Charlie Maynard
Main Page: Charlie Maynard (Liberal Democrat - Witney)Department Debates - View all Charlie Maynard's debates with the HM Treasury
(1 day, 6 hours ago)
Commons ChamberRead Full debate Read Hansard Text Watch Debate Read Debate Ministerial Extracts
Charlie Maynard (Witney) (LD)
There is a real irony in the fact that the Conservative party has tabled a motion calling for the control of public expenditure and for trust to be returned just three years after a notorious mini-Budget that saw the biggest set of unfunded spending commitments in recent memory and that continues to damage the markets’ confidence in UK fiscal credibility. We still pay the so-called moron premium, driving up interest expenses on Government borrowing, which are now running at £131 billion a year. That is money out of the pockets of everyone across this country and we are still living with the real-world impact of that, because debt in the UK has gone from £0.5 trillion in 2005 to £2.9 trillion today. That is up six times in 20 years—and who has been running the country for the majority of those years?
Stuart Anderson
It is interesting that the hon. Member raises the moron increase. I point out that we are no longer in government. The hon. Member’s party was also in government from 2010 to 2015.
Charlie Maynard
I think the hon. Gentleman will find that the moron premium relates to Liz Truss. People are feeling pressures and that has a huge impact on everybody individually. Pay cheques go less far, tax bills are higher and small luxuries such as having a slice of cake or a pint, or taking the family to the pub, are increasingly out of reach for many people. That hurts, and it is all on the back of stagnant economic growth. Those facts are all the enduring legacy of the disastrous decisions that the Conservative party made. [Hon. Members: “The coalition!”] It is fun to keep saying “coalition” but, sorry, this is more recent than that. We want to back—
Charlie Maynard
If hon. or right hon. Members would like to intervene, will they please do so?
Sir Julian Lewis
May I try to find some common ground with the hon. Gentleman? As has been pointed out, his party was in coalition with the Conservatives for five years. Can we at least agree that Nick Clegg’s decision to vote for trebling tuition fees, thus breaking a manifesto commitment, was a disaster for his party’s ratings? Can we also agree that if the Government do the same in respect of what they have pledged to do, it will be a disaster for their ratings as well?
Charlie Maynard
I thank the right hon. Gentleman for that. We want to back—[Interruption.] It was unquestionably a disaster for our ratings—I will happily give the right hon. Gentleman that—and I do not want the Government to break their promises. That is absolutely right and correct.
Jerome Mayhew
I am grateful to the hon. Gentleman for saying that he does not want the Government to break their promises. If he looks at the Liberal Democrat amendment, that is exactly what it does: it takes away the injunction to control public expenditure in order to keep the promises made by the Chancellor of the Exchequer. Does he now accept that it is right that the Government should keep their promises and not follow his amendment?
Charlie Maynard
I have already said that the Government should keep their promises, so there we are. May I continue, please?
We want to back hard-pressed households and small businesses and push for practical steps that will help ease the burden on families and get our high streets thriving again. We have called on the Government to respond to the crisis in our hospitality sector through an emergency VAT cut. That would boost footfall on our high streets, thus protecting jobs in a sector that employs people from all walks of life: young, old, those returning to work, those vulnerable part-time workers and everyone in between.
We also propose bringing down household energy costs as winter is coming by removing the biggest levy baked into people’s electricity bills and, in effect, putting more than £90 a year into the pockets of the average family. Indeed, that will be closer to £250 for some of the least well-off, who rely more on electricity for their heating. This is about supporting local businesses at the heart of our communities, which we all represent, and making a real difference to people’s lives by making it cheaper for them to heat their homes. For too long, our high streets and the small business owners on them have been crippled by the policies of successive Governments.
All that needs to be paid for and needs to be done in a way that is pro-growth and pro-business and which shields households from even greater bills each month. That is not an easy circle to square—I will not pretend that it is. We, as Liberal Democrats, seek to bring deliverable and progressive ideas to the table. If the Chancellor chose such ideas, she could deliver them in her Budget, which is just days away, and the impact would be felt by households across the country with almost immediate effect.
