Self-employed Persons: Financial Support

John McDonnell Excerpts

Tuesday 24th March 2020 Commons Chamber

[Steve Barclay]

For some within this population—not all—there will be some solution already through the £5 million loan that is available as of yesterday. That will not cover the entirety of this population, but, in accordance with the business needs of some who are self-employed, there is support. For some of the population—again, by no means all—there will be some relief through some of the measures the Chancellor set out on property and business rate relief, but part of the complexity of the target population is that different measures work for different groups. That is part of what my right hon. Friend the Chancellor is working through, but I recognise the point my hon. Friend the Member for Altrincham and Sale West (Sir Graham Brady) and others have raised. We do recognise the importance of timing on this issue.

[John McDonnell (Hayes and Harlington) (Lab)]

Can I say to the right hon. Gentleman and other Members that no one is looking for a row over this? We are looking for a solution. The reason some Members became irritated earlier was the emphasis, in one of the Chancellor’s responses, on the rich self-employed. They are not the people who are contacting us. The ones who are contacting me at the moment are the plumbers and the hairdressers. Yes, some freelance artists and others are in desperate straits, but I do not think there is a Member who has not received representations. We are just looking for something we can go back with today to give them some assurance. We know how complicated it is, but we have to find a solution quickly. I urge the Government to at least set a deadline, so we can go back to our members and say, “By the end of this week, there will be a proposal brought forward.”

The other assurance that people want was raised by the right hon. Member for Kingston and Surbiton (Sir Edward Davey). If we can go back and say, “You will get the equivalent of the 80% or whatever that was offered to other workers,” it would lift people’s spirits that something was on the way.

Many self-employed workers, just like other workers, are having to sign themselves off sick. They do not have access to statutory sick pay—still. I have to say that asking people to survive on £94.25 a week is just an impossible ask. When the Secretary of State for Health was asked on television last week whether he could live on it, he said no. I agree with him. We need the level of sick pay raised for everybody if we are expecting them to choose not to work, and not have to choose between health and hardship.

Finally, in Treasury questions my right hon. Friend the Member for North Durham (Mr Jones) raised a point about different categories of workers. I know that it is complicated, but we do have to consider agency workers. I have had many emails and telephone calls from people working in the construction sector who do not know whether they should be at work today, or whether they would be safe if they were. Let us use this opportunity to look at the exploitation by payroll companies and umbrella companies of people who in many instances are forcibly designated as self-employed.

We do not want a row over this; we want to work with the Government. In fact, Anneliese and I are happy to come and work a shift in the Treasury, if that is what Ministers want. [Interruption.] We might come up with slightly different solutions. We need this quickly and we need it to be effective as soon as possible.

[Several hon. Members rose—]

Contingencies Fund Bill

John McDonnell Excerpts

Committee stage & 2nd reading & 2nd reading: House of Commons & Committee: 1st sitting & Committee: 1st sitting: House of Commons
Tuesday 24th March 2020 Commons Chamber

[John McDonnell (Hayes and Harlington) (Lab)]

May I start by assuring the Treasury Bench that the official Opposition will support this Bill? I support the Government throughout, obviously, but as the Minister might expect, we will be constructively critical as well throughout the process.

This Bill, as the Minister says, will enable the Government to access the resources to tackle the crisis. I have to say, there is a sense of irony here, because only three months ago I hoped to be bringing forward a Bill for about £250 billion as well, for long-term investment in our infrastructure—but that is another story. It probably would have been supported as well, because it was infrastructure spend. Anyway, we will support this Bill, but we have the opportunity to raise some issues on the way in which the resources will be applied—forgive me if I do that.

We recognise that this is the gravest crisis facing our country that any of us in this House has known. We are debating matters of life and death, and the proposals that we make now and the decisions that we need to take in the coming months obviously deserve scrutiny, and that scrutiny should be welcomed on all sides. Last night, the Prime Minister was right to call for people to stay at home to protect our NHS and to save lives. We called for enforcement measures yesterday morning, and the Mayor of London and many others have been making private representations for greater clarity and greater action.

Clear and detailed guidance to employers and workers is needed on which workplaces should close. As we saw in the earlier response to the statement, a lack of clarity remains about certain operations, particularly within the construction sector. We have received reports from unions, particularly those representing construction workers, that there is utter confusion on the ground at the moment about what operations should be maintained and which workers should be on site. For anyone who has been anywhere near the construction industry or worked on site at any time in their lives, things have not changed that much in recent years. These workers also work in some of the most insanitary conditions, so we have to ensure that they are properly protected.

The Chancellor and the Government must act immediately so that every single worker has a protected income. We discussed that earlier today. We want to ensure that every single household is secure in their home, whether they rent or mortgage, so that no one who makes the right choice to stay at home faces hardship. Last week, the Chancellor set out an unprecedented scheme to underwrite 80% of the wages of all workers “furloughed”—as he put it—promising that no redundancies or lay-offs were needed and that the Government would do, “Whatever it takes”. Today is the time to deliver, with clarity and security for everybody, including our most vulnerable, whatever it takes to keep them protected and safe. That is why we are supporting this Bill to enable the resources to be available.

Last night, the Prime Minister effectively shut down every non-essential business. I want the Chancellor and Treasury Front Bench to make it clear now that every single worker, in every single one of those businesses, will be covered by the 80% income protection scheme, and that if, as a result of that 20% cut in incomes, they fall below the thresholds for universal credit or housing benefit, they will be eligible for top-ups. I ask the question, will the Government consider setting a national minimum wage floor for the income protection schemes? That would protect the lowest paid, because 80% of low pay might result in some people being paid below the national minimum wage.

Will we now get more clarity on exactly when the income protection scheme will be operational? Will the Government also condemn employers such as Wetherspoon that have now stopped wage payments and told employees that those will not resume until the end of April? Some senior members of the Government have an influence over that particular employer, so we would welcome the Government making it clear to that employer that that he should pay his staff and that he should close so that that company can play its part in protecting the health of our community.

The Government cannot act only for workers who are furloughed. They must also step up for the many who will be having their hours reduced but not stopped altogether, by topping them up to at least 80% of their regular wage, or through some other scheme. When the Minister responds, will he clarify what will be the protection for workers who have been put on short time?

Sadly, many workers have already been laid off as a result of this terrible virus. The Secretary of State for Health and Social Care was extremely candid and honest last week when he said that he could not live on the £94.25 per week statutory sick pay. I do not think any of us can. How can the Government expect entire families to afford a week’s shop on that sort of income? Will the Government therefore increase the appallingly low level of statutory sick pay and ensure that all workers are eligible for it? So many are not at the moment. Will they also increase the £73 rate of jobseeker’s allowance and employment support allowance for disabled people? Will they also look at the even lower rate of carer’s allowance? Carers are expected to live on £66 a week.

As we discussed earlier today, there are 5 million self-employed workers in this country, many of whom cannot work from home. We desperately need a scheme that will be ready for them soon. It needs to guarantee them the 80% of income that others have been guaranteed. Whether it is a cabbie, a childminder, an actor or a plumber, there are battalions of self-employed out there who need their security. We need confirmation that a scheme will be brought forward not within days but within hours, to give them that assurance.

We also urge the Government to work with the construction industry and the trade unions to find a solution that covers the particularities of that sector—we have pointed them out before—with workers employed through payroll companies and umbrella companies. Most of them are forced into self-employment, and often exploitative self-employment of the worst sort.

I turn to housing. We welcome the moves to protect mortgage holders, with payment holidays now put in place for mortgagees, but we need the same security for renters and for the Government to understand the difference. For a renter, a rent holiday is not the same as a mortgage holiday. Rent is paid continuously during a tenancy, while mortgages have a fixed term, meaning that repayment terms can be simply extend. It is therefore important that the Government act to ensure that rents are paid, not merely that payments are suspended for this period.

We are extremely disappointed by the legislation published yesterday. Frankly, many believe that the Prime Minister has broken his promise to the country’s 20 million renters in 8.5 million households. It was not an evictions ban, as the Prime Minister promised. That legislation will not stop people losing their homes as a result of the virus; as my right hon. Friend the shadow Secretary of State for Housing, Communities and Local Government said, it just gives them some extra time to pack their bags. To be frank, it is just not good enough. The Government must look again; we urge them to look again.

There are also wider problems. Over recent years, austerity cuts have lessened the value of support available via housing benefit. The Government must immediately suspend the benefit cap and rid us of the bedroom tax that has affected so many families. We welcome the moves announced last week on local housing allowance, but the Government must go further and restore the local housing allowance from the 30th percentile back to the 50th percentile of market rates, as it was before 2010.

People will have made rental decisions based on their incomes, and they should not be penalised by the unforeseeable impact of the coronavirus, when we are asking people to lock themselves away. Now is not the time for families to be downsizing or sofa surfing with parents, grandparents or friends in cramped conditions. Many of us represent constituencies where overcrowding has become the plague of modern existence.

May I briefly pay tribute to the Mayor of London, Sadiq Khan? His team has worked tirelessly and creatively in securing hotel accommodation to get London’s rough sleepers off the streets, though we would like to know more about the duration and the cost of the deal that the Government have procured with hotels. It is important that the Government act to keep households in their homes so that that attachment to work, school and study can continue seamlessly at the conclusion of this extraordinary period. We cannot have a situation in which, at the end of this, tenants have either depleted all their savings or, worse, have amassed large and unpayable bills. If this is the case, the Government will be deferring evictions only a few months down the road, so the suspension of evictions for private and social tenants should be extended, we believe, from three months to six months. Shelter has estimated that as many as 20,000 eviction proceedings are already in progress and will go ahead over the next three months unless the Government take action to stop them, and they must be stopped. When the Financial Secretary to the Treasury rises to his feet, he must be clear that there will be no evictions of any kind during this period.

In addition, we also believe it necessary to suspend all bailiff proceedings for the same period. Practically speaking, there are clear health and safety issues about bailiffs entering the homes of families who may be self-isolating. Furthermore, what measures is the Chancellor proposing for suspending payments of household utility bills? That was raised in the discussions this morning and we will support measures that are brought forward. During this period, we cannot have bailiffs and we cannot have disconnections of water, energy or internet.

What are the Government doing about those without internet access? Many people in our communities rely on libraries to access the internet, but now those libraries are closing. What measures will the Government bring in to ensure that people can get online, whether for benefit services or to maintain some form of social contact? These are huge demands being placed on the civil service, and I pay tribute to all those public servants throughout our public administration who are working day and night to establish these schemes. They are not often praised, but they are in this situation.

The civil service has been depleted by a decade of austerity. As extra demands are placed on, for example, Her Majesty’s Revenue and Customs and the Department for Work and Pensions, other civil servants are being redeployed. Are those recently retired or made redundant from the service being asked to come back to assist, just as we have invited other professionals to come back into the NHS?

Will the Minister also confirm that the current round of HMRC office closures and redundancies will at least be paused, if not reversed, at this stage? What adaptations have been made for those working in the mass call centres of HMRC and the DWP? Is the telephony technology there for them to work at home? Is there greater social distancing within the call centres themselves? We all know that universal credit cannot cope now, but its roll-out was again delayed in the Budget. Millions more households are becoming eligible for universal credit, housing benefit and other payments, so are the Government confident that the system can cope with this increased demand, because the feedback that we are getting from our constituents on the frontline is that they find it impossible because of the long waits to get through and have their case dealt with successfully. No one is blaming the civil servants; it is about resources and investment.

What are the Government doing to encourage businesses to take up business interruption loans, when some businesses see loans as less effective than grants for keeping them afloat? Is there potential for increasing the level of grants and extending their range? Have the Government considered our proposal that such loan agreements should include job retention clauses, which would mean that when businesses receive a loan, they can give workers the security they need in the knowledge that they will not lose their jobs? It is not much to ask of a business receiving financial support from the Government in this way that they work towards our overall objectives.

[Kevin Hollinrake (Thirsk and Malton) (Con)]

The difficulty with what the right hon. Gentleman suggests is that most businesses do not know the extent of this crisis and the impact it will have on them. It is impossible at this point to determine exactly how long this will last or how deep a recession might be. Is he not asking the impossible of businesses?

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[John McDonnell]

In the real world, that is exactly why trade unions have asked that when loans are given or support is provided through the jobs retention scheme, there is a requirement for businesses to sit down with their trade unions and work through a plan for the future. In that way, security could be given to workers, because they would be involved in determining that, and judgments can then be made at different stages of the business development process. We are looking for some form of assurances that will give wider security than there is at the moment. If a company is being supported by a loan or the job retention scheme, it is not much for them to sit down with their workers to work honestly and fairly on a plan for the future to see how they can work together to secure those jobs.

Consideration has been given to extending grants to many small businesses that cannot afford to take on additional debt. We would welcome information on how the Government will extend coverage by extending the range of eligibility criteria, to make the grants more flexible.

