Budget Resolutions

Ruth George Excerpts

1st reading: House of Commons
Tuesday 28th November 2017 Commons Chamber

[Greg Clark]

I am conscious that many Members want to speak and the hon. Gentleman is tempting me into a discussion that would take more time than I have. However, our future as a successful economy is about trading more with Europe and the rest of the world. That should be free of tariffs and free of friction, and that is what we want to achieve through our negotiations.

None of the investment in and improvement to the productive capacity of the economy would be possible without a fundamentally strong economy. The essential foundation of future prosperity is to be a place in which global investors can have confidence. It is sometimes easy to take for granted the progress that was made by my right hon. Friend the Chancellor and his predecessor in rescuing the economy from the catastrophic situation in which we found it when the Labour party left office. Britain had its largest deficit as a share of GDP since the second world war. So reckless had the Labour Government been with the public finances that in their last year in office—almost unbelievably—for every £5 of Government spending, £1 had to be borrowed. Unemployment rose by nearly half a million, the welfare bill ballooned and the number of households who had never worked had doubled. If we had continued on that course, Britain’s reputation as a dependable place for global investors to entrust their assets would have been lost, and it would have taken many generations to recover.

As a result of the steady and painstaking work of the British people, however, backed by the leadership of Conservative Members, we have cut the deficit by three quarters at the same time as cutting income tax for 30 million people. Britain has been one of the job creation hotspots of the world, with employment up by 3 million in just seven years and unemployment lower than at any point since 1975. However, just when the deficit is being tamed and we can look forward to falling national debt, which has to be repaid by future generations, the Labour party—I hope it will contradict me—has adopted a platform that is even more extreme than the policies that produced the previous situation. Labour’s proposal is to borrow an extra quarter of a trillion pounds. As if that were not enough, it also wants to increase taxation to what the Institute for Fiscal Studies has called the highest peacetime level in the history of this country. That would, as the IFS also said, make the UK a

“less attractive place to invest”.

It is no wonder that the reaction of employers the length and breadth of Britain has been one of alarm. The chief executive of the EEF said that those policies are from a bygone era. Do they have credibility? The answer is clearly no.

[Ruth George (High Peak) (Lab)]

Will the Secretary of State give way?

[Greg Clark]

I am about to conclude.

If we want a strong, competitive economy that is fit for the future, we need to live within our means, create good jobs and pay people well. We need to be a beacon of free trade and internationalism. That is what our industrial strategy and this Budget are about. Prosperity for all is the best alternative to the high-tax, anti-enterprise, job-destroying ideology that has taken over the Opposition Front Bench. Our Budget takes us into the future; the Labour party takes us into the past. I commend the Budget to the House.

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[Rebecca Long Bailey]

I applaud the hon. Gentleman’s attempts at crowbarring that in there. I was talking about access to SME finance, so I will carry on.

[Ruth George]

As there is tax relief for R and D, the higher the rate of corporation tax, the greater the incentive for companies to invest in R and D, as the hon. Member for North West Leicestershire (Andrew Bridgen) would do well to learn.

[Rebecca Long Bailey]

I thank my hon. Friend for her comments. The Government’s proposals on unlocking access to finance for business lack ambition and fail to recognise the impediments many businesses face when attempting to access finance. Indeed, Craig Berry, a member of the Industrial Strategy Commission, has said:

“the plan for unlocking private investment is under-cooked and, frankly, pitiful.”

Furthermore, the proposed sector deals appear very narrow and the strategy as a whole will do nothing to help the millions who work in retail, hospitality, care and other large low-wage, low-productivity sectors. A large proportion of those people are women, but, as we know, the Government do not have the best record when it comes to supporting women in the economy. [Interruption.] If I were a Conservative Member, I would listen to this, because these are the stark statistics: men are expected to receive 46% more of the funding from this Budget than women; and the Budget made no impact on the shocking fact that 86% of tax and benefit changes since 2010 have come at the expense of women, according to Labour and House of Commons Library research. That is scandalous.

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[Mr Kenneth Clarke (Rushcliffe) (Con)]

I am afraid that time will prevent me from following the hon. Member for Salford and Eccles (Rebecca Long Bailey) too far in some of her analyses. I shall certainly resist the temptation to go into her rewriting of history, in which she glossed over a Government who carried on borrowing money during an entirely artificial boost in tax revenues, at a time of an artificial credit boom, and then found themselves hopelessly in debt at the time of the crash, leaving the 2010 Government with a colossal deficit and a huge burden of rapidly mounting debt, which they have managed strongly so far. I wish to look at where we are now and to look ahead. I should certainly resist the temptation to start re-fighting the battles on how the Labour party ruined the economy of the 2000s.

