Air Passenger Duty
Nigel Evans Excerpts(11 years, 1 month ago)
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Sammy Wilson
Only a fool would deny that there is climate change. The world’s climate has been changing ever since the world was in existence. The question is what is the cause of that climate change, and what impact might the fiscal measures introduced by the House have on it.
Mr Nigel Evans (Ribble Valley) (Ind)
On measures to address climate change, does the hon. Gentleman agree that air passenger duty has led to passenger change? Instead of flying from UK domestic airports, people are going to Schiphol, Paris, Frankfurt and Madrid for their long-haul flights, which means that the UK just loses out.
Sammy Wilson
We in Northern Ireland, of course, feel that much more than anyone else because we share a land boundary with another country and are just 100 miles away from what is now a major international airport at which there is no air passenger duty. That places airports in Northern Ireland at a grave disadvantage.
Nicky Morgan
I thank my hon. Friend for that suggestion. Like him, I know East Midlands airport very well as an east midlands Member of Parliament. The difficulty with regional holidays or variations is that they must be quite substantial to change passenger behaviour. That takes us back to my original point that the £3 billion that is raised by APD is a significant contribution to the Exchequer when we are tackling the deficit.
Mr Nigel Evans
I congratulate my hon. Friend on her new position. She said that the changes would have to be significant to alter passenger behaviour. Is not the fact that we have the most expensive APD in the world changing passenger behaviour, because people are taking short-haul flights to Schiphol, Charles de Gaulle, Dublin or even Belfast in order to take longer-haul flights, saving several hundreds of pounds for their families?
Nicky Morgan
I thank my hon. Friend for his remarks. The previous question was about regional variations within the United Kingdom. That is why I was talking about changing behaviour. As I said, this all goes back to my original point that air passenger duty raises £3 billion a year, which is a sum that cannot be ignored if we want to do what this Government were elected to do, which is to repair the nation’s finances. Obviously, my interest in this area is growing as every second of this debate passes.
Finance (No. 2) Bill
Nigel Evans Excerpts(11 years, 7 months ago)
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Jonathan Edwards
On a point of order, Mr Evans. Since when has an amendment agreed by the Clerks of this House been a political stunt? This is what the Labour party is saying in the media. It is a disgrace and it brings dishonour on this Chamber. [Interruption.]
The First Deputy Chairman of Ways and Means (Mr Nigel Evans)
Order. Everything that is being debated today is in order; otherwise it would not have been selected. It sounds to me like part of the current debate.
Cathy Jamieson
Thank you, Mr Evans.
I have no concern about whether what is on the Order Paper is in order; of course, if the Clerks have accepted it, it is indeed in order. I recall some of the Members who are bickering and heckling from the Back Benches making similar remarks about perfectly legitimate amendments that Labour Members have tabled in the past, and perhaps making similar suggestions. I am criticising not what is on the Order Paper but the fact that hon. Members apparently wish to widen this debate to the whole question of breaking off certain parts of the United Kingdom instead of focusing on the specific issue.
This is a very serious matter, as was highlighted during the Back-Bench debate that we had back in November. At that time, we as a House came to an agreement that the issue should be looked at in more detail. I would be interested to hear from the Minister what action has been taken. Prior to the election, the Conservatives gave a commitment to look at the per-plane duty. The resulting report was not taken forward for very good reasons; certainly, the industry did not support it. Following all the representations that have been made and the Back-Bench debate that took place, is the Minister now in a position to respond to some of the issues that have been raised today and to say whether a further report is necessary?
Finance (No. 2) Bill
Nigel Evans Excerpts(11 years, 7 months ago)
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Mr Deputy Speaker (Mr Nigel Evans)
Order. Although there is no time limit on speeches this evening, I hope that Members will be mindful of the fact that others wish to contribute to the debate when considering the length of their own contributions.
amendment of the law
Nigel Evans Excerpts(11 years, 8 months ago)
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Sarah Champion
No, I am sorry.
Initially, I broadly welcomed the Government’s schemes to encourage people to buy new builds and to assist people with mortgage deposits. With the demise of building societies, banks have a virtual monopoly on mortgages. The percentage that is required for a deposit has been rising steadily, especially for first-time buyers. That has created an environment in which people who are more than able to pay for a mortgage cannot get one because the tens of thousands of pounds that they need for a deposit are unachievable.
However, I then started to consider the broader picture and the details of the schemes. First, it has been revealed that the Government’s mortgage scheme will not exclude people who are buying a second home. What about a third or a fourth home? How does that help people who are starting out? Not only are the Government pressing ahead with tax cuts for millionaires, it now seems that the mortgage scheme will help people, no matter how high their income, to buy a subsidised second home worth up to £600,000. Secondly, what interest rate will be charged, or will it be an interest-free loan? Thirdly, is it right that the taxpayer will effectively be underwriting the banks? The state will be facilitating banks to make profits on these mortgages.
