UK Economy
Edward Leigh Excerpts(2 months ago)
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Bim Afolami
I thank the hon. Lady for focusing on inflation. She is right that it is critical, and bringing it down is a focus for the Government. The House has heard her point about the European Union, but I would add that we have a clear plan for bringing down inflation, which we will continue to carry out. She has to ask those on her Front Bench why they do not have one.
Sir Edward Leigh (Gainsborough) (Con)
For too long, too many people in the Treasury—not my hon. Friend, who is an excellent Minister—have thought that the best way to grow the economy is to fill the country with more and more people. Will the Government recommit to insisting that anyone who comes here to work should earn the average UK earnings of around £33,000 a year? That means no shortage schemes and no exemption for care workers or the NHS, but that in those sectors we pay proper wages, we get people off benefits—too many people are on them, dragging down our economy—and we seriously cut mass legal migration; and, by the way, if there is a general election, let us give our people something to vote for.
Bim Afolami
My right hon. Friend makes an important point about migration. I completely agree that we need higher earnings for British people, not an economy where we import too many people and keep earnings down. That is why we have been focusing on raising the national living wage and ensuring that ordinary household incomes will go up as a result of this Government’s policies, as I have explained. It is worth pointing out that certain things happened last year, such as people fleeing Ukraine and Hong Kong, which meant that the immigration numbers were particularly high. The broad thrust of what my right hon. Friend said is correct: we want a high-skill, high-wage economy.
Oral Answers to Questions
Edward Leigh Excerpts(2 months, 2 weeks ago)
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Selaine Saxby (North Devon) (Con)
Sir Edward Leigh (Gainsborough) (Con)
The Financial Secretary to the Treasury (Nigel Huddleston)
Small businesses are the engines that drive our economy and we support them to thrive using levers right across Government. Our small business rates relief means that one third of business properties in England already pay no business rates. We provide tax reliefs benefiting small and medium-sized enterprises, such as the annual investment allowance and employment allowance, and we support investment in SMEs through British Business Bank programmes and a variety of other support measures.
Nigel Huddleston
My hon. Friend and I have spoken about these policy areas on a number of occasions. In terms of supporting small businesses, the employment allowance enables businesses with employer national insurance contributions bills of £100,000 or less to claim up to £5,000 off those bills. That was increased in April 2022 from £4,000 to £5,000, so the smallest 40% of businesses have already been taken out of paying employer national insurance contributions, and many of those are in the hospitality and leisure sector. We always keep policies under review, and I know that my hon. Friend will always be lobbying on this issue.
Sir Edward Leigh
Becoming an entrepreneur in this country has become increasingly purgatorial over the past 25 years. Does the Minister agree that what small businessmen want is not more handouts and allowances from the Government but lower, simpler and flatter taxes, and less regulation not more? They want the Government to get off their backs and shove off.
Nigel Huddleston
That was very interestingly put by my right hon. Friend. I completely agree with his instincts, though, and those instincts are completely shared on the Conservative Benches. When we are able to reduce tax and release the entrepreneurial spirit, independence and innovation that exist right across the UK, the country thrives and all of us thrive.
IMF Economic Outlook
Edward Leigh Excerpts(1 year, 2 months ago)
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James Cartlidge
The right hon. Gentleman talks about tight fiscal monetary policy. We are faced with inflation; it is higher in the UK than in 14 countries in the EU. Inflation is a global challenge, so he is right: we do need to have that stance. Obviously, we want to get inflation down. The cost of energy bills is precisely why, this winter, a typical household in the United Kingdom will have received £1,300 of support, £1,400 in cost of living payments, and the energy price guarantee, estimated by the OBR to be worth £900 for the typical household. That support is provided to every single part of the United Kingdom.
The right hon. Gentleman’s specific suggestion—to be fair, he is making a specific fiscal proposal in relation to the allowance—will hurt one particular sector: the North sea and investment in UK energy. Does he know what the long-term answer to this is? It is not supporting families—we are doing that very generously at the moment—but energy security, investing in nuclear and in the North sea as part of our transition to net zero.
