Finance Bill

Debate between Rachel Reeves and Alan Reid

Tuesday 3rd July 2012 Commons Chamber

[Rachel Reeves (Leeds West) (Lab)]

I thank my hon. Friends the Members for Pontypridd (Owen Smith), for Newcastle upon Tyne North (Catherine McKinnell) and for Kilmarnock and Loudoun (Cathy Jamieson) and others for serving on the Public Bill Committee with me over the past several weeks. I also thank our able Chairs for supervising us during that process and the Commons Clerks for their advice and assistance throughout the process in Committee and in the House.

The Bill has been on quite a journey since it was first presented to the House just a few months ago. I fear that the Exchequer Secretary spoke too soon last December when he announced that

“the Government’s more open, predictable and simple approach to tax policy making is working well.”

He said that by publishing tax legislation in draft form first,

“we are giving greater certainty and stability to taxpayers and businesses”.

I do not think that taxpayers and businesses, or indeed Members of this House, realised that the Finance Bill itself was still only a draft when it was published in March. This Finance Bill has been through so many stages of crossing out and rewriting that it would have been easier for the Government to have scrapped it and started again, perhaps with some measures that would have supported jobs and growth.

As we have heard throughout the Committee and Report stages, the Budget has been a total and utter shambles. When we first saw this Bill back in March, it contained provisions to raise VAT on hot food, on static caravans and on improvements to listed buildings.

[Mr Reid]

What was in the Budget back in March was a consultation exercise on VAT on static caravans and so on. I am glad that after that exercise the Government listened and amended their proposals, but it was a consultation. This Government, unlike the previous one, listen to what people say in consultations.

[Rachel Reeves]

That is the first time I have heard a Finance Bill being called a consultation—I do not even know where to start.

The Budget in March also included a 3p rise in fuel duty in August and limits on charitable donations. All this was necessary, we were told, to deal with the deficit. Yet the Bill before us, as we reach Third Reading, contains none of those measures. We have had a series of abrupt reversals that, according to one estimate, will cost the Exchequer nearly £700 million.

Opposition Members argued that these measures were misconceived from the start, and that adding to the costs faced by families and small business at this time would make it even harder for our economy to climb out of the recession that this Government have dug us into. But it must be a matter of regret that so much uncertainty and confusion has been created for those affected, doing real damage to businesses, charities, pensioners and families, and that at a time of tight public finances the Government’s financial and fiscal planning seems to be in such disarray, with no one at all clear what the Government’s priorities actually are.

Despite the Government’s belated change of heart on those matters, the Bill remains a deeply flawed, unfair and utterly inadequate response to the problems facing our country today and that is why the Opposition will vote against it this evening. The Bill still offends against the most basic principles of fairness by giving priority to a reckless and irresponsible tax cut worth tens of thousands of pounds for a few thousand millionaires while at the same time asking millions of ordinary people who are already under pressure from rising prices, falling wages and cuts to tax credits and benefits to make further sacrifices and endure further hardship.

The Bill breaks a promise that the Chancellor made in the Budget last year to Britain’s pensioners that their age-related allowance would rise in line with inflation for the rest of this Parliament and instead imposes a stealth tax that will hit 4.5 million people over the age of 65, all of whom live on modest pension savings. The Bill is breaking the principle of universal child benefit and still means that one-earner families will lose thousands of pounds a year while a two-earner family on almost twice as much will keep all their benefit. It is a botched, half-baked measure dreamt up for a party conference speech but the measures are described by the Institute of Chartered Accountants in England and Wales as a “policy disaster” that are

“in danger of becoming a practical disaster when they come into effect”.

We have raised a number of other concerns about the Bill, such as the controlled foreign companies changes and the impact that they will have on developing countries. What is most wrong with the Bill, however, is that it represents a massive missed opportunity to end the recession and get our economy working for ordinary working families, pensioners, businesses and young people. It could have been a Bill that took the tough decisions necessary to ensure that those who could make a fair contribution to deficit reduction did so, so that those hit hardest by the current crisis were not put under even more pressure.

It could have been a Bill that cut VAT, giving immediate relief to hard-pressed families and giving our economy the stimulus it needs to get growth under way again and to make unemployment fall. It could have been a Bill that redirected money wasted on excessive bank bonuses and put those resources to better use, helping young people get back to work and constructing new affordable homes.

Post Office Card Account

Debate between Rachel Reeves and Alan Reid

Tuesday 24th May 2011 Westminster Hall

[Rachel Reeves]

As the hon. Member for Truro and Falmouth has said, it would be good to see the Government working on a more joined-up basis. Savings for one area of government put costs on another area of government, and this is a prime example of that. It also goes against the commitments in both the Conservative and the Liberal Democrat manifestos. They would have put more services into post offices, but awarding the green giro account to PayPoint goes against those principles.

[Mr Reid]

The hon. Lady keeps forgetting that it was the previous Labour Government who wrote the tender specification, which could have specified the need for an extensive rural network. That would have meant that only the Post Office would have qualified, so why did her Government not specify the tender in that way?

[Rachel Reeves]

As I have said, the Labour Government did not get everything right in relation to post offices. The Labour party is using the period of our policy review process to look at a large number of our policies. I return to the point, however, that both the Liberal Democrat and Conservative manifestos made it clear that those parties were committed to giving more services to post offices, not to removing them. That is why the decision on the green giro was so disappointing, because it went against those commitments.

To return to another point that I made earlier in response to the Minister’s question, although POCA was put out to tender, the previous Labour Government recognised the public concern, ended that process and gave POCA to the Post Office. That decision was welcomed by our constituents and by post offices up and down the country.