Finance Bill

Debate between Roberta Blackman-Woods and Sheila Gilmore

Tuesday 3rd July 2012 Commons Chamber

[Sheila Gilmore]

The hon. Member for St Austell and Newquay (Stephen Gilbert) seemed to think that he was living in a parallel universe, and, indeed, most of we Opposition Members thought that we were living in one as well. The process that has taken place is rather like the process that takes place when someone says “I want £10 from you”, and then, after a great deal of argument, says “I will make it just £2, so you should be happy”, and we find ourselves saying “Thank you so much for listening.”

Yes, it was good that the Government listened. I do not think that any Opposition Member has said otherwise, although we might have preferred them to listen from the outset. They had an opportunity to do so on Second Reading. One or two Conservative and Liberal Democrat Back Benchers voted against the Government even then in order to make their views known, but many others who had heard the Government say that the measures were necessary voted for them. Yes, it is good that the Government have listened, but it might have been better had they never embarked on this road. We must ask whether it was sensible for the Treasury—which, one assumes, is in charge of our economy to some extent—to spend the last four months dealing with matters which it had, after all, generated in the first place.

[Roberta Blackman-Woods (City of Durham) (Lab)]

Does my hon. Friend agree that the Government listened only partially, especially when it came to the imposition of VAT on listed buildings? Churches will still have to undergo a bureaucratic process in order to claim it back, and other listed buildings will still be subject to VAT for repairs. That could really affect the country’s heritage.

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[Sheila Gilmore]

That may indeed may be the case. I recall that in 2007 a new council took charge in Edinburgh—it was a Liberal Democrat-SNP coalition—and it announced that it was planning to close some 22 schools. There was a very interesting cartoon in the local paper. It showed officials coming out of a meeting with the new administration and turning to each other and saying, “We never expected them to accept all that. That was a starter for 10, and we thought we’d get beaten back.” The officials had put forward this proposal and the new and inexperienced administration had said, “Yeah, we’ll go for that.” It did them some reputational damage. They proposed closing 22 schools, but then had to roll back very substantially because of the public outcry. The officials had expected to be told, “Actually, that’s not what we want to do. That’s not sensible. Let’s see the proper workings before we ever go public on this.” Perhaps the suggestion that this Budget measure was a consequence of our having a very inexperienced Government and Chancellor was right, therefore.

[Roberta Blackman-Woods]

Does my hon. Friend not agree that that view is much too kind to the Chancellor and the Government parties, as they clearly dreamt up these mad ideas themselves?

[Sheila Gilmore]

I will resist the temptation to take up my hon. Friend’s invitation to agree with that view, because we have to be tolerant, to a degree, of inexperience. There is currently a strong cult of youth and inexperience in our politics, but that might change, and it might at some point in the future be acknowledged that there is merit in looking to those who have had experience of life and living before entering politics, rather than to those who become as exalted as the Chancellor of the Exchequer before they have lived and experienced a great deal of ordinary life.

I shall spare Members having to listen to me list all the listed buildings in my constituency that are not churches. Those who want to know what those buildings are can read the relevant Committee report in Hansard. There is an important point, however. It has been assumed that because the Government made a concession—albeit not a full one, perhaps—to churches, the problem has been solved. There are other listed buildings that are not churches, however, which will now face the 20% rate with no financial assistance or concession made to them. These buildings are equally important. Churches are extremely important as historical monuments, even if some of them are no longer used as churches. In Edinburgh, there are examples of churches that have been converted to other uses, but there are other buildings that are at risk, too, and imaginative alterations might be made to some of them in order to put them into community use. This extra cost will put some such community projects at risk, however, and will put some buildings at risk, too. If those buildings cannot be put into community use, it is likely that they will deteriorate and end up having to be demolished on safety grounds.

[Roberta Blackman-Woods]

Does my hon. Friend agree that it is thoroughly irresponsible to bring in the increase on repairs on listed buildings without conducting a proper impact assessment, and that the Government should review this policy?

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[Sheila Gilmore]

I agree. The Government have pointed out that VAT falls on repairs but it did not previously fall on alterations, and they say we should equalise the situation. That misses the point. Alterations often enable buildings to have a different use from their previous one. They are made to be able to function again for business, residential or community-use purposes. Such alterations are generally bigger projects than simply repairing the roof and ensuring that the rain does not come in. The costs involved can be great, and this 20% addition to the cost will therefore be very considerable and will put many such projects at risk. Many people have made that point, and do not feel the Government concession in respect of churches goes nearly far enough. We must bear that in mind. We will find out in the future whether these concerns were right.

In respect of VAT at least, this Budget has been shambolic. It is not good enough for people to say, “Well, because there has been a change, the whole process is now a good one.” It has not been a good one reputationally for the Government—and perhaps we, as Opposition Members, should be pleased about that. We cannot be pleased, however, when we see the effects that a declining economy has on so many of our constituents, who feel they are faced with a Government who truly are not caring.

Let us think about the arguments made in defence of some of these changes. On listed buildings, we have heard all sorts of arguments, such as, “The previous situation allowed rich people to build swimming pools.” There was no particular evidence of that, but the Chancellor obviously thought it was a good argument to put up because he liked the idea of presenting himself as being on the side of the small person rather than the rich—despite the overall effect of his Budget policies.

[Roberta Blackman-Woods]

Does my hon. Friend agree that if the Government were indeed concerned that alterations were going to be made to create swimming pools, the measure could simply have exempted such alterations?

[Sheila Gilmore]

That is indeed the case. Conducting research and finding good evidence before making and changing policy is of paramount importance. We have seen that in respect of many aspects of this Budget. We saw it in the debate yesterday in respect of the 50p tax rate. There were a lot of hypotheticals—a lot of “maybes” and “perhapses”—but there was not a lot of solid evidence.

