Financial Transaction Tax and Economic and Monetary Union

Debate between Stephen Williams and Chris Leslie

Tuesday 18th June 2013 Commons Chamber

[Chris Leslie]

The public are sick and tired of hearing more of the same from the Government—no solutions, just reasons for not doing anything differently. It should not need to be restated—although it clearly does for Government Members—that the global financial crisis and the collapse of many organisations in the financial services sector required an enormous bail-out from the public purse. That collapse in revenues led to an extra £300 billion on the national debt. As the Government have failed to turn things around, we can see that many of the consequences are still being felt today by our constituents and that we need to do something different.

[Stephen Williams (Bristol West) (LD)]

I just want to clarify that my position and that of my party is that a financial transaction tax could make a useful contribution to world development if it were introduced across all the global financial sectors. Is it the Labour party’s position that if the EU proposal, which, as constituted, would affect Paris, Frankfurt and perhaps London, were to go ahead, Labour would support it despite it not also applying to New York, Zurich, Shanghai and everywhere else?

[Chris Leslie]

I shall set out our position clearly: we do not think that the EU variant of the FTT is optimal. Of course it should be improved. We think there are better ways to design these things and I shall come to many of the arguments in a moment. I am delighted that the Liberal Democrats—well, the one Liberal Democrat who is in the Chamber—support the principle of a financial transaction tax. That is exactly why we phrased the amendment in the way that we did.

Let me read the amendment out so that the hon. Member for Bristol West (Stephen Williams) can consider it carefully, because I am minded to test the House’s opinion on it. We are calling

“on the Government to support the principle of an FTT”—

so far, so good—

“to learn lessons from the EU proposal”,

which, of course, we have to do, and to

“work with other global financial centres, especially the US”,

as clearly New York is central,

“to reach a consensus on a design set at a modest rate without creating negative economic consequences and which minimises international tax arbitrage”.

I am quite sure that in his heart of hearts the hon. Gentleman does not disagree with a single word of that.

--- Later in debate ---

[Stephen Williams]

The shadow Minister is absolutely right: I did not disagree with a single word he read out. It was, however, a selective reading of the amendment, because he left out the first couple of lines, which would leave out the reference to the fact that the Government are challenging the European Parliament’s decision in the European Court of Justice precisely because it affects this country adversely while we do not have global agreement. That is the problem.

[Chris Leslie]

Oh dear, oh dear, oh dear! The hon. Gentleman cannot seriously be suggesting that he is going to vote against the amendment because we have to leave out the reference to further noting that there is a Court challenge. I would have been quite happy to have tabled an amendment that did not leave out that bit of terminology, but—I am sure that you can confirm this, Mr Deputy Speaker—we did not do so because the Clerks tell me that a motion can only have 250 words. Of course, the Government use up their 250 words in the motion, so we needed to find space to insert the reference to the principle of the financial transaction tax. The hon. Gentleman should trust me: I have been considering the point and I did not want to leave anything out of the motion, but we wanted to put that reference in. I hope that with that assurance, he will think again, because the amendment is eminently supportable.

Finance (No. 2) Bill

Debate between Stephen Williams and Chris Leslie

Wednesday 17th April 2013 Commons Chamber

[Chris Leslie]

The OBR is still bedding in. It has had a difficult time because on every autumn statement and Budget it has had to downgrade and revise its forecasts, upgrading the forecast for the deficit along the way, so one has to feel slightly sorry for it. There were some signs that its chairman was keen to chastise the Prime Minister and the Chancellor for overstating what was happening to public finances, so we wish it well for the future.

New clause 5 concerns the introduction of a 10p starting rate of income tax, funded by a mansion tax on properties worth more than £2 million, a policy that used to be advocated by the Liberal Democrat—

[Stephen Williams (Bristol West) (LD)]

It still is.

[Chris Leslie]

Apparently, it is still advocated by the Liberal Democrat, but Liberal Democrats tend to have a habit of voting against it whenever the opportunity presents itself. Those on low incomes have had their tax credits cut, their child benefit has been affected, and their wages and living standards have fallen, but millionaires on average benefit from a £100,000 tax cut. Surely it is time to help lower and middle-income households with an extra level of tax support, directed from revenues raised from a mansion tax on properties worth more than £2 million.

--- Later in debate ---

[Stephen Williams]

Thank you, Mr Hoyle. Your advice is always given with good heart and accepted freely.

