Financial Transaction Tax and Economic and Monetary Union

Debate between Chris Leslie and Mark Lazarowicz

Tuesday 18th June 2013 Commons Chamber

[Chris Leslie]

I think that we need to have a financial transaction tax, ideally in concert with other international centres, in addition to stamp duty. That would be a sensible and modest reaction to the modern circumstances of the financial services sector. As I said to the Minister earlier, he has got to snap out of his “no can do” attitude and to wake up and realise that the public want alternatives. They want different ideas, and the financial transaction tax could offer a good way forward.

Opposition Members support the principle of a financial transaction tax with the widest global participation. London and New York City are the two largest global financial centres. Our view is that enforcement of the FTT needs both to move in concert. The Government ought to support our amendment, which is totally unobjectionable. We should not have to wait for a change of Government to move this agenda forward. We should be building those alliances, especially with the United States. That is a very important task.

[Mark Lazarowicz (Edinburgh North and Leith) (Lab/Co-op)]

The health of the financial services industry is important not just to London and New York, but in my constituency and my city as well. Is not the crucial point that we need international negotiations and international agreement on a way forward? We are all concerned about the impact on jobs in our constituencies. I know that in my area the biggest damage to the financial services industry has been the vagaries of the market, and the uncertainty and instability. That is what we need to tackle.

[Chris Leslie]

There are others who make compelling arguments about the need for intervention on the volatility of the high frequency trades, which are clearly many steps removed from the real economy. Some of the potentially beneficial aspects of a financial transaction tax might have a part to play in that, though we must be careful about negative economic consequences. We do not want the impact that the European variant might have.

Finance (No. 2) Bill

Debate between Chris Leslie and Mark Lazarowicz

Wednesday 17th April 2013 Commons Chamber

[Chris Leslie]

In, out, in, out, shake it all about—who knows what is going on in the minds of Treasury Ministers? It is impossible to tell, sometimes, just by looking at them.

[Mark Lazarowicz (Edinburgh North and Leith) (Lab/Co-op)]

Further to the intervention from my right hon. Friend the Member for Delyn (Mr Hanson), the scheme could have an important impact on the devolved Administrations. Perhaps in the course of the afternoon the Minister could get a message from the civil servants to help him on that. I understood that although the Help to Buy scheme applied only to England, the mortgage guarantee scheme applied certainly throughout Great Britain, and probably throughout the entire UK. That needs to be clarified. Constituents have already asked me about the scheme and whether they would be able to apply for it.

[Chris Leslie]

The Minister’s pen will run out of ink as a result of the number of specific questions about the scheme that he will have to reply to, but he is diligent and I know he will address them all. I would be grateful if he could confirm that he has thought through the consequences of the design of the scheme for the devolved Administrations. [Interruption.] His gaze has not lifted for the past 15 minutes or so.

I do not wish to take up too much more time, but there are other anomalies. For example, I think the Government have said that home owners will be able to remortgage, but they will not be able to remortgage with their own bank or building society; they have to go elsewhere. Ministers need to think that through a little more carefully. If there is a genuine case for remortgaging, are they, in effect, going to create a whole set of exit fees for those consumers to have to bear and a set of new application fees? What is wrong, in the circumstances of remortgaging, with someone continuing the relationship with their existing bank or building society?

We have a number of concerns about the Help to Buy scheme. Let us leave the last word on the matter to the Office for Budget Responsibility. What was its assessment when it looked at the scheme? What view did it take about the impact that it would have on the housing market? The OBR revised down its forecasts for property transactions, despite the two new schemes that have been announced. It says, I think on page 88 of its report, that

“we have reduced our forecast relative to December to a level which is more consistent with other outside forecasters.”

There we have it. For all the announcements, the spin and the press releases about the scheme, the Treasury could not convince the OBR, which is only just down the corridor from where Ministers reside.

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[Mark Lazarowicz]

It is useful of my hon. Friend to remind us of the coincidence of Budget day, which meant misery for many ordinary people, and millions of pounds of bonuses announced by that bank. That indicates another reason why the bank bonus tax is so important: we have to do right by the public, who cannot understand how, in spite of all that has happened, some bankers get multi-million-pound bonuses at a time when most other people are having to tighten their belts in a big way.

