(5 years, 9 months ago)
Commons ChamberI am happy to take that point, which although a little outside the remit of the Bill is none the less interesting. For us, the relationship that we would seek with the EU would be based quite simply on a solid cost-benefit analysis of what is in the UK’s best interests. If we look at the various options on offer, given that half the world is already in a regional trading bloc or a customs union of some sort, it is absolutely clear that what we would risk losing by losing frictionless trade with the European Union would never be gained by external trade deals with the rest of the world. A customs union is therefore the right way to go forward. Were the UK to enter one, we clearly could not have a situation in which we were unilaterally exposed to the deals that the EU did with other countries without having a say, so it is a pretty logical position. That does not mean that those deals would always receive the backing of all parts of this House. Elements of those deals might be unacceptable.
The point about sovereignty, which comes from Brexiteers in the main, is so important, because people say, for instance, “Let’s not do a customs union, let’s do a deal with Donald Trump’s America,” but would our constituents really accept unilateral access to the NHS for American healthcare providers? Of course they would not. Would our constituents accept hormone-treated beef in the supermarkets? Personally, I do not think they would. The question is always about the balance between what is in the proposed economic relationship and the political oversight that should go with it. That position is fairly logical and straightforward.
The hon. Gentleman has just said that he would have a customs union and a say in those trade deals. How would we have a say if we were in a customs union run by the European Union yet not in it anymore? I do not understand that.
We are not proposing to remain in the customs union but not be a member of the EU. We are discussing joining a new customs union that we would negotiate with the European Union. I will say to the hon. Gentleman—I do not think that I am revealing any secrets here—that for a large number of Conservative MPs and, indeed, perhaps for the Treasury itself, that is their preferred solution; they are just not in a position to negotiate that or to request that because of the parliamentary arithmetic of the Conservative party. It does also have the very substantial benefit of our being able to honour our commitments under the Good Friday agreement. That is something that should have been a much bigger part of the referendum negotiations, and it should certainly be a paramount concern for this House going forward. I will get back to the Finance Bill, but I hope that that allays the concerns of Conservative colleagues and makes it quite clear what we think the relationship should be going forward.
How would the hon. Gentleman have a say? This would be a customs union with the European Union which we would have left. How would he have a say in it? We would not have a vote anymore.
That is what we are proposing that we would negotiate. That is the entire basis of the proposal. I have no doubt that such an arrangement was on offer and may still be on offer from the European Union. The hon. Gentleman is well-informed and I always look forward to his contributions in these debates. I am sure that he has contacts as we do in other European Parliaments or perhaps in the Commission itself. If he does some investigations, he will see that that was always a preferred option for many people and it is, without question, the right way of going forward for the national interest of this country.
(5 years, 9 months ago)
Commons ChamberIn 2017, we had a record number of start-ups in this country, with 660,000 new businesses, up from just under 600,000 in 2015. This Budget, along with the package of measures being introduced, helps entrepreneurs across the piece. I look forward to more entrepreneurs starting their own business in this country, as I and other Members have done across the country. The work allowance measure helps those who want to get off benefits and into work, and I welcome it.
My hon. Friend is making an excellent point. Does he agree that the whole point about being an entrepreneur is not to be reliant on benefits, but to invest in a business, grow it and succeed, so that people can stand on their own two feet and support others, including those they employ?
(6 years, 1 month ago)
Commons ChamberThe key concern for me is that we seem to be separating EU trade and non-EU trade, but is it not the case that so much of our non-EU exports are from foreign-owned businesses that invest in this country for export precisely because of the attraction of the single market and so on?
I agree and that is why I tabled, with my right hon. Friend the Member for Broxtowe (Anna Soubry), new clause 12 on a customs union. I have taken the view that, while I can see nothing wrong with that amendment, I am prepared to try to get us out of this political chaos by giving the Government White Paper a try. It is attempting to reach precisely the objectives I am arguing for: frictionless trade, with none of these procedures at the border. I cannot see what is wrong with a customs union. If anyone calls a vote on that, I shall abstain. I do not vote against amendments that I plainly agree with and that I have tabled. If a facilitated customs arrangement can be devised which achieves the same, good luck. What is most important is that, now we have the White Paper, we agree with our partners in the EU that we now negotiate on this. We have wasted two years and are facing laughable suggestions that we are going to solve all the problems now in the next three months, or possibly by Christmas if that slips. That is absolutely ludicrous. That is the uncertainty that is racking business and anybody in the country with an interest in our economic future.
Now we have actually got quite a large majority of the Cabinet to agree on this. I never thought the Cabinet we had was ever capable of agreeing on anything on this subject because of the sincerely held, completely opposite views on virtually every aspect of it. We now have most of the Cabinet behind it. If we give them a chance, lots of developments will take place. As compromise takes place, with any luck, people who actually understand the subject will be allowed to try to come up with some workable version of this that achieves the essential objectives.
I am afraid the debate that the public are listening to infuriates them as it is all about personalities. Most sensible members of the public do not have the faintest idea what we are talking about because, throughout the entire debate, no one has ever given a proper explanation to the country of what a customs union or a single market even are and what certificates of origin involve. That is inevitable. We have never debated these things before, but we owe it to the public to have a slightly more sensible debate in future.
Half the arguments used in the general debate do not understand what a trade agreement is with any other country. As things stand, if we leave with no deal, we will be the only developed country in the world that does not have a trade agreement with any other country, because it is not going to be easy to roll over all the other agreements we have with other countries, which are based on the EU. We have driven the EU to achieve all those agreements. I agree that there are problems with 28 member states negotiating, but the problems with America are far worse. All the Americans want to do is export food to us; they will not open up their public procurement or their service industries.
(6 years, 1 month ago)
Westminster HallWestminster Hall is an alternative Chamber for MPs to hold debates, named after the adjoining Westminster Hall.
Each debate is chaired by an MP from the Panel of Chairs, rather than the Speaker or Deputy Speaker. A Government Minister will give the final speech, and no votes may be called on the debate topic.
This information is provided by Parallel Parliament and does not comprise part of the offical record
I beg to move,
That this House has considered the five-year land supply.
It is a pleasure to serve under your chairmanship, Sir Christopher, and to have been selected to introduce this important debate. I welcome my hon. Friend the Minister. It is great to see so many colleagues here—their presence underlines the importance of this issue.
The phrase “five-year land supply” sounds innocuous, but it cuts through to one of the most critical parts of the planning system. We all know the national picture. There is consensus that we need to build more homes because of the crisis of home ownership and the fact that housing is very expensive in large parts of the country. Those houses have to be built somewhere. There is often tension in communities about where properties should go, so we rely on our planning system to come to fair decisions about how sites are allocated and developed. I fully accept that the Government require a method for measuring the extent to which councils deliver those homes, but the five-year land supply system—although it is understandable in the way it is set out—is fundamentally flawed. Rather than encouraging the delivery of homes, it encourages speculative development. That is true not only in my constituency; a number of colleagues have spoken to me about it.
Let us understand why the situation arises. If the council or planning authority in question does not have a five-year land supply, rather than local policy taking priority when planning applications are considered, the national planning policy framework becomes the priority. Neighbourhood plans fall away and local policies become far less important.
Let me correct my hon. Friend. Neighbourhood plans do not fall away. The law was changed, under ministerial guidance, to bring the five-year land supply down to three years where there is a neighbourhood plan that allocates sites and is two years old. My constituents have made a lot of that important concession.
I know that my hon. Friend was influential in neighbourhood plans. I was going to make that point, which is certainly true, so that was not so much a correction as a preview. I always say to my communities, “If you’re going to do a neighbourhood plan, allocate sites, because it will still be relevant if there is only a three-year land supply.” That incredibly important development was confirmed by Gavin Barwell when he was Housing Minister.
I fully support my hon. Friend. In Wokingham we have 11,000 outstanding planning permissions and a required build rate of 900 a year. People might therefore think that we had a 12-year supply, but until recently the Government said that we had less than a five-year supply. They do not want to endorse our decision, which makes a lot of sense, to have four major sites with infrastructure and other support.
I am grateful to my right hon. Friend. That chimes with the situation in my area and many others, as I have heard from colleagues. I will come back to that point.
To understand why the system leads to speculative development, it is important to understand that when I say local policy becomes less important in the absence of a five-year land supply, I basically mean that it becomes far easier for a developer to get an application through on appeal. That is the nub of the issue. The district may still reject the application, but the point is that a developer with savvy lawyers and all the rest of it can game the system and get their application through on appeal. When it goes to appeal, the local community and local democracy have almost no say and the system becomes unaccountable. My right hon. Friend is absolutely right about that.
One might say, “Hold on a minute, we want to build more homes. Isn’t that the way we should be doing things?” Let me use as an example the district of Babergh, which is entirely within my constituency. Babergh has been charged with providing 7,820 homes over the next 20 years. It has already granted unbuilt permissions for almost 5,000, so almost two thirds of 20 years’ worth of permissions have already been granted, yet we are seen as not having a five-year housing supply. That is extraordinary.