New clause 5 highlights the Labour party’s conversion to the principle of a mansion tax. I said that the new clause was an innovation. Unfortunately, I am a veteran of Finance Bills. I have obviously insulted my Whips Office on several occasions in the past and keep being put on to Finance Bills as a punishment. I remember from last year’s Bill that, time after time, Opposition new clauses and amendments called for studies of the impact of Government policy, while the Opposition proposed no new policies of their own. Now, finally, after three years, they have suggested a new policy, albeit one pinched from my party, but they are still asking the Treasury to do a study of it—even though it is they, not the Government, who proposed it—because the Labour party cannot be bothered to explain how this new policy that it has suddenly converted itself to will actually work.

The Opposition have not provided any clues as to how their approach might work, even though they have had plenty of opportunities to do so. The hon. Member for Corby (Andy Sawford) referred to the Opposition day debate five weeks ago, and the Labour party has since had plenty of opportunities to flesh out how its version of the mansion tax would work in practice. I had hoped that Labour Members would explain it to us today, but they have not.

New clause 5 does not provide many clues. Let me give those on the Opposition Front Bench a piece of advice: if they want to ask somebody else to assess the impact of their own policy, they really ought to give them a bit more detail to work on. I am sure that the Minister will confirm that those who work at the Treasury are very clever people. Among them are a lot of economists and accountants with good qualifications and excellent degrees from top universities, but the Labour party should not think that it can present them with an almost blank piece of paper, which new clause 5 is, and then expect them to be able to explain within a few months how its policy will work without their having been given the barest of details.

[Chris Leslie]

rose—

[Stephen Williams]

I see that the shadow Minister is itching to come in.

[Chris Leslie]

This is the thing with the Liberal Democrats—the hon. Gentleman is taking the biscuit. He is whipping himself up into a sense of righteous anger about his own policy, which we want to put on to the statute book. He is picking holes in a policy that he supposedly supported, but which he now cannot bring himself to vote for. Talk about a “push me, pull you” approach from the Liberal Democrats.

[Stephen Williams]

I assure the hon. Gentleman that I have righteous enthusiasm for the policy, because it is a Liberal Democrat policy that I have enthusiastically supported for the past three and a half years. How many weeks has he been an enthusiastic proponent of the mansion tax—10, 12, nine? How many weeks has the Labour party believed in this policy? When did he experience his conversion and accept the wisdom of the Secretary of State for Business, Innovation and Skills, who first proposed this policy several months before the 2010 general election? I know that the hon. Gentleman was not a Member of Parliament at that time, but I assure him that his colleagues who were in government rubbished the policy during the general election and the coalition negotiations. For the first three years of this coalition Parliament, Labour did not support it, but now—lo and behold—it does. When was he converted?

[Chris Leslie]

I am intrigued by the hon. Gentleman’s line of argument. He is attacking us for agreeing with him. We might not have agreed with him several years ago, but now we feel that a mansion tax is necessary to help with a tax break for lower and middle-income families. Is it his argument that we are wrong for supporting a mansion tax? Is that really what he is saying?

[Stephen Williams]

My argument is straightforward: I do not know what the Labour party’s variant of the mansion tax would be. Moreover, the Labour party does not seem to know, either; otherwise, why on earth would it frame new clause 5 in a way that asks the Treasury to explain how it might work? We are in an extraordinary position. I know what my party’s policy is and am about to tell the hon. Gentleman exactly how a mansion tax would work, but I had hoped to hear from him a little more detail on how his version would work, so that the clever people at the Treasury could produce the study that he wants.

--- Later in debate ---

[Stephen Williams]

The hon. Gentleman is essentially asking me a variant of the question asked by the hon. Member for Carmarthen East and Dinefwr (Jonathan Edwards). He mentions agricultural buildings. Clearly, a mansion tax is a residential property tax: a tax on the building that the landowner—the farmer, the rich individual or whoever—lives in. It would not include barns, pigsties and the other agricultural buildings to which he referred, even if they have a high value. This would simply be a tax on residential property occupied by a person, not farm animals or anyone else: only the farmhouse itself, or the estate house, would fall into the ambit of a mansion tax.

