Points of Order

John McDonnell Excerpts

Tuesday 11th September 2018 Commons Chamber

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

On a point of order, Mr Speaker. Whether people agree or disagree with the hon. Member for Bolsover (Mr Skinner), he is respected across the House. I invite the Chancellor to apologise for the personal remarks he made.

[Mr Speaker]

I must say I have never found anything wrong with the hon. Member for Bolsover’s hearing. I think it was an off-the-cuff remark. It probably was not the best chosen, but it is a matter for the Chancellor to judge whether he wants to say anything.

Oral Answers to Questions

John McDonnell Excerpts

Tuesday 11th September 2018 Commons Chamber

[Mr Hammond]

I think it comes back to the same point: it depends if my hon. Friend is buying.

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

There are only weeks to go now before a deal has to be agreed with our European partners, but there are still mixed messages coming from Government Ministers. The Foreign Secretary says that crashing out of the EU without a deal would be a

“mistake we would regret for generations”,

the Brexit Secretary says that no deal would bring “countervailing opportunities”, and the Prime Minister says that it

“wouldn’t be the end of the world.”

The Chancellor has a critical role to play in bringing some rationality to this debate. The Treasury has calculated that no deal could result in the UK’s GDP being over 10% smaller. Will he outline, and be absolutely clear to some of his colleagues, what that would mean for jobs, wages, investment and living standards?

[Mr Hammond]

There is no ambiguity at all about the Government’s objective. We want to strike a deal with the European Union based on the White Paper that we have published, which we believe will be good for Britain and good for the European Union. We are devoting all our efforts over the coming weeks and months to securing that deal and protecting the British economy.

[John McDonnell]

The problem is that time is running out, and increasingly people on all sides of this issue are feeling let down, so let me put this to the Chancellor: can we both try to get the message across to the Prime Minister, who continues to insist that no deal is better than—[Interruption.] She continues to insist that a bad deal is better than—[Interruption.] I will negotiate that again, Mr Speaker. She continues to insist that a bad deal is better than no deal. Business organisations are clear. The CBI is warning of a “catastrophe”, the National Farmers Union says it would be “an Armageddon scenario”, and, according to the TUC, a no deal Brexit would be “devastating for working people”. So may I appeal to the Chancellor? He knows the consequences of a no deal scenario, so will he now show some leadership and make it clear to his colleagues that he will not accept it?

[Mr Hammond]

First, I would love to know what it actually said on the right hon. Gentleman’s bit of paper. Let me be very clear to him. I, the Prime Minister and all members of the Cabinet are committed to achieving a deal that protects British jobs, British businesses and British prosperity going forward. That is what we are committed to. He is absolutely right that time is running out. We are working against the clock; we understand that. We will be working flat out over the coming weeks and months to achieve that.

Oral Answers to Questions

John McDonnell Excerpts

Tuesday 3rd July 2018 Commons Chamber

[The Chief Secretary to the Treasury (Elizabeth Truss)]

My hon. Friend is absolutely right. The way in which we will get higher wages is by improving productivity and skills, which is why we are investing in a record level of apprenticeships and the national training partnership.

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

As my hon. Friend the Member for West Bromwich West (Mr Bailey) pointed out, the British Chambers of Commerce has said today that its patience with the Government over Brexit is at “breaking point”. Its sense of frustration reflects accurately what trade unions and businesses across the country feel. All the British Chambers of Commerce wants are answers to some very basic questions, so will the Chancellor and those on the Treasury Bench provide some answers today? Post-Brexit, will goods be subject to new procedures and delayed at border points? Will regulation checks on goods conducted in the UK be recognised in Europe? Will firms be able to transfer staff between the UK and the EU as they do now? Above all else, will Ministers stop squabbling and provide some answers to these vital questions?

[Mr Philip Hammond]

It is fascinating to see the right hon. Gentleman posing as the champion of business when he has been attacking and undermining business ever since he got into his current position. Yes, I recognise all the questions he asked. The Cabinet will meet on Friday to set out our way forward in our negotiation with the European Union. We recognise that this is now urgent and that we need to make progress. The right hon. Gentleman mentioned minimising frictions and maximising flexibility for employers in order to protect jobs and investment. We agree with him and the British Chambers of Commerce on all those things, and we will be looking to deliver a Brexit that maximises employment and prosperity in this country.

[John McDonnell]

The Chancellor does not have to worry about others undermining capitalism; the Government are doing a pretty good job themselves.

When the warring factions in the Cabinet meet this weekend, it is the role of Treasury Ministers to bring them into the real world and point out to them firmly the real cost of a no-deal Brexit for jobs, the economy and all our living standards, so will the Chancellor tell us today the Treasury’s latest estimate of the cost of no deal, its consequences for the economy and the potential loss of jobs? Surely it is time for him to show a bit of grit and to make it clear that no responsible Chancellor could remain in a Cabinet that is so recklessly putting our economy at risk through no deal?

[Mr Hammond]

I assure the right hon. Gentleman that I will be setting out for my colleagues, in the privacy of our Cabinet meeting on Friday, the Treasury’s assessment—indeed, the cross-Whitehall economic group’s assessment—of the implications of potential routes forward. However, as the Prime Minister has said, we cannot give a running commentary in public on a matter about which we are in intensive negotiation with our European interlocutors. I have said before, and say again today, that when the time comes for Parliament to vote on our proposed package, I will make sure that all the available material is put into the public domain so that Members of Parliament are properly informed.

Oral Answers to Questions

John McDonnell Excerpts

Tuesday 22nd May 2018 Commons Chamber

[John Glen]

I acknowledge the report of the Select Committee. This Government stand by the rule of law. We do not do random confiscations but, alongside the work being undertaken, work is under way across Whitehall to examine what further steps are necessary. I am eager that we go as far as we can, and we must do so in ways that are consistent with our values.

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

I associate myself with the Chancellor’s eloquent words on the Manchester tragedy. I also commend the emergency services that operated on that day.

“The Government cannot afford to turn a blind eye as kleptocrats and human rights abusers use the City of London to launder their ill-gotten funds”.

Not my words but the words of yesterday’s Foreign Affairs Committee report. For eight years this Government have turned a blind eye to the flow of dirty money through the City. Not only have they delayed until 2021 the introduction of a full public register of overseas companies that own UK property but they have refused to introduce the tougher scrutiny and regulation of City flotations that we have demanded, and they have failed to broaden the definition of “politically exposed persons” to include more individuals linked to crime or criminal regimes.

Will the Government do as the Foreign Affairs Committee has demanded and start taking money laundering and tax avoidance seriously by bringing forward the date for the register of overseas companies that own property in the UK?

[John Glen]

We will continue to take these matters very seriously. We will freeze Russian state assets where we have evidence that they will be used to threaten the life or property of UK nationals and residents. As the Prime Minister made very clear in her statement to the House, the National Crime Agency will bring all UK capabilities to bear against serious criminals and corrupt elites. As somebody who has experienced that directly in my constituency in recent months, I stand by the Prime Minister’s statement. There is no place for these people and their money in our country.

