Budget Resolutions

Leo Docherty Excerpts

1st reading: House of Commons
Thursday 1st November 2018 Commons Chamber

[Andrew Gwynne]

My hon. Friend is absolutely right. Whatever this Government say, austerity is far from over for the people who require our help through the social security system.

Turning to communities, it was only a few weeks ago, in a speech that began with the Prime Minister dancing across the stage, that we were told that austerity is over. After almost a decade of cuts that have made life difficult for families across the country, I expect that many people welcomed the news coming out of Birmingham and breathed a sigh of relief. No longer would they have to visit food banks after work because they could not afford to eat. No longer would they feel unsafe in their neighbourhoods after 21,000 police officers had been cut. No longer would too many people be left shivering in the cold, unable to afford somewhere to live and with nowhere to turn. No longer would local councillors be worrying about balancing their books, about providing care for vulnerable children, or about ensuring dignity for the elderly people who need the care that their councils should be providing.

Fast-forward to the Budget presented to the House this week, and many people will have been left bitterly disappointed. This is not an end to austerity, but merely more of the same. Two thirds of the welfare benefit cuts planned by the Government will still happen, and headteachers will still be forced to write begging letters to parents to pay for the basics. No wonder that the “little extras” referred to by the Chancellor—a frankly insulting term to schools at a time when the independent pay review body has said that they do not have the resources to give any pay rises to their staff—were so badly received. Teachers’ pay is down £4,000 in real terms since 2010, and headteachers are writing to parents to ask for donations just to keep services at current levels.

[Leo Docherty (Aldershot) (Con)]

This Budget has delivered a tax cut for 32 million people. Can the hon. Gentleman clarify Labour’s position, because the shadow Chancellor says that he supports that but the Leader of the Opposition says he does not? What is Labour’s policy?

[Andrew Gwynne]

As I was speaking about education, the hon. Gentleman must try harder, go to the back of the class and pay attention. Some £1.3 billion of cuts—

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[Leo Docherty (Aldershot) (Con)]

I am very pleased to be called to speak in this important debate.

I welcome the Budget very much, especially the cut in business rates, which will have a hugely positive impact on many businesses in my constituency. One such business in Aldershot is the butcher Alf Turner, a long-standing establishment founded in 1956. Madam Deputy Speaker, you will know that it is not only Budget week, but UK Sausage Week. I am pleased to report that Paul Turner, the proprietor of Alf Turner, is a supreme sausage champion, having won the UK Sausage Week award for best traditional sausage. Last night he said to me:

“The cuts to business rates from Monday’s Budget are fantastic news for local family-run businesses like mine. Keeping local shops open can only serve our local communities.”

I draw attention to that because the real point is that Paul’s business is successful not because the Government are helping it, but because the Government are letting it get on with what it does best: making great sausages. It creates a superb product that local people choose to buy and is now available nationally. The lesson is the importance of choice. When freedom of choice is allied with the free flow of capital and labour, and protected by property rights and the rule of law, we have a flourishing free market. That is the great genius of our economy and many economies in the west.

[Bim Afolami]

Could my hon. Friend illuminate the House by saying what he fears would happen to small businesses such as the ones in Aldershot that he mentioned if they were subject to the programme of huge tax rises and nationalisation proposed by Labour?

[Leo Docherty]

I am grateful to my hon. Friend for that intervention. The wholesale economic devastation that would be the consequence of Labour’s nationalisation plan—I do not know whether it has a plan to nationalise sausage production, but I hope not—would be clear. We have to make the case for the free market. In this day and age, it is astonishing that Labour Front Benchers espouse an ideology that totally opposes the free market.

The shadow Chancellor is a self-declared Marxist. The House will know that in 2006 he said:

“I’m honest with people: I’m a Marxist”.

He said of the 2008 crash:

“I’ve been waiting for this for a generation”.

In 2017, he stood in front of Communist flags at a May Day parade in London, and just this year he attended the Marx 200 conference in London, at which he claimed:

“Marxism is about the freedom of spirit”.

[Eddie Hughes]

I understand that Alf Turner served for 20 years in the Royal Army Service Corps—in complete and stark contrast to the shadow Chancellor.

[Leo Docherty]

I am very grateful for that intervention. Absolutely—it puts those two sets of values into stark and very worrying contrast.

The free market is not an ideology but an inevitable human condition, which Conservative Members rightly espouse. We must call out at every turn the Marxist ideology of Opposition Front Benchers, and we must also reflect that those who had the unpleasant experience of living in countries with the devastating experience of the doctrine of Marxism being applied in reality, such as the Soviet Union, have bitterly regretted it. Shadow Front Benchers and the shadow Chancellor would do very well to read the moving autobiography of Elena Gorokhova, “A Mountain of Crumbs”, which describes the devastating famines of the 1920s and the wholesale shortages of foodstuffs in the Soviet Union in the 1980s, which meant that when she went to the United States, she was simply amazed by the range and variety of foodstuffs on the shelves of the supermarkets there.

Before I conclude, I would be happy to take an intervention from an Opposition Front Bencher if they wish to deny that the shadow Chancellor is a self-declared Marxist. There is no movement from them, so the record will show that they are happy to confirm this depressing fact. We must reject the Marxist ideology of the current Labour party and rejoice in the bright future of the free market that we have in our country, burnished by free choice, a growing economy and the freedom to choose.