We also need clarity for workers beyond the retail sector—those on construction sites in particular, but also in factories, call centres, warehouses, distribution and other settings. What are essential workplaces? What is the clear definition? I think that many of these issues can be dealt with fairly readily in the discussions that the Government are having with the trade unions, but they need to be more detailed and on a more permanent, structured basis.

The NHS was promised budget increases over the next five years. We suggest that the Chancellor brings forward the funding for years two, three and four into year one. Can the Minister assure us that we will not have another weekend when doctors and nurses working in intensive care have to go on the media to beg for personal protective equipment and clothing? There were instances over the weekend, and we have heard assurances from the Government, but action is needed rapidly. Can he also assure NHS workers that they will get not only the equipment they need but the tests they need? The World Health Organisation has made it clear from the start that its advice is test, test, test. The scale and the speed of testing need to be addressed.

Can the Minister assure the House and the public that everything is being done to procure more critical care beds? I welcome the news that 7,500 recently retired staff have returned to the NHS, and I pay tribute to each and every one of them. The Government have begged retired NHS staff to return. We believe that the same must happen with social care staff. Chronic low pay in the care sector, with many paid just the minimum wage, means that staff have left for less stressful jobs in retail and other sectors. Those workers need to be brought back. They need the appropriate personal protective equipment and clothing, and they need proper recompense.

Many will have seen the devastating news from the Oaklands nursing home in the constituency of my hon. Friend the Member for Hove (Peter Kyle), where 16 of the 20 residents and seven staff have coronavirus symptoms. I was most concerned about the reports that, despite pleading for it, the home has been unable to source the proper protective equipment. Just yesterday, my right hon. Friend the Leader of the Opposition and the shadow Minister for social care, my hon. Friend the Member for Worsley and Eccles South (Barbara Keeley), demanded an urgent action plan for social care—a system that looks after those most at risk from the virus. As the Chancellor said, our social care system needs whatever it takes. Whether that is residential care, domiciliary care or family carers caring for loved ones in their own home, the resources have to be there now. Can the Minister tell us how much has been allocated immediately to councils and care providers?

Let me turn to local government. I welcome the sectoral consultation that is taking place and the dialogue with trade unions across all departments. Councils have a key role to play as the guarantor of social care provision, but they too have been devastated by cuts and now have the responsibility of the hardship funds to administer. Will the Minister be clear what extra resources are being made available to local councils, especially as many are likely to start seeing drops in council tax and business rates revenue? What extra funding is being made available so that councils can extend council tax support schemes in this period as well?

Although we fully back the measures outlined yesterday, there are unfortunately some households where these measures could mean more abuse and even risk to life. This is where domestic abuse takes place. For victims of domestic abuse and for others, this home isolation will be terrifying. We need the police, refuges, mental health services and other social services to have all the resources and capacity they need. I pay tribute to my hon. Friend the shadow Minister for Women and Equalities, who has raised these issues repeatedly. We need a positive Government response that is backed by sufficient resources and full consultation.

Others, like me, have raised the issue of the charity and voluntary sector. Many charities whose work is essential in filling the gaping holes in our public services and our safety net are desperately worried about their finances. Charities dealing with the immediate response to the coronavirus and its effect on the most vulnerable need access to enough grants to allow them to scale up their operations. Others need to be assured that they can access the same level of support that small businesses are rightly getting so that they can suspend some of their operations without having to lay off their hard-working staff and can restart once the crisis passes. Can the Minister tell us what reassurances have been provided by the Government to the charity and voluntary sector? Will the Government work with the sector to find suitable reliefs in these unprecedented times and can the Government outline what schemes are available now to charities struggling with the loss of revenue?

On schools and education, I understand that schools remain open to the children of key workers and to vulnerable children, but only if no safe alternative is available. As for the universities sector, may I ask the Minister about the fees that will have been paid by students in further and higher education and what refunds and deferments will be available? Many students—in fact most students these days, because of tuition fees—work in term-time and during holidays, and that work will no longer be available to them. May I ask the Government immediately to reduce the interest rates on student debt to zero for the duration of this crisis to assist those students?

On transport, what provision has been made by Her Majesty’s Treasury to refund lost revenue for transport authorities, whether that is Transport for London or those that run bus services across the country? On railways, I echo what my hon. Friend the shadow Secretary of State for Transport has said: we back the measures that will keep key workers and freight moving on our railways during this crisis, which has exposed, as he says, the fundamental weaknesses of the franchise model. May I also thank all the railway staff and bus workers who are keeping the essential parts of our country moving? Will the Minister assure us that all public facing railway staff will also have the appropriate personal protection equipment and clothing that they need? Can the Minister tell us whether any consideration has been given to making public transport free for key workers who are risking their lives every day? NHS staff are receiving free rail travel in Wales and a similar move is being rolled out in other countries, such as New Zealand. We would welcome that in this country.

Prisons were understaffed and overpopulated before this crisis. This is not just a question of resources but of safety. I welcome moves to escalate prisoner release schemes for those who do not pose a threat to our society, but the probation service was in crisis before this virus hit us and the lockdown announced yesterday complicates matters even further. Can the House be assured that the police and the probation service will have every resource possible to keep people safe and to monitor those who need supervision? I welcome the moves last week to release detainees from detention centres due to health and safety concerns. Can the Minister be clear about what extra resources are going in to protect people’s health overall?

I was brought up a Catholic. Our local parish priest optimistically calls me a lapsed Catholic, so I welcome any sinner who repents. I therefore reach across the divide and pay tribute to the hon. Member for St Austell and Newquay (Steve Double), who yesterday said that

“many people who we considered to be low-skilled are actually pretty crucial to the smooth running of our country”.—[Official Report, 23 March 2020; Vol. 674, c. 17.]

I also echo his call to the Home Secretary. The point has been made repeatedly by the shadow Home Secretary and many of our Members on the Opposition Benches. The hon. Gentleman asked for the new points-based immigration system to be reviewed, in his words,

“to reflect the things that we have learnt during this time”.—[Official Report, 23 March 2020; Vol. 674, c. 17.]

Have the Government given any consideration to temporarily suspending no recourse to public funds, which is blighting so many people’s lives, or to allowing temporary access to benefits for non-UK nationals so that they can survive this period? That is important at a time when more and more people are out of work and unable to travel.

As a public service to all Conservative MPs, I say that the market does not distribute wages fairly or efficiently in a capitalist society, and there is no correlation between pay rates and the social value of many jobs. If there is one lesson that we learn from this crisis, maybe that will be the one that lasts the longest.

Just three weeks ago, I asked the Government to take a lead internationally in tackling this virus. It is vital that we are engaged in all global health and political forums and that we learn from best practice and share solutions, because this virus respects no borders. By helping others globally, we help ourselves. By neglecting others, we neglect ourselves. Will the Minister assure the House today that extra resources are being made through the international development budget to aid the poorest countries in combating this virus?

I think we will look back at this period as an unprecedented moment in our lifetimes. I know that this is already a tragic time for so many, and all of us will be hurt by this, but I want us all to be able to look back with pride about what we did in this period—to be able to say, “We widened who was covered by our safety net when we had to. We protected people and their jobs and wages. We cared for people around us. We provided all the support that was needed and, as a result of that, we came through this all the stronger.”

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[Kevin Hollinrake]

I thank the hon. Gentleman for that contribution, and indeed for all the work he does on the all-party parliamentary group on fair business banking and for the many speeches he has made on the matter. I absolutely agree. The two best things that I have heard the Treasury say over the past two weeks—and there have been many—are, “We will do whatever it takes” and, “We are all in this together.” The banks should take that approach as well. I and many other Members of the House will be watching to make sure that this time the banks do the right thing and restore their reputation.

[John McDonnell]

The hon. Gentleman has done some sterling work on this, so would he like to comment on the figures that are coming out on 6 April and the interest rates for overdrafts from HSBC, First Direct, M&S Bank and TSB? Nationwide have already gone there, with an increase from 9.99% to 39.9%. What does he think about that?

[Kevin Hollinrake]

I think it is an absolute disgrace. I do not think that the FCA saw it coming, which is one of the flaws of the regulator. The FCA has been criticised many times in this place, including by the right hon. Gentleman. It told the banks, “Right, you’re not going to charge anybody any more than anyone else is.” But that let them all put their rates up to the highest level. It is exploitative and absolutely outrageous.

The banks need to look at this as a sector and start to treat their customers fairly, which of course is a basic requirement of the principles of banking, so the FCA should step in and look at this. In fact, I think it should be the subject of an inquiry by the Competition and Markets Authority. The fact that the rates are not just high, but all the same, smacks of directors getting together in a room and agreeing a figure. It cannot be a coincidence that all the rates are exactly the same in this supposedly competitive market.

On commercial loans, it is right that the Government have negotiated with the banks to give mortgage holidays, which of course have to be paid back but nevertheless give borrowers vital breathing space. I think the same is true of some commercial loans, but the banks are saying, “We’ll give you a holiday only on the payment of the principal, not the interest.” Those paying for a commercial loan are paying much more on the interest than they are on the principal, which again seems grossly unfair if we are all in this together.

We are going to work together to try to get through this, so I call on the banks to look at this again, to be fair and to rebuild their reputation. The final way they could do that is by suspending legal action, certainly in relation to residential repossessions but also for repossessions against businesses. They should show forbearance and use the business banking resolution service—I am one of the people who have been working on that in recent months—which will be like a super ombudsman for banking disputes. They should defer any issues they have with their customers until that service is properly established, so that those complaints can be resolved fairly—fair to the bank and fair to the customer.

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[Bill Esterson]

Absolutely. It is important, and I certainly welcome it. None the less, there are some challenges with it. The fact that it is not available for the March payroll is a big problem for many businesses. We have already seen a significant number of businesses close and many workers laid off who will not now be eligible to be part of that scheme. The Government, totally understandably, have used examples of furlough schemes elsewhere in the world, but it will be difficult for the scheme to deal with the nature and the scale of this crisis.

[John McDonnell]

What we were trying to establish in our discussions with the Government last week was equality of sacrifice. Yes, workers and the Treasury have realised that there will have to be some sacrifice, but we were expecting some contribution from employers themselves. An hour ago, 400 workers at Tristar in my constituency were laid off. Those 400 drivers were told that they will get paid 80% of their wages by the Government and they have been laid off for three months. We expected the employers to contribute to that 20%, but, in this case, that will not be paid. The crisis is falling on the shoulders of workers, rather than on businesses. There is no equality of sacrifice in a number of these companies, some of which are being ruthless.

[Bill Esterson]

My right hon. Friend highlights the fact that some employers do not behave in a way that we should be able to expect them to behave given the nature of the crisis. We have heard other examples of large companies behaving in a way that is irresponsible and, frankly, downright wrong.

In addition to what my right hon. Friend says about employers not paying the 20% element of the wage replacement scheme and taking advantage of it, it is also the case that, for employers who wish staff to go on to short-time or part-time working, or reduced hours of some sort, the scheme does not apply. There is a real challenge for businesses in those categories, too.

That brings me on to the self-employed and this point about desperation. People are desperate now. We have debated that a number of times today and over the past few days as well. I just do not get the sense of urgency in this place. We are in here, and away from the real world. The same applies with Whitehall. I just think that, sometimes, people here do not have a sense of just how desperate things are when two members of the same household are both self-employed and have no money. They cannot put food on the table. When the Chancellor says, as he did this morning, that he is worried about the scheme for self-employed going to wealthy people, I say, as indeed did the right hon. Member for Kingston and Surbiton in his urgent question, let us not make the perfect the enemy of the good. Let us get a scheme in place and let us make it comparable with what the Government have offered to employees.

I want to say just a word or two about food supply and how the fund might apply there. There will be challenges around security of food supply; obviously, given the closing down of international transport links, that will be a challenge. We heard about the pressures on supermarkets. Some of the behaviour in supermarkets has been completely unacceptable, and the same applies to pharmacies. I hope that some of this money will go to ensuring security of deliveries, to protecting retail workers, to making sure that food and medicine get to those who most need it, and to helping pay for deliveries. The same applies to the supply of PPE, which hon. Friends have spoken about.

The right hon. Member for Kingston and Surbiton is right to raise the issue of helicopter money; at some point, that is something that the Treasury should consider. Any scheme, whether on PPE, food or access to funds, is only as good as the information out there, the awareness of the scheme, and the immediacy of access to it. The Government need to do much more to ensure that people know what is available in all those areas. The gov.uk website will carry that information, but lots of people and businesses do not know that it is there.