My main question is, where are all the new homes for people to buy? The Government’s schemes mean that more people will be trying to buy the same number of houses. That will just push up the cost of a house unless more homes are built. The Government announced an extra £225 million for affordable house building, but according to the OBR only £125 million will be spent before 2015. That figure is dwarfed by the £4 billion cut in the funding for affordable housing that the Chancellor made in his first Budget. That stopped a very successful affordable housing scheme in Rotherham that was run by Transform South Yorkshire.
House building is at its lowest rate since the 1920s and the situation is getting worse. Housing starts fell by 11% in 2012 to below 100,000. The impact of that is that the Government have put 80,000 construction workers out of work and construction output has fallen by 8.2%.
Labour has proposed some practical measures to address that problem. We called on the Chancellor to use the money raised from the 4G mobile auction to build thousands of affordable homes to stimulate the economy and tackle the housing crisis. To improve the housing stock, we recommended that VAT on home repairs, maintenance and improvements should be cut to just 5%. To help young people who want to get on to the property ladder, the CBI’s proposal of a housing individual savings account should be considered. We also advocate giving first-time buyers a stamp duty holiday on properties worth up to £250,000. Finally, I support Labour’s recommendation to bring forward long-term infrastructure investment in schools, roads and transport to get construction workers back to work and to strengthen our economy.
Those measures would boost growth, get builders back to work building the homes that we need, and create apprenticeships for young people. I urge the Government to look more closely at the details of their schemes and to find ways to build more affordable homes and genuinely help first-time buyers. We need action now to get Britain building and to kick-start our economy.
Mr Deputy Speaker (Mr Nigel Evans)
I thank Sarah Champion for taking less time than she was allowed, which will mean that other Members can get in.
Yasmin Qureshi (Bolton South East) (Lab)
They say, “If you tell a big enough lie and repeat it constantly, people will believe it”—and that is what the Tory-led Government have done. We are constantly told that the last Labour Government left the biggest debt in the developed world. That is an odd thing to say when the Chancellor admitted to the Treasury Committee in 2011 that he did not even know that the UK had the lowest debt in the G7.
Of course the UK will have a higher debt and deficit than some other countries, and Government Members often make a comparison with Greece, but Greece has a totally different economy from ours; we are the sixth largest in the world. Of course our debt will be higher than Greece’s, but the real figure to look at—one that relates to economic competence—is the ratio of GDP to national debt.
Let me remind the House—I know Government Members have a collective amnesia about this—that in 1997, when the Labour Government came to power, the national debt was 42% of GDP; after 11 years of the Labour Government and before the global recession of 2008, the ratio of GDP to national debt was 35%. That is a reduction of 11%, and it was not achieved by a Government who were financially incompetent. In fact, that Government achieved an even greater reduction than the Conservatives.
The second claim that we hear is that Labour created the biggest deficit in the developed world by overspending. If that was the case, why did Germany, Japan, the United States and other similar economies have a problem? Why did they have banking crises? Why were they not in deficit? We know the answer. We know that there were global economic problems. We know that the financial crisis began in the United States with the sub-prime mortgages. In fact, it was a former Chancellor, my right hon. Friend the Member for Edinburgh South West (Mr Darling), who took a bold initiative, saving our banking systems and, subsequently, saving half a million jobs as well.
Those are not just my views. The International Monetary Fund concluded that
“the UK experienced an increase in the deficit as result of a large loss in output/GDP caused by the global banking crisis and not even as result of the bank bailouts, fiscal stimulus and bringing forward of capital spending. It’s basic economics: when output falls the deficit increases.”
The deficit increase was not due to any of the actions taken by the Labour Government. In fact, all those actions made the economy better, and saved more jobs. In contrast, this Government’s policies over the past three years have done nothing to help the economy to grow.
Another reason for our financial loss was the fact that we are one of the main financial centres in the world. Given that there was a global banking crisis, of course we were likely to take the hit more than other countries. We should also bear in mind that up to 2008, while Labour was in power, the actual borrowing costs were low. Indeed, they are still low. That is because in the United Kingdom our bonds are strong and are performing well, because people know that the Bank of England is there to step in if there is any problem, and, of course, because over the last 300 years the UK has never defaulted on its debt. The Government try to blame austerity, saying, “We must introduce all these measures because we need to balance the books,” but the truth is that they are using austerity as a justification for downsizing the state, which, in ideological terms, the Conservative-led government have always wanted to do.
Even the Chancellor’s budget deficit programme is not working. Everyone knows that a budget deficit occurs when expenditure exceeds income, but one way of securing income is taxation, direct or indirect. When people are being laid off and are not working, they are paying no taxes. They are having to be supported by a benefits system, which is why—
Mr Deputy Speaker (Mr Nigel Evans)
Order. I am terribly sorry, but the hon. Lady’s time is up.
Mr Deputy Speaker (Mr Nigel Evans)
Order. I hope to be able to call Members who wish to speak, but to assist the House I should state that the winding up speeches will start no later than 9.36 pm.
