Oral Answers to Questions
Chris Bryant Excerpts(13 years, 4 months ago)
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The Financial Secretary to the Treasury (Mr Mark Hoban)
My hon. Friend takes a close interest in that matter as chairman of the all-party group on credit unions, a position he took over from the hon. Member for Bristol East (Kerry McCarthy). He is right that that LRO will bring significant benefits to credit unions. Following comments by the relevant parliamentary Committees that scrutinised the draft laid by the previous Government, amendments need to be made, and I hope to lay the amended regulations in late January or early February.
Chris Bryant (Rhondda) (Lab)
T4. The Chancellor of the Exchequer seems to take a particular delight in playing the role of Baron Hardup. May I say to him, in the nicest, most Christmassy way possible, that all his austerity talk provokes real anxiety in many of my constituents, who worry about their winter fuel allowance, the VAT increases in January and the major losses in construction jobs in the new year? May I encourage him to play, just sometimes, Prince Charming instead?
Mr Osborne
At least I am not the pantomime dame. The measures we are taking are dealing with the economic inheritance that the previous Government, of whom the hon. Gentleman was a Minister, left this country. As we go into the new year, we are one of the few European economies not facing concerns about their sovereign debt issues, and we are providing a platform for economic growth next year. That is why people are looking at the UK and saying, “There is a country that is dealing with the problems.”
Loans to Ireland Bill (Allocation of Time)
Chris Bryant Excerpts(13 years, 4 months ago)
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Chris Bryant
I, too, do not want overly to delay the House, but we are using an emergency procedure on a Bill that will not go through the same processes as other Bills. It is therefore all the more important that we ensure that we rarely use such a procedure. Will the Minister ensure that the Government do not use this procedure on future occasions, if similar arrangements have to be made for other countries?
Mr Hoban
It is important that there is proper parliamentary scrutiny of measures such as this. That is why we sought to agree the timetable through the usual channels, and to ensure that there is time to debate amendments and that the Bill goes through the normal process of scrutiny. Given that the Bill is shorter, it can be scrutinised in a shorter period of time without compromising scrutiny. That is why I believe that we can deal with it today. I urge the House to support the programme motion.
Finance (No.2) Bill
Chris Bryant Excerpts(13 years, 6 months ago)
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Chris Bryant (Rhondda) (Lab)
On a point of order, Mr Deputy Speaker. I have never seen you in the gym, although you may visit it regularly, but when I was there earlier this evening, the Division Bell did not ring. I do not know whether it did not ring in other parts of the estate, but I hope that it will ring on this occasion—although I am here now.
Mr Deputy Speaker (Mr Nigel Evans)
Funnily enough, that is a point of order for me. It may be the first that I have taken.
I do go to the gym, although I do not go to the one to which the hon. Gentleman has referred. I thank him for giving me notice of his point of order. I have asked for someone to be in the gym in time for the next Division in order to ascertain whether the bells are working normally. The hon. Gentleman should be reassured that the matter is being investigated as we speak.
Question put, That the clause be read a Second time.
The House proceeded to a Division.
Mr Deputy Speaker: Order. It has been brought to my attention that there is a problem with the Division bells not only in the gym, but in other parts of the parliamentary estate. I am therefore giving Members a further two minutes to vote in the current Division. In the meantime, may I ask that the bells be investigated in Norman Shaw North as well as in the gym? I also advise all Members to be attentive to the monitors as well as the Division bells, because there may be more Divisions this evening.
Oral Answers to Questions
Chris Bryant Excerpts(13 years, 10 months ago)
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Chris Bryant (Rhondda) (Lab)
2. What assessment he has made of the likely effect of the proposed increase in the standard rate of value added tax on the retail sector in Wales.
The Exchequer Secretary to the Treasury (Mr David Gauke)
A full impact assessment was published on Budget day. Although it focused on the compliance costs for all businesses, it had an emphasis on retailers, as it acknowledged that they were expected to incur higher compliance costs. However, having experienced two VAT changes in the previous two years, retailers should now be familiar with the necessary system and process changes.
Chris Bryant
I am sorry but that was a really complacent answer. Much of the retail sector in my constituency is very dependent on the business that comes in through the door from pensioners. There are 13,000 of them in the Rhondda, a growing number, and they are the people who will be very heavily hit by the VAT increase, because they will have less discretionary income to spend on gifts and the things that make life worth living. Will the hon. Gentleman look specifically at how the retail sector in more distant areas—outside the main city centres—can be supported?
Mr Gauke
The fact is that we had to raise VAT because there was no money left. I do not know whether the hon. Gentleman is proposing that we should have cut spending by even more, but I do not think that that would have a lot of support on his Benches or on ours. After all, our predecessors looked very closely at raising VAT and would have done so had the previous Prime Minister not vetoed it.