Coming directly to the problem with new clause 5, the poor clever people in the Treasury simply do not have enough detail to go on to produce this study within six months of the passage of the Bill. This is the opportunity for Labour Front Benchers to answer these questions. They can intervene as many times as they like. [Interruption.] If they are listening, of course. This is an opportunity for them to tell us how the Treasury is going to conduct this study. It really does need some more detail. Is Labour’s variant on the mansion tax a tax on the whole of the £2 million, or is it a tax on the excess of the £2 million? That is completely unclear from any of the speeches made by shadow Ministers, or from the motion. What is the base of the tax?

[Chris Leslie]

We based our proposal on the Liberal Democrat analysis that a mansion tax could be on the excess of £2 million of value, raising, I think the hon. Gentleman said, £2 billion. That was the basis on which we assume he has some deeper calculations, and I hope he can produce them and share them with the Committee, because it seems a sensible proposal.

[Stephen Williams]

That is very helpful, because that is the first time we have heard it. It is nice, too, to have an acknowledgement that the Opposition have based whatever they have said so far on statements from my party. I am grateful for that acknowledgement. They have been giving the impression that it is their policy, rather than a magpie policy stolen from the Liberal Democrat policy nest.

[Chris Leslie]

Given that I have helped to clarify that for the hon. Gentleman, will he now do the right thing and support his own policy in the Division Lobby today? It is very simple.

[Stephen Williams]

I always strive to do the right things; I am sure all hon. Members do. In the Opposition day debate five or six weeks ago, the Government amendment was so beautifully crafted by the people in the Liberal Democrat Whips Office and the Conservative Whips Office that I was able to vote for it. It said that the Liberal Democrats in the coalition support the principle of a mansion tax, but acknowledged the fact that the Conservatives in the coalition do not. When I voted for that motion, therefore, I was indeed voting to endorse the Liberal Democrat policy of a mansion tax.

--- Later in debate ---

[Stephen Williams]

I am happy to reveal now that I will not be supporting new clause 5 in the Division Lobby. That should not surprise the hon. Gentleman. I will not be supporting it, because it is not about the principle of introducing a mansion tax. It asks for a study. It asks the Treasury to do some work. These are busy people, with important work to do, and I do not want to waste their time. We do not want them to waste their time finessing badly thought-through Labour party proposals.

[Chris Leslie]

On a point of order, Mr Hoyle. Is it not the case that only Government Members can table amendments to a Finance Bill that would increase a charge or a tax, and therefore, under the rules of the House, these sorts of reviews are the only device the Opposition have to suggest such a tax change?

--- Later in debate ---

[Stephen Williams]

Of course, that is broadly correct, but I repeat that if the shadow Minister wishes new clause 5 to be implemented, he needs to provide more detail, so that the House can consider whether it is worthy of support. I do not think it worthy of support, because it is so full of holes. It would waste the time of the mandarins in the Treasury to ask them to come forward with a study for which they do not have the right brief. We have not been told at what rate the Labour party wants to set the mansion tax. Here is another opportunity for the Opposition to help the Treasury. Would the rate be 1%, 2%, 2.5%, 3%?

[Chris Leslie]

It would raise £2 billion pounds.

[Stephen Williams]

The shadow Minister says that it would raise £2 billion. [Hon. Members: “That’s your answer.”] Well, it is an answer, but it is not what is in the new clause. Why does the new clause not say, “Can we have a study from the Treasury on the best way to raise £2 billion?” It would be in order, would it not, Mr Hoyle, to put down a new clause asking the Treasury, “What is the best way to raise £2 billion?” The Labour party wants to raise £2 billion, but wants someone else to tell it how to do it.

[Chris Leslie]

I confess. Perhaps we could have mentioned the £2 billion. Will the hon. Gentleman forgive us to the point of at least abstaining on the new clause? Perhaps that is a compromise we can offer.

[Stephen Williams]

Abstention on certain issues is sometimes unfairly pooh-poohed by all parties. I have done it on certain issues. Indeed, abstention on a Bill that has a range of measures, some of which one likes and some of which one does not, is an entirely honourable thing to do, and Members from all parties will have done it. Although we would like to think that the Labour party has had plenty of time to craft a motion that might appeal to Liberal Democrats, I am afraid that in new clause 5 the Opposition have failed. They have again not managed to tell us how they think a mansion tax would work.

--- Later in debate ---

[Chris Leslie]

Given the constrained time available under the Government’s programme motion and the need to move on to other issues, I do not wish to press new clause 1 to a vote, but it is important that we continue to press Ministers for some firmer answers on their Help to Buy scheme, which gives the impression of having been written on the back of an envelope without much thought and without looking in sufficient detail at some of the questions that have arisen in the course of the last few hours, whether with regard to devolved Administrations or second home purchases. Therefore, it is necessary to consider this further during the Bill’s passage.