[John McDonnell]

That is just not good enough. We were promised a register in 2015, and we are still having to wait another three years. The Government are letting the crooks, the tax avoiders and the money launderers off the hook again. They have failed to introduce and enforce stricter due diligence for companies as registered companies, they have failed to take on the service providers that set up these laundering scheme, and they have refused to legislate to create a new offence of failing to prevent money laundering. Those are all amendments that the Opposition tabled to the recent Sanctions and Anti-Money Laundering Bill. The people of this country are entitled to ask why this Government are soft on tax evaders and money launderers.

There is another issue that has to be addressed today, as highlighted by the allegations against Lycamobile. Will the Government bring forward legislation requiring any political party found to have accepted donations from money launderers and tax evaders to forfeit or return that money?

[John Glen]

Obviously, it is impossible for a Minister to comment on live cases, but we will continue to use powers to disrupt and pursue money launderers and terrorists. We will use the anti-corruption strategy, and my right hon. Friend the Minister for Security and Economic Crime is committed to using the National Economic Crime Centre to pursue those who need pursuing, but we will do so within the rule of law, consistent with the values of this country.

Oral Answers to Questions

John McDonnell Excerpts

Tuesday 17th April 2018 Commons Chamber

[The Financial Secretary to the Treasury (Mel Stride)]

Perhaps I am in need of the gym, Mr Speaker.

I shall take that as an early Budget representation, and my hon. Friend should be aware that we already have various tax-free reliefs in respect of health in the workplace—check-ups, eye tests, the cycle to work scheme, on-site workplace gym membership and welfare counselling. Of course, our soft drinks industry levy has led a number of companies to improve the quality of their products healthwise.

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

In advance of today’s debate on Syria, I welcome financial measures to sanction the Syrian regime. According to past Government figures, £151 million of assets belonging to leading figures in the Assad regime in Syria have been frozen by authorities here. Since then, 261 Syrian individuals have been listed as financial sanctions targets in the UK. Can the Chancellor tell the House what the Treasury’s best and latest estimate is of the total value of assets held in the UK by individuals connected with the Syrian regime?

[Mr Philip Hammond]

I do not have a figure for the latest valuation of those assets. Many of the assets in question will be property assets, I suspect, meaning that the values will move from time to time. I can assure the right hon. Gentleman that the Treasury is fully engaged in the process across Whitehall of seeking to deal with unacceptable behaviours of the type that we have seen in Syria. Financial sanctions will remain an important tool in our armoury, whether we are dealing with chemical attacks in Syria or attacks on the streets of the UK.

[John McDonnell]

I welcome the Chancellor’s response, but the problem is that the lack of transparency in our financial system makes it virtually impossible for him to know exactly how many assets linked to such regimes are owned in the UK. It is estimated that more than £5 billion of assets owned by Assad and his associates are being held overseas and, according to international reports, the UK is recouping far less of the corrupt assets owned by individuals linked to the Syrian regime than is being recouped by other countries. For example, assets linked to the Assad regime worth more than half a billion pounds have been not just frozen but seized by the Spanish authorities. So far, no unexplained wealth orders have been used against Syrian regime figures.

The Government promised to give a date for the publication of a register of owners of UK property based overseas back in 2015, but now, three years later, we are told that a register will not be published until 2021. Will the Chancellor bring forward the date for the introduction of what is an essential defence against corruption?

[Mr Hammond]

I think that the right hon. Gentleman is being a little bit harsh on the unexplained wealth orders. The legislation has been in place for only a couple of months, and we will of course look at opportunities to use it. As for his challenge on the date for the registers, I will look into the matter, as he has asked me to do. I will then write to him to let him know the reason for the date that we have set, and whether there is any opportunity for it to be brought forward.

I think that we are all in the same place on this issue. We all want to ensure that London cannot be used as a route for dirty money—for the ill-gotten gains of regimes that are stealing from their people and channelling money offshore. It must be recognised that London is the world’s largest global financial centre, which presents us with some challenges, but we will continue the work.

Spring Statement

John McDonnell Excerpts

Tuesday 13th March 2018 Commons Chamber

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

I thank the Chancellor for providing me with early sight of his statement, but I have to say that his complacency today is astounding. We face in every public service a crisis on a scale that we have never seen before. Has he not listened to the doctors, nurses, teachers, police officers, carers and even his own councillors? They are telling him that they cannot wait for the next Budget. They are telling him to act now. For eight years they have been ignored by this Government, and today they have been ignored again.

The Chancellor has proclaimed today that there is light at the end of the tunnel. This shows just how cut off from the real world he is. Last year, growth in our economy was among the lowest in the G7—the slowest since 2012. The OBR has just predicted that we will scrape along the bottom for future years. Wages are lower now, in real terms, than they were in 2010—and they are still falling. According to the Resolution Foundation, the changes to benefits due to come in next month will leave 11 million families worse off—and, as always, the harshest cuts fall on disabled people.

The gap in productivity between this country and the rest of the G7 is almost the widest for a generation. UK industry is 20% to 30% less productive than in other major economies—and why? In part, the reason is that investment by the Government, in real terms, is nearly £18 billion below its 2010 level. This is a Government who cut research and development funding by £1 billion in real terms. Business investment stagnated in the last quarter of 2017. Despite all the promises, the Government continue to fail to address the regional imbalances in investment. London will, again, receive five times more transport investment than Yorkshire and Humberside and the north.

How dare this Government speak on climate change? This is a Government who singlehandedly destroyed the solar industry, with 12,000 jobs lost as a result of subsidy cuts. The Chancellor talks about the fourth industrial revolution, but Britain has the lowest rate of industrial robot use in the OECD. The Government have put £75 million into their artificial intelligence programme—less than a tenth of what the US is spending.

[Simon Hoare (North Dorset) (Con)]

Talking of artificial intelligence!

[John McDonnell]

The Tory bully boys can shout all they want. They can make—[Interruption.]

[Mr Speaker]

Order. There will be a full opportunity for people to contribute, but the right hon. Gentleman must be heard.

[John McDonnell]

The Tories can shout all they want and they can make their snide remarks, but people out there know about the crisis in our communities.

The Chancellor has made great play this week of reaching a turning point in reducing the deficit and debt. That is a bit rich coming from a party that has put £700 billion on the national debt over the past eight years. It is worth remembering that this is a party that promised us that the deficit would be eliminated completely by 2015 and then 2016. Bizarrely, his predecessor, now ensconced in the Evening Standard—or Black Rock, the Washington Speakers Bureau, or whatever number of jobs he now has—has been tweeting about achieving, three years late, a deficit target that he actually abandoned himself.