Finance Bill
Chris Bryant Excerpts(13 years, 10 months ago)
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Danny Alexander
I want to say a word or two about the process of the Finance Bill.
Danny Alexander
No, I want to make some progress.
The Finance Bill before the House today seeks to ensure that the Government’s key tax priorities as set out in the emergency Budget are put on the statute book as swiftly as possible. This year, however, we face exceptional circumstances owing to the timing of the general election, which resulted in a curtailed Finance Bill following the previous Government’s March Budget and a relatively short timetable between our emergency Budget and the summer recess. There remain a number of minor and technical measures that we inherited from the previous Government and which must be legislated for before 2011. We shall therefore introduce those measures in a further Finance Bill in the autumn. Consistent with our aim of greater scrutiny of tax legislation, again set out in the Budget, we shall publish all those measures in draft for consultation before the end of July.
Chris Bryant
The right hon. Gentleman says that he is thinking about a derogation for rural areas in relation to VAT on fuel. May I point out that not a single house in the Rhondda is more than half a mile from a farm, so will he include the Rhondda in a derogation not only from VAT on fuel but from everything else as well?
Danny Alexander
The hon. Gentleman has misunderstood what is being discussed, which is no surprise, given the previous Government’s attitude to the idea, as the hon. Member for Na h-Eileanan an Iar (Mr MacNeil) knows. We are not talking about a VAT derogation; the proposal relates to fuel duty.
Budget Resolutions and Economic Situation
Chris Bryant Excerpts(13 years, 10 months ago)
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Chris Huhne
My hon. Friend is absolutely right. There is no doubt that the lessons of history are completely clear. Those countries that grip their problems and deal with them do so in their own time and their own way and in a proactive manner. Those countries that fail to do so end up like Greece and Spain—with socialist Governments—grappling with measures that will be far more severe than anything that we have introduced in this House. I simply remind the right hon. Member for Doncaster North that Lord Keynes, the great Liberal economist who continues to be an economic hero to me, was once famously accused of changing his mind. He splendidly replied, “When the facts change, sir, I change my mind. What do you do?” The right hon. Gentleman’s principal problem today is that the facts have changed and he has not changed his mind. That is precisely the argument.
I would merely remind the right hon. Gentleman of another dictum from a rather great economist—also something of a hero of mine; I should probably be looking towards the Liberal Democrats here—J. K. Galbraith. He served a number of American Presidents, including J. F. Kennedy, and I should point out to the right hon. Gentleman that it was J. K. Galbraith who said that the essence of leadership was for a leader to confront the greatest dangers of the people they aspire to lead. The right hon. Gentleman is not doing that.
Chris Bryant (Rhondda) (Lab)
I can fully understand why the Secretary of State feels the need to justify his change of position; he has a lot of voters to try to explain himself away to. I can also understand why he makes the argument that some elements of the economic situation in Europe have changed over the past few months. [Interruption.] No, I can see why he might make that argument, but I do not see why that means he has got to change his principles, because I thought one of his principles was that progressive taxation was better than regressive taxation, and that that was why he had a great big poster about a VAT tax bombshell. It is his principles that we are worried about.
Chris Huhne
The hon. Gentleman makes an interesting point, but I would merely commend to him the Institute for Fiscal Studies analysis published today, which looks in particular at the distributional consequences of value added tax. From the tables the IFS has usefully produced—at this point I rather agree with my right hon. Friend the Secretary of State for Business, Innovation and Skills that it would be helpful if we had a PowerPoint presentation pack in the Chamber for the edification of those who seem to be unaware of the evidence—and in particular from the analysis of the impact by decile of expenditure, it is very clear that VAT is not in fact the regressive tax that the Opposition have said. [Interruption.] Please, just look at the IFS distributional impact analysis, as it is made clear there. The reason for that—
Chris Bryant
On a point of order, Mr Speaker. “Erskine May” makes it very clear that hon. Members should be able to explain themselves without requiring documents that they then want to present to the House. The right hon. Gentleman has just said that Members should look at some document that he is referring to, but we are not able to do so. Should we not get back to the facts?
Mr Speaker
It is true that the use of visual aids in the Chamber is disorderly. I am going to be charitable and generous, and interpret the Secretary of State as suggesting that these are matters that people might like to take forward at another time outside the Chamber, but they clearly do not aid the debate in the Chamber now.
Chris Huhne
Quite properly, the hon. Gentleman wants me to anticipate announcements that will be made by the Government in the normal course of events. I understand that game, as I have played it myself on many occasions. At this stage, however, I can merely tell him that I visited Aberdeen recently for the All Energy conference, where I had interesting and fruitful talks with the marine energy specialists currently testing equipment off Orkney. I am deeply committed, as I believe the Government are, to making sure that what is a genuinely interesting source of potential future prosperity and jobs continues to get the support that it needs to get off the ground.