However, it is important to test the view of the House on new clause 5, particularly given the speech of the hon. Member for Bristol West (Stephen Williams), who, in an acrobatic display of contortions that tests even the most adept of Liberal Democrats, managed to find a way to oppose a policy that he has supposedly advocated for a long time. Even when we agreed that the policy was the same, raising £2 billion on mansions worth over £2 million and using that money for a tax cut for low and middle-income households, he could not bring himself to abstain on the issue but will vote against the new clause. Therefore, we must test the view of the Committee.

[Stephen Williams]

New clause 5 calls for a study to be done by the Treasury; it is not about the principle of the policy. The Labour party gets £13 million of public money, Short money, to spend on policy development. Why does it not use some of that money to do its own studies?

[Chris Leslie]

When the Liberal Democrats are in a hole they really should stop digging. Is the reason for the hon. Gentleman voting against his own policy that he does not want us to look into the very details that he could not answer when challenged on his policy? Of course, if we are to implement a mansion tax we want to make sure that we get it right. We do not want the unthought-through approach taken by the Treasury. We want to make sure that we have taxes that are fair and will be sustainable for the population as a whole. Therefore, it is important that we test the principle of a mansion tax. Lower and middle-income households need that extra help and it is important that we put this question to the test. I beg to ask leave to withdraw the motion.

Clause, by leave, withdrawn.

New Clause 5

Mansion tax

‘The Chancellor shall review the possibility of bringing forward a mansion tax on properties worth over £2 million and publish a report, within six months of the passing of this Act, on how the revenue could be used to fund a tax cut for millions of people on middle and low incomes as part of a fair tax system.’.—(Chris Leslie.)

Brought up, and read the First time.

Question put, That the clause be read a Second time.

Tax Fairness

Debate between Stephen Williams and Chris Leslie

Tuesday 12th March 2013 Commons Chamber

[Stephen Williams]

Yes, it was. I said it on “Westminster Hour”, on Radio 5, on the “Daily Politics” show, and on other programmes as well. Indeed I could have written it myself. However, I know precisely what I mean by a mansion tax, but we have not heard spelled out in any detail what Labour Members think it should be. I know what I mean by a tax cut for low and middle-income earners, because that is what this Government are doing while we are in office. I am entirely clear what I mean by the text of the motion; the trouble is that it has not been exactly clear what Labour Members mean by their words.

[Chris Leslie]

We support the proposition that the hon. Gentleman has elucidated about a mansion tax, so, okay, we are clear about what we mean by a mansion tax. When the Business Secretary said that if the motion were

“purely a statement of support for the principle of a mansion tax, I’m sure my colleagues would want to support it”,

was he wrong?

[Stephen Williams]

The Business Secretary is never wrong; he is a very wise man. I do not see any great difference between what he said and what I said on the record several times yesterday and over the weekend. We know what we mean by a tax for low and middle-income earners. We know what Labour Members mean as well—a reintroduction of the 10p tax rate, and that is why we disagree with them.

Multiannual Financial Framework

Debate between Stephen Williams and Chris Leslie

Wednesday 31st October 2012 Commons Chamber

[Stephen Williams (Bristol West) (LD)]

The hon. Member for Vauxhall (Kate Hoey), who I assume has gone to light her bonfire—I am not sure whether Mr Barroso or anyone else will be on top of it, but I hope that she enjoys the heat south of the river—said that the House was at its best when it is united. I entirely agree that the House is at its best when united on an important point of principle in which we all genuinely believe, and some Members are genuinely standing up for what they believe in—the hon. Members for Rochester and Strood (Mark Reckless) and for Wellingborough (Mr Bone), for example, who are genuinely Eurosceptic—but when the public see nakedly opportunistic Opposition motions, that is when the House is at its worst in their eyes, and that is what undermines public confidence in the work of Parliament.

[Chris Leslie]

Will the hon. Gentleman remind the House what he said about tuition fees before the general election?

[Stephen Williams]

This is about a debate we are having now on a budget from 2014 to 2020, not about a position we took in 2009 before any of us knew we were going to be in a coalition Government. This is a position we can decide for ourselves, knowing the circumstances we are currently in. They are entirely different situations.