The reality is that the Chancellor and his predecessor have not tackled the deficit: they have shifted it on to the public services that the Chancellor’s colleagues are responsible for. He has shifted it on to the Secretary of State for Health and the shoulders of NHS managers, doctors and nurses throughout the country. NHS trusts will end this financial year £1 billion in deficit. Doctors and nurses are struggling and being asked to do more and more while 100,000 NHS posts go unfilled. Does the Chancellor really believe that the NHS can wait another eight months for the life-saving funds it needs? How many people have to die waiting in an ambulance before he acts? He has mentioned the pay offer to NHS staff that we are expecting shortly. That was forced upon him by campaigns against the pay cap by the Labour party and the trade unions. Taking away a day’s holiday from those dedicated staff is mean-spirited. I ask him now: will he drop this miserly act?

The Chancellor has also shifted the deficit on to the Secretary of State for Education and head teachers, with the first per capita cut in schools funding since the 1990s. Today the Government are even trying to deprive 1 million children of a decent school dinner. I am asking the Chancellor, and I am asking every Conservative MP —[Interruption.]

[Mr Speaker]

Order. The House must calm down. There will be plenty of opportunity for questioning from Members in all parts of the House. The right hon. Gentleman must be heard.

[John McDonnell]

I am appealing to Tory MPs today, if they are serious about ending austerity, to vote with us this afternoon to give those children the free school meal they are entitled to.

The Chancellor has shifted the deficit on to the Home Secretary and the Justice Secretary. Crime is rising, yet he has cut the number of police officers by 21,500 and the number of firefighters by 8,500, and our prisons and probation service are in dangerous crisis.

In shifting the deficit on to the shoulders of the Secretary of State for Housing, Communities and Local Government, in reality he has shifted the burden on to local councillors—Labour, Lib Dem and Conservative councillors alike. I raise again the stark reality of what that means for the most vulnerable children in our society. There has been a 40% cut in early intervention to support families. The result is the highest number of children taken into care since the 1980s. Children’s charities—not us but children’s charities—are saying that this crisis could turn into a catastrophe without further funding. Last year, 400 women seeking refuge were turned away because there were no places available for them in refuges. There are now nearly 5,000 of our fellow citizens sleeping rough on our streets—more than double the number in 2010. Tragically, one of our homeless citizens died only feet away from the entrance to Parliament.

The Chancellor mentioned additional housing funding in London. The additional housing funding announced for London today is not a new announcement: this is money already announced. Any new funding is welcome, but it is simply not enough and it represents a cut in London’s budgets compared with the money that Labour allocated in 2010. One million vulnerable older people have no access to the social care they need. Conservative Councils are going bust. Many will be forced to hike up council tax. Councils are running out of reserves, as the National Audit Office explained to us. I ask the Chancellor: will he listen to Conservative council leaders, such as the leader of Surrey, who said:

“We are facing the most difficult financial crisis in our history. The government cannot stand idly by while Rome burns”?

How many more children have to go into care? How many more councils have to go bust? How many more have to run out of reserves before the Chancellor wakes up to this crisis and acts?

Today’s statement could have been a genuine turning point but it is, depressingly, another missed opportunity. People know now that austerity was a political choice, not an economic necessity. The Conservatives chose to cut taxes for the super-rich, the corporations and the bankers, and it was paid for by the rest of us in society. They even cut the levy on the bankers in the Finance Bill. We were never “all in this together” as they claimed—never. They cut investment at the very time when we should have been developing the skills and infrastructure needed to raise productivity and grasp the technological revolution with both hands. And when they had a responsibility to meet the challenge of Brexit, we have a Chancellor who this weekend admitted he has not even modelled the Government’s options.

Today we have the indefensible spectacle of a Chancellor congratulating himself on marginally improved economic forecasts, while he refuses to lift a finger as councils go bust, the NHS and social care are in crisis, school budgets are cut, homelessness has doubled and wages are falling. This is not a Government preparing our country for the future; it is a Government setting us up to fail.

[Mr Hammond]

The right hon. Gentleman supported the switch to a single fiscal event, and now he is complaining that I have not delivered a mini Budget today. I am not surprised that he cannot quite understand anybody passing up the opportunity to introduce some new taxes, because that is what a Labour Government would be doing, not once a year or twice a year but every other week.

I heard the right hon. Gentleman referring to some of my hon. Friends as “Tory bully boys”. I remind the House that this is the man who still refuses to apologise to my right hon. Friend the Secretary of State for Work and Pensions, so I do not want to hear anything about bullying from the Labour Benches. The public will draw their own conclusions.

The right hon. Gentleman knows his Lenin, of course. The task is to win power, and that is why we see from him the smooth reassuring mien of the bank manager, but every now and again, the mask slips, and we get a glimpse of the sinister ideology that lies beneath—an ideology that would wreck our economy if he ever gets anywhere near the controls, threatening confiscation, dismissing property rights, undermining the cornerstones of our economy and the basis of our freedom and prosperity.

The right hon. Gentleman talks about political choices. Let me tell him the political choices we have made. We have closed the tax gap to one of the lowest in the developed world. We have raised £175 billion by 100 measures against tax evasion and avoidance. We are collecting 28% of all income tax from the richest 1% in our country—a higher percentage than in any year under Labour. He says that real wages are falling. I have good news for him: the OBR expects real wages to rise from quarter one 2018, which, in case he has not worked out, starts in two weeks’ time.

The right hon. Gentleman talks about spending on the disabled. Well, I have good news for him again: spending on the disabled will be higher in every year of this Parliament. He talks about research and development to support our economy. Research and development spending is at a record high.

The right hon. Gentleman reels out the same old bogus statistics on regional distribution; I think he has got the briefing from Russia Today. Let me tell him this: the Infrastructure and Projects Authority has published figures that clearly show that the highest per capita spending on transport infrastructure investment is in the north-west region, not, the last time I checked, one of the southern regions. All regions have benefited from the boom in employment. All regions will end this Parliament with lower unemployment and higher employment.

The right hon. Gentleman talks about £700 billion of increased national debt. We have had to deal with the legacy of Labour’s meltdown in 2009 because they did not fix the roof while the sun was shining. Our historical function is to clean up Labour’s mess, and my report today shows that we are doing it once again.

The right hon. Gentleman talks about funding for the NHS. I have put £9 billion into the NHS since autumn statement 2016. He talks about school budgets. School budgets are increasing per pupil in real terms. On children’s services, he must know that Department for Education research shows that spending on the most vulnerable children has increased by around half a billion pounds in real terms since 2010. We have committed £1 billion to tackling rough sleeping and homelessness and made a manifesto pledge to eliminate rough sleeping by 2027 and halve it by 2022.

No one watching our exchanges today can be in any doubt that Britain faces a choice. We have a plan to get our economy growing. The shadow Chancellor says it does not matter whether GDP grows or not. We have a plan to get people on the housing ladder, while the shadow Chancellor does not want “to get bogged down in property rights”. We have a plan to deal with our debts. The shadow Chancellor wants to send debts soaring because he fantasises that he can borrow for free.

