Budget Resolutions

Debate between Jesse Norman and Peter Dowd

Tuesday 2nd November 2021 Commons Chamber

[Peter Dowd (Bootle) (Lab)]

Mr Deputy Speaker, in the light of the point of order from a Government Member earlier, which I thought was rather churlish, will you pass on my thanks to the Speaker, your fellow Deputy Speakers, the House of Commons Commission and the House staff for all their help and support, and the safety in which they keep us in the House?

Bootle is one of the most deprived towns in England and has five super-output areas in the lowest 1%, so how can it be right that our levelling-up fund bid has been rejected? In the light of that type of Government approach, it is becoming apparent that the Chancellor’s financial statement was pretty shallow and a sort of economic whistling in the dark. Inflation is on the rise; interest rates are on the rise; taxes are on the rise; the deficit is on the rise; the national debt is on the rise; inequality is on the rise; billionaire incomes are on the rise; profits from dodgy covid deals are on the rise; covid infections are on the rise—the Chancellor is taking the rise.

The Chancellor’s statement came three months after the Prime Minister’s levelling-up speech, in which he committed to working

“double hard to overturn…inequalities”—

inequalities that the Prime Minister and other Tory Governments have exacerbated. I am afraid the Prime Minister working “double hard” does not fill me with much confidence: 100% of nothing multiplied by two is still nothing.

What about the Government’s fiscal rules? They have missed so many targets that they have stopped counting. On 18 October, the Institute for Fiscal Studies said:

“There are currently no active fiscal rules in the UK. The fiscal rules adopted in the 2019 manifesto were abandoned just four months later with the onset of the Covid pandemic.”

The Chancellor did announce some fiscal rules, but they are unlikely to be met, like those of other Tory Chancellors, although hope does spring eternal.

How about the national debt? In May 2010, the Tories inherited a national debt of just over £1 trillion, or 63.2% of GDP; in August 2019, it had gone up by three quarters to £1.7 trillion, or 78.4% of GDP; in February 2021, just pre-covid, it had gone up again to £1.784 trillion, or 81.9% of GDP; and by September 2021, it was at £2.218 trillion, or 95.5% of GDP. So the Tories have added £16,000 for every man, woman and child in this country. That is why—to respond to the question from the hon. Member for Warrington South (Andy Carter)—you cannot trust the Tories with the economy. The party of fiscal rectitude has more than doubled the national debt in just a decade—more wrecked than rectitude.

[Jesse Norman]

Will the hon. Gentleman remind the House what the national debt as a percentage of GDP was in 1997 and then what it was when the financial crisis—to which Labour had allowed the country to become enormously overexposed through increased debt in the banking sector—had struck? I will tell him: it went from 46% to 84% while Labour was in government.

Customs Safety and Security Procedures (EU Exit) (No. 2) Regulations 2019

Debate between Jesse Norman and Peter Dowd

Monday 7th October 2019 General Committees

[Jesse Norman]

HMRC has published some guidance already, and plans to publish more in time for the moment when declarations may come into force.

The hon. Member for Bootle asked whether these powers have the effect of undermining scrutiny. He should be aware that of course Border Force will continue to run checks on goods in the way it does at the moment, and these declarations are independent of customs declarations that might be made.

[Peter Dowd]

I wanted clarity about the declarations because one has to be prepared in advance of the potential for a declaration. Rather than having the guidance only when one gets to the declaration, would it not be much more appropriate to have that guidance laid out clearly and unambiguously much earlier, in advance of the need to make the declaration?

[Jesse Norman]

I think the hon. Gentleman is making my point for me. The instrument introduces a 12-month transitional period until 1 November 2020, during which there is no requirement for entry summary declarations for goods imported from territories where the UK does not currently require them. That is precisely in order to allow people to adopt guidance as necessary.

Income Tax

Debate between Jesse Norman and Peter Dowd

Wednesday 3rd July 2019 Commons Chamber

[Peter Dowd]

The Minister ought not to put words in my mouth. I exhort him to read what I said. Unlike the leadership candidates, who are spending money left, right and centre, the Opposition are responsible. The point I was trying to make is that it is important to review reliefs. There are 1,200 of them. Many other countries review reliefs—there is nothing particularly radical about that, and I exhort the Government to do so.

[Jesse Norman]

It is hard to make swingeing criticism of the idea of reliefs and then not indicate any that a Labour Government would propose to abolish. It raises the question whether the Labour party is serious about this. The hon. Gentleman described these reliefs as “corporate welfare” and giving away millions of pounds to large companies. All companies benefit that have qualifying investments and are subject to UK taxation in the way indicated; it is not just larger companies. Many of the reliefs he describes are negligible and therefore should not necessarily be the target of extensive review. He talks about the reduction in corporation tax as though it is a bad idea but neglects the fact that significantly more corporation tax has been raised following these reductions.

--- Later in debate ---

[Jesse Norman]

The answer is that they are not. The hon. Lady is welcome to write to me with specific details of the student housing in her constituency. Of course, many students live in housing that universities would regard as equivalent to hotel accommodation of years ago. However, the general rule is that it is not included, but that hotels and care homes—where there is such trade, as I have described—are included. I think that is a tolerably clear line.

The final point the hon. Lady raised was about the impact on GDP. The independent Office for Budget Responsibility has estimated that the capital allowances package announced at the Budget would increase business investment by 0.4%, so that number has been calculated and put into the public domain.

[Peter Dowd]

The Minister is talking about numbers and putting the record straight. He referred earlier to the bank levy and bank surcharging. In 2017-18, they raised £2.6 billion and £1.9 billion, totalling £4.5 billion, and in 2023-24, they will raise £1.1 billion and £2.1 billion, totalling £3.2 billion, so they will raise considerably less than they raise now, not the billions more that the Minister suggests they will raise.

