Debate on the Address

Debate between Sammy Wilson and Geraint Davies

Thursday 19th December 2019 Commons Chamber

[Sammy Wilson (East Antrim) (DUP)]

May I first congratulate the Government on winning the election? For many people across the United Kingdom, the kind of Queen’s Speech we could have had today could have been vastly different: probably a programme for bankruptcy rather than a programme for a brighter future for the United Kingdom. It is significant that, right across the United Kingdom, people who would normally have voted for other parties decided that they were not taken in by the Leader of the Opposition wrapping himself in his big red coat and promising all kinds of Christmas presents. They knew that, if they voted for that, they would be paying for Christmas for years.

It is important that we have a Government who have promised to deliver sensible arrangements for services across the United Kingdom and sensible economic growth, while at the same time recognising that one of the major things that people in this country wanted was delivery on the promise that the referendum to leave the European Union would be honoured. I will come back to that issue in a moment or two, because I do not believe that the approach the Government are taking fully fulfils that commitment. There are things that we as a party want to see the Government changing in the next year. But let me just say that we welcome many of the commitments that have been made.

I know from the campaign that I had around the doors in East Antrim that one of the major things that came up time and again was the state of our health service. Given the growing demands on the health service, the greater possibilities for treatments that did not exist in the past, and the higher standards that people expect, there are increasing demands on the health service’s resources. We have a commitment from the Government to put more money into the health service. I know that there have been complaints. There was no mention of Wales in the Queen’s Speech. Of course Northern Ireland, like Wales and Scotland, will benefit from these decisions because there will be Barnett consequentials for the devolved Administrations to spend.

I also welcome the promise of infrastructure development, and I look forward to the Prime Minister delivering on the comment he made to my hon. Friend the Member for North Antrim (Ian Paisley), when he talked about physically linking Northern Ireland to the GB mainland with a bridge. He said, “Watch this space”, and we will be watching this space. We expect the space between Scotland and Northern Ireland to be filled at some stage with a physical link. Physical links and major infrastructure projects like this all over the world are judged not only on their economic benefits but on their political benefits, including how they integrate countries. Indeed, if one looks at the arguments for HS2 integrating the north of England with the south of England, we see that it is as much a political project as it is an economic one.

[Geraint Davies]

My right hon. Friend has mentioned Wales and infrastructure. Wales has 5% of the population, 11% of the rail track and 1.5% of the rail investment. We do not benefit from HS2, and we would look to have a consequential from that. Does he agree that this is not a fair system, and that Wales needs more in that sense?

[Sammy Wilson]

This should apply to all national infrastructure projects. I am pleased to see, for example, that even with an infrastructure project such as the third runway at Heathrow, there is a commitment to ensuring that some of the benefits are spilled out across the rest of the United Kingdom through various Heathrow hub projects, which I hope Northern Ireland will benefit from. There are ways of dispersing the expenditure on those major projects, even if they do not physically run through some parts of the United Kingdom.

The commitment to the application of the armed forces covenant is especially important in Northern Ireland, given the number of people who served through the troubles. Tens of thousands are still living with the consequences, and they do not have access to services on the same basis as in other parts of the United Kingdom. We look forward to the commitment on that and on the promise that legacy issues will be dealt with, so that soldiers are not dragged through the courts for things that happened 40 years ago, while, incidentally, terrorists walk free as a result of arrangements made by the Labour party during the Belfast agreement negotiations.

We are happy to support the benefits that high streets will see from changes to business rates. I have seen the devastation done by high rates to businesses across town centres in my constituency. Business rates relief is, of course, only one part of the solution to the changing retail environment right across the United Kingdom. Promoting business through tax incentives for research and development, for training and for opening up new markets will be especially important as we look to the wider global benefits that we can take when we leave the EU and can do our own trade deals.