Obviously, we are in very tough times and have had to cut our cloth to fit our straitened circumstances, but I believe that marine energy offers real opportunities. We have made a number of proposals in that regard, and we will continue to support the sector.
Chris Huhne
No. I said that the previous intervention would be the final time that I would give way before winding up, and I have given way to the hon. Gentleman before.
By the way, I should add to my response to the previous intervention by saying that we have confirmed some of the grants and soft loans made available, for example, for wind energy.
Budget Resolutions and Economic Situation
Chris Bryant Excerpts(13 years, 10 months ago)
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Ms Harman
And the VAT rise makes this a Budget of broken promises. Before the election the Prime Minister said he had no plans to put up VAT, and now, in his first Budget, he puts up VAT. During the election campaign the Liberal Democrats attacked what they called the Tory secret VAT bombshell. Little did we know that the Lib Dems had their own secret bombshell to drop on us: that they would vote for it.
The Tories present this Budget but they try to evade responsibility for it. They try to justify their broken promises, saying that things have changed—that things are worse than they realised—but what is this new information? The OBR forecasts are better than we predicted at the time of the March Budget: less borrowing than expected, and lower unemployment than expected, because of our actions.
The Government like to cite new information from abroad: the problems of Greece. Greece is in a completely different position from us: it is still in recession; it does not control its interest rates; and its debt is over 115% of its GDP. Greece is no alibi for this Tory Budget.
Nor should they pray in aid the story of Canada’s Budget cuts. Canada’s deficit reduction was taking place as Canada’s economy was boosted by strong growth in its neighbouring economy and main export market, the United States. Our export market is mainly the EU and growth there is sluggish. That is why President Obama wrote to his fellow G20 leaders this week urging them to turn away from the rush to austerity. Yes, deficits must be reduced, but we must not risk undermining the fragile global recovery. This is a Budget based on rewritten history and false excuses.
They say there is no alternative, but the truth is this is what they want. This Budget is not driven by economics; it is driven by ideology—their commitment to a smaller state. The Chancellor claims he has no alternative, but the OBR last week clearly stated that our plans would have more than halved the deficit over four years. No, this austerity Budget is their choice, and right now it is exactly the wrong choice.
This reckless Tory Budget would not be possible without the Lib Dems. The Lib Dems denounced early cuts; now they are backing them. They denounced VAT increases; now they are voting for them. How could they support everything they fought against? How could they let down everyone who voted for them? How could they let the Tories so exploit them? Do they not see that they are just a fig leaf? The Liberal Democrat Chief Secretary is just the Chancellor’s fig leaf. The Deputy Prime Minister is just the Prime Minister’s fig leaf. The Lib Dems’ leaders have sacrificed everything they ever stood for to ride in ministerial cars and to ride on the coat tails of the Tory Government. Twenty-two Liberal Democrat ministerial jobs have been bought at the cost of tens of thousands of other people’s. The Liberal Democrats used to stand up for people’s jobs, but now they only stand up for their own.
Look at the Business Secretary, the right hon. Member for Twickenham (Vince Cable). The House has noticed his remarkable transformation in the past few weeks from national treasure to Treasury poodle. They have no mandate for this Budget; this Budget has no legitimacy. Even if the Lib Dems will not speak up for jobs, we will. Even if they will not fight for fairness, we will, and even if they will not protest against Tory broken promises, we will.
We will support measures that are fair and that will help the economy. We will support the increase in capital gains tax. As the Chancellor said, it will help to stop people avoiding income tax by getting payment in capital. Such avoidance of tax is even more objectionable when we need to cut borrowing. We welcome the retention of the 50p tax rate. The Labour party was the first to call for a levy on the banks and the Government are going ahead with it. We will support that move, although I note that the banks will get a corporation tax cut to compensate them. We will support the increase in personal allowance, but the public, who will be hit by a rise in VAT, will feel short-changed.
In the face of a global economic crisis, this has been a difficult time for businesses and families, not just here but around the world. What this country needed was a Budget to support economic growth, to protect jobs and to cut the deficit fairly, but what we have got is a reckless Budget that pulls the rug out from under the economy. Predictably, the Tories do not care and are not listening. The Lib Dems are wringing their hands, and well they might, but that is not good enough. They should think about their constituents who will suffer if this Budget goes ahead. The Lib Dems should think again, but whatever they do, we will vote against it.