[Ruth George]

rose—

[Mr Clarke]

Having been partisan, I shall give way.

[Ruth George]

In spite of what the right hon. and learned Gentleman just said, I wonder whether he agrees with the organisation Full Fact, which says that for most of Labour’s last term in office public sector national debt was down and that it was 36% in 2008-09. Yes, it then went up to 65% in 2009-10, but that was as a result of the global economic crash and the subsequent recession, which happened globally.

[Madam Deputy Speaker (Mrs Eleanor Laing)]

Order. This is not a speech.

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[Ruth George (High Peak) (Lab)]

After seven years of Conservative-led Government and seven years of austerity, my constituents in rural Derbyshire will tell this House that austerity is not working. Both our hospitals are facing closure. Three nurseries have already closed, and more are saying that they cannot continue. Schools are being squeezed by 5% cuts and saying that they cannot continue and are having to lose teachers. We have lost more than 400 police officers in Derbyshire. There are not enough to respond to serious incidents; there are not even enough to police Buxton carnival. And our firefighters have been reduced to a retained service.

Austerity is hitting us hard—it is hitting every community hard—but it is not working. After seven years of telling us that we must not borrow to invest in public services, the Conservatives are borrowing up to the hilt. The national debt clock, which they were so keen to talk about at the time of the 2010 election, now stands at £1.95 trillion. They have almost doubled the national debt, and what have we got to show for it? We have public services that are on their knees. We have public servants who cannot afford a house. We have millions of people on benefits visiting food banks. That is an absolute disgrace.

We in the Labour party believe that we should borrow, but that we should borrow to invest. We should borrow to invest in our economy, in our public services, in our workers, in our jobs and in our communities. Then we would see an economy that could grow. People would be able to spend in their local businesses, and businesses would be able to thrive. Communities would be able to prosper once again. Instead, all that this Budget has offered us is more of the same—more of the same cuts and more of the same poverty—and we ain’t seen nothing yet. The little Red Book has shown that we are just at the start of those cuts. We have another four years of freezes to benefits and school budgets, and cuts to our police, to our hospitals and to the NHS communities. That is what is happening. This Budget was a chance for the Government to come up with big new ideas, but they did not. This Government need to make way for one that can.

Finance (No. 2) Bill

Ruth George Excerpts

2nd reading: House of Commons
Monday 11th December 2017 Commons Chamber

[Peter Dowd]

My message to the great British public, who have showed their support for Labour on this, is to get out and vote Labour. That is the message. The other point is that the Minister’s hon. Friends have been waving an iPad around. I suggest they get on their parliamentary iPads and do their work.

[Ruth George (High Peak) (Lab)]

Does my hon. Friend agree that it is a bit ironic to be asked to take lessons in finances from a Government who have doubled the debt and doubled austerity at the same—[Interruption.]

[Peter Dowd]

My hon. Friend is right. Of course, as ever with the Tories, when we tell them the truth, we get shouted down, which is exactly what has just happened to her.

By refusing to base the Finance Bill on an amendment of the law resolution, the Minister has deliberately restricted the scope of amendments to this Bill, and the ability of the Opposition to scrutinise it properly and improve it. I know the Financial Secretary was president of the Oxford union and his debating skills were honed in its atmosphere, but I am sure he would never have dreamed of putting the same restrictions on the debates he chaired as his colleagues are putting on debates in this Chamber of the mother of Parliaments. What is good enough for the Oxford union should be good enough for this place. “No gagging” is the call from the Opposition; the Government instead want a muffled and restricted debate. That is why this measly Bill contains few policy and tax changes, and will have no positive or constructive impact on the majority of ordinary people’s lives.

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[Ruth George]

Does the hon. Gentleman agree that it is terrible that more than half of small businesses fail in the first five years, largely due to lack of capital investment, as he says? Does he agree that it is time for more radical ideas, as the hon. Member for North West Hampshire (Kit Malthouse) said, and that Labour’s proposal for a business investment bank would help those companies?

[Kevin Hollinrake]

Businesses fail for many reasons. Business is an extremely risky undertaking—I have been in business most of my life—which is why we should pay tribute to all people who take the step forward to create wealth and jobs. I accept that we need to find more different and innovative ways to get finance to business start-ups and scale-ups.