Sir Edward Leigh (Gainsborough) (Con)
If the Minister is not able to share with the House the advice he has received from the Opposition on how they will reduce public spending and taxation if they ever form a Government, will he at least accept my advice that the message from successful enterprise economies is that we must have a credible plan to reduce corporation tax and regulation on business?
James Cartlidge
With great respect to my right hon. Friend, who is very consistent on such points, I am bound to point out that, even with the forecast increases, corporation tax will still be the lowest in the G7 headline rates, and, of course, roughly 70% of businesses do not pay that higher rate because of the small business rate that pertains. I have not received any representations from the Opposition, other than a pledge for sound money from a party, which, since promising to put away the great big Government cheque book, has announced almost £50 billion of unfunded spending commitments.
Oral Answers to Questions
Edward Leigh Excerpts(1 year, 4 months ago)
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Jeremy Hunt
The hon. Lady is right about the importance of retention. That is why we are pleased to have 32,000 more nursing staff than at the start of the Parliament, which takes us some way towards our 50,000 additional nursing staff target. When there is a cost of living crisis, as we have at the moment, the best way to resolve this is an independent process. It is an independent process; when I was Health Secretary, it often made rulings that were not comfortable. The best way to resolve the situation is to respect that process.
Sir Edward Leigh (Gainsborough) (Con)
Pensioners are increasingly worried about the fact that, although they have paid high—and now higher—taxes all their life, the service they get from the NHS seems to get worse. Will my right hon. Friend consider an idea put forward and implemented by his great predecessor, Ken Clarke, to give tax relief on private health insurance for pensioners? If we were to have a meeting, could he invite his hon. Friend the Exchequer Secretary, who campaigned for this idea before higher office silenced him?
Jeremy Hunt
My right hon. Friend always asks important and challenging questions. I do not agree with the way forward that he has outlined, but Ken Clarke revolutionised our education system by introducing Ofsted, which has led to a massive increase in standards in our schools. That was the reason I introduced the Ofsted system in our hospitals through the Care Quality Commission, which is also seeing a big improvement in standards.
Autumn Statement Resolutions
Edward Leigh Excerpts(1 year, 5 months ago)
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Sir Edward Leigh (Gainsborough) (Con)
It is always a pleasure to follow the robust Conservative good sense of the right hon. Member for East Antrim (Sammy Wilson). Most of the time, I agree with everything he says. Of course I acknowledge the difficulties facing the Government from the pandemic and the war in Ukraine, although many of those difficulties were exacerbated by our over-intrusive attitude to regulation during the pandemic—successive lockdowns, furloughs and all the rest, for which we are now paying the price.
I am also very worried about the disincentives to work, particularly for the lower paid. We have heard a lot about those on benefit. I understand that this is an extremely complex area. We have to help those genuinely in need—those with genuine long-term sickness issues, disabled people—but we do have a massive problem in this country, with more and more people choosing not to work. If benefits are increasing with inflation, which is very high, while public sector pay is being kept down, that is a disincentive to work. Many people who are striving—working very hard, perhaps in low-paid jobs—wonder why their pay is being kept down, while those on benefits who could work see their benefits rising with inflation. It is a complex area; there is no easy solution. My right hon. Friend the Member for Chingford and Woodford Green (Sir Iain Duncan Smith) has done some wonderful work with the Social Justice Institute that he heads, but we have to find a way forward.
Sir Edward Leigh
No, we have heard from the hon. Lady. I want to get through my remarks as quickly as possible.
As there are these disincentives to work, people say that we need mass migration. We are told by the bosses of the NHS that they cannot fill all the vacancies, so we need more mass migration. Mass migration is deeply unpopular with the British public. It is particularly unpopular with those who are working hard, particularly those on relatively low wages. They see their wages are kept down by employers who will always get people in from abroad. We have to defeat this argument as a Conservative Government that the way to achieve growth is through mass migration. That is the easy way to achieve growth. The best way to achieve growth is through high productivity, encouraging people to work.
