Eurozone
Nia Griffith Excerpts(14 years, 5 months ago)
Commons ChamberRead Full debate Read Hansard Text Read Debate Ministerial Extracts
Mr Osborne
I think it is a reflection of the fact that people around the world believe that we have “a credible plan”—those were the words used by the Governor of the Bank of England last week—to repay our debts. Let us remember that we have the largest budget deficit of any forecast for the G20. That is the situation we inherited and we are trying to bring that deficit down. Other countries with much lower deficits have got into trouble because they have not had credible plans, presented by a united Government and implemented with a good majority in their Parliament. We have those things and we are going to keep them.
Nia Griffith (Llanelli) (Lab)
Many small businesses and manufacturers across the country are still very worried. They have seen growth stall under the Chancellor’s policies and now they see the crisis in the eurozone. Can he explain, simply and clearly, how his policies are going to help stimulate growth and help these companies have the growth that they need, particularly given that many of them are going to lose a lot of business when public procurement contracts come to an end?
Mr Osborne
The hon. Lady says that public procurement projects are going to come to an end. The British Government are going to be spending £3 trillion over the next four years, so let us make sure that that money is well spent and that good British businesses, small and large, are able to avail themselves of the procurement that will take place under a £3 trillion Government budget. But of course I do not underestimate the difficulty of the situation the world faces at the moment and the situation that Britain faces because of its exposure to the world and to the problems that it itself created in recent years. I understand that, but the whole world is experiencing slow growth at the moment. We have actually grown more this calendar year than the United States and we are currently forecast to grow more next year than France and Germany. That is just a reflection of the fact that our problems are being experienced by other countries but our solutions have kept us out of the financial danger zone, which the shadow Chancellor asked me about earlier. They have meant that our credit default swap rates, our interest rates and market interest rates, our credit rating and so on have been protected at a time when many other European countries have experienced real market volatility.
Global Economy
Nia Griffith Excerpts(14 years, 7 months ago)
Commons ChamberRead Full debate Read Hansard Text Read Debate Ministerial Extracts
Mr Osborne
First, while not all the recent economic data have been encouraging, the services index for the United Kingdom in the last couple of weeks was the strongest in Europe, which gives us some cause for optimism in that sector. I agree that we want to maintain our competitiveness, and that we want to export more to Europe. I think Europe’s agenda should be much more about completing the single market and implementing measures such as the services directive, which has merely sat on the “Too Difficult to Handle” shelf for far too long. That is the agenda that we need to get the European Union focused on.
Nia Griffith (Llanelli) (Lab)
Last week I visited the Dividers Modernfold factory in my constituency. In common with many other construction products companies throughout the country, it is very worried about the prospects for immediate economic growth, particularly in the light of public procurement cuts. What precisely is the Chancellor going to do in the very near future to stimulate demand and growth, so we can create and safeguard jobs in the private sector? We do not want to be fobbed off with the sorts of answers he has just given to my right hon. Friend the Member for Oldham West and Royton (Mr Meacher) and the Chancellor’s party colleague, the hon. Member for Northampton South (Mr Binley).
Mr Osborne
In the spending review, we set higher capital budgets than those set out by my predecessor, the Chancellor of the Exchequer in the last Labour Government. Therefore, capital spending budgets are higher than they would have been under the plan the hon. Lady stood on in the last election.
On getting the construction sector moving, that is precisely why we are tackling issues, such as the planning delays, that have been so difficult, and why we made a number of tax changes in the Budget to help the construction sector. The construction index was also positive in the last couple of weeks. I just say to the hon. Lady that when we are running the highest budget deficit in the G20, it is not possible to abandon our fiscal consolidation plans and to seek someone out there in the world to borrow more money from. That would lead to markedly higher interest rates—we need only look at the interest rates in Spain and Italy at present—and we know that higher interest rates do particular damage to the construction sector.
Finance (No. 3) Bill
Nia Griffith Excerpts(14 years, 8 months ago)
Commons ChamberRead Full debate Read Hansard Text Read Debate Ministerial Extracts
Tom Blenkinsop
I thank my hon. Friend for his intervention. Yes, I certainly do. To finish, let me say that a review will allow the Government to take stock of the policy and to make quick changes to it, as I fear they might have to before it is too late.