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[Peter Dowd (Bootle) (Lab)]

I am glad to see the Chief Secretary to the Treasury in her seat today, as she could not get one on Monday. I wish to comment on what a number of Members have said. The right hon. and learned Member for Rushcliffe (Mr Clarke) asked, in a rather perplexed way, why the Government were spending all the headroom. The answer is: because they are up the creek. My hon. Friend the Member for Dulwich and West Norwood (Helen Hayes) talked about the problems her local authority has because of the Government’s austerity plans. My hon. Friend the Member for Sheffield South East (Mr Betts) spoke similarly, as did many other Members.

The hon. Member for Dover (Charlie Elphicke) said young people need to be better off; well, that is why young people are voting Labour. Rather bizarrely, the hon. Member for Aldershot (Leo Docherty) talked about sausages and Marxism; I hope his sausages are more sizzling than his speech was.

My hon. Friend the Member for Barnsley Central (Dan Jarvis) made the case for devolution. My right hon. Friend the Member for Wolverhampton South East (Mr McFadden) talked about how women have been most affected by austerity. [Interruption.] Conservative Members may want to laugh at that sort of thing, but we take that very seriously. My hon. Friend the Member for Rotherham (Sarah Champion) made a similar case. The theme was there throughout the debate: austerity has not ended and will not end under a Tory Government.

When I entered Parliament, I believed that a primary role of this House was to hold the Government to account. I looked at the parliamentary website to check out my assumption, and found that it says:

“Parliament works on our behalf to try to make sure that Government decisions are…open and transparent”—

that is a foreign land for this Government—

“by questioning ministers and requesting information”

and

“workable and efficient”—

not a concept routinely associated with this Government—

“by examining new proposals closely and suggesting improvements”.

However, the Government have systematically treated the House in the most contemptible way. All Members should be worried. First, the Government stitched up Committees with a Tory majority, even though they are a clapped-out minority Government who are not fit to govern. Secondly, they have obstructed substantive scrutiny of three Finance Bills in a row by not permitting any amendments to the law, which is unprecedented. Thirdly, behind closed doors they agreed a billion-pound deal with another minority party, without proper parliamentary scrutiny or the signatories to the deal being held to account by this place. Fourthly, without precedent they did not provide my right hon. Friend the Leader of the Opposition with the traditional advance copy of the Budget statement. That is wrong. Fifthly, the Chancellor did not even have the courtesy to attend the House when my right hon. Friend the shadow Chancellor opened the debate on Tuesday afternoon. That is simply disrespectful, not to the individuals but to the protocols of the House.

The power grab by Ministers continues in the Budget resolutions—for example, in resolution 79, which is worryingly designed to give Ministers the ability to amend key tax legislation ahead of Brexit without parliamentary oversight. That is unprecedented and wrong and we will vote against it. We will continue to raise this egregious contempt for Parliament through any means we possibly can.

As for the Budget itself, the Prime Minister offered an end to austerity, but the promise has turned out to be as hollow as a Halloween pumpkin. The Chancellor claimed it would be a Budget for

“the strivers, the grafters and the carers”—[Official Report, 29 October 2018; Vol. 648, c. 653.]

but the spectre of austerity continues to haunt the country, and will do for many years to come.

[Leo Docherty]

Will the hon. Gentleman give way?

[Peter Dowd]

No, I will not.

There is nothing in the Budget for teachers, police officers and local government workers. There is not a penny for most frontline services, while local council funding is being cut by £1.3 billion next year alone. The Government have broken all their economic targets. They keep setting their own work, but they are marked an F grade every single time. Economic growth has been sluggish and is set to stay below 1.6% for the next five years. Productivity remains 15% lower than in other developed economies and the Government are doing nothing about it. Regional economic disparity is vast. Public sector investment is more than £18 billion lower than in 2010—[Interruption.] The hon. Member for Aldershot talked about Marxism and brutal regimes. This is a man who has been to Saudi Arabia many times. That is the sort of brutal regime that he should be worrying about. It is an absolute disgrace.

Public sector investment is more than £18 billion lower than it was in 2010. That is not talking down the economy; that is talking up the truth. If austerity is over, why then is the Chancellor pressing ahead with a further £7 billion of social security cuts? The Health Foundation says that the money for the NHS is not enough. There is, of course, no mention of the £12 billion of outstanding loans and deficits that the NHS has had to use to get by.

On social care, the £650 million announced is less than half what the King’s Fund estimates is needed. Our children’s services are in meltdown. The additional money announced for universal credit is only half what was cut in 2015, and the list goes on and on. There is, of course, no shortage of gimmicks in the Budget. The introduction of a digital services tax is, I am told, already sending the tech companies into a frenzy. My right hon. Friend the Member for Barking (Dame Margaret Hodge) says that it is media management.

In the labour market, one in nine workers across the country is in insecure work. Many are relying on credit cards to survive. As my hon. Friend the Member for Bradford South (Judith Cummins) reminded us earlier this week, since 2008 only one in 40 net jobs created has been full time. There was no mention of that particular fly in the ointment by the Chancellor. Eight years of austerity have ripped through our society and our communities, driving in-work poverty and inequality, and further entrenching the economic crisis caused by greed and avarice. Therefore, in that context, we will not stand in the way of more income for low and middle earners; they deserve some respite from the Government. That is unlike the Liberal Democrats, who evidently will be voting against their own flagship tax policy set out in their manifesto.