May I follow my hon. Friend the Member for Redditch (Rachel Maclean) on the subject of channel migration? Frankly, the Government must grip this. It is utterly destabilising. We have thousands of people pouring across the channel, making the Government look incredibly foolish. We could solve the problem: we need to get out of the Human Rights Act and out of the refugee convention. We need to have our own Bill of Rights and ensure that when people land on these shores, they can be detained, arrested, dealt with quickly and deported, because it is utterly debilitating to our reputation.
We have heard a lot about the NHS. The fact is that the country has been increasingly weighed down by an ever-increasing benefit bill, and we are pouring, every year, more and more of our gross national product into the NHS. I do not have private health insurance; I rely entirely on the NHS, as does my family. People of my age are now frightened. Up to now, Conservative Governments have assumed that the NHS was very popular. I can assure Members that it is not very popular at the moment when we are facing these enormous delays. If a person has a non-urgent condition, they can be required to wait for up to two years. Then we are told that the NHS is the supreme example of healthcare in the world. We all recognise the wonderful work that our doctors and nurses do, but I read today that perhaps up to 50,000 people working in NHS quangos and other NHS bodies never actually see a patient. That organisation is riddled with low productivity, waste and incompetence, and we must learn from what other countries are doing, because someone elderly is much better looked after in Italy, France, Germany and Sweden. Indeed, in his statement the Chancellor recommended what is happening in Sweden and Singapore, and all those nations have social insurance policies. Under our system, someone pays taxes all their life, and when they get to a certain age and have a medical condition they are told to join the back of the queue. In France, Germany, Italy or Sweden, they have rights, and the Government have to address that. We cannot just go on repeating the mantra that the NHS is the best health system in the world. It simply is not. Its outcomes on cancer and in many other areas are lagging behind those of similar nations.
As well as considering social insurance, one simple thing that the Government could do—I have suggested it many times—is what Ken Clarke did in the last Conservative Government and provide tax relief for those of pensionable age who take out private health insurance. We could at least give some guarantee that if the NHS fails to deal with someone’s case within a year, or two years, the Government will fund them to go private.
Rob Roberts
Does my right hon. Friend agree that the NHS is a problem generally? We have three different Governments in charge of the NHS in the UK, with Labour in Wales having the worst record of them all. Does he agree that it is not a problem of Government funding or who is in charge, but the fact that the structure and the way that we run the NHS generally across the whole UK is just not workable in modern times?
Sir Edward Leigh
No, it is not workable, and I welcome the fact that the Health and Social Care Secretary appears to be trying to think creatively about that. We need radical surgery in the NHS. We pay taxes all our life, and we demand that when we have a health condition, we are not required to wait for two years. There must be a way forward. We cannot just put more and more sticking plasters on the NHS when NHS bosses ask for an ever greater proportion of national wealth. We have to take tough decisions.
Of course pensions have to keep pace with inflation. I benefit from the triple lock, but long-term the triple lock is utterly unaffordable and will bankrupt the nation. Of course pensions this year should go up with inflation, but what happens next year or the year after, when we deal with inflation and earnings start rocketing up? Will pensions then keep pace with earnings? We have to be honest with people, and I think people are prepared to listen to Conservative Governments who are prepared to take difficult decisions.
Why are we still proceeding with vanity projects such as HS2? Why are we not prepared to take difficult decisions to maximise energy resources, for instance with fracking? Why are we delaying spending cuts? Apparently the autumn statement is responsible and we are dealing with inflation, but the spending cuts are not happening this year. They are happening the year after next—why is that? We cannot postpone difficult spending decisions until after the next election. We should be moving towards a more dynamic and—dare I say it?—a more Conservative direction. People who voted Conservative in 2010 voted for a low-tax, deregulated economy.
