Finance (No. 2) Bill

Baroness Winterton of Doncaster Excerpts

2nd reading
Tuesday 13th April 2021 Commons Chamber

[James Murray]

I have only a few moments. The hon. Gentleman may speak later.

We will vote for our amendment and against the Bill, to make it clear to people in our country that we understand that people need to be spared the Bill’s tax rises; that Amazon does not need any favours; that NHS workers deserve our support, that we need good new jobs in every region in the nation; that the economy will grow only through responsible investment; and that we need to fix social care, the climate emergency and the housing crisis. Above all, people in our country need a Government who are on their side, and it is absolutely clear from the choices that the Bill and their Budget make, and the problems that they choose to ignore, that this Government fail that test.

[Madam Deputy Speaker (Dame Rosie Winterton)]

We now go to the Chair of the Treasury Committee, Mel Stride.

--- Later in debate ---

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

I, too, pay tribute to Prince Philip; in tribute to him, I am wearing my father’s tie. Like Prince Philip, he served in the Royal Navy in the second world war. He lost his own father at the age of 12; Philip was, of course, estranged from his father at 13. Both fought the Nazis.

I mention this partly because the main conflict there was the battle of the Atlantic, which was the attempt by the Germans to starve Britain. In 1939, half our meat, 80% of our fruit and 70% of our cereals were imported. Last year, 80% of our food was imported. Thanks to the botched Brexit deal—there was no mention at all of this in the Budget—we now have the prospect of self-imposed food shortages. In January our exports to the EU, our largest market, were down more than 40%. Imports were down by 29%. They will go down more when we introduce non-tariff barriers. The reality is that in Britain today, a carrot pulled up in Spain on Monday could be on our shelves by Thursday. That will no longer be the case. We face the prospect of food shortages and food inflation.

The Office for Budget Responsibility found that the botched Brexit deal would cost the economy 4% within 15 years, and something like 1.4 million jobs and £1,300 each. The reason we are seeing tax increases, taking us to a share of taxes not seen since the 1960s, is not the pandemic, which is a one-off hit that will be recovered, but the ongoing problems of the botched Brexit. We need to remember that. We need to look towards better realignment and better trade with our closest marketplace.

The other thing to bear in mind is that last year something like 1 million people from the EU left this country to go back to Europe. Many will not come back, partly because of the hostile environment here, and that creates an issue about the size and quality of our labour market when it comes to productivity and production. The EU is already questioning the legality of our breaches of the Northern Ireland protocol and there is a question mark over divergence of standards and protections in the future that might lead to tariffs. If we manage this badly, we may be hit even harder.

For those on the Government Benches who say, “Oh, don’t worry—we’re opening up loads of other markets,” it is worth remembering that, the Japan deal, for example, is worth £1.5 billion to GDP, but if it had been done through the EU, it would have been worth £2.6 billion, because it can negotiate a better deal because it is bigger.

The truth is that while the Government are spending enormous amounts of money on covid, that is not really the explanation for the massive personal tax increases that Britain will suffer.

The other thing to mention about productivity, other than the loss of young workers to the EU, is that not only have we had the highest rate of death in the world from coronavirus, but there is clearly a move, once we have got people over 50 vaccinated, to be reckless again. The issue is the fall in productivity of younger people with long covid. We all know anecdotal examples, but we do not know the full impact of that. I have knowledge of music students, for instance, who have had a shake—a violinist—or who cannot blow the trumpet as well because they have lost lung capacity. These issues are significant for the overall productivity of our economy in the future.

On the workforce being fit and ready to work for our recovery, we should also think about the fact that in today’s Britain, 7.6 million people are living in hunger, 1.7 million of whom are children—it is an absolute disgrace. They are left in food insecurity, as the UN calls it and as the Environment, Food and Rural Affairs Committee recently reported. In essence, that means that they do not have sufficient nutritious food on a daily basis. That is deplorable.

Interestingly enough, in 1952, when the Queen came to the throne and Philip was 35, rationing was still in place for sugar, butter, meat, cooking fat, cheese and so on. In that year, Aneurin Bevan, the founder of the national health service, famously wrote “In Place Of Fear”, in which he warned that while we had to confront poverty and that it was difficult to define, the basic requirement was to ensure that there was no hunger. He warned that if millions were left in hunger, our civilisation would be at risk. It is certainly the case that we now face a depleted, physically weakened and hungry workforce. That surely is not the recipe for the productive economy that we need for the future. On top of that, our youngsters have lost a year in education—[Interruption.] I apologise for that, Madam Deputy Speaker.