The Opposition’s amendment to resolution 1 sets out our progressive taxation policy, which we laid out in our manifesto in 2017, of increasing taxes for the top 5% to help pay for improvements in public services, which we all need and which many people across the country need. This amendment highlights our tax reforms, which would shift the emphasis on to the wealthy few, while guaranteeing no further increases of tax on anyone earning less than £80,000. Labour will challenge the Government every step of the way to introduce a more progressive taxation system despite their rigging of Parliament. This is yet another broken-promise Budget that does nothing to end the slowest recovery since the great depression.

Austerity has damaged our economy, weakened our recovery and divided our society. It has made poor people poorer, made them angry, made them fearful, and made them distrustful of the politicians on the Government Benches who they feel do not stand up for them against powerful lobbies. Austerity has made the richest richer; that cannot be right and that cannot be just. It is not in the national interest. Government Members have made a point of claiming that they are not ideological, that they are pragmatists. Let them prove their pragmatism and their open-mindedness. If they are so confident of their policies, so sure of their convictions, then quite simply let them support our amendment. What do they have to fear?

Finance (No. 3) Bill

Leo Docherty Excerpts

2nd reading: House of Commons & Programme motion: House of Commons
Monday 12th November 2018 Commons Chamber

[Mel Stride]

I will make a little progress.

What does this history teach us? Is it that that Marxism provides the answers, as the Labour leadership would have us believe; that fomenting the overthrow of capitalism, as the shadow Chancellor put it, can lead to prosperity; or that high taxation, nationalisation, the blatant sequestration of private capital and borrowing on a scale hitherto unimagined might provide us with the answers or some easy way out? No, the lesson is rather more prosaic but, none the less, noble: that living within our means matters; that those who work hard for their money should get to keep more of it; that the taxman should be held back from the pay packets of those who create and strive; that those parts of our country that have, for too long, felt neglected and left behind should once again be included and heard; and that economies, our communities and our very liberty thrive if we are freed from the burdens of the excessive state interference advocated by the Labour party.

[Leo Docherty (Aldershot) (Con)]

My right hon. Friend may not have read “Economics for the Many” by the shadow Chancellor, but he will not be surprised to learn that in that book the shadow Chancellor says that the fact that Labour’s figures do not add up is “largely irrelevant.” Does he agree that that shows a shocking disregard for the economic future of our great country?

[Mel Stride]

My hon. Friend is entirely right. Of course, it is easy to make pledges when in opposition. Indeed, in the run-up to the last general election the Leader of the Opposition appeared to pledge the abolition of student fees, only to discover that the measure would cost around £100 billion and is totally unaffordable.

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[Kirsty Blackman]

The sooner that deal can be announced and that commitment can be made by the UK Government, the better for the industry. Confidence is still shoogly just now, and although that confidence is rebuilding, we need clear commitments for the industry and the clear support of the UK Government so that the industry feels more secure and takes decisions on investment and exploration. That is why signing a sector deal as soon as possible would be hugely appreciated.

More generally, one of the things that infuriates and frustrates me about this UK Government particularly is that they think that if they stand up and invent a new definition for something, it will immediately become true. They have decided that if they say “living wage” instead of “minimum wage”, people will actually be able to live on it. That is not how it works. People still cannot live on it, even if the Government call it a living wage, and that is especially the case for the under-25s, who are not eligible for the living wage. It does not cost someone who is 24 less to live than someone who is 25. The Government need to get rid of those differential rates.

The UK Government say that they have ended austerity. By anyone else’s definition, they have not ended austerity. Just because they say, “We’ve ended austerity,” it does not mean that they have actually ended austerity. There are still cuts to Government Departments. There is still the benefits freeze. We still have all those issues.

[Leo Docherty]

Will the hon. Lady give way?

[Kirsty Blackman]

Not just now. In terms of the economic growth forecasts that the OBR has apparently made—

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[Alan Mak]

I thank the hon. Lady for her intervention. I actually said that it was despite the pressures on our public finances, rather than our public services. We have to get the balance right between cutting taxes for our hard-working taxpayers and investing in our public services. She will know that the Government have announced an increase of £20 billion a year for our NHS—a step that I welcome—but we can only invest that money in our NHS and our public services if we are creating the wealth in the first place. It is the measures in the Budget, including those that cut corporation tax, that will allow us to generate that wealth. It is the measures we have implemented since 2010 that allow us to cut corporation tax.

[Leo Docherty]

Does my hon. Friend agree that the slashing by one third of business rates for small businesses, which are the backbone of our economy, is further good news for business and is to be welcomed?

[Alan Mak]

I welcome my hon. Friend’s intervention. He is absolutely right that small businesses in his Aldershot constituency and in my constituency are the backbone of our economy. We want more of those small businesses. That is why we had a record number of start-ups in 2017, which I very much welcome.

The changes to corporation tax in the Budget will increase the take-up of entrepreneurship, increase entrepreneurs’ ability to start a business and ensure that the marginal rate on them is much lower. We will have the lowest rate of corporation tax in the G20, and we will maintain that ultra-competitive edge as we leave the European Union. The OECD’s evidence suggests that the more we cut corporation tax, the higher the rate of revenue we get for our economy. This is a welcome step that will turbo-charge our economy as we leave the European Union.