Mr Iain McKenzie (Inverclyde) (Lab)
The coalition Government have spent their time in office since 2010 telling us over and over again that they are trying to get the country’s finances in order. We have had their austerity, their new taxes and their extreme cuts, and yet two years later, our borrowing is still growing at an alarming rate. Despite the Government’s austerity, the Chancellor is expected to add billions to the national debt over his five years in office. Since his spending review in 2010, the UK economy has grown by just 0.7%, compared with the 5.3% forecast at the time.
Last year, the UK economy went through a double-dip recession. The Government’s failure on deficit and debt reduction is colossal. Lack of growth has meant huge Government borrowing to pay for the cost of their economic failure. The Chancellor has failed the test he set for himself. The economy is flatlining, prices are rising a lot faster than wages, the deficit is going up, and the UK has lost its triple A credit rating. Instead of delivering a credible Budget that demands confidence in our economy, the Chancellor delivered a downgraded Budget with no plan for jobs and growth, and a Budget that hits hard-working households further.
A wiser Chancellor would have been less dogmatic about the rightness of his policies and so left room to manoeuvre when he saw them failing. However, last Wednesday’s Budget was the work of a Chancellor who is in a hole but continues to pretend that the only way forward is to keep digging. We needed bold and decisive action last week, and a Budget that would kick-start the economy and help millions of people up and down the country who have been struggling to cope financially. I wonder whether Government Members know what that means: it means broken Britain, it means businesses closing their doors, it means small communities struggling to create local growth, it means a choice between paying the bedroom tax and eating, and it means national failure at the hands of this Government.
In my constituency, more than 1,000 people are being referred to local food banks. Food banks in 21st-century Britain is the reality of this coalition. Instead of borrowing to help millionaires, the Government should be borrowing to help jobs and opportunities, and to stimulate economic growth across the country. The Chancellor could have brought forward infrastructure investment in schools, roads and transport to get construction workers back to work and to strengthen our economy for the future. Those measures would boost growth, get builders back to work, build the homes we desperately need and create apprenticeships for our young people.
Britain needs a radical Budget for homes, jobs and growth, not another false dawn. We face the biggest housing crisis in a generation and the Government’s housing and economic policies are just making it worse. House building is crucial to economic recovery. Helping families to get on to the housing ladder should be a priority for the Government, and that is why we have been calling for this action for more than two years. The Government’s record on housing offers little hope to hard-working families who are struggling to get on to the housing ladder. Under this Government, house building has fallen, rents have risen, home ownership is becoming a harder goal for young people to achieve and, most worrying of all, homelessness has risen. The Government failed to back Labour’s call to use the money raised from the 4G mobile spectrum auction to build 100,000 affordable homes to stimulate the economy and help tackle the ever-growing housing crisis. The Chancellor could also improve existing housing stock by cutting VAT on home repairs, maintenance and improvements to 5%. I might add, however, that without a job it is impossible to buy a home or to improve it.
Next month’s planned tax cut for millionaires should be scrapped. When the Government came to power in 2010, the message was that we are all in this together. I wonder if my constituents who have lost their jobs and the millions who rely on food banks would agree that we are all in this together. What about the millionaires looking forward to a tax cut? Well, they are definitely in it all together.
Companies are not investing and people are not spending because they lack confidence in the UK economy. Economic confidence comes from believing that tomorrow will be better than today. The problem the Government have created is that the country no longer believes in a better tomorrow. In short, we desperately need a Labour Chancellor to deliver a Budget that supports hard-working families and struggling businesses. We need a Government who have a long-term plan for jobs and growth to build a better and fairer tomorrow.
Mr Deputy Speaker (Mr Nigel Evans)
I thank Members for their co-operation. We now will get the last two Members in.
Budget Resolutions and Economic Situation
Nigel Evans Excerpts(11 years, 8 months ago)
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Ed Balls
I do not want to have to give the hon. Gentleman an economics lesson, although given that he thinks we are on the right track, perhaps he needs one. The Chancellor’s fiscal rule is to balance the current structural budget, excluding investment—[Interruption.] Don’t be so silly. [Interruption.]
Mr Deputy Speaker (Mr Nigel Evans)
Order. Can we calm down? Shouting from sedentary positions does not help the debate.
Ed Balls
The economy has flatlined and the national debt is rising year on year, and the hon. Gentleman does not want to know the truth.
Not only is the Chancellor pressing ahead with a tax cut for millionaires; it now seems that his mortgage scheme announced yesterday will help people, no matter how high their income, to buy a subsidised second home worth up to £600,000. From what I have seen so far, the Government are basically saying, “If you’ve got a spare room in a social home you’ll pay the bedroom tax, but if you want a spare home and you can afford it, we’ll help you to buy one.” Are the Government really going to allow millionaires, who will get a tax cut averaging £100,000 in two weeks’ time, to get a taxpayer guarantee if they use that money as a deposit on a house, a second home, or even a buy-to-let house? That is not just tax cuts for millionaires; it is subsidised mortgages for millionaires—or should I say a spare homes subsidy? I will take an intervention if the Chancellor wants to clear up the absolute confusion and chaos over this policy. Surely people struggling to get a mortgage—those who want to get their first home—should be the priority for help, not the small number who can potentially afford to buy a second home or a buy-to-let home. We will solve the housing crisis and help first-time buyers only if we finally build the new affordable homes that we said should be built but which he ignored in this Budget.