The Government say that they have spent a lot on coronavirus and of course they have, but we have read in the newspapers and elsewhere that, in many cases, the money has not been well spent—personal protective equipment, track and trace and food parcels that have been done through Tory party dealers. We have also heard about David Cameron being involved with Greensill. There are question marks about how well this Government are treating taxpayers’ money.

When it comes to the Chancellor, of course we know that he was a founding partner of the hedge fund, Theleme, which presumably had a partner stake. We do not know about that because those tax returns and details are in the Cayman Islands, but we do know that that particular hedge fund appreciated in value from something like £7 billion to £39 billion shortly after we heard news that the Health Secretary had ordered 5 million doses of the Moderna vaccine, in which the hedge fund had invested. We do need to get to the bottom of these things and find out what happened. If it was the case, for example, that the Chancellor had, say, 15% of that hedge fund, his share of that increase—

[Madam Deputy Speaker (Dame Rosie Winterton)]

Order. I do think it is quite important that we address some of the issues in the Finance Bill, so I am sure that the hon. Gentleman will be doing that.

[Geraint Davies]

Thank you very much for that advice, Madam Deputy Speaker. I was just going to turn to the nurses’ pay increase. Had the nurses been granted a 5% increase in pay in this Budget, that would have cost £1.7 billion gross, but in fact, after looking at the recovery of taxes from both income tax and sales tax—consumer tax—we see that it would have cost just £330 million a year. On my calculation, that is about a 10th of the value of the appreciation in the hedge fund that I was mentioning—the 15%—that would have been privately earned by the Chancellor. Obviously, we need to have these figures disclosed. I am trying to put in context the fact that we can afford to pay the nurses a decent wage. There are tremendous amounts of money moving around at the moment and we do not really have a proper tie on it.

We should contrast that with what is happening in Wales, where we have a more effective system of track and trace, PPE is bought more effectively, food parcels are not bought privately but down to local authorities, and the sickness rate and death rate from coronavirus are much lower. We should contrast it with the way that money has been invested to help business. The Chancellor has put money into cutting stamp duty, and lots of that has been spent on second homes—but not in Wales—because that money is not well targeted where it is needed. Money has been given to large businesses with large properties, but again not in Wales, where the larger supermarket stores with big properties will not get the council tax relief because they are making extra-normal profits during coronavirus. The issue is investing money where it is most needed.

Turning back to the nurses, in Wales we have the highest proportion of single earner households in the country and the lowest average wage, which is 70% of gross value added in terms of the UK average. These people might include a nurse as the only earner in a poor household who has faced nearly 10 years of pay freezes and now another pay cut. It is no surprise that nurses are going to food banks. These things are not necessary; they are political choices. I am just drawing the contrast between those who have so much and those who have not enough.

Mention has been made of Amazon and the fact that it and others have basically decimated our physical retail side. There are questions about what should be done about that. In my view, local authorities should be empowered to provide digital marketplaces to support local businesses to sell to local people with overnight delivery so that people would have a choice between sending their money offshore to some huge American organisation that does not pay tax, is destroying local jobs and undermining workers and supporting local businesses through a collective approach with a modernised online service.

We have of course elections coming up, as you know, Madam Deputy Speaker, and people are making these financial choices and comparisons—including, in Wales, those aged 16 to 18. In this Budget, prescription charges in England are now going up to £9.35, whereas in Wales people do not pay for prescriptions. In Wales, we have ensured greater safety by giving advice that people do not travel more than four or five miles, whereas in England people could go wherever they liked. In Wales, a two-metre rule was put into legislation—

[Madam Deputy Speaker (Dame Rosie Winterton)]

Order. May I just interrupt the hon. Gentleman again and say that we really need to address the Finance Bill? I think the feeling is that perhaps he might be bringing his remarks to a close fairly shortly.

[Geraint Davies]

Yes, that is my feeling as well, Madam Deputy Speaker. I was simply making the case that owing to a more cautious approach in terms of coronavirus, we have got to a situation where productivity is better supported.

I will bring my remarks to a close as you suggest, only finally to say that we need to do more on the issue of climate change and the environment, because 64,000 people a year are dying from air pollution, while nothing has been done about diesel or accelerating towards electrification. We need to look at a different approach whereby we can generate growth and opportunity for the future.