There is a real imperative on the Government to work much harder on the information that is getting out there, and on access to what is being offered. Television and radio will lose their commercial advertising; there is a great opportunity to replace it. I can give an example of the power of really good advertising: the video put together by the Belfast Health and Social Care Trust respiratory department. It was one of the most powerful pieces of advertising about the need for people to stay at home that I have ever seen. The BBC showed it; I think Sky might have, too; and it had viral attention on social media. The Government need to produce advertising of that quality to demonstrate what is available in a range of areas across society. Some of this money can be used to deliver on that agenda. Information and proper access will ensure the most effective use of this enormous necessary injection of funding.

The debate has been an opportunity to bring together the issues. I hope that the Financial Secretary will take them to all his colleagues across Government, as appropriate. It is interesting that the right hon. Member for Kingston and Surbiton said that 1919 was the last time there was this sort of scrutiny; that was the year of the Spanish flu pandemic. We will not vote against the measure this time, but let us hope that, this time, it is effective, and that the money gets through as quickly as possible.

Economic Update

John McDonnell Excerpts

Tuesday 17th March 2020 Commons Chamber

[John McDonnell (Hayes and Harlington) (Lab)]

There was an element of déjà vu about that statement. I thank the Chancellor of the Exchequer for providing us with an earlier copy of it. Of course, we recognise the immense threat that this virus poses to our country and the globe, and we want to work with him to ensure that we do everything we can to protect our economy and our people. But today, in some of our constituencies, people were being laid off—they were losing their jobs and their incomes, and their livelihoods are being threatened. People are worried, and I am disappointed that today’s package of measures does not really appreciate the urgency or the gravity of the situation for those individuals and their families.

Let us establish a principle throughout our discussions. To protect our people, the underlying principle must be that, wherever a person is sick, self-isolating or laid off from their employment, we will protect their income and give them security. I want to raise a number of questions about issues that the Chancellor failed to address and that I hope will be addressed urgently.

On those people who are sick, there is an urgent need for statutory sick pay to be available for everybody from day 1, and that means extending it to people on low pay, in part-time work and on zero-hours contracts, who at the moment do not qualify. Will the Chancellor now consider abolishing completely the lower earnings limit with regard to statutory sick pay, as called for by the CBI? May I also ask him to heed the call of the TUC and other groups to lift the overall level of statutory sick pay? The TUC has proposed that it should be raised to the level of the real living wage, and I think we should support that. Other countries are providing 100% protection of wages.

Other questions with regard to individuals remain unanswered. Will those workers who have been asked or required to self-isolate—teachers, health workers, nurses, carers and other essential public servants—be protected on full pay to ensure that essential services continue? Will the Government assure people of a right to work from home?

Other pressures felt by individuals relate to rents, mortgages and evictions. I really regret—I ask the Chancellor to consider this urgently this evening—that there was nothing in the statement to protect renters. It affects all our constituents. Will the Chancellor bring forward urgently now measures to protect renters, prevent evictions and enable rent holidays for those people unable to meet their costs? Will he put powers in the legislation now to follow the example of some other countries that have frozen or suspended utility bill payments and put that on a statutory footing because this is an emergency?

For those who have already lost their jobs, let us be clear: the level of and access to universal credit are unacceptable. The Chancellor has said that those receiving universal credit can receive an advance as a loan. This is pushing people into debt, some of them the poorest in our society. The Child Poverty Action Group has asked whether we can make that loan non-repayable as a grant. Can I urge him to consider that?

The Chancellor has said, and I welcome it, that he is going to bring the trade unions together to look at a more sustainable package. We need to do that within days, not weeks, and we will work with him to ensure that happens. I would cite other examples. In Denmark, the Government cover 75% of wages and companies cover 25%. It is true that workers give up some holidays in exchange, but there is a job guarantee for those workers.

We want financial support, but we want guarantees that these people, when this crisis is over, will have a job to go back to, particularly in those companies where there have been significant lay-offs. Unfortunately, we are now facing significant job losses, and a real sense of uncertainty for workers and businesses alike. I have to say that that uncertainty was made worse last night by statements with regard to the hospitality sector. I do not believe that the Chancellor’s statement today gives the clarity that is needed. Will he make it clear to the insurance companies that those in the hospitality sector—the pubs, the clubs, the theatres, the festivals—are closing on the instruction of the Government? In that way, most of them, even if they do not have “pandemic” in their insurance policies, will be covered.

I welcome today’s announcement of loan guarantees to businesses, but I notice in the small print—can the Chancellor clarify this?—that this is interest free for a period of six months only. I am not sure whether that gives the sufficient support and guarantee for the long term that many will want. I welcome the grants, but may I say to him that the response so far from a number of businesses has been that the scale of the grants needs reviewing? They are too small, and they do not relate to the costs that people are involved in at the moment.

I welcome what the Government have said about the business rates relief holiday, but last week the statement seemed to exclude nurseries and childcare. Can the Chancellor just clarify that that has been remedied now, because childcare and nurseries will be desperately needed in the coming period? A bit of concern has been expressed about the British Business Bank being asked last week to deliver the business interruption loan scheme. As of very recently there is little public evidence that the scheme has been established or developed.

I will turn quickly to individual sectors. On the aviation sector and other key transport sectors, I accept that there is a need now for support. I say gently, however, that I resent Mr Branson urging his workers to take eight weeks of unpaid leave, when he makes such a fortune, often by tax avoidance as well. If we are to give grants, loans and assistance to some of these sectors, we should consider whether to take an equity stake for the long term. That also relates to the rail sector. If any franchise fails, is there any planning to bring it under public ownership and management?

Another sector that has been mentioned—this is deeply worrying—is the fishing industry. It has been hit hard, particularly because of its inability to export. We have been told about the lack of insurance cover for boat mortgages. Can we look at that rapidly now to develop some form of legislative protection? Agriculture is now moving into the planting season. The sector was already facing a significant shortage of workers, but it now faces even bigger challenges. Will the Chancellor reassure the House that there will be support for agriculture throughout, because food supplies will be essential during this coming period, especially domestic food supplies?

I must also raise the issue of public services, which the Chancellor did not mention in any depth. The Opposition received well the commitment that whatever the NHS needs it will get, but can we be clear about the allocation of funding to enable testing to take place at scale? The £5 billion response fund did not earmark any particular funding for the NHS, let alone for testing. Clearly, the public now want reassurance that testing will be developed, and we need the funding. Also on the NHS, can the Government point to stronger steps that need to be taken to manufacture essential ventilators and provide personal protective equipment for frontline NHS workers? If we are harvesting our resources, Labour Members do not believe that we should be paying for private hospital beds at this time. Indeed, many of us believe that they should be requisitioned for the use of the whole community.

The overall system of caring for our population relies not just on the NHS but on social care. Will the Chancellor be absolutely clear now about the scale of funding that has so far been directed to social care, as there is uncertainty about that at the moment? What does he think is the best estimate for the level of funding that will be needed, given that we have already inherited 120,000 vacancies, and staff numbers may well dwindle because of the impact of the virus? In recent years, we have seen evidence that some care companies face threats to their financial viability. What plans have the Government developed to intervene if necessary in that sector? There is also pressure on family carers, who are relied on to support our social care system. We need proposals to support them financially as well.

One area of change that has been mooted is the possible closure of our schools. It is crucial that childcare support is provided in the event that any closures occur. We will work with the Chancellor on that issue and with local authorities, but it is crucial that children who depend on free school dinners receive support if the schools are closed. We cannot allow them to go hungry. School staff may be off for long periods and we would like an assurance that their incomes will be guaranteed. Pupils and students are being advised to study from home and most will require access to high-speed broadband. What will be done to ensure access to broadband for students? May I suggest to the Chancellor that it could be free? We all rely in our communities on the voluntary sector as well and it is being hit hard because of the temporary downturn in donations and staffing levels. What consideration has been given to grants to ensure that the voluntary sector can continue to carry out its important functions?

We need more clarity on the Barnett consequentials, and very quickly, because there is uncertainty about the scale of support that will be given to the devolved countries and regions.

With regard to international interventions, whatever people thought about Gordon Brown’s individual policies, in 2007 and 2008 he showed international leadership to tackle that crisis. I have expressed previously my disappointment that the Government did not act sooner in bringing countries together. I urge the Chancellor to follow up the teleconference with the G7 on Monday with engagement through the G20, the World Bank, the World Health Organisation and the UN, and to bring forward a global plan with his colleagues to ensure that we can give assurance not just to the markets but to those, particularly in the global south, who may well be hit hardest by this virus.

[Rishi Sunak]

I thank the right hon. Gentleman for the constructive attitude with which he approaches some of these issues. I very much welcome his desire to work with me to try to solve some of the pressing issues that face our nation.

I will try to answer as many of the right hon. Gentleman’s specific questions as possible, starting with financial security for our most vulnerable people. I wholeheartedly agree that this is a priority and should be a priority, which is why, in the Budget, we made significant changes to the operation of statutory sick pay, universal credit, and employment and support allowance to ensure that people had quicker and more generous access to a support system for them and their families. We have already invested £1 billion to provide that extra security, but of course we keep all these things under review. As I said, the next step of our plan is to focus on providing support to people, their incomes and their jobs over the coming days.

The right hon. Gentleman asked about insurance for the leisure sector. I can confirm that, after extensive meetings today between my hon. Friend the Economic Secretary to the Treasury and the insurance industry, the insurance industry will honour insurance contracts that would have been triggered if the advice had been to ban certain things, rather than it being advisory not to do them. That has been agreed and negotiated by my hon. Friend. I thank him for those efforts, and I thank the insurance industry for doing the right thing.

The shadow Chancellor asked, rightly, about renters. Of course, I announced measures today on mortgages. He is absolutely right that the biggest fixed cost that many families face will be their rent payment, and it is right that we have regard to that. I can tell him that my right hon. Friend the Housing Secretary will, in the coming days, make a statement with further measures to protect renters through these difficult times.

The shadow Chancellor asked about other countries and their experience, and about global leadership. He mentioned some specific examples of schemes. I can assure him that I am in touch with my counterparts across the G7 and the G20 to understand how schemes in other countries work. He mentioned, for example, employment support schemes in both Germany and Denmark. I say to him and to the House that, whatever package or scheme we come up with that we believe will provide the appropriate support, it is important that we can operationalise that at speed. The difference between our system and that of many other countries is that they have these systems already in place, so it is far easier for them to step them up quickly. We need to make sure we come up with a solution that can be delivered so that it makes a difference to people quickly, which is why I am happy to work closely with unions and business groups to see what will make the most sense.

On international leadership, I say to the right hon. Gentleman that it was widely noticed by other countries that last week, in this country, we saw both monetary and fiscal policy—the Government and the Bank of England working independently but in a co-ordinated fashion to provide significant support and confidence to the economy. That was acknowledged by people, including the International Monetary Fund, which noticed what happened here and pointed at it as an example for others to follow.

On the scale of our response, I ask the right hon. Gentleman to look at the analysis comparing the scale of the fiscal support that various different countries are providing. Again, I think he will find that the package of measures announced both last week and today shows that we have one of the strongest responses of anybody in the G7 as a percentage of GDP to the significant challenge that we face.

The right hon. Gentleman asked about the delivery of the loan scheme and it is right to focus on how it will be delivered. We have been working at pace over the past week to make sure that the loans can be delivered not by the British Business Bank, but by individual retail banks on high streets up and down the country. Again, because of the work of the Economic Secretary, that will happen by early next week: businesses will be able to walk into their local branches and request a business interruption loan that has been backed by the Government on these attractive terms. Again, we have to work with the systems that we have. We cannot let the perfect be the enemy of the good because we want to be able to deliver these schemes as quickly as possible to businesses up and down the country.

The right hon. Gentleman asked about support for a variety of sectors. I can tell him that I have urgently asked my Cabinet colleagues to convene roundtables and engagement with their particular industries to understand if there are specific measures we should be looking at, on top of the measures for airlines and airports that we can look to address in the coming days. All the sectors he mentioned will be covered by that.

I agree with the right hon. Gentleman: when it comes to providing support to larger companies, if the taxpayer is going to be put at risk in supporting those companies, it is right that the taxpayer is rewarded on the other side. That is a principle with which we also wholeheartedly agree. He can rest assured that, as we negotiate those situations, we will always protect the interests of taxpayers.

The right hon. Gentleman rightly asked about public services. Our No. 1 priority is to ensure that the NHS has everything it needs to get through this period. I made that commitment last week. I re-echo that commitment today.

On the Barnett consequentials, the right hon. Gentleman will have seen this week that we released the full amount of the Barnett consequentials resulting from the Budget package in advance to all devolved authorities. Today, I announced the overall quantum. Again, we will quickly release those, in advance of those payments being released in England, to the devolved authorities, so they can plan appropriately.

The right hon. Gentleman can rest assured that all the specific public service issues he mentioned, whether school meals, schools and social care, are under active and urgent consideration.

I will end on this point. Our public servants, in particular those working hardest in our NHS right now, deserve nothing but our support at this difficult time. I want them to know, and I want the country to know, that we will do whatever it takes to get through this.

