Changes to the Budget
John Bercow Excerpts(11 years, 11 months ago)
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Mr Speaker
Order. The Ministers who appear are chosen by the Government, and it is not for me to explain that choice. Members ask, “Where’s the Chancellor?” The Chancellor is appearing before the Leveson inquiry, as Members know perfectly well. We welcome Minister Gauke.
The Exchequer Secretary to the Treasury (Mr David Gauke)
The Budget supports working families and re-establishes the UK’s reputation as a leading place to do business. It continues to deal with the record peacetime deficit that we inherited, so that the state no longer borrows £1 in £4 it spends, as it did when we came to office.
The Budget contained 282 measures. Having said that we would consult on some of its measures, we have made changes to three. On VAT for hot food, it is right to end anomalies and ensure that VAT is applied fairly between businesses. Where fish and chip shops had to charge VAT, supermarkets selling the same products did not. Having consulted, we have revised the relevant tests to ensure that, for example, bakers cooking hot savoury food that is left to cool are not caught in the changes.
On VAT for static holiday caravans, we have listened to hon. Members, who argued that static caravans should be treated more akin to second homes and not like touring caravans. Given that static holiday vans fall in a grey area between residential properties and temporary holiday accommodation, and given the relevant tax regimes that apply to them, a 5% rate of VAT is a fair compromise.
On tax reliefs, we continue to think that the system we inherited—which allows the wealthiest to pay the least tax, meaning that cleaners can pay a higher rate than their bosses—is unfair. We will therefore move to cap reliefs to ensure that this is addressed. However, having engaged with the sector, we will exclude reliefs relating to charitable giving from the cap.
These changes are small in the context of a Budget that lowered tax by £170 for 24 million people. The amounts concerned are tiny compared with the total tax changes announced in the Budget—in monetary terms, less than 2% of the Budget changes and 0.0002% of total receipts. The Budget continues to have a neutral impact on the public finances, and we remain on track to tackle the unprecedented debt and deficit we inherited. This is a Budget that improves the country’s competitiveness by cutting the top rate of tax, reduces corporation tax to give the UK the most competitive rate in the G20, and rewards and supports hard-working families by helping to take 2 million people out of income tax altogether.
Rachel Reeves
I thank the Minister for his answer, but regret the absence of both the Chancellor and the Chief Secretary to explain this series of U-turns.
This statement leaves a number of questions unanswered. On 16 April, the Exchequer Secretary told the House:
“The same approach should apply to mobile caravans as to static, non-residential caravans, and to a hot pie served in a fish and shop and one served in a bakery.”—[Official Report, 16 April 2012; Vol. 543, c. 130.]
On 12 April, in relation to the proposed cap on income tax relief for charitable donations, he said:
“The policy that we’ve announced is a sensible one.”
What new evidence has come to light since then and during the recess that has led the Government to change their mind? The reality is that the facts have not changed. This is a Government who do not like to be held to account for their mistakes. The Minister has tried to make a virtue out of the Government’s abandonment of policies that prove to be unpopular and unworkable by saying that they are listening. However, failing to do the necessary work on a policy before announcing it and then sneaking out a reversal when they hoped no one was looking is not consultation—it is total incompetence. Is it not the truth that this Government were so desperate for money-making measures that they took from whomever they thought they could, hoping to get away with it? The result: a total and utter shambles of a Budget.
The mistakes that are still in the Budget are, however, the worst ones of all: a tax cut for millionaires while asking millions to pay more, and no plan for the jobs and growth that we desperately need to get our economy back on track and our deficit down. As the Minister and his colleagues are making such a virtue of listening and of their readiness to change course and make the occasional U-turn, perhaps now they will listen—to the millions of pensioners hit by the granny tax; to the millions of families hit by cuts to their tax credits; to the 1 million young people out of work; to the businesses struggling to break even; and to everyone in this country suffering from the double-dip recession made in Downing street and crying out—[Interruption.]
Mr Speaker
Order. The House needs to calm down, on both sides. I remind the shadow Chief Secretary to the Treasury that the narrow focus of the question covers changes to the announced policy. I know that she will concentrate on that narrow matter, as this is not a Second Reading debate on the Budget.
Rachel Reeves
Given the number of U-turns that the Government have made in the past two weeks, it is difficult to know where to start. Will they now change course on the biggest mistakes in the Budget—cutting tax credits for working families, the granny tax and cutting tax for millionaires while asking ordinary people to pay more? The country is crying out for the Government to change course and to get a grip on their policies, which dug us into this hole and this recession.
Mr Speaker
Accommodating the interests of colleagues will require brevity, to be exemplified by Mr Jacob Rees-Mogg.