Nia Griffith (Llanelli) (Lab)
There have been many excellent contributions, so I shall keep my comments short.
As secretary of the all-party steel group, I want to speak to amendment 12, in particular to subsection 4(c) and (f). We are asking for the Finance Bill to be amended because of the very significant negative impact that the carbon floor price, at the level set, is likely to have on heavy industry, such as the Trostre steelworks in my constituency and similar steelworks and energy-intensive industries throughout the UK.
Finance Bill
Nia Griffith Excerpts(14 years, 9 months ago)
Commons ChamberRead Full debate Read Hansard Text Read Debate Ministerial Extracts
Ian Swales
I understand that charities have an issue with VAT, and I understand that Save the Children is right in its analysis. I am talking about the effect on personal spending.
The concept of a progressive spending tax is well understood across Europe. New clause 6 would take VAT in the UK back to a level where, among EU countries, only Cyprus and Luxembourg would have a lower rate. We have not heard from the Opposition parties how they plan to finance the cut in VAT.
Nia Griffith (Llanelli) (Lab)
Can the hon. Gentleman think of any other way in which people who can afford a Ferrari could contribute to the tax system?
Ian Swales
Well, £4,000 extra VAT is obviously one way that they are contributing as a result of this Government’s policies.
The hon. Member for Nottingham East (Chris Leslie) said in the previous debate that the important focus of the tax and benefit system is on need and alleviation of poverty. I believe that VAT increases, which impact on the wealthy more than on the poor, are a good way of doing that.
Nia Griffith
I am delighted to be given this opportunity to speak, perhaps a little sooner than anticipated. I shall speak to new clause 10 and I specifically remind Members that it is about having an assessment of the impact of the VAT rate on UK economic growth. That is the area on which I shall focus; it is what we need to talk about if we want to get this country back on its feet.
We are not asking for a knee-jerk reaction. We recognise that there is a complex relationship between the various different fiscal measures that can be taken—between VAT and all the other types of fiscal measures. We also recognise the importance of a changing environment, as events elsewhere might affect our ability to export, for example, and economic events in different countries will impact on our economy in all sorts of ways.
Let us look at what has happened recently. We have massive inflation and businesses are having real difficulty. They are being badly squeezed. They are experiencing rising costs, rising costs and more rising costs, and they are having to make difficult judgments about how many of those costs they can pass on to consumers before they begin losing sales. Their difficulties have been compounded by the fact that they have had to contend with a higher VAT rate since January. They are making calculations daily. The costs of their raw materials are changing constantly. They must keep asking themselves, “What must we do in order to keep afloat?”, but the problem is, of course, that many of them are going under.
Gordon Birtwistle
Does the hon. Lady agree that businesses—[Interruption.] I was asking the hon. Lady, not the animal in front of her. Does the hon. Lady agree that businesses can reclaim the VAT that they are charged?
Nia Griffith
I fully understand that businesses reclaim the VAT, but the consumer purchases the end product for a composite price that reflects everything that has been done to produce the thing in the first place, as well as the transport costs—that was explained by my hon. Friend the Member for Chesterfield (Toby Perkins)—and, of course, the VAT. The customer pays the VAT in the end, but the business has already been affected by the rise in costs that it is incurring, which do not include VAT. The price of raw materials, particularly fuel, has risen, and every business is being squeezed to the limit. Every penny counts, and businesses are asking themselves, “At what point can I put the price up? At what point does the purchaser not buy?”
Many of my hon. Friends have mentioned the impact on hard-pressed families, and they have indeed been hit very hard. The hon. Member for Redcar (Ian Swales) recited a long list of goods that do not attract VAT. Was he suggesting that every middle-income and lower-income family should exist solely on food and children’s clothing? Has he not thought of the numerous household items—
Stephen Williams
The hon. Lady’s Front-Bench colleague, the right hon. Member for Delyn (Mr Hanson), said that there would be a £450 increase per “hard-pressed family”, if I may use her phrase. That means that families would have to spend £18,000 a year on VATable items—not VAT-exempt or zero-rateable items. Can the hon. Lady give us an example of the sort of items on which those hard-pressed families would spend £18,000 a year?