Tax Avoidance and Evasion

John McDonnell Excerpts

Tuesday 25th February 2020 Commons Chamber

[John McDonnell (Hayes and Harlington) (Lab)]

I beg to move,

That this House notes that the tax gap, the difference between the amount of tax that should be paid to HMRC and what is actually paid, has been estimated at between a minimum of £35 billion and £90 billion; believes that successive Conservative governments have failed to address tax avoidance and evasion while making savage cuts to public services and undermining the social security net; further notes that the Tax Justice Network has described the UK as backsliding on financial transparency; is concerned by reports of the Conservative Party’s links with individuals and companies that have engaged in tax avoidance; and calls for the proper funding of public services after a decade of austerity and for robust action to tackle tax avoidance and evasion.

With a Budget in just over a fortnight, over the coming days we will be setting out an agenda of issues that we believe the Government need to address to tackle the social and climate emergencies that our country now faces. And yes, there is a social emergency in many of our communities. Yesterday, my hon. Friend the Member for Leicester South (Jonathan Ashworth), the shadow Health Secretary, exposed the appalling levels of health inequality across the regions of our country. Today, the Marmot report shows what he described as the “shocking” results of 10 years of austerity: life expectancy has stalled for the first time in more than 100 years, and has even been reversed for the most deprived within our community, women in particular.

Yesterday, the hon. Member for Denton and Reddish (Andrew Gwynne), the shadow Secretary of State for Communities and Local Government revealed the scandalous impact of cuts to local councils—for example, the impact they have had on the services desperately needed to keep our children safe. This afternoon, my hon. Friend the Member for Worsley and Eccles South (Barbara Keeley), the shadow Minister for mental health and social care, will describe the immense suffering and distress caused by the cuts in social care imposed by this Government. Members will remember the report only last year, reporting that 87 people died each day before actually receiving the care they needed.

At present, we have a Government who, on this evidence, have proved to be incapable of providing care for our people, of housing our people, of feeding them or of providing the work that will lift them and their families out of poverty. There is a lot of hyped-up talk about the big expenditure numbers that might be associated with the coming Budget. What we are interested in is outcomes, and the impact on the wellbeing of our people. These will be the key tests of the forthcoming Budget. Will it really end austerity? Will it really reverse the decade of austerity cuts that have been imposed on our community by this Government? Will it ensure that our people are properly cared for, properly housed, properly fed and lifted out of poverty? Alongside all of this, in a week when we have seen the Prime Minister’s failure to respond to the flooding that has damaged so many of our people’s lives, the overriding test is: will this Budget tackle the existential threat of climate change?

It is interesting that, contrary to virtually all the advice from mainstream economists 10 years ago, the newly elected Conservative Government took the political decision to impose austerity cuts on our community. As we have repeatedly said, it was a political choice, not an economic necessity. The alternative was to ensure that we had a fair taxation system to fund our social infra- structure, and that we borrowed to invest in our physical infrastructure to grow our way out of recession. The reality is rather that the neo-liberal ideologues simply could not let the economic crisis go to waste. They seized the opportunity to launch their experiment to downsize the role of the state through cuts, outsourcing and privatisation. This was linked to ever more restrictions to reduce the effectiveness of trade unions to represent their members and to shift the balance of power between capital and labour in the workplace.

The result has been that virtually every area of our public services is in crisis, with the slowest growth in wages in 200 years, 8 million of our people in working households in poverty and over 4 million of our children in poverty. The UN rapporteur has described levels of destitution in our country and the treatment of disabled people as an abuse of human rights. The Government’s alibi for austerity was the global financial crisis, even though Government spending was never a cause of that crash. Now, 12 years on, the Government no longer have that fake alibi for the cuts. It is clear the Tories do not just want to shrink public services and cut public sector jobs in the short term; they want to downsize our public services for good—as the Institute for Fiscal Studies has said, baking austerity into Government.

All this suffering, all this hardship, all this holding back the potential of a near-generation of our people would have been rendered completely unnecessary if we had had a fair taxation system and had invested in our economy. A fair taxation system starts with ensuring that people and corporations pay their taxes. That patently is not the case at the moment. There is much talk about levelling up; well, let us start with levelling up the rules of taxation and the amount many of the rich and the corporations pay in taxes.

[Kevin Hollinrake (Thirsk and Malton) (Con)]

Surely the right hon. Gentleman will be aware that the top 1% of earners in this country now contribute about 29.6% of all taxation, whereas in 2009-10 the figure was only about 25%. How can he say that is a failure?

[John McDonnell]

They pay that much because they earn so much more than everybody else, but the other issue, and it relates—[Interruption.] Let me finish. We have this debate time and again. The hon. Gentleman is referring to income tax, but when we take into account overall taxation we see that the poorest-paid in our country are paying about 40% of their income while the richest are paying around 34% of their income. It is the poorest who are hit hardest, it is the poorest who have shouldered the burden of austerity, and it is the poorest whose life expectancies are being reduced at the moment. That cannot be right; surely to God no one in this House was elected to ensure that life expectancy for the poorest stagnates and for some goes backwards.

[Ms Angela Eagle (Wallasey) (Lab)]

Does my right hon. Friend agree that the other side of this calculation is that those who are best able to pay ought to pay their fair share of tax, and what we have seen over the last few years is the creation and mass-marketing of tax evasion schemes? Those now exist like package holidays—they are package schemes. Does he also agree that the Treasury has been very remiss in not cracking down on this awful emergence of tax schemes that are packaged to make it much easier for people to avoid paying their fair share?

[John McDonnell]

I want to pay tribute to a number of my colleagues in this House who have consistently raised this issue, and my hon. Friend is one of them. When we had the debate very early on—in, I think, 2012 or 2013—a number of hon. Members, including my hon. Friend, started describing what was taking place as tax avoidance on an industrial scale. That is exactly what has happened, and it has not got better; it has got worse consistently.

At the moment, Her Majesty’s Revenue and Customs is saying that the tax gap is about £35 billion, and it defines that as the difference between its estimate of the tax that should be paid and what is paid. But we know, and HMRC accepts this, that that does not include many of the abuses of corporate profit shifting, and HMRC acknowledges

“many sources of uncertainty and potential error”

in its own calculations. So other experts have suggested—this is the point my hon. Friend is making—that the tax gap could be as high as £90 billion overall. So let us look at who we know is not paying their taxes.

[Paul Blomfield (Sheffield Central) (Lab)]

Each year I organise an annual community consultation, and each year there has been growing anger among my constituents about the sense that they are paying their fair share from very ordinary incomes while the level of corporate tax avoidance has been growing out of control as successive Conservative Governments have failed to step up to the mark in tackling it. We are apparently losing over £1 billion of tax due on UK earnings from just five of the biggest US tech firms; that is money that could pay for more than 42,000 rooms in care homes for people who desperately need them. So does my right hon. Friend agree that there is enormous public support for tough action on corporate tax avoidance?

[Mr Speaker]

Order. I can put the hon. Gentleman’s name down if he wishes to make a speech, but we must have shorter interventions.

[John McDonnell]

May I thank my hon. Friend for that wonderful speech?

Whoever is in government needs to accept that this is an issue that we have to address, because there is now an increasing lack of confidence in the tax system, and I know from meeting companies, including some in the City, that fulfil their obligations that they feel anger towards those that do not; so this anger is felt within the wider community, but also within the business community. It destabilises the whole process of tax collection and undermines confidence in the system, and also undermines confidence in Government overall.

As I have said, some have suggested that the tax gap could be as high as £90 billion. Let us look at who is not paying: it is the rich corporations, and in particular the multinationals. Successive Conservative Governments have been, I have to say, weak on multi- nationals. According to analysis by Tax Watch UK the top five tech companies alone avoided around £5 billion in UK tax over the last five years. We need to recognise that this is money that could be used by whichever Government for useful purposes. That sum is enough to reverse the cuts to homelessness services—we should remember that 700 of our fellow citizens died on the streets last year. It is enough to provide support for families to prevent children from being taken into care, and Members will recall that when we had a debate not long ago we had the report that there are record numbers of children coming into care because of the cuts in early interventions to support families.

We have had discussions in the House about this, therefore. Recent years have seen secret sweetheart deals between HMRC and tech giants, and they have only been made public as a result of the tireless work of tax justice campaigners. The Government have trumpeted their digital services tax. It was trumpeted before the election, but that tax has been widely criticised. It is aimed only at digitalised business models, and many have said—and I agree—that it is hard to administer and becoming impractical. It creates a pitiful 2% tax on the revenues of a very small group of businesses and is predicted to raise £5 million only this coming year —and that is if it is brought into force on 1 April. Now there is talk of the Government dropping even that hollow half-measure. So let us be clear: if the Government drop or delay the digital services tax, as is rumoured, it will effectively be another tax giveaway to powerful multinationals.

Let us look at non-doms again. Non-dom status is another tax giveaway. My right hon. Friend the Member for Barking (Dame Margaret Hodge) has been raising this issue consistently for quite a while. This is just another area where the Tories have said a great deal but have not had an effective clampdown. It is a colonial hangover from 1799 that allowed colonists to shelter their property from tax—a carve-out from the general rule that UK tax residents pay tax on income wherever it is earned. It is a carve-out that applies only to some who might have their domicile outside the UK.

George Osborne, one of the many Chancellors I have dealt with over the years, tinkered with the process and introduced an annual charge of £30,000 to be paid by some non-doms and £60,000 by others. The Government now will claim they are abolishing non-dom status, but actually it is being kept intact for a significant number of years despite the evidence that those who use this status are the wealthiest individuals, able to pay, able to contribute to the funding of our public services, and able to contribute to our society, which they enjoy living in for long periods. Previous estimates have said that fully abolishing now the status of non-doms could raise £1 billion for our public services—think what that could do now to assist families whose homes are flooded.

There are many other ingredients; non-dom status is just part of an array of ingredients that enable abuse of our tax system. Secrecy is at its core; it is financial secrecy, and especially the exploitation of overseas territories and Crown dependencies to avoid tax.

Last week, to this Government’s shame, the Tax Justice Network judged that the UK had increased its secrecy score by more than any other country since it last measured financial secrecy. It said that the UK had been backsliding in recent years by building its “spider web” of satellite tax havens. Some of us were in this House when the Panama papers were exposed. They revealed that the most popular haven in the world is the Virgin Islands, which is a British overseas territory.

A lot of words have been said about enablers, but there has been a history of failure to clamp down on the enablers of avoidance and evasion, including the auditors and, yes, the lawyers. One recent paper said—my hon. Friend the Member for Wallasey (Ms Eagle) made this point—that

“the tax services industry, propagated by the Big Four—”

the big four accountants—

“is essentially the apex of this pyramid of factors that helps build, manage and maintain”

the tax havens, but the Government have said and done little to crack down effectively on the tax services industry.

There has also been a history of failure to recognise how the City of London is complicit in the financial misconduct affecting the global south when it comes to tax collection and the hiding of taxation. According to Oxfam, the global south is losing £170 billion in tax revenue due to the wealth of individuals and corporations hidden in tax havens associated with this country. Surely it is our responsibility to ensure that London is not used as a global laundromat for washing dirty money. It is the Government’s duty to protect our citizens by stopping that dirty money undermining the rule of law internationally and undermining international stability. What goes around comes around, and allowing the City of London to be used in that way will have its consequences in the long term for all of us. To collect taxes we need tax collectors, yet Her Majesty’s Revenue and Customs has seen its staff numbers plummet from 105,000 in 2006 to 65,000 in 2019.

As we have raised before, there is a litany of legal loop- holes that the Tories have not acted on or have actively created. The general anti-abuse rule that many of us argued for has proved to be toothless—far weaker than anti-avoidance rules in other legislations. The use of legal professional privilege in tax avoidance cases is little short of a disgrace. George Osborne promised the “march of the makers”, but Nicholas Shaxson has said that the Tories have only created the “march of the takers”. I concur. A number of us have been working with a range of tax experts, accountants, the Public and Commercial Services Union, the HMRC staff union, tax justice campaigns and corporate reform groups. Labour has developed a plan to tackle each of those issues, and there is a range of expertise in this House on all sides arguing for more action.

On secrecy, we believe, as others have said, that we need a stronger public register of trusts and beneficial ownership of companies. We need to put an end to financial secrecy, because the current register of trusts, so often a vehicle of tax avoidance, is not truly public and the penalties for non-compliance are pathetic. The current register of who controls companies is not being verified properly and has a high threshold for disclosure. We have a plan for working with overseas territories and Crown dependencies to accelerate their move towards tax transparency. It is just not good enough that the deadline for establishing public registers of company controls has slipped to 2023 at the earliest.