We are essentially discussing a comprehensive spending review of the European Union from 2014 to 2020, for which the European Commission has asked for a budget of €972 billion. That is roughly €100 billion above what would be a real-terms freeze. That is completely unrealistic at a time when EU member states are under real budgetary pressure, and some more so than others. It would be unacceptable for the United Kingdom to agree an increase of that magnitude, because it would represent roughly £10 billion in extra contributions. Therefore, it is absolutely right that the UK Government are going into the negotiations, in concert with many other member states, asking for a real-terms freeze. That is what is important: the position our Government are taking is in agreement with that of many other member states. It is a position that has a realistic prospect of achieving the success that most of us actually want. Undermining the United Kingdom’s position today will blow a hole in that negotiating position and make it much less likely that we will get the outcome many of us wish to achieve.

European Budgets 2014 to 2020

Debate between Stephen Williams and Chris Leslie

Tuesday 8th November 2011 Commons Chamber

[Stephen Williams (Bristol West) (LD)]

I am glad to have the opportunity to speak, especially after that generous build-up. We are having a curious discussion. We have had many European Union discussions in the past few months, and I cannot recall my hon. Friend the Financial Secretary being received with such warm accolade on every occasion as he has been on this one. I am sure that must have cheered him. We saw the curious alliance of Conservative Eurosceptics and Labour Eurosceptics when there was discussion of the possible demise of the eurozone. However, on this issue we might actually have tri-party agreement. May I assure my hon. Friend the Member for Wellingborough (Mr Bone), even though I am a Europhile within the Liberal Democrats—that phrase must make him shudder—that my party has usually been at the forefront of calling for reform from within the European Union? We do that because we want the European Union to work. We want it to be a success and we are certainly not blind to its shortcomings.

[Chris Leslie]

Will the hon. Gentleman therefore confirm that Fiona Hall, the leader of the UK Lib Dems in the European Parliament, posted an article on 15 July that said:

“It’s time to consign the UK rebate to history, along with the rest of Thatcherism”?

[Stephen Williams]

That is not a position of this coalition Government at Westminster. As a good democrat, the hon. Gentleman will recognise that decisions that we make in local councils or in the European Parliament, where people have their own electoral mandates, do not bind parliamentarians in this House. That is the way in which our democracy works and we take a different stance on the matter here.

The European Commission has asked for a 5% budget increase, from €966 billion to just over €1 trillion, for the second half of this decade. Most of our constituents would find it extraordinary that a request is being made for the EU budget to wax while people in every member state are having to endure the waning of their budgets. It was right that last December five large net contributors to the EU budget—the UK, Germany, France, the Netherlands and Finland—called for a freeze in the EU budget for the second half of this decade. I would like the Minister to tell us whether the Government are seeking a cash freeze or a real-terms freeze.

Whatever the level of the budget, it certainly is a budget in drastic need of reform. The common agricultural policy still accounts for more than 45% of the European Union’s spending, whereas research and development accounts for only 6.7%. The Commission is actually proposing a switch between those budgets, but that switch is made possible only by the Commission’s call for a larger budget. It is simply ludicrous for the European Union to continue to have agriculture as its largest area of expenditure, rather than the industries of the future—industries where the UK is well placed. We are currently the largest recipient of EU funds for research and development, and that is the budget that should be expanded. The priority for the United Kingdom coalition Government should be to negotiate a major shift within the EU budget and certainly within the existing level of resources. To clarify the issue for the hon. Member for Nottingham East (Chris Leslie), I say that our budget rebate should remain while the EU budget remains in its current unreformed and out-of-date state.

On sources of revenue for the European Union, I share the sentiments expressed by the Opposition Front-Bench team that it would not be right for the EU to take on the personality of a federal state and have taxes paid directly to it, whether that be VAT or the proposed financial transactions tax. There is a very good case for a financial transactions tax being levied once we can have international agreement among the global financial centres, many of which lie outside the European Union, but there is no case at all for the European Union itself to pinch that money, which the people who have campaigned for the Robin Hood tax have earmarked for other purposes. May I reassure my colleagues that the Government are right to call for a freeze in existing EU budgets? However, they should also vigorously press the case for reform.