The choice is clear: our vision of a dynamic, modern economy, or the Labour party’s vision of an inward-looking, narrow-minded country. We have to win this argument, because if we do not, it will be ordinary people—not the rich and the powerful and not the globally mobile—who pay the price, as they always do for Labour’s failings.

Oral Answers to Questions

John McDonnell Excerpts

Tuesday 27th February 2018 Commons Chamber

[Elizabeth Truss]

We put an extra £2 billion of spending power into the hands of the Scottish Government at the last Budget, and we have also said that we want to be flexible over public sector pay to make sure we are retaining and recruiting the best possible staff.

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

First, if you will forgive me, Mr Speaker, as we came into the Chamber we heard the news of the death of Simeon Andrews, who co-ordinated a large number of all-party groups and trade union groups, and, if we can, I would like us to send our sympathies to his family on behalf of the House.

The ministerial responses we have heard demonstrate absolutely no understanding whatsoever of the crisis created by the cuts of the past eight years and their impact on local government. Local councils are now facing a funding gap of nearly £6 billion by 2020, and it is the most vulnerable in our society who are suffering. The number of children taken into care is at its highest level since 1985, and one in three councillors are warning that the cuts have left them with insufficient resources to support these children. The leader of the Chancellor’s own Surrey council said:

“The Government cannot stand idly by when Rome burns.”

Will the Chief Secretary commit today to use the opportunity of next month’s spring statement to address the funding crisis in our local councils?

[Elizabeth Truss]

First, the spring statement is not a fiscal event, and it is vital that we maintain the discipline that we have achieved over the past eight years and keep control of public spending, because that is what has led to the strong economy we are now seeing, with record levels of employment and an increasing number of new businesses starting up. The reality is that if Labour were to get into power, that legacy would be squandered.

Local government will see a 2.1% increase in cash terms between 2015 and 2019, and, as I have pointed out, they have also seen an increase in local council reserves of £8 billion—money available to spend on, and invest in, local services.

[John McDonnell]

With the crisis in children’s services, to be frank this is not the time for political knockabout responses. I am not sure whether the Chief Secretary has witnessed a child being taken into care; I have, and it can scar that child for life. But do not listen to me; listen to the all-party inquiry into children’s social care, which warned that nine out of 10 councils are struggling to meet their legal duties to children. The president of the Association of Directors of Children’s Services has said:

“We cannot go on as we are”,

and it is reported that over half the councils in England are planning further cuts to children’s services.

Recent estimates of Government spending and income show that the Chancellor will have sufficient resources to protect our children from further cuts. So I appeal—once again—to the Chancellor to use the flexibility he has to use the spring statement to address the £2 billion funding gap in our children’s services, to protect our children.

[Elizabeth Truss]

It is a bit rich of the right hon. Gentleman to suggest that we should not bring politics into this when that is precisely what he is doing. We are making sure that local councils have the flexibility to raise council tax to fund these vital public services. Labour has to acknowledge that this is not just about the money we spend but the way we spend it. The reality is that if the entire focus is on the level of spending rather than what we are doing, we end up with the situation that occurred in 2010—vast increases in spending and services actually getting worse.

Oral Answers to Questions

John McDonnell Excerpts

Tuesday 16th January 2018 Commons Chamber

[Elizabeth Truss]

I am pleased to say that we are investing a record amount in economic infrastructure, and the Institute for Fiscal Studies said that such investment would be at a 40-year high by the end of this Parliament. We are giving money to improve transport in towns and cities, allocating £1.7 billion for that purpose at the Budget.

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

Thousands of Carillion workers will turn up to work tomorrow unsure whether they have a job, and they may not appreciate Conservative boasts about employment today. The workers face cuts to their pensions, and hundreds of small firms along the supply chain are also uncertain about their futures. The traditional role of the Treasury is to protect our public finances, so will the Minister explain to the House what involvement the Treasury had in the billions of pounds of contracts held by Carillion at the time of its liquidation? We know that Treasury approval is required for PFI contracts, so will she tell the House how many PFI and PF2 contracts were signed by the Treasury during the current Chancellor’s time in office? What will happen to those projects and to the staff working on them? When there were loud and clear worrying signs about Carillion, why did Treasury Ministers, instead of intervening, collude in the strategy of drip-feeding more contracts to Carillion to buoy up an obviously failing company?

[Elizabeth Truss]

What has happened at Carillion is regrettable, which is why we are ensuring that the people employed by Carillion have support from jobcentres and why our No. 1 priority is ensuring that we continue to supply public services. However, it would be completely wrong for a company that got itself in such a state to be bailed out by the state, and we are not doing that. We are making sure that we continue to supply public services at the same time as helping the people who work for the company.

If we look at the record of contracting, a third of those contracts were signed under the previous Labour Government, and one of the most recent contracts was signed by the Labour-led Leeds City Council. The fact is that we have £60 billion of contracts with private sector companies that deliver public services across this country, which is an important way of delivering our public services. When there is an issue, as we have had with Carillion, we have made the preparations, and we are sorting out the situation.

[John McDonnell]

We are asking questions about when it was obvious that this company was failing and what the Treasury’s role was. I put it no stronger than this: at this stage, there are real suspicions that the Government were too close to the company and too wedded to its privatisation role. We need full transparency on the meetings and discussions that took place between Ministers, civil servants and representatives of Carillion. What warnings were given to Ministers and what action was recommended, whether it was implemented or not? We need the Treasury to start playing its proper role and to provide an independent assessment of the potential costs and risks facing the taxpayer. As has already been mentioned, a Cabinet Office minute was published after the statement yesterday that established a contingent liability. We urgently need to know from the Treasury about the potential range of costs now facing the taxpayer.

[Elizabeth Truss]

We already publish all those minutes and details of meetings. We are a transparent Government, and we make decisions in an objective fashion. Those decisions are signed off by the Treasury, and they are signed off by the Cabinet Office. Recent decisions on Carillion contracts have been made on the basis of joint and several liability to make sure the taxpayer is protected. We always look for value for money in the way we set up our contracts. The Government are dealing with this in a responsible and measured way, rather than making cheap political shots at a time when people’s jobs are in question and when we are working to sort that out.

Budget Resolutions

John McDonnell Excerpts

Thursday 23rd November 2017 Commons Chamber

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

After a disastrous election campaign and a party conference that literally fell apart, yesterday’s Budget’s sole purpose was to revive the fortunes of the Conservative party—and maybe to fend off for a time the Tory pack that has been hounding the Chancellor, week after week. But the Budget showed just how out of touch and cut-off from the real world of the economy and from people’s real lives the Chancellor and his Government really are.

Only this morning, the Chancellor said on “Sky News” that the UK economy is “fundamentally strong”. What is strong about an economy in which economic growth has been downgraded to the lowest in the G7 countries? What is strong about an economy in which productivity growth has been revised down to the lowest since modern records began; in which business investment is, to quote the Office for Budget Responsibility,

“significantly lower than…expected in March”;

and in which real pay and living standards continue to deteriorate?