The irony is that that land is sitting on balance sheets rather than being delivered. That precludes smaller builders and developers from taking on sites. Does my hon. Friend agree that we need to find a way to resolve that and allow some of our smaller builders to deliver?
I know that my hon. Friend is passionate about that issue and has come up with some radical suggestions in that regard.
The experience in Babergh is common around the country, and it underlines my main point. It sounds good in principle to say to councils, “Nimby councils will be held to account—you must deliver the homes,” but they are doing the right thing. They are granting permissions—in fact, they are granting way more than they are meant to—and going through the pain of taking controversial decisions in planning committees and so on, but sites are not being built out.
I led a debate on this issue earlier this year, which my hon. Friend supported. Does he agree that although we must get the detail right, there is also a question of principle? Through the Localism Act 2011, we set out to be the party that, when in government, gave local communities the chance to shape their future. We are now in danger of looking like we are in favour of speculators, profiteers and out-of-town developers, who dump housing estates that we legislate for, with no responsibility being taken locally. That is not what our party should be about.
That is an excellent point. The key word, which we will hear a lot in the coming days, is “control.” We call it speculative development because the community loses control. Let us be honest: if an area has a five-year land supply, there will still be controversial planning applications, but those will be determined by the local authority. People will be unhappy about homes being built in—this is a terrible phrase—their backyard, but the point is that the local community will have a say; it will have control.
Colleagues know what speculative applications are like. They come forward, often from a new breed of company called the promoter of a development, rather than from a builder. Those companies work the system to their advantage, putting out brochures that often boast, “Your local district doesn’t have a five-year land supply.” We get extraordinarily unpopular applications that get people marching down our streets, yet we find there is nothing we can do about them. It is not like councils are not doing the right thing; they are giving out thousands of planning permissions.
I congratulate my hon. Friend on securing the debate. As he rightly says, there is a need for local councils to deliver housing where that is appropriate. Mid Suffolk and Babergh failed for a number of years to address housing provision. Only under new leadership, with a new chief executive, did they take the issue forward and look at developing a local plan, underneath which neighbourhood plans will sit. What does he say to those councils, and how can we make councils look at their local housing need and deliver homes for people who need them?
That is a perfectly fair point. Many councils will have been seen as recalcitrant in the past. My point is about build-out rates. The councils I am talking about are delivering permissions; the issue is the build-out rate. No one disputes that. The Government themselves appointed my right hon. Friend the Member for West Dorset (Sir Oliver Letwin) to review the delivery of permissions, and I very much welcome that.
I am not going to speak for much longer, because colleagues wish to contribute and I think we will be interrupted by Divisions. I have a simple ask. The Government are looking at what measures to bring in to compel, incentivise or encourage development, so that permissions become properties in which people can live. While those powers are not at hand, there should be a transition period during which councils are assessed purely on the number of permissions they grant. If councils do not have the power to compel development, how can we punish them for sites with permission not being built out? That is the core of my ask.
What effect would that have? What would happen if we said tomorrow, “Councils will now be measured purely on the number of permissions they grant rather than on the build-out rate”? The answer is simple: builders would have to build out the sites for which they had been granted permission—hey presto! That is surely how the system should work. The Government clearly do not want this to happen, but as many as 60, 70 or 80 councils do not have a five-year land supply, which means that, rather than more delivery, they get speculative applications that undermine consent for the planning system.
What does this issue boil down to? It is about having sustainable development rather than speculative development. Sustainable development does not mean that everyone welcomes development in their backyard and is excited about 150 new houses being built in their village or market town, but it at least means that they trust the system is legitimate and give it their consent. That is being squeezed out by the five-year land supply system. I simply say to the Minister that he should listen to me and to colleagues when we say that we need to look seriously at reforming this area.
It is very rare for me to be cut off in the middle of a sentence, so allow me to sum up where I was before the Division bell rang. In relation to the consultation on the national planning policy framework, I have had conversations with members of the Department about the three-year housing land supply figure. The Department is looking at whether that should be permanent, or, if not, how long it should apply for.
The other change that I have called for as part of my work with the local plan expert group is to ensure that we do not continue to lose the millions of pounds that are lost each year through councils having to go to law to defend their five-year land supply. I have suggested that the five-year land supply becomes part of the council’s annual report, and that once it is in there it is not challengeable in the courts for that year. That gives the council a year’s breathing space each year, once the figure is agreed. As for the calculation of the land supply, I am perfectly open to whether it is based on planning permissions or delivery. I can see the logic for it being a calculation based on delivery.
Members have spoken about how neighbourhood plans are delivering about 10% more houses than were predicted. That is actually quite a lot of new houses. There are something like 2,500 communities across the country that are going through or have been through the process of producing a neighbourhood plan. The results of the referendums have been North Korean in style, as was witnessed in the village in which I live, where the approval rate in the referendum was something over 90%. I think that is a great triumph for everyone who was involved in it.
I remain positive about neighbourhood plans. I have been around the country speaking to those involved in them, and if hon. Members want somebody to come and talk about neighbourhood plans, that is the job that I have, and I am happy to do that for any hon. Member who asks me to do so.
On a point of order, Sir Christopher. In the great excitement of commencing my speech, I failed to draw the House’s attention to my entry in the Register of Members’ Financial Interests.
I have about nine minutes left—that is about right. My thanks go to a great Parliamentary Private Secretary.
Issues with the current five-year land supply model and slow build-out were a key feature of the housing White Paper. The Government are seeking to address that through a package of reforms to the planning system, including revising the national planning policy framework, which will be published this summer. The review of the NPPF is fundamental to delivering the 300,000 homes a year we need, and sets out a comprehensive approach to ensure that we get the right homes, built in the right places and to the right quality.
The revised framework implements around 80 reforms that were announced last year, and retains the emphasis on development that is both sustainable and locally led. Those changes include clearer expectations of local authorities and developers to deliver their commitment to unlock land, fulfil planning permissions, provide essential infrastructure, and ensure that homes are built to meet the diverse needs and expectations of communities. The measures include a standardised way of assessing local housing need; reforming the plan-making system to ensure that every part of the country produces, maintains and implements an up-to-date plan; and an opportunity for local authorities to have their five-year housing land supply agreed on an annual basis. The last two points are particularly relevant to today’s important debate.
It is important that local authorities plan effectively for the new housing required in their areas. Ultimately, new homes need to be provided through up-to-date local plans, produced in consultation with local people and communities. These are a vital element of the planning system. They are the starting point for planning decisions by planning authorities and inspectors. I welcome the progress that Babergh District Council, working with Mid Suffolk District Council, has made with their local plan preparations. I understand that the local authorities are aiming to submit them for examination by the Planning Inspectorate in spring next year.
It is important that adequate land is available to build the homes we need. Local authorities play their part by producing up-to-date local plans and identifying a five-year supply of housing sites. That provides clarity to local communities and developers about where homes should be built so that development is planned rather than the result of speculative applications. Every right hon. and hon. Member in the Chamber will have had experience of that. I have great sympathy with communities that feel that they have no control over planning, and nobody wants to see companies overtly gaming the system. However, we need more homes, and that is why communities should consider a neighbourhood plan—championed by many right hon. and hon. Members here today—to give them more control over the issue.
Demonstrating a deliverable pipeline of housing sites has been a long-standing Government policy. Since the existing NPPF was introduced in 2012, local planning authorities have been asked to identify and update annually a supply of specific deliverable sites, and to demonstrate a five-year land supply. Where the local authority cannot demonstrate that, the lack of supply means that plan policies are not considered to be up-to-date, and applications are assessed against the presumption in favour of sustainable development. However, the presumption in favour of sustainable development does not, and should not, mean development at all costs. Any adverse impacts of the development will still need to be taken into account.
The housing White Paper acknowledged that the current policy has been effective in bringing forward more permissions but has had some negative effects, as we have heard today from my hon. Friend the Member for South Suffolk. In response, we have proposed reforms to how land supply is calculated. The draft revised NPPF includes proposals to allow local authorities to agree their five-year housing land supply position on an annual basis and to fix it for a one-year period. The Department believes that taking up that opportunity should reduce the number and complexity of appeals, and provide greater certainty to all parties.
The Minister is making a fantastic speech. I am glad he has reached that point about appeals, because it seems to me very welcome that once someone has the five-year land supply and it has been signed off, they then have 12 months of security. At the moment, as soon as a council says, “We’ve got the five-year land supply,” there can be an immediate appeal by a developer and the certainty goes away. The issue therefore arises with councils that do not yet have the five-year land supply and do not have that security, but are giving many permissions. Can there be greater flexibility on that, as my hon. Friend the Member for Milton Keynes South (Iain Stewart) suggested?
My hon. Friend raises a valid point. We are hopeful that that will go a long way to eradicating some of the issues that he and right hon. and hon. Members have experienced. The idea is that it can be fixed at a one-year period. We will also see what other reforms are proposed as part of the review that my right hon. Friend the Member for West Dorset (Sir Oliver Letwin) is planning.
