Tax Fairness

Nigel Evans Excerpts

Tuesday 12th March 2013 Commons Chamber

[Several hon. Members]

rose—

[Mr Deputy Speaker (Mr Nigel Evans)]

Order. There is to be a 10-minute limit on Back-Bench contributions with the usual injury time for two interventions.

[Geraint Davies (Swansea West) (Lab/Co-op)]

What a load of codswallop we have been listening to since the Minister got up on his hind legs! Obviously, this motion is setting out a direction of travel. We are saying that those with the broadest shoulders should take the biggest load and the poorest should not pay the cost of the bankers’ recklessness.

The myth that is habitually recited by Government Members is “What a fine mess you’ve left us in,” so it is important to remind people of the facts. I recently met people from the Bank of England, and I have in my hand a graph showing that our growth rate rose continuously between 1998 and 2008, but then dipped when there was the financial tsunami. The GDP growth under Labour was 37% before that dip. We then had the fiscal stimulus thanks to our friend Mr Obama and my right hon. Friend the Member for Kirkcaldy and Cowdenbeath (Mr Brown), which got us back to some fragile growth moving into 2010, but then the Tories came to power.

I also have a graph showing that two thirds of the deficit—the green bit—is from the bankers and the other third is the Government spending above their earnings in order to pump-prime, to avoid a depression and deliver a mild recession and a prosperous future for Britain. What happened? Obviously, George Osborne came along, announced that half a million people would be sacked but he did not say who they were, so public servants stopped spending—

[Mr Deputy Speaker (Mr Nigel Evans)]

Order. Please refer to the Chancellor by his title, not his name.

[Geraint Davies]

Exactly. The Chancellor, no less, decided to announce that half a million people would be sacked but did not say who they were, so people stopped spending and started saving, consumer confidence fell and the economy has been flatlining ever since.

--- Later in debate ---

[Geraint Davies]

Sadly, I cannot confirm that at the moment because I am not quite in a position to be writing the party’s manifesto, although I have ambition.

In difficult times we should focus on growth and ensure that those with the broadest shoulders take the weight and that we do not just squeeze the poor for the bankers’ mistakes. This proposal is part of a tapestry of opportunity to move forward on that, and we call on the Liberal Democrats to support us on what is, after all, their idea. Locally in Swansea the Liberal Democrats have been a very strong party with control of the council. Since 2010, they have been in a woeful state because people are worried about their broken promises on tuition fees and so on. This is their chance to redeem themselves so that there can be some glimmer of belief in a future for the Liberal party. If they do not vote for their own policy, what hope is there? Very little, I am afraid.

[Mr Deputy Speaker (Mr Nigel Evans)]

I call Stephen Williams.

--- Later in debate ---

[Mr Brown]

Yes.

[Mr Deputy Speaker (Mr Nigel Evans)]

Order. I hope that the hon. Gentleman’s question will be about the mansion tax, because it seems as though the speech is going somewhat wider.

[Stewart Hosie]

I very much agree with the tenor of what the hon. Gentleman is saying, particularly in relation to fair taxation. However, I remind him that barely any of the sensible things that he wants to do were achieved in the 13 years of the Labour Government. Some of what he says is therefore rather galling to listen to.

--- Later in debate ---

[Sheila Gilmore]

I have great sympathy for people who are overcrowded and for those on the housing waiting list. The majority of people waiting for housing in my city are looking for small houses, so that could also cause certain problems.

Fundamentally, however, this is not a housing issue. If we want to make the issue about housing, we should deal with it as a housing issue and look at ways of encouraging and facilitating moves for people who want them. That is not necessarily happening. People have asked me, “Well, if I did move who would help me pay for this move? Who will reimburse me for the fact that I put my own kitchen into this house? My landlord did not quite get around to it, so when I was working a few years ago I put in that new kitchen. Is somebody now going to reimburse me for that? Are they going to help me with the cost of moving my things? Are they going to help me with the cost of setting up in a new place? I don’t think so.” If a local authority—some do—decided that it wanted to encourage people to move once they had outgrown their homes, it could do so. It might have a cost, but it would have a benefit.

If every single person suffering from the bedroom tax was able to move—

[Mr Deputy Speaker (Mr Nigel Evans)]

Order. Is this a bedroom tax on mansions? This is an Opposition day motion. I think the hon. Lady is actually holding it in her hands. Has she read it, and, if she has, could she perhaps stick to it?

[Sheila Gilmore]

The point I was going to make in relation to the matter that was, after all, raised in an intervention is that if everybody moved successfully and reshuffled, there would be no saving, and that is odd because a saving is wanted. It is in that context that people are saying, “What sort of fairness is it that imposes such a great burden of trying to effect economic recovery on those who are least well off? Could we look at other measures to show that we really are all in this together?” That is where the mansion tax comes in.

The mansion tax enables us, in part, to really feel—as a community and as a country—that people are bearing a fair share of the burden. We have heard a lot about tax avoidance and tax evasion. It worries me greatly that the justification given for removing the 50p rate of tax is that people are not paying it. Instead of looking at why people are not paying it, and whether anything could be done to ensure that it was paid, we again hear, “Actually, we’ll just take it away because they aren’t paying it.” That is not a good message to put out.

We have also had reference—in relation to the mansion tax, Mr Deputy Speaker—to not wanting to have such a competitive tax regime that we risk people fleeing our shores. Reference was made to the PricewaterhouseCoopers report about competitive tax rates. There is an interesting coda to that report from some of those who were surveyed. The question then becomes: will the increased competitiveness lead to increased investment in this country, because that is what is really important? Many of the tax people thought it was crucial to turn improved tax relief on capital expenditure into investment in this country, and that it should be the No. 1 priority for the UK. In 2010, the Chancellor abolished capital allowances for investment in his first year in office. Perhaps he would like to look at the whole report, and not just the parts that suit him.

An argument has been made—as it always is with regard to rates and council tax—about people who are asset-rich and income-poor. It is usually raised as a reason for not putting up council tax banding, for example. In the old days, it was used as a reason for not making changes to the rating system. Yes, we can all come up with examples of people who are in that position. Usually, the example is a widow who cannot afford to pay. However, we cannot design our entire system of taxation around that, and there are ways it can be mitigated, as there are with council tax. If someone is genuinely as income poor as has been suggested, they would—at least until the Government decided to change the rules on council tax benefit—have been eligible for assistance with their council tax. There are always ways to help such people.

Earlier, I made what to some people might have seemed an unfair comparison. We were being asked to think about the widow who might struggle with a mansion tax. The 60-year-old widow I referred to is being asked to pay £13 per week out of an income of £71 a week, and the answer is that she should take in a lodger. If we want to be fair to both groups, we have to treat them with equal compassion.