Financial Transaction Tax and Economic and Monetary Union

Luciana Berger Excerpts

Tuesday 18th June 2013 Commons Chamber

[Greg Clark]

In fact, we already have a financial transaction tax. It is called stamp duty, and it has existed for a long time.

Let me say something about the opinions of markets outside the European Union. Representatives of other jurisdictions are appalled by the plans, particularly our major trading partners. In the United States, the Investment Company Institute says that the tax would “crash across borders”, and that

“All investors would be hit.”

The US Government also have serious misgivings: the Treasury Secretary, Jack Lew, has said that, despite objections from financial and non-financial trade associations and Government officials in the United States, Canada, Australia, Japan, Korea and other countries regarding the global reach and negative impact of the proposal, their concerns remain unanswered.[Official Report, 20 June 2013, Vol. 564, c. 5MC.]

[Luciana Berger (Liverpool, Wavertree) (Lab/Co-op)]

The Financial Secretary mentioned stamp duty. Stamp duty has an extra-territorial application, which he used as a reason for not introducing a financial transaction tax. Further to the point raised by my hon. Friend the Member for Nottingham East (Chris Leslie), may I ask why, following a G20 meeting in Pittsburgh back in 2009, the then shadow Chancellor supported the principle of a financial transaction tax, and why he is opposing it now while not coming up with an alternative?

[Greg Clark]

I shall say more about stamp duty shortly, but I am sure the hon. Lady, who I am sure is a student of these matters, will be aware that it was agreed at Pittsburgh in 2009 that the International Monetary Fund should conduct a study to establish whether there was an international basis for proceeding. It conducted that study, and found that there was no such basis.

I hope that, given the international concern about the proposed tax, the House understands that we have no choice but to challenge it. Not only are there numerous problems with the design, but the proposal flagrantly disregards the position of those who choose not to participate.

The hon. Member for Nottingham East pointed out that the Chancellor had said that we had no objection to the principle of a financial transaction tax. Of course that is the case. How could we possibly have an objection to a financial transaction tax, given that we in the United Kingdom have had one since 1694? It is called stamp duty, and it is very different from the proposed design of this tax. It contains, for instance, an exemption for intermediaries to avoid the “cascade effect”, whereby at every stage of a transaction a tax racks up throughout the chain. That has a very negative impact on the costs faced by savers and companies. We have no objection to levelling the playing field with countries, including France, that have recently adopted stamp duty-type taxes of one sort or another, but other countries, particularly the United States, are far from being close to a consensus. If the hon. Gentleman has taken an interest in the matter, he will know that President Obama and his Administration have described this development as very troubling.

Of course Britain will play a leading role in promoting global standards when it comes to taxes, but I think the whole House would acknowledge that, in international negotiations, we should focus on what will give us a realistic chance of making a big difference to people, rather than choose to divert effort and negotiating capital into what, given the views of others, would be simply a gesture.

Economic Growth

Luciana Berger Excerpts

Wednesday 15th May 2013 Commons Chamber

[Mike Thornton (Eastleigh) (LD)]

May I say that just a few months ago I could only have dreamt that I would be able to follow such a distinguished and respected Member of the House as the hon. Member for Coventry North West (Mr Robinson)?

Hon. Members will be glad to know that I will be brief—I will also talk about something other than our coalition partner’s internal difficulties over Europe. My e-mail inbox—like, I imagine, everyone else’s—is filled with demands that we spend more on the health service, education, defence and so on. However, to be able to do so in the current budgetary situation requires the economy to grow faster than spending. Otherwise, the resultant increase in debt would act like a massive anchor on a ship, bringing the SS Great Britain to a shuddering halt and leaving it vulnerable to the international winds and tides of financial misfortune.

I want to consider five fundamental issues which I think the coalition is addressing. They are: jobs, jobs, jobs, jobs and jobs. Let me deal first with jobs in our small and medium-sized businesses. We are putting in place £2,000 for each business to help them to take on new staff. They include businesses as diverse as SPI Lasers, Oswald Bailey and La Fenice in my constituency. We are looking at helping young people to get jobs. Already, 1.2 million apprenticeships have started. In Eastleigh, that has meant a 65% increase in apprenticeships since we came to power.

[Luciana Berger (Liverpool, Wavertree) (Lab/Co-op)]

The hon. Gentleman will be aware that the unemployment figures came out today and that long-term youth unemployment is now more than double what it was when his Deputy Prime Minister introduced the Youth Contract. Does he think the Youth Contract is therefore working?