This is more of the same from a Chancellor who does not even understand the Budget he has announced, as we saw a year ago. I ask him again—is the taxpayer subsidy available for second homes to people with incomes over £100,000 or for buy-to-let properties? Yes or no? If he does not clear it up, the confusion and chaos will continue. Does he want clarify it? Pasties, caravans, churches, skips—and now subsidised second homes for millionaires. It is not “Who Wants To Be A Millionaire?”; it is “Who Wants To Help A Millionaire?” It is not “phone a friend”; it is “cut taxes for your friends.” As for “ask the audience”, he must be hoping that he does not have to ask the electorate any time soon—certainly not after the past 12 months.
What a 12 months it has been for this Chancellor! The omnishambles Budget, the double-dip recession, booed at the Paralympics, forced to upgrade on the train, downgraded by Moody’s, his fascinating biography—and now his colleagues are even speculating that he might have to be replaced by the Foreign Secretary, the Defence Secretary, or even the right hon. Member for Wokingham (Mr Redwood). A year ago they feted him as the next leader of the Tory party; now, according to the Tories, they are touting him as our next man in Brussels. It used to be Calamity Clegg they were sending off to the Commission; now it is Calamity George. Well, we do know he likes a bit of “Whip crack-away, whip crack-away, whip crack-away.” [Interruption.] Are you suggesting that I do not sing it, Mr Deputy Speaker?
A few weeks ago, the Chancellor reportedly told his colleagues at a Cabinet meeting that if they did not make a decision that day they would have to do so after 2015, sitting round the shadow Cabinet table. That is going to be the one forecast that he actually gets right.
Ed Balls
The hon. Gentleman needs to look at the figures and understand the impact on working families in his constituency. The problem with his Chancellor is that he gives with one hand and takes a lot more with the other. A one-earner family on £20,000 and with two children are worse off, even with the personal allowance, by £380 a year because of the cuts to tax credits. Working families are losing out. The Chancellor tried to divide the country into strivers versus shirkers, but we do not hear that any more because it turned out that his shirkers were the working people of this country.
The real tragedy for this Chancellor is that he is set to join a long line of past Chancellors. Philip Snowden, Norman Lamont and now George Osborne—
Ed Balls
I apologise, Mr Deputy Speaker.
Philip Snowden, Lord Lamont and now Chancellor Osborne—[Interruption.] It was not the Lamont name that I got wrong, was it, Mr Deputy Speaker? Philip Snowden, Lord Lamont and now this Chancellor have said, “I will stick to the plan.” Those past Chancellors ignored all the warnings from those who said that the plan would not work. They boasted, “If the medicine’s not hurting, it’s not working,” and ploughed on and on as things got worse and worse, and their careers ended in disaster as their failed policy finally consumed them.
Is that not the truth? This Chancellor is an historian who does not know his history and he does not know his economics, either. He is completely out of his depth—business, the country, his Back Benchers and Cabinet colleagues and the Business Secretary all know it and, in his heart of hearts, I think the Chancellor knows it, too. He was the wrong man for the job at this vital time. He is running out of excuses, he has run out of answers and he is running out of road.
We needed a Budget for growth, jobs and fairness, but we got more of the same. There is no plan for growth, just tax cuts for the rich while everyone else pays the price. This is more of the same failing plan from a downgraded Chancellor—not steady as she goes, but sinking like a stone.
Mr Deputy Speaker
Order. Thirty-three Members want to take part in this debate and a time limit will be announced following the Business Secretary’s response to the shadow Chancellor, but six to seven minutes would not be too far out.
Mr Deputy Speaker (Mr Nigel Evans)
Order. To accommodate the remaining speakers we are moving to a five-minute limit.
Mr Deputy Speaker (Mr Nigel Evans)
Order. The wind-ups will start no later than 4.40 pm.
Barbara Keeley
On a point of order, Mr Deputy Speaker. There has been lot of confusion over the last few hours about the Government’s new mortgage guarantee scheme, and while we have the opportunity I would like to ask those on the Treasury Bench to clarify whether second home owners are eligible for the scheme. Can the scheme, which can be used for new builds and other types of housing, be used in that way?
Mr Deputy Speaker (Mr Nigel Evans)
That is not a point of order for the Chair. As the hon. Lady knows, we still have another half hour of this debate and two full days on the financial statement. No doubt I will be in the Chair at times during those two days, and I know that her point will be raised, and that the Government will respond, probably in a way similar to the responses we have heard during this debate. I am absolutely certain that it will be part of the debate.