We have heard a lot of people talking about benefits, but I want to speak on behalf of middle England, and people who spend all their life saving for their mortgage and their pension pot—striving. More and more—8 million—have now been dragged into being higher taxpayers. Those people should also have a voice, and people in this Chamber should represent the strivers of this nation, and those who work hard and pay tax all their life, with an ever greater burden falling on their shoulders. These are not rich people or people with the broadest shoulders.
I am now going to say something even more unpopular. We cannot load a marginal tax rate of 60% on the people who earn, say, between £100,000 and £125,000—middle managers, consultants and young entrepreneurs—and say we are going to create wealth. That is not what the Conservative Party is about. We are the heirs, not of Gordon Brown, but of Margaret Thatcher.
Decline is not inevitable. Brexit gave us the freedom to deregulate our economy, to make it a dynamic, low-tax, Conservative economy. That is the challenge we face. We must have confidence in ourselves and not accept that we are going to just stagnate forever into a kind of sub-social democratic and poor economy.
Oral Answers to Questions
Edward Leigh Excerpts(1 year, 5 months ago)
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Jeremy Hunt
I always listen very carefully to anything that Sir John Major says. I know that he took difficult decisions that put the economy in excellent shape. The one thing that I do not want to do is bequeath it to a Labour Government.
Sir Edward Leigh (Gainsborough) (Con)
As the Chancellor prepares for his autumn statement, will he remember the good voters of middle England—people who have rarely, if ever, been on benefits and who have worked all their lives for their mortgage and pension pot? They fear that more and more of them will be dragged into becoming higher rate taxpayers and that their pension pot will be attacked so that the state can get larger and more can be spent on those on benefits.
Jeremy Hunt
Absolutely. I say to my right hon. Friend that it is the good voters of middle England who want us to be a country that pays its way, that does not borrow at the expense of future generations, and that can be trusted when it comes to sound money. That is what we will deliver.
Public Sector Pay: Proposed Strike Action
Edward Leigh Excerpts(1 year, 5 months ago)
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Several hon. Members rose—
Sir Edward Leigh (in the Chair)
If everybody is to get in, you need to limit your comments to five minutes, please. I call John McDonnell.
Chris Bryant (Rhondda) (Lab)
It is always a delight to see you in the Chair, Sir Edward.
I should declare that I am a member of the GMB. When I was a priest in the Church of England, no union would take us, because if we did go on strike, it would not be very obvious what had not happened. MSF took us on for a while, and then we became members of Unite, but when Burberry was trying to close its factory in Treorchy, Rhondda, a few years ago, I worked so closely with the GMB that I thought it was right to join. I am a very proud member.
I start with the principle that it is a fundamental human right for people to be able to withdraw their labour, and any attempt to undermine that right is a contradiction of all our human rights. There may be many different reasons why someone needs to withdraw their labour, but it is worth reminding people that no trade unionist, trade union leader or member of a trade union ever takes the decision to go on strike lightly, for the very simple reason that, apart from anything else, it costs them and their family money—goodness gracious, the miners of the Rhondda knew that in spades back in the 1980s. Individual members of trade unions are proud of the work they do, so they do not want to not be in work—they want to be in work.
Many of the people we are talking about have been described as “key workers”. That phrase came into existence during the covid pandemic, when people suddenly discovered that bus drivers, train drivers, bus conductors and people who work in supermarkets or for a local council—many of whom suffered more than anybody during covid, because they were at daily risk—are all key workers because the whole of the rest of the economy simply cannot function without them. Those people know that they are essential to society, and they do not want to let down their customers, clients, passengers and patients or the people with whom they work. They are proud of their work, and they want to be in work, so it takes a lot to get a trade union or an individual member to vote for strike action.