We believe there should be a clampdown on enablers through the introduction of stronger laws on facilitating tax evasion and, yes, harsher penalties for those who promote schemes. The current law has a wide defence for those accused of facilitation, and penalties for promoters of tax avoidance and evasion are just too weak. We urge the Government to introduce an overseas loan transparency register. That would tackle injustices of the kind that we have seen in, for example, Mozambique. We met a group of women from Mozambique, who told us what had happened in their country. Some of their politicians had undertaken secret lending using UK law and had ripped billions from the budget of Mozambique. Then, when the effects of climate change were felt through flooding following a major cyclone, Mozambique did not have the resources it needed to protect its own people.

We urge the Government to introduce a plan to increase targeted audits undertaken by HMRC to raise the nearly £3 billion owed by self-assessment taxpayers. The majority of the self-assessment tax gap is owed by a small number of self-assessment taxpayers, who could be effectively targeted by such audits.

Our concern is that far from moving forward on tackling tax avoidance in the coming Budget, the Government are opening up the opportunity for more abuse, specifically with their proposals for freeports. The evidence suggests that freeports simply relocate jobs and investment, rather than creating new jobs and investment. Far too often, they become hubs for the abuse of workers’ rights and tax evasion.

Let me be straight with the Conservative party. There is a concern about why the Tories will not tackle tax evasion and avoidance effectively. It is argued by some that they are in the pockets of the City, and in the pockets of the avoiders, the evaders and the enablers. It is hardly surprising that some will be able to level that charge. For example, they could come to that conclusion when only this month we discovered that Lycamobile, which donated £2.1 million to the Conservative party, is embroiled in three tax disputes with HMRC over £60 million in unpaid tax. Indeed, the French auditors were blocked from accessing that company’s records in this country. The problem, however, may also lie closer to home: not just with donors, but with the Chancellor himself.

I put it on the record that there are questions I believe the Chancellor himself, given his past associations, has to answer about his own attitude to tax avoidance. I have written to the Chancellor with a series of questions on this matter. In recent weeks, it has become clear that the Chancellor of the Exchequer, the right hon. Member for Richmond (Yorks) (Rishi Sunak), has had close associations with tax avoiders and tax havens. If people are expected to have any confidence in this Government’s commitment to tackling tax avoidance, it is critical that the Chancellor is fully open and transparent about his own past activities. A former close business associate in two companies in which the Chancellor held senior positions was ordered to repay £8 million after engaging in an unlawful tax avoidance scheme. Two of the firms in which the Chancellor held senior positions have made use of the notorious tax haven of the Cayman Islands.

On our side, we will continue to press the case for a fair taxation system. To do that we need first of all to close the loopholes that allow tax avoidance and evasion to flourish. However, we also need to deal with the overall regulatory architecture of finance, a challenge raised by a report published this morning by the True & Fair Campaign. Let me quote from that report:

“the last four years have seen a multiple pile-up of mis-selling scandals and incidents of regulatory failure. It has witnessed the repeated and wanton abdication of responsibility by leading market participants...Worst of all, it has demonstrated a breathtaking betrayal of the trust...rightly owed by so-called financial services professionals to their investors and employees.”

That report is called “Asleep at the Wheel”. It singles out for criticism the Financial Conduct Authority, and in particular Andrew Bailey, appointed by the Government to be the next Bank of England Governor. On several occasions I urged the previous Chancellor, in this House and by correspondence, to delay the appointment and installation in office of Mr Bailey until there has been an independent review of his role at the FCA. This report adds urgency to that recommendation. I urge the new Chancellor to act on it now.

In conclusion, the forthcoming Budget will be a test of whether the Tory party has, as it claims, turned a page. From the evidence so far it looks like a bit more Johnsonian bluster. There is nothing on the scale needed to address in any serious way the damage Conservative Governments have inflicted on our community over the past decade, and certainly nothing on the scale needed to tackle the climate crisis. Any realistic policy to end and reverse austerity and invest for the future needs, at its base, a fair taxation system. We will wait, therefore, to see whether in this Budget, the Government will at long last effectively confront the scandal of tax evasion and avoidance. All I can say is that judging on past form, I am not holding my breath, and I do not think many others are either.

Oral Answers to Questions

John McDonnell Excerpts

Tuesday 11th February 2020 Commons Chamber

[Sajid Javid]

I can absolutely confirm that to my right hon. Friend. We are blessed with talent throughout our country. Wherever we look, we have talent. Our country is oozing with talent, and that, of course, includes Wales: we have just seen a demonstration of that talent. We need to ensure that there is much more opportunity, which means investment in infrastructure and skills and retaining a dynamic, competitive economy.

[John McDonnell (Hayes and Harlington) (Lab)]

In the last month we have seen the Financial Times predicting that the Chancellor will miss his balanced budget target, and today we have seen zero growth in the economy. At the same time, Mr Dominic Cummings has demanded cuts in taxes and massive spending commitments, so the Chancellor has resorted to floating a possible raid on middle-income pensions, a mansion tax—once described as Marxist—and a 5% cuts round to find some money to pay for Mr Cummings’s demands. Yet in the real world out there, the victims of Wonga, the payday loan company, were told a fortnight ago that they would receive less than 5% of the compensation that they are owed. Will the Chancellor take a break from his arm-wrestling with Mr Cummings, and introduce measures to compensate the Wonga victims fully?

[Sajid Javid]

I think that I have to correct myself. I said that there was talent throughout the country, but, judging by what we have just heard, I do not think that that includes the Labour party.

There is all sorts of speculation about the Budget, and I am not going to respond to that. However, the right hon. Gentleman will know that when the Budget is published, it will be published alongside a report by the independent Office for Budget Responsibility. Those are the figures that are going to matter, not the ones that are speculated about in the press. As for growth, the right hon. Gentleman will also know that although there has been a fall in global growth, the International Monetary Fund forecasts that Britain will grow faster this year than France, Germany, Italy and Japan.

[John McDonnell]

I asked about Wonga. [Hon. Members: “You did.”] On the basis of that answer, I can see why No. 10 nicknamed the right hon. Gentleman CHINO: Chancellor in name only.

Wonga is just one example of the recent scandals in the financial sector. We have seen the scandals of closet tracking last year, London Capital & Finance, Woodford Investment Management, the tax avoidance by Lycamobile —a Tory party donor—NMC Health’s misreporting today, large-scale money-laundering, and audit failure after audit failure. Regulation of the finance sector—I say it again—is clearly failing, and now there is the risk to jobs resulting from the tardiness of a post-Brexit settlement. Let me put this to the Chancellor: can he assure me that the White Paper that he has promised today will address the failure of regulation and the culture of recklessness and abuse that has developed in some sections of the City, in addition to the risks from Brexit, so that we can plan a long-term stable future for our finance sector?

[Sajid Javid]

I remember that not long ago the shadow Chancellor stood here and said that he wanted to be known as the “people’s Chancellor”. I think the people had a very different idea, however. On his question about high-cost credit, when I was last in the Treasury as Economic Secretary, that was the first time that any Government had introduced proper regulation around high-cost credit. This is something that we keep under review, which is why, as we present our White Paper, we will be looking to see what more we can do.

Economy and Jobs

John McDonnell Excerpts

Monday 20th January 2020 Commons Chamber

[John McDonnell (Hayes and Harlington) (Lab)]

I beg to move an amendment, at the end of the Question to add:

‘but respectfully regrets that the Gracious Speech fails to put an end to a decade of austerity, to invest in the UK’s underfunded public services, or to scrap universal credit; notes the damaging impact that the four-year freeze in working-age benefits has had on families on low income; and calls on the Government to bring forward a plan to reverse the damaging impact austerity has had on communities in the UK, tackle the climate and environmental emergency, and reshape the economy to work for everyone by clamping down on tax avoidance, tackling insecurity in work by extending full employment rights to all workers, ending in-work poverty, and introducing a real living wage.’.

I appreciate that many new Members will want to speak today, so I will seek to be as brief as possible. [Interruption.] I thought that would be appreciated on both sides. We aim to please.

You, Mr Speaker, have been in the House as long as I have, so you will know that the classic approach to a good Queen’s Speech and its subsequent debate combines an assessment of the position of the country—a state of the nation address—with at least some attempt to address the issues facing our people. On both counts, the latest Queen’s Speech and this process is by any stretch of the imagination crushingly disappointing—I believe that the overriding view that will come to be associated with this Government may well be one of disappointment. They appear to have no appreciation of the lives so many of our fellow citizens live or of the often heartrending problems they face.

The Government’s programme in the Queen’s Speech fails to reverse the decade of austerity. As the Institute for Fiscal Studies has said, austerity is baked into the Government’s economic policies, which fail to tackle insecure work, to end in-work poverty and to introduce a real living wage. Worst of all, the Queen’s Speech fails to address the brutal hardship caused by universal credit, introduced by this Government. We face twin emergencies: first, a climate emergency, an existential threat to our planet that, as we have seen only too well in Australia and Indonesia, is rapidly spiralling beyond control; and, secondly, in this country, a social emergency resulting from a decade of harsh austerity and decline. Last year, the House resolved that we faced a climate emergency. We should also resolve that we face a social emergency.

[Simon Hoare (North Dorset) (Con)]

If what the right hon. Gentleman says is true—and I very much doubt it—and if his Eeyore approach to what the country thinks is correct, to what does he ascribe the best result for the Conservative party since 1987 just last month?

[John McDonnell]

I suppose we will have a longer debate at some stage about the outcome of the last general election. I will be straight with the hon. Gentleman: I think the overriding issue was Brexit and that the overriding message was the one the Conservative party put out of “Get Brexit Done”. I ascribe the victory of the Conservative party to that. I cannot be straighter with him than that.

In the last three months in this Chamber, we have had debates on the spending review and the last Queen’s Speech in which hon. Members have highlighted report after report from independent agencies exposing the impact of a decade of austerity. I want to seize on one group as an example—a group dear to all our hearts. If we are to lay any claim to being a compassionate or even a civilised society, surely the most effective test is how we care for our children, and on that count the Government fail appallingly. Surely no Government could ignore organisations such as the Children’s Society and the Child Poverty Action Group, which have reported that more than 4 million of our children are still living in poverty. That means that one child in three is living in poverty in our country in the 21st century. Some 125,000 of those children are homeless and living in temporary accommodation.

The effects on our children of living in poverty are well documented by the Children’s Society. Those children are more likely to be in poor health, to experience mental health problems, and to have a low sense of wellbeing. They underachieve at school, and experience stigma and bullying. The shocking statistic, though, is that 70% of children living in poverty are in households in which someone is in work. The Children’s Society describes that experience as being hit by a perfect storm of low wages, insecure jobs and benefit cuts. The result is remarkable: this Government have achieved the historic distinction of being the first modern Government to break the link between securing work and being lifted out of poverty.

The Chancellor boasted recently that wage rises were at record levels compared with those of the last 10 years. That is a bizarre boast. Wage rises are at a 10-year record high because his Government have kept wage growth so low for the last decade. Average real wages are still lower than they were before the financial crisis. [Interruption.] The Chancellor, from a sedentary position, has again used the slogan “Labour’s crisis”. Let me try to find a quotation for him. George Osborne said:

“did Gordon Brown cause the sub-prime crisis in America? No.”

He went on to say that “broadly speaking”, the Labour Government

“did what was necessary in a very difficult situation.”

The Chancellor, again from a sedentary position, refers to the deficit. Let me quote again. In 2007, George Osborne said:

“Today, I can confirm for the first time that a Conservative Government will adopt these spending totals.”

He was referring to the spending totals of a Labour Government, by implication. Let me caution the Chancellor, because we might want to examine his role at Deutsche Bank, where he was selling collateralised debt obligations, described by others as the weapon of mass destruction that caused the crisis.

As I was saying, average real wages are still lower than they were before the financial crisis. The Resolution Foundation has described the last decade as the worst for wage growth since Napoleonic times. The recent increase in the minimum wage. announced with such a fanfare by the Government, reneges on their minimal commitment that it would be £9 an hour by this year. It certainly is not. The UK is the only major developed country in which wages fell at the same time as the economy grew after the financial crisis.

The Government seem to believe that the answer to low pay is raising national insurance and tax thresholds. When tax thresholds are raised, the highest gainers are largely the highest earners, and raising them and national insurance contributions is the least effective way of tackling poverty. According to the IFS, only 3% of the gains from raising the national insurance threshold would go to the poorest 20% in our society. A £3 billion cut in the national insurance contributions of employees and self-employed people—which, at one stage, was promised by the Prime Minister—would raise the incomes of that group by 0.1%, which pales into insignificance in comparison with the losses endured from benefit and tax credit cuts since 2010. It is also worth bearing it in mind that, while the heaviest burden of austerity has been forced on the poorest in our society, this Government have given away £70 billion of tax cuts to the corporations and the rich.