Finally, Havant is known for its engineering and manufacturing prowess. Manufacturers such as Dunham-Bush, Lewmar and Kenwood export from Havant to countries all around the world. The reforms to the capital allowance rate and the increase in the annual investment allowance will allow them to buy the machinery, plants and technology they need to expand and grow. I welcome the Bill, because this Budget helps taxpayers to keep more of the money they earn, it helps our businesses to grow and it prepares our country to seize the opportunities of the new technologies of the future.

Finance (No. 3) Bill

Leo Docherty Excerpts

Committee: 1st sitting: House of Commons
Monday 19th November 2018 Commons Chamber

[Julian Knight (Solihull) (Con)]

It is an enormous pleasure to speak in this Committee stage of the Finance (No.3) Bill, and it is an even greater pleasure to follow the hon. Member for Aberdeen North (Kirsty Blackman) in today’s debate. There are always many responses to a Budget and a Finance Act, and people often look at them and pull them apart over time. In this case, however, I think most people would say that the Budget and Finance Bill have been tremendously well received among financial commentators and many pressure groups. One of the areas that have been most well received is the bringing forward by a year of the increases to personal allowances. The increase to £12,500 for basic rate taxpayers and £50,000 for the higher—40p—taxpayers will make a direct impact on the lives of 32 million of our fellow residents.

[Leo Docherty (Aldershot) (Con)]

Is my hon. Friend absolutely delighted, as I am, that this means that a basic rate taxpayer is paying some £1,200 less in tax, on an annual basis, than they were in 2010?

[Julian Knight]

My hon. Friend is correct. The very recent change will benefit basic rate taxpayers to the tune of £120 a year—a direct tax cut for millions of hard-working Britons—and that is to be welcomed.

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[Julian Knight]

I am afraid that I really do not see the hon. Lady’s point. What I do see is the fact that we are giving tax cuts to 32 million people across the board, and, instead of being so churlish, the Labour party should welcome that.

[Leo Docherty]

Does my hon. Friend agree that the hon. Lady should check Hansard to see my question of a few moments ago in which I said that, since 2010, a basic rate taxpayer will pay £1,200 less in tax, which clearly shows that this Government are on the side of the hardest working?

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[Peter Dowd (Bootle) (Lab)]

I am glad to have this opportunity to debate the issues surrounding new clauses 1, 2 and 3 in my name and the names of others in the Committee of the whole House, and to discuss them in the context of the Government’s attempts to distract attention from their woes. We have just had a lesson in voodoo economics from the hon. Member for Solihull (Julian Knight).

Members need to pay attention to Labour’s proposals in relation to new clauses 1, 2 and 3, but I must first point out that, in response to the Government’s authoritarian restrictions on amending this Bill, we had asked whether the entire legislation could be debated on the Floor of this House. That would at least have ensured a scintilla of constructive discussion among Members on the whole Bill. Alas, our request was denied by the Government, and we are left yet again asking for reviews and assessments as set out in our new clauses. It is important none the less to get these issues about child poverty out into the open. The Government increasingly seek to implement their austerity agenda—for that is what it is—behind closed doors. They will no doubt see our new clauses as an irritant that would highlight the differences between a slash-and-burn approach to public services by the Government juxtaposed with a policy of investment, renewal and rebuilding from this party based on a fair taxation system, as identified in our new clauses.

The Government have practised their manoeuvres in Committees that they have stitched up to give themselves the majority, which they do not deserve, and they do not have the guts to allow proper amendments to their Bill. No Minister has had the decency to defend that position and it is pretty pathetic. The electorate did not give them that mandate, but they arrogantly take it in any event, so it is important that we debate and tease out the issues that we have set out in new clauses 1, 2 and 3.

[Leo Docherty]

The hon. Gentleman mentions tax cuts. Will he describe whether the Opposition support the tax cuts laid out in the Bill?

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[Peter Dowd]

My hon. Friend is right. I am afraid that the Government are in denial over the question of child poverty; I will come back to that point shortly.

Quite simply, the Prime Minister and those around her have lost the plot; and there have been plenty of plots recently. This Government would not know progress if it stared them in the face, which is why we need new clauses 1, 2 and 3. It is little wonder that the Government have presided over eight years of economic ineptitude that have seen our tax system and society becoming increasingly unequal.

As I said on Second Reading, Labour will not stand in the way of any change that would put additional income into the pockets of low and middle earners. Maybe that answers the question of the hon. Member for Aldershot (Leo Docherty), so he might not have to look at Hansard. Low and middle earners have borne the brunt of the economic failure of this Government and we will not take that cash out of their pockets. However, we believe that the richest in our society and those with the broadest shoulders should pay more tax to help support our public services and finally end austerity. This is not a controversial view, at least among the morally orthodox.

[Leo Docherty]

The hon. Gentleman mentions tax increase. If Labour were to put in its plans for a wholesale renationalisation of major parts of our economy, how much extra tax would the average British taxpayer be paying?

[Peter Dowd]

Dear, dear—none. The hon. Gentleman really has to take his nose out of the Tory voodoo economics book, widen his horizons and look at Labour’s “Funding Britain’s Future”.