[Mike Thornton]

The Youth Contract still has a few months to go, but I think we can see that it has already been effective, and the March figures demonstrate a return to increasing employment and a reduction in unemployment. What is more, part of our work on apprenticeships is about preventing abuse of apprenticeships. We are setting out a definition of what an apprenticeship is, which will be a significant help in enabling businesses to take on more apprentices.

We have also seen an increase in jobs in manufacturing, with our continuing commitment to green energy and £5 billion of extra investment in science and high-tech. The electricity market reform alone could support as many as 250,000 jobs in that sector. Then there are jobs in the regions. I am lucky to have a very low rate of unemployment in my constituency, but a £2.6 billion investment in our regions is spurring economic growth in all our constituencies, not just mine. Finally, there are jobs through design. By making it easier for businesses to protect their designs, intellectual property rights will spur further investment in this British success story.

What do all those schemes mean? They mean more jobs, and more jobs mean a better life for millions of people, which I am sure all of us in this House would like to see. They also mean more revenue for the Government—more funds for the NHS, the disabled and our schools. What is more, the Lib Dem initiative to increase the tax allowance to £10,000—and, hopefully, onwards and upwards—means more take-home pay for every single one of those new employees. If that is what Liberal Democrats can achieve when they are in government as part of a coalition, just imagine what we could achieve with a Lib Dem majority in this place. [Laughter.] If Members want to hear, I will tell them what: a stronger economy and a fairer society, so that everyone can get on.

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[Luciana Berger (Liverpool, Wavertree) (Lab/Co-op)]

I am grateful for the opportunity to contribute to the last day of debate on the Gracious Speech.

I want to talk about this chaotic Government’s shambolic attempts to revive our flatlining economy. The Government are running on empty. When it comes to the questions the British people most want answered, they have nothing to say. On our flatlining economy, where is the plan for growth? On building more homes, 130,000 construction workers are out of work, but new home completions are at the lowest level since the 1920s.

What assistance is there for small businesses when 1,600 firms in my constituency are crying out for help? I agree with many of the tax evasion and avoidance concerns raised earlier by the hon. Member for Redcar (Ian Swales). When an estimated £120 billion is lost to our economy every year, how can the Government believe that it is a bright idea to slash 10,000 staff from Her Majesty’s Revenue and Customs?

On the increase in child poverty, the explosion in food banks and, worst of all, unemployment, I have felt as if I am in a parallel universe sitting in the Chamber today. I remind Government Members that more than 2.5 million people are without a job, and that 900,000 have been without a job for more than a year—the highest long-term unemployment since 1996. That is nothing short of a crisis, but for this Prime Minister, this Chancellor and this Government, it appears that unemployment is a price worth paying. They have not met the 4,100 people in my constituency who cannot find work—more than a quarter of them are young people. It is an abomination that one out of every five 16 to 24-year-olds are not in employment, education or training.

Labour would rightly offer a guaranteed job for all young people who are out of work for more than a year, paid for by a bankers’ bonus tax. Labour Members understand that spending cuts that push young people into poverty are not savings—they are a cast-iron guarantee of increased welfare spending and higher borrowing, and of an entire generation being thrown on the scrap heap.

[Nigel Adams (Selby and Ainsty) (Con)]

Will the hon. Lady give way?

[Luciana Berger]

I would love to take the hon. Gentleman’s intervention, but I am conscious that there are still hon. Members who wish to speak.

The Government should be doing everything they can to get people into work—that is what should be keeping the Government up at night. I have been looking closely at those on the Front Bench and I do not see dark circles under Ministers’ eyes. I do not want to see just any kind of work. We need sustainable, high-quality jobs where employees are respected.

The Queen’s Speech states that the Government are

“committed to building an economy where people who work hard are properly rewarded.”

That is an aim I applaud, but it is not the reality for too many of my constituents. We have seen a massive increase in precarious employment: zero-hours contracts, temporary contracts and agency workers. One million people working part time want to work full time, and there is downright exploitation. There can be no clearer example of that than the experience of my constituent Sophie Growcoot. She is 20 years old, and she and her colleagues have been ruthlessly exploited by one of the most well known companies operating in the UK.

Sophie thought that she had landed her dream job when she was hired to join a Ryanair cabin crew after an intense recruitment process. It was not until she started that she learned she would not be paid for all the hours she put in, only the time when a plane she was working on was in the air. That meant not a penny for every pre-flight briefing she attended, nothing for sales meetings, nothing for turnaround time when a plane was on the ground between flights, and nothing for the hours waiting on the tarmac during delays and flight cancellations. She was only paid for four days each week, and on the fifth day she had to be available on unpaid standby, ready to come in at a moment’s notice but not receiving any payment if not called in. Sophie was told that she had to take three months of compulsory unpaid leave each year, and was forbidden from taking another job during that time. If she wanted to leave within nine months of joining the company, she had to pay Ryanair a €200 administration fee. To add insult to injury, she had to pay a staggering £1,800 to her employer for compulsory training.

