Finance (No. 2) Bill

Stella Creasy Excerpts

3rd reading: House of Commons & Report stage: House of Commons
Wednesday 21st February 2018 Commons Chamber

[Helen Whately]

I thank my hon. Friend for making such an important point. This Government have given thousands of young people the opportunity to have a job. It was not that long ago that everyone was always talking about NEETs—the big debate was about all those young people not in education, employment or training. Those numbers have now shrunk phenomenally under this Government’s leadership.

[Stella Creasy (Walthamstow) (Lab/Co-op)]

The hon. Lady has mentioned the power of numbers to be able to track progress. Obviously, new clause 9 is about the power of numbers to be able to track progress in tackling inequality. If she thinks that those numbers were so important in the battle to ensure that we did not leave young people behind, why does she not think the same when it comes to women and ethnic minorities?

[Helen Whately]

I am not surprised by the hon. Lady’s intervention. The point is that there is a thorough impact analysis of the Budget. Where does it get us if we endlessly go around these things, again and again?

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[Rachel Maclean]

My hon. Friend makes a very important point. As she says, the national living wage helps people from all sectors of society, including those with protected characteristics. Our record on these policies speaks for itself.

[Stella Creasy]

The hon. Lady is promoting the Government’s record. One reason why the Labour party wants to get explicit equality impact assessments—not the tax information and impact notes, which I think is what she has been told the Government do produce—is that the evidence is showing counter to what she suggests. For example, we know that the gender pay gap between women in their 20s and men in their 20s has actually started to grow under this Government. It is now five times what it was six years ago. I do not know where the hon. Gentleman from Scotland got his data. I got mine from the Office for National Statistics, if he wants to have a look. Can the hon. Lady account for that? Does she not understand that having the data—understanding where Government policy is either promoting or helping to deal with the situation—would help us all to make progress?

[Rachel Maclean]

The hon. Lady is a passionate advocate for addressing the gender pay gap. I will come to the issues she raises shortly.

[Rachel Maclean]

My hon. Friend really reinforces my point, which is that it is about putting pounds in the pockets of people up and down the country. That is what this Government have done, informed by fairness from the day that we came into office.

[Stella Creasy]

The hon. Member for Cheltenham (Alex Chalk), as ever, needs clarification. There is data that shows us that the gender pay gap is growing. We are asking for analyses of the impact of Government policy so that we can understand it. We are talking about two different things. I hope that clarifies, for him and for the hon. Member for Redditch (Rachel Maclean), why the new clause matters.

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[Stephen McPartland]

I do agree with my right hon. and learned Friend. I have another colleague from Hertfordshire here as well—my hon. Friend the Member for Hitchin and Harpenden (Bim Afolami). We have seen massive investment in our area. I am very proud of the number of primary schools that have been expanded and rebuilt in my constituency. A couple of secondary schools have also been rebuilt, creating great opportunities for the pupils. I am also very proud that all the primary schools in my constituency are rated “good” or “outstanding”. It is probably one of the few constituencies in the country where that is the case. Four of my six secondary schools are good, and the other two we are currently dealing with. I hope that by the time of the next election I will be one of the few Members of Parliament where every single child in my constituency will be in a good or outstanding school.

I do not believe that new clause 9 provides equality of opportunity and equality of aspiration. It will do nothing to help people in my constituency from disadvantaged—

[Stella Creasy]

We are all concerned to see good schools, I think. Does the hon. Gentleman recall a former Prime Minister who argued that sunlight was the best form of disinfectant? Having the numbers to track why, disproportionately, young men from black and ethnic minority backgrounds do worse in our schools, for example, and whether Government policies are influencing that, or whether their parents’ income might be an issue, would help him to understand how he gets those better schools.

[Stephen McPartland]

The hon. Lady and I agree on a lot of things and disagree on others. We have debated issues across this Chamber and in Committee Rooms. I do not think that figures will help those children. Figures are just retrospective and talk about what is possibly happening.

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[Mel Stride]

Yes. My right hon. and learned Friend makes a very important point. As I have already pointed out, around major fiscal events we have household distributional analysis, which covers welfare, taxation and public expenditure. It takes a cumulative approach to that information and it is often relied upon by Government to take subsequent decisions. We also have, on substantial individual tax and national insurance contribution measures, tax impact and information notes—the so-called TIINs—which were introduced in 2010 and were not there under the previous Labour Government. We are, therefore, doing a number of things, both in the context of major fiscal events and on a tax-by-tax, national insurance-by-national insurance change basis, which look to provide just the kind of information that informs decisions around equality.