It is worth mentioning that in return for being allowed to agree their five-year housing land supply position on an annual basis and to fix it for a one-year period, local authorities will need to be more realistic in planning to meet housing needs. The draft NPPF includes further clarity on how to calculate five-year land supply, and we intend to provide further guidance to support local authorities in their role.
I know my hon. Friend the Member for South Suffolk has concerns about the time that it takes to build homes after sites are identified and permission is granted. The Government want homes to be built faster, and expect house builders to deliver more homes, more quickly and to a high standard. However, as my hon. Friend mentioned, it is important to recognise that after planning permission for new homes is granted, a variety of factors can prevent development from starting and can slow down delivery.
Last year, my right hon. Friend the Member for West Dorset was commissioned to examine what can be done to speed up building on major sites. The review has been looking into the build-out of sites that have been granted planning permission. The aim is to close the significant gap between housing completions and the amount of land permissioned for new homes. The initial analysis, which was published last month, has presented some interesting findings on the delays in building out large sites and what helps to speed up build-out rates. I look forward to reading the final report, which is due in the autumn.
Coming on to the points raised by right hon. and hon. Members, my hon. Friend the Member for South Suffolk talked about local communities not having a say on speculative development. Applications for speculative development are still subject to local consultation, as are all planning applications. He also mentioned, as others did, that existing permissions are not being taken into account. The draft NPPF encourages the use of shorter timescales for starting development before the permission will expire, to encourage developers to build the permitted homes more quickly.
The hon. Member for Stroud (Dr Drew), who is flying the flag brilliantly for Her Majesty’s Opposition, talked about viability assessments. We recognise those concerns and, again, the draft NPPF includes new policies on viability assessments. My right hon. Friend the Member for Arundel and South Downs (Nick Herbert) talked about burning effigies at the start of his speech; that was slightly worrying, as I live in York, where Guy Fawkes was from. I hope my right hon. Friend takes that into account. Neighbourhood planning protection was included in the draft NPPF. We consulted on the draft wording, and I thank him for his continued work and suggestions in this area. We are considering those responses and will publish the final NPPF in the summer.
My hon. Friend the Member for North Cornwall (Scott Mann), who I cannot see in his place, talked about what we are doing to encourage small developers. We need to support small and medium-sized house builders and bring forward a greater variety of sites. My hon. Friend the Member for Henley (John Howell), who does a fantastic job as the champion of neighbourhood plans, said that the Government do not know how many authorities have a five-year land supply. Guidance is being produced to advise local planning authorities on how to publish their supply figure, so it will be publicly accessible.
I thank and pay tribute to Councillors Lamb and Stephenson, the hard-working councillors of my hon. Friend the Member for Elmet and Rothwell (Alec Shelbrooke), who continue to fight for their local communities but appear to be being ignored by their local council, Leeds City Council. I hope that Leeds will have heard today’s debate and my hon. Friend’s excellent contribution. My hon. Friend the Member for North East Derbyshire (Lee Rowley) talked about the reporting of a five-year land supply. Alongside the—
(6 years, 2 months ago)
Westminster HallWestminster Hall is an alternative Chamber for MPs to hold debates, named after the adjoining Westminster Hall.
Each debate is chaired by an MP from the Panel of Chairs, rather than the Speaker or Deputy Speaker. A Government Minister will give the final speech, and no votes may be called on the debate topic.
This information is provided by Parallel Parliament and does not comprise part of the offical record
I beg to move,
That this House has considered the proposal to dual the A120.
It is a pleasure to serve under your chairmanship, Mr Hollobone. A line in my maiden speech to this House in 2015 was a request of the Government. I said that I would fight for the Government to
“help relieve congestion on the A120, a road so regularly and heavily congested that many drivers cut through Braintree in order to bypass the bypass.”—[Official Report, 10 June 2015; Vol. 596, c. 1287.]
It got a chuckle at the time, if not today. The point was that much of the town of Braintree, after which my constituency is named, is regularly blighted by heavy congestion and long tailbacks. My commuters and residents experience frustration because the A120 is regularly backed up to both the east and west of Galley’s Corner, a major interchange. To the west, people trying to get to the major retail site at Freeport are often stuck in traffic, as are people coming home from work. To the east of that junction, a number of small villages that straddle the A120 are brought to a standstill because of the tailbacks.
For those who are unaware of the geography of the A120, the section we are speaking about starts just to the south of Braintree and stretches across to the junction with the A12. It is part of a major east-west arterial route in a significant part of the country in both cultural and economic potential terms. Stansted airport is on it, and at the other end is the seaport of Harwich. There is a natural flow from an airport to a seaport, yet in the middle—the section we are speaking about—it reduces to an unsegregated minor road with one lane in each direction.
I congratulate my hon. Friend, who has been a doughty campaigner on this issue, on bringing the debate forward. Does he agree that the A120 is a road of national significance because our region is a net contributor to the Exchequer and that, if it wants that to remain the case, we need the infrastructure in East Anglia and the south-east that supports Essex, Suffolk and the whole region?
I thank my hon. Friend for that point. He is right, and he invites me to come on to what I think is a credible pitch for why this road needs improvement. I am certain that my parliamentary colleagues who have constituencies along the route will enhance and reinforce some of the points that I will briskly make, to give time for others to speak.
I have already mentioned having a major airport and a major seaport at either end of this section of road, but ambitious plans have been discussed by local government at both district and county level to unlock the economic potential of this part of Essex and, in doing so, reinforce the economic potential of one of the few net contributory regions to the UK economy. The east of England is one of the net contributors to the UK economy. We want to contribute more, and we would be able to if we could unlock the entrepreneurialism and business acumen of the people who live and work in our part of the country.
Both at district and at county level, there are ambitious plans for business investment and housing investment. Housing is interwoven with the necessity for good quality infrastructure—transport infrastructure, as well as digital and water infrastructure, and social infrastructure such as schools and doctors’ surgeries. It is absolutely key. The road is currently well out of date; it is at best a 1950s or 1960s road, dealing with a 21st-century level of traffic. Improving and dualling this road, rerouting it and taking away the pinch point at Galley’s Corner will not just benefit my constituents in Braintree—although as their representative here that is what I am passionate about—but it will benefit the county as a whole and the country as a whole.
The reason I talk about residents, local government and businesses is that we speak with one voice on this issue. It has been incredibly important to us that local residents, local small businesses, local businesses, Members of Parliament, district council and county council are all on the same page. We are keen not to miss the chance to get funding from Government in the next few years to relieve the pressure on a congested and often dangerous road.
I conclude by saying to the Minister that at this time we need to ensure that the whole of the UK economy is optimised. We have a fantastic opportunity ahead of us. We are now talking about international trade really, for the first time in a generation. For a road in the home counties, with an airport and a seaport, to still be so under-resourced is no longer acceptable. I ask Government to look seriously and sympathetically at the route that Essex County Council has put forward as its favoured option, because if the Government are able to support it, we can help the Government to pay the bills.
It is a privilege to serve under your chairmanship, Mr Hollobone. I again congratulate my hon. Friend the Member for Braintree (James Cleverly) and all hon. Members who have spoken.
It is timely that my hon. Friend the Member for Waveney (Peter Aldous) has arrived, along with me, to underline that this is about not just Essex, or Suffolk, but the whole of East Anglia. The A120 is a critical road for the eastern region’s economy. As I said when I intervened on my hon. Friend the Member for Braintree, we are a net contributor to the economy, and if the Exchequer puts up a cheque for this road, it will get its money back and then some. That is critical to the case that we are all making.
I will just pick up on a few specific points. My right hon. Friend the Member for Witham (Priti Patel) made the point about the A12, which I wholeheartedly agree with. It would be good to get an update on that. The two roads have to be seen as an integrated project, not least because once trebling has occurred from Chelmsford to Colchester, the next stretch is in south Suffolk, where I can safely say we have possibly the worst junctions to be found in the United Kingdom. Drivers join a very sharp bend at national speed limit, probably in first gear. All I can say is that drivers should check that they have life insurance before they do so. I actually took the Minister, my hon. Friend the Member for Hereford and South Herefordshire (Jesse Norman), to see that, and he was struck by the danger it presented. I think we often underestimate the safety issue for all these projects. My hon. Friend the Member for Braintree made that key point—this is dangerous; it is not just about the economics.
However, the business case will be about the economics, and while there is obviously an understandable focus on housing, we have to emphasise the extent to which the road can drive serious industry, exporting and services—not least with the airport. I do not want young people in my constituency just to get on a train to London to try to find a good job; I want them to have opportunity at home, in the local region. At the moment, to go from Sudbury, the biggest town in my constituency, to Stansted is just beyond commuting distance. If we improve the road, we can get it within commuting distance and the thousands of vacancies can be filled with people from the local workforce. I therefore endorse what has been said so far. The economic case is strong, and I urge the Government to consider it wholeheartedly.
I agree that tourism is a really important consideration when we are looking at infrastructure investment. It should be at the heart of the wider discussions and seen as an economic piece all by itself.