Finance (No. 3) Bill

Debate between Stephen Williams and Chris Leslie

Tuesday 5th July 2011 Commons Chamber

[Stephen Williams]

I shall make some brief remarks in this Third Reading debate on yet another Finance Bill. Unlike the hon. Member for Nottingham East (Chris Leslie), who is lucky not to have sat through every stage of the Bill, I have endured all of it, from the Budget and Second Reading right the way through to the upstairs and downstairs stages. I too congratulate my hon. Friend the Minister on being named tax personality of the year, which is indeed an exalted position. The tax personality of the year should, of course, know that 5 July is the end of a tax month; in fact, it is also the end of the first quarter of the traditional tax year, so he could have mentioned that too. I can only assume that the judges made their decision before they heard his Bananarama joke. Unfortunately you were absent at that point, Mr Speaker, so you will have to look in Hansard to see what I am talking about.

In the spirit of cross-Chamber harmony, I too briefly congratulate the right hon. Member for Delyn (Mr Hanson) on his birthday. He has also been with us for all stages of the Finance Bill, apart from this one. I can only assume that he has thought of somewhere better than the Chamber of the House of Commons from which to watch the final stage of the Bill.

This is a good opportunity to weigh up the credibility of both the official Opposition and the coalition Government, after all the various stages of the Bill. We have heard many times that the Labour Opposition believe that fiscal tightening and a reduction in the budget deficit are needed. However, although we have heard from many Opposition Members about the cuts that they oppose, we have not heard from any of them about the cuts that they favour. We have also heard about their difficulties with the various tax changes that the coalition Government are making. As my hon. Friend the Minister pointed out, the Opposition pulled a rabbit out of the hat in the middle of our proceedings when the shadow Chancellor announced a great new policy with a flourish. His policy was that the Opposition would, after all, oppose the VAT increase to 20%. However, first the Scottish National party gave the Opposition an opportunity to vote against the increase and they abstained, and then Plaid Cymru gave them another opportunity and they abstained again. Indeed, the Opposition could have given themselves an opportunity to vote against the increase, but they failed to get their amendment in on time. That is two official abstentions and one botched attempt to oppose the Government’s policy, so the next time any Labour MP says that they oppose the rise in VAT, they will not have much credibility.

The Opposition also even opposed tightening a tax avoidance measure in Committee, and this morning the last vestige of Labour credibility—if Labour had any—in dealing with the economy was stripped away by the hon. Member for Nottingham East, when Labour refused to support the extension of special drawing rights arising from Britain’s contribution to the IMF. Of course, that was part of the initiative launched by the former Prime Minister, the right hon. Member for Kirkcaldy and Cowdenbeath (Mr Brown), when he supposedly saved the world—I think that was the phrase—at the London G20 summit in 2009. And today, his successor spokespersons for the Labour party refuse to support the spirit of internationalism in dealing with bail-outs around the world.

[Chris Leslie]

I hope the hon. Gentleman will allow me to put on record something that he admits has been conspicuous by its absence—namely, the fact that the UK’s subscription to the IMF is rising from, I think, £10.7 billion to more than £20 billion. I hope he will explain that figure to his constituents and tell them, at a time when we are also on the hook for the other European bail-out arrangements, why we should be paying twice in that regard. I would be interested to hear his point of view.

[Stephen Williams]

I would be happy to invite the hon. Gentleman, as well as any other hon. Members and my own constituents, to read my blog, where I explained exactly that point straight after this morning’s debate. The explanation is of course a movement between the Government’s reserves and the reserves that we denominate in special drawing rights at the IMF. That does not involve additional Government borrowing or additional cuts, as the hon. Gentleman very well knows. What we saw this morning was the Labour party making a cheap, opportunistic point on a very serious issue.

[Chris Leslie]

I am grateful to the hon. Gentleman for being so nice about me just a moment ago. The Minister refused to tell us this morning, but does the hon. Gentleman know how much British taxpayers’ money is on the hook, via our IMF support for Greece? How many pounds sterling are on the hook? Does he know what our liability is?

[Stephen Williams]

The hon. Gentleman will have heard exactly what I heard this morning from the Financial Secretary to the Treasury, which was that, in its whole history since 1945, the IMF has never lost its money because it is always the first creditor to be paid. Our money is therefore not at risk, but our providing it is essential in order to ensure that the international economy stabilises. That is also in our own national interest.