[Chris Leslie]

As I was saying, Barclays has talked about confronting some of the necessary culture changes. It commissioned the Salz report after its involvement in the LIBOR scandal and the fines it received as a result, yet still that oil tanker of bonuses continued to float on, even in that particularly difficult year.

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[Chris Leslie]

Of course that argument could be made about any demerit activity or level of taxation. People have been making that argument about cigarette taxes over the years, saying “Well, if people give up smoking, will the Treasury not lose a lot of money from it?” I do not want to divert too much into the wider principle, but I would say that a very considerable tax cut has been given to bankers by reducing the 50p rate of income tax to 45p—a cut that is providing a very significant bonus to those individuals in this year. The hon. Gentleman need not worry too much about these poor maligned executives in the banking system. I know that things must be very difficult for them—they may even have to defer the purchase of their yachts for that little bit longer—but we must start capturing and getting a grip on this issue in a way that the bank levy has not worked to achieve so far.

[Mark Lazarowicz]

On my hon. Friend’s last point, given that many of the banks are substantially owned by the public sector, what does not go in bonuses to the top bankers might come back to the taxpayer in other ways. On the question of the European dimension, we often hear that a bankers’ bonus tax could not be introduced only in the UK because all the top bankers would flee to Luxembourg, France, Germany or wherever. Is that not a good reason why a Europe-wide policy should be considered—precisely because there would be less opportunity for people to get away from UK taxation, which is sometimes used as an objection to a bankers’ bonus tax?

[Chris Leslie]

I know that Members of the European Parliament have debated some of these issues earlier this week; indeed, they have this week instituted a cap on the bonus level. We will need to reassess behaviour under that new arrangement, but I reiterate that we are confident that the revenue could be used for the purpose of helping the young unemployed.

Infrastructure (Financial Assistance) Bill

Debate between Chris Leslie and Mark Lazarowicz

Monday 15th October 2012 Commons Chamber

[Chris Leslie]

It is difficult to say, when looking at a guarantee scheme or underwriting scheme, because certain things are not wholly in the control of Ministers. They are putting the guarantee out there and waiting for organisations in the private sector or elsewhere to come forward and bid for the resource. It is a bit like pushing against a piece of string; it is impossible to know what the demand will be. We do not rule out the possibility of the proposal being of benefit—of course it could be—but it is impossible to know at this stage. We are holding up a finger to test the direction of the wind. There are no time scales in the Bill, and the explanatory notes do not add any information in that regard. We want to know the judgment of the studied intellects in the Treasury.

[Mark Lazarowicz (Edinburgh North and Leith) (Lab/Co-op)]

My hon. Friend mentioned the downturn in the house building industry. In my constituency, the total number of new house builds in the last quarter was just 10, and that is in a city whose population is growing. Does he accept that, in addition to the immediate difficulties that the construction industry is experiencing, companies that go bust and firms that close down cannot suddenly spring back into action when the economy changes? This is another reason why we need the measures that he is outlining, and that the Government have not yet put into operation.

[Chris Leslie]

That loss of productive capacity is another example of the permanent damage caused by recession, resulting in an inability to take advantage of the opportunities that present themselves when a recovery occurs. The International Monetary Fund released figures only last week to illustrate the damage being done by the recession to our ability to fulfil such expectations. In my city of Nottingham, not a single new affordable social house has been constructed in the past 12 months. Is that because there is no demand? Absolutely not. We have more than 12,000 people on waiting lists for decent homes. That applies in many other areas of the country as well, including Greenwich.

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[Chris Leslie]

I am not sure I agree with my hon. Friend on the particular example he provided. It is quite clear that there would be benefit for the economy within the UK if those offshore schemes proceeded. The frustration I have is with the rather hasty drafting. Yes, we accept that it is necessary to frame a scheme that has sufficient flexibility, but there are dangers in enacting legislation that does not focus sufficiently on significant financial schemes, employment and jobs here in the UK. That is the purpose of the amendment.

[Mark Lazarowicz]

I am sure that when my hon. Friend’s amendment is successful, he will arrange for his noble Friends in the other place to deal with any clarifications required as a result of our debate. Earlier today we heard a statement on the west coast main line franchise, and we saw how the whole franchising system is in a state of shambles. Is that not going to have an effect on private sector investment, making it important to get even quicker investment in rail projects across the UK, through Directly Operated Railways, through Network Rail and other means to ensure that we gain the benefit—to the rail industry, to passengers and to the economy—now and not four, five, six or seven years down the line?