The debate on how the A120 can be improved to alleviate much of the congestion has been a long time coming. Five options were originally presented. I appreciate that those have been whittled down to four, and option D has been favoured by Essex County Council as the preferred route for the new A120. I also note that option C, interestingly, would see approximately one third of the route bifurcating Bradwell quarry and therefore would relieve some of the environmental impact should that scheme go ahead. We must also note the importance of farmland and agribusiness. In the Government’s planning of development, whether rail or road, they should take on board the need to ensure fertile land is maintained for the purposes of growing our food. I know there is much debate on that point.
The second compelling case made by the right hon. Member for Witham (Priti Patel) was about road safety. With 53 fatalities and 325 serious injuries on this stretch, it is clear that not intervening would allow those risks to continue. That is a serious consideration.
It is worth saying, however, that we cannot look at road improvement without looking at intermodal and alternative modes of transport, and seeing the improvements that can be brought in from other schemes—particularly our rail, but also other forms of transport—in serving communities. While I understand that all hon. Members are trying to promote their local scheme for RIS2, I say to the Minister that we need to look at intermodal options before we look at road. It appears we have shifted to a road-first policy, as opposed to looking at public transport as the preferred option. Evidence from Newbury, Blackburn, Lincoln and other similar cases has shown how induced capacity is having a serious impact on their local economies, so we have to be careful as we make these decisions and look at them in an integrated-transport way.
Looking at alternative modes is a fair point, which I hear about all the time. The issue we have is lorries. In our modern economy, all our goods have to go through lorries, from Felixstowe or whatever port. It is coming down on HGVs. It is very hard to get that on to rail when it is at capacity, even though we have a good freight service. Does the hon. Lady agree that that is where there is a shortcoming in alternative forms of transport?
I agree, there is a challenge with the use of freight. It creates an opportunity, however, to put the focus back on putting freight on to rail. We are already 45,000 lorry drivers short in our economy. How we expand rail freight, therefore, is a serious consideration, in order to see that fast through-put of freight. That is something to which we have given much thought and attention.
Where there have been road-widening schemes, after 20 years we have seen induced capacity building congestion again, with an increase as high as 45%. Out of 25 projects only five have delivered the economic benefits that were promised. We need to ensure that everything is thoroughly tested before investment is made.
I think I have made myself perfectly clear in today’s debate, with all due respect. What I have said is that we believe that we should have a fully integrated, intermodal approach to transportation, which, as I have—
As I have said in this debate, we need to look at that intermodal option and that has not been presented in the case that I have read. Clearly, we need to see investment across all our modes of transport, so that hon. Members’ constituents have real choice over how they travel and so they do not have to take the car if it is their preference to take a bus or train. That is what I am saying. We have got to see integrated—
May I finish my sentence? So that we can see an integrated approach to how we assess transport projects in the future, rather than looking at the silos of rail over here, and road over there, which is the approach taken at the moment, as we know, because the RIS process is completely segregated from the control period, and we want to see a real integrated approach. That is the point that I have made throughout the debate.
Mr Hollobone, it is an honour to serve under your chairmanship.
No doubt my colleagues have realised that I am not 6 feet 4 inches, so I am not the Under-Secretary of State for Transport, my hon. Friend the Member for Hereford and South Herefordshire (Jesse Norman), who is the Minister with responsibility for roads. However, I will do my best to respond to all the questions put today and no doubt Department officials will write to answer any questions that are not responded to.
I congratulate my hon. Friend the Member for Braintree (James Cleverly) on securing this debate about upgrading the A120 in Essex. He has made a strong case for the economic benefits of upgrading the A120. Other hon. Members, in particular my right hon. Friend the Member for Witham (Priti Patel) and my hon. Friend the Member for South Suffolk (James Cartlidge), also spoke, about not only the economic benefits that would be opened up but the business case, the residential case and the case for tourism, which was also mentioned by my hon. Friend the Member for Clacton (Giles Watling).
We know that transport is a key driver of the economy and an improved network will provide better journeys and boost local growth, productivity and opportunities. I agree with all of the representations that have been made here today and no doubt the Department is listening very closely, especially to the point made by my right hon. Friend the Member for Witham, who has been banging this drum for eight years—nearly a decade—and I do not doubt that there are reams of paper about the correspondence and meetings that she has had with the Department over those many long years.
I thank my hon. Friend the Minister for giving way and for her support. Was she shocked, as we all were, that today the Labour party was unable to commit to supporting explicitly the dualling of the A120? Does she agree that we can talk about choice, but in the real world, where our constituents live, they do not have a choice? We cannot move goods, other than a small proportion, down rail; they will continue to be moved on HGVs for a long time. People may not like that, but that is the real world in which we have to plan our roads today.
It has been a very passionate debate and I was also slightly startled that the Labour party representative today, the hon. Member for York Central (Rachael Maskell), could not bring herself to recognise that Essex is a gem of a county in economic development and somehow was taking away choice, by removing the opportunity to invest in road infrastructure, let alone in tourism, business, residential or economic development in the future. However, these debates sometimes bring out surprising results.
(6 years, 4 months ago)
Commons ChamberThat is a question for the Secretary of State for Health, but I would point out that we are putting extra funding into the health service, including an extra £10 billion to help with nurses’ pay and to ensure that we are investing in the technologies for the future.
The shadow Chancellor mentioned frozen Syrian assets. There has been a long-running cross-party campaign to unfreeze frozen Libyan assets so that that money can be spent compensating the victims of Libyan-sponsored IRA terrorism. Will my right hon. Friend look at that again? Is he aware that it would require a UN resolution? Is that the case with Syria’s assets, and does he think that all the members of the UN Security Council would be in favour of such a move?
My hon. Friend tempts me down a complex route. I will look at that again; I am familiar with the issue from my time as Foreign Secretary. The decision that Ministers have to make around the freezing of assets is a quasi-judicial one, and it has to be made very carefully in the light of the specific facts. There are great complexities in Libya, where in some cases competing authorities are claiming ownership of assets.
(6 years, 5 months ago)
Commons ChamberI am clear—I think I have alluded to this already—that one of the factors depressing the forecast growth is the uncertainty that still exists around the economy. If the hon. Lady, like me, expects that uncertainty to dissipate over time, she should look through it to the fundamentals of our economy and its underlying strengths. This economy is in a fundamentally good shape. Once we can restore confidence and certainty about our future path, I am confident that those fundamental strengths will deliver increased economic growth.
My right hon. Friend made a fantastic statement. Does he join me in welcoming the 65% fall in youth unemployment in South Suffolk since 2010? Does he agree that while my right hon. and learned Friend the Member for Rushcliffe (Mr Clarke) is entirely right to mention inter- generational fairness, the worst form of intergenerational unfairness would have been to allow our youth unemployment to peak at socially dangerous levels, as it has in the rest of Europe?
My hon. Friend is absolutely right. I welcome the very large fall in youth unemployment in his constituency, but that will be from a base that was very much lower than what has come to be considered normal by many of our European neighbours. As he rightly says, this is not just an economic factor, but a societal factor. Persistent high levels of youth unemployment have a hugely damaging effect, as we have discovered in the past in this country to our cost. If someone is unemployed during their formative years, they are far more likely to remain unemployed and unemployable for the rest of their working lives.
(6 years, 5 months ago)
Commons ChamberAs the hon. Gentleman will know, the devolution of ADT has been delayed after consultations between ourselves and the Scottish Government. Both Governments are satisfied with the arrangements. As for Ryanair, I believe that part of the announcement was also that the company would be extending the number of routes out of Edinburgh airport.
If we want a sustainable rise in wages, we will need higher productivity. Does my right hon. Friend therefore welcome the recent improvement in the figures?
Yes. We have had two quarters of good productivity data, but we should recognise that the productivity challenge we face is long term. The Government have taken a range of measures to address it and we will watch the evolution of the data very carefully, but there is certainly absolutely no scope for any complacency about the scale of the challenge we face, and we are determined to rise to it.
(6 years, 8 months ago)
Commons ChamberThe hon. Gentleman raises an interesting idea, but I would argue that that is already effectively in practice in the form of the post office: post offices are able to deal with the customers of the major banks, to take cash, and to offer banking services—albeit not the full range, but certainly the most basic and most important to local communities—and, as I said earlier, there are more than 11,500 of them across the UK.
All of us who represent rural constituencies are concerned about the issue of access to bank branches and closures, but does that not mean that there is an extra onus on providing access to fast broadband in rural areas so that people can access online banking? To that end, should we not welcome the announcement in The Sunday Times that there will be further help this week for speeding up broadband in the most hard-to-reach rural areas?
My hon. Friend raises an important point about connectivity, particularly in rural areas, including in constituencies such as mine where making sure there is good broadband is often one way of reducing sparsity and people being cut off from each other, and that is why we have invested so heavily in that area.
These changes are expected to increase the additional tax contribution from banks by more than £4.6 billion over the current forecast period to 2022-23.