[Jesse Norman]

If I may, I will just correct the record. I said that they have raised billions more—and they have raised billions more—than the pre-existing Labour tax. That is a fact of the financial environment that surrounds banks, just as this is a new fact for the financial environment that surrounds corporations more generally. And on that point, I will sit down.

Question put and agreed to.

The Value Added Tax (Reduced Rate) (Energy-Saving Materials) Order 2019

Debate between Jesse Norman and Peter Dowd

Monday 24th June 2019 General Committees

[Jesse Norman]

I thank all colleagues who have spoken in the debate. Let me start in reverse order, with the issues raised by my right hon. Friend the Member for Newbury. He is absolutely right to highlight the extent to which this country has been in the vanguard of legislation and change to combat climate change and to improve our energy efficiency, often ahead of the EU—he is right to focus on that and I identify to a degree with his experiences. He is also right to suggest that it is quite wrong to imply that somehow our officials or lawyers are soft on these matters. When we send legal teams in to negotiate or fight battles, that is done at the highest level in the European Court of Justice and with the gloves off, as one might expect from any high-quality legal adviser or barrister. The same is true of policy officials. We have a rule-of-law society, possibly more developed than anywhere else in the EU. That is why, as a general matter, we take it upon ourselves to be compliant with EU law and in good time.

My right hon. Friend raised two interesting ideas. One was a grant scheme on the model of the churches scheme that he described; the other was whether batteries should somehow be accommodated by HMRC to create a new battery industry. Both are interesting ideas; they are tangential to the scope of this debate but I am happy to take them away and write to him with proper advice about whether we could do something in both areas. We will need to, and want to, comply with relevant EU law, but within that there would be some scope for discussion and I would be happy to take that up with him.

The hon. Member for Aberdeen North raised a series of more technical questions. First, I will ask my officials to make sure that the link to the tax information impact notes has been corrected. She asked about the impact on industry; if she has specific impacts in mind, she is welcome to write to me about her constituency or Scotland more generally and I will be happy to discuss that. In this case, the Government consulted twice: once on the policy and once on the statutory instrument. I assure the hon. Lady that officials meet the industry regularly and have shared aspects of the negotiation as they have gone forward, to bring that consent with them.

The hon. Lady closed by asking about the logic of the 60% figure, which is an improvement on the original EU suggestion. As I think she understands well, having read the explanatory memorandum and researched the matter, EU VAT law allows the reduced rate to apply to all installation costs except where the cost of the goods is significant. The question is: what does “significant” mean? The original suggestion was 50%; in negotiation, that was pushed up to 60%. That was a better outcome than was anticipated—certainly a better outcome than was anticipated by the other side. Our judgment has been that it strikes the right balance—certainly the right negotiable balance—between the twin concerns of complying with EU law and minimising any adverse impact on UK businesses.

It is important to note—certainly, the comments of the hon. Member for Bootle show that it is easy to forget—that we are talking about a very small change in terms of impact. Some 95% of installations are projected to be unaffected by this change, and its overall effect on the Exchequer is negligible—less than £5 million. As we have spent £30 billion supporting renewable energy over the last few years, one can see the magnitude of the contrast.

I come now to the comments of the hon. Member for Bootle. This is our first debate together, and I hope future debates are not characterised by the approach that he has taken today. There was a lot of bombast and windbaggery in his remarks, and I do not think it dignified him or the debate. Let me pick up some of his points. First, he tried to suggest there was great conflict in the position into which we have been forced not merely by EU regulation, but by a prolonged process of litigation and negotiation.

The hon. Gentleman contrasted our position with other aspects of Government policy over the past few years. Let me remind him that this is the only Government to announce that the country is exiting the coal industry entirely. There is the Renewable Transport Fuel Obligation Order 2007, the Energy Act 2013 and the “Road to Zero” transport strategy—a vast array of measures have been taken to comply with our international obligations and electrify the economy.

Wind power, particularly offshore wind—an area with which I was closely associated when I was a Minister at BEIS—has been a conspicuous success story precisely because we have taken the kind of energetic international action that characterised the forward position we have taken as a country, to which my right hon. Friend the Member for Newbury referred. Before the hon. Member for Bootle accuses the Government, he needs to tell us whether he would accept the EU Court judgment if he were part of a Labour Government, or whether he would propose allowing the situation to drag on and endure significant infraction costs.

[Peter Dowd]

The premise of my argument is quite simply that we are in this position because the Government failed to do proper negotiations and discussions. That is the whole of it. The Minister is now asking me to close the door after the horse has bolted, but it is his horse and his door.

[Jesse Norman]

I am absolutely not proposing that. Members will recall that the original infraction case has dragged on for many years. It is a problem that any Government would have faced. The hon. Gentleman is not prepared to say whether a Labour Government would accept the EU judgment or incur the infraction costs, which illustrates the hollowness and bombast of his position. We are in this position despite a very prolonged process of litigation and negotiation, and it is fatuous to suggest that he would somehow work more closely with the EU than the Government have done to agree proposals. He was not in the Court when the judgment was made, and he was not present at the negotiations. He has absolutely no reason to second-guess the intelligence, wisdom, advice or good intentions of the officials and legal advisers who were involved. We must treat what he says as essentially evidence free.

The hon. Gentleman refers to paragraph 37 of the European Court judgment. From what he read out, it appears to concern zero rates of VAT, which does not bear on the matter at all. This issue has been taken to the highest level in the EU judicial framework: the European Court of Justice itself. A better outcome has been negotiated than was originally sought. The order will have a negligible impact because 95% of installations will not be affected. I therefore commend it to the Committee.

Question put.