Jacob Rees-Mogg (North East Somerset) (Con)
Does the Minister agree that the real things that must not be changed are a tight fiscal policy and a loose money policy? There is no alternative.
Simon Hughes (Bermondsey and Old Southwark) (LD)
Let me reassure the Minister that Liberal Democrats welcome the change both to the pasty tax and the caravan tax. [Interruption.] We would also have liked a third change—to keep the top rate of income tax, but we did not win that argument. Will the Minister join me and make sure that all Ministers turn up the volume—[Interruption.]
Mr Speaker
Order. This is most discourteous. We must hear the voice of Bermondsey and Old Southwark— Mr Simon Hughes.
Simon Hughes
Will the Minister ensure that all Ministers turn up the volume to get over the central message of the Budget, which is that over 20 million pay less tax and millions pay no tax at all? Clearly, some people have not heard it yet.
Mr Speaker
Let me remind the House that the urgent question relates to the subject of changes made by the Treasury to the Budget presented to the House on 21 March. Questioning must be focused on that narrow terrain. I know that in that respect we can rely on Mr Stewart Hosie.
Stewart Hosie (Dundee East) (SNP)
The Minister said that these U-turns, however welcome, would be neutral in terms of the Budget, so will he confirm that by the time we get to 2016-17 the Government will still take out of the economy £155 billion a year in tax increases and service cuts?
Mr Speaker
I am grateful for the Minister’s diplomacy, but let me say gently to the hon. Lady that the question was not quite as wide as the channel—but it was not far short of it!
Seema Malhotra (Feltham and Heston) (Lab/Co-op)
Will the Minister confirm what extra information came to light during the recess that led to the U-turn on the charity tax?
Jason McCartney (Colne Valley) (Con)
I greatly welcome the consultations, but will the Minister confirm that the Government will stand firm on the main facets of the Budget, which have resulted in tax cuts for 25 million people, council tax frozen for the second year running and fuel duty being 10p lower than it would have been under the other lot?
Mr Speaker
Order. I did not hear a question about changes, but the hon. Member has registered his view with force and alacrity, and it is on the record so his constituents will hear it.
Sheila Gilmore (Edinburgh East) (Lab)
The Minister started by saying that this was a Budget for families, so will he now consider another U-turn and restore the tax credits to working couples on low wages and low working hours?
Mr Speaker
Order. I am sorry if I did not explain the position sufficiently clearly—although I must say I thought I did. Some Members are making speculative bids for extending the U-turns. They may wish to do so, but the terms of the urgent question relate specifically to the announced changes. I am sure that understanding that point will not be beyond the ingenuity of the hon. Member for Wansbeck (Ian Lavery).
Ian Lavery (Wansbeck) (Lab)
On the announced changes—the U-turns—on everything from buzzards and skips to caravans and pasties, when will the Government reconsider a U-turn on the granny tax and the cut in the tax on the rich people in society?
Mr Speaker
I am disappointed in the hon. Gentleman. He started out as such a good boy, and it is a pity that he spoiled that thereafter. I know that a similar sin will not be committed by the hon. Member for Kingston upon Hull East (Karl Turner), because he is a good listener and a quick learner.
Karl Turner (Kingston upon Hull East) (Lab)
I welcome the Government’s U-turn on the caravan tax, which would have adversely affected many thousands of people throughout the country. However, will the Minister take this opportunity to apologise to the 350 employees of Willerby Holiday Homes in my constituency who were told that they would potentially be made redundant as a result of the Government’s barmy idea, and will he describe the effect on the industry of the introduction of the 5% tax on caravans?
Business and the Economy
John Bercow Excerpts(11 years, 12 months ago)
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Mr Speaker
Order. In view of the extensive interest in this debate, numbering almost 50 Back Benchers, I have decided to impose a limit on Back-Bench speeches of six minutes each. There has been no time limit on Front-Bench speeches, as there ordinarily is not, and of course the Secretary of State wanted to take interventions, which is respected. The shadow Secretary of State may also wish to do so, but may I invite a certain self-denying ordinance in the interests of maximising the number of Back-Bench contributors?
Oral Answers to Questions
John Bercow Excerpts(12 years ago)
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Katy Clark
My constituent, Mrs Orr, is losing £290 a month as a result of the tax credit changes. She lives with her husband, who is retired, and her 13-year-old daughter. She works for 20 hours a week at Crosshouse hospital and has tried to increase her contractual hours, but has been unable to do so. She works any overtime that is available. How do you suggest that she makes ends meet?
Miss Smith
I thank the hon. Lady for raising that example in which the couple’s ages are more distant from each other than is the norm. She makes an interesting point. However, as I said in my initial answer, there are arrangements for those over 60 and for those in retirement in the tax credit system, the pensions system and other benefit systems. As I have said in previous Question Times, the economy is moving, there are work vacancies out there and we believe that the changes to working tax credit are fair. For example, they place couples on a par with lone parents.