I think that the shadow Chancellor is more interested in Groucho Marx than Karl Marx, quite frankly.
It is very kind of the hon. Gentleman to take so many interventions on the trot. [Laughter.] This is not a minor issue. Let us not forget that Marxism destroyed the economy of half our continent. I very much admire the hon. Gentleman, but he did mention ideology in the first place. It is therefore not only in order for me to raise the question in his terms, but pertinent. Is he a Marxist—or is he perhaps a Leninist, a Bolshevist, or an adherent of one of the various other isms?
Order. It may be in order in the hon. Gentleman’s terms, but it is not in order in my terms. I should like to return to the bank levy.
My hon. Friend is right. Conservatives always try to take the credit. They take responsibility for the good things and no responsibility for the bad things—it is the way they are made.
The banking levy was not designed to ensure that the banks received enormous and unprecedented bail-outs from the taxpayer, such as the £76 billion of shares the Government purchased in RBS and Lloyds. It was designed to make them pay their fair share. In fact, the very concept of a levy was developed at the G20 summit in Pittsburgh in 2009. It was championed by the previous Labour Government, who subsequently introduced the bankers’ bonus tax. In the coalition’s 2011 austerity Budget, the Government decided to dump the bankers’ bonus tax and adopted the bank levy. At the time, Labour made it clear that the levy threshold was far too low in comparison with the money that would be raised if the Government stuck with Labour’s bonus tax. Instead, Ministers wilted under pressure from the banks and set the levy at a puny £2.6 billion.
The hon. Gentleman is talking about where the bank levy came from. I remind the Committee that it was actually Geoffrey Howe who introduced a deposit levy in a Budget in the early ’80s as part of his stabilisation of the financial system inherited from a previous Labour Government.
There are many, many calls on the taxpayer, and that is one of them. The Government would do well to pay attention to the exhortations of the hon. Gentleman.
I am more than happy to give way in relation to corporation tax, but it is important that I maintain the theme of the austerity project. It has not led us to prosperity. It has delivered misery for this country, yet the Government stick to the same old rules: tax breaks for wealthy bankers and cuts for the rest of us. It is like a stuck record.
I am sure that, coming from where he does, the hon. Gentleman takes a close interest in the Republic of Ireland, a country he has not mentioned. Is he aware that, by keeping its corporation tax rate low, it has revolutionised its economy and become an export tiger, and that that has been a key factor in helping it to recover from the crash?
Huge amounts of support from the European Union have revolutionised the Irish economy. My forebears came from Ireland, but I do not think even the Irish would compare themselves as a small country of 3.5 million people or thereabouts with the United Kingdom with its 60 million—this is chalk and cheese. The hon. Gentleman will appreciate that that is a ridiculous comparison to make in the debate.
Our amendment will finally help to demonstrate the true cost to the public purse of the Government’s favourable approach to some. In that way, we can understand exactly what the cost in revenue is. This should be all the evidence the Government need to change course—things simply are not working. Productivity is low, inflation is up, wages are stagnating, public services are in absolute decline and the NHS is under strain, as is social care, yet the Government just do not get it. They seem to think that we live in Shangri-la, but, unfortunately, we do not. We know that the Conservative party relies on support from vested interests for its own survival, but the question we must ask ourselves is: should the survival of a clapped out, atrophying, self-centred, out-of-touch, diminished Tory party take precedence over the needs of children? I know the answer, so I will simply leave Conservative Members to answer it in the silence and solitude of their own consciences.
I was about to describe the level playing field as I see it. The Bill will remove any disincentive there might have been for banks to base themselves in the UK, which is important. I remind all Members of the reputation that our country and particularly the City has. I think we would all agree that the City is the financial capital of the world.
With respect to the bank levy, the banks’ contribution must go beyond the paying of taxes, as outlined in the Bill. Given the banking sector’s behaviour—I referred to the comments by the hon. Member for Bootle about saints and sinners earlier, but I am generalising now—the banking industry does have a responsibility to make a fairer contribution to society, which is what the measures taken by the Government since 2010 and 2015 have made happen.
Let me mention in passing the Financial Conduct Authority’s report on the Royal Bank of Scotland and its treatment of small and medium-sized business customers.
I do not want to distract my hon. Friend from his excellent speech, but he referred earlier to the former First Minister, Alex Salmond; does he recall the encouragement that Mr Salmond gave to RBS with respect to ABN AMRO and anything related to that purchase, which many people thought at the time was a risky investment?
I have a very bright recollection of that. There is a famous document that shows the First Minister wrote to the chief executive of RBS and added at the end some personal notes that went above and beyond encouragement.
Given recent history, it is right that the banks make a more-than-fair contribution, and that is what they have been doing. I return to the FCA’s report on the RBS and its treatment of small and medium-sized business customers. I refer specifically to the conduct of RBS’s global restructuring group, about which the FCA’s report makes depressing reading. When I looked at the report, I lost count of the number of times the words “inadequate”, “inappropriate”, “systematic” and “failure” were linked repeatedly to a wide range of RBS’s activities, and particularly the global restructuring group’s conduct towards small and medium-sized businesses. The words I highlighted were appended to the description of how the group laid charges and managed loans and communications and to the description of its valuation practices. There is also the fact that the complaint procedures were completely ignored.
Many Members from all parties will know of examples of how the systematic failings in RBS’s global restructuring group affected constituents and their businesses. My constituency is no different. I am mindful of ongoing investigations involving cases in my constituency and have no desire to jeopardise their progress as I address the issue of bank levies. I shall simply say that from the cases I have seen there remain many unanswered questions that RBS needs to address.
Many Members present will be aware of RBS and the Bank of Scotland having closed their bank branches.
My hon. Friend reminds us that, what with Royal Bank of Scotland and Bank of Scotland, there is clearly a theme among these great institutions that failed. Has he considered the fact that the bank levy is one function of a system in which ultimately the lender of last resort is the most important function? That system would simply not exist had Scotland gone independent and been left with massive liabilities to pick up. It would not have been able to cope.
My hon. Friend makes a first-class point. He provides me with an opportunity to remind the House that, thankfully, in September 2014, Scotland had the good sense to vote overwhelmingly to remain part of the United Kingdom. Part of the reason for that was, I am sure, the lessons we had learned as a country from our experiences between 2007 and 2009, particularly the recklessness of the Scottish National party Government and the First Minister at the time, Alex Salmond, in the way he conducted himself with respect to RBS.
Just so that the hon. Member for Glasgow North (Patrick Grady) is aware, I am talking about the bank levy in relation to bank closures. It is my firm belief that having bank branches in communities is part of the covenant between the public and their financial institutions, but that covenant that is clearly broken. People should expect the banking sector to keep businesses going with cash flow, loans, financial planning and so forth. People should also expect that bank branches are close by and serve the communities in which they live. Earlier, the hon. Member for Liverpool, Walton (Dan Carden) reminded us that high street banking is particularly important for people in our constituencies who are elderly or whose mobility is challenged in other ways.
In Bannockburn, Dunblane, Bridge of Allan and the Springkerse estate in Stirling, RBS and the Bank of Scotland are leaving communities without adequate access to banking. It is important to state these things in the context of our consideration of the bank levy.
You will be delighted to know, Sir Roger, that I will be talking about the bank levy and the new clauses that have been tabled both by the Opposition and by our party. I wish to start by saying that I have rarely been more embarrassed to be part of this House than I am this evening. This debate followed hot on the heels of a statement on bullying and harassment and we ended up in a situation in which there was a ping-pong between Government Back Benchers and the Opposition Front-Bench team. It just was not acceptable. I appreciate the fact, Sir Roger, that you intervened and brought Members back to the matter under discussion.
No, I will not give way.
The other concern about the tone of this debate thus far is that it has basically been a history lesson. Both sides have been talking about the history and how we have ended up in this situation. Very few people have spoken at any length about the future and about how the bank levy in the future will affect the tax take of the Treasury, as well has how it could be made to be more fair and ensure that we redistribute taxes and wealth in a positive way.
The SNP has a manifesto commitment to support the reversal of the reduction in the bank levy. We stand by that commitment and have been consistent in our views on that. We have also been consistent in supporting the introduction of a tax on bankers’ bonuses.
I am pleased with the way in which Labour’s new clause 1 has been written; there is a lot to commend it to the Committee. The suggestion of looking at the effects on revenue of the bank levy compared to the bank payroll tax is utterly sensible. It strikes me that this information should be in the public domain, so that we can all talk from a position of knowledge about the actual effects that this has had, rather than the projected effect that the Treasury thought it would have when it was first put in place or even thinks it might have now. It is totally reasonable for us to ask for a review of these things.
We would be able to go further and ask for more drastic changes if the Government had proposed an amendment of the law resolution, which would allow us to be more flexible in tabling amendments. As I think I have said before—if not, I am quite happy to say it now—the fact that the Conservative Government are not proposing an amendment of the law resolution means that future Labour Governments will be likely to do the same thing, so this creates a situation whereby the House is less transparent and there is less Opposition scrutiny. It would be much better for all parties if there was an amendment of the law resolution.