First, we call for a time-limited tax on big commercial banks levied on the massive windfall profits that they receive due to unintended consequences of our financial system. Because of high interest rates and the way the quantitative tightening programme works, the Treasury hands over billions of pounds to the big banks every year via the Bank of England, effectively subsidising banking profits at the expense of the taxpayer. Figures from the OBR confirm that, as things stand, we are on course to hand the big banks £50 billion over the course of this Parliament. Banks never expected to receive that windfall, they never relied on it and never took any risk to reap it. They have only received the payments because inflation and interest rates shot up. That needs to be corrected. It is fair and reasonable to return a portion of that unexpected windfall to the taxpayer and it will do nothing to undermine the health of our financial sector to claim it back.
Sarah Olney (Richmond Park) (LD)
Does my hon. Friend agree that interest rates shot up in the way he has just described as a direct result of that mini-Budget three years ago, and that that is precisely why the taxpayer is now paying such large interest rate payments to the banks? Is it not therefore right that the Conservative party should get behind our plan to tax the banks, to reclaim some of that money for the taxpayer?
Charlie Maynard
I wholeheartedly agree with my hon. Friend—[Interruption.] People might be joking about it, but our reputation as a country matters. That is why people invest in our country, and that is why traditionally our debt prices have been low. When we self-sabotage, we pay for it not just for a few weeks or months but for years, and we are paying for it now.
Joe Robertson
When we are just two weeks away from a Budget where the Chancellor is preparing all sorts of unpleasantness for families and businesses, is the hon. Member not just a little concerned that the hon. Member for Richmond Park (Sarah Olney) is quizzing him about a Budget from three years ago? Does he not think the British people are more interested in what is about to happen in two weeks’ time?
Charlie Maynard
They are interested in what costs them money, and their mortgages are more expensive because of the decisions the Conservatives took three years ago—[Interruption.] Well, read the Financial Times.
Moving on, I suggest that the digital services tax is another way we should be looking at to raise revenues. We would increase it from 2% to 10%, which would raise roughly £4 billion a year and get some of the biggest and wealthiest corporations in the world to finally contribute their fair share of tax here in the UK. We would also increase gambling taxes, because gambling really beggars some of the most vulnerable in society. Of course, the biggest one of all is that we should rejoin the customs union with the EU. Nobody voted to leave the customs union, but we are now in a market that is more than seven times smaller than the one we used to be in. As somebody who founded and ran a business for 24 years, I know that that hurts. It has done huge damage to small, medium-sized and big businesses and we are living with that loss. The quickest thing we could do is to negotiate a new, bespoke customs union with the EU. This would unleash the potential of British business.
With every month and year that goes by, it becomes clearer just how economically damaging the previous Government’s Brexit deal has been. The OBR has forecast that it will harm economic growth, reducing long-term GDP by 4%. However, according to Frontier Economics, a much closer trading relationship with Europe—not even a customs union—could boost UK GDP by 2.2%. These are enormous numbers, so when we are looking around for solutions, there is one right in front of us. It stands to reason that a new customs union would probably raise more than £25 billion a year for the Exchequer. There it is. Grab it, please. With the autumn Budget just two weeks away, the Liberal Democrats’ message to the Chancellor is clear. Instead of asking hard-working households and struggling small businesses to pay even more tax, she must take growth seriously and repair our broken trading relationship with Europe.
Dr Luke Evans
The hon. Gentleman talks about the trading union, but if we were to go back into the EU, one of the things we would have to take is freedom of movement. How does that tally with the Lib Dems’ position on dealing with immigration?
Charlie Maynard
I think we should have all the economic benefits of Europe while controlling our borders and controlling movement—[Interruption.] Well, look at Norway, Switzerland and Turkey. There are lots of options out there. Let’s go and negotiate something that makes sense for us.
My final point is that we need an office for value for money—an effective regulator with proper scrutiny and proper teeth that really looks into our Budget. I ask the Government to take inspiration from the Swedish model of tax scrutiny. I understand that after introducing these changes 30 years ago, and aided by strong economic growth, Sweden has reduced its national debt from nearly 80% of debt to GDP to 32%. Meanwhile, our public debt is around 95%, which means that billions that we could be spending on our public services are instead going towards servicing our debt.
