Kevin Hollinrake
Main Page: Kevin Hollinrake (Conservative - Thirsk and Malton)Department Debates - View all Kevin Hollinrake's debates with the HM Treasury
(4 years, 6 months ago)
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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.
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.
Sajid Javid
I give way to my hon. Friend the Member for Thirsk and Malton (Kevin Hollinrake).
Kevin Hollinrake
One of the worst effects of the banking crisis was the impact that it had on many thousands of small and medium-sized enterprises in this country, who lost their livelihoods and sometimes their homes. The Business Banking Resolution Service, which has been set up to deal with historic complaints, is excluding many people on very tight eligibility criteria, which I regard as unfair, as someone who sits on that steering group. I believe it requires the intervention of the Chancellor to get UK Finance to come to the table, to be fairer about those eligibility criteria. Will he commit to do that?
Sajid Javid
Look, first I commend my hon. Friend for all the work that he has done, and continues to do, to support small businesses throughout the country. He has raised an important issue. He knows that work is ongoing to address that, but I would be happy to meet him and discuss it further.
Vernon Coaker (Gedling) (Lab)
This debate about the economy gives us an opportunity that the shadow Chancellor tried to take and the Chancellor missed, although the right hon. Member for Sevenoaks (Sir Michael Fallon) started to get to where I think this debate on the economy should be taking us. Let me explain what I mean.
My constituents in all parts of Gedling—in Carlton, Arnold, Netherfield, Colwick and Burton Joyce—say exactly the same as is being said by many people in the country: that the system, as it is currently, does not work for them. They do not believe that the way the system operates is fair and they want something done about it. And what they want from this Parliament is a vision of an economy that is different from the way it functions now.
It is such a big issue that the Financial Times—the doyen of the City of London—recently ran an editorial that itself asks the question,
“How to build a more responsible…capitalism”.
It talks about how that can be done. I hope that the new Chair of the Treasury Committee will consider whether his Committee should look at how we are going to deliver a market system that regulates itself in a way that does not allow the excesses that we have seen. This is a quote from a Guardian report on the Panama papers:
“Twitter and Facebook received hundreds of millions of dollars in investments that can be traced back to Russian state financial institutions…Aggressive tax avoidance by multinational corporations, including Nike and Apple…billions in tax refunds by the Isle of Man and Malta to the owners of private jets and luxury yachts.”
None of us, whether we are Labour, Liberal, Scottish nationalist or Conservative—whoever we are—can believe that is right. Where in the Chancellor’s speech did it say that whoever was in government they would tackle that?
It cannot be right that multinational companies are shifting a growing share of profits offshore—£600 billion in the past year alone. Then we turn to the people who HMRC pursues for a few pounds that they owe, or the Benefits Agency pursues for a few pounds that they owe. That is not the sort of society that people want. That is not the sort of society that people think is fair. The Sunday Telegraph, on page 5, laid into the way in which investment funds work. Nigel Woodford—I have never heard of him—
Vernon Coaker
Well, there you go—Neil Woodford. I have still never heard of him. We read about Terry Smith, Nick Train and Anthony Bolton, and millions of pounds of investors’ money. The money that we—hon. Members on both sides of the House—pay into savings, trust funds and pensions is put together and invested on our behalf by a system that has short-term interests and profit at its heart rather than the long-term benefit of communities. It cannot go on.
It cannot be right that my own brilliant BEIS Committee reported that the average FTSE 100 chief executive is on £4 million a year compared with the average worker on £30,000. It cannot carry on. All I wanted to hear was a Chancellor of the Exchequer who put at the heart of his Queen’s Speech contribution equality, a responsible capitalism, a change to the fast buck and a change to those people who seek to make money rather than putting people first. That is what I wanted to hear and it was seriously lacking.
Kevin Hollinrake (Thirsk and Malton) (Con)
I listened carefully to the speeches made by the Chancellor of the Exchequer and the shadow Chancellor of the Exchequer. The shadow Chancellor said that there is too much inequality in the UK—I absolutely agree. As a one nation Conservative, I believe in equal opportunity for all, but I guess that the method of getting there is where we differ. In my view, we get there through a balance between free markets and capitalism, and a sensible amount of state intervention, to ensure that the free markets work for everybody, not just the privileged few. The difficulty is that, if we look at future challenges for the taxpayer, our scope for intervention will be very limited. Our current debt-to-GDP ratio is 80% of GDP. That is forecast to grow to 280% of GDP by 2060 unless we change our tax system. There are huge challenges ahead and huge burdens for the taxpayer, particularly in the areas of pensions, social care and healthcare. Free market opportunities will be more important than ever.
I agree with my right hon. Friend the Member for Sevenoaks (Sir Michael Fallon) about the reduction in the number of capitalists in this country for various reasons. G. K. Chesterton once wrote:
“Too much capitalism does not mean too many capitalists, but too few capitalists.”
If we look at where we normally get capitalists from in our society, we see that it is SMEs—young businesses starting up and building—and people getting into either the stock market or the housing market. Of those two cohorts, SMEs in particular face bigger challenges than ever in today’s economy because of the imbalances and unfairness. As other Members have said, larger companies—the Amazons, Tescos and Starbucks of this world—are able to take competitive advantage of the tax system, and as a consequence, the growth rate of SME start-ups has started to falter. Their growth rate today is lower than it has been for the last 10 years.
