Charter for Budget Responsibility
Debate between John McDonnell and Chris Philp(8 years, 4 months ago)
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John McDonnell
Let me just finish another paragraph before I give way again.
A new set of rules for fiscal policy is needed. I know that some Members have questioned the need for fiscal rules at all. During the discussions on the Fiscal Responsibility Bill in early 2010, I recall the right hon. Member for Tatton (Mr Osborne), who was then shadow Chancellor, saying that the Bill was a “completely feeble stunt” and the
“biggest load of nonsense that this Government have had the audacity to bring to Parliament in this Session”.—[Official Report, 5 January 2010; Vol. 503, c. 72.]
That was the then shadow Chancellor condemning Gordon Brown for having a fiscal rule. A short while later, when he became Chancellor of the Exchequer, he produced his own fiscal rule: the fiscal responsibility charter. He missed every target in his first charter, so he brought in a second one. He was on course to miss the targets in his second one, so he brought in a third.
Chris Philp (Croydon South) (Con)
The shadow Chancellor has just questioned the performance of the economy under the fiscal rule, but is it not the case that the deficit fell from 11% to 4% of GDP, that the economy created 2.6 million jobs—more than in the rest of Europe put together—and that the employment rate increased by 4% and now stands at the highest level in our country’s history? Is not that evidence that the approach of the last Government worked and should be continued?
John McDonnell
I remind the hon. Gentleman that under his own Government’s fiscal rule, the deficit should have been completely eliminated last year, and debt should have dropped but it has increased. I will send him a reading list.
Budget Resolutions and Economic Situation
Debate between John McDonnell and Chris Philp(8 years, 8 months ago)
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John McDonnell
I find a form of electoral politics, where you target a vulnerable group in society just because they do not vote for you, unacceptable. Not a word of apology! One nation Conservativism? It is a contradiction in terms.
Chris Philp
May I remind the shadow Chancellor that the richest 20% are now paying 52% of all income tax, which is up from 49%, and that the national living wage is putting money into the pockets of our country’s poorest citizens?
John McDonnell
The hon. Gentleman refers only to income tax. If he had looked at last weekend’s analysis of the overall cuts and what has happened with regard to tax and benefits, he would have seen that it is actually the poorest decile who are paying the most. The two groups hit hardest are young women with children and older women with caring responsibilities. Some 81% of the cuts are falling on women. This is a discriminatory Budget.
Tax Avoidance and Multinational Companies
Debate between John McDonnell and Chris Philp(8 years, 9 months ago)
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John McDonnell
I am going to press on.
We all supported the changes to public procurement rules that enabled the Government to prevent public contracts from being awarded to companies found to be engaged in tax avoidance schemes. Staggeringly, it is understood that no company has been denied a public contract on those grounds and that, even though its tax affairs were under such lengthy investigation by HMRC, Google was awarded public contracts to supply services—who to?—to HMRC.
Chris Philp (Croydon South) (Con)
On the point about international agreements, the United Kingdom Government have been at the forefront of the base erosion and profit shifting initiative. Richard Murphy, who describes himself as the author of Corbynomics, told the Treasury Committee yesterday that he was “pleased and very surprised” by the progress the Government have made since 2010.
John McDonnell
I support the Government in that action, but this deal flies in the face of that action and undermines the agreements that we are trying to make.
Over the weekend we also heard from Mr Jones, the Google whistleblower. In his view, HMRC ignored his exposure of Google’s tax avoidance methods. That evidence was received by the Treasury Committee on a cross-party basis.
We all accept that the existence of tax havens and the complexity of national tax systems present an ongoing challenge to national Governments. As a result, we have all supported the negotiation of international agreements on tax collection. The UK is a signatory to some of these. As the hon. Member for Croydon South (Chris Philp) said, the Government have agreed in successive steps to abide by the base erosion and profit shifting programme under the auspices of the OECD. We supported that.
Charter for Budget Responsibility
Debate between John McDonnell and Chris Philp(9 years, 1 month ago)
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John McDonnell
No. This is a limited debate, so I need to press on.
Over the last five years, the focus of the economic debate on the deficit has reflected the capture of the economic narrative by the right since the crisis in 2008. Over six years, the Conservatives have managed to convince many people that the economic crisis and the deficit were caused by Labour Government spending. It has been one of the most successful exercises in mass public persuasion and the rewriting of history in recent times. Today I am going to correct the record.
The facts speak for themselves. The Conservatives backed every single penny of Labour’s spending until Northern Rock crashed. The average level of spending under Labour was less than it was under Mrs Thatcher. It was not the teachers, the nurses, the doctors and the police officers whom Labour recruited who caused the economic crisis; it was the recklessness of the bankers speculating in the City, and the failure of successive Governments to ensure effective regulation. In opposition, this Chancellor and his colleagues wanted even less regulation of the banking sector that crashed our economy. The deficit was not the cause of the economic crisis, but the result of the economic crisis.