Ed Balls (Morley and Outwood) (Lab/Co-op)
The Chancellor has had a difficult few weeks since the Budget. To be told by his own side that he is an out-of-touch posh boy who does not know the price of milk must be particularly hard to take. I will ask him today not about the price of milk but—[Interruption.]
Mr Speaker
Order. Let me say once and for all to the junior Whip, sitting next to a senior Whip: be quiet, do not heckle, and if you cannot keep quiet, leave the Chamber. Make a habit of that.
Ed Balls
Shall I start again at the beginning of the question? I am going to ask the Chancellor today not about the price of milk but about a price that he surely must have considered at Budget time. I will ask him a specific question. What is—[Interruption.] I am going to ask the Chancellor a specific question that he must have considered at Budget time. What is the price of a litre of unleaded petrol at the pumps today, and what was it on Budget day a year ago?
Mr Osborne
The plans we set out for public expenditure were measured, but they involved reducing the deficit. That has been very important. The public finance figures, published today, show that we are on track to meet our deficit targets. At the same time, we have found resources for things such as extra nursery education for disadvantaged youngsters, the pupil premium and all sorts of other things that support our objectives of a fairer and more balanced economy. [Interruption.]
Gemma Doyle (West Dunbartonshire) (Lab/Co-op)
West Dunbartonshire is the most difficult local authority area in the whole of the UK in which to find a job, yet the Scottish National party Government have refused us any help and refused to meet me. Have this Government also abandoned West Dunbartonshire or can we expect help to do one thing—to create jobs?
Mr Speaker
Order. I am sorry. Treasury questions have long been an appealing fixture to colleagues, but demand has exceeded supply and we must now move on.
IMF
John Bercow Excerpts(12 years ago)
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Ed Balls (Morley and Outwood) (Lab/Co-op)
In thanking the Chancellor for advance sight of his statement today, let me begin by setting out three propositions on which I believe all parts of the House can agree. First, the ongoing crisis in the euro area is a major threat to the stability of the European and global economies, including Britain’s. Secondly, the International Monetary Fund is a hugely respected organisation that must be properly funded if it is to play its proper role. Thirdly, solving the euro crisis and ensuring that the IMF is properly resourced are both firmly in the British national interest.
However, the agreement that the Chancellor signed up to at the weekend fails on all three counts. It will not speed up, but further delay the decisive action we need from European leaders to kick-start growth and empower the European Central Bank to act. If those extra resources were to result in the IMF stepping in to act when the European Central Bank would not, that would risk weakening the IMF as an institution. Furthermore, in those circumstances, allowing eurozone leaders further room for delay and exposing the IMF and British taxpayers’ money when rich eurozone countries will not act would categorically not be in the British national interest.
Members across the House will find it baffling that that is precisely the view that the Chancellor took, just a few weeks and months ago. Following the G20 summit in October, when euro area leaders tried and failed to get international agreement on IMF resources to bail out the euro, he told the House:
“But the IMF contributing money to the eurozone bail-out fund? No. And Britain contributing money to the eurozone bail-out fund? No. That is Britain’s clear position.”—[Official Report, 27 October 2011; Vol. 534, c. 471.]
He went further in February when he told Sky:
“We are prepared to consider IMF resources but only once we see the colour of the eurozone money and we have not seen the colour of the eurozone money”.
Will the Chancellor tell us what has actually changed since then, because we have categorically not seen the colour of the eurozone’s money? The eurozone agreement that was reached last month was widely dismissed as a “sticking plaster” that merged two funds with no new money. As Wolfgang Münchau of the Financial Times stated:
“Ignore the headlines. This is not an increase in the eurozone’s rescue fund”.
In recent weeks, as market doubts have grown about Spain and Italy, market analysts have been clear that the eurozone bail-out fund has nowhere near the resources that it would need to stop a renewed crisis. There is still no firewall, and the only institution that comfortably has the resources to act—the European Central Bank—is prevented from doing so because rich euro area countries refuse to put sufficient money at risk. So, let me ask the Chancellor this: does he really think that the eurozone’s firewall is sufficient? Is this really the “big bazooka” that the Prime Minister talked about last summer? Does the Chancellor really think that the ECB now has the political backing to act as lender of last resort, and so stop contagion spreading? No, of course he does not. So why is he now signing up to an agreement that will mean that the IMF will be pressured into supporting Italy and Spain because the ECB will not, exposing as meaningless his nonsensical “countries not currencies” slogan?