Last year, Ryanair recorded profits of just under half a billion pounds. How can its chief executive, Michael O’Leary, think it is fair or acceptable for his company to be profiting on the back of poorly treated staff like Sophie? As her situation grew worse, Sophie knew that there were no other jobs out there for her.

Oral Answers to Questions

Luciana Berger Excerpts

Tuesday 14th May 2013 Commons Chamber

[Mr Gauke]

We are taking measures to address this: the hon. Gentleman will be aware of the action that we took in the last Budget to close the loophole relating to offshore companies. We of course want a tax system that ensures that the tax is consistent with the economic reality, and that is what we intend to have.

[Luciana Berger (Liverpool, Wavertree) (Lab/Co-op)]

Do the Government believe that cutting £2 billion from HMRC’s budget will help or hinder its ability properly to address tax evasion and tax avoidance in this country?

[Mr Gauke]

This is the Government who have found £1 billion to support HMRC in dealing with tax evasion and tax avoidance. This is the Government who have provided resources in that area. Yes, we can find efficiency savings in HMRC—just as the previous Government did, to be fair—but we are putting more into those parts of HMRC that get the money in. We are making dramatic progress, with HMRC’s yield hitting record levels.

Economic Policy

Luciana Berger Excerpts

Monday 25th February 2013 Commons Chamber

[Mr Osborne]

My hon. Friend is right. The UK had the highest structural deficit of the G7 going into the financial crisis. That was confirmed by the IMF just before Christmas. He is also right about our trade patterns. When this Government came to office we were exporting more to Ireland than to the BRIC countries—Brazil, Russia, India and China—combined. We are seeking to expand our trade with those countries and it has been going up markedly. I think there has been an almost 100% increase in our trade with China and, of course, the Prime Minister led a high-powered business delegation to India only last week.

[Luciana Berger (Liverpool, Wavertree) (Lab/Co-op)]

Will the Chancellor remind the House and the country how many billions of pounds his Government have borrowed since he came to office?

[Mr Osborne]

We borrow money because we are running a deficit and we are trying to get it down from the 11.5% that we inherited. The deficit has actually come down by a quarter over the past couple of years.

Food Banks (Wales)

Luciana Berger Excerpts

Tuesday 12th February 2013 Westminster Hall

[Kevin Brennan]

Obviously other people assess the need, and not the food bank itself—the vouchers are brought along to the food bank. I cannot comment on the hon. Gentleman’s local food bank, of which I am sure he has a better knowledge than I do; I can comment on my local food bank, however. I have heard stories from other hon. Members, and I have seen evidence from across the country. He is burying his head in the sand if he does not think that the vast expansion of food banks is happening because of the impact of austerity economics, welfare benefit changes and the cost of living.

We called this debate to set the record straight on the growing use of food banks in Wales and to highlight the cost of living crisis facing hundreds of thousands of Welsh families.

[Luciana Berger (Liverpool, Wavertree) (Lab/Co-op)]

I am here to listen to the debate because I have constituents who work in Wales, and there are people from Wales who come to work in my constituency. As my right hon. Friend the Member for Neath (Mr Hain) highlighted, the issue is as much about people in work as about people out of work. Does my hon. Friend the Member for Cardiff West (Kevin Brennan) share my concern about the explosion of the issue? We have heard about the growth in the number of food banks in Wales, but nationally, a couple of hundred food banks have opened across the UK. By the end of April, 250,000 people in our country will have accessed emergency food aid. Does he not think that is a terrible indictment in 2013 in the seventh most industrialised nation in the world?

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[Kevin Brennan]

My hon. Friend is absolutely right that, in many cases, the reason why people are unable to feed their family that weekend is that there is no benefit. They have fallen upon a crisis in their life and there is no immediate assistance available. They have been told they will have to wait for some considerable time, and they are unable to access a crisis loan of any kind, which is why they come to us. We are handing out vouchers so they can get some food for the weekend. That is the reality. It is not a lifestyle choice, though the tone of the comments from No. 10 Downing street suggests it is. They do not want a free box of tinned or dried food to top up their adequately stocked pantries; they are using food banks because of the cost of living crisis that is facing families across the UK.