The third part of new clause 9 relates to the taxes to which this analysis would apply. On income tax, as I have said, we are looking at impacts on households. We may raise the personal allowance, as we did in the last Budget. That is now up to £11,500. It could be argued that that disproportionately favours one sex over another, but when we look at the effect on the household, income is typically distributed within families, within households and within the family unit. That is extremely difficult—in fact, I would go as far as to say impossible—to capture.

[Stella Creasy]

The Minister made that point the last time we tried to discuss this issue. Forgive me, but he seems to be presuming that a household is a man and a woman. Has he managed to get his head around single person households and single women, because women’s incomes are disproportionately hit by Government policy? At the very least, could he manage to measure the women who are affected by his tax and policy changes who do not live with a man who might confuse him?

[Mel Stride]

If the hon. Lady can come up with a sure-fire way of identifying women who live with men who do not confuse them, we will probably make some progress. The point I am making is that this area is riddled with huge complexity, yet new clause 9 seeks to achieve the presentation of reports and assessments that have the imprimatur of Government and the Treasury upon them. They are relied upon to take very important decisions, yet the arguments I am prosecuting suggest that we would actually end up with an incomplete picture. In fact, I would go further than that and say that they could be misleading in a way that would be unhelpful to what I know the hon. Lady is seeking to achieve and indeed what the Government are also seeking to achieve.

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[Chris Philp]

My hon. Friend makes a very important point. The fact that the tax gap is 6% rather than the 8% bequested to us by Gordon Brown sounds like a theoretical point, but that two percentage point difference, as she rightly says, amounts to billions of pounds funding the NHS and schools. In debating these avoidance measures, we are not talking about something theoretical and of academic interest: it is precisely these measures that fund our public services, and that is why they are so important.

Turning to the Opposition’s amendments and new clauses, I was rather surprised, on looking at the amendment paper earlier today, to see that new clause 6 once again calls for a review and analysis—analysis which, I am sure, is already conducted by the Treasury, as the Financial Secretary will no doubt point out. But there was an absence—a silence and a desert; tumbleweed was rolling across the amendment paper—where I would have expected to see an abundance of ideas that we might have adopted from the fertile mind of the shadow Chief Secretary. If he could not have proposed ideas in an amendment for some arcane parliamentary procedural reason, he might at least have done so in his speech.

The Financial Secretary to the Treasury is an extremely attentive and receptive Minister. Had the shadow Chief Secretary proposed some constructive ideas, I am sure that the Financial Secretary would have listened carefully. I am very disappointed that after all the noise and, I dare say, bluster—I hope that is not unparliamentary—that we heard in the shadow Chief Secretary’s speech, we did not hear any concrete ideas. We cry out for and are open to new ideas, yet we did not hear any in what was otherwise an amusing and entertaining speech. I am disappointed.

If the Financial Secretary is in the market for new ideas on avoidance, as I am sure he is, one idea is that we could give some thought to ensuring that the Land Registry records the ultimate beneficial ownership of property and land. We discussed that yesterday in our debate on sanctions, and it was suggested by David Cameron a couple of years ago. When the ultimate beneficial ownership of those properties changed, we might then levy stamp duty on that change as though the physical property had been transferred. A lot of high-end residential property is held in non-UK corporate wrappers, and when the property is transferred, rather than selling it, as we would sell our properties, ownership of the company is transferred. There is no record of that in the UK and therefore no stamp duty is paid. That idea might well raise some more stamp duty. I could hardly criticise the shadow Chief Secretary for his lack of ideas without proposing at least one myself. I hope that Ministers will give some thought to that idea in due course.

In conclusion—[Hon. Members: “Hear, hear!”] I am glad I have said something that finds favour among Opposition Members. I must have set a record for the number of interventions taken, though there was only one from my own side. The action on the bank levy contemplated in the Bill is the right one. We are taxing banks more heavily than non-banks. We are raising more money than ever before, but we must be mindful of the risk of driving these companies or part of them overseas at a time when they contribute 9% of our total income.

On avoidance and evasion, I am proud that this Government have delivered the lowest tax gap in the world and improved by a quarter the position that they inherited. That pays for public services, as pointed out by my hon. Friend the Member for Redditch (Rachel Maclean). It is a good record, and I am proud of it. I look forward to supporting the Bill.