A key component is significantly strengthening the scrutiny powers of this Chamber when it comes to the Government’s financial management. The Chancellor’s practice of keeping the Budget secret until the day, at which point everyone else has to scramble to assess the detail and has no time to provide a proper, meaningful critique, is far from the best way to scrutinise the Government’s economic policy. This is not how many of our international peers go about their economic policy. Proper, detailed scrutiny of the Budget, as opposed to the wave-through regime we currently have, with no proper transparency before approval, needs to be addressed—
Charlie Maynard
Okay, can I just respond to my colleague chuntering in the background? He keeps saying “the OBR”. We are Parliament. We have a responsibility to scrutinise the Budget, and I believe that we, as a Parliament, should be doing that properly, line by line and taking out what is wasted—[Interruption.] I would do it tomorrow if we had the chance, yes. I will finish in a moment, then I will be off—
Mark Garnier
Even the Lib Dems agreed with the OBR. Danny Alexander agreed with the OBR. I will stop chuntering now.
Charlie Maynard
Just because we have always done things a certain way does not mean that there is not room for fresh thinking, a more collaborative approach and greater ambition. Realistically, if we are going to repair the economic damage of the last few years, we need fresh thinking and new ideas.
Gregory Stafford
The hon. Gentleman has aptly described the social utopia that I accused him of describing. The fundamental point is that if we do not have businesses contributing to the economy, we cannot fund public services. If 90,000 people in the hospitality sector are made unemployed, they are not paying income tax, and we cannot support public services. The idea that the Government can just raise money out of nowhere forever, inevitably, without consequence, is not sustainable, and we are seeing that in our economy.
Charlie Maynard
I have already said this, and will say it again: I absolutely—and I speak on behalf of my colleagues—expect the Chancellor to stand by her promises.
Gregory Stafford
I thank the hon. Gentleman for that clarification. Hopefully, that means that the Liberal Democrats will vote for our motion later.
Gregory Stafford
The hon. Gentleman shakes his head—our motion probably does not fit the narrative that he is looking for.
The hon. Member for Bishop Auckland just said that neither he nor I know what is in the Budget. While that is technically correct, the Government have been flying many kites about what will be in this Budget, pretty much since the summer—more kites than Mary Poppins—and I think that gives us some indication of what will be in the Budget. As has been said, that has caused great uncertainty and worry. Businesses are either deciding not to invest because they are so worried about what will happen, or delaying investment decisions because of the Budget.
Dr Spencer
My hon. Friend is absolutely spot on. Our constituents are hurting. They are in a difficult situation and very worried about what is going to happen in two weeks’ time. They look at this place and see Government Members just wanting to talk about the past over and over again.
Madam Deputy Speaker (Caroline Nokes)
Order. When the hon. Gentleman makes an intervention, he should do that via me, facing the Chair and not the Back Benches.
Charlie Maynard
Let us talk about trade, Madam Deputy Speaker. I find it extraordinary if we look at the future. I think it was Stephen Bush in the Financial Times who talked about the permanent lobotomy that the Tory party needs to have when talking about Brexit. If we are talking about getting money into the Exchequer, let us get our economy moving again and get growth back into the economy. Let us open up a customs union with Europe and get our economy growing. Let us look to the future.
Dr Spencer
I have to apologise to the hon. Member. I came into the House in 2019, and it strikes me that this debate is probably better suited to 2018, before I was elected.
On the situation that we find ourselves in, many Labour Members have spoken about the Chancellor or the Government bringing in free this and free that. The Government do not have money and the Chancellor does not have money. It is not even just taxpayers’ money that they are pledging to spend; it is our children’s money. That goes to the core of the problem that we face.
The decisions that the Government are taking to keep on and not cut spending and to keep on borrowing and borrowing are not on my head. They are not on the heads of anyone in this room. Those decisions are on the heads of our children. Families know how to budget, and this is the equivalent of a parent saying, “We fancy going on holiday to—I do not know—Lanzarote this year and we are going to borrow money to do it. I am not going to borrow it on me, though; I am going to borrow it on my kids. They will take out the loan and they can pay it back in future.”