Those are the things to which we can give our support. Throughout many of today’s speeches, including the Prime Minister’s, people have talked about the Government party being a one nation party. However, if we are to talk about a one nation party, it must not be one nation just in terms of bringing forward policies that affect all the social layers in the economy and in the country; it must also extend to all parts of the United Kingdom. The Conservative party wants to be the party of the Union and I noted that the Prime Minister said that he would not allow anyone to rip up the UK—one of the most successful political unions. Yet one of the first things mentioned in the Queen’s Speech is the pushing through of the withdrawal agreement Bill, the content of which will, in effect, leave Northern Ireland behind the EU’s customs frontier. It will leave us outside UK customs arrangements and inside the EU customs arrangements. In effect, when it comes to trade and the economy, the European boundary will be extended around the outside of Northern Ireland, which will have economic consequences for businesses in Northern Ireland: increased costs, delays in goods going through customs, or extra bureaucracy. Of course, it will also affect trade from Northern Ireland into Great Britain, which is our biggest market. Those are only the immediate economic consequences; there will also be long-term political consequences.

The Government's Plan for Brexit

Debate between Sammy Wilson and Geraint Davies

Wednesday 7th December 2016 Commons Chamber

[Geraint Davies]

No, I will not.

I do not think people voted for Brexit at any cost. In fact 75% of those who voted to leave have said they will not leave with a blank cheque and at any cost. The situation is that even though the majority voted in principle to leave, the mass of people—the silent majority—are now thinking twice. They do not want this decision made behind closed doors; they want to be able to have the final say. The silent majority want the final say on the final deal because they will live with the consequences.

A lot of rubbish has been talked about article 50 on both sides of this Chamber, but the reality is that as soon as we trigger it, that is literally giving back our membership of the EU. We then have no negotiating power, and the other 27 countries will decide in their own interests what deal we have. The Members on both sides of the House who want a referendum after we trigger article 50 must realise that if we have a referendum or a vote here and say we do not like the deal, the EU 27 nations will say, “Tough; that’s the one that suits us. It stops others leaving. Live with it and shut up.” That is a constitutional fact, and it is the primary reason why I cannot support the amendment that calls on the Government to invoke article 50 by 31 March. After that date, we will have no negotiating power. What is more, there is an election in France in May and an election in Germany in October, so that time would be wasted even if negotiations were going on because the two biggest power players would not be able to engage with us as they will be focusing on their domestic audiences. Article 50 should therefore certainly not be triggered until November next year at the earliest.

[Sammy Wilson]

Is the logic of the hon. Gentleman’s argument that we might as well never trigger article 50 because we will have given away all our negotiating powers, regardless of when it is triggered?

[Geraint Davies]

I introduced a Bill on the terms of our withdrawal from the EU. It stated that after the emergence of the situation in which we now find ourselves had become apparent, the British people should have the final say on the deal before article 50 was triggered. The EU would then have an incentive to negotiate with us, because it would know that our default position was to stay in the EU. At the moment, it has no such incentive.

The reason the Government are keeping their cards close to their chest is that there is nothing on those cards, because none of the 27 EU countries will speak to the Government. They are just saying, “You’re leaving—get out! Trigger article 50, get on with it, and we’ll tell you what you’re getting.” People are buying that up and thinking that it is in the British interest, which it clearly is not. I appreciate that the Government’s game is to rush forward with article 50 before March, to take two weeks to repeal the Fixed-term Parliaments Act 2011, to rush towards a May election and then to have the appalling Budget that they will have delayed from March in the autumn. They would then say, “Oh, what could we do? We didn’t realise there was going to be a downturn.” Then all the money going to Nissan and Tata and the others under the table would be revealed. But the British people will not buy that—

Wales Bill

Debate between Sammy Wilson and Geraint Davies

Wednesday 10th December 2014 Commons Chamber

[Geraint Davies]

Let me publicly assure Mrs Edwards that the wedding was not spurious. I congratulate the hon. Gentleman on both his point and his suit. It is a very nice suit, in black and white.