New clause 1 states that the proposed review would consider
“the effectiveness of the levy in reflecting risks to the financial system and the wider UK economy arising from the banking sector”.
That is key. Despite all that has happened since the financial crash, there are concerns about ensuring that banks continue to make less risky propositions and continue to be safe places for people to put their money. It is reasonable to look at the bank levy in the context of discouraging risky behaviour by banks, and the reference to the incoming revenue is key.
New clause 11, tabled by the SNP, would deal with two things: inclusive growth and equality. We will hear an awful lot in the debate tomorrow about equality, and this should apply across all measures. The review proposed in our new clause would consider whether reducing the bank levy would disproportionately affect, for example, people of a certain gender or people who are not wealthy. People who work for banks are more likely to be male and wealthy. Therefore, reducing the bank levy is more likely to support them than it is to support groups that are disadvantaged in the first place.
We in the SNP have been absolutely clear and consistent in our support of inclusive growth. We have also been clear that things such as quantitative easing—certainly since the first round of QE—do very little to support those people at the bottom of the pile or to inject money into the real economy, but actually have a disproportionate effect in organisations such as those in the FTSE 100. We will keep being clear that inclusive growth is important, which is why we have proposed progressive options for taxation. Particularly in this place, it is difficult to get any sensible answers from the Government about how their proposals will affect people across the spectrum. That is not necessarily because the Government have not done the work; they may have done the work, but they are unwilling to publish it. They do not produce comprehensive reviews of how the tax takes have changed as a result of the changes they have made to the tax system.
Hon. Members will be unsurprised to hear me calling again for the Government to be more transparent, but that is what I am doing. I will also be very clear that we are keen to support new clause 1 if Labour decides to push it to a vote.
It is a pleasure, as always, to follow the hon. Member for Aberdeen North (Kirsty Blackman). Interestingly, she mentioned inclusive growth, to which I will return shortly. It is also a pleasure to follow my hon. Friend the Member for Stirling (Stephen Kerr), whose speech was a real tour de force. The hon. Member for Aberdeen North criticised him for not talking about the future and dwelling on the past. Actually, he was talking about the present—the challenges facing his constituency today, in the here and now. The bank levy is incredibly important because it is all about the future prosperity of those constituents, so I very much welcome my hon. Friend’s comments.
Interestingly, the Opposition’s new clause 3 gives us a good way of looking at the bank levy as it stands. Subsection (2) of new clause 3, which would affect schedule 9—the schedule that contains the details about the bank levy—states:
“No later than 31 October 2020, the Chancellor of the Exchequer shall lay before the House of Commons an account of the effects of the proposed changes in Part 1 of Schedule 9—(a) on the public revenue, (b) in reflecting risks to the financial system and the wider UK economy arising from the banking sector, and (c) in encouraging banks to move away from riskier funding models.”
I accept that those three points are incredibly germane. In fact, let us not wait until 31 October 2020. Let us stand here now and think about how a review would fit under Labour’s very own new clause.
Look at subsection (2)(a) of new clause 3, which is about the impact “on the public revenue”. What do we see? Well, the banking sector paid 58% more tax in 2016-17 than in 2009-10. That is under a Conservative Government. The average amount paid by the banks every year since 2010 has been 13% higher than under Labour. In 2016, the Government introduced an additional tax on banks—the 8% corporation tax surcharge, which we have been discussing—which will raise nearly £9 billion by 2022.
In 2009-10, the banks were recovering from the worst position they had been in since the 1930s. In many cases, they went under and needed Government support to get out. Does the hon. Gentleman accept that it would therefore have been extraordinary if the banks were not making more profit in 2016-17 than they were in 2009-10, that that is the reason why there is more take from the bank levy than there was in 2009-10, and that it is not simply because the Conservatives have reduced the amount of it?
I consider the hon. Gentleman to be a friend because we work together in Suffolk as MPs; we are always happy to do that. I will be coming to the issue of the crash and the way in which the banks went back to the 1930s, as he puts it, because I experienced that myself.
Is my hon. Friend aware that the total tax take from banks now is 6% higher than it was in the year before the financial crash?
My hon. Friend makes an excellent intervention and provides the rebuttal for me. The key point is that more tax is being raised now than before the crash.
My point is that were we to apply now the test of the impact on the public revenue under Labour’s very own review as proposed in new clause 3, we could only come to one conclusion, which is that all the taxes we have put in place on the banking sector—not just the bank levy—have been raising significantly more revenue. The rising revenue has contributed to paying off the deficit and supporting UK public services. [Interruption.] The shadow Minister, the hon. Member for Bootle (Peter Dowd), is shaking his head. I am happy for him to intervene and tell me that we are not raising more tax from the banks. He was very generous in giving way to me, but it appears that he is not going to intervene.
Subsection (2)(b) of new clause 3 states that the review that Labour would introduce of the bank levy would look at
“reflecting risks to the financial system and the wider UK economy arising from the banking sector”.
I always find it amusing to see a Labour amendment—particularly from this Labour party—talking about risks to the financial system; indeed, I think the shadow Chancellor himself has referred to Labour as a risk to the financial system. One wonders whether, in its own review, Labour will be modelling what the impact of a run on the pound—let alone a run on the banks—would be on the banking system. I certainly think it would be most profound.
The hon. Member for Aberdeen North said we are going back in time, but of course we have to go back, because the bank levy was born out of what happened in 2008. The bank levy came from the crash, which has had very many wider impacts, but particularly on this aspect of our tax system.
Let us remember the real bank levy—the real cost to the public. The cost of the bail-out of the banks was £850 billion. That was the figure the National Audit Office published in 2009 while there was still a Labour Government. That consisted of all kinds of costs. There was £107 million for City advisers—that’s right, a Labour Government spent over £100 million on City advisers. There was £76 billion to buy shares in RBS and Lloyds. There was £250 billion to guarantee wholesale borrowing to strengthen liquidity. There were many more hundreds of billions of such costs, including hundreds of billions for the Bank of England to insure itself in providing liquidity. People forget that. When we talk about the cost of the bail-out, we are not talking just about buying shares in the banks; this huge amount of subsequent activity that took place ultimately has to be accounted for, and it is borne by the whole of our economy and all our taxpayers.
I am very interested to hear the hon. Gentleman give us his rhetoric about history. What, at the time, were the suggestions from the Conservative party in terms of dealing with the impending crash? Anecdotally, I know that chief execs of banks were talking about money running out at cashpoints. What would the Conservative party have done differently in 2008 from what happened under the Labour Government?
I would say three things. First, the hon. Gentleman talked earlier about the shadow Chancellor, but I have to go back and quote the City Minister at the time—Ed Balls—who said in 2006:
“nothing should be done to put at risk a light-touch, risk-based regulatory regime”.
If we are going to trade quotes across the Chamber, the then Member for Witney, who was the leader of the Conservative party at the time, said:
“I want to give you…less regulation.”
If we are talking about regulation and the state of the banks at the time, the Conservative party is as culpable as anybody else.
I am happy to have that debate. I will tell the hon. Gentleman what I said. I started a mortgage broking company in 2004—we have expanded since then, and I should declare that I still have interests in that business. I wrote an article for The Guardian in 2004 about the next general election. [Interruption.] Just a closet Marxist. At the time, the big issue being talked about was public services, but I said—this was in 2004—that the big risk we were not talking about was consumer debt. I knew that because, having just started a business in that area, I was stunned by what was happening in mortgage finance, which, of course, was the type of borrowing that laid the seeds for our destruction in 2008.
May I tell the hon. Gentleman how prescient he was in 2004? He was clearly right. Does he have the same concern about the rising level of private debt now?
The hon. Gentleman makes a very good point, and I will come back to that once I have set out the context of my remarks. The key point is this: there are some concerns, but in a growing economy, consumer debt will tend to rise, so we have to separate out that which is perfectly acceptable and that which may give cause for concern. I will come back to that point, but it is very fair.
In respect of proposed subsection (2)(b) of the Labour new clause, which talks about
“reflecting risks to the financial system”,
we conclude by reminding ourselves that it was the very explosion of the financial system that created the need for this bank levy. As I say, we have to debate the past—why we are here in the first place and where this all came from—and the fact that we are on a journey. The reason this tax is being tapered off is that the banking sector is once again becoming profitable, and we are allowing it to flourish again as a free enterprise-based banking system, but, of course, in the context of very strict regulation and a prudential regime.
Let me go back to the point about personal experience. It amazes me when members of the Labour party stand up and, like Pontius Pilate, wash their hands of the huge impact of that crash. At the time, many of us approached the regulator—the Financial Services Authority—which Gordon Brown launched early in the first Parliament after Labour won in 1997. He claimed that that would avoid future financial crises. We must remember that and have accountability.