The official growth forecasts from the Government’s own Office for Budget Responsibility were the worst in its history. No Government in modern times has ever presented a set of growth forecasts in which growth in every year is less than 2%. Productivity growth is forecast to have ground to a halt this year, and barely increase next year. That, too, is the worst downgrade in the OBR’s history.

The squeeze on living standards is now so great that the Resolution Foundation estimates that real pay will not return to its pre-crash levels until 2023.

[Jack Dromey (Birmingham, Erdington) (Lab)]

The shadow Chancellor is making a powerful case. The Governor of the Bank of England has said that the last time workers suffered such wage stagnation was 150 years ago, when Victoria wore the crown, Gladstone and Disraeli were in No. 10 Downing Street, Darwin was evolving the theory of evolution and trade unions were illegal. Does the shadow Chancellor agree that under a Labour Government wages go up, but under a Conservative Government—

[Madam Deputy Speaker (Mrs Eleanor Laing)]

Order. Before we go any further in this debate, which has only just started, I should explain to the House that a great many people have indicated that they wish to speak this afternoon. Speeches will have to be time-limited and short. It is simply not fair for people to make very long interventions and possibly not stay for the whole debate. [Hon. Members: “Ah!”] I am not suggesting that the hon. Member for Birmingham, Erdington (Jack Dromey) will not. He is an honourable gentleman and knows how to behave in the Chamber. It is perfectly in order and good debating practice for the shadow Chancellor and anyone else to take lots of interventions so that we can have a debate, but interventions must be short and Members must recognise that every minute taken up by an intervention takes a minute off the speech of someone who waits all day to speak. It is a matter of being fair and decent to each other.

[John McDonnell]

I will take some interventions, Madam Deputy Speaker, but I am cognizant of what you have said about the need to ensure that everyone can speak.

On the point made by my hon. Friend the Member for Birmingham, Erdington (Jack Dromey), we all knew that the election of a Tory Government would set us back; what we did not appreciate was that it would set us back a century.

Average annual pay is now projected to be £1,030 lower in 2022 than was forecast in the March 2017 Budget. It is those delivering our key services—the nurses, midwives, firefighters and teachers—who are worse off than they were a decade ago. There is nothing here that could remotely be considered strong. This is a weak economy. In terms of growth, it is now the weakest in the G7.

Let us remember that we are in this mess because for the past seven years the Government have implemented policies that have undermined and weakened our economy. The Chancellor was a key figure in all those policies. He and his colleagues were warned that austerity spending cuts would fail to bring the debt or the deficit under control, and that instead they would undermine the real economy. We were promised in 2010 by the Chancellor’s predecessor that the deficit would be cleared by 2015, yet today the debt burden is still rising. The Chancellor borrowed more in his first year in the job than any Chancellor in history.

[Mr Bob Seely (Isle of Wight) (Con)]

The shadow Chancellor paints a very negative picture, but can he explain why patient satisfaction in the NHS is at its highest for 20 years, why we have the lowest unemployment for 43 years, and why we have the highest employment in our history?

[John McDonnell]

There are now waiting lists of 4 million in the NHS, predicted to rise to 5 million because of the lack of investment. We welcome the increase in those in employment, but 800,000 are zero-hour contracts, and we now have more than 2 million people in insecure work. It is no wonder that people are anxious about their futures.

As I have said, the Chancellor has borrowed £145 billion —more than £5,000 per household—which is more in his first year in the job than any other Chancellor in history. The OBR now expects the deficit in 2021 to be almost three times higher than it forecast in March. It blames this deterioration on the collapse in productivity growth, but productivity growth has collapsed because investment has fallen. Government investment is £20 billion less in real terms today than it was in the last year of the previous Labour Government.

[Huw Merriman (Bexhill and Battle) (Con)]

May I ask the shadow Chancellor, or indeed his iPad, how much it would cost to service the Government debt in the event that his own spending plans came to fruition?

--- Later in debate ---

[John McDonnell]

I welcome the opportunity to respond to the hon. Gentleman. What we have said very clearly is that under our fiscal rule, unlike that of this Government, we will borrow not for day-to-day expenditure but to invest. That investment will grow the economy, and, as a result of that growth, we will cover any need to borrow. That is what any sensible Government is doing right the way across the globe, right the way across Europe. It is that attitude displayed by the hon. Gentleman that has caused our economic problems. The lack of investment over seven years has affected our productivity.

[Clive Efford (Eltham) (Lab)]

Many of the things that have been welcomed in this Budget—and some things have been welcomed—by people outside this House are measures that we have been calling for since the downturn in 2008. If those measures are right now, they were right back then, which means that it is a consequence of austerity and the economic policies followed by the Tories that has made our economy flatline for virtually seven years.

[John McDonnell]

The issue is that whatever was put forward in the Budget yesterday was so trivial that it will not have the effect that is required.

Investment by businesses is the lowest in the G7 countries. The few measures announced yesterday just will not address that. They will not close the gap between the south and the rest of the country by investing in a rail project in the north-east that will receive just 2% of the total cost of Crossrail in London. Our economy and our people will only reach their potential when there is real new investment brought forward by Government on a scale that is needed to meet the opportunity. The right approach from 2010 would have been to target the real economy and real investments to produce growth and so bring the deficit into line. Because the investment that was needed then did not materialise, productivity growth has stagnated, and because productivity growth has fallen away, the forecast deficit has been widened by the OBR to some £30 billion by 2021. The Government know that austerity is not working. They have now been reduced to fiddling the figures to meet their own targets.

[Sir Edward Leigh (Gainsborough) (Con)]

rose—

[John McDonnell]

Let me just quote the OBR, because it is important. On how the Government will meet some of their targets, the OBR was damning. It said that

“the Government has ensured that net debt still falls fractionally as a share of GDP in 2018-19…It has achieved this largely by announcing fresh sales of RBS shares and by passing regulations that ease local and central government control over housing associations in England.”

That is creative accounting on a scale that we have not seen under any Government. In other words, the Government have met their own debt target—barely—by exploiting a reclassification of housing association debt and putting in some extraordinarily optimistic forecasts for their sale of RBS shares.

[Sir Edward Leigh]

I am very grateful to the right hon. Gentleman for giving way. I am genuinely trying to find a way out of our problems that we agree exist. I accept his point that he wants to borrow more to invest. The trouble is that we are already paying in interest more than we spend on defence and the police—that is just paying interest on our debt. I understand where he is coming from, but whatever we spend this money on, the interest will still be accrued, so how will he deal with that?

[John McDonnell]

Debt under the hon. Gentleman’s Government has gone up by nearly £800 billion, and it is debt to pay for failure rather than to pay for investment. If we borrow to invest, we grow the economy, which means that we can put more people to work with more skills and higher wages. They pay more taxes and it pays for itself. That is the lesson that the Government still have not learned.