Tax Fairness
Nigel Evans Excerpts(11 years, 8 months ago)
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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.
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)
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.
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.
Financial Services (Banking Reform) Bill
Nigel Evans Excerpts(11 years, 8 months ago)
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Mr Deputy Speaker (Mr Nigel Evans)
Order. I am lifting the time limit for the remainder of this debate. I call Mr John McDonnell.
John McDonnell (Hayes and Harlington) (Lab)
Thank you, Mr Deputy Speaker. Does that mean that I have an hour and a half?
John McDonnell
I most probably will not even take 10 minutes.
I am very pleased that the plane of the hon. Member for Caithness, Sutherland and Easter Ross (John Thurso) did come in, because he always makes complex issues simple and entertaining. There is a consensus in the House around regulation as the approach to take towards resolving the banking crisis and ensuring that, if we do not prevent a future crisis, we at least stave it off for, as the hon. Gentleman suggested, possibly another 70 years. The degree of positioning is around Glass-Steagall-type full separation, a ring fence, and then, as he said, the novelty of an electrified ring fence. There must be different power levels of electricity on this ring fence, as well.
I stand outside that debate, because I do not think that regulation will work. I was the first Member to raise the issue of Northern Rock in this House. At that time, I completely underestimated what Northern Rock was up to. I thought that it was all about an offshore tax scam that was part of its link with the organisation that it called Granite; I had no idea of the scale of the problem that would be unravelled. I can remember the then Chief Secretary to the Treasury, I think, leaving the Chamber after I had talked about Northern Rock, to obtain a briefing about what I was talking about. I realised that what I was talking about was a crisis that was being created in the City by greed, primarily, and by speculation and casino banking. I remember being at the Labour party conference in the 1980s, around the time of big bang, and organising the launch of a book called “Big bang: the launch of a casino economy”, authored by the then Member for Hackney and my hon. Friend the Member for Bolsover (Mr Skinner), which predicted some of the outrageous potential that there was for speculation as a result of big bang.
When I raised Northern Rock, I completely underestimated the levels of casino banking and the corruption that was taking place. In the previous debate a few weeks ago, I described the City as a “cesspool of corruption”, which it was. However, what was also revealed was the absolute incompetence. It was like “The Wizard of Oz”—when the curtain was pulled back, there was not a wizard but someone scrambling with various levers. We discovered then that the hierarchy of British banking did not even understand the instruments with which they were working because they were so complex. Then it all started to unravel, and we discovered scales of greed, incompetence and corruption that none of us expected.
At that time, we were assured that the regulatory system was not at fault, but we soon discovered how inoperable it was. The result, as we all know, is that the then Government intervened to borrow and they used taxpayers’ money to bail out the system. At its peak, taxpayers’ exposure to the bank collapse was on the scale of £1.2 trillion. I understand that so far we have retrieved only £14 billion of that taxpayers’ money. The second wave was the austerity programme introduced to pay for the Government intervention to save the banking system. Mervyn King estimated the cost of that to be £1 trillion. Anthony Haldane, who is probably more accurate in his assessment, estimates that we have lost the equivalent of between one and five years’ GDP. Those absolutely staggering sums are the result of a crisis brought about by incompetence and greed. The majority of people are 7% poorer than in 2007, and their living standards have fallen, according to the latest estimate, by 13.2% since 2008. The median household income in 2015-16 will be the equivalent of that in 2002-03. These are the implications of what this wealth of greed brought about: mass unemployment, welfare benefit cuts, food banks, and parents missing meals so that children can eat. It is absolutely staggering.
I find it extremely difficult to come to terms with an issue that was raised by my right hon. Friend the Member for Holborn and St Pancras (Frank Dobson). Since the crisis occurred—since I first stood up in this House and mentioned Northern Rock—and we went on to the nationalisation of banks, and then to quantitative easing on a scale that we had never seen before or could even comprehend, the scandalous practices have not gone away: they have continued. As my right hon. Friend said, the bonuses have continued, fraud has continued, LIBOR interest rate fixing has been investigated, and we have seen tax evasion and money laundering. This is happening even when the bankers are in full public sight. At a time when the eyes of the country are on them, they are still manipulating the system.
I find it astounding—I have raised this in the House three times, and 10 days ago I received a letter from the Minister about it—that when quantitative easing was introduced, we discovered through press reports that bankers even then sought to profiteer from it. The letter from the Minister confirmed that at one point the Bank of England had to intervene and withdraw from the market because there were suspicions of price fixing and manipulation of the market during quantitative easing.
Infrastructure
Nigel Evans Excerpts(11 years, 9 months ago)
Commons ChamberRead Full debate Read Hansard Text Read Debate Ministerial Extracts
Mr Deputy Speaker (Mr Nigel Evans)
I inform the House that the Speaker has selected the amendment in the name of the Prime Minister.
