Phillip Lee
Main Page: Phillip Lee (Liberal Democrat - Bracknell)Department Debates - View all Phillip Lee's debates with the HM Treasury
(8 years, 4 months ago)
Commons ChamberForgive me for not being in the Chamber at the start of the debate, Madam Deputy Speaker. I was not here because I had absolutely no intention of speaking. However, when I listened to the shadow Chancellor’s speech, I found myself understanding his frustrations and understanding the points he made. I guess the problem is that his solution seems to be some sort of socialist utopia, which I do not think will work. I see no example in history of its doing so. I have, however, been forced to consider what a viable solution to this state of affairs might be.
Understandably, as many colleagues have already illustrated ably in their speeches, the general public are angry and frustrated. There is a palpable sense that there has been a breakdown in trust not only in us in this Chamber, but in systems of government, whether it is the tax system or, given the latest dreadful case in Burton, the social work system. Across the board, the public are deeply mistrustful, and increasingly so, as well as deeply cynical. That is understandable, because this is not the only tax scandal. We have had Google and many others, including in relation to corporation tax.
I can understand why the average man and woman in the street is thinking, “If it is good for me, why is it not good for them?” The response should not be hypocrisy and it certainly should not be envy; it should be to ask what we can practically do in the globalised economy we all inhabit. I readily admit that there are failings in our current capitalist model, and I rarely see contributions from people who recognise that or, indeed, who have thought about what might replace it. A notable exception is my hon. Friend the Member for Hereford and South Herefordshire (Jesse Norman).
The hon. Gentleman mentioned public anger. Measures against the recession have been going on for about six years. The public are weary of that, just as the public in America are weary of what is happening there. The public feel aggrieved at us because the recession and the measures to deal with it have been too harsh and have gone on for too long. That is one reason why people feel that they bear the biggest part of the burden.
I thank the hon. Gentleman for his contribution, but the political and philosophical point in it is that he does not believe that reducing the size of the state is necessarily in the interests of the majority. I do, and that is where we diverge, but the hon. Gentleman is right that there is a sense that the middle are carrying the burden and the very rich are not. However, all these things that we have been discussing, about which I have no knowledge—I wish I had money in trusts, offshore or elsewhere—are legal. If something is legal, I believe that it is legitimate. To those who believe that there is a moral component to paying tax, I say, “Get real.”
We probably need to look at the system first. Earlier, I referred to the corporation tax scandal, Google and the like. I know that the Government have made significant progress on reducing corporation tax, but corporation tax is out of date in a globalised economy. Let us just scrap it. We either make a decision not to spend £42 billion, or we move to a form of taxation that is not so easily avoidable, be it employee taxation, a sales tax or a property tax. However, the perpetuation of corporation tax in the world I see is plainly nonsense.
On the point about London property ownership, it is all about avoiding stamp duty. Scrap stamp duty. We should either not spend the £7 billion or find another way of levying the tax. Perhaps people should be taxed for ownership on an ongoing basis. Perhaps council taxes should be increased. I do not know—one can choose. However, corporation tax and stamp duty are clearly not fit for purpose and are easily avoidable.
The other challenge is intergenerational inequity. Significant sums of money are tied up in particular generations. Much has been said about the Prime Minister’s inheritance tax arrangements, which are totally to be expected—anybody with any wealth will mitigate inheritance tax. Who in that position would not? Let us not be hypocrites. The problem is that significant wealth is tied up in a particular generation, who were born post war. How will we facilitate the transfer of that wealth fairly and equitably? Answers on a postcard, please. At the moment, we do not have a system that works, and we need one.
I move on to transparency and the need for simplification. I am attracted to the Scandinavian—Norwegian and Swedish—model of publishing tax and wealth online. I support that; I have absolutely nothing—as far as I am aware—to hide. When I mention that to Conservative colleagues in particular, they worry about privacy. If that is founded—and those arguments are strong—the Prime Minister should not have published his tax returns, and nobody else should do so. It should be all or nothing. Each and every one of us in the Chamber, and indeed those watching in the Public Gallery, has a share in our democracy and in our Government functioning. For that share to be valued, we must all trust that it is legitimate and fair and that everyone is playing by the rules. I am therefore drawn to the Norwegian model, with all the necessary clarifications of legitimate application.
Which Norwegian model? There is one to do with the sex trade, there is another to do with negotiations for the referendum—is my hon. Friend talking about the tax one?
Of course I am talking about the tax system. There have been some concerns about it, to do with extortion and potential for kidnapping the very wealthy. However, if the system is applied with a log in and all the necessary things that need to be put in place, I do not see a problem with it. In the first couple of years, everyone will be interested—twitchy curtains—in what everyone else is earning, but after that, things will settle down.
I have contributed today and I feel strongly about this because if we do not have trust, not just in us but in this establishment and in Government, we cannot achieve much. The challenges that the country faces with the long-term sustainability of health and welfare, particularly pensions, mean that there will be some difficult decisions for whoever is in power. For them to be implemented, we must be trusted. Everything that we do here should be about that. That is why I think that our priorities should be transparency, simplification and scrapping taxes that have long been out of date.
I am grateful to my hon. Friend for his interesting speech. Does he believe that tax transparency will automatically lead to greater trust among the electorate? I feel that the electorate has reached the point where transparency may not necessarily lead to greater trust.
I agree with my hon. Friend that initially no, it would not. However, in time, once the system beds down, it will. The richest man in Norway, who published all his wealth and income, is now extremely popular because it turns out that he is a great philanthropist. People do not have a problem with others being successful. I certainly do not detect that in the British public. However, I think that there is a suspicion that something underhand is going on in some quarters and, as the Prime Minister says, transparency is the best disinfectant.
We need to act because trust matters. Without trust, we cannot implement what is necessary, whatever the policies are. Anything that the Government can do to encourage the public to trust in the system and in this institution will get my support.