Is it not the truth that the Chancellor is now conspiring in allowing the IMF to become the de facto central bank of the euro area, putting the resources of UK taxpayers and some of the world’s poorer countries at risk because rich euro area countries will not act? This deal might, for a short period, take the pressure off euro area leaders, but it will be at the cost of delaying a proper solution to the euro crisis, and it will undermine the IMF in the process.
The Chancellor says that his UK critics, on both sides of the House, are “isolated” in the global community in opposing this weekend’s agreement, but the United States has not signed up to give more money either. The US Treasury Secretary said, just this month:
“Europe is a very rich continent and they have the means to solve this on their own…I don’t think it is appropriate for the IMF to take on a larger role. The world needs to see that Europe is working on helping itself first. We are not going to shift our help for them so that the burden is on the American taxpayer”.
Canada is not contributing more money either. This is what the Canadian Finance Minister said about euro area leaders this weekend:
“They need to step up to the plate and overwhelm this issue with their own resources.”
The Chancellor says that we are “out on a limb” on this issue, but with America and Canada there too, that is some limb.
Will the Chancellor tell the House why he chose to tell us on Friday that he was contributing “just under” £10 billion more? With the US not contributing, that is clearly less than the UK’s quota share. Could it be that if he had contributed a fraction more, he would have had to come to the House and ask for parliamentary approval? After the Budget shambles—should I say the “omnishambles”?—of the last few weeks, is not the Chancellor running scared of those on both sides of the House of Commons?
Could the Chancellor also explain what has happened to the UK’s contribution to the IMF through the new agreement to borrow? When an IMF quota was first increased in 2009, it was understood that it would be offset by a reduction in UK exposure to the NAB—the new arrangements to borrow. Let me remind the Chancellor what the Financial Secretary told the House last summer:
“The G20 summit in London agreed on the importance of preserving the IMF status as a quota-based institution…so at the G20 meetings last November, agreement was reached to review the NAB and to reduce it in size once the quota increase was implemented.”—[Official Report, Second Delegated Legislation Committee, 5 July 2011; c. 3.]
So let me ask the Chancellor this: can he update the House? Has the UK contribution to the IMF been reduced through the NAB as the quota increases, as the Financial Secretary said, or has the Chancellor found a back-door route to increase the net UK contribution by more than £10 billion, without the permission of Parliament?
Ed Balls
Finally, Mr Speaker, as for the Chancellor’s claim that the UK has sorted out our problems, unlike the US, the UK is mired with the rest of the euro area in no growth, high unemployment and much more borrowing than was planned, so how out of touch can this deluded Chancellor get? He should have stuck to his guns this weekend. He capitulated. This agreement was bad for the euro area, bad for the IMF, bad for the British taxpayer and bad for the British national interest.
Mr Osborne
First, I congratulate the shadow Chancellor on running the London marathon yesterday and raising money for good causes, but his arguments are a bit like his marathon legs—wobbly and about to collapse. His response started so well. In the first 30 seconds, he said he supported increased resources for the IMF and supported Britain’s contribution to it, but spent the next 10 minutes telling us why he was against those things. He was in favour of the loan before he was against it. I have to say it smacks of the political opportunism and empty opposition that have been the hallmark of his shadow chancellorship.
People in Washington this weekend who know the shadow Chancellor, because he used to help represent Britain at the IMF, were completely astonished by his opposition to the IMF deal. They wondered whether he was the same person who was in the Treasury for all those years and who wrote all those speeches for the right hon. Member for Kirkcaldy and Cowdenbeath (Mr Brown) about the importance of the IMF and of the international architecture being part of global solutions. Is it the same shadow Chancellor who said in November that
“the Labour party supports an increase in the UK’s International Monetary Fund subscription”?
He was asked in an interview why he opposed the Government’s decision and he said:
“I support an increase in resources to the IMF”.
Then, the interviewer said:
“Sorry? I thought you didn’t.”
He said:
“No…I support an increase in resources for the IMF”.
One is led to the conclusion that only political opportunism is driving the shadow Chancellor to the position he takes.
The right hon. Gentleman asked just a couple of specific questions. I think I answered all of them in the statement, which he should have listened to before he asked his questions. The US Treasury Secretary went out of his way to welcome the deal, but pointed out that the US had not made a loan at the London G20 summit and did not do so again because of the swap lines. Since we talked about this in the autumn, the European Central Bank has provided $1 trillion of liquidity support and €200 billion extra to the firewall, but I completely agree that euro countries need to do more to ensure reforms in their own economies.