I have dealt with the Labour party’s credibility, but what about that of the coalition Government? The points that the hon. Gentleman has just made lead me neatly to compare this country with Greece. During the passage of the Bill, we have seen the sad events in Athens, with the Greek Government having to make difficult and unpopular decisions. Greece’s bond rating, which reflects people’s willingness to lend to it, is CCC, while ours is AAA, even though our budget deficit is much higher than that of Greece. The difference is that our Government have a credible plan for repairing our public finances, and that is what gives us credibility in world markets and at home.

The Finance Bill and the Budget have also confirmed one of the most important measures that the coalition Government will introduce—namely, making the income tax system fairer. That was the No. 1 commitment that my Liberal Democrat colleagues and I stood on in the general election. We believe that work should pay, and that the lowest-paid employees in this country should be shielded from income tax. I am therefore pleased that the Bill takes another step towards making our pledge of £10,000 of tax-free income come true during the lifetime of this Parliament.

The Bill also puts in place a bank levy, so that the bankers will pay something back towards the problems that they helped to create during the last Government’s period in office. The budget is now under control. That is why the coalition Government were formed in the first place. Many of us might have thought at the time that it was a somewhat unlikely coalition, but it was put together to take these difficult decisions, to repair our public finances, to bring back international confidence and to give confidence to our own constituents that our country could get back on track. The difficult decisions have now been made, and we will see the job through.

Banking Reform

Debate between Stephen Williams and Chris Leslie

Monday 29th November 2010 Commons Chamber

[Chris Leslie]

We do not necessarily need to end all bilateral trading of derivatives, but to pick up where the G20 in Pittsburgh left off in 2009. It resolved to move towards greater exchange trading, but not necessarily the end of all over-the-counter trading. I know that we disagree on this specific point in the wording of the motion, but it is important that we should be responsible when considering some of the reforms that are being suggested. It is good that the Backbench Business Committee has enabled this debate to take place today.

I have doubts about the Government's policy on this because they are leaving it very much to the European institutions to lead on this matter, and leaving it up to the European market infrastructure regulations, which are now emerging as the only likely vehicle for reform. It is striking that Ministers are happy to be led, rather than showing leadership on this matter themselves, especially as the UK financial services industry is at the forefront of many of these activities. I urge Ministers to be far more front-footed on these reforms, rather than hanging back and complaining that details and policy are being foisted upon them.

We also need to consider some of the other regulatory shortcomings that have been raised in the debate, including those relating to bonuses, to management incentives skewing behaviour, and to transparency. I do not want to be too partisan, but I find certain aspects of this situation astonishing. My hon. Friends the Members for Streatham (Mr Umunna) and for Leeds East (Mr Mudie) said that the Government needed to show more leadership on banker remuneration. We have seen the appalling confusion and weak will of Ministers even over listing the number of bankers earning more than £1 million. Even that seems to have been a difficult step for them to take.

It is a particular shame that the Business Secretary is not here tonight—at least we have a couple of Liberal Democrats representing him here—especially as he was so vociferous on this subject exactly a year ago in his article in the Daily Mail. He described the proposal to disclose simply the number of bankers earning more than £1 million as a “whitewash”, saying that it would represent only “a small advance”. He went on to say:

“Shareholders who own the banks and the taxpayers who guarantee them have every right to know who is being paid how much and for what…Directors of public companies are already required to declare their earnings…The failure of Walker to grasp this is compounded by Alistair Darling’s meek acceptance of his recommendations. There are splits in the Government…Taxpayers sign the bankers’ bonus cheques, so we must see the names and numbers on them.”

We clearly do not need to wait to see the Business Secretary’s appearance on the Christmas special of “Strictly Come Dancing”; he is perfectly able to perform his volte-faces, somersaults and U-turns one after the other. He is performing spectacular political cartwheels more often than ever before.

[Stephen Williams (Bristol West) (LD)]

rose—

[Chris Leslie]

I would love to hear what the Liberal Democrats have to say about this.

[Stephen Williams]

Let us see whether the hon. Gentleman can pirouette his way out of this one. During the last Parliament, probably the largest piece of legislation that went through was the new Companies Bill. Given that my right hon. Friend the Member for Twickenham (Vince Cable) called at that time for more disclosure in companies’ reports about directors’ remuneration, why did not the previous Government rectify that anomaly?

[Chris Leslie]

It is difficult for the hon. Gentleman to criticise the previous Government, when they put the statute in place ready to be triggered by the present Government. It is baffling to my constituents and to his that we cannot allow them to see the simple figure of how many multi-millionaire bankers there are. I am not suggesting that we reveal their names, just the number involved.