Nia Griffith
When we arrived at the £450 figure, we were taking account of the total impact of all the tax changes introduced in the emergency Budget last June. However, if Members look around their bathrooms and kitchens, they will see numerous items that do not last for ever and need to be repaired. For example, adults will need to replace some items of clothing.
Catherine McKinnell
Does my hon. Friend share my confusion about the fact that during the election the Liberal Democrats campaigned against the Tory VAT bombshell, yet tonight they seem to be the only Members present who are defending the Tories’ increase in VAT?
Nia Griffith
I find that extraordinary, and I also find it extraordinary that the Tories seem to have so little comprehension of the impact of the increase. As I have said, many household items need to be replaced.
Andrew Gwynne
Is not the real purpose of new clause 10 to enable us to assess whether the impact of the VAT increase is indeed returning growth to the economy, and does not the evidence so far suggest that the economy is going into reverse as a result of the Government’s measures?
Mr Hanson
My hon. Friend, like myself, is a Welsh Member of Parliament. May I draw her attention to a press release last year entitled “Welsh Lib Dem MPs want VAT rise impact to be assessed”. The hon. Member for Brecon and Radnorshire (Roger Williams) said:
“we are worried about the proposed increase in VAT. … We need to carry out this work so that we can lessen the impact of any increase in VAT.”
The hon. Gentleman said that they were
“particularly concerned about the impact on the voluntary sector”
and on hard-pressed rural areas.
Nia Griffith
That is an extraordinary statement, especially as I can remember the most surreal experience of being in a studio in Cardiff and the hon. Member for Brecon and Radnorshire (Roger Williams) popping up on a screen from some distant place to defend the increase in VAT. So what is the position of the Liberal Democrats? I really do not know. One minute they say one thing about an assessment, the next minute they pop up on a screen defending to the hilt every statement in the Budget last June. I do not know what the position of Welsh Liberal Democrat Members is.
Albert Owen (Ynys Môn) (Lab)
My hon. Friend is making a strong point about small businesses being unable to absorb the VAT increase. She asked about the position of the Liberal Democrats. They are on the wrong side of the argument and they are here tonight to defend the Tory rise in VAT. It is an absolute disgrace, and Welsh businesses and businesses throughout the UK will punish them at the next election.
Nia Griffith
My hon. Friend is right.
Let us move on from the small items such as mobile phone bills and the VAT on them—it might be someone’s only phone if they do not have a landline. Let us move to the other end of the scale and what are called the big ticket purchases such as replacing a car or refurbishing a kitchen. They are things that people do not have to do now, but they may choose to do; perhaps they intend to do them in the next few years. The Labour Government introduced the car scrappage scheme, which spurred on people who were thinking of replacing their car in the next couple of years to bring that purchase forward. It meant that money that was available, which some people had put by in savings, was fed into the economy and made a difference.
Mrs Madeleine Moon (Bridgend) (Lab)
Does my hon. Friend remember that the car scrappage scheme was particularly effective in Wales, where the Ford factory found that the majority of cars bought under the scheme were Fords. So jobs were kept in Wales? The Welsh Liberal Democrats want to take those jobs away from Welsh workers.
Nia Griffith
The whole point of an active Government who take an interest in re-igniting the economy was absolutely that—to create jobs and ensure wealth creation so that we would be in a better position to pay back quickly—
Ian Swales
Can the hon. Lady confirm that she is now proposing a cut in VAT and car scrappage schemes and other measures to stimulate the economy? Or is she offering a choice?
Nia Griffith
I am asking about the Government’s growth strategies. I am trying to explain by giving some examples of how Governments can stimulate the economy and make a difference. They can choose to kick-start the economy or to allow it to go spiralling down and unemployment to increase. These are active choices that a Government can make. We are asking in our new clause for a proper assessment of the effect of the increase in VAT on what is happening now in the economy.
Andrew Gwynne
My hon. Friend has been generous in giving way. She talks about the Government’s growth strategy. It appears to me that they have neither a coherent strategy nor, apparently, growth.