Is the right hon. Gentleman really saying that, when a request is made for the countries of the world to come together at the IMF to provide increased contributions, Britain should stand apart from it? He represents a Labour party that stands, or used to stand, for internationalism and for the institutions of the world coming together. Now he has led the party down a complete blind alleyway. He even voted against the highlight of the Labour Government—the deal done at the London G20 summit. This is what the shadow Chancellor has done to his party—left it in no man’s land, not taken seriously at home and not taken seriously abroad. If he were ever in charge, we would be getting a bail-out from the IMF, not giving it a loan.
Sir Peter Tapsell (Louth and Horncastle) (Con)
I had rather changed my mind about asking a question because of the extremely unappealing way in which the shadow Chancellor put his case; but in order to be consistent with everything that I said in October and November, I am bound to say now that I regard it as the prime duty of Germany to solve the European problem, and that I hope that this further support from the IMF will not weaken the pressure on the German Government to do exactly that.
Mr Speaker
Order. There is still extensive interest in the subject, which I am keen to accommodate, but if I am to do so, brevity is of the essence.
Dr Julian Lewis (New Forest East) (Con)
When one’s friends are trapped in a burning building, is not the kindest thing to do to lead them in the direction of the exits in an orderly way, rather than give them billions to stay exactly where they are?
Mr Tom Clarke (Coatbridge, Chryston and Bellshill) (Lab)
The Chancellor is now in a position to tell us whether he intends to honour his commitment of 0.7% gross national income for overseas aid by 2013. When can we expect the legislation, which I understand is now sitting on the desk of the Secretary of State for International Development?
Mr Speaker
Order. I am sure that the Chancellor will relate the answer to the IMF, to which I feel sure the right hon. Gentleman was seeking indirectly, and without saying so, to relate the matter.
Mr Osborne
We are going to honour that 0.7%. That is in the aid budget. It is in the budget of the Department for International Development. We can talk about the merits of legislation, but we do not need a piece of legislation. The proof is whether the money is being provided, and this Government are providing the money. I for one am proud that we will be the first Government in British history to hit the 0.7% of international aid.
Financial Services Bill
John Bercow Excerpts(12 years ago)
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John McDonnell
On a point of order, Mr Speaker. The main purpose of the Financial Services Bill—
Mr Speaker
Order. May I appeal to Members who are planning to leave the Chamber to do so quickly and quietly, so that the House can do the hon. Member for Hayes and Harlington (John McDonnell) the courtesy of listening to his point of order?
John McDonnell
Thank you, Mr Speaker.
The main purpose of the Financial Services Bill was to secure corporate responsibility in the financial sector, and the batch of amendments that were not reached dealt specifically with corporate responsibility. May I, through you, Mr Speaker, convey a message to the Leader of the House, who is present? There will be a second day of debate on the Bill, and he may well wish to look at the programme motion again to establish whether we can debate the important elements of those amendments on that second day.
Mr Speaker
I am grateful to the hon. Gentleman for his point of order. Let me say two things to him in response to it. First, as he can see with his own eyes, the Leader of the House is present, and will have heard what he has said. Secondly, business questions on Thursday will provide a good opportunity for him to pursue the matter further—and, knowing his indefatigability, I expect to see him in his place on that occasion.
Finance (No. 4) Bill
John Bercow Excerpts(12 years ago)
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Mr Speaker
I explain for the benefit of the House that the amendment has not been selected.
Amendment of the Law
John Bercow Excerpts(12 years, 1 month ago)
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John Mann (Bassetlaw) (Lab)
Mr Speaker, can you believe it? I do not mean the fact that the price of my petrol is going up and the price of my pasty is going up. No, I am asking whether you can believe how many or how few are here. Of course, SNP Members are not here yet again. We have a Budget only once a year and there are two Tory Back Benchers and two Liberal Back Benchers. They have probably come in a taxi. Looking at them, you might see Tories and Liberals, but I see Lincoln, Burnley, Redcar and Stafford—I see four Labour gains. Those four hon. Members are enjoying their last days on those green Benches. Why are the rest of them hidden away? I will tell you. It is because there are only two things that resonate in this Budget, and the first is growth.
Last year the Chief Secretary and the Chancellor told us that growth this year would be 2.5%, but they have reduced it to 0.8% in a year. Something tells me, therefore, that the policies are not working. They said last year that the national debt would come down—all the cuts were to bring the national debt down—but this year they say the national debt will go up next year, the year after and the year after that. That is the policy that they have put forward. It does not need any more complication. Growth is virtually not happening.
But there is something far worse for our communities. The cuts that we have heard about, the cuts that we have fought against, have hardly begun. The real cuts come next year. This is the Government’s Achilles heel, but it is also ours because it will hurt people across the country, including in my constituency. It will be the market towns, the traditional Tory areas, that take the brunt of the cuts because what that lot are doing, like most Governments, is make cuts and centralise. They are removing jobs from towns such as Retford in my constituency. For the first time those small market towns are taking a disproportionate number of the cuts, with jobs going and the relocation of people in order, allegedly, to save money by putting them in one office. Who is going to spend to support the small businesses that are trying to make a living, or for the potential new small businesses, in those market towns?