We have also heard Ministers refer to the so-called jobs miracle. Of course we all welcome increased employment, but when we look behind the global figures we find nearly 4 million people in insecure work with no guaranteed hours and 900,000 people on zero-hours contracts. Britain has one of the highest levels of income inequality in the developed world. A FTSE 100 chief executive will be paid more in three days than the average worker’s annual wage. Surely no Member of this House can think that that is right, can they? The gender pay gap is 17.3% and there is now an inter-generational pay gap of over 20%. There is an 8% pay gap for black workers, and if you are disabled the pay gap is 15%. There is nothing in the Queen’s Speech that will address any of this. There is nothing that will address the grotesque levels of inequality in our society and at work, certainly on the scale that is needed.

[Sir Edward Leigh (Gainsborough) (Con)]

And 30% of all tax receipts come from the top 1% of earners.

[John McDonnell]

That is just income tax. It is interesting that the lowest earners pay 40% of their income in tax while the highest earners pay 34%. We know who is paying more in comparison with what they earn.

There is nothing in this Queen’s Speech that will address the grotesque levels of inequality. Actually, the reverse is true because the Government are now launching another assault on trade union rights and, in particular, the human right of the ability to withdraw one’s labour. The Chancellor has also rejected future dynamic alignment with EU employment rights and standards, and there is a real fear—let us express it now—that this prefaces the fulfilment of ambitions of Conservative Members to undermine workers’ rights and conditions. Maybe that is what some of their campaigning for Brexit was all about. Wage levels are low, in part because this Government have produced a productivity crisis. Over the past decade, productivity grew at its slowest level in 60 years. A German or French worker produces in four days what a British worker produces in five, not because the UK worker is any less industrious; far from it. It is because investment in the UK has been broadly weaker than in the rest of the G7 countries, especially since 2016, and investment is currently stagnating.

This has been exacerbated by the lack of investment not just in capital but in human capital—in training and skills. In his interview at the weekend in the Financial Times, the Chancellor highlighted the role of further education colleges, and I agree with him. He talked about the role they could play in raising productivity by promoting lifelong learning and skills training. As someone who benefited from further education while I was on the shop floor, I fully agree, but the reality is that this Government have brought FE to its knees, with the IFS suggesting that at least £1.16 billion is needed just to reverse the cuts that the Government have imposed on further education. We have seen a decade of a Government denying opportunities to the very people whose skills have been desperately needed, not just to fire up our economy but also to lift their families of poverty.

Alongside skills, a vibrant economy needs to invest in the future if we are to compete in the fourth industrial revolution, but on investment in research and development, the UK is now 11th in the EU. We await the Government’s detailed proposals on investment in R and D, and if they are of a scale we will support them, but it will take a lot to make up for the lost decade in this field. A lack of investment in infrastructure and R&D has resulted in productivity going backwards in many regions of the UK. The 2017 Kerslake report identified a £40 billion productivity gap in the three northern regions compared with the south, which has produced some of the worst regional inequality in all of Europe.

[Mr Richard Holden (North West Durham) (Con)]

The Labour manifesto wanted to scrap R&D tax credits. How does the right hon. Gentleman square that with his support for R&D now?

[John McDonnell]

Quite simply. It is a good question, because we wanted to scrap the tax credits and put direct investment into R&D. Some of the very advisers the Government have called upon, such as Mariana Mazzucato, have been ripping apart some of those tax credits for inefficiency and ineffectiveness. We shared the objective, but we found a different and more effective route.

We have referred in the past to the differentiation between types of investment, and the example that we have used in previous debates is stark. Planned transport investment in London is 2.6 times higher per capita than in the north, so it is no wonder that rail infrastructure in the north has been falling apart. After a decade of decline, the Government at last seem to have at least acknowledged their mistake in refusing to invest in the regions—something we have been crying out for—but we will see what scale of investment is produced after the fine words.

However, this is not just about capital investment in infrastructure. There is also a desperate need for revenue investment in the social infrastructure of our regions and nations. It is interesting that many cities and towns in the north have borne the brunt of austerity. Seven out of the 10 cities with the largest cuts in the country are in the north-east, the north-west and Yorkshire. That came about not by some miracle, but as the result of deliberate Government policy.

Imitation, they say, is the highest form of flattery, so I suppose Labour should be flattered that the Government are now looking to rewrite the Treasury Green Book to reorient investment decisions towards the regions outside London and the south-east—an exercise that Labour undertook two years ago. I suppose we should also be flattered by the Government now following Labour in adopting a fiscal rule that enables them to take advantage of low interest rates to borrow, which we advocated at least four years ago.

[Richard Fuller (North East Bedfordshire) (Con)]

As we are in the habit of stealing clothes, as the right hon. Gentleman would present it, the Labour Party had its election manifesto and the costings—two documents that obviously have been consigned elsewhere—but the third document was about corporate tax breaks, so does he suggest that the Government should look at existing corporate tax breaks and reorient them to support investment in other regions?

[John McDonnell]

Again, Labour undertook work to look at exactly that. We looked at the regional impacts and at how tax breaks are distributed unequally around the country. There is an important and exciting piece of work to be done, and some of those issues were considered by the Kerslake review in 2017. There will be some element of consensus on how we can direct future investment, and we can build upon that in the long term, because if anything comes out of the lessons of the past 10 years, it is that we need a longer schedule than just a five-year parliamentary process for capital investment of that scale.

Returning to fiscal rules, the Government have now advocated a fiscal rule that largely follows Labour’s advice, but it is this Government’s third or fourth fiscal rule—I have lost count. Some of them have been adhered to—no, actually, looking back at it, none of them have actually been adhered to, which largely defeats the object of having fiscal rules. It will be interesting to see how long this one lasts and how far it is achieved. The problem is that, even if they use all the headroom that their new fiscal rule allows, they are only paying lip service to the need to invest at scale and for the long term. If we are to tackle the issues of poverty, regional inequality and, yes, climate change, the amount of new investment mooted so far by the Chancellor is nowhere near the scale needed to address the dilapidation of our infrastructure outside London, and it is certainly not at the scale needed if we are to tackle climate change. From what we have heard so far, the maximum amount of increased investment talked about by the Chancellor is less than today’s estimate of the cost of High Speed 2.

The Chancellor’s idea in his Financial Times interview, of splitting the Treasury and sending some of its officials to work in satellite offices outside London, is a pale imitation of Labour’s plans not just for regional offices but to move whole sections of the Treasury to the north, to move the Bank of England to Birmingham and, similarly, to locate a national investment bank outside London. If the Government are going to plagiarise Labour’s policies, they at least have a duty to do so competently.

What all these things have in common is a failure to tackle the root causes of the problems to which the Government pay lip service: the grotesque levels of inequality in income and wealth in our society; the concentration of wealth and power in the hands of a few; the ownership of the economy by an elite, with the vast majority of people locked out of decision making and having no say on how the economy works or on who it works for; and an economy increasingly serving the few, not the many. There is no sign that the Government recognise the root causes of the crisis we face, whether social or environmental—at least, there is no sign of them doing anything about it.

Of course, all these investment proposals will count for very little if the Government fail to secure a post-Brexit trade deal with our EU partners that protects jobs. On that score, it is hardly surprising that businesses’ fears rose when the Chancellor, in his weekend interview, cavalierly threatened to throw our manufacturing sector under a bus, as he rejected the calls from business for alignment with the EU to ensure his own Government’s long-standing promise of frictionless trade. He casually said:

“There will be an impact on business one way or the other, some will benefit, some won’t.”

Let us be clear that if frictionless trade is not achieved in a future trade deal or, worse, if there is no deal, the bulk of our manufacturing sector, including cars, aerospace, pharmaceuticals and food and drink, will be in the “some won’t” category. One recent estimate identified that, in the past decade, we have already lost 600,000 manufacturing jobs.

Today, business leaders and unions have combined to warn the Chancellor that his promise to split from the EU will cost billions and damage UK manufacturing. Bizarrely, he blames the manufacturing companies for not having already prepared for any regulatory divergence coming out of any future trade deal, when no one knows what the deal or the rules will be. There is an element of Samuel Beckett or Kafka here, I am not sure which.

We hear that the Chancellor is the only Minister to be secure in his job ahead of the possible “night of the long knives” reshuffle in February.

[Matt Western (Warwick and Leamington) (Lab)]

Following the Chancellor’s interview in the Financial Times, the response from the likes of the CBI, the Engineering Employers Federation, the Society of Motor Manufacturers and Traders, and the Food and Drink Federation is extremely alarming. They have said in unison just how concerned they are about the Government’s ambivalence, as my right hon. Friend says, about the real cost both to jobs and to industry.

--- Later in debate ---

[John McDonnell]

The Chancellor’s statement was reckless. I wish him well, as always, but I caution him that the Prime Minister may well be preserving him in his job to take the hit for any trade deal outcomes that go pear-shaped if frictionless trade is not achieved.

I am aware that many new Members wish to make their maiden speeches. It is important that the Front Benchers do not take too long, so I will come to a conclusion. There is so much more to be said about the operation of our economy: about the failure of the Government to effectively address tax avoidance and evasion and money laundering, which infects our financial system; and about the failure, despite the scandals within the City, and within our accountancy and audit systems, to address our failing regulatory structures.

[Chris Stephens (Glasgow South West) (SNP)]

Is the shadow Chancellor aware that Her Majesty’s Revenue and Customs’ wealthy unit had 1,046 full-time equivalents 18 months ago but now has 961? What does that say about the Government’s approach to tax avoidance and evasion?

[John McDonnell]

The whole process of cuts in HMRC over the years has been a self-defeating one, by which we remove the expertise we need to ensure a fair taxation system and to tackle tax evasion and avoidance.

There is a desperate need to harness our economy effectively, as we will discuss at a later date, and to end our dependence on fossil fuel and to do so much sooner than the inadequate target date of 2050. We will still have some opportunity to address these issues in the run-up to the Budget, but for now let me conclude by cautioning the Government that this Queen’s Speech fails dramatically to demonstrate the sense of urgency and scale of action needed to provide the decade of renewal they promise. Our people have endured a decade of decline. On the basis of what is laid out in this Queen’s Speech and the policy direction laid out so far by the Chancellor, they face not a decade of renewal but a decade of disappointment. We already have had a foretaste of the dangerous politics that disappointment and disillusion creates. We must avoid it, and I ask Members to support our amendment.

[Madam Deputy Speaker (Dame Rosie Winterton)]

As the shadow Chancellor said, a great number of colleagues wish to speak this afternoon. Just to warn Members wanting to speak, let me say that I will impose an eight-minute time limit immediately after the Front-Bench contributions. I am sure that the Chancellor and the Scottish National party spokesperson will bear that in mind.

Oral Answers to Questions

John McDonnell Excerpts

Tuesday 7th January 2020 Commons Chamber

[Sajid Javid]

I welcome my hon. Friend to his place. He is absolutely right about the importance of business rates, which are a real burden, particularly on smaller community and village shops. That is why we have made our exemption for the smallest businesses—some 675,000 businesses—permanent, and we have a rural and retail discount scheme. He will also know that in our manifesto we committed to a fundamental review of our business rates schemes. I look forward to working with him and hearing his ideas.

[John McDonnell (Hayes and Harlington) (Lab)]

Mr Speaker, may I associate myself with your words about the tragedy taking place in Australia?

Let me say to the Chancellor that I welcomed his statement yesterday that we are to have a Budget at last, as well as that the Green Book is to be rewritten—only two years after Labour proposed it; and that there is a new fiscal rule to accommodate new investment—only four years after Labour proposed it. But there was another statement, which he made reference to, which was the statement before Christmas about appointing Mr Andrew Bailey to be the Governor of the Bank of England. During Mr Bailey’s tenure as chief executive of the Financial Conduct Authority, we saw the scandals of London Capital & Finance and the Woodford Equity Fund, and the continuing saga of the Royal Bank of Scotland’s Global Restructuring Group. In all those scandals, many people—many on low incomes—were hit extremely hard. May I ask the Chancellor: did he consult any of the victims of these scandals before he appointed Mr Bailey?

[Sajid Javid]

First, I welcome the shadow Chancellor to his seat. He fought a hard campaign and I commend him for his efforts. As he noted, just before the Christmas recess, I announced the new Governor of the Bank of England—I have just referred to that. Mr Bailey was an outstanding candidate—the stand-out candidate to be the next Governor of the Bank of England. That is one of the most important public sector jobs that our country has to offer, and it is hugely important that it goes to a rightly qualified person. Any reasonable person who looks at Mr Bailey’s track record of outstanding public service will see that he is eminently qualified.