Nia Griffith
That is precisely the problem. In spring 2010 we were beginning to come out of the recession, the economy was growing, inflation was low, and unemployment was coming down. Under Labour’s plan, the economy was set to grow strongly. In fact, as more people were getting back into work, borrowing ended up £21 billion lower last year than had been forecast.
Bill Esterson
I am sure that my hon. Friend is aware that the Treasury is set to borrow £46 billion more than it planned last autumn as a result of slower growth. I am sure that she agrees that without growth the deficit will continue to rise. Surely that is why we are right in the new clause to call for an investigation of the impact of the measures on growth. Clearly, the Liberal Democrats do not understand the impact of the rise in VAT.
Nia Griffith
That is precisely the point. There is a huge contrast between an economy that was growing and doing better than the forecasts had predicted, and a situation where there has been no growth since last October. As my hon. Friend pointed out, the Office for Budget Responsibility now predicts that the Government will have to borrow £46 billion more over the coming years than was forecast last autumn after the spending review. Worse, they are failing to get Britain back to work, which is probably pushing up the benefits bill this Parliament by more than £12 billion. That not only makes the deficit worse, but makes the lives of the people involved infinitely more miserable.
Clive Efford
My hon. Friend cannot have failed to notice that only one Back-Bench Conservative Member is present—
Clive Efford
Yes, he is a PPS. By contrast, nearly a dozen Liberal Democrat Members have been present. That is nearly as many Liberal MPs as positions their party has taken on VAT. I have here positions set out by not only the hon. Member for Brecon and Radnorshire (Roger Williams), but the hon. Member for North Cornwall (Dan Rogerson), who called for a review, and a Liberal Democrat activist, who called for a cut in VAT on tourism in that part of the world. Just how many positions do the Liberal Democrats have on VAT?
Nia Griffith
The whole point is that our new clause calls for a proper assessment to be made to see what the actual effect of the current VAT rate is on the economy, given the lack of growth and the lack of a plan for growth. The important thing is to carry out that impact assessment and work out the best growth strategy, because nothing is coming from this Government in order to put things right.
What has been happening in the news recently? Everybody must be aware of the crisis we are facing on our high streets and in store after store. This is happening to TJ Hughes and its 57 stores, to Jane Norman’s 90 stores and 100-plus concessions, to Habitat, and to HomeForm, which covers Möben Kitchens and Dolphin Bathrooms. Some 5,300 jobs are in the balance, and now we hear about what is happening to Thorntons and Comet. Judith McKenna, chair of the CBI’s distributive trades panel, has commented:
“After a year of growth, high street sales volumes fizzled out in June….Shoppers are budgeting hard and cutting back on their discretionary spending, such as on clothes and big ticket household goods.”
She is the CBI’s chief financial officer.
Alison McGovern (Wirral South) (Lab)
I thank my hon. Friend for mentioning TJ Hughes in her speech, because all this will have a great impact on its home in Merseyside. Does she agree that it demonstrates a problem with the Government’s approach to VAT, which is that the inflationary expectations they have built into the economy are damaging not only the people who will lose their jobs at TJ Hughes, but high streets throughout Merseyside and up and down our country?
Nia Griffith
I wish to correct what I said, because Judith McKenna is chair of the CBI distributive trades panel and ASDA’s chief financial officer.
The point is that the message is being given clearly from all our retail people. The CBI’s retail sales index fell to its weakest level in a year. Why was that? It was because anxious shoppers are cutting back on purchases of clothing, groceries and big-ticket items, as everybody is being squeezed.
Mr Robinson
Does my hon. Friend agree that the gist of what she is a saying in a general and good contribution is that the Government have managed to combine a deflationary economic policy with inflation at double the rate they forecast? Such a policy does not stand up. Is not the core of this their overall deflationary policy, of which an increase in VAT was the central part?
Nia Griffith
Absolutely. That is now having a devastating impact on the economy, on businesses and on individual families. In our new clause, we are asking for a proper impact assessment of the effect of the VAT rate on growth in the UK. Let us see whether the Government can come up with something more constructive and find a way to drive the economy forward.