One only needs to look at our European neighbours to see that the rate of tax on higher earners in this country is relatively low compared with Germany, France, Sweden and even Ireland. To set the ball rolling, Labour’s new clause 1 would require the Chancellor to lay before the House a distributional analysis of the effect of reducing the tax threshold for the additional rate to £80,000 and introducing a 50% supplementary rate for those earning more than £125,000 a year.

These are Labour’s policies, committed to in Labour’s very, very popular manifesto of 2017. They will put—[Interruption.] I know that Government Members do not like to hear this, but these policies will put the country on a much fairer fiscal footing, ensuring that the wealthy pay their fair share for the restoration of our social fabric, which is crumbling after eight years of gruelling Tory austerity.

The fact is that since the financial crash a decade ago, the very rich have only become richer. The Institute for Fiscal Studies identified that the top 1% have received an increase in share of total income from 5.7% in 1990 to 7.8% in 2016. In response to the hon. Member for Aldershot, it is no wonder they are paying more taxes—they have had the biggest share of total income.

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[Peter Dowd]

The Treasury has not reviewed the relief and does not know whether it is working, but it has chucked £2.7 billion—I repeat, £2.7 billion—at a relief that affects only 52,000 people. There is something not quite right with that. I get that and my hon. Friends get that, but Conservative Members are in denial about it, as they are about child poverty.

[Leo Docherty]

Given that the hon. Gentleman is against relief for entrepreneurs, will he tell the Committee whether he is also against small businesses being relieved of their rates, with business rates being slashed by one third? [Interruption.]

[Peter Dowd]

Out of courtesy I will respond to the hon. Gentleman. What we want is a fair taxation system, which is completely and utterly alien to the Government. It is as simple as that.

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[Richard Graham]

Exactly. The figures are a coincidence, but my hon. Friend is absolutely right to highlight that we are putting the same amount of extra money into the NHS—the largest ever amount invested into our national health service.

[Leo Docherty]

My hon. Friend is painting a very lucid picture of how the Government differ from the Opposition with regard to tax, but does he agree that that also applies to our approach to private property? The discussion that the Labour party is having about the wholesale renationalisation of major parts of our economy is deeply alarming, and it should come clean to the public about how much that would actually cost.

[Richard Graham]

My hon. Friend is absolutely right. The remark made by the shadow Chancellor earlier that the public—all our constituents—would have to pay zero extra to fund the widespread nationalisation of all the utility companies, the train companies and anything else was really quite extraordinary. To be honest, I would be surprised if somebody did not raise that on a point of order in terms of misleading the House and the nation, because clearly those figures are a mile away from what independent analysts have calculated.

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[Sir Vince Cable (Twickenham) (LD)]

I wish to say a few words about amendment 18, which would remove clause 5. I spoke on this at length on Second Reading, so I do not need to say a great deal.

The difficulty with clause 5 is that it combines two very different measures, the first being to lift the low earners threshold. As the hon. Member for Solihull (Julian Knight) reminded us a few minutes ago, this was a policy that I and my colleagues pursued in government, and it is not something I at all disagree with. The second, however, is a much more substantial measure to lift the tax threshold for middle earners. I do not pretend for a moment that people at the higher rate threshold are rich people—at the bottom end, they are paid less than Members of Parliament—but we need to get beyond the headlines and look at the actual numbers.

The lower threshold is to be lifted by £650, and 20% of that is £130, so the people solely on standard rate tax will get £130 in their pocket as a result of this measure. Of course, that is welcome. It is about a 2% increase, which is roughly in line with inflation, and is unquestionably a good thing. For the high earners threshold, however, we are talking about much bigger sums of money—a £3,650 increase in the threshold. Multiplied by 20%, and we are talking about £730, but of course high earners also benefit from the standard rate threshold increase. Add the two together and we have got £860. This measure, which is badged as a measure to help low earners, helps low earners to take home £130 a year and high earners £860 a year. On no conceivable measure could that be described as some enlightened policy for helping the low paid.

Having said that, I should add that there are things that the Government could have done as part of the policy of reducing fiscal drag. I fully understand the need at the margin to stop people being dragged into higher tax rates, and something could have been done to offset that. The Chancellor himself has acknowledged that there are extremely expensive and lavish tax reliefs on pension contributions for upper earners, which cost the country about £25 billion a year. I think that if he had chosen to offset the upper-rate threshold measure by some reduction in pension tax relief for the high paid, such that it neutralised it, many of us would have thought that that was quite a reasonable way of making progress, but he did not, despite the urgent need for revenue.

In an ideal world we would be looking at tax cuts for everyone, but we are not in an ideal world. There are issues of priorities. As several Conservative Members have reminded us—former Chancellors, among others—we are living in a world of severe fiscal restrictions, despite the proclamation of the end of austerity. There are other purposes for which the money could have been better used. We are talking about £2.8 billion in the first year, tapering to about £1.7 billion a year, of which roughly half is for the upper rate threshold. We can all think of many, many ways of spending that money, but for me the priority would have been fully restoring the cuts in universal credit that were made two years ago. The Government have partly done that, but with the additional sum of £1.3 billion, the Chancellor could have returned universal credit to the levels at which it was placed two years ago, in the Osborne Budget. The money could also have been used to end the benefits freeze a year early. The continuation of that freeze means that the poorest 30% in the population are being dragged down as a result of the Budget, but ending the freeze a year early could have offset that. Obviously there are many other purposes for which the money could have been used, but those would have been my priorities.