My constituency neighbour, my hon. Friend the Member for Cynon Valley (Beth Winter)—not “Sinon Valley”, as Tony Blair always used to call it—is absolutely right about the cost of living crisis. Energy costs in our constituencies are often even higher because many homes are difficult to insulate and to keep warm and dry, as they are basically made out of stone and rubble. If someone is on very low wages, seeing their energy costs double in a year makes a dramatic difference, whatever the Government may have done this year, and people are anxious about what will happen after April. Inflation for the poorest is even higher than the 10.1% that has been mentioned, not least because poorer people spend more of their money on the essentials in life—food, energy and housing costs—and the cost of cheaper brands has risen the most. The cost of things that fill kids’ bellies more readily, such as pasta, have risen by 45%, 47% or 48%, while bread has gone up by 34%, so inflation is even worse for the poorest.
My constituency may be different from other poorer constituencies, because more than 70% of people in the Rhondda own their homes. Many have small mortgages, but some have substantial ones. They may not have taken a long fixed-rate mortgage, because they were not sure how things would work out and did not want to be in a difficult situation in five years’ time. If someone sees their monthly rate going from £300 to £500, they will be thinking about losing their home. The problems that many pensioners are having are intensified by the fact that, if they had a small pension pot of, say, £35,000 in July, it may now be worth only £25,000 after the mini-Budget, so the annuity they might get if they retire now will be lower.
Then, on top of all that, there is wage suppression, which we have seen for 12 years for nearly every key worker. Apart from anything else, that has been counterproductive. One reason we are not getting people back into work is that there is an enormous backlog in the NHS. I am not making a partisan point here, because we have the same problem in Wales—there is an NHS backlog across the whole UK. If wages are suppressed in the NHS, fewer and fewer people will choose to work in it, more and more people will retire, and more and more people will leave it entirely, which will exacerbate the problem.
I completely support the CWU’s strike at the Royal Mail. It seems utterly preposterous to make such a small offer to the workers when significant amounts have been awarded to senior managers and shareholders. That is completely wrong. In my patch, people are worried about Royal Mail deliveries, but I am not blaming the staff; I am blaming the managers, because quite often they simply have not employed enough people to get the work done. I should add that I also support the CWU in its dispute with Openreach, which suffers from exactly the same problems as the Royal Mail.
My final points are about the Government’s role. First, it is to ensure that the laws in this land are fair to the employer and the employee. I do not think we have laws that are fair to the employee at the moment—I think the law is unbalanced. The former Prime Minister—the one we have just lost—would not have been able to become Prime Minister if the rules that presently exist for a strike ballot had been exercised for her. That is an utter hypocrisy in the Government’s line.
Secondly, where the Government have a direct, indirect or even just tangential interest or role in a dispute, they should do everything in their power to keep both sides at the table. In my experience, trade union members and trade union officials are the best deal makers in the land. The Government should learn from them and not the other way round.
Sir Edward Leigh (in the Chair)
Let us be fair to all our colleagues—five minutes, brothers, please.
Tony Lloyd (Rochdale) (Lab)
Let me add to the point made by my hon. Friend the Member for Leeds East (Richard Burgon). Why not make people like me pay national insurance contributions once we have passed the statutory age for retirement? Why not lift the cap on national insurance contributions, which would raise real money for our national health service? That would be a credible way forward. I hope that the Minister has listened intently. It is perhaps unfair that she is nearly on her own, apart from the hon. Member for Broadland (Jerome Mayhew).
It is true that the internationally recognised right to strike is circumscribed quite badly in this country. However, the real question that Conservative Ministers should address is this: why are so many people, across so many occupations, so angry that they are prepared to take industrial action? We have seen it with Royal Mail, Openreach, the Fire Brigades Union and PCS, and I could go on.
I want to concentrate on a couple of issues. In the end, when people take the opportunity to go on strike, it points to a fundamental malaise in the workplace. They have very few alternatives. One is to look for work elsewhere. That is a real issue when there are around 132,000 vacancies in our national health service, and when a third of teachers are leaving teaching after five years, when they have seen their salaries go down by around 20% since austerity began in 2010. The issue of retention should worry the Government just as much as the summer of solidarity and the woeful winter that we are heading into.