That is one Achilles heel, but the Government have another that they have hidden and that has not been exposed: draw-down pensions. Most of the 300,000 pensioners who will be affected do not realise that, because of quantitative easing and the failure to put a counterbalance in the Budget, and because gilts are at an all-time low, draw-down pensions are being hugely cut. Let me give an example from my constituency.
A fairly well-to-do couple who have worked hard over the years have been retired for 14 years on a good pension. Their private pension of £30,000 a year between them has been cut overnight in the past month to £13,000 by the Government Actuary’s Department. That is a 60% cut in their pension. That is what the Government have done, but they have failed to address the problem in the Budget. It is a nightmare for pensioners such as those. Most of the 300,000 draw-down pensioners do not know that this reduction is coming because they are informed of changes on a three-year cycle. I challenge the Chief Secretary to the Treasury on this point. What are you going to do about it? Are you going to sort it out, or are those people going to lose 60% of their pension because of your being in power this year?
Mr Speaker
Order. The House needs to calm down a bit. I was listening intently, because I wanted to hear the Chief Secretary’s answer, and I was struggling somewhat to do so. I want to hear what he has to say.
Danny Alexander
It is no surprise that Labour Members want to drown out any reference to their record in government.
I think I know why the record increase in the income tax personal allowance has not been welcomed by Labour Members today and was hardly mentioned by the two Opposition Front-Bench speakers, despite the fact that Labour used to call itself the party of working people. This debate has also revealed something of lasting significance about the Labour party—
Danny Alexander
The Budget is fair. It raises additional taxes from the wealthiest and asks the wealthiest in this country to pay more. That is why, for example, we are capping—[Interruption.]
Mr Speaker
Order. There is so much noise that I am not sure the Chief Secretary can even hear that his right hon. Friend the Member for Haltemprice and Howden (Mr Davis) is seeking to intervene. Perhaps he can hear and does not want to give way, but if he cannot hear, he is not able to give way.
Mr Speaker
Before I put the questions on the remaining Budget resolutions, I must inform the House that motion 67 on Stamp Duty Land Tax (Higher Rate for Certain Acquisitions by Companies etc.) has been corrected since the original printing. The version in today’s booklet of Budget resolutions is the correct version.
The Speaker put forthwith the Questions necessary to dispose of the motions made in the name of the Chancellor of the Exchequer (Standing Order No. 51(3)).
E-Tabling of Written Questions
John Bercow Excerpts(12 years, 1 month ago)
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Andrew Bridgen (North West Leicestershire) (Con)
On a point of order, Mr Speaker.
Mr Speaker
The hon. Gentleman was a bit slow on the uptake. I told him that he should do his point of order before the Adjournment, but anyway we will give him a go.
Andrew Bridgen
What powers do you have, Mr Speaker, to censure Her Majesty’s Opposition, who spent five days opposing the cut in the top rate of tax from 50p and then abstained from voting in the Lobby?
The Exchequer Secretary to the Treasury (Mr David Gauke)
Further to that point of order, Mr Speaker. I note that the shadow Chancellor said:
“There will be a vote next week, and we will vote against the 50p change.”—[Official Report, 22 March 2012; Vol. 542, c. 960.]
What guidance can you provide, Mr Speaker, to right hon. and hon. Members to look at the Budget resolutions, where they will see clearly that resolution 72 referred to an additional rate of 45p, which was obviously a change from 50p?
Mr Speaker
I think the hon. Gentleman is seeking to offer that guidance, but he is a constituency neighbour of mine, so I know that what he would not seek to do, for it would be unworthy—and he would not be unworthy—is continue the debate that we have spent the past few days having. So we will leave it there for tonight. He looks contented, as he is smiling at me beatifically and that is a boon to the House.
Budget Leak Inquiry
John Bercow Excerpts(12 years, 1 month ago)
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Urgent Questions are proposed each morning by backbench MPs, and up to two may be selected each day by the Speaker. Chosen Urgent Questions are announced 30 minutes before Parliament sits each day.
Each Urgent Question requires a Government Minister to give a response on the debate topic.
This information is provided by Parallel Parliament and does not comprise part of the offical record
Mr Speaker
Order. There is extensive interest in this subject, which I am keen to accommodate, but that requires brevity, a great example of which can now be provided by Mr Jacob Rees-Mogg.