Jonathan Edwards
I thank my parliamentary neighbour for giving way. Is she saying that the evidence is already there that the VAT rise is hurting the economy, as I believe it is, or that we need a review to see whether it is doing so?
Nia Griffith
I am saying that any fiscal measure is interdependent on other fiscal measures and the Government need to decide how their growth strategy will work and how the VAT rate will fit into that, in addition to any other fiscal measures they wish to take. I am not promoting any one particular measure, but there needs to be some form of stimulus because at the moment we are spiralling downwards and seeing increases in the debt and the deficit, in the benefits bill and in the number of people who are out of work. We would like to see increases in the number of jobs and in the number of businesses that are picking up and we would like to see the deficit come down so that we can get Britain back to work and get people back into jobs. The problem at the moment is that the policies with which we are being presented seem to do precisely the opposite, as was ably explained by my hon. Friend the Member for Coventry North West (Mr Robinson) a moment ago.
We need a proper assessment and we need proper decisions to be made on the basis of it to help our economy to grow.
Roberta Blackman-Woods
I want to support new clause 10. It is very important that the assessment of VAT considers the effects of the rise on both individuals and businesses. We need to consider both categories to understand fully the impact that the rise could have on economic growth. I know from sitting through the last debate that the Conservative and Liberal Democrat parties have no understanding and no idea of the pressures that are being placed on family budgets. This debate seems to be showing that they do not have any understanding of the stresses and strains being put on businesses in constituencies such as mine. In fact, as my hon. Friends have said, the Government seem to have very little understanding of what is happening to businesses across the north of this country.
I know from my constituency postbag and I hear from my local citizens advice bureau that more and more people are looking for advice not only because they are concerned that they might lose their jobs, which is affecting a large number of people in my constituency and the neighbouring areas, but because those who are in work are experiencing increasing rises in food, energy and petrol prices while facing a cut in wages in order to keep themselves in employment. If we add those factors together, we can see that consumers are concerned about the future, which is affecting what they purchase on the high street. That has a huge impact on all our constituencies and we have heard tonight of many examples of businesses in the retail sector that are falling daily.
Independent Financial Advisers (Regulation)
Nia Griffith Excerpts(15 years, 3 months ago)
Commons ChamberRead Full debate Read Hansard Text Read Debate Ministerial Extracts
Nia Griffith (Llanelli) (Lab)
I recently met a group of independent financial advisers who serve Llanelli and the surrounding area. They fully understand the need to have a properly regulated industry, and the need to improve consumer confidence. They want high standards, and I can assure hon. Members that they simply would not get away with it if they did not have high standards, particularly in a close-knit community, where everyone knows whether they have done well or badly in their last transaction. Their next custom really does depend on that. They also made the point that they already have certification. In addition, many of them have a great many years’ experience. They also accept that new entrants to the profession need proper qualifications and training.
A number of difficulties have already arisen with the new scheme. The first relates to the availability of slots to take the exams at the examination centres. One independent financial adviser in my constituency is waiting for a slot to take an exam in January in Bristol. Now, Madam Deputy Speaker, there is nothing wrong with Bristol, except for the fact that it is some considerable distance from my constituency. There is also the inconvenience of having to travel there in the winter, to fill a particular slot for a particular examination. If that slot were not available, they would have to go somewhere else.
Andrew Bingham
Does the hon. Lady agree that, if grandfather rights were to be introduced, as many of us wish, it would not only be fair to existing IFAs but release more slots so that new ones could come into the market, thereby increasing competition and choice for consumers?
Nia Griffith
Indeed, there are certainly issues about the way in which the whole system has been set up and run, and about whether it can be worked properly. As the hon. Gentleman points out, to have so many people trying to take the exams in just two years is not particularly practical. The time scales are extremely tight, and the independent financial advisers have to book into the slots. Another problem, of course, is that they do not always pass the exams.
That brings me to the nature of the exams. As I have said, independent financial advisers already have certification, and I have seen some of the questions that they have to answer in order to gain that certification. Many of them seemed to require a very different kind of knowledge from the knowledge that the IFAs in my area usually need. Furthermore, IFAs are fully aware of their own shortcomings. They know that they have limitations, and that they will sometimes need to pass a client on to someone else for specialist advice.