This measure, politically, was obviously intended to enable the Chancellor to proclaim that the end of austerity is not just about public spending, but about cutting taxes. There is nothing wrong with that general proposition, but the problem is that it is dishonest: that is not what is actually happening. The revenue line in the Red Book shows clearly that as a result of revenue measures, council tax will rise by £6 billion over the next five years—that it will rise by considerably more than income tax is being cut. What, essentially, is happening is that as a result of the reduction, or the freezing, of spending on support for local councils, the councils are making up their revenue through council tax increases to the maximum extent allowed. The Government, according to their own numbers, believe that council tax revenue will rise by £6 billion to about £40 billion. That, as I have said, more than cancels out the income tax cuts, most of which in any case accrue to higher-rate earners. So this is not a tax-cutting Budget at all. It is, indirectly, a tax-raising Budget, and I hope that that will be pointed out to members of the Government when they use such rhetoric in future.

I simply wish to move my amendment, and we will seek to oppose clause 5 stand part.

[Leo Docherty]

It is an honourto follow the right hon. Member for Twickenham (Sir Vince Cable).

I welcome the Bill. As we consider the amendments, we are faced with a stark choice that faces all politicians and members of the public when they consider the basic question of how we manage our economy and how we manage tax and spending. It is the stark choice between responsibility and recklessness. If we cast our eyes back over the last eight years, we see the benefits of the responsible, balanced approach of the Conservatives. Since 2010 the deficit has decreased by 80%, and the economy has grown for eight consecutive years, by a total of 17%. Unemployment is at its lowest rate since 1975—the year before I was born—and the Government are managing to boost public spending while simultaneously cutting tax. I am particularly pleased about the almost doubling of basic-rate tax relief: those on the basic rate are paying £1,205 less every year than they were paying in 2010, which is a tremendous step forward.

[Julian Knight]

The increases in the minimum wage and the living wage have also had a fundamental impact on the earning capacity of people at the lower end of the income scale in our society.

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[Leo Docherty]

Absolutely, and the bottom line is that that allows more people to spend more of their own money doing what they want. That is what this Government deliver.

[Grant Shapps (Welwyn Hatfield) (Con)]

Does not the rise in the tax-free allowance from £6,475 to £12,500 also mean that the tax collector will no longer have to waste time chasing and trying to track down people who are earning the basic salary to secure very small amounts that probably cost more to collect than they constitute in receipts?

[Leo Docherty]

My right hon. Friend has made a very good point. The rise is not just good for the taxpayer, but good for the Government.

This balanced, responsible approach is in stark contrast to the reckless and ideologically driven approach of the Opposition. Members will probably need no reminding that in 2016 the shadow Chancellor declared, “I am a Marxist”. He pursues—well, let us call it a policy of half-based Marxism mixed with 1970s-style union militancy.

[Rachel Maclean]

Does my hon. Friend recall that, along the same lines, the Labour Opposition were preparing for capital flight and a run on the pound, and does he share my alarm at that prospect?

[The Chairman of Ways and Means (Sir Lindsay Hoyle)]

Order. May I share my wisdom with you both? The debate is about the clauses and new clauses before us. Members tried to go down this route once before. The new clauses are quite clear, and the clauses are quite clear. I am sure Mr Docherty wishes to stick to that, and I am sure Members will not tempt him again.

[Leo Docherty]

You are absolutely right, Sir Lindsay. I certainly will not be tempted to stray from the clauses and new clauses that we are considering.

It is, of course, important to consider the approach to ownership of private property that the shadow Chancellor and his party laid out last year in a document that Members can obtain from the Library, entitled “Alternative Models of Ownership”.

[Lyn Brown (West Ham) (Lab)]

Why is this relevant?

[Leo Docherty]

It is relevant because it puts renationalisation at the front and centre of the Labour party’s economic policy. Regrettably, there are no figures in the document. That is because the cost of renationalisation, calculated by the Centre for Policy Studies, would be £176 billion: £6,471 for every single household. That is a deeply alarming fact.

That approach was given further voice when, just last week, the shadow Chancellor made a speech at an event hosted by Red Pepper. He discussed his broad economic approach, and his approach to tax and private property. He promised that the Labour manifesto would be even more radical than the last. This is relevant because, referring to Labour’s approach to the private ownership of land, the shadow Chancellor said:

“One of the big issues we’re now talking about is land, how do we go about looking at collective ownership of land”.

[The Chairman of Ways and Means (Sir Lindsay Hoyle)]

Order. We have strayed completely from where we should be. If the hon. Gentleman wants a debate on the Opposition, he needs to wait until the right moment. Today is not that moment. This is about the new clauses that we are discussing, and what he is talking about is not relevant. I have allowed him a little leeway, but we have now strayed too far. I would like him to concentrate on the new clauses.

[Leo Docherty]

I am grateful to you, Sir Lindsay. I will come back more pertinently and conclude by bringing the debate back to the effect on small businesses. I hugely welcome the cut in business rates in the Finance Bill.

[Julian Knight]

Enterprise relief is the subject of one of the amendments. Does my hon. Friend agree that it is wrong-headed to say that only 52,000 people would benefit from the said changes proposed in the Bill? Does he agree that we should take account of the fact that many employees and others will benefit from entrepreneurs bringing about these businesses, and does he therefore support the changes to enterprise relief?