As I mentioned earlier, the differential rates pose a real problem. There is a presumption that Wales will not lower the higher rate, but a very small number of people in Wales earn more than £150,000 a year. They currently pay 45%, and will pay 50% under a new Labour Government. In theory, if a new Labour Government in Cardiff or Westminster—or any other Government, for that matter—reduced the top rate and a large number of people simply slipped across the border, they would be evading large amounts of tax. Obviously Wales would benefit, because more money would be coming in, but for the overall tax-paying community, the amount would go down, and that is of legitimate concern.

I should like to hear from Ministers what evaluation the Office for Budget Responsibility has made, producing different forecasts with different scenarios. My guess is that it has made none, and that this legislation is being rushed through in the hurried aftermath of what happened in Scotland, so that Wales can be given something comparable to the quick settlement that was made following electoral concerns in Scotland as we move towards a general election. That is not the way in which to establish a new constitutional settlement and a settled financial regime. It is all very well the hon. Member for Carmarthen East and Dinefwr (Jonathan Edwards) saying “You want harmony, we have difference, so it does not matter what happens.” Such changes and differences bring pressures that are not settled, and which will be replicated in the future.

Air passenger duty has been mentioned. Other things being equal, if someone says, “Can I set my own air passenger duty?”, the response might be, “That’s brilliant: we can raise some money.” But what if Boris Johnson in London says, “Hold on, there is a precedent here, I want the money for Heathrow, and I am going to lower air passenger duty”, which is what he has said about stamp duty? We are talking about major shifts in the financial powers across the Union, which will unsettle the Union itself. Obviously we want a devolved settlement that is stable rather than ever-changing, rather than the setting in motion—by means of a quickstep to avoid short-term political advantage—of a system that will unravel into chaos.

I know that there seems to be consensus across the Floor of the House today. It is a case of “Don’t worry; we will have a referendum, and hopefully it will be all right on the night.” What I have just described will probably not happen in Wales, because what prospect is there of our suddenly having five UKIP Assembly Members and a regional list? Oh, there is such a prospect; well there we are. What prospect is there of a newly emerging rainbow alliance—perhaps a very unfortunate rainbow with not a crock of gold but a crock of something much more unpleasant at the bottom of it, which will generate a cynical, unfair tax proposition that will lead us back into the dark ages? That is possible. [Interruption.] Obviously there is agreement, as laughter leads the room.

[Sammy Wilson]

I am glad to learn that the hon. Gentleman has now joined the Unionists in his heart, but does he accept that once we start to disaggregate the fiscal arrangements for the United Kingdom, real constitutional issues become involved? The danger is that the more fiscal powers are devolved to regional administrations, the looser the Union will become. [Interruption.]

Finance (No. 2) Bill

Debate between Sammy Wilson and Geraint Davies

Wednesday 17th April 2013 Commons Chamber

[Sammy Wilson]

I agree that a general proposition that every specific tax raised should be hypothecated for a certain purpose would be very dangerous, but this is not a general proposition; it relates to one specific case and that case has to be made.

[Geraint Davies]

In following the logic of the hon. Gentleman’s eloquent argument, am I right in saying that he agrees that what banks should really be doing is supporting small businesses that have large order books and successful products and that want to upsize and build their business, but that do not have a lot of collateral and houses? That is what the banks should be focusing on in our local communities and economies, not on massive bets against share price changes and derivative bundles, which will develop multi-billion pound bonuses in an almost virtual world. What we want is a real economy supported by banks, not a bonus culture backed up by the state.

[Sammy Wilson]

That is one of the arguments for separating retail banking from the riskier banking activities described by the hon. Gentleman.

The fourth argument is totally different from the others, but I think that Government Members were getting increasingly desperate as they clawed for arguments against what is a reasonable proposition. One Member asked several times whether the amendment was designed to change behaviour, to act against perverse incentives or to raise revenue. All taxes tend to have behavioural consequences anyway; it is in their nature to change behaviour. Some are specifically designed to do so, while some are more genuinely revenue-raising because they do not affect behaviour as much. If the revenue from the tax goes down because fewer bonuses are paid, that does not necessarily mean that it is bad for the economy. For example, if banks decide not to pay bonuses and to keep the money as profits, corporation tax revenue will go up; or if they decide to put the money back into the bank and thereby increase liquidity, that will have a beneficial effect on the economy, because banks will be able to make more loans to businesses. Just because it may change behaviour does not necessarily make it a bad proposition. In fact, the proposition stands, as it could have other tax revenue-raising consequences or induce changes in bank behaviour that mean they have more money to do what the public expect them to do, rather than simply giving huge bonuses to their top-ranking employees.