One very experienced financial adviser in my area is a well respected member of the community who is very much involved in local town centre activities and in keeping the community alive. He recently failed one of these exams, however, which has knocked back his morale and that of a number of other financial advisers who know him. He failed the exam not because he was not perfectly capable of doing his job or because he lacked intelligence or experience. That seems only to confirm that the nature of the exams needs to be reconsidered. We also need to take into account the enormous amount of time that has to be put into them —400 hours has been mentioned, and that is probably the minimum—as well as the costs involved.
I know from experience of developing new examination schemes what happens in such circumstances. Everyone wants to put in their 5p worth and everyone wants extra questions on their area, and the whole thing develops until it becomes so big and unmanageable that no one could possibly want it as a syllabus. Another problem is that people are often terribly worried about being thought of as soft. They are worried that someone is going to tell them that standards are falling, so they decide to put in harder and harder questions to try to counteract that.
Harriett Baldwin
Have any of the hon. Lady’s constituents been able to observe how the qualifications might help to identify those independent financial advisers who might have a tendency to mis-sell, compared with those who might not?
Nia Griffith
My constituents have made clear to me that many of the questions do not bear much relation to what they do in their everyday work, and are certainly not a test of their integrity. That does not mean that they do not want regulation or do not like the idea of having proper qualifications and a respected profession, and it does not mean that we should abandon the RDR altogether. What those people are saying is that we should look at the detail again and create a workable system that can be respected and is a useful tool, rather than one rejected by the profession that will not help anyone in the long run because it will simply lead to an exodus that will have the impact on local communities that many Members have described.
Mr Robert Buckland (South Swindon) (Con)
I probably know some of the constituents to whom the hon. Lady has referred. Some of them have been in touch with me, as well as with my local independent financial advisers. In other professions, when it comes to continuing professional development and examinations, those who specialise concentrate on their specialities, and therefore undergo tests that relate to their experience. The problem with the RDR regime is that it is far too general. That puts people in a really difficult position, which is unfair.
Nia Griffith
My friend and compatriot is right. That is why those responsible refer such people to others. They know that they do not know everything; they know what they do know, and they know what they do not know. This is not about throwing the baby out with the bathwater. It is not about abandoning the system altogether. It is about getting it right: it is about having another look, and establishing whether there are ways of implementing the system that will make sense. We need an arrangement that will not create a time scale that is difficult to adhere to, will not depend on slots that are impossible to secure, and will not involve questions the answers to which people will not need to know in their professional lives. We need modifications to make the system much more manageable.
Comprehensive Spending Review
Nia Griffith Excerpts(15 years, 5 months ago)
Commons ChamberRead Full debate Read Hansard Text Read Debate Ministerial Extracts
Lilian Greenwood
If only. I thank my hon. Friend.
What did I hear in the media coverage of the visit? I heard about the Prime Minister’s amazement that he had found a lad who liked broccoli. I did not hear the Prime Minister or Deputy Prime Minister telling the kids about the huge gamble that the Government are taking with their future. They are performing a huge economic experiment. They have a theory that if we cut public spending, lose 490,000 public sector jobs and, as PricewaterhouseCoopers tells us, lose another 500,000 private sector jobs that depend on the public sector, the rest of the private sector will somehow fill the gap. They do not seem to hear the warnings of economists who disagree. Listening to Ministers last week, one would have thought that the PricewaterhouseCoopers figures had about the same credence as Mystic Meg. The Government do not want to hear about the effect of their cuts, because they want to make them.
Nia Griffith (Llanelli) (Lab)
Has my hon. Friend found any evidence that the coalition Government have thought out how confidence will be created to stimulate the public sector, given that millions of people across the country are worrying that their household might be one of the million that will be hit by a job cut, and fearing that cuts to housing benefit will mean that they are left with very few pennies to spare after their mortgage payments or rent?
Lilian Greenwood
I thank my hon. Friend for that interjection. In fact, the latest figures for both consumer and business confidence are going through the floor.