It is fundamentally and morally unacceptable that we are in this position and that the Government do not have an approach to try and drive down the deficit and pay back the debt. That is why I am so pleased that the Leader of the Opposition announced the golden rule for making sure that policies going forward recognise that we cannot keep on spending money that we do not have.
In the last Government, from 2010 onwards, we worked really hard on driving down debt, and we had almost got there, in terms of reducing the deficit, when covid kicked off. Can people imagine the situation we would have been in if covid had kicked off without the work we had done to balance the books and without the fiscal firepower that we had to get through it? I remember the debates that we had around covid, and I remember well the first year—I am sure everyone in this Chamber does, whether they were a Member or not. I remember early on being desperately worried that the shadow of covid would loom long and loom hard, and that, over the next decade, we would see the impact of turning off the economy for two years.
Sir Ashley Fox (Bridgwater) (Con)
During the general election, the Labour party said that it would not increase income tax, national insurance or VAT. It repeated that it would not increase taxes on working people. In its manifesto, it said it would increase spending by only £9.5 billion and that that was to be paid for by £7.3 billion in extra taxes and £3.5 billion in extra borrowing. That was a modest plan with a prudent margin. It was a plan put forward to the electorate to show that the party could be trusted with the public finances. My constituents might be surprised to learn, however, that if they now look on the Labour party website, that manifesto is rather more difficult to find than it was a couple of months ago.
It is fair to say that we Conservatives did not believe them, so we were not entirely surprised when, within weeks of moving into Downing Street, the Chancellor told the country that she would have to raise taxes after all. She had apparently found a magical £22 billion black hole. I say “magical” because nobody other than the Government seemed able to locate it—certainly, the Office for Budget Responsibility could not find it. It was, of course, a fiction to give the Chancellor cover for what she always intended to do, which was a massive increase in taxes, borrowing and spending, because that is what Labour does. Dogs bark, cats miaow and Labour increases taxes, borrowing and debt.
In her first Budget last year, the Chancellor did not raise taxes by the £7.3 billion promised in the manifesto. She increased taxes by £40 billion. She increased borrowing not by the promised £3.5 billion, but by £32 billion. And believe it or not, she did not increase spending by the promised £9.5 billion. She increased it by £72 billion. The Chancellor imposed £40 billion of extra taxes on our economy. She increased employer national insurance, stamp duty and capital gains tax and she imposed extra taxes on family businesses and family farms, then she pretended that none of those were taxes on working people.
Charlie Maynard
Will the hon. Member acknowledge that debt has risen from £0.5 trillion to £2.9 trillion from 2005 to 2026, forecast to March? That is nearly six times as much, and the great majority of that happened under the Conservatives’ watch. Yes, we can talk about covid, but covid is a very small portion of that—about £0.7 trillion—so what about the rest of it? Is anyone going to take any responsibility for that?
Sir Ashley Fox
The hon. Gentleman will know that the Liberal Democrats joined a coalition Government in 2010 with the Conservatives. We inherited a deficit of £156 billion in 2010—11% of GDP—and it took 10 years, to 2020, to reduce that steadily to 2% of GDP. For all the moaning and whining from the Labour Benches about austerity, what we were trying to do—as a coalition Government for five years and as a Conservative Government for the remainder—was to live within our means, and that is tough. That is really difficult. It is about improving public services, but without necessarily hosing money at them. We see that most successfully in the field of education. In England we have seen a dramatic increase in reading standards and the standards of examination of English pupils caused by genuine reforms. That compares very favourably with what has happened in Scotland and Wales, where those reforms did not take place. The skill of government is in improving public services without always spending more money. The Liberal Democrats used to have a few Members who were called “Orange Book” Members. It is a shame there are so few of them left.
Who does the Chancellor think she is kidding when she says she has not increased taxes on working people? Try telling the farmers in my constituency that they are not working people, or the young family where both parents work and are saving to pay the stamp duty on their first home. As Labour Members will recall, that first Budget was not well received, so to draw a line under her broken promises, the Chancellor said:
“We’ve now wiped the slate clean. It’s now on us. We’ve put everything out into the open, we’ve set the spending envelope for the course of this Parliament. We don’t need to come back for more.”
Except we know that that is not true. She is coming back for more. She is now set to break that promise again by putting up taxes again.