Business banking is unregulated. If a bank acts inappropriately, it is usually far too wealthy for an individual or business to sue. To rectify that problem, we need an independent redress scheme for businesses. I have a constituent who was mis-sold an interest rate hedging product that resulted in him paying £18,000 a month in interest payments from a relatively small business. It was put into receivership. The bank eventually compensated him for the mis-selling of the product, but did not compensate him for the business he lost. That cannot be right. The Government propose expanding the financial ombudsman scheme to deal with the problem, but that will not be enough.

We need an extension of the tribunal system, similar to the employment tribunals, so that small businesses can seek redress without going to the huge cost of suing a bank in the courts. Financial services tribunals already exist, but for the wholesale markets. We need to expand that system to bring in SMEs, so that judges preside over cases, instead of us having a cosy internal system involving ex-bankers who now work in a different part of the sector. Such a system would be low cost and funded by the banks. It would increase confidence in the banking system and, crucially, result in banks lending more money, because people would have confidence in the system. I hope the Minister will look at the financial services tribunals. I am meeting the Economic Secretary in January to discuss this in more detail, but I believe it is one of the missing pieces of the jigsaw when it comes to improving productivity. I welcome the many measures in the Budget and will support the Bill this evening.

[Ruth George (High Peak) (Lab)]

The Chancellor’s Budget speech set out the serious state of our economy, including on the key issue of productivity, as Members on both sides have agreed. Our productivity is now 29% lower than Germany’s. It grew by only 0.2% in 2016 and not at all in 2017. It is serious when the OBR is saying that there are few signs of recovery and that the recent weakness will prove more enduring. Surely this is the time when the Government need a big plan to improve our productivity.

We already have the lowest GDP growth of any OECD country except for Portugal and Greece. Household incomes have fallen 6% compared with inflation, and we are now predicted to have another decade of falling incomes. It is no wonder that household debt is rising and 8.3 million people are now in problem debt. Added to the lack of productivity, we now have the lowest Government investment of any OECD country except for Portugal and Greece. That leads to increased Government borrowing for which we see nothing in return. Last year £52 billion more was borrowed, and it is £60 billion more this year. The OBR’s prediction of lower productivity growth will add another £26 billion to borrowing. That is the cost of the Government’s policy of austerity that is hurting but not working.

Our national debt is now nearly £2 trillion, which is nearly 90% of GDP and higher than that in both Germany and France, although it was lower in 2010. In spite of biting austerity, we see lower growth, lower productivity and lower Government investment. It is no wonder our productivity is so low when we now have the longest commuting times in Europe and the most expensive privatised public transport. Some 3.7 million workers spend more than two hours a day travelling to work. The average travel time of almost an hour is the highest in Europe. That adds to our people’s misery and our lack of productivity, but still we see no investment for a Crossrail of the north. East midlands rail electrification has been cut. Even the small improvement of dualling the track on sidings in my constituency to speed up journey times between Manchester and Sheffield—fully funded by Network Rail—has been stuck with the Department for Transport for four years. We await a decision on half a kilometre of track to make small improvements to our productivity, and our freight and transport times.

The Bill does nothing to help public services that are crying out for proper support. It does nothing for our public servants who are suffering under an unfair pay cap. It does nothing for the people suffering £1,000 of cuts to tax credits since 2010, with another £4.6 billion due to be cut under universal credit, or the 1 million more children due to be in poverty by 2020. The Bill does nothing to reverse those trends, nothing to support public services and nothing for hard-working people. Yes, we have seen 3 million extra jobs, but we have also seen zero-hours contracts, short-hours contracts and 3.7 million working people in poverty. That does not help our economy.

The Bill is a wasted opportunity. It continues to reduce corporation tax—it is now down to 19%, which is less than the rate of income tax—and creates a false impetus for creative accounting. The reduction in corporation tax for the largest companies does not go to the workers, despite what the Government promised when they kept cutting it. From my time negotiating with the shopworkers’ union, the Union of Shop, Distributive and Allied Workers, I know that the reductions in company accounts for corporation tax are far greater than the amount that goes in extra pay for workers. Instead of the handouts to large companies with over £1.5 million a year of profit that we have seen over the past seven years, Members on both sides of the House agree that it is smaller companies that need investment. I refer to Labour’s proposals for a business investment bank to borrow to invest in the companies that drive our productivity and growth. Instead, only four in 10 small companies survive for five years. They have been hit by the rise in VAT and business rates, cuts to regional development funds, and the lack of investment in our infrastructure.