The Government appear, as is demonstrated today, to be completely out of touch with the mess that our economy is in. They have no understanding of the consequences of their choices for the lives of our people. They do not seem to grasp the scale of what is happening to our people out there. The Chancellor has tried to claim that income inequality has fallen, but he does not seem to be aware that more than a million food parcels have been handed out in this, the sixth richest economy on the planet. Inequality is not falling. He may well be aware that London is home to more billionaires than ever before, but does he know that there are more people homeless than ever? How can he claim that inequality is falling when that stark comparison is made? This Government’s decisions will make the poorest poorer still. Buried away in an annex, at the very back of the Treasury’s own distributional analysis, is the truth on this. The poorest fifth are being made poorer by the changes this Government is implementing. Those in the poorest fifth will lose almost £250 a year.

The House of Commons Library has confirmed that the burden of cuts—86%—made in tax and benefits measures since 2010 have fallen on women. Is that what equality is under this Government—86% of cuts on the shoulders of women?

[Rebecca Pow (Taunton Deane) (Con)]

rose—

[John McDonnell]

I will come back to the hon. Lady.

On housing, the Government’s proposed solution to the crisis is inept, and counterproductive. The stamp duty cut for first-time buyers will not bring forward the new homes that we need. No wonder the OBR expects only 3,500 additional sales to happen because of the change. It says that thanks to the price rises

“the main gainers from the policy are people who already own property.”

The problem is simple, but perhaps it needs explaining: you cannot solve a problem of housing supply by driving up housing demand. We are not the only people saying that. Conservatives Ministers reviewed a previous stamp duty reduction and said that the cut had

“not had a significant impact on improving affordability for first time buyers”.

Setting a target of 300,000 homes a year for the mid-2020s does little for a housing crisis today.

[Rebecca Pow]

rose—

[Jo Churchill (Bury St Edmunds) (Con)]

rose—

[John McDonnell]

The hon. Member for Taunton Deane was first.

[Rebecca Pow]

I was going to intervene on a previous point. The people of Taunton Deane have more money in their pockets, which is what they want. We have put up the national living wage, cut income tax by raising the personal allowance, and, again, frozen fuel duty. People actually have thousands more in their pockets than they had under the Labour Government.

[John McDonnell]

I know that the hon. Lady is well intentioned, but she has displayed ignorance of what large numbers of people are experiencing. May I suggest this to her—[Interruption.] I do not wish to be patronising. [Interruption.] If that is the way it is interpreted, it is not how it is meant to be. I just say that all of us, who are on relatively high wages, need to be very careful when talking about levels of income and levels of wealth because many people, including 4 million of our children, are actually living in poverty. Two thirds of those children are living in households where someone is in work, which says something about low pay to me, as it should do to all of us.

[Mr Seely]

Will the right hon. Gentleman give way?

[John McDonnell]

I will come back to the hon. Gentleman.

The number of people sleeping on our streets has doubled since the Conservatives came to office in 2010. More than 3,500 people were forced to sleep on the streets last year. Some 80,000 households are living in temporary accommodation because councils simply do not have anywhere to house them. I repeat: in the sixth richest country in the world, there are more than 120,000 children without a home to call their own, living in temporary accommodation. That figure is up 60% since this Government have been in power. That means children are being brought up in places that are often not safe, having to share communal bathrooms and kitchens, and being robbed of a normal family life and childhood. We have seen this in our constituencies. Ministers do not seem to understand the strength of anger felt by many on the Labour Benches at the fact that our constituents are being forced to live in overcrowded, unsafe and inadequate housing.

The Government had the opportunity to deliver the funding that would build the homes we need. Only a third of the £44 billion announced yesterday is genuinely new, and there is no extra Government investment in new affordable homes. This Government’s record of failure on housing will continue to blight the lives of hundreds of thousands of people trapped in overpriced, inadequate housing.

[Jo Churchill]

I was working in the construction industry in 2008-09, so I watched its decimation at the tail end of the last Labour Government. Nobody sprang to our aid to keep people in work in the industry. This Government had to start from the get-go. We have built 217,000 houses this year, which is nearly double what was built in the last period of the Labour Government. The Labour party walked away from the industry at that time, so it is wrong for the right hon. Gentleman to stand there and say it supported us.

[John McDonnell]

I ask the hon. Lady to re-examine the history of that period. I point her to the Kickstart programme, which was developed by the Labour Government to enable building to happen in the public and private sectors. I understand what she is saying; she is right that that time was an immensely difficult period for the economy, and that many people suffered, but her party supported the policies to deregulate the banks that brought about the speculation that resulted in the economic crisis in this country and elsewhere.

Thousands of people are trapped in poverty. The Child Poverty Action Group estimates that as many as 1 million children could be pushed into poverty as a result of cuts to universal credit. The introduction of universal credit has been a disaster that has pushed many thousands of people into despair and, in many cases, outright destitution. Food bank charities have reported that they have gathered an extra 2,000 tonnes of food to cope with demand as a result of the introduction of universal credit. The Trussell Trust reports that the use of food banks is up 30% in areas where universal credit is being rolled out. Yet the amendments offered by the Chancellor yesterday and mentioned in the statement today are so feeble as to strongly suggest that he and this Government simply do not grasp the scale of the problem.

Hon. Members need to know what this poverty means for children in our society. It means not having a winter coat this winter and being left behind when the rest of the class go on a school trip. Last year’s reports showed that thousands of children are going hungry during school holidays. The Chancellor did nothing yesterday for self-employed people, second earners, lone parents or disabled people, all of whom have seen their living standards suffer particularly acutely under universal credit. He failed to mitigate the £3 billion a year cuts that were slashed from the universal credit programme by his predecessor, and he failed to address the impact of the social security freeze in universal credit, due to push millions into poverty.

[Mr Seely]

Will the right hon. Gentleman give way?

[John McDonnell]

I will come back to the hon. Gentleman.

The additional funds put in place amount to £1 returned for every £10 that the Government are cutting from the system. This means that those claiming universal credit will now have to take their first payment as a loan, so they will face 12 months of reduced payments. What has the Chancellor offered to some of the most desperate people in the country—those who are already drowning in debt? More debt. The Chancellor had nothing to say for the people who are newly registered for universal credit and who face destitution this Christmas. Not a single extra penny, however inadequate, will be available for the new year. Some 59,000 families will be left without any support over the Christmas period. Those families include 40,000 of this country’s children. The percentage of children living in relative poverty is the highest since records began in 1961—in the sixth richest country in the world.