[Luciana Berger]

My hon. Friend is generous in giving way, and I will not seek to intervene on him any further. We know from questions asked just before Christmas that neither the Prime Minister, the Deputy Prime Minister, the Chancellor nor Ministers from the Department for Work and Pensions or the Department for Environment, Food and Rural Affairs have visited a food bank. Does my hon. Friend agree that had any of those Ministers, including the Prime Minister, been to a food bank, we would not have heard those comments from No. 10?

[Kevin Brennan]

Yes, I suspect my hon. Friend is right. I am sure the Minister has visited a food bank and will say what impression it made on him. What were his feelings on visiting the food bank?

Government policies such as the Welfare Benefits Up-rating Bill, the VAT hike and the bedroom tax are making the crisis worse. I hope the Minister will distance himself from the comments we have heard from Downing street and acknowledge that Government policies are making things worse, not better, for hundreds of thousands of families across Wales.

Oral Answers to Questions

Luciana Berger Excerpts

Tuesday 11th December 2012 Commons Chamber

[Mr Osborne]

My hon. Friend has that reassurance. We have discovered an extraordinary thing today, namely that Labour will vote against yet another measure to deal with the deficit. Labour would have a higher benefits bill as a result of that decision and it will have to explain that to the hard-working people of this country.

[Luciana Berger (Liverpool, Wavertree) (Lab/Co-op)]

I listened carefully to the Chancellor’s answer to the question asked by my hon. Friend the Member for Linlithgow and East Falkirk (Michael Connarty) about food poverty, but he did not actually answer it. Is he ashamed that, under his watch, by the end of this year a quarter of a million people across the country will have accessed emergency food aid?

[Mr Osborne]

We are dealing with the economic mess that the previous Government left behind, when unemployment rose, the economy shrank by 6% and people were put into poverty. That is the cause of these problems and Government Members are dealing with them and clearing up the mess that that man—the right hon. Member for Morley and Outwood (Ed Balls)—left behind.

Autumn Statement

Luciana Berger Excerpts

Wednesday 5th December 2012 Commons Chamber

[Mr Osborne]

We do not intend to disrupt existing PFI schemes—although, sadly, there are not many left, because so many dried up at the very end of the last Labour Government’s time in office owing to financing problems—and the new PFI 2 will help to restart private and public investment. The big difference is that from now on, instead of the public sector bearing the risk and getting none of the reward—as has happened, for example, in the case of a hospital project not in my hon. Friend’s part of London but in south-east London—it will share in the upside as well.

[Luciana Berger (Liverpool, Wavertree) (Lab/Co-op)]

Can the Chancellor confirm that the capital spending that he has announced for free schools amounts to less than a third of the cuts in the capital budgets for schools and colleges?

[Mr Osborne]

Capital spending is higher than the level in the plans that we inherited from the last Labour Government. That is simply the case. We inherited big planned cuts in capital spending, and we have increased capital spending, off those plans. We have that new money for schools, and I would hope that the hon. Lady would welcome that.

Jobs and Growth

Luciana Berger Excerpts

Thursday 17th May 2012 Commons Chamber

[Luciana Berger (Liverpool, Wavertree) (Lab/Co-op)]

Will the hon. Gentleman give way?

[David T. C. Davies]

No, I have no more time to give way.

I want to know why Labour Members still maintain that the banks are to blame, when, in all, just £120 billion was given to the banks out of a total debt of £1 trillion, almost 10 times more. They are following the policy of fools, knaves and despots throughout history started by Edward I, who blamed everything on bankers. The reality is that, every year, we are borrowing more from banks than we have given them. We get 10% of our revenue—£50 billion a year—from the banking industry. If Labour Members are allowed to destroy it, they will have to find cuts 10 times greater than the ones that we, unfortunately, have already had to make.

This Government are taking proper and concrete steps and I think that most Members present support almost all those measures. I totally agree with the decision to reform welfare spending, so that people have to go out to work, and at the same time to cap immigration, which has held down wages for the lowest paid, as even Opposition Members have been the first to accept. As one who has experience of trying to run a small business, I am delighted that the Government will do something to reduce the red tape of employment legislation, which makes many businesses reluctant to take people on. It is, of course, a pleasure to read about cuts in corporation tax and, yes, even the cut in tax for top rate taxpayers. We know that that is politically difficult to defend, but there is a strong economic argument for the measure, which is why Labour Members were not prepared to vote against it and will not now say what they would do.