[John McDonnell]

You will note, Mr Speaker, that I asked whether the Chancellor had consulted any of the victims of these scandals, and no response was received. Clearly, he did not. I referred to the Woodford Group, and in the filings lodged today at Companies House, it is reported that £13.8 million of dividends were received by Mr Ian Woodford, and his chief executive, in the 12 months leading up to the crisis that engulfed Woodford Investment Management and affected so many investors deleteriously. That adds to concerns already expressed by others that Mr Bailey was asleep at the wheel during his period of office at the FCA. Labour has already called for a short, sharp inquiry into the recent scandals and into the regulation of the financial services sector. May I suggest to the Chancellor that it would be appropriate to postpone Mr Bailey’s installation in office until an independent inquiry into those failures of financial regulation had taken place?

[Sajid Javid]

I believe the right hon. Gentleman means Mr Neil Woodford, not Mr Ian Woodford. The ongoing inquiry is, rightly, being led independently. It is not a matter for Ministers, and neither should it be. We are, of course, interested to ensure that an inquiry takes place and that we learn all necessary lessons. I believe the Economic Secretary to the Treasury again has a meeting with the FCA on this issue tomorrow, but we will let the inquiry take its course independently. Once it is complete, we will ensure that all necessary lessons are learned.

The Economy

John McDonnell Excerpts

Thursday 24th October 2019 Commons Chamber

[John McDonnell (Hayes and Harlington) (Lab)]

I beg to move amendment (g), at end add

‘but respectfully regret that the Gracious Speech fails to rebuild the UK economy, tackle the housing crisis, further pushes public services into crisis and contains no vision to bring this divided country back together; call on the Government to bring forward a plan to rebuild the economy so that it works in the interest of the many, not just handing out rewards to those at the top; and further call on the Government to address the climate emergency by bringing forward a green industrial revolution to decarbonise the economy and boost economic growth.’

Mr Speaker, may I just say this? This is the last time that you will be chairing a day of the Queen’s Speech debate, and I may not get the opportunity in other tribute debates to say this. It has been a privilege to serve in this House while you have been Speaker. Thank you.

I listened to the Prime Minister introducing the Queen’s Speech. What I always find most startling about the Prime Minister is his ability to create his own truth and, when confronted with any reality that contradicts his truth, to bluster his way through. I believe he believes that, with a combination of bluster and the occasional pretentious use of Latin, he can always avoid confronting reality or answering for it. So, if we can achieve anything in today’s debate, let us at least try to confront the reality of what some of our people face and assess whether the announcements in the Queen’s Speech in any way meet those challenges.

On the economy, the Prime Minister referred in his speech to “economic success” and “free market success”. He also said:

“in important respects this country is the greatest place to live and to be—the greatest place on earth.”—[Official Report, 14 October 2019; Vol. 666, c. 19.]

I think many of us feel that way, but I just wish it was the same for everyone. For so many of our people, tragically, it is not at the moment. There is a multitude of statistics evidencing just how far the Prime Minister is out of touch and how he appears to have no understanding of what our people have gone through over nearly a decade. Let me start with three stark examples of what the austerity the Conservative party has inflicted on our people has meant and continues to mean, and which I deeply regret were not addressed in the Queen’s Speech.

First, on infant mortality and child poverty, earlier this month, the British Medical Journal published a research project into infant mortality. Declines in infant mortality have been reversed for the first time in 100 years. The research found that, between 2014 and 2017, there were 570 excess infant deaths. The research concluded that 172 of those infant deaths were associated with the increase in child poverty. Out there, there are nearly 200 families who are grieving as a result of the Government’s austerity policies. There is nothing in the Queen’s Speech—nothing—that will tackle the poverty affecting 14 million of our people, and nothing that will tackle the poverty that 4.5 million of our children are being brought up in, or help the 125,000 children who are forced to live in temporary accommodation. There is nothing to address the £3 billion funding gap local councils face in trying to provide the services needed to support those very families. I will not forget, and many Labour Members will not forget, that this is a Government who have closed over 500 Sure Start centres, the very institutions we founded to support those families and to prevent infant mortality and morbidity on the scale we have seen.

Let me take the second example of what the Tories have done to our people. Earlier this month, the Office for National Statistics reported a record number of deaths of homeless people in England and Wales in 2018. Last year, 726 homeless people died. That represents the highest year-to-year increase since data was first collected. The Government have cut £1 billion from support to the homeless since 2010, so it is hardly surprising that rough sleeping has risen by almost 165%. In London, rough sleeping has more than tripled since 2010. Again, there is nothing—nothing—in the Queen’s Speech to tackle the scourge of homelessness.

My third example is the distance between what the Government claim and what employment and wages are like in this country. The Prime Minister claimed that

“we have unemployment at its lowest level since 1974”.—[Official Report, 14 October 2019; Vol. 666, c. 22.]

The reality is this: more than 3 million people are missing from the unemployment rate because they report themselves as “economically inactive,” we have over 2.5 million people counted as employed even though they work fewer than 15 hours a week and there are 3.7 million people in insecure work.

[Nick Smith (Blaenau Gwent) (Lab)]

The Government have received over £4 billion from the mineworkers’ pension scheme, despite not having paid a penny in. With retired miners getting by on a pension of, on average, £84 a week, does my right hon. Friend agree that it is time for the Government to listen? This Queen’s Speech should announce a review of the scheme so that miners and their widows get a fair deal.

[John McDonnell]

Madam Deputy Speaker, I know that large numbers of Members are seeking to make speeches—I will take a number of interventions, but I will protect the time as best I can for others to speak.

Let me give my hon. Friend this assurance on that critical point: in our last Labour party manifesto, we promised that we would review the mineworkers’ pensions scheme—it is dear to my heart, because I was one of the administrators of the scheme soon after I left university, when I worked for the RMT—and we will review it because we want to lift miners and many miners’ widows out of the poverty that they now live in. We give that commitment.

I mentioned insecure work. There are now about 900,000 people on zero-hour contracts—up by 100,000 from a year ago—and real wages are still below pre-crisis levels. The Government like to talk about wage rises and wages rising at their fastest rate in a decade. It is a bizarre claim, because the Government have been in charge of the economy for the last decade, suppressing wages all through that period. According to the Financial Times, the UK was the only major economy where growth returned but wages fell. According to TUC calculations, since 2010, average pay has also fallen for 7.7 million low to middle-income earners, and 11.5 million middle to high-income earners. It is extraordinary that that was not even acknowledged in the Queen’s Speech—that we now have a low-pay, insecure-job economy that this Government have created over the last decade.

[Ian Murray (Edinburgh South) (Lab)]

What my right hon. Friend’s wonderful speech is proving is that Government priorities make a difference. The previous Labour Government lifted millions and millions of children out of poverty, and the Government’s priorities since 2010 have plunged them all back in again.

[John McDonnell]

Let me put on record that we pay tribute to Gordon Brown for the work that he did during that period. He committed himself to lifting children out of poverty and, my God, he delivered it.

[David T. C. Davies (Monmouth) (Con)]

I am listening with great interest to what the right hon. Gentleman is saying. I do not share his perception of the economy and I am wondering whether he still believes that Venezuela offers a better economic model than that of my hon. Friends on the Front Bench.

[John McDonnell]

I said that I would limit interventions, but I accept that they can often be a job application, so I do not want to limit this job creation scheme that we are creating here—I wish the hon. Gentleman well in his future career.

The scale of human suffering and hardship inflicted on our people over the last nine years is never mentioned by the Government. The reason is that they would have to explain why our people have endured so much. They would have to admit that austerity was never—as we have said, and let us repeat it—an economic necessity; it was always a political choice. The choice the Tories took was that the bankers—their friends, many now populating the Government Front Bench—would never have to pay for the crisis that they had caused through their speculation. Instead, they determined—[Interruption.] The Chancellor of the Exchequer says, “You caused it”—this is the man who was selling the CDOs through Deutsche Bank. Deutsche Bank was a major contributor to the economic crisis that we faced—they have a nerve coming here blaming others, when they caused it. They determined that they would not pay for the crisis, but that the rest of our society would. They also took the view that they would never let a crisis go to waste, so they used it as the excuse to cut the taxes of the corporations and the rich. They have made £47 billion in cuts to our public services and, on their plans, they will have given away £110 billion in tax cuts to the corporations by 2022.

[Kevin Hollinrake (Thirsk and Malton) (Con)]

The right hon. Gentleman pointed to the fact that it was this Government who bailed out the banks when, actually, the Asset Protection Agency was set up by the Labour Government.

[John McDonnell]

I say to the hon. Gentleman, who I have a lot of time for: it is best to listen to what I have said before he intervenes, because he did not, I think, accurately report what I said.

[Ben Bradley (Mansfield) (Con)]

Will the right hon. Gentleman give way?

[John McDonnell]

No, I will press on. The hon. Gentleman will have the opportunity to speak.

The Government have made £47 billion in cuts to our public services, they are giving away £110 billion, and to ramp up the profits of these corporations, they have sold out our public services to them: £9 billion-worth of contracts in health and social care were handed over to private companies this year. Outsourcing under this Government has been exposed this week for the racket it is. A report by the think tank Reform showed that outsourcing contracts wasted £14.3 billion of taxpayers’ money in the last three years. Nothing in this Queen’s Speech even acknowledges these rip-offs, let alone promises action to reverse them.



I found nothing either in the Queen’s Speech that addresses the scandal of the industrial scale of tax avoidance and money laundering that is staining the reputation of our country. Today, Transparency International published its report “At Your Service”, which shows how

“UK service providers have been involved in some of the most egregious cases of corruption in our time.”

From the looks of this Queen’s Speech, the Government will continue to do nothing about it. The registration of overseas entities Bill, which will create a register of controlling owners of overseas legal entities that own UK land, is nowhere to be seen in the Queen’s Speech, three and a half years after the Government first committed to it.

We are at the tail end of what has been nearly a lost decade for our country—a near decade of the grotesque mismanagement of our economy by successive Conservative Chancellors; I am on my third in three years. The New Economics Foundation has shown that austerity has suppressed growth by almost £100 billion—that is more than £3,600 per household. After nine years of stuttering growth, GDP even went backwards in the last quarter. Public debt was meant to peak at 70% of GDP in 2013-14, only for it to rise to 86% of GDP in 2018-19. For all their stale claims of reducing the deficit, the reality is that the Conservatives have simply shifted that burden on to the shoulders of headteachers, councillors, NHS managers and police chiefs. These are the people who have had to make the tough decisions, not Ministers, and who have had to face up to the undermining of their services by these cuts.

Part of the testament to the Government’s failed fiscal strategy has been the litany of fiscal rules, invented, published, broadcast widely and then quietly and embarrassingly dropped. Within weeks, we hear that a new fiscal rule—probably largely stolen from us—will be announced in the Budget. I should say that we may have a new fiscal rule because we cannot be sure: only yesterday, despite the Chancellor announcing the Budget and its date, other Government sources were briefing that it was off. We have a Chancellor whose staff are sacked and escorted by armed guard out of their office, without his being told, and now Cummings is possibly cancelling his Budget. I give a word of advice to the Chancellor and his colleagues: get a grip on Cummings before he does any more damage to our country.

Apart from Budget making, one of the vitally important responsibilities of the Chancellor is to ensure that the Government and this House have the fullest information before them when considering legislation or issues impacting our economy. It is therefore extraordinary, and I think a dereliction of the Chancellor’s duties, that he—unlike his predecessors—has refused to publish a detailed economic impact assessment of the Government’s Brexit proposals. Studies of similar proposals have indicated a hit to the growth of our economy of between 3.4% and 8.1%. Even the lower range of that hit will have a severe impact on our people’s jobs and living standards, and on the economy overall. Surely it is only reasonable for Members to have a degree of information and analysis from the Chancellor’s Department before they make this momentous decision.

In their most recent manifestos, both the main parties committed themselves to respecting the outcome of the referendum. We do and we will, but, as we made clear on Tuesday, the House will not be bounced into an unrealistic and unfeasible timetable for considering and scrutinising such a critically important piece of legislation. That is why the Leader of the Opposition and Labour’s Chief Whip met the Prime Minister yesterday to offer a genuine compromise and to agree on a proper timetable that will allow, in the normal manner, proper scrutiny of the Bill and the opportunity to promote, debate and determine amendments. The Opposition have set out their views on the parts of the Bill that it wishes to amend, but of course we accept that it will be the House that decides. As always, we must accept the will of the House, even if, on many occasions, we disagree with it. It is a pity that the Prime Minister does not adopt that attitude.

There is an opportunity here for us to demonstrate to our people that Parliament can and does work. If we can demonstrate civility and a rational process in the House, we may be able to help to overcome some of the division and, indeed, bitterness that have set in within our own society.

[Maria Caulfield (Lewes) (Con)]

I thank the shadow Chancellor for giving way. It is very generous of him.

The Labour party’s policy of a four-day week will reduce the earnings of the poorest workers in the country. Those are not my words, but the words of a Labour peer, Lord Skidelsky.

[John McDonnell]

Lord Skidelsky’s report suggests a 32-hour week—not a four-day week—but one without loss of pay, which will be achieved over a decade as a result of our investment in the economy to increase productivity.