The Government introduced austerity in 2010 and immediately strangled Britain’s economy, which was starting to grow again. Since then, they have borrowed nearly £1 trillion more, cutting and cutting. As my hon. Friend the Member for Bootle (Peter Dowd) said, a nation’s economy is like a business: it needs investment to grow. Any respectable businessperson will tell you, “You can’t cut your way out of a recession.” The Government would do well to learn that lesson.

We needed a big plan for Britain. The Bill is like shuffling the deckchairs while our economy continues to sink. Those of us on the Opposition Benches have plenty of ideas, but it is typical of this Government’s attitude that they will not allow the Bill to be amended, they will not let the whole House vote on those ideas and they will not let Britain’s economy grow.

Finance (No. 2) Bill

Ruth George Excerpts

Committee: 1st sitting: House of Commons
Monday 18th December 2017 Commons Chamber

[Lloyd Russell-Moyle]

I will try to be brief, because we all want to get to the vote and then move on, but I will say that the measures we are considering are far too little and far too late. Homelessness has doubled in Britain, and in Brighton it has tripled, with 10% of adults now on the housing register. How do these proposals help them? The measures will increase house prices for first-time buyers. I know the Minister says that he has better data than the OBR, but I tend to believe the OBR, which was set up by the Conservative Government to provide independent analysis, over the books that are cooked in the Treasury—[Interruption.] Yes, the books that are cooked in the Treasury. What we need are clear supply-side measures—[Interruption.] The evidence for cooked books is that the OBR does not believe the Government’s figures. The evidence comes from the independent regulator. Let me get back to what I want to say, otherwise I will be distracted and we will be here for longer.

We clearly have a problem with young people and first-time buyers getting into the property market. In my constituency today, only five studio flats are on the market for less than £200,000. With average earnings in Brighton lower than the average for the rest of Britain, the introduction of a stamp duty waiver will make not one jot of difference, because people cannot afford to raise money for a deposit and to go to banks to ask them to lend. What we really need is decent social and council housing so that people can move into secure tenancies. I asked the Prime Minister whether she would lift the housing revenue account cap. We see in the Bill that there will be a lift to the value of £1 billion, if councils apply, but of course £22 billion would be made available, at no direct cost to the Government, if they just lifted the cap completely. Why will they not? Because they are scared—they are chicken—to allow working people to have decent homes. Clearly they want to keep people subjugated and in poor-quality rented private property. That is the only conclusion I can draw from their miserable set of proposals.

Another thing we need is planning regulation that is stronger, not weaker. Until very recently, I sat on my local council’s planning committee. Time and again we were toothless in enforcing the social and affordable housing requirements. We do not need to give councils less power to enforce those requirements; we need to give them more powers to enforce them. The measures in the Bill to try to deregulate the planning sector go in completely the opposite direction.

I could make other points, but I am not going to talk anymore—let us go home. It is quite clear that I will be voting against the Government’s measures, because they are absolutely useless for dealing with homelessness and house building. In fact, they will make matters worse.

[Ruth George (High Peak) (Lab)]

I echo my hon. Friend the Member for Stalybridge and Hyde (Jonathan Reynolds) in saying that I am proud of Labour’s record on housing. I am proud of how we invested in 2 million more new homes, increased home ownership by 1 million, and made sure that more than 1 million homes were brought up to a decent standard, fit for human habitation, which is what we need to see now.

Since 2010, we have seen home ownership fall by 200,000 as house prices have risen by an average of 32%. Of those homes that have been built, less than 20% have been affordable, as councils’ rights to impose affordable limits have, as my hon. Friend the Member for Brighton, Kemptown (Lloyd Russell-Moyle) said, been taken away, with the rug pulled out from under their feet. What have we had instead? We have had £10 billion invested in the Help to Buy scheme, which even Morgan Stanley said has almost entirely gone towards raising house prices and increasing the share prices of the biggest house builders.

In my constituency, those house builders are not content with all the assistance from Help to Buy. Almost all their new homes are sold on leasehold—or fleecehold, as it has been called—so people do not feel that they actually own the home in which they live, despite having paid an inflated price for it. They still have to pay ground rent; they are still being fleeced with maintenance charges; and they still have to pay fees to a third party. It does not feel like home ownership any more. This is actually private rental as well as home ownership.