Will the hon. Gentleman be reasonable or fair enough to acknowledge that while it is entirely possible to say that the system of regulation on the eve of the financial crisis was not adequate— no one is making the case that it was—surely it is illogical and ridiculous to suggest that the Conservatives would have been doing anything different. After all, the banks themselves were not aware of the level of risk they had undertaken, so it was no surprise that the regulator did not appreciate it. One cannot claim that the Conservatives advocated anything different from the overarching framework of regulation that existed at the time.
I entirely disagree. The absolute root cause of it all was not saving enough and having a bad culture of over-reliance on debt. I well remember that back in ’98 and ’99 when Francis Maude was the shadow Chancellor, he kept saying, with regard to the low savings ratio, “We are storing up problems for the future.” At every Budget, no matter how high Labour was in the polls, our shadow Chancellors and shadow spokesmen—people like Howard Flight—would say that the savings ratio was way too low and we were storing up problems for the future. We did warn, we did say it, and we were ignored.
The hon. Gentleman is making the case that people borrowed too much because they were somehow feckless or immoral. [Interruption.] He mentioned the poor savings culture in this country and said that people were unable to save. Actually, is it not the case that the picture has worsened since then, because the simple fact is that wages have been held down and people are now unable to save? How has his party in government fared on the issue that he has raised?
I never talked about fecklessness or being immoral. I was talking about the economic fact that the savings ratio was dangerously low throughout much of the Labour Government’s time in office, and they were warned about it. Labour Members are saying that we never said anything, and that simply is not true.
The hon. Lady seems to think that Labour had good policies on debt. I remember when someone could get a self-certified mortgage, with no proof of income, on an annual percentage rate relating to bad credit, so they could have a history of failing to pay debt. Not only that, but it was interest-only, so they were not even repaying the capital. There was a whole menu of different types of sub-prime such as light-adverse, medium-adverse or heavy-adverse. As I have said before, basically the question was, “Do you have a pulse?”, and then one got a mortgage.
Will the hon. Gentleman simply acknowledge that in August 2007 the Conservatives had a policy of significantly more deregulation, including of the banks, and that was ratified by the Tory shadow Cabinet at the time?
I do not accept that. Those mortgages were being advanced. The FSA knew about them and the Government knew about them. The fact is that when you are in charge of the financial system, you have a responsibility to act in a prudent manner. The Governor of the Bank of England always says, “Your duty is to take the punchbowl away when the party gets started.” The problem was that when the party got started under the new Labour Government in terms of debt and borrowing too much, they did not take the punchbowl away—they came out with a new round of tequila slammers, and when that was not enough, they brought out the Jägerbombs, until in 2008 we had the biggest hangover in our history, with the crashing of our economy on the back of the most reckless oversight of financial regulation that this country has ever seen.
My hon. Friend is making a very strong case. However, he is relatively new to this place. May I remind him, and the Committee, that when I was on the Opposition Benches for 10 years, the then Labour Chancellor of the Exchequer told us that he had abolished boom and bust? That is the political context in which Labour ruined the economy.
My hon. Friend is absolutely right. The types of borrowing that I have talked about were the reality, but what have we done since? It is no longer possible to get self-certified mortgages. It is very difficult—almost impossible—to get interest-only mortgages as a residential purchaser.
The hon. Lady did not give way to me, but because I believe in inclusive growth and equality, I will give way to her.
The hon. Gentleman is making a very sensible case about the issues there were with mortgages before, but there are currently issues with consumer credit. The Bank of England has raised concerns about, for example, the card credit that people are taking out, and the fact that half of households have less than £100 in savings. When is he going to take the punchbowl away?
I did say that I would come to the current position on credit. I want to finish on the analysis of the three tenets in new clause 22 under which Labour says that we should consider how the bank levy has worked. According to subsection (2)(c), we should look at it in terms of
“encouraging banks to move away from riskier funding models.”
It is quite amusing to see a Labour new clause that contains the phrase
“encouraging banks to move away”.
My colleagues will appreciate that the whole point of reforming the bank levy is not to encourage banks to move away, but to encourage them to stay here and create wealth and jobs. Let us not forget that in all the figures we have heard about, we have not heard the key one. Banks contribute £116 billion of value added to our economy, not including any of the tax take.
We have talked about the rewriting of history. The Shadow Cabinet at the time—we are talking about what happened at the time—said:
“We need to make it more difficult for ministers to regulate, and we need to give the critics of regulation more opportunity to make their case against specific new proposals.”
The Conservatives’ direction of travel at that time was towards not more regulation, but less. Does the hon. Gentleman acknowledge that at all?
All the financial plans of that shadow Government would have been about fiscal prudence, and the context would have been completely different. The Labour Government crashed the economy on every single front, which is why we are where we are today.
There is one final point I want to make. We had a wide-ranging discussion earlier about Marxism, which I thought particularly intriguing. We have to decide, as a country, whether we want to be a flourishing free enterprise economy or a centrally commanded one in which everything remains in, or is taken into, the public sector. When the banks were nationalised, they were bailed out on the basis of rescuing the economy from an extreme threat that could have left us resorting to barter. The point is that we have put the banks on a stable footing so that they can flourish again and become competitive businesses. The bank levy, to me, is about striking a balance but having a competitive financial services sector to drive our exports and growth, and that is why I will be voting to support it.
We have had an interesting, if not very factually correct, history lesson this evening. I want to bring us back to the question of how we spend £4.7 billion of taxpayers’ money, and the political choices that the Conservative party are making in this Finance Bill. Politics is about priorities, and I would like to talk, as the hon. Member for Aberdeen North (Kirsty Blackman) suggested we should, about the future and how we might spend the money differently. For my constituents in Bristol South, and, I think, for the country, the biggest issue in the Budget is productivity. I would like to think that we could use that money for something better, such as technical qualifications, to help to reduce the skills gap in my constituency.
Of all the constituencies in the country, mine sends the smallest number of young people into higher education, and only 24% have a level 4 qualification. For a city that contains two universities and has two more close by, that is scandalous. Because of that, I have followed the apprenticeship levy very closely and supported the Government in its introduction, but the figures are hugely disappointing. Large employers are using the levy to train current executives, and small employers simply do not know how to navigate the system. That has led to the 62% drop-off in apprenticeship starts since last July. It is outrageous that in the Budget, the Chancellor could only give a nod to the apprenticeship levy by saying that he would keep an eye on it, at the same time as deciding to grant the banks a tax giveaway of £4.7 billion.
T-levels have had very little debate in this House since they were announced in October, and they are mentioned only in passing in the Budget. I welcome the Government’s approach to trying to improve technical education as an alternative to the academic option, because it could really help social mobility in my constituency and those of many other hon. Members. The Government have said that T-levels were
“the most ambitious post-16 education reform since the introduction of A-levels”,
but if they are, the current signs are very worrying. Let us compare that £4.7 billion with the sums of money that the Government have committed to T-levels: £60 million in 2018-19, £445 million in 2021-22 and £500 million every year afterwards to ensure that the supposedly hugely ambitious T-levels are a success. However, while the overall investment is welcome, it pales into a rather small figure compared with the other sums we are talking about.
(6 years, 9 months ago)
Commons ChamberMy hon. Friend makes an important point. Transparency is at the heart of all this. I experienced a bizarre situation last week when I was on “Newsnight” with the chairman of the Cayman Islands stock exchange. What an insouciant attitude that man had to tax avoidance. He actually said that there had not been any wrongdoing—maybe not—and called for the journalists to be jailed. That is what he did, and that is the position in which we find ourselves.
I am going to take Mr Speaker’s suggestion and push on, because it will become an admonition otherwise. I will then take some interventions.
I hope that Members across the House will join me in condemning the irresponsible and offensive comments of the chairman of the Cayman Islands stock exchange. All of us owe a debt of gratitude to the journalists involved for their hard work and diligence. They have demonstrated the importance of a free press in holding the wealthiest and most powerful individuals and multinationals to account.
To be clear, we are talking about tax avoidance that covers activities that are within the law but work against its effective application. Most of the people involved in the cases have not broken any laws or acted in a criminal way, but that does not make tax avoidance acceptable or justifiable in the 21st century. After all, as has been identified, tax avoidance costs us all. Every pound avoided is one pound taken away from our children’s education, from our armed forces—the very people who protect us—and from the elderly and disabled. The conservative—and Conservative—figures that the Government have published on tax avoidance show that HMRC recorded from 2010-2015 that £12.8 billion was lost to the Exchequer through tax avoidance. That is unacceptable.
People have a view about what the previous Labour Government did. They think that it was much better than the Tories overall, but I am not going to go there. The question arises—[Interruption.] I refer the hon. Member for Rochford and Southend East (James Duddridge) to the Financial Times. With the greatest of respect, I am not his researcher, and I am sure he is more than capable.
Does the hon. Gentleman accept that if the current tax gap was at the same level that it had been on average under Labour, our deficit would be £12 billion higher?
My hon. Friend the Member for St Helens South and Whiston (Ms Rimmer) says, “Move on.” and I think she is absolutely right. I will reaffirm the point that was made in Labour’s tax programme document: we have to push on with this debate. It does no good for the Government to talk about the past; we want to talk about the here and now and the future.
