Budget Statement

Lord McKenzie of Luton Excerpts

Friday 12th March 2021 Lords Chamber

[Lord McKenzie of Luton (Lab) [V]]

My Lords, I start by offering my congratulations to all those who have made maiden speeches today. The pandemic has caused the most comprehensive and sustained economic shock that we have had to endure, and Brexit has of course added to that challenge. Witness the devastation on our high streets, the impoverishment of our councils and the continuing housing crisis.

The Chancellor’s chosen method of introducing a range of tax increases was to freeze a whole bundle of tax thresholds and allowances at 2021-22 levels —a rather weasel way of circumventing manifesto commitments, but not novel; we have all been at it. It leaves the determination of the rates of real increases in tax to a range of market economic factors not necessarily under the direct control of the Chancellor.

Perhaps the time has come to get more from capital taxes—inheritance tax and capital gains tax—and one further tax. Noble Lords may be aware that the Wealth Tax Commission, chaired by the noble Lord, Lord O’Donnell, recently delivered its final report. As the report sets out, it is half a century since a wealth tax was seriously considered in the UK. Given the scale of the public finance crisis, there is an imperative, I suggest, to think big on tax. Why should we not at least develop our thinking on a wealth tax—a broad-base tax on the ownership of net wealth—to help pay the bills, as some have suggested? Public attitudes, according to the report, show a clear desire for wealth to be taxed more relative to income. I live in hope.

EU-UK Trade and Cooperation Agreement

Lord McKenzie of Luton Excerpts

Friday 8th January 2021 Lords Chamber

[Lord McKenzie of Luton (Lab) [V]]

My Lords, it is hard to celebrate legislation which will lead to our country becoming poorer. It is also difficult to accept that Boris Johnson has just “got Brexit done” when so much else remains to be resolved. In the meantime, we are urged to anticipate the beginning of a new, historic relationship built on shared history, interests and values, while many of us were content with the old arrangements. It is hard to receive these urgings from those who have made a career out of scapegoating the EU.

However, we have to support the TCA and build on its thin prospectus. Membership of the EU has brought substantial benefits to our country, and certainly to the place where I live, Luton, where our mainstay employers are in the automotive sector and aviation. A few years back, General Motors decided unilaterally that it was going to close the car plant in Luton, and it was the engagement of the EU together with trade unions that fostered new investment and regeneration projects, the beneficial effect of which can still be seen today. My noble friend Lord Woodley will recall those times.

I am sure that, until the pandemic hit, Luton Airport was one of the fastest growing in the country. It is therefore to be hoped that the arrangements we now have with Europe will of course go beyond a trade agreement and will foster easyJet continuing to fly and Vauxhall continuing to build vans. This means coping with the rules of origin, the ending of automatic freedom of movement, sustaining the level playing field, dealing with an explosion of customs declarations, and much more. I see this deal as one which we have to embrace, regrettably.

Finance Bill

Lord McKenzie of Luton Excerpts

2nd reading & Committee negatived & 3rd reading & 2nd reading (Hansard) & 2nd reading (Hansard): House of Lords & 3rd reading (Hansard) & 3rd reading (Hansard): House of Lords & Committee negatived (Hansard) & Committee negatived (Hansard): House of Lords
Friday 17th July 2020 Lords Chamber

[Lord McKenzie of Luton (Lab) [V]]

My Lords, Covid-19 has changed all our lives in a way that we might have thought unimaginable a few months ago. With optimism for a V-shaped recovery receding and facing a 12.8% fall in GDP this year, and with public sector borrowing in excess of £500 billion, we face difficult times. Levels of borrowing that might previously have been said to be indefensible, dangerous and unsustainable are now being viewed as mainstream.

With the reality of major job losses growing apace, and faced with the changing norms of ongoing social distancing, working at home, changing supply chains and accelerated use of technology—just look at this place, for example—life has changed. The world of work has changed, and will change more after Brexit, and I do not think it will spring back any time soon. If it is to, where are the signs to suggest that it will?

The pandemic has brought home that, in times of crisis, we have to look to and engage the power of the state to find solutions and to provide resource and direction, nowhere more so than in tackling unemployment. It is to the state that we must look to build a safety net—the social security system newly enthused by those who hitherto never imagined that they should need recourse to it and who now have to engage with the paucity of its provision and the frustrations of its complexity. Of course, this will necessitate more borrowing, but one of the lessons we have directly learned is that levels of public borrowing must not be bound by the orthodoxy of the past. We need jobs as the priority.

One of the lessons, as we see from its nightly inclusion in people’s lives through our TV screens, is the spotlight being shone on just how unequal is the society in which we live and how fragile the financial resilience of many families—evidenced by growth in access to food banks, for example. With the poorest one-fifth of households suffering a 7% fall in income, how do we find this acceptable?