Banking

Debate between Sammy Wilson and Chris Leslie

Wednesday 15th January 2014 Commons Chamber

[Sammy Wilson (East Antrim) (DUP)]

Does the hon. Gentleman recognise that although bonuses may have been halved, in banks such as RBS, which is still making losses and denying the finance that is needed to businesses across the United Kingdom, bankers bonuses are still sometimes in excess of twice their salaries?

[Chris Leslie]

That is exactly the issue that we are debating.

For all the sophistry and smoke-and-mirrors attempts by Ministers, including the Prime Minister earlier today, to give the impression that they are taking action on bonuses, we know that they confront a key decision because of the new Europe-wide decision to limit bonuses. However they try to spin their way out of it, they will have to confront that decision. It is a matter of national embarrassment that UK policy on bankers bonuses was not led by the UK Treasury. Now that we have a bonus ratio in statute, albeit from the European Union, surely the Minister will not cast his shareholder vote, on behalf of the taxpayer, to allow state-owned banks to shell out bonuses that are above the level of their salaries.

Finance Bill

Debate between Sammy Wilson and Chris Leslie

Thursday 15th July 2010 Commons Chamber

[Chris Leslie]

Absolutely. My right hon. Friend the shadow Chief Secretary to the Treasury made that point very forcefully earlier. The regressive impact of insurance premium tax is not widely understood, but, when our poorest constituents take out insurance, they are hit disproportionately hard, and unfortunately many of them will decide to go without that insurance altogether.

[Sammy Wilson (East Antrim) (DUP)]

I appreciate the hon. Gentleman’s point about a 1% rise being regressive, but, on his earlier point about it putting people off buying insurance, the average household insurance policy is £400 and a 1% increase will add £4 to the total cost. If someone who seriously wishes to insure their home is prepared to pay £400, is he really suggesting that an extra £4 will produce the result to which he referred, namely that many people will no longer purchase insurance?

[Chris Leslie]

The hon. Gentleman makes a reasonable point, and he is right that at that level the disincentive might well be marginal. However, my point is that there is a slippery slope, and, with 1% here and 1% there, before we know it we have 2% or more—3%, or even 4%. My right hon. Friend the shadow Chief Secretary asked about the potential risk of aligning our insurance premium tax arrangements with those of the wider European Union, and, if they are at 22% in Italy or wherever, there is a risk of a serious disincentive.

So, I regard this debate as a stitch in time to put down a marker and say to the Government, “Don’t chance it too far. This may well feel like a small amount of money. but £10 on a motor insurance policy of £1,000 is quite an additional burden and not to be sniffed at.” If the Government continued to ratchet up the costs in that way, that would be regrettable. Some of the amendments before us are very sensible, and, in asking for a report from the Treasury, I also urge it to consider in that document the merits of a requirement on insurers to advertise more prominently the yield from insurance premium tax and the rate of tax that customers pay, because it is exceptionally important that our constituents understand why they are asked to pay so much.

When I consulted the Association of British Insurers about that, its representatives said that they would welcome more information on policy documentation and be more than happy to work with the Treasury on those matters. If the amendment is carried, and there are good arguments for doing so, I hope that the Minister will consider that point seriously.

The impact on travel insurance will be even greater, given the costs for many people who travel abroad on, perhaps, their holidays. If those people are my constituents, they will often do so for one week a year, if that. However, all travellers are encouraged to take out travel insurance for such trips, and the rate is currently 17.5%, but it will go up by 2.5 percentage points to 20%, which is a significant amount of money, so, if we discourage our constituents from taking out insurance on their holidays or travel, there will again be consequences.

Budget Resolutions and Economic Situation

Debate between Sammy Wilson and Chris Leslie

Tuesday 22nd June 2010 Commons Chamber

[Chris Leslie]

I could not agree more. That level of maturity is refreshing, but the Chancellor of the Exchequer saying that there was consensus that the measures had to be taken in a particular way shows how the hon. Gentleman departs from his Front-Bench colleagues. I hope he will have the foresight to listen to the differences of opinion and recognise the possibility that austere and harsh public expenditure reductions, as well as some of the tax increases, could have a harmful effect on the economy. We do not know about the individual measures, but we have already heard from my right hon. and learned Friend the Leader of the Opposition about the effect on unemployment, as shown in the forecasts from the so-called Office for Budget Responsibility, appointed while the Conservatives were in opposition.

[Sammy Wilson]

The hon. Gentleman is making some good points, but he takes his argument a little too far when he describes Government Members as economic masochists who enjoy the process. At the end of the day, their constituents will not thank them for unnecessary cuts. There is a good argument to be made, but does the hon. Gentleman not agree that the extent to which he is taking it may diminish his case?

[Chris Leslie]

I hope that the hon. Gentleman is right. Judging from the Conservatives’ reaction—the papers waved in the air when the Chancellor sat down—the enjoyment they took in those harsh—[Interruption.] The hon. Member for Devizes (Claire Perry) calls out, “Pathetic”, but why else would they cheer with such fervour?