Finance Bill

Simon Kirby Excerpts

Tuesday 1st July 2014 Commons Chamber

[Cathy Jamieson]

I am going to come on to the issue of who benefits, but I noticed that, once again, the Minister was not able to say how this particular tax cut proposed by the Government is going to benefit our constituents.

Let me deal with the Government’s tax impact note, which provides some information, saying that the chief beneficiaries of this particular initiative will be the 100 UK fund managers who control 2,500 investment schemes. Hon. Members would doubtless be very concerned if they thought that the overall health of the UK’s investment industry was somehow at risk, which is why the initiative was brought forward. One might think that it was somewhat ailing if it was deserving of a tax cut amounting to, as my hon. Friend the Member for Inverclyde said, £160 million a year. However, if we look at the reality of the industry, we could readily say that it is in pretty good health, raising the question of whether the industry really needs the Government’s help, which could more usefully be put to assisting those hard-working families feeling the squeeze as a result of Government policy.

According to the Investment Management Association, as of January 2014, its members managed over £4.8 billion in the UK on the basis of OEIC funds alone and around £4.5 trillion overall. The association also tells us:

“UK assets under management and funds under management are at record levels, and the UK retains its position as the second largest asset management centre in the world after the US.”

It could well be argued, therefore, that the UK’s investment industry is doing okay— without the intervention or assistance of the Government.

[Simon Kirby (Brighton, Kemptown) (Con)]

rose—

[Cathy Jamieson]

I will give way to the hon. Gentleman if he will tell me how this particular tax cut benefits my constituents and those of my hon. Friend the Member for Inverclyde.

[Simon Kirby]

I have been listening carefully to the points the hon. Lady is attempting to make. I still do not understand, however, whether hedge fund managers will benefit from this change; it seems quite clear that they will not.

--- Later in debate ---

[Mr Gauke]

The hon. Lady is nodding her head. I will take that as an acceptance, even though, as we have heard, this is a policy that her colleagues and those higher up in her party appear to misunderstand.

[Simon Kirby]

Does the Minister agree that it seems incredibly naive to give away these jobs and reduce these pensions for nothing? Surely the Opposition should better understand the proposed legislation.

[Mr Gauke]

It is striking that time and again senior figures in the Labour party went around describing this as a tax cut for hedge funds. It is to the credit of the hon. Member for Kilmarnock and Loudoun that she refused to repeat that accusation. Although she did not quite go as far as she might have done towards putting the record straight, at least she did not repeat the accusation despite being given multiple opportunities to do so. I do worry about the understanding of some issues within the Labour party. Just today, we have seen the example of the confusion about how many jobs have been created inside and outside London. I understand that the Leader of the Opposition is standing by his position this morning, although he did not quote that in his speech—but there we go. I am afraid that this is an example of somewhat shoddy thinking from the Opposition.