Chris Bryant (Rhondda) (Lab)
On a point of order, Mr Deputy Speaker. The Chancellor of the Exchequer said to us earlier that this country would hear the facts about his Budget straight from him at the Dispatch Box, but this morning his freeze of the civil list moneys was announced in The Guardian, his announcements on capital spending plans were in The Guardian and his proposals on national insurance, child tax credit and the VAT rise being delayed were all in The Guardian. Also, the precise figures about the changes to income tax—rising by £1,000 to £7,475—were in every single media outlet in this country. That is an abuse of the privilege of this House. Will Mr Speaker, or you on his behalf, refer this issue of the abuse of the privilege of the House to the Select Committee on Standards and Privileges?
Mr Deputy Speaker
As hon. Members well know, Mr Speaker is unhappy about announcements being trailed before they come to this House. If the hon. Member speaks later, he can bring it to the House’s attention once more. No doubt, this will be passed on to Mr Speaker.
Economic Affairs and Work and Pensions
Chris Bryant Excerpts(13 years, 11 months ago)
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Mr Osborne
I will make a little progress.
The Queen’s Speech contains five Treasury-sponsored Bills, and I should say something about each of them. There is the national insurance contributions Bill to stop the jobs tax that Labour would have imposed. Like every post-war Labour Government, the previous Government left office with unemployment rising, and their answer was to increase the cost of employing low-paid people. I have not yet heard from the shadow Chancellor, or anyone else, whether that is still the official Opposition’s policy. Our reforms to national insurance will not just stop the most damaging part of the jobs tax but will, by raising employer thresholds, reduce the cost of employing people on lower incomes. The Budget will also contain further measures to stimulate private sector employment and to proclaim to the world that Britain is open for business.
There is the financial services regulation Bill to fix the previous Government’s system of banking regulation. To respond to the question asked by the shadow Chancellor, next week I will set out in more detail the content of that Bill and how we propose to take the matter forward. I find it somewhat baffling to be told by him that he is unsure who is in charge of banking regulation at the moment. That was the question posed by the Treasury Committee in the last Parliament—a question about the system of regulation that his predecessor as Chancellor, the right hon. Member for Kirkcaldy and Cowdenbeath, created in 1997. That system meant that no one was in charge of looking at the growing levels of debt and the systemic risks building up in our banking system.
I believe that it is still the Opposition’s policy to oppose our decision to introduce a bank levy; they claim that they want every country in the world to have agreed to such a levy before Britain goes ahead with it. Our decision is to proceed with it, because the banks should pay some contribution to clearing up the mess that they helped to create.
We are working urgently on a problem that the shadow Chancellor correctly raised, but to which, of course, he found little solution when he was Chancellor: the problem of getting credit to small and medium-sized businesses that still face a credit crunch out there in the country.
I welcome the shadow Chancellor’s support for the terrorist asset freezing Bill, which, of course, has bipartisan support. Then there is the Bill that should have been introduced by the previous Government years ago—the Equitable Life payments scheme Bill to help those who lost everything and were given nothing by the Labour Government.
Chris Bryant (Rhondda) (Lab)
I warmly welcome the fact that the Chancellor has introduced that Bill, which is an important piece of legislation, and I hope that compensation arrives for those who lost an awful lot of money. However, may I urge him to learn one thing from the miners compensation scheme, which ended up putting an awful lot of money into lawyers’ pockets—unscrupulous lawyers in many cases? Will he make sure that it is a simple, transparent scheme that does not require us to pour taxpayers’ money into lawyers’ pockets?
Mr Osborne
The hon. Gentleman makes a good point. What happened with the miners compensation scheme was a tragedy, and we will certainly seek to learn the lessons of what went wrong. He is more than welcome to correspond with us—I am going to volunteer, if he wants, a meeting with one of my colleagues to discuss the issue—because we are determined to introduce the legislation and help those people who lost everything. We hope that that will command support on both sides of the House.
Finally, we will introduce a Bill to give the independent Office for Budget Responsibility statutory authority and to bring transparency and honesty to our nation’s finances. I cannot work out whether the shadow Chancellor now supports that proposal, which he opposed in government, but it is a revolutionary step in budget making, removing forever the historic power that Chancellors have had to make the official forecasts. It is based, however, on a very simple idea—perhaps completely alien to the thinking of the previous Government—that in future, we fit the Budget to fit the figures, instead of fixing the figures to fit the Budget.
With the help of Sir Alan Budd, we have established the Office for Budget Responsibility on a non-statutory basis. Today I am publishing in a written ministerial statement the terms of reference that I have agreed with Sir Alan. With his consent, I can confirm in the House for the first time that the office will produce its independent assessment of the growth forecast and other forecasts next week, on Monday 14 June. The Budget will be presented just over a week later, well within 50 days of the election, as we promised.