The Government have to get real about this situation. Looking at the national health service, it has been said so many times that it is almost tedious to repeat that we applauded health workers during the pandemic, but now we are saying to health workers across the piece that we do not value their work. It is astonishing that the Royal College of Nursing and the Royal College of Midwives are balloting for industrial action. It is almost beyond belief, and certainly beyond any kind of precedent. The Government should worry about that, because they have broken something that was precious: the commitment of people to their workplace and to those whom they serve, because they now have to look at defending their own families.
It is not that midwives and nurses do not want to be there for the people whom they serve. I have had great experiences with the national health service; I know the dedication that people are prepared to give on a daily basis. We have to ask: what has gone so badly wrong that the Government have forced people into this situation? It is similar with teaching. Healthcare and teaching are two professions that are so fundamental to the quality of our way of life. We can talk about the private sector generating resources, but when someone is ill, they want a nurse, and a child wants a teacher. Those things are so important.
Now that we are in this crisis, the Government have got to look in the mirror and ask themselves what has gone wrong. Of course we can find alternative sources of funding, and we must, because that is the political choice. My challenge to the Minister is not to condemn strikers; I will support those who feel they have to take industrial action. I want them not to strike, but that depends on the Government coming forward and agreeing to make the political choice to not go back into austerity for those people in the public sector. They need to make the political choice to reward them in a way that is adequate. The Minister on her own today may not be able to give us an answer, but I urge her to go back and tell the Prime Minister and the Chancellor that this is what we demand.
Sir Edward Leigh (in the Chair)
I remind hon. Members that if you wish to speak, it is courteous to be here right from the beginning. I call Claudia Webbe, but just for a couple of minutes—it is not fair on the Opposition spokesman otherwise.
Sir Edward Leigh (in the Chair)
Order. Could the hon. Lady bring her contribution to an end?
Claudia Webbe
I will wind up now. That is despite the Government wanting a return to feudal Britain. Austerity, which has been debunked by many progressive scholars as economically illiterate, needlessly pushed working people into another level of destitution, and contributed to more than 140,000 deaths in the UK. Put simply, whether it is austerity or the cost of living crisis, crisis after crisis has made the UK worker pay with their lives while inequality widens and the wealth trickles up.
Beth Winter
I thank all Members for their contributions. As others have said, it is woefully inadequate that nobody from the Government Back Benches is present.
In summing up, there are three key points for me. First, it is time for the Government to listen. Given the Minister’s comments just now, I really despair, because it seems she is not listening to the reality for so many people in this country—
Sir Edward Leigh (in the Chair)
Order. Sorry, but I have to end the debate at 4 o’clock sharp. I have no choice; I apologise.
Motion lapsed (Standing Order No. 10(6)).
Economic Update
Edward Leigh Excerpts(1 year, 6 months ago)
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Jeremy Hunt
I was a Cabinet Minister in 2010 when we had very difficult decisions to take in the wake of the financial crisis, and my Department’s budget was cut by 24%. I do not believe that we are talking about anything on that scale; I think it likely that cash spending will continue to go up. That being said, I want to be completely frank with people: we are going to have very difficult decisions, both on tax and on spending, in the next couple of weeks. We will try to take those decisions as compassionately as possible. So it is going to be tough going forward, but I do not expect it to be on the scale that the hon. Lady suggests.
Sir Edward Leigh (Gainsborough) (Con)
I congratulate the Chancellor on his soothing and competent tone, and of course we have to calm the markets, but what is our vision? Of course we accept the shortcomings of the mini-Budget, but does the Chancellor accept that we cannot just slide into a second-rate economy and go in the direction of France, with a bloated public sector, the highest taxes for 70 years and gross inefficiencies? By the time of the next election, can we as a Conservative party promise to get taxation back to at least its level at the start of the current Parliament, and get corporation tax back to being one of the most competitive in Europe? Otherwise, what is the point of a Conservative party? [Interruption.]