Never mind the extra 1 million who will be out of work, the extra £700 million that we will have to spend on jobseeker’s allowance or the loss of tax revenues; the Government’s attitude is, “Cut deep and keep your fingers crossed.” But did the Prime Minister say that when he was in Nottingham? Did he tell those children about his gamble? Of course not, just like he did not tell them that their families, many of whom are in the poorest 10%, would be hit harder than anyone else. He did not mention that for all the talk of fairness, families with children will have to pay more than twice as much as the banks towards reducing the deficit. He did not mention that although his friend the Chancellor talked about continuing the decent homes programme, the funds have actually been cut.
Oral Answers to Questions
Nia Griffith Excerpts(15 years, 5 months ago)
Commons ChamberRead Full debate Read Hansard Text Read Debate Ministerial Extracts
Nia Griffith (Llanelli) (Lab)
1. What steps his Department is taking to increase the level of tax compliance.
The Exchequer Secretary to the Treasury (Mr David Gauke)
The Chief Secretary to the Treasury announced £900 million of investment in Her Majesty’s Revenue and Customs to tackle avoidance, evasion and fraud, sending a clear signal that the spending review will be focused on both fairness and deficit reduction. It will include an increase in prosecutions and steps to tackle organised criminal excise smuggling. HMRC also recognises the importance of helping businesses to get their tax right and has launched additional education and guidance packages in order to do so.
Nia Griffith
Given the enormous importance of reducing the tax gap, and thereby reducing the deficit, what assurances can the Minister give that actually he will be taking on more tax officers and ensuring a good geographical spread to make sure we get in the maximum tax revenues possible?
Mr Gauke
As was made clear in the Chief Secretary to the Treasury’s statement, the Government are determined to reduce the tax gap. It currently stands at £42 billion. It is too high, but we are determined to take measures to address it and we have already announced proposals by which we can reduce the tax gap.
Equitable Life (Payments) Bill
Nia Griffith Excerpts(15 years, 6 months ago)
Commons ChamberRead Full debate Read Hansard Text Read Debate Ministerial Extracts
Nia Griffith (Llanelli) (Lab)
I am grateful for the opportunity to take part in the debate today, and I certainly want to support the Bill, because we do not want to do anything to delay the payments. The important thing now is to get those payments made as quickly as possible to the many ordinary hard-working people who made sacrifices in order to put money away in a scheme that they trusted to provide for them in later life. Those people were thinking ahead; they were the responsible citizens who had no intention of having to rely on the state. They continue to worry, however, and to suffer hardship, because they fear that there will be still more delays. They are also worried by the mention of a cap being placed on the funding of the payments. Most importantly, those people do not want smokescreens, spurious justifications or complicated explanations. They simply want the Government to take notice of the ombudsman’s letter of 26 July and move as swiftly as possible to making proper payments. They want those payments to be realistic, not just a sop; they want them to be made in the spirit of the ombudsman’s report.
I am very concerned by the fact that the Minister spoke today of linking the amount to be paid out to Equitable Life victims with the comprehensive spending review. That would be totally unacceptable. We know that the issue of Equitable Life has gone on for some years now, and it should not be arbitrarily subject to a review that is to take place in a few weeks’ time. Opposition Members are committed to seeing Equitable Life victims receive proper payments that reflect their losses. Anyone listening to what both the coalition parties said before the election would have thought that they too were committed to making proper payments. Indeed, they were vying with us to say that they would be more generous than we would. To state that the payments will now be subject to spending review cuts of perhaps 25% is absolutely disgraceful. What would have been a £100 payment could now be only £75. Frankly, that seems to me next to dishonest. Equitable Life victims were not responsible for the banking crisis, and they certainly do not deserve to be penalised by the slash-and- burn policies of the present Government, whom respected economists are now suggesting might send us into a double-dip recession.
Gordon Birtwistle (Burnley) (LD)
The hon. Lady says that she is keen to see the payments made to the Equitable Life policyholders. Will she tell us how much Labour would have paid out if it had been in control?
Nia Griffith
What is important now is to move on and get those payments made. The worry is that these smokescreens are putting people off, and the policyholders will not see any money at all. They want to see actual payments.
