to tax avoiders and dodgy dealers across the globe.

The Government make great claims on tackling tax avoidance in the Bill—we heard the Minister talk about this earlier—but it is a charter for tax avoiders, and no amount of smokescreens and bluffing can hide that fact. The Chancellor wants us to believe that measures to bring some non-doms into tax will really tackle the problem, but throughout the Bill we see measures to preserve the special status of non-doms and to privilege that group over domiciled taxpayers. Even the Government’s headline “deeming” measure is undermined because they have chosen to preserve the non-dom status of offshore trusts. How on earth is this going to get more taxes paid if non-doms are being forewarned that they can simply hide their money away in a trust and still keep it beyond the Revenue’s grasp? When is closing a loophole not closing a loophole? When it is hidden in a magic spreadsheet.

The Bill fails to introduce any meaningful measures to tackle tax avoidance and evasion, which even this Government admit are costing at least £36 billion a year. In short, this Finance Bill continues to push our country towards a low-tax and low-pay economy in which a small minority of the rich can get wealthier at the expense of everybody else.

[Mr Jacob Rees-Mogg (North East Somerset) (Con)]

I would love this to be a low-tax economy, but is the hon. Gentleman aware that tax as a percentage of GDP is going to be at its highest level since Harold Wilson was Prime Minister?

[Peter Dowd]

I am grateful to the hon. Gentleman for bringing that to my attention. Let me put it like this: if we had a Labour Government, the percentage would be even higher.

The Finance Bill does nothing to fund the NHS, which is facing its worst ever crisis. As the former Secretary of State for Health, Lord Lansley, has said, the Government planned for five years of austerity, but having 10 years of it was neither planned for nor expected. That came from a man who wasted £3 billion on a top-down reorganisation of the NHS. By underfunding and overstretching the NHS, the Tories have pushed health services to the brink; that must be in everybody’s postbag.

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[Mr Rees-Mogg]

Absolutely. That is an important part of the reforms, but there has perhaps been a tone—more from the previous Chancellor than from the current Chancellor—that the non-doms were using the system. A lot of them could actually go anywhere in the world, but they come here because of the great virtues of investing in the UK: we have clear rights of property; we have an effective rule of law; and we have had simple regulations that have allowed them to be here. However, we have now increased the charges on them and increased their eligibility for certain taxes, and I think we should be very cautious about that because one never knows, with these sorts of things, where the tipping point will come. It may be that the annual charges applied to non-doms seem quite small compared with their wealth, but when we consider that they have families—the charges have to be multiplied for the wife, the number of children and grandparents, or whoever—we may find that the charges become quite high. The people bringing such wealth into the country have enormous mobility: they can go elsewhere. I know that standing up for non-doms six weeks before an election is not necessarily going to be a great rallying call for North East Somerset, but ultimately I think good economics leads to good politics rather than the other way around. A lot of what was done with regard to non-doms was much more about politics and perception than the contribution non-doms make to this country. In the context of Brexit, we want to show that we are genuinely open to the rest of the world. We want people to come here to invest and to spend their money, because that is so important to our long-term economic prosperity.

There is a broad challenge with this Finance Bill, as there will be with its successor which will no doubt come. I have a feeling that this will be one of those happy years where we get more than one Finance Bill. Finance Bill debates are particularly enjoyable parliamentary occasions because they have no time limit. The hon. Member for Aberdeen North (Kirsty Blackman) said that we might go right through the night and not be able to have our debate tomorrow. I look forward to that happening at some point in the future, but I have a feeling it is not going to happen today. Finance Bill debates are the best debates because of their fluidity and flexibility.

When we get to the second Finance Bill, a fundamental choice will still have to be made. This relates to the answer we had from the hon. Member for Bootle (Peter Dowd) on the Opposition Front Bench. There is an absolutely key point at the heart of this Finance Bill, as there will be at the heart of any new Finance Bill. When I intervened on him and said that the tax rate as a percentage of GDP was at its highest since the days of Harold Wilson, his answer to me was that under Labour it would be even higher.

[Peter Dowd]

May we just have clarity on this? I did not say that. The hon. Gentleman brought it to my attention that it was high under Harold Wilson and I made the point that yes it was.

[Mr Rees-Mogg]

I look forward to reading the characteristically accurate transcript Hansard will have for us tomorrow. The great thing about Hansard is that it allows us to correct our grammar—indeed, it often corrects it for us—but it does not allow us to correct the sense, so we will see what was said precisely.