Gordon Birtwistle (Burnley) (LD)
I am grateful to the hon. Lady for giving way. Let me point out to her that spending on PFI schemes amounts to billions and billions of pounds—as I understand it, somewhere in the region of £800 billion—and is totally unaffordable. Is it right to spend money on a hospital—[Interruption.] Opposition Members should listen. Is it right to build a hospital under a PFI scheme whereby at the end of 25 years, we will have paid for it 18 times over? It might have cost £120 million to build, but by the time it is finished it will have cost more than £2 billion. I will not agree to spending money on that basis. We should spend money in the correct manner that is affordable for the people of this country; we should not have to pay for something 18 times over. Would you buy a house and pay for it 18 times over?
Mr Deputy Speaker (Mr Nigel Evans)
That means me. Members should speak through the Chair.
Rachel Reeves
I do not know how the hon. Gentleman bought his house, but when I bought mine, I had a mortgage because I could not afford to buy it outright. That is why schemes such as PFI were introduced. I am not sure what school, hospital or children’s centre in the hon. Gentleman’s constituency he would prefer not to have opened during the last Labour Government. I bet a lot more of those things opened under the last Labour Government than have been opened under this Conservative and Liberal Democrat Government.
The reality is that what the Government are doing is hurting business confidence. The director general of the British Chambers of Commerce has described the Government’s plan for infrastructure as
“hot air, a complete fiction”.
Rachel Reeves
I hope the hon. Gentleman is not suggesting that the Government are not going to be able to make the repayments on their debt. We know that their triple A rating is under threat, so if this is a warning that the Government are planning on not paying their debts and the deficit back, it will be interesting news.
The CBI has warned the Government that
“businesses in Britain are looking for action and we haven’t seen any yet”.
Yesterday, the monthly index published by BDO showed that business confidence hit a 21-year low. That is the lowest level of business confidence since Norman Lamont was Chancellor and sterling was ejected from the exchange rate mechanism on Black Wednesday in 1992. I am sure that right hon. and hon. Gentlemen will remember that day. The Prime Minister certainly does—he was working for the Chancellor at the time. Confidence is now at those low levels again.
It is now clear: business has lost confidence in this Government, who do not have a plan for jobs or growth. It is hardly surprising, then, that the Government are failing to attract the private sector funds they need for their infrastructure investment. It is worth remembering how the Government’s plan to target £20 billion of pension funds for investment is going. Responding to a question from my hon. Friend the Member for Ochil and South Perthshire (Gordon Banks), the Chief Secretary to the Treasury had to tell us that the Government were on course for just a 10th of their original target: £2 billion out of £20 billion raised.
The Government lack the policy framework to attract the long-term investment we need. Changes such as cuts to feed-in tariffs have had a detrimental impact on low-carbon investment. The CBI warned the Government that such measures have been
“damaging to business confidence, with implications not just for immediate investment decisions but for longer-term trust in government policy”.
It is no wonder that, last year, 50 companies, investors and industry bodies wrote to the Chancellor asking him to set a firm decarbonisation target for 2030 to give investors the confidence they needed. On energy policy, the Institution of Engineering and Technology has been clear in saying:
“Short-term uncertainty around UK energy policy…is very unhelpful and has the potential to… delay much-needed investment in all forms of energy infrastructure.”
According to the findings of a poll by KPMG, two thirds of businesses believe that the UK’s energy and water infrastructure is unlikely to get any better because of uncertainty about the policy framework.
From the business community, we hear resounding frustration when it comes to the Government’s infrastructure policy. The Government do not seem to understand that businesses long for certainty when attempting to grow, employ more people and build for the future. Those are the people and businesses that we need to encourage, not put off, and infrastructure is vital to that, but the Government’s ideological decision to cut infrastructure investment further and faster is hampering confidence rather than nurturing it.
Small businesses, the engines of growth, are still waiting for the Government to roll out universal broadband. The Government abandoned the commitment from the last Labour Government to provide broadband for virtually every household by 2012. When business needs this Government, they are nowhere to be found.
Fundamentally, the Government fail to understand the need for a comprehensive and long-term plan to build Britain’s infrastructure for the 21st century. That is why the Labour party has commissioned Sir John Armitt, chair of the Olympic Delivery Authority, to consider how long-term infrastructure decision making, planning, delivery and finance can be radically improved. The Olympics taught us what we could achieve together as one nation. With the right leadership and the right investment, and by building consensus around the long-term projects that are essential for our energy, transport and housing needs, we can compete globally, with a national infrastructure that is fit for the 21st century. Labour is therefore making the case for a British investment bank, which would help to support long-term finance for British businesses so that they could take risks and grow. That is especially urgent given that net lending to businesses has fallen by a staggering £13.5 billion over the last year.
Investing in infrastructure is about more than the tarmac on our roads or the bricks that make up our schools. It is about creating skilled jobs for our youngsters. It is about supporting the entrepreneurs who want to export and grow their businesses. It is about ensuring we can grow and operate across the globe. It is about attracting investment from abroad. It is about being ambitious in the face of challenges, and attempting to build a better country for the next generation.