Local councils are being starved of the funds they need to protect the most vulnerable children in society. Charities on the frontline are clear and report solidly that cuts to parenting classes, children’s centres, substance misuse prevention, teenage pregnancy support and short breaks for disabled people risk turning the current crisis into a catastrophe for the next generation of children and families. A record 70,000 children have been taken into care this year. One in 64 children in England is at risk of abuse or neglect. There are 1,200 fewer children’s centres than in 2010, eight in 10 schools have no funding to support children with special needs and funding for early intervention to protect children is down by 55%. There was not a single penny extra in the Budget to address this emerging crisis in our children’s services. The Chancellor and the Government are failing some of the most vulnerable children in society, and I urge the Government to look again at this emerging crisis.

It goes on. Schools are facing the first funding cuts per pupil in real terms since the 1990s. Headteachers are being forced to go begging to parents for funds to pay for basic supplies. Five thousand headteachers have written to the Government, asking just for the return of the funds that have been cut. One headteacher in the Prime Minister’s constituency is asking parents for £1 a day to help to pay for stationery.

The National Audit Office says that schools face a £1.7 billion real-terms funding cut by 2020. For younger children, there are 1,000 fewer nursery places and childminders. Eight in 10 schools have been left without the funding to provide adequately for special needs pupils. This means that our most vulnerable children are deprived of the counselling or support they need, and spend break times away from their friends, alone. Their education is being discriminated against.

[Emma Hardy (Kingston upon Hull West and Hessle) (Lab)]

I was told by a headteacher in Hull that there is not enough money for post-16 special educational needs provision, because they cannot cut the number of teaching assistants due to the ratios of staff needed to care for these children. She is looking at of not being able to offer a full-time post-16 school placement for children with SEN. Does my right hon. Friend agree that that is appalling?

[John McDonnell]

It is absolutely shocking when, as a society, we are looking to integrate everybody into the mainstream as best we can. It means that those children will be deprived for the rest of their lives. More than 4,000 children with an approved education, health and social care plan are still not receiving the provision they are entitled to, which confirms what my hon. Friend reports.

The Local Government Association is now warning the Government that the cuts to local government will mean schools being forced to turn away students with special needs. Yesterday’s Budget offered £177 million for additional maths and IT teachers, supposedly to make us fit for the future, at a time when just 10% of our schools offer IT GCSEs—£177 million to compensate for £1.7 billion, or £1 pound given back for every £10 taken away. Capital spending on schools is also scheduled to be cut by £600 million over this Parliament, at a time when class sizes are rising.

On the NHS, experts and health professionals are agreed that it is approaching breaking point. The NHS needs proper funding. The chief executive of NHS England has said our national health service needs £4 billion this year to prevent it from falling over. He has warned of 5 million people being left on the waiting lists if there is not additional funding.

[Mrs Madeleine Moon (Bridgend) (Lab)]

Is my right hon. Friend aware that clinical commissioning groups in the NHS are looking to introduce new taxes on patients? Kernow CCG proposes to make kidney dialysis patients pay for transport to their dialysis. This is a death tax of £120 a month. Dialysis or death—that is their option.

[John McDonnell]

Under the figures that have been announced this week in the Budget, there will be more of this. There will be more rationing. There will be more people suffering. There will be more people’s lives put at risk.

Under this Government, 4 million people are now waiting for care—the highest level in a decade. More than 100,000 patients were left waiting more than two weeks to see a specialist after being diagnosed with cancer, and more than one in 10 did not start treatment within 62 days. Only three in 10 of the most urgent 999 calls for help are answered within the targeted time. Yet, the Government have brought forward less than half the amount that is needed and that professional, sober assessments say is needed. The claim in yesterday’s Budget that £10 million in capital funding is available is totally misleading. The Government will provide less than half of that. The remainder will come from selling off NHS estates or from the private sector.

Nor has the pay cap that has driven hard-working public sector workers to despair been tackled. The dedication of the staff is extraordinary. There are nurses waiting behind after 12-hour shifts to give care to keep the system from imploding. These are the same NHS nurses who have seen their pay fall so much in real terms that one in four must take a second job to make ends meet. The Royal College of Nursing reports that nurses are even visiting food banks, such is their desperation. It is not possible to run a health service worthy of the name on the unpaid and underpaid dedication of its staff alone. The Chancellor is able to offer nothing for them.

[Mr Seely]

Will the right hon. Gentleman way?

[John McDonnell]

I have given way to the hon. Gentleman, and I am worried about making sure, as you said, Madam Deputy Speaker, that other people are fully involved.

The Chancellor was able to offer nothing for these staff. The cap is not being removed, because, as the Treasury briefed once the Chancellor sat down, any pay rises the pay review boards offer above 1% must be taken from existing budgets. It is a derisory offer to make after seven years of real-terms pay cuts. Worse than that, for NHS nurses, any additional pay will be linked to “Agenda for Change” modernisation, which really means threatening their working conditions—tearing up their terms and conditions of pay.

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

Is it not also a con, because 55% of civil servants’ pay is not covered by a pay review body?

[John McDonnell]

That is exactly it. That is how the Government, up until now, have avoided their responsibility to ensure that civil servants have a proper pay rise.

For those in social care, with the system still approaching what the Care Quality Commission calls “tipping point”, the Chancellor has not offered a single penny either.

Let me turn to the environment. The Chancellor had a few choice words about electric cars yesterday—I thought a driverless car was a wonderful metaphor. However, on the bigger picture, the Budget is potentially disastrous. The fact that there will be no new low-carbon electricity levies until 2025 could spell the end of much of the low-carbon development in the UK. There was not a single mention in the Chancellor’s speech of renewables, sustainable sources of energy or investment in domestic energy efficiency. It is quite clear that, beyond a few gimmicks, this issue is not, in any sense, a priority for the Government.

The Chancellor referred extensively to technological change, which offers huge potential for our economy and our society if we are prepared to commit to the investment needed. However, it was a Conservative-led Government, of which the Chancellor was a member, that cut research funding by £1 billion in real terms. Unlike the Chancellor and his party, Labour Members know that realising the possibilities of new technology will require a Government committed to providing the funding and long-term investment needed—not a Government, like this one, repackaging existing announcements on fibre optics and 5G in consecutive Budgets, and not one who re-allocates funds they allocated a year ago in the autumn statement, claiming it is new research funding. The Government say they aim to reach the OECD average of 2.4% of GDP spent on R and D by 2027, but after years of languishing below that level, Britain should be aiming to be above the OECD average, rather than belatedly hitting it a decade from now. Even the target displays a lack of ambition and foresight.

The Government have the same problem with Brexit. They never planned for it before the referendum, and they cannot see beyond their own slogans after it. Some 17 months after the referendum result, there is not a single agreement with the EU on any point. The Government are lurching towards the hardest possible Brexit, ripping up our existing relationship with our closest trading partners, instead of trying to work to create a new relationship.

Every major business group has begged the Government to take a different approach—from the CBI to the EEF to the British Chambers of Commerce. Already, businesses are pulling back investment for fear of what might come. So this Government do not just lack ambition: they will not listen to advice and cannot seem to see just how disastrous a cliff-edge plunge out of the EU would be for our economy.