[Leo Docherty]

I am wholehearted in my support for the changes to entrepreneurs’ relief. I was in my constituency of Aldershot on Friday, visiting one of the many small and medium-sized enterprises that are the backbone of our economy there. Gemini Tec is one of the leading manufacturers of short circuit boards in the country, and that business is successful because of the entrepreneurs who have been driving it forward for the past 40 years. They do not ask any special favours from the Government. Indeed, they want the Government to keep out of their way and let them thrive. However, if the Government can in some way create an ecosystem and an atmosphere, through measures such as entrepreneurs’ relief, that is wholeheartedly to be commended. We have a tradition of tremendous innovation and creativity—not least in Aldershot, north Hampshire, the Blackwater Valley and Farnborough—and this drives a lot of the job creation that we are now seeing in this country. As I have said, this has led to the lowest rates of unemployment since 1975, the year before I was born.

[Ruth George (High Peak) (Lab)]

Does the hon. Gentleman believe that money to support entrepreneurs is being well spent through the Government giving an average of £450,000 in entrepreneurs’ relief each to just 6,000 entrepreneurs? Does he acknowledge that the Government will take £1.5 billion off the 300,000 small businesses that will lose out through the universal credit minimum income floor, which the Government are driving through?

[Leo Docherty]

This is not a debate on universal credit. This is actually about job creation. That is the more important point when it comes to entrepreneurs’ relief.

[Kirsty Blackman]

New clauses 3 and 7 both ask the Government to say exactly what the effect of entrepreneurs’ relief will be. Does the hon. Gentleman agree that it would be best for reliefs to be targeted to ensure that the most jobs are created, the most people benefit and the most businesses can grow as a result of the changes? Does he therefore agree that it would be good for the Government to explain why their proposal is better than any other proposals?

--- Later in debate ---

[Leo Docherty]

Of course the best way to measure the effect of this is in employment growth. I expect these changes to further deepen the positive impact and the positive growth in employment that we have seen recently. Having considered these amendments, I am delighted to welcome the Bill wholeheartedly. Government Members must be confident about supporting our balanced approach, in contrast to the reckless and ideologically driven approach of the Labour party. We must consider this not just in economic or fiscal terms, but in human terms. Free-market capitalism has been one of the greatest forces that the world has ever seen. It has lifted 1.5 billion people out of poverty in the past 30 years. We should be confident about that, and we should be confident in our balanced and responsible approach. I am delighted to welcome the Bill this evening.

[Debbie Abrahams (Oldham East and Saddleworth) (Lab)]

Before I speak to my new clause 18, I want to gently chastise the hon. Member for Gloucester (Richard Graham). He is not in his place at the moment, but I am sure that someone will respond to this for him. He very inappropriately raised quite selective data on inequalities, a subject that I spent nearly 20 years working on before I came to this place. He should know that we are the seventh most unequal country of the 30 developed countries in relation to income inequality. By some measures, we do worse than others, but overall, economic equality is not just about income; it is also about pay and wealth. We need to be mindful of this fact, and selectively reporting data is not a practice that we should be indulging in.

I should like to declare an interest as the chair of the all-party parliamentary group for health in all policies and as a fellow of the Faculty of Public Health, following more than 20 years of national and international work in this field prior to becoming an MP. It is lovely to see you in the Chair, Madam Deputy Speaker. New clause 18 would require the Government to commit to undertaking an assessment of the effects of the personal taxation measures in the Budget—including changes in the personal allowance and the higher rate threshold—on poverty, on the public’s health, including their life expectancy and healthy life expectancy, and in turn on public services.

The reason I have tabled this new clause is that, over the past eight years or so, I have seen the gains made under the previous Labour Government being totally reversed by this Government. Those gains included the reduction in the number of children and older people living in poverty and the improvements in health including an increase in our life expectancy and reductions in health inequalities. As the UN’s special rapporteur on extreme poverty and human rights, Philip Alston, said on Friday, the cuts and reforms introduced in the past few years have brought misery and torn at our social fabric. He went on:

“British compassion for those who are suffering has been replaced by a punitive, mean-spirited and callous approach”.

As I mentioned in my point of order earlier, I am afraid the Under-Secretary of State for Exiting the European Union, the hon. Member for Spelthorne (Kwasi Kwarteng) demonstrated this exact point in his comments on the “The Andrew Marr Show” yesterday. The lack of humanity he showed in his response to the plight of Emily Lydon, who is being forced to sell her home because of issues with transitioning on to universal credit, shamed not only himself and the Government of which he is a Minister, but this whole House.

--- Later in debate ---

[Jack Brereton (Stoke-on-Trent South) (Con)]

It is a pleasure to speak in this part of the debate. I really do think that this is the best Finance Bill that we have seen in some years. I return to the point that I made on Second Reading: Governments do not have their own money, only taxpayers’ money. It is absolutely imperative to remember that and to remember that taxes are paid in the expectation that they will be spent wisely and necessarily. Where the Government can find a way to enable taxpayers to keep more of their own hard-earned money, they should do so.