The policyholders are also worried about tax and benefit loss. I am pleased to see clause 1(3) in the Bill, but it is far too loosely worded. It gives the Treasury the power to disregard payments to Equitable Life victims when assessing their tax liability or their entitlement to means-tested benefits, but I would like to see a much more strongly worded provision, as well as a genuine awareness among Ministers that any payment will be disregarded.
Nia Griffith
I would like to continue for a moment, because I want to explain what I have understood from the speech made by the Financial Secretary to the Treasury today.
I was perturbed by what the Minister said. Far from giving any assurance that there would be a disregard for tax and benefit purposes, he said that the Department for Work and Pensions would sort these matters out in the usual way. That will set alarm bells ringing, as anyone who has lost benefit, pound for pound, as a result of receiving a payout will confirm. Equitable Life victims, having waited all these years, could end up receiving their payment only to lose the equivalent amount in benefits or additional tax. We need assurances from Treasury and DWP Ministers alike that insult will not be added to injury in that way.
Gavin Williamson
It is incredibly interesting listening to the hon. Lady’s speech, but surely she ought to hang her head in shame at the actions of the Labour Government, who continually betrayed Equitable Life policyholders. Will she apologise for the Labour Government’s failure to act?
Nia Griffith
If the hon. Gentleman had been here under the previous Government, and been a regular attender at business questions, he would have known that the timetable for the Equitable Life programme was raised again and again. I can assure him that I made many representations to our Ministers to ask them to speed up the process. It was a complex process and there were enormous difficulties; there was also an enormous amount to read. That is why it took the ombudsman so long to produce the report in the first place. I can assure the hon. Gentleman that an enormous amount of good work was done, and that we would not be where we are now if we had not put in that work before the general election.
We need assurances from the Treasury and the DWP that people will not lose out in the way that I have described. People are worried because the suggestion of a cap is being bandied about, and because the figures might be cut again in the comprehensive spending review. If they were then to lose money through a clawback of tax or benefits, it would be an absolute disgrace. It would also affect the most vulnerable people in particular.
Another worry about the Bill is that it contains no mention of a proper appeals mechanism. The Minister made a few encouraging remarks about appeals, but there are no details in the Bill. I call on him to consult policyholders about that mechanism, and to publish the relevant details as soon as possible. We want to see the settlements made as soon as possible, but we also want to see an appeals mechanism that can hear appeals quickly and fairly. The last thing we want is for Equitable Life victims, who have already waited far too long, to have to wait in a queue for their appeal to be heard.
Amendments have been proposed by those on our Front Bench, including my right hon. Friend the Member for East Ham (Stephen Timms). One relates to timing, which is crucial. We must have a specific start date so that we know when the victims are going to get their proper payments. We also need a scheme that will be totally independent of the Government. There is also an amendment that provides for hon. Members to vote on the scheme, to ensure that it is swift, simple, transparent and fair. That is vital if we are to have the trust of the public that this is a genuinely fair scheme, not one that has been cooked up in a back room and that will be cut and cut again in order to meet some overriding demand from the Chancellor. I look forward to debating the Bill more thoroughly in Committee. I very much hope that we will have the opportunity to table our amendments, and that they will be well supported by hon. Members on both sides.
Banking Reform
Nia Griffith Excerpts(15 years, 9 months ago)
Commons ChamberRead Full debate Read Hansard Text Read Debate Ministerial Extracts
Mr Hoban
My hon. Friend makes a good point about the role of insurance. In this crisis, we must ensure that we distinguish between what has happened to the banking sector and the relative success of the insurance sector in withstanding the storms of this crisis. It is an important sector to the UK economy and a huge wealth generator. We need to ensure that the insurance sector, when it comes within the remit of the PRA, has the right sort of prudential regulation that recognises its strengths and challenges. It will of course be regulated as regards its relationship with consumers by the CPMA.
Nia Griffith (Llanelli) (Lab)
The people of this country want to see a bit of humility and payback on the part of the banks. One opportunity to do that would be through the so-called Robin Hood tax on banking transactions, with the money going to alleviate poverty here and to tackle climate change across the globe. Will the Financial Secretary urge his right hon. Friend the Chancellor to introduce such a tax and to influence colleagues worldwide to do likewise?