This has been a poor piece of policy making. I congratulate the Government on turning, but if they had thought things through first, they would never have had to turn.

Child Benefit

Debate between Roberta Blackman-Woods and Sheila Gilmore

Tuesday 22nd May 2012 Westminster Hall

[Roberta Blackman-Woods]

My hon. Friend makes an excellent point. The workability of the proposals will have to be reconsidered. We seem to be building into the system a number of problems for families. The Government could have learned from previous practice and not gone down this road.

We are left with a number of questions about the workability of the changes and the need for them, as well as questions about fairness. As late as 2009, the Chancellor was promising not to scrap child benefit. No doubt we will hear today that it has not been scrapped, but changed massively. More significantly, it has already been cut massively because of the lack of uprating with inflation. Therefore, child benefit and families with children have already been targeted for cuts, even without the cuts that have been made to tax credits.

[Sheila Gilmore (Edinburgh East) (Lab)]

Will my hon. Friend reflect on the fact that, in the run-up to the Budget, there was debate about child benefit and the coming changes to working tax credit, which affect some of the lowest-paid working couples in our society? The Government found enough time and energy to make some amendments on child benefit, but none to the proposals on tax credit.

[Roberta Blackman-Woods]

My hon. Friend makes an excellent point. She is right. The overriding question is, why have the Government chosen to target cuts in respect of families, particularly those with children? None of us have received a satisfactory answer; perhaps the Minister will provide us with one.

The second question is, why are women being targeted again by this Government? It is not only families with children that are being targeted, but women—mostly women who are single parents—and it is more likely to be women who are put under pressure not to claim by their partners, so that their partner’s tax does not change. Whether or not that happens in reality, the Government should not even countenance the possibility. Women will suffer in terms of pension credits if they do not claim. This is a real mess and is just one more aspect of the omnishambles Budget that needs to be changed.

It took more than 70 years from Eleanor Rathbone’s entry into politics to get universal child benefit paid to the mother for all children. I hope that it does not take another 70 years for these appalling changes to child benefit to be reversed.

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[Sheila Gilmore (Edinburgh East) (Lab)]

I do not intend to say very much in this debate. The reason why I did not seek to catch your eye before, Mr Streeter, was that I thought that I might have to leave. I will have to leave before I have the benefit of the Minister’s response and I apologise for that, but I am serving on the Finance Bill Committee.

I want, however, to say a little about the difficulties that can arise in relation to family structures and so on. As someone who was a family lawyer, I know how relationships can not only break up but re-form, and that may happen over a relatively short period. That is a practical aspect of this issue that I am not sure has been taken fully into account. As family lawyers, we used to joke that we achieved a higher rate of reconciliation than marriage guidance counsellors. People’s lives are not linear. They do not necessarily go straightforwardly through this process: “Oh, I’ve fallen out with my partner. Now we’re separating and that’s it.” It is very common for people to encounter a circumstance that leads to a break-up and then to reconcile. It may be a very serious situation. Even in cases of domestic violence, people reconcile. As a solicitor, I might sometimes have wished that they had not; nevertheless, they do so.

A relationship structure can change quite a lot, even in a single financial year. That is an additional layer of complication. It should not be assumed that just because people are paying higher rates of tax that relationship breakdowns do not happen, because that is far from the case. That is yet another practical issue that must be addressed.

The position could have been very different. Perhaps all Governments wonder how they arrived at certain decisions. If we look back at this one, it seemed to arise from what looked like a clever wheeze. It was announced at a party conference, which is never a good time to announce policy, because it is the headline of the day that is very much wanted. I suspect that the thinking was, “Ah! We can really get the Labour party here. We are going to take a benefit away from higher rate taxpayers and the Labour party won’t dare to oppose that, so we will have got them on the run.”

We said right from the beginning, as well as dealing with all the issues about fairness and the reason why child benefit and its predecessor, family allowance, were introduced in the first place, that there was a practical issue. Many of the practical criticisms were voiced at that time. This all dates back to October 2010. A year later, those practicalities had apparently not been thought through very carefully. Some amendments have now been brought into being—at the last gasp—but those changes produce yet more anomalies. They produce a marginal rate of tax for some families that is far higher than presumably anyone would think was desirable for people who are in the middle ranges of income. Some families will face marginal tax rates of 50% to 60% because of how the changes take place and particularly the tapering. That has been introduced to try to make things a bit better, but arguably may make things a whole lot worse, because it introduces a whole new level of complexity.

Hon. Members have mentioned not just the community charge but the ill-fated and, in my view, ill-thought-out 10p tax rate abolition proposal. I have said this before and I know that many of my colleagues have. I was not in this place at the time, but as party members and activists, we have a view on these things and we thought, “Oh no, this is not good.”

[Roberta Blackman-Woods]

Is not the point about the 10p tax rate debacle—I think we would all accept that that is what it was—that when the outcome of that policy was made obvious, the Labour Government of the day reversed most of the adverse consequences of the policy? We see no indication from the current Government that they will do the same.

[Sheila Gilmore]

I agree. The point that I was making was that, sometimes, what looks like a clever idea to start with quickly unravels into something that is much more difficult. The slight amendments that were made to the current proposal before it was introduced into the Budget, far from addressing the issues, are making the whole thing even more complicated. Not much time seems to have been given to work these things through. Some campaigners are suggesting to the Government that it is not too late. If they are still minded to implement this proposal in some way, shape or form—I hope that they will not want to—they should at the very least not go ahead with it starting from January of next year, given that it has been so poorly thought out and the implications and problems have not yet been fully resolved. To put a hold on it and perhaps come back if they think that they have solved those problems—ideally, they would not come back with it at all—would be sensible at this stage. I urge the Minister to give that very serious consideration.