Helping families in constituencies like mine better to meet the costs of living is absolutely critical. I am therefore a strong supporter of clause 5, raising the personal allowance for us all and the scope of the basic rate to more of the middle earners who have previously been dragged into higher rates of taxes than they should have faced. These are not the top earners, but will often be the likes of middle management, senior nurses, or lower-rank inspectors in the police, and they have previously been penalised by this punitive higher rate of tax.

The increase in the personal allowance is the latest in a line of such increases. This will mean that a typical basic-rate taxpayer will pay £1,205 less tax in the next tax year than they did in 2010-11. Importantly, the increase to £12,500 comes a year earlier than planned. That can happen because the public finances are in a better shape than had been predicted, thanks to the hard work of the British people and the sound fiscal management of my right hon. Friends the Chancellor and the Chief Secretary, and the Ministers on the Front Bench. They know that taxpayers’ money is taxpayers’ money, and they have rightly allowed taxpayers to keep more of it as soon as it has been possible to do so, as we see in these clauses. This is combined with inflation coming back under control and wages rising again in real terms. The lowest paid have not only been taken out of income tax altogether but enjoy an increased national living wage.

[Leo Docherty]

I share my hon. Friend’s thoughts about the increase in the personal allowance. Does he agree that one of the very significant positive things in this Finance Bill is also the—I am sorry; I will let him continue.

[Jack Brereton]

I thank my hon. Friend for his comments.

As I was saying, allowing taxpayers to keep more than it would have been possible to do previously is combined with inflation coming back under control and wages rising again in real terms. The lowest paid have not only been taken out of income tax altogether but enjoy an increased national living wage, thanks to this Government. We are seeing the lowest paid paying less tax but also bringing home more money. The annual earnings of a full-time—

[Jack Brereton]

The national living wage is a critical part of ensuring that some of the lowest paid in our society earn much more and take home more pay. Earnings for a full-time minimum-wage worker will have increased by £2,750 since it was introduced in April 2016.

[Leo Docherty]

rose—

[Jack Brereton]

My hon. Friend can have a better go this time.

[Leo Docherty]

I am very grateful to my hon. Friend for giving way and giving me another chance. He mentioned inflation. Does he share my view that the fact that the annual deficit has been reduced by 80% since 2010 is another very significant piece of progress with regard to inflation?

[Jack Brereton]

I agree with my hon. Friend’s comments, which show the responsible approach we on this side of the House have taken to the economy, compared with the approach the previous Labour Government took.

--- Later in debate ---

[Alex Burghart]

I thank my hon. Friend for his comments. I believe that the answer to his question is none, but I stand to be corrected.

Alongside the Budget, we heard the remarkable news last week that wage growth is at its highest level for a decade. That welcome return to growth benefits people in my constituency and around the country. In addition, we have the best employment figures in my lifetime. Sometimes, we are given the impression that such figures are idle statistics that mean nothing—that the Government are just chirruping on about that silly little thing, employment—but employment is not a marginal thing. Employment is what gives our constituents the opportunity to work, to support their families, to play their part in society and to have independence and choice. It is the greatest gift that the economy can bestow.

I always enjoy Finance Bill debates, because I am a genuine fan of the hon. Member for Bootle (Peter Dowd). I assure Hansard that I am not being sarcastic when I say that I genuinely enjoy his company and his speeches. Over the years we have shared in the House, we have enjoyed some debates on the Beatles, on Plutarch and on sausages. Today, I shall add to that list by picking him up on voodoo economics.

The hon. Gentleman has accused us of voodoo economics when it comes to reducing corporation tax and thus bringing greater revenue into the Exchequer. I encourage him, in the spirit of friendship, to go and talk to some of the businesses that have onshored to the UK to take advantage of our extraordinarily competitive corporation tax rates. That is why people are coming to this country to do business. It is why they are choosing to raise revenue here and pay taxes here. That is good for them, it is good for our economy and it is good for the people who use our public services. I respectfully suggest that if anyone wants an example of voodoo economics, they should look to the attempt to dig up the dead and rotting corpse of socialism, reinvigorate it with magic spells and have it wandering the streets, looking to bring rack and ruin. We find real voodoo economics in the suggestion that it will cost nothing to renationalise a range of utilities and services. As my hon. Friend the Member for Aldershot (Leo Docherty) has pointed out, it will not cost nothing; it will cost at least £176 billion. Contrary to what the shadow Chancellor says, it will not pay for itself. It will be paid for by British taxpayers.

[Leo Docherty]

My hon. Friend is making an eloquent speech. He is right to point out the voodoo economics surrounding the Labour party’s plan for nationalisation. As he has said, we are not simply talking about the fact that it will cost £176 billion across the whole country; if we divide that up per household, my constituents in Aldershot are deeply alarmed at the prospect of having to pay £6,471 for this madness.

[Alex Burghart]

I imagine that they are; they have every right to be very concerned—nay, furious—about it.

Several clauses in the Finance Bill have been misrepresented. They put more money in people’s pockets and make more money available to businesses, not for the sake of some blind ideological exercise, but because Conservatives know that growth matters most to our economy. We would all like to have more money for public services today, but if we get that additional money by raising taxes, there will be less money in the economy and, ultimately, less revenue, so less money for public services. The only way to increase the size of the slice of the pie that goes to public services is by increasing the size of the pie. The only way to do that effectively is by giving people opportunities to spend more of their own money, and by giving businesses opportunities to set up, survive, grow, employ people and share wealth.