The Chancellor trailed this Budget as making Britain “fit for the future”. What it actually demonstrated, as my right hon. Friend the Member for Islington North (Jeremy Corbyn) North said yesterday, is that this is a Government no longer fit for office—too divided to deliver. The Budget demonstrated that this is increasingly a Government without purpose, divided and in disarray, whose confidence is sapped and whose time is up. I just say to them: it is better to go with a bit of dignity—just go with a bit of dignity!—rather than humiliating disintegration. Labour is ready and willing to form the Government that this country needs, rather than this shambles that cannot even be described as a Government.

--- Later in debate ---

[Sajid Javid]

I am aware—far more than the Labour party, despite its name—that what workers want is work. That is why we should celebrate the fact that we have more people employed today than at any time in our history, and we have the lowest unemployment rate in 40 years.

Labour Members talk a good game, but all they have are blank cheques they know will never be cashed and empty promises they know they will never be able to keep. Over and again, the shadow Chancellor refuses to say how much his spending plans would cost, how much he would have to borrow and how much debt he would pile on to the next generation. He says that he does not “need a number”, because that is “what iPads are for”. He even accused one reporter of wanting him to “pluck a figure” out of thin air. Well, no, we do not want him to pluck a finger out of thin air—[Interruption.] A figure, and a finger as well. He is good at putting up the finger—we know that. We want him to tell the British people how much his plans would cost. His failure to do so can mean one of only two things: either he has no idea what the cost would be, in which case he is not fit to be Chancellor, or he does know, but is refusing to share his dirty little secret because he is all too aware of how shameful it is.

[John McDonnell]

I have taken a vow that I will not throw about any form of book in the Chamber ever again, but may I suggest that we send the right hon. Gentleman a copy of the “Grey Book”, which identified every policy, all costings and all funding sources—including our capital transformation fund—that would build the homes that we need and ensure a fair taxation system? That is how we would fund our policies. The only numbers in the Tory manifesto were the page numbers.

Paradise Papers

John McDonnell Excerpts

Monday 6th November 2017 Commons Chamber

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

(Urgent Question): To ask the Chancellor of the Exchequer if he will make a statement on the Government’s actions to curb aggressive tax avoidance schemes in the light of the Paradise papers revelations.

[The Financial Secretary to the Treasury (Mel Stride)]

The Government believe in a fair tax system where everyone plays by the rules. It is this Government who have taken decisive action to tackle tax avoidance and evasion and to improve the standards of international tax transparency. The UK has secured an additional £160 billion in compliance revenue since 2010—far more than was achieved under the last Labour Government. Under this Government, the UK now has one of the lowest tax gaps in the world. We have provided Her Majesty’s Revenue and Customs with tough new powers. In 2015, HMRC received £800 million in additional funding to go on tackling tax avoidance and evasion.

Let me turn to recent events. Yesterday evening, several international news organisations, led by the International Consortium of Investigative Journalists, reported on an information leak regarding the financial affairs of a large number of individuals. I should remind the House at this stage that Ministers do not intervene in the tax affairs of individuals or businesses, as to do so would be a breach of taxpayer confidentiality. However, I can inform the House that, on 25 October, HMRC requested that the ICIJ, The Guardian and the BBC share the leaked data so that this information can be compared with the vast amounts of data that HMRC already holds due to the initiatives this Government have undertaken. They have yet to respond to this request.

Nevertheless, since these data were retrieved in 2016, the Government have implemented international agreements that have changed the game for those seeking to avoid and evade their taxes. HMRC is already benefiting from the automatic exchange of financial account information through the common reporting standard—an initiative in which the UK has led the world, with over 100 jurisdictions signed up. The Crown dependencies and overseas territories are among those signed up to this initiative, and have been exchanging information with HMRC for over a year. The Crown dependencies and overseas territories have also committed to holding central registers of beneficial ownership information, which the UK authorities are able to access.

It is important to note, and I quote the ICIJ’s disclaimer here:

“There are legitimate uses for offshore companies and trusts”

and the ICIJ does

“not intend to suggest or imply that any people, companies or other entities included in the ICIJ Offshore Leaks Database have broken the law or otherwise acted improperly.”

So, notwithstanding the generalised aspersions made by the Opposition, the use of offshore accounts or trusts does not automatically mean dishonesty. But this House should be assured that, under this Government, HMRC will continue to bear down with vigour on any tax avoidance or evasion activity, wherever it may be found.

--- Later in debate ---

[John McDonnell]

Unless there is a critically overriding reason, I believe the House will consider it unacceptable that the Chancellor is not here to address the biggest tax scandal of this generation.

The Minister’s response today was the same bluster. He cites a figure for additional tax revenues that cannot be verified from any publically available data. He refers to a tax gap that does not include the likes of Apple, Facebook, Google and others. He boasts of this Government’s efforts to address avoidance, yet last week they voted to protect non-doms in the Finance Bill. Last month, the European Parliament accused this Government of obstructing the fight against tax avoidance evasion and even money laundering. Does he not appreciate the outrage in our community at this tax dodging? Every pound in tax avoided is a pound taken away from our NHS, our children’s education, and care for the elderly and the disabled.

Given that the chairman of the Conservative party and Chancellor of the Duchy of Lancaster is responsible for administering

“the estates and rents of the Duchy of Lancaster”,

has the Chancellor or any Minister discussed these revelations with the Chancellor of the Duchy of Lancaster, the right hon. Member for Derbyshire Dales (Sir Patrick McLoughlin), and will the right hon. Gentleman be apologising to Her Majesty for the embarrassment this episode has caused her?

With regards to Lord Ashcroft, a major funder of the Conservative party who reportedly contributed half a million pounds to the Conservatives in the general election campaign, will the Minister tell the House what information he has had about the domicile status of Lord Ashcroft between 2010 and 2015, and whether Lord Ashcroft was paying taxes on his overseas wealth?

The Chancellor now has an immediate opportunity to tackle tax avoidance. Can he assure the House that in the forthcoming Budget he will adopt Labour’s proposals to remove exemptions from non-doms and secure full transparency of trusts? Will he now also agree to Labour’s proposals to establish an independent public inquiry into tax avoidance? I tell the Government this: if they refuse to act, the next Labour Government will.

[Mel Stride]

The right hon. Gentleman raises the veracity or otherwise of our figures. We have collected £160 billion through clamping down on avoidance, evasion and non-compliance. That is a figure that he will find broken down and indeed published in Her Majesty’s Treasury’s annual report and accounts.

The right hon. Gentleman refers to Lord Ashcroft. As I said in my opening remarks, I am clearly not going to start getting into the individual tax affairs of any particular individual, regardless of their political allegiance or whoever they may be.

The right hon. Gentleman raises non-dom status and non-doms, and the measures that he and his party put forward for the most recent Finance Bill. Can I remind him of two things? It is the Conservative party that has put an end to permanent non-dom status, and it was Labour that sought, by voting against that Bill on Third Reading, to stop that from happening.