Finance Bill

Debate between Alex Salmond and Mark Durkan

Tuesday 21st July 2015 Commons Chamber

[Alex Salmond]

It will not have escaped the hon. Gentleman’s notice that the Government seem to have run out of speakers on the Second Reading of the Finance Bill. Might that be because of the reality that thousands of families with children in every single constituency in this country are going to be worse off as a result of the Budget? Is that why the Tory party seems so unenthusiastic about supporting the Budget?

[Mark Durkan]

The right hon. Gentleman makes a very good point. I think many people will wonder about the paucity of attendance on the Benches at such an important debate today. We have been served notice that there will be various amendments in later stages of the Bill, but I think people would have expected a bigger attendance here today. Given the impact it will have on many people with marginal incomes and the consternation that many people feel about MPs’ pay increases and other matters, they will be wondering where everybody is.

[Mark Durkan]

Maybe they are away celebrating other people’s birthdays. [Laughter.] Maybe the hon. Gentleman, having had so many interventions, can now safely go and celebrate his. We all know he was here and not somewhere else.

In the provisions on the national living wage and some of the other early clauses, the Chancellor seems to be doing exactly what he decried his predecessors for doing: passing legislation to put restraints or constraints on himself. He is advertising in legislation his own behavioural discipline. It is the ultimate political selfie to put oneself into legislation. Some only last for the life of the Parliament, yet are being put into legislation. How gratuitous a political exercise is that? Perhaps that is why other hon. Members cannot see fit to indulge the Bill too much.

Government Members have said that the charter for budget responsibility is a key issue, which it is, but a key aspect of the charter is the welfare cap. In yesterday’s debate, we heard references to the benefits cap—there has been much discussion about the benefits cap, which affects households—but less attention has been paid to the overall implications of the welfare cap, which was first introduced as part of the charter last year. If we look at what the summer Budget, as opposed to the March Budget, does for the welfare cap over the next four years, we find some revealing figures. In the March Budget, the overall welfare cap for the UK for 2016-17 was £122.3 billion; in this Budget, it is £115.2 billion. For 2017-18, it was £124.8 billion in the March Budget; it is £114.6 billion in this Budget. It was £127 billion for 2018-19 in the March Budget, ahead of the election; it is £114 billion in the summer Budget, after the election. For 2019-20, it was £129.8 billion in the March Budget; in this summer Budget, it is £113.5 billion. Over those four spending years, that is a cumulative cut of £46.5 billion, as a result of the charter for budget responsibility and the welfare cap.

Many Opposition Members—or perhaps not many of us, as I think only 20-odd of us voted against the welfare cap when it was introduced—said that what the Treasury was bubble-wrapping as a neutral budgetary tool would turn into a vicious cuts weapon, and now we see it, in the name of the welfare cap. When there is so much discussion about the benefits cap, people forget that the real story is the welfare cap, and that will bear down on people in my constituency and lead to more conflict around the next wave of welfare reform when it comes to the Northern Ireland Assembly.

We heard earlier from the hon. Member for East Antrim (Sammy Wilson) and we heard yesterday what he thinks the implications of the cap will be. If he was still here, I would be saying to him directly that on this issue he and his party need to catch on; they have been wrong in the past, and it is a bit late to be scrambling now, when they have invited this very situation. Many of us told them that their support for the welfare cap, on top of their support for the last wave of welfare reform in the Assembly, would lead to this very situation, but they told us to forget about those concerns because there was nothing we could do about it.

[Alex Salmond]

Will the hon. Gentleman accept that Members from eight political parties last night voted against the welfare Bill, so perhaps it is a case of “better one sinner that repenteth”?

[Mark Durkan]

Yes, I certainly have no problem with that, and I welcome the breadth of opposition. I also welcome the depth of opposition I heard from some hon. Members who, because of their party’s Whips situation, did not vote but whom I know care passionately about a number of issues and have served notice that they will vote in the amendment stages. I hope, therefore, that we can go further in this Bill and yesterday’s Bill to build on that.

However, let us be clear: this Bill purports to cover more than just the issues that we discussed yesterday. Hon. Members have referred to the questions around corporation tax, and of course the Government have served notice that they are going to reduce it. I am someone who has supported the measures to give Northern Ireland the devolved capacity to vary the rate of corporation tax, and I have no issue or argument against that. Indeed, I predicted that one of the reasons why the Conservatives were so keen to devolve corporation tax was that they wanted to create an excuse or cover to do so in England and Wales as well.

However, although that can be welcome in Northern Ireland at one level, because it means that the cost of any variation in corporation tax for us will be less in time, let us be clear that, contrary to what the hon. Member for East Antrim said yesterday, it will not be parties such as mine holding these issues up; it will be the tactics and policies of the Government, who are trying to create a budgetary arm-lock on the devolved Executive. They are basically saying, “Unless you get your Assembly to pass the legislation that we want in respect of welfare reform, we are going to create budget stress”—which in turn will lead to a budget crisis, which in turn will become a political crisis—“as the price of your failure to do so.”

When we are locked in that budget crisis—which will be contrived and the result of the Government bullying us on welfare reform—they will then say, “You don’t have a balanced and sustainable budget; therefore, you’re not getting your corporation tax powers.” Just as the Government said they would not introduce the corporation tax Bill until they were satisfied with what it looked like the Assembly was going to do on welfare reform, so they have built in a clause for Northern Ireland in the Bill that says that, come 2017, they will not switch on the power unless they are satisfied that there is a balanced and sustainable budget.

When it comes to the outstanding measures in the Scotland Bill, I hope that hon. Members present in the Chamber will be mindful of the possible need for a clause to prevent the Treasury from adopting any such tactic on the dual exercise of welfare powers between Westminster and the Scottish Parliament, because the “twilight zone” difficulty that Northern Ireland has got into offers a very salient warning.