We know how important SMEs are. There are 5.7 million of them in the UK, and 99% of all businesses in the UK are SMEs. They employ 60% of the private sector work- force, and they are more productive in their start-up years than the rest of the economy. It is hugely important that we support the dynamic creation of new businesses.
With limited room for intervention, we have to ensure that the playing field is fair and level for all businesses. As I said in my earlier intervention, one of the imbalances is between SMEs and banks, which are so important to them, when things go wrong. We need a proper resolution process. We have seen disgraceful treatment of SMEs by banks. Where do they go when things go wrong? The new Business Banking Resolution Service is promising, and I am working with the steering group, but it unfairly excludes 85% of businesses that could apply for resolution of historical complaints. That cannot be fair.
Sir William Cash (Stone) (Con)
Does my hon. Friend accept that, during the transition period, it is essential that we protect ourselves from legislation from the European Union on tax and business, which could do enormous damage to our vital national interests?
Kevin Hollinrake
My focus in this speech is SMEs, and I will stick to that, but my hon. Friend raises an interesting point.
If we are to have a fair and level playing field, we must ensure that our investment is spread more fairly across the regions. It is wrong that this country is firing on one cylinder when it could be firing on three or four. This is not about the north-south divide; it is London versus the rest of the country. For every £3 spent per capita in London, only £1 is spent in the regions. We need a fairer deal to help to level up our economy in the UK.
Finally, it is a shame on this country that we do not do more about tax avoidance. New rules are coming in to try to level the playing field, such as the diverted profits tax, but we must do more to ensure that everybody in the business environment pays their fair share of tax. That is how we build a fair and level playing field, encourage more SMEs to start up and scale up, and become a more productive economy. That is how we get a bit less capitalism, but a lot more capitalists.
Peter Dowd
My hon. Friend refers to just some of the many thousands of workers who have been let down by this Tory Government. We all walk past people sleeping rough on the streets every day, but what have the Government done about that? Nothing. Despite endless promises of jam tomorrow, there looks to be little respite ahead under this Government. Their approach to this is writ large by the smirks on the faces of the members of the Government Front Bench.
Manufacturing output in August dropped at the fastest pace in seven years, with EU-based customers rerouting supply chains away from the UK in anticipation of 31 October. Consumer and business confidence is tumbling. Anecdotally, we know that a worrying proportion of businesses are moving their operations and investment elsewhere.
My right hon. Friend the shadow Chancellor said:
“We have heard the Prime Minister’s previous crude dismissal of British business. Now we are seeing his words become Government policy.”—[Official Report, 8 October 2019; Vol. 664, c. 1650.]
Businesses are responding in droves. The Centre for European Reform says that the economy is already £69 billion smaller as a result of Tory turmoil and uncertainty since the Brexit vote. That is their responsibility on their watch—nobody else’s. Time and again, they put party over country while the economy suffers. The Government’s false dichotomy of no deal versus a bad deal amounts to an attack on the economic wellbeing of our citizens. Our economy needs cast-iron guarantees of frictionless free trade and strong regulatory alignment with the European Union. It needs a targeted industrial strategy to turn the biggest threat of our time into an economic opportunity, but not with the Tories.
The only threat we face that is equal to the continuation of this Government is the climate emergency. We need a green industrial revolution: a rapid and far-reaching transformation of the UK’s infrastructure, from our homes to our transport and energy systems. That requires investment on a scale that makes the Government’s programme pale into insignificance. Labour is offering—
Peter Dowd
I am sorry, but I will not at this stage.
Labour is offering a national transformation fund and a national investment bank that would invest £500 billion of lending and spending over 10 years, with tackling climate change as a central mission—a concept alien to that lot over there. It will include targeted investment to develop and commercialise new technologies so that they are designed here, assembled here, installed by a well-paid unionised workforce here, and then exported to the rest of the world. It is a far-reaching programme of economic revival that will create the industries of the future here. This is a Government of yesterday. We are the Government of tomorrow.
With its wind and marine resources, the UK has some of the best potential in the world for renewable energy. Renewable energy should be to the UK what tech has been to California, but the Government’s failure to support these nascent industries has held us back. We should be building on our existing strengths, such as the automotive sector, which could, with the right support, lead the world in electric vehicle and battery production. At the Labour party conference, my hon. Friend the Member for Salford and Eccles (Rebecca Long Bailey), the shadow Business Secretary, announced a multibillion-pound package of investment to kick-start the electric revolution. That is the scale of targeted support that our automotive industry needs—not just green number plates. Today, she announced plans to create a carbon-neutral energy system by the 2030s, including insulation upgrades for every home in the UK and enough new solar panels to cover 22,000 thousand football pitches, including Anfield.
This is not just about avoiding a climate catastrophe. The green industrial revolution is about building the world we deserve, not the world that the Tories think we deserve. We will ensure that nothing is too good for the working people of this country. We can tackle climate change while transforming our economy so that it works for the many, not just the privileged few.
As my right hon. Friend the Leader of the Opposition has said, this is not the time for despair; it is the time for action. I hope the Chancellor—hope does spring eternal—will act by accepting amendment (g) so we can begin to rebuild our economy in the interests of the many, not the few. Under this Government of yesterday, I will not hold my breath.