In Wales the public sector is very large, and the Army forms a large part of that sector. I am worried to learn of proposals to amalgamate the Queen’s Dragoon Guards with another regiment. Many Welsh people are employed in the Queen’s Dragoon Guards, which is an excellent regiment. Since the battle of Agincourt, Wales has supplied men and women who have fought loyally for Britain, as I would have been happy to do in the Territorial Army—I saw no active service. I hope that the Chancellor will bear that in mind when the decisions are made.

I hope that the Chancellor will forgive me for expressing the hope that he will also look carefully at the carbon tax. I am one of a growing number of people who worry about the fact that there has been no increase in temperature for the past 12 years. It took me a while to get the figures from the relevant Government Department, but Members should have a look at the Met Office website. I worry about imposing on the manufacturing industry a tax that is not being imposed elsewhere in the world. I am not absolutely certain whether global warming is taking place or not, but I am certain that if we start imposing measures that are not imposed elsewhere, all that will happen is that manufacturers will go elsewhere and there will be no overall decrease in carbon dioxide emissions.

I am coming to the end of my little piece. I want to assure the Chancellor that we are his most loyal supporters, even if we occasionally quibble on certain issues. We are determined to face down the forces of financial chaos on the Opposition Benches. We know that every Labour Government have ended in utter financial catastrophe, whether because of Attlee using war loans to build the NHS on the back of American credit, Harold Wilson devaluing the pound and telling us it would stay the same, Jim Callaghan having to go cap in hand to the International Monetary Fund, as the Greeks are now doing, or the previous Prime Minister, himself a former Chancellor, who told us that he had ended boom and bust and then created one of the biggest booms in history, on the back of lax lending regulations and lax immigration controls, and then the biggest bust in history, which we now have to sort out.

We know, as do most people in this country, that, whether one is a nation, a company or an individual, it is impossible to go on spending more money than one earns. That is why Government Members will be loyally supporting the Government on the Queen’s Speech and making sure that we can build a better Britain, built on real growth, not debts that our children will have to pay off at some point in the future.

Oral Answers to Questions

Luciana Berger Excerpts

Tuesday 6th March 2012 Commons Chamber

[Jessica Morden (Newport East) (Lab)]

1. What assessment he has made of the effect on families of the changes in eligibility rules for working tax credit to be introduced in April 2012.

[Luciana Berger (Liverpool, Wavertree) (Lab/Co-op)]

4. What assessment he has made of the effect on the economy of changes to the working tax credit to be introduced in April 2012.

[Jonathan Reynolds (Stalybridge and Hyde) (Lab/Co-op)]

6. What assessment he has made of the effect on the economy of changes to the working tax credit to be introduced in April 2012.

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[Miss Smith]

I shall be precise. I can tell the hon. Lady that the number of vacancies was up by 11,000 in the last three months to January 2012, and 1.07 million people moved into employment in the last quarter.

[Luciana Berger]

I was interested to hear that response from the Minister because a representative of the Union of Shop, Distributive and Allied Workers in my constituency told me that in one supermarket alone close to 30 employees had requested extra hours. Those extra hours just do not exist. Will she confirm that from April a couple with children on the minimum wage who cannot increase their hours to 24 per week will be £728 better off out of work?

[Miss Smith]

I cannot comment on that particular set of circumstances, as the hon. Lady will appreciate, but the fact is that about 80% of households with children will see their tax credit awards rise. It was the previous Government who allowed nine out of 10 households with children to be eligible for tax credits. That was unsustainable and uncontrolled spending.

Northern Rock

Luciana Berger Excerpts

Monday 21st November 2011 Commons Chamber

[Mr Hoban]

My hon. Friend is absolutely right. What is impressive about Virgin Money has been the way it has sought to engage with stakeholders in the north-east and to understand the importance of Northern Rock not just to the employees but to the wider community in the north-east. It has put forward a business plan that seeks to focus its operations in Gosforth in a way that will help to protect and grow the operation there. That is why the news of Northern Rock’s sale to Virgin Money has been greeted positively by most people, but, sadly, not by those on the Opposition Benches.

[Luciana Berger (Liverpool, Wavertree) (Lab/Co-op)]

Earlier this year, UKFI ruled out remutualising Northern Rock on the grounds that that would represent the gifting of shares to members of a new mutual. Aside from the fact that mutuals are not premised on gifting, can the Minister explain how using £250 million of existing equity within Northern Rock to finance this deal is anything other than gifting?

[Mr Hoban]

The deal we have agreed with Virgin Money involves the receipt of £747 million in cash now and further receipts in the future. I think that offers much better value for money than the remutualisation route, which would have involved the free transfer of shares to members and would have had no certainty of return to the taxpayer. It is in the long-term interests of the Northern Rock business for this deal to go ahead as it is.