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[Stephen Pound (Ealing North) (Lab)]

I hope my hon. Friend will forgive me for interrupting her flow. She is making a precise and pertinent point. Would she not wish to encourage all people of good heart here present to support the Bill that has been presented by my hon. Friend the Member for Westminster North (Ms Buck) on this very subject?

[Ruth George]

Absolutely. I hope that Members on both sides of the House will give their encouragement to that Bill so that we can make homes fit for human habitation.

On the subject of universal credit, whether or not homes are fit for human habitation, unfortunately landlords are not prepared to rent. A representative of a lettings agency came to my surgery just last week and showed me the books for its tenants. At the moment, 20 tenants are on universal credit—we still have not seen it rolled out—of whom 18, or 90%, are in huge arrears. Nine of them—45%—have had to be evicted because landlords cannot get any redress for arrears. They cannot afford to see those arrears build up. Now that they no longer claim mortgage interest relief, they know that they will have to pay a big tax bill come the end of January, so they need to ensure that they can make their homes pay.

This Government’s housing policy is simply racking up disaster on disaster. Homelessness is doubling and home ownership is falling, and universal credit is yet to come. We needed big ideas from the Chancellor, as the Secretary of State for Communities and Local Government told him in no uncertain terms. We see nothing in this Bill but tinkering at the edges that will do nothing to help solve the enormous housing crisis in this country.

[Mel Stride]

We have been debating important measures. Clause 8 introduces an income tax allowance for members of the armed forces to help them to meet the cost of accommodation in the private market in the UK. Clause 40 makes sensible legislative adjustments to the additional rate of stamp duty land tax to ensure that people in some specific—often disadvantaged—circumstances are not unduly penalised. Clause 41 announces the Government’s abolition of stamp duty land tax for first-time buyers purchasing properties under £300,000. This key part of the Government’s drive to ease the burden on young first-time buyers will go a significant way towards levelling the playing field in those people’s favour. It is notable, and equally lamentable, that this particular policy, which predominantly assists the young, appears to be something that the Labour party rejects and indeed derides. I commend the clauses and schedule to the Committee.

Question put and agreed to.

Clause 40 accordingly ordered to stand part of the Bill.

Schedule 11 agreed to.

Clauses 41 and 8 ordered to stand part of the Bill.

New Clause 4

Review of relief for first-time buyers

“(1) The Commissioners of Her Majesty’s Revenue and Customs shall undertake a review of the impact of the relief for first-time buyers introduced in Schedule 6ZA to FA 2003.

(2) The review shall consider, in particular, the effects of the relief on—

(a) the public revenue,

(b) house prices, and

(c) the supply of housing.

(3) The Chancellor of the Exchequer must lay a copy of a report of the review under this section before the House of Commons no later than one calendar week prior to the date which he has set for his Autumn 2018 Budget Statement.”—(Jonathan Reynolds.)

This new clause requires a review to be published prior to the Autumn 2018 Budget on the impact of the relief for first-time buyers, including its effects on house prices and on the supply of housing.

Brought up, and read the First time.

Question put, That the clause be read a Second time.

Finance (No. 2) Bill (Fourth sitting)

Ruth George Excerpts

Committee Debate: 4th sitting: House of Commons
Thursday 11th January 2018 Public Bill Committees

We need to be able to assess the efficacy of the first-year tax credits in generally boosting water quality and efficiency and reducing carbon emissions against measures that could be introduced but have not been and those that this or previous Conservative Governments have cut. Many of us had hoped that the Office of Tax Simplification would be able to undertake just such a detailed analysis for us, but that has not yet happened for environmental measures. Therefore, I repeat our request for a proper review of the tax reliefs.

[Ruth George (High Peak) (Lab)]

The total corporation tax take in the last year was £56 billion and capital allowances reduced that bill by £22.5 billion—almost half as much again of the total bill. Does my hon. Friend not agree that that makes it even more important that we review such a substantial area of reduction in corporation tax?

[Anneliese Dodds]

I thoroughly agree with my hon. Friend. I must admit that the UK is not alone in its general lack of consideration of the incidence of tax reliefs and their impact on forgone expenditure, but surely we need to be at the forefront of public administration and public policy globally. We should be considering the issue. As my colleagues mentioned, we are talking about not small amounts of money but very substantial amounts, which to all intents and purposes are forgone tax, although they are classified differently from expenditure within Government accounts. For that and many other reasons, I commend the amendment to the Committee.