That is the choice. If the hon. Gentleman now wishes to move away from that choice I think that is telling: with an election approaching Labour Members are nervous about it, but the Labour party—the socialists—remains the party of high taxation. The Conservative Government have had to increase taxation because of the enormous deficit left by the spendthrifts of the last Labour Government who almost bankrupted the country. We would probably have gone to the International Monetary Fund at the time if it had had any money left, but it was bailing out Greece and everywhere else so it did not have much for us by the time the Conservatives came in. Through hard work, control of expenditure and, I am sorry to say, some tax rises, the deficit has been brought under control. That is the fundamental achievement of this Government.

As we go into an election, it is the really big picture that matters. It will give such a clear and forthright choice to the British people. Do they want to continue to be governed by people who recognise that it is their money—the money of the individual taxpayer—of which the Government must take as little as possible to finance that which they are required to do? Or are we going to go back to the days of socialist tax and spend, with a huge increase in the deficit to finance spending programmes and tax increases that are even higher than those in the days of Harold Wilson? It was, of course, Denis Healey who said that he would squeeze the rich until the pips squeaked. That was his approach to taxation. Do we, by dutiful, sensible and prudent management of the economy, get things back under control where, with proper reforms, we can lower the tax burden?

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[Peter Dowd]

If the long-term economic plan was such a wonderful strategy, why did the former Chancellor and the current Chancellor keep missing their targets?

[Mr Rees-Mogg]

Targets are based on forecasts and forecasts have variables within them that even the wonderful, or not always wonderful, boffins cannot get absolutely right. What matters is not the precision of the forecast, but the broad trend of the economy. We have had consistent economic growth. We have the highest employment on record. This is an enormous achievement. As I said a moment ago, we have the fastest growing G7 economy.

NHS (Charitable Trusts Etc.) Bill

Debate between Jacob Rees-Mogg and Peter Dowd

Friday 6th November 2015 Commons Chamber

[Mr Rees-Mogg]

That is an interesting point, but probably, no, I would not agree. Such an extension should happen in highly exceptional circumstances, rather than made a general rule, because copyright law needs to be simple and fair. If it were used to advance particular charities, it would give an option on copyright that was ultimately extendable to a charity of the donor’s choice and we might end up with strange, effectively, avoidance measures to pass money through generations and extensions that had not been intended in the legislation. The length of copyright is already quite long beyond the author’s death, and that provides plenty of charitable donations in the normal course of events. Although I believe in rigour in what one believes politically and in trying to follow logic through to its end, the fact that “Peter Pan” is such an exceptional play and Great Ormond Street is such an exceptional hospital shows that there should be exceptions that make the system fundamentally more human. Therefore, I am in favour of such an extension as a one-off, but I would not welcome it as a general rule.

I have one question for the Minister, however, on the Transatlantic Trade and Investment Partnership. The trade agreement with the United States will look particularly at matters that relate to intellectual copyright. It might be important specifically to exclude “Peter Pan”—along with the French, who are excluding all their dodgy films, but that is slightly by the bye—because I can envisage a Hollywood studio making a film of “Peter Pan” and finding that it had to pay royalties in the United Kingdom but nowhere else, and that might conceivably fall foul of TTIP. I do not want to raise absurd difficulties for TTIP, which is a good scheme and is enormously welcome, but this is such an exception not just to our laws of copyright but to the normal international laws of copyright that it would be a pity if the system were not robust and could not continue. It may not be disastrous, because American film-makers are good, decent, noble people, and it is hard to think that they would be so mean-minded and damage their reputation, which is probably more to the point—[Interruption.] The hon. Member for Bootle (Peter Dowd) needs to shout a bit louder—I cannot hear his sedentary interruptions, but they sound fascinating, and I wish he would share them with the House. I am happy to give way if he wishes to intervene. American film-makers would not want to damage their reputation by being aggressive on “Peter Pan”.

[Peter Dowd (Bootle) (Lab)]

Does the hon. Gentleman agree that he is damaging his reputation talking this nonsense?

[Mr Rees-Mogg]

If I were talking nonsense, Madam Deputy Speaker would rule me out of order under Standing Orders that refer to a speech being both tedious and repetitious. I do not think that I am being either of those, nor wandering—