Budget Resolutions and Economic Situation

Debate between Sammy Wilson and Geraint Davies

Wednesday 20th March 2013 Commons Chamber

[Sammy Wilson]

Indeed. I am glad that the hon. Lady has raised the matter, because I want to come on to that.

The Chancellor set himself the objective of reducing debt, yet the Red Book shows—this is since the autumn forecast in 2012, so a period of six months—that by 2015, or the end of this Parliament, Government debt will increase from 80% to 85% of gross domestic product. The hon. Member for Chichester (Mr Tyrie) gave us the reason for that: the automatic stabilisers are kicking in. We are spending the money on benefits, or paying people to be on the dole, instead of spending it—this is the point I want to come on to—on the things that would stimulate growth, increase the capacity of the economy and enable us to pay our way out of our debt, while at the same time giving people the dignity of having a job and making a positive contribution to the economy.

That is why I think the Chancellor has got this wrong. There has never been a better time for him to borrow. The 10-year price of bonds is down 2%, and it is now cheaper to borrow than it has ever been. Borrowing for those things that will stimulate growth and increase infrastructure in the economy can be very useful.

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

Does the hon. Gentleman accept that the issue, as he has said, is the ratio of debt to GDP? There are two ways of confronting it: reducing debt or increasing GDP. If we had growth, that ratio would go down, but growth has been completely ignored.

[Sammy Wilson]

The hon. Gentleman is quite right. One reason why debt has increased as a percentage of GDP is that GDP has fallen while spending has had to go up to pay for a policy that has failed anyway.

If the Government wish to borrow, what kinds of things should they do? I shall give just two examples of infrastructure projects in Northern Ireland on which tens of millions of pounds have been spent, but which have already begun to have an impact on the economy. First, there has been investment in the broadband infrastructure as a result of the Chancellor’s initiatives in previous Budgets. Project Kelvin and broadband infrastructure around Belfast and Londonderry have helped us to grow the financial services industry in Northern Ireland, which employs nearly 30,000 people, and it has helped us to grow the film industry there too. Both industries need connectivity to north America, and there is faster connectivity to north America from Northern Ireland than there is from the west coast of north America to the east coast. That has stimulated a range of other investments, and it makes sense when it comes to infrastructure investment.

In our tourism industry, we spent nearly £100 million on two signature projects— the Titanic signature project and the Causeway project—which were supposed to generate over half a million visitors in one year. In the first six months, they nearly doubled that estimate, in business for hotels in Northern Ireland and business for restaurants, taxi drivers and so on. The hon. Member for Swansea West (Geraint Davies) made the point that there is good borrowing and bad borrowing. Bad borrowing is paying to keep people at home on the dole; good borrowing is paying to have infrastructure development, which helps to increase the capacity of the economy. I think the Chancellor has missed a trick. Instead of having a financially neutral Budget, he ought to look to the future and ask what we can do and how we can raise money to spend on projects that, in the long run, will generate more tax and jobs, give us growth, and bring down the deficit.

While I welcome the things that I mentioned at the outset, and I acknowledge the way in which the Chancellor and the Treasury have responded to some of the points that we have made from Northern Ireland, for the country as a whole there are things that could have been done that have not been done, which we will live to regret and which will probably result in the Chancellor standing at the Dispatch Box next year saying, “I forecast this, and unfortunately I’m downgrading those forecasts again.”

Finance Bill

Debate between Sammy Wilson and Geraint Davies

Thursday 15th July 2010 Commons Chamber

[Geraint Davies]

I certainly do not think that the Government can be trusted but, more importantly, do the industry, consumers and the wider financial community trust them to get their ducks in a row and recover the £3.6 billion? Much was made of the Chancellor saying, “We’ve got to get all this money and get the deficit down, otherwise we might be re-rated,” but suddenly we do not know where a key component of that—£3.6 billion—is coming from.