Jacob Rees-Mogg (North East Somerset) (Con)
I wonder whether my hon. Friend notices the incongruity of those who oppose openness in the Budget but were all in favour of it in terms of risk registers. Does he agree that the criticism is either muddled or synthetic?
Mr Speaker
Order. May I remind the House that this is a narrowly focused urgent question seeking a leak inquiry? It is a matter of great importance, but it is on that matter that exchanges should be focused. This is not a rerun of the Budget debate, which will be continued, but is about the subject of the urgent question.
Mr David Evennett (Bexleyheath and Crayford) (Con)
Does my hon. Friend agree that there will obviously be wild speculation before any Budget, much of which turns out to be wrong, and that we do not need any lectures from Opposition Members, who leaked everything all the time when they were in government?
Lorely Burt (Solihull) (LD)
Does my hon. Friend agree that it is rank hypocrisy on the part of Opposition Members to accuse this Government of leaking? Can my hon. Friend remember how many times the Labour Government held inquiries into leaks about their Budgets?
Mr Speaker
Order. Let us be absolutely clear about this. The hon. Lady can make a general charge. She cannot and will not make a personal charge against an individual Member in any part of the House. I trust that the hon. Lady is not accusing the hon. Member for Nottingham East (Chris Leslie) on the Opposition Front Bench of hypocrisy.
Christopher Pincher (Tamworth) (Con)
Is my hon. Friend aware that Labour’s record of leaking is as long as its record in office. Not only did the last Govt leak like a sieve but Hugh Dalton, a previous Labour Chancellor, was forced to resign for leaking Budget secrets—
Mr Speaker
Order. The hon. Gentleman will resume his seat. I made the position clear. This is a set of exchanges about a specific and narrowly crafted urgent question. It may be about many things within that context, but it is not about 1947. We will leave it there.
Henry Smith (Crawley) (Con)
The previous Labour Government leaked worse than the Titanic. Does my hon. Friend agree that, whatever the Labour party’s budgetary policies may be—we are not quite sure—they would be an equal disaster?
Mr Gauke
Earlier this morning, the hon. Gentleman denied it. [Interruption.] He is shaking his head now, so he is clearly denying that that is the case. Presumably, it is reasonably easy to work out what time a Twitter post was made and to know what time the urgent question was announced. But it is not for me to lecture the Opposition; I am sure that they would be very concerned if there had been such a leak and they would be cracking down on it straight away.
Mr Speaker
It is not really a matter for the Minister. These matters are dealt with in a very specific and orderly fashion—the submission of a request, the consideration of the matter at the appropriate time of the day by my colleagues and me, and the disclosure of the result of the request to the interested parties. All was done—I know the hon. Member for Kingswood (Chris Skidmore) will be satisfied that it was—in an absolutely orderly way on this occasion as it is on every other.
Duncan Hames (Chippenham) (LD)
Has the Minister discussed this matter with his colleague the Chief Secretary to the Treasury? I have found the earliest published source of information on the Budget. It was written by my right hon. Friend the Chief Secretary—on the front page of the Liberal Democrat election manifesto nearly two years ago.
Amendment of the Law
John Bercow Excerpts(12 years, 1 month ago)
Commons ChamberRead Full debate Read Hansard Text Read Debate Ministerial Extracts
Mr Speaker
Order. Angie Bray will be the next speaker, but before calling the hon. Lady I inform the House that, in view of the large number of Members seeking to contribute, the time limit for Back-Bench speeches will now be five minutes, with immediate effect.
Neil Parish
I am interested in why you say that it is dubious to cut the rate from 50% to 45%, when in 13 years of your Government, you did not put it up from 40% to 50%.
Mr Speaker
I am extremely grateful to the hon. Gentleman, but I am not sure why he refers to my Government. There should be no reference to my Government in these matters.
Neil Parish
I meant the Government of which the hon. Member for Edinburgh North and Leith (Mark Lazarowicz) was a member.
Mr Speaker
I am sure that that is what the hon. Gentleman meant. It would be good in future if that is what he said.
Mark Lazarowicz
Those points were covered earlier in the debate.
I want to highlight the problems for businesses in my constituency. I say again that a cut in VAT would certainly make a difference for businesses in my constituency that are on the brink. Such a reduction in VAT would increase business activity, increase sales, increase the taxation income of the Exchequer and decrease unemployment, with a consequent cut in spending on benefits. The boost for smaller retailers and smaller companies in the construction sector would have other beneficial effects. From my constituency office, which is in a street that is still relatively well occupied, I can see shops and businesses closing and the resulting cycle of deterioration not only in the local economy, but in the local environment. I can see that happening in my constituency. That is why I believe that the temporary reduction in VAT that we have called for would be a great boost not just for business, but for the wider economy.