I will give way to the hon. Member for South Suffolk (James Cartlidge).
Order. There is no obligation on the hon. Gentleman to speak if he does not want to.
I will ask the shadow Minister a question. The tax gap is now 6%. It averaged 8% under Labour. Does he accept that if the tax gap was 8% now, the deficit would be £12 billion bigger?
The hon. Gentleman can extrapolate all he wants. I could extrapolate all sorts of figures, but I am not going to get into that. We will no doubt come back to the matter in due course at the Budget.
Having listened to the hon. Member for Morecambe and Lunesdale (David Morris), I am dismayed. What we are talking about is openness and transparency about tax. The right hon. Member for Sutton Coldfield (Mr Mitchell) set the tone for this debate, along with my right hon. Friend the Member for Barking (Dame Margaret Hodge). This is an important cross-party issue, and I agree with nearly every word—in fact, every word—that the right hon. Gentleman said. Tax avoidance and evasion harms countries around the world, including developing countries. It hits taxpayers in our constituencies because the wealthiest people and large corporations find ways to reduce their tax bills or to avoid paying tax completely.
I wish to make some progress, please.
I congratulate my right hon. Friend the Member for Barking on securing this debate, and I congratulate the International Consortium of Investigative Journalists, “Panorama” and The Guardian for shining a light on what has come out of the Panama papers. The Public Accounts Committee has been shining a light on aggressive tax avoidance for some years. I pay tribute to my right hon. Friend, my predecessor as its Chair, for the work that she led us through when I served as a member of the Committee. It is thanks to the Committee’s work under my right hon. Friend that some of the worst excesses of avoidance came to light. International action—it has to be international—has led to real change at a faster pace than we have seen under any Government for many decades, by making public more information about corporations’ tax arrangements.
We continue to pursue this issue, and with political will, we can make progress. In December last year, the Public Accounts Committee held an international tax transparency conference. We had imagined, in our own humble way, that we might get people from some European Union countries to come along; we were amazed that representatives from countries around the world came. More than 20 of them signed up to our pledge on international tax transparency, to fight for our citizens and through our Parliaments to press our Governments to be bolder and faster, as the right hon. Member for Sutton Coldfield said. There are the beginnings of some political will, but we are not moving at the right pace.
The release of these papers and this information is staggering to our constituents, who just pay their taxes and have no idea how hard the wealthiest work to avoid paying tax that would help our country, particularly in this time of austerity and pay dampening. Public country-by-country reporting for large corporations is something that the Government could do right now. My right hon. Friend the Member for Don Valley (Caroline Flint) has been a champion on that issue and managed to work with the Government to change the law. The Paradise papers show that the tax arrangements we are discussing come to light only when the information is in the public domain. We need to see fast change. The establishment of offshore trusts that then buy homes, wine and cars for the beneficiary, without tax being paid, or the paying of money into offshore trusts that then make loans to individuals that are never repaid—these things cannot be right, and although they may be legal, I doubt whether they are in some cases.
The Panama papers were released in April 2016. According to the representatives from HMRC who appeared before the Select Committee last week, 66 criminal or civil investigations are currently under way, four people have been arrested and a further six have been interviewed under caution. Even with that haul, HMRC only expects an additional tax yield from the Panama papers of £100 million. That is not to be sniffed at, but it is small fry in relation to the official tax gap. That just demonstrates the lengths to which people will go to hide their money and the importance of making sure that HMRC has the resources required to pursue this matter.
We need public country-by-country reporting to be enacted. Yes, it needs to be done internationally, but if international players will not lead the way, let the UK Government take us forward. Let us be bold and brave and make sure that we set the tone and the standard for the world. The Select Committee has urged HMRC to consider a wealth tax for wealthy individuals, as they have in Japan and Australia, to make it easier to track down where people hold their wealth and where they are paying tax.
We need continued parliamentary and public pressure, so that businesses voluntarily move towards more openness. The fair tax mark has already been taken up by 30 companies, and we hope that it will be taken up by many more. I would like to see HMRC take forward more prosecutions to set an example to those who seek to avoid tax and to make sure that people question the highly paid tax advisers they recruit, because it is no longer good enough to say, “I didn’t know what was going on; I just paid someone else to do it.” Everyone needs to take responsibility for their actions, whether they are corporations or wealthy individuals.
As I said, we need to give HMRC the resources to tackle tax avoidance and evasion. As my right hon. Friend the Member for Barking said, there is a very high return rate for every pound of taxpayers’ money invested in HMRC’s investigatory arms. It is important that the Exchequer sees that benefit and ramps up the money that is available. An arbitrary target of 100 prosecutions annually has now been set. That seems an odd figure to have plucked out of a hat. We are pressing HMRC to explain where that figure has come from out of the blue. We need to make sure that the right number of prosecutions take place, not just set an arbitrary target.
My constituents pay their taxes and they deserve better. Tax is paid for the common good, and my Committee works hard to make sure that tax money is spent by the Government efficiently, effectively and economically. We need to speed up on the measures to crack down on aggressive tax avoidance and, obviously, tax evasion. We need to move towards a world in which the impact of someone not paying their fair share of taxes is recognised as something that is plainly wrong.
I will speak relatively briefly. Slightly earlier, I had the pleasure of intervening on the shadow spokesman. In fact, I had a unique pleasure in that he allowed me a second intervention; I think it is called a BOGOF.
There is no obligation on the hon. Gentleman to speak any further if he does not feel inclined to do so. It will be difficult, but we will probably manage without him. If he does want to speak further, he may.
I was referring to my earlier intervention, when there was some confusion; the point of substance I was trying to get at was the difference in the tax gap. The precise figure for the tax gap is now 6%, and it was 8% under Labour. The difference in annual terms is £11.8 billion. That is incredibly important, as the newspapers are dominated by all the coverage of the Paradise papers, and the impression that gives the public is that multinational companies are running the rule over us and getting away without paying their fair share of tax, and that we are failing to deal with that. In fact, all the statistics show significant improvement under this Government in closing the tax gap and bringing forward measures to deal with avoidance and evasion.
As my hon. Friend the Member for Amber Valley (Nigel Mills) mentioned, one important issue is property. My experience, before I came to the House, was in property, as I ran a business helping first-time buyers. One of the great grievances felt by first-time buyers is the sheer quantity of money that has come into the property market, particularly in London. That money is driving up prices and making property less accessible to local people who want to get on the ladder. We should remember that we have brought in two important measures to deal with that. Until April 2015, foreign nationals did not pay capital gains tax when they sold a property in the UK. We closed that loophole in April 2015.
Is not one of the greatest problems of the housing crisis described by the hon. Gentleman the inequality in the UK, where the 100 richest individuals have the same wealth as the bottom 19 million? Indeed, globally, the 85 wealthiest people in the world have the same wealth as 3.5 billion people.
I do not want to go global in my answer as I am talking about the general position in the UK property market, but it is undoubtedly true that a sense of great unfairness now pertains. Prices have risen so sharply and beyond the means even of those on relatively high incomes—let alone modest ones—particularly in London. Young professionals can be on £100,000 and still struggle to get on the ladder in significant parts of the capital. But it is not just about London. My constituency of South Suffolk and those in the counties around London know that the ripple of high prices in expensive areas comes out many miles—[Interruption.] The hon. Member for Na h-Eileanan an Iar (Angus Brendan MacNeil) is shaking his head, but many people move to my constituency because of the sheer cost of living in London.
The hon. Gentleman is talking about property prices. He just mentioned the Government’s decision to close the loophole whereby foreign owners of residential properties were avoiding capital gains tax. Does he regret not joining with the Opposition to close the loophole regarding commercial properties? That is having exactly the same impact on the property market.
It has to be said that the commercial sector is one area that has been much weaker since the Brexit vote, but the main issue of fairness from the point of view of taxpayers and first-time buyers relates to residential property. Making changes to tax is about not just tax avoidance, but about provisions such as the higher stamp duty we now levy on second-home ownership and properties purchased to rent out. The key point is that those measures have had a huge impact in supporting first-time buyers.
My hon. Friend just asked about Labour’s plans for an offshore companies property levy. Does he agree with the Institute for Fiscal Studies that such a levy is likely to raise zero pounds?
I was not aware of that so I am grateful to my hon. Friend for bringing it to my attention.
The broad point—my right hon. Friend the Member for Sutton Coldfield (Mr Mitchell) mentioned this earlier—is that we should look to have cross-party agreement on this. I think that we all agree on the simple point that taxpayers want a system where all companies, particularly the biggest, pay their fair share of tax. What concerns me about stories such as the Paradise papers is that there is a huge amount of associated hyperbole, giving the impression that the system is not bringing in as much tax as it could when, in fact, that is not the case.
Quite simply, I would like a system where we reward success. We must never have a system that discourages enterprise, as we need enterprising businesses to generate the wealth that funds public services. The Government are getting the balance right. We should not get the impression from this debate and from all the leaks in the papers that the Government are failing to get a grip on the issue.