The Prime Minister said in his new year address:
“This is, quite simply, a government in a hurry. And there’s a reason for that. Britain is in a global race to succeed today.”
Whichever way we look at it, however, this Government do not seem to be in a hurry to invest in our country’s infrastructure. Indeed, as I said earlier, they are spending £12.8 billion less on capital investment than the amount specified in the plans that they inherited from the last Government, which amounts to an 8% cut. A Government in a hurry? Hardly. Inertia is the watchword of this Government, at a time when what we need is action.
When other countries are investing in their infrastructure, aware of the benefits, this Government dither. On infrastructure, as on so much else, the country needs decisive leadership. Instead, we get incompetence, delay and cuts. It is time that we changed course.
Mr Deputy Speaker (Mr Nigel Evans)
Before I call the Financial Secretary to the Treasury, I should inform the House that a speaking time limit for Back Benchers will be announced when he has sat down. I advise Members not to think much beyond eight minutes for the moment.
Mr Deputy Speaker (Mr Nigel Evans)
Order. I inform Members that there is an eight-minute limit on speeches.
Andy Sawford (Corby) (Lab/Co-op)
Thank you, Mr Deputy Speaker, for the opportunity to speak in this important debate. I congratulate my hon. Friend the Member for Leeds West (Rachel Reeves) on bringing forward this debate on what the Opposition know to be an incredibly important and urgent issue.
I disagree fundamentally with the hon. Member for St Albans (Mrs Main) when she says that we need to go slowly in bringing forward infrastructure in this country. Given the desperate state of our economy and the number of people who are desperately looking for work, we need a great deal of urgency from the Government, particularly given their appalling record over the past two and a half years.
It was interesting that the Financial Secretary chose to speak mainly about policies from the past. Most of his speech was actually about the last century. Some of the people who are now suffering, such as those who want school places in my constituency while the Government are failing to bring forward infrastructure investment, were not even born at the time of the decisions that he talked about.
The Financial Secretary took on the former Deputy Prime Minister, John Prescott, in particular. I was at the opening of the new St Pancras station when John Prescott was praised by Lord Heseltine for his fantastic contribution to ensuring that the channel tunnel rail link went ahead and that that fantastic building was saved for the nation. The many people who arrived at that station ahead of the Olympics saw what we can do in this country when we commit ourselves to major infrastructure projects. I agree with the CBI and the many other people, including some of the economists who previously endorsed this Government’s plans, who say that this Government lack the political will to take forward major infrastructure projects.
When people get on the train at St Pancras, which John Prescott and the last Labour Government did so much to make possible, they can now come to Corby and see the new railway station that has been built there. If the Minister tells any one of the commuters or the people who use that line for leisure day in and day out that the last Labour Government did not do enough to improve rail services in my constituency, they will laugh him out of town on the next train.
We want to do more and to go further. We want to have northbound routes on that railway line. The other week, the Government made an announcement that was typical of their infrastructure announcements. They said that they were going to electrify the midland main line with £1 billion of expenditure. However, the figure was exactly the same as the amount of money they disastrously took out of the plans for infrastructure spending to which the previous Government had committed in this Parliament. They give us jam tomorrow.
Earlier, the Economic Secretary whispered to the Financial Secretary about the improvement to the A43 in my constituency. Ministers talk about that proudly, but nobody was fooled when that announcement was made—it was just weeks before a by-election. I was surprised there was no announcement today of an Eastleigh bypass or orbital route, a south coast Hampshire link road or some other such potential bribe. Perhaps the coalition parties cannot agree on what appropriate bribe to give.
Labour can give hope to the people of Eastleigh because we have a plan—a five-point plan for jobs and growth. We have talked—[Interruption.] You can laugh.
Mr Deputy Speaker (Mr Nigel Evans)
Order. I think the hon. Gentleman meant to say, “The Financial Secretary can laugh.”
Andy Sawford
Some young people from my constituency were here yesterday to learn about parliamentary etiquette —I should have taken more tips, Mr Deputy Speaker. If the Financial Secretary had laughed in front of those young people when I talked about the desperate need to invest in jobs and growth in this country, they would have given him very little credit indeed.
There is a fanciful picture of how the Labour Government did not invest in infrastructure, but hon. Members should come to Corby and east Northamptonshire and drive past the schools that were built there, such as the brand-new Kingswood school, which is a fantastic facility. My nieces get a fantastic education at the Corby business academy—[Interruption.] The Economic Secretary says that we will pay for those projects, but a combination of funding from the public and private sector—[Interruption.] He should listen to bodies such as the Monetary Policy Committee, which says that we need to find ways of investing in infrastructure in this country.
Corporate Tax Avoidance
Nigel Evans Excerpts(11 years, 10 months ago)
Commons ChamberRead Full debate Read Hansard Text Read Debate Ministerial Extracts
Mr Gibb
That is why this issue is so important. It is not just about the corporate tax base, which is hugely important, but about the competitiveness of British-based businesses.