There were some announcements in the Budget that will benefit my constituency. There was confirmation that Edinburgh will be one of the cities that will benefit from superfast broadband and the green investment bank was also mentioned. However, those two announcements have been made a number of times already. The announcement about superfast broadband for Edinburgh and a number of other cities was made at the end of last year. The fact that the Chancellor chose to highlight those innovations again only goes to show the lack of imagination in the Budget when it comes to growth. We could have had a Budget for jobs and growth. Instead, we had a Budget with very few specific policies. That is regrettable and it is bad for the country.
I hope that the Government will change course and reduce VAT, if not in this Budget, then at a later stage, to support smaller businesses in the construction sector, which would benefit greatly from such a change.
Kwasi Kwarteng (Spelthorne) (Con)
I am pleased to have the opportunity to speak in the Budget debate, because we had a significant Budget yesterday.
We have to consider what the Chancellor said in the Budget in the context of 10 years of Labour profligacy in public spending and in the context of the international economy. The Office for Budget Responsibility has been clear about the problems that face the British economy. There are structural problems caused by too much debt, which in turn was caused by too much spending. It is clear to everyone that spending more money or running a greater deficit would not help to get us out of this situation. The Government are doing what they set out to do and they are reducing the deficit. The Budget yesterday was a step in the right direction. We are trying to cut regulation and to encourage enterprise and aspiration. All that was clear in the Budget.
I would like to talk about tax cuts. The most significant tax cuts in yesterday’s Budget were not at the top end of the income scale, but at the lower end. It was an historic step to take hundreds of thousands of people out of taxation. It is striking that in this debate, the Labour party has made no comment about that. It has not given us the courtesy of saying that it agrees with the proposal, nor has it opposed it, yet it was the most significant move in the Budget.
There were other, perhaps more controversial moves, such as cutting taxes for wealthier citizens and subjects, which have created some debate. It is received wisdom, I think, that high taxes did not stimulate economic growth. Some Members will remember that there was a 98% super-tax in the 1970s, and we were a very highly taxed nation. Other Members were here when Nigel Lawson cut the top rate of tax from 60% to 40%. That was so successful that in 12 years, Labour did not touch it. It always accepted that 40% was a reasonable and good tax rate, not because it was friendly to the rich but because Labour’s leadership realised that there needed to be incentives to make the economy grow.
Mr Speaker
Order. I think the hon. Gentleman was referring to his noble Friend the Lord Lawson of Blaby. It would be good to preserve some of the courtesies of the House.
Kwasi Kwarteng
Indeed. I am very grateful to you, Mr Speaker, for putting me in my place. I will refer to him with proper courtesy with his title. The Budget in which he cut the top rate—the 1987 one, I believe—was the most significant in recent years, and only latterly have a series of political games been played and has the top rate been increased. Other Members have referred to that, and it is an elephant trap that the Government have mercifully dodged.
We have to consider the Budget in its national context, but also in an international context. It is no good our having worthy debates here without referring to what is going on in the rest of the world. I was very pleased to see that the Chancellor had finally realised that aviation capacity in the south-east is a massively important issue. The fastest-growing cities in the world need to have more connections. We will not be able to make money or trade with them without connections, and the Chancellor’s step of recognising the problem is mature and bold.
While we are focusing on spending and regulation, we have to realise that other parts of the world such as China, India, Brazil and places in the middle east such as Dubai have favourable regimes for business. If we are to compete seriously with those countries and their regimes, we will have to do an awful lot more even than we are doing to make ourselves competitive.
The Budget was excellent and a step in the right direction, although we need to do more to meet the targets that we have set ourselves. The Office for Budget Responsibility has said that it is looking for 3% growth in 2015 and, to meet that, we will have work an awful lot harder.
Pauline Latham
I do not know how you have calculated that for my constituency, because I am not even sure you know where it is. We are looking after pensioners. They will not be losing what you are talking about. They are getting a bigger increase than ever from the triple lock, and we are increasing their allowances. There will possibly be a year when some people will have to pay slightly more tax, but not the majority. Most people will not be spending any more money, and they will certainly not be losing any more money next year compared with this year, so you might like to look a little more carefully at what we are doing.
Mr Speaker
Order. I gently remind the hon. Lady, as I did the hon. Member for Tiverton and Honiton (Neil Parish) earlier, that we direct debate through the Chair. I am not involved in these arguments.
Pauline Latham
I do apologise, Mr Speaker.
The change to child benefit is also something that we should welcome, as it shows that the Chancellor has listened to what people out there have been saying. There will not be a cliff edge, as people have suggested, and no one earning £50,000 or less will lose anything. Only when people earn more than £60,000, which is quite a lot of money, will they lose their child benefit.