[Lilian Greenwood (Nottingham South) (Lab)]

My right hon. Friend is making an excellent speech. Does he agree that perhaps one of the reasons why the Government are so anxious not to publish an economic impact assessment of their Brexit proposals is that it would show that our economy will suffer under their hard Brexit, that our public finances will suffer under their hard Brexit and that the promises that they have made about investment in our police, our schools and our health service could not possibly be met under those Brexit proposals?

[John McDonnell]

Although the Government will not publish their economic impact assessment, others have made such assessments and have concluded that a hard Brexit could cripple our economy in the short and long term. We need to have a proper debate in the House to consider the consequences and discuss what amendments can be made to protect our economy.

[Albert Owen (Ynys Môn) (Lab)]

My hon. right Friend is absolutely right about those economic impact studies. Has he had any conversations with the Welsh and Scottish Governments about the huge impact that a border in the Irish sea will have on Welsh and Scottish communities? It appears that the Government have not done so.

[John McDonnell]

Is it not interesting that virtually every Government apart from this one are willing to undertake an impact assessment of some sort? What does that display? I am not usually a suspicious person, but I think we have our suspicions.

Let me say to the Chancellor that he has a role to play in shouldering his responsibility to provide us all with the fullest possible information on the basis of which we can make our decisions. That means publishing a full economic impact assessment and doing it fast, so that we can have a proper debate.

As the Government have a working majority of minus 45, it is obvious that the Queen’s Speech is little more than a pretty crude election stunt. In all their various comments in the House and the media, the Prime Minister and the Chancellor have depicted their programme as “the people’s priorities”. As a political artisan, I can admire a good turn of phrase—

[The Economic Secretary to the Treasury (John Glen)]

Apprentice. [Laughter.]

[John McDonnell]

I have been here for 22 years. That is a long apprenticeship—and sometimes the apprentice can point out the truth as well.

As I say, I admire a good turn of phrase, and I congratulate the creatives in whatever PR agency the Conservative Party now uses for coming up with that one—it must have tested very well in the focus groups—but that is all it is: a slogan, a turn of phrase. The reality, as demonstrated in the Queen’s Speech, is that after something approaching a decade of harsh and brutal austerity, a few cynical publicity stunt commitments to paper over the massive cuts in our NHS, schools, policing and care will go nowhere near what is needed. A slogan will not suffice.

People know—and this is relevant to the Brexit debate—that if the economy hits the buffers again, as a result of Brexit, economic mismanagement by the Tories or both, and when a choice must be made by the Tories about who will pay, they will always protect their own: the corporations and the rich.

[Chris Ruane (Vale of Clwyd) (Lab)]

Before he ends his speech, will my right hon. Friend say something about the impact of future cuts on women? Over the past 10 years, 80% of austerity has fallen on their backs.

[John McDonnell]

I met members of the Women’s Budget Group again yesterday, and they said that 86% of cuts were falling on women. Our society remains patriarchal, and many caring responsibilities still fall to them. Cuts in social care undermine the basis of support for many elderly people in particular, and that falls on the shoulders of women. This is what austerity has done over the last nine years. We are committed to providing free personal care for everyone, and that is what we will do.

[Tom Tugendhat (Tonbridge and Malling) (Con)]

The right hon. Gentleman has said that the Conservatives look after their own, and I agree with him. That is why we have cut the taxes of 32 million working people. That is why we are cutting taxes on businesses that are generating growth and employment for the people of this country.

[John McDonnell]

Tragically for so many at the lower levels, all those tax cuts have been cancelled out by cuts in benefits and the introduction of universal credit. Some of the most vulnerable, particularly disabled people, have been forced to the wall as a result of the brutal implementation of the work capability assessment and the scrapping of the independent living fund. There is a litany of attacks on ordinary working people that Labour Members should consider a disgrace.

[Ben Bradley]

Will the right hon. Gentleman give way?

[Kevin Hollinrake]

Will the right hon. Gentleman give way?

[John McDonnell]

No, I will press on. I understand that we are short of time.

The Tories will indeed protect their own. Under them, it will always be the people who are burdened with cuts in services and pay and benefit freezes. What people need now is real change. They need real change in our economy, so that we can face up to the existential threat of climate change through Labour’s green industrial revolution; real change to provide the scale of resources that our NHS, our schools and our police services need, funded by a fair taxation system in which we will tackle tax evasion and avoidance; real change to bring forward the scale of investment that our infrastructure needs to compete in the global economy and meet the challenges of the fourth industrial revolution; and real change to ensure that our people share in the prosperity that we will create through decent wages, ownership and an end to the rip-off of privatisation.

Only a Labour Government can bring about the real change that our country needs after a lost decade under the Tories. What does that say? It says that it is time for a Labour Government.

HMRC Impact Analysis: Customs

John McDonnell Excerpts

Tuesday 8th October 2019 Commons Chamber

[John McDonnell (Hayes and Harlington) (Lab) (Urgent Question)]

To ask the Chancellor of the Exchequer to make a statement on HMRC’s published impact analysis of introducing new customs legislation and amendments.

[The Financial Secretary to the Treasury (Jesse Norman)]

I am delighted to respond to the right hon. Gentleman’s question. The Government are devoting huge energies, as the House will know, to Brexit preparations. The Prime Minister has stated that the Government’s preference is to leave with a deal, but, if necessary, they will leave without a deal as it is so vital that we get Brexit done and move the country forward. The last thing that businesses need is more uncertainty and delay. A key part of those preparations is to ensure that there is a functioning customs, VAT and excise regime on exit to put the legal underpinnings in place. HMRC has laid 56 regulations to date following last year’s Taxation (Cross-border Trade) Act 2018 .

To support the latest bunch of statutory instruments, which were debated by this House yesterday, the Government published a third edition of the overarching impact assessment of the movement of goods if the UK leaves the EU without a deal. This updates and builds on previous versions of the impact assessment, which were published in December 2018 and February 2018. The new version provides updates to cover the September 2019 regulations, including transitional and other arrangements for safety and security declaration requirements for the period after exit; further temporary customs and excise easements to extend the transitional arrangements after exit; further VAT data-gathering powers to specify the type of information that was collected from postal operators; and, finally, various technical amendments and transitional provisions.

As I have said, our preference is very much for a deal, but the Government continue to ensure that this country is ready for no deal and that the impact on business is minimised as far as possible, which is why we have introduced a series of easements for traders moving goods in the UK to take effect in a no-deal scenario. Those easements, for example, are planned to simplify radically import processes for EU goods, which means that the costs identified in this impact assessment will be mitigated for UK importers. Crucially, the Government are also working to boost the long-term potential of the economy so that the United Kingdom can seize the opportunities that exist for us outside the EU.

[John McDonnell]

Perhaps I can help the Minister fill in some of the gaps in the statement. The Government’s own assessment shows that their no-deal Brexit policy will introduce

“significant ongoing administrative costs impacting on UK and EU businesses of all sectors.”

It is an avalanche of paperwork descending on British businesses in the form of import, export, safety and security declarations. The burden will cost our business sector an annual £15 billion in administrative costs, and that does not even include the costs of complying with the new VAT procedures, which will hit our vital service companies—all this to pursue the hardest possible Tory no-deal Brexit.

We have heard the Prime Minister’s previous crude dismissal of British business. Now we are seeing his words become Government policy. Does the Minister not understand that this only compounds the uncertainty brought about by this Government’s failure to secure a deal that protects the UK economy? A senior No. 10 source, who I most believe to be the Prime Minister’s adviser—well, I say “adviser”—Dominic Cummings, said:

“We’ll either leave with no deal on 31 October or there will be an election and then we will leave with no deal”,

and that everything to do with the duty of sincere co-operation that we have with the EU partners

“will be in the toilet”.

Does the Minister agree with the priorities set out by No. 10 as a result of that statement? Does he also challenge the Institute for Fiscal Studies, which said today that this would push UK debt to its highest level since the 1960s, soaring to 90% of national income?

The reckless incompetence of this Government just knows no bounds, does it? At a moment of national crisis, this Government pose a threat to their own people and the economy they rely upon. Has the Minister any idea of the scale of the destruction of confidence in the British economy that this Government’s stated policy is bringing about?

[Jesse Norman]

This is a long document at some 45 pages or so, but I would have hoped that the right hon. Gentleman could have made it to page 9. He claims that the cost to British business will be £15 billion, but it says perfectly clearly at the bottom of page 9:

“The latest…estimate for the annual administrative burden…is £7.5 billion (updated to reflect 2017 data)”.

I am in no sense happy about that—[Interruption.] I am just correcting the record. The right hon. Gentleman said £15 billion, when in fact the figure is £7.5 billion. That figure is, of course, prior to any mitigations that might be put in place by the Government.

Let me turn to the right hon. Gentleman’s other concerns. He criticised the Government for, as he puts it, failing to secure a deal. All his party had to do was support the perfectly sensible series of deals that have been put before this Parliament, and it would have a deal.

I am not going to comment on unsourced speculation of the kind mentioned by the right hon. Gentleman. Let me just remind the House that when this Government’s predecessor came into office in 2010, debt was at a peacetime high thanks to the previous Labour Government. The deficit was at almost 10% and, interestingly, inequality under the Labour Government was significantly higher than it is today.

Oral Answers to Questions

John McDonnell Excerpts

Tuesday 1st October 2019 Commons Chamber

[The Financial Secretary to the Treasury (Jesse Norman)]

I thank my hon. Friend for that question. I have addressed the substance of it, but let me make a point about Sir Amyas Morse. I think that Sir Amyas is a superb choice. As my hon. Friend may be aware, in a debate in the House of Commons on 6 March 2019, the Chamber united across the parties in praise of Sir Amyas. The Chair of the Public Accounts Committee, the hon. Member for Hackney South and Shoreditch (Meg Hillier), called him

“a fearless advocate for what is good in the public sector and for challenging Governments of whatever party”.

The Liberal Democrat spokesman, the hon. Member for Oxford West and Abingdon (Layla Moran), said that he was not only “unfailingly courteous”, but had

“an intelligence of steel. He has a knack for calling out obfuscation, fudge and imprecision”,

and

“a reputation for being completely fair.”—[Official Report, 6 March 2019; Vol. 655, c. 1004-05.]

He is a very good choice to lead this review.

[John McDonnell (Hayes and Harlington) (Lab)]

Will the Chancellor give the House a quick fact-check of his speech yesterday? The Conservatives have cut funding for buses by £640 million a year. Yesterday, he announced nothing new; he simply reannounced £220 million from the spending review. His Government have cut £900 million a year from annual youth services budgets. Yesterday, he offered £500 million, possibly as a one-off. The National Infrastructure Commission says that we need £33 billion to roll out full-fibre broadband. Yesterday, he offered £5 billion. All of those promises will count for nothing if there is a no-deal Brexit. Has he not just followed the Cummings code: grab a headline, possibly wrap it around a bus and ignore the truth? But there is one figure that I would like to ask him about: 120,000. What significance does the figure 120,000 have for him?

[Sajid Javid]

The right hon. Gentleman knows that the last time his party was in office, we had the biggest budget deficit in our peacetime history and the biggest banking collapse this country has ever seen, and our country was virtually bankrupt. Now our economy is strong, with the lowest unemployment rate in 45 years, and it is because the economy is strong that yesterday I could make the announcement of investments in buses, roads, youth facilities and full fibre. If he wants to see that kind of investment continue at the next general election, he should vote Conservative.

[John McDonnell]

I did not ask about the Chancellor’s record at Deutsche Bank; I never asked about the products he was selling that brought about the financial crash.

Let me tell the Chancellor what the figure 120,000 means. It is the number of deaths linked by the British Medical Journal to the Conservatives’ cuts since they came to power in 2010. No amount of spin will wash away the memory of nine years of this scale of human suffering. He claimed yesterday:

“We believe in a society where everyone knows that if they work hard, and play by the rules then they will have every opportunity to succeed.”

But isn’t it true that the Conservatives have broken the link between people working and being able to lift themselves out of poverty, when 70% of our children living in poverty are in households where someone is at work? And isn’t it the case that, despite the Chancellor’s pathetic attempt yesterday at playing catch-up to Labour party policy, under the Tories’ plans no one will reach the Tories’ target minimum wage until five years from now? And isn’t it the truth that, with this Chancellor and Prime Minister in charge, the Conservatives will always be the party of tax avoiders, bankers and the super-rich?

[Sajid Javid]

Let me tell the right hon. Gentleman a fact: the Labour party no longer represents working people and it is no longer the party of working people. That stopped a long, long time ago. He should reflect on his own policies of renationalisation; mass confiscation of private property, including the shares and homes of individual investors; protectionism; and state control. He calls business the real enemy, but the fact is that the Labour party is no longer fit to govern. It would wreck the economy and it would be hard-working people who would pay the price.