Another thing that I found odd about the Amazon structure was that the accounts filed at Companies House report that the company has 2,265 employees, which is vastly different from the 15,000 employees that Andrew Cecil told the Public Accounts Committee Amazon employs in the UK. The other strange thing about Amazon’s group structure is that even the Luxembourg operation, with its €9 billion turnover, appears to have made a post-tax profit of just €20 million.
As we have seen with Starbucks and Google, profits can be siphoned off from individual jurisdictions by payments for intellectual property rights through royalties or technical fees. Starbucks pays a royalty of 6% of its turnover to its company in the Netherlands. Google also pays for the use of its technology. Although that technology was developed in California, the rights to use it outside the USA are held in Bermuda.
Much of this area of law is governed by a network of double tax treaties, of which the UK has signed more than 100. They are based on a model double tax convention that was agreed at the OECD and have been highly effective in boosting worldwide trade and overseas investment over the decades. Britain benefits hugely from that network of treaties. We have £10.9 trillion of investments abroad, which generated £188 billion of income in 2011. The Government are therefore right to want to tackle the problem of corporate tax avoidance through international negotiation. As the Prime Minister wrote in his letter to G8 leaders on 2 January:
“in a globalised world, no one country can, on its own, effectively tackle tax evasion and aggressive avoidance. But as a group of eight major economies together we have an opportunity to galvanise collective international action.”
One such action is the OECD’s study into the transfer pricing aspects of intangibles. In its discussion draft, snappily entitled “Revision of the Special Considerations for Intangibles in Chapter VI of the OECD Transfer Pricing Guidelines and Related Provisions”, published in June last year, the OECD concluded:
“It should be emphasized that not all intangibles deserve separate compensation in all circumstances, and not all intangibles give rise to premium returns in all circumstances.”
In other words, the OECD is coming to the view that the huge royalty payments that some international groups make their overseas subsidiaries pay to their home country or to tax havens may no longer be allowable against tax in the overseas jurisdictions. However, the OECD, by necessity, moves slowly. Speedier action could be taken by the UK tax authorities by speeding up transfer pricing inquiries. It is therefore welcome that the Chancellor has allocated additional funding to HMRC to do that. HMRC could also take powers to require companies to disclose in advance all international connected party payments and to supply the associated documentation. There could be tougher penalties when a company’s tax return is wrong because of over-aggressive transfer pricing.
I conclude by touching on a wider issue relating to corporate tax avoidance: the ethics of companies and their boardrooms. In our everyday lives, we are all governed by a sense of morality, not just by law and regulation. Corporations are artificially created legal personalities. The morality of a corporation is determined by its board—by both executive and non-executive directors. It is no good for individual companies or for free market capitalism, which I support passionately, if directors interpret their role too narrowly. Too often, people who sit on company boards fail to ask the simple and straightforward question that governs moral behaviour: is this the right thing for us to do? Too often, directors seem to take the view that their fiduciary duty as directors stops at the maximisation of shareholder value, but section 172 of the Companies Act 2006 makes it clear that the duty of a director to promote the success of the company must be subject to a number of wider considerations including
“the desirability of the company maintaining a reputation for high standards of business conduct”.
I question whether the directors, including the non-executive directors, of the three companies so ably questioned by the PAC were fulfilling that duty.
Action needs to be taken to ensure that the corporate tax contribution of a multinational to a nation’s Exchequer is broadly consistent with the level of economic activity in that jurisdiction. We need to ensure that that action does not hamper world trade: it must be multilateral, but it needs to be swift. There are measures that HMRC can take in the meantime to ensure that it has the intellectual resources to match those of the international accounting firms. There are also questions that the boards of corporations need to take seriously as business leaders and members of society.
Financial Services Bill
Nigel Evans Excerpts(11 years, 11 months ago)
Commons ChamberRead Full debate Read Hansard Text Read Debate Ministerial Extracts
Mr Deputy Speaker (Mr Nigel Evans)
I must draw the House’s attention to the fact that financial privilege is involved in Lords amendments 122, 125 to 128, 138 to 140, 146, 182 and 203. If the House agrees to them, I shall ensure that the appropriate entry is made in the Journal.
Clause 1
Deputy Governors
The Financial Secretary to the Treasury (Greg Clark)
I beg to move, That this House agrees with Lords amendment 1.
Mr Deputy Speaker
With this it will be convenient to consider the following:
Lords amendment 2.
Lords amendment 3, and amendments (a) and (b) thereto.
Lords amendments 4 to 15.
Lords amendment 16, and amendment (a) thereto.
Lords amendments 17 to 21 and 148 to 178.
Greg Clark
It is a pleasure to be muscling in at this late stage of our proceedings on the Bill, but I feel it is a bit of a cheek to do so given that many Members have laboured many hours over these clauses in Committee—