[Stella Creasy]

I rise to support the amendments tabled by the Opposition and to speak to my amendments 1 to 4.

I was into PFI before all the cool kids were. These amendments speak to a long-held concern of mine, which is that it is not enough for us as politicians to identify when something has gone wrong and to shrug our shoulders and say, “It’s complicated.” The consequences for the communities we represent and for this country’s public finances are so toxic that it is vital we act.

George Bernard Shaw said:

“Political necessities sometimes turn out to be political mistakes.”

Let me be clear that I am not seeking to blame anyone. Governments of all colours used PFI. It started in 1992 and has gone on to the present day. Absolutely, the last Labour Government used PFI to fund things, and it was not an ideological decision; it was a very simple one about keeping borrowing off the books.

However, we know now just how costly these decisions have been for this country. Every single school, hospital, street lighting system and motorway built was needed, but we know now that the consequence of these costs is that we may not be able to build such things in the future. I am in the Chamber today to propose a way in which Parliament can now act to get money back for our public services, because everyone of us has one of these projects in our constituencies.

We can talk about the numbers involved: £60 billion of capital building, on which we will pay back £200 billion. These companies are truly the legal loan sharks of the public sector, charging an excessive rate of interest in comparison with public sector borrowing for building and running services for us. Conservative Members may say that the cost I am talking about includes services, so it is worth breaking down the charges. Last year alone, this country paid out £10 billion in PFI repayments, over half of which was for interest and charges. The money we are paying for PFI is not paying for schools and hospitals to be run; it is paying the profits of the companies we borrowed from to be able to build them in the first place.

The National Audit Office has done absolutely sterling work uncovering just how bad a value-for-money calculation it was to go for PFI. On average, these projects are 2% to 4% more expensive than Government borrowing at the time. In total, with charges and fees included, they are now, on average, 40% more expensive than having worked with the public sector.

The interest rate matters because the costs are not necessarily about the management of a project; they are about the profits being made. Every single MP who is being lobbied about their schools and hospitals needs to recognise that 20% of the extra money the Government say they are giving to schools and hospitals will not touch the sides of emergency wards or go into the budgets of teachers to pay for the books and classes our schoolchildren need. It will go straight out of our public sector into pure profit for these companies.

The Centre for Health and the Public Interest has gone through the accounts of the few hundred companies running schools and hospitals to identify just how much money is involved. It found that they will get £1 billion in the form of pre-tax profit from NHS deals alone, which total just 125 of the 700 PFI projects. For example, the company holding the contract for University College London has, alone, made £190 million in the past decade out of the £725 million the NHS has paid out. In short, it has made enough in profits to build and run an entire hospital.

We have to talk about the human cost. I became interested in PFI when I saw the damage it was doing to my local hospital, Whipps Cross in Walthamstow, and to schools such as Frederick Bremer School in Walthamstow. Its headteacher is now desperately struggling to balance her budget in the face of this Government’s swingeing cuts to the schools budget, but the one repayment she cannot cut is the PFI one. Barts, the biggest PFI in our NHS—with a £1 billion capital build, and £7 billion repaid—is paying £150 million a year, of which £74 million is interest alone. It is no wonder that the hospital is in such persistent financial difficulty.

[Wes Streeting]

My hon. Friend is making a powerful case. Whipps Cross University Hospital also serves my constituents. To the east, the cost of PFI at Queen’s Hospital in Romford is such that it is creating enormous financial pressures on the Barking, Havering and Redbridge University Hospitals NHS Trust. Does she agree with me that that underpins the urgency of the need to tackle this issue? We should not stick to the ideological dogma of the past, but look at what has really happened and claw back some of that excessive greed to better fund our public services.

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[Stella Creasy]

My hon. Friend—my next-door neighbour MP—pre-empts my argument. My amendments relate specifically to the 700 existing contracts, because I believe—I am glad my Front Benchers support this—that we can and must do something urgently about the damage these 700 contracts are doing every single day in schools where headteachers are having to consider sacking people but cannot cut the repayments, and in hospitals that are having to cancel operations but cannot reduce the repayments to their lenders.

There is a sixth-form college in Haywards Heath with no sixth form, because nobody will take on the school’s PFI debt. We keep talking about Northamptonshire Council, which is selling its own buildings because it is going bankrupt. It will owe £240 million to just five PFI deals in the next two to five years, of which £77 million is interest payment. Surrey Council is also in financial difficulties. It has £386 million of PFI commitments that it will not be able to reduce, of which £51 million alone is interest.