I mentioned that there will be a discussion group of stakeholders in the summer. The previous Labour Government considered reducing the annual allowance and all the other options. It is on the record in Hansard that the annual allowance proposal was rejected partly because it was less well targeted—as has been said, we wanted to focus on those who are able to pay most easily and without great pain rather than make the weakest pay more—and partly because of its complexity.

Another key point I wanted to make—I do not think it has been made clearly enough—is that primary legislation is necessary to reduce the annual allowance. The proposal in the Bill is half-baked. It gets rid of a system of gathering £3.6 billion and the Government are incapable of replacing it with an alternative. I object to the clause not just because of the discussion with stakeholders and the uncertainty, but specifically because section 282(2) of the Finance Act 2004 states that the annual allowance set by Treasury order must not be less than the preceding year. Given that the allowance is £255,000, it cannot suddenly become £30,000 to £45,000 without changing that legislation. Such a measure is not included in the Bill, which is another indication of how half-cocked the proposals are. We are discussing a Finance Bill now, but we would need another one before April 2011 to change that allowance. The proposal is incomplete and will mean uncertainty; it demonstrates ineptitude and incompetence; and it undermines confidence among industry providers and consumers. After all, we want more people to save with certainty, so that they have comfort rather than hardship in what we hope will be their long and happy retirements. This will undermine those prospects. People will be less likely to subscribe to sensible, robust pension schemes for the future.

The Government are giving themselves the power to repeal primary legislation by order without knowing exactly what will be put in its place. That is a half-baked approach. Amendment 60 calls for an analysis of “the likely impact”. I tabled an amendment that was not selected, but it simply suggested that this clause should be scrapped. We have looked at the issue, and we know what the distributional impact will be, albeit not in detail. We know that the rich will be let off the hook, and more widely it will cause massive uncertainty about the future. There may also be a question mark over whether we can fulfil our financial obligations as set out in the Budget.

Towers Watson, which is a leading consultant on pensions, says that lowering the annual allowance to £30,000 would lead to tax charges for long-serving final salary scheme members. That means that employers would pull the plug on such schemes. That is not my claim, but that of industry experts. We have already seen across British industry the loss of reliable and robust final salary schemes. Towers Watson says that the changes will undermine final salary schemes because they will not be as useful in retaining staff if they have a tax bill attached. The Minister has not thought this through. If big employers have these final salary schemes, their staff stay with the company because they know that each year they gain a little more benefit, instead of going to a predatory competitor company.

Towers Watson argues that the Government can either introduce a simple system or a fair system, but not both. A rough and ready approach was fine when a few were worried about the annual allowance, but the Government’s proposals would have an impact on hundreds of thousands of people. All the stakeholders will be running around wondering what the changes will mean for them and providers will wonder whether they should provide a different scheme. I mentioned KPMG before, and I will not go through all the consultants in terms of their support for my position, but KPMG says that the number of pension savers affected has widened from 2% to 10%. PricewaterhouseCoopers says that the level will need to be £30,000—as opposed to £30,000 to £45,000—to raise the £3.6 billion needed. The movement from £255,000 to £30,000 is a radical change and we are still consulting on it.

PricewaterhouseCoopers says:

“Employers need certainty over the regulatory framework for pensions if they are to be remotivated to provide quality workplace pensions.”

The Government’s proposals are unfair, unclear, half-baked, fast and loose and a massive new multi-million pound bankers’ bonus to pay back many of the people who put us in this mess in the first place. They are disgraceful and should be withdrawn.

[Sammy Wilson]

I have only a few points to make. The Conservative party’s fortunes or misfortunes do not really affect us in Northern Ireland so I am not seeking to score political points or to say that the Tories are bad people, even though they may be considered to be so by many people. However, the basic issue that hits everyone in the face in considering this measure is how it sits with the claim by the Government that the Budget is fair.