Jeremy Hunt
There is the problem, with all the noise from the Opposition. This compassionate Conservative Government were able to step in with massive help for members of the public, with the furlough scheme and the energy price guarantee, because we took difficult decisions on the economy in the preceding years, each and every one of which was opposed by the Labour party. I say to my right hon. Friend that the point of a Conservative Government is to build a strong economy, and that is what we will do. It is the job—[Interruption.] This is an important point that I wish to make. It is the job of the Chancellor not just to balance the books but to have a vision for economic growth, and I hope I will persuade my right hon. Friend in two weeks’ time that I have just that vision.
New Wealth Taxes
Edward Leigh Excerpts(1 year, 10 months ago)
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Westminster Hall is an alternative Chamber for MPs to hold debates, named after the adjoining Westminster Hall.
Each debate is chaired by an MP from the Panel of Chairs, rather than the Speaker or Deputy Speaker. A Government Minister will give the final speech, and no votes may be called on the debate topic.
This information is provided by Parallel Parliament and does not comprise part of the offical record
Several hon. Members rose—
Sir Edward Leigh (in the Chair)
Order. Quite a lot of people have risen to speak, and I would like to give them all the chance to do so. I do not want to introduce a limit at this point, so I ask that you keep your speeches under six minutes.
John McDonnell (Hayes and Harlington) (Lab)
I congratulate my hon. Friend the Member for Leeds East (Richard Burgon) on introducing this debate. It is extremely timely and is given justification what our communities are experiencing.
I want briefly to run through a statistical portrait of our country. I have looked at some hard facts about the situation in our country. My hon. Friend has emphasised the importance of redistribution in tackling some of the real problems that many working people face. I have looked before at issues relating to poverty and I will reiterate some of the stats. There are 14.5 million people living in poverty and 4.3 million children growing up in poverty. According to the Institute for Fiscal Studies, there are 700,000 more children in poverty than there were a decade ago. The people who seem to be hit the hardest are families with children, and households with someone who has a disability. Interestingly, two thirds of children growing up in poverty are in households where someone is in work. What does that say about wages overall?
I have also looked at the issue as it relates to pensioners. Despite improvements—which I have welcomed, particularly that with regard to the triple lock, even though it was deflected this year—there are still 2.1 million pensioners living in poverty. There is no need for me to mention the massive increase in the use of food banks. A recent survey and report about children demonstrated that even children are skipping meals because their family cannot afford to feed them on a daily basis. An estimated 2.6 million are skipping meals in some form, and going hungry.
On fuel poverty, National Energy Action estimated that price rises would result in the number of households in fuel poverty increasing by more than 50% in April. The language has changed—we have not experienced until recent years—from a discussion about poverty into one about destitution. There are 2.4 million people who have experienced destitution, including 550,000 children. Destitution is the inability to provide the basics in life: a warm coat, shoes, heating and, of course, eating. That is what they are experiencing at the moment.
The housing figures are startling. On rough sleeping, 64,890 households are assessed as being homeless or facing the threat of being homeless. There are now 1 million on housing waiting lists. The figures on health inequality and poverty are staggering. The gap in life expectancy between our poorest and richest areas is 27 years.
As my hon. Friend said, the increase in the number of millionaires and billionaires is staggering. I looked at The Sunday Times rich list. Britain’s super-wealthy have grown their combined fortunes by a record £710 billion in just the past 12 months. As my hon. Friend said, there has been a nearly 30% increase in City bonuses. In March alone, £6 billion was paid out in bonuses.
Wages are facing the longest squeeze in modern history since Napoleonic times. The research published this morning demonstrates that wages are falling behind again, because of the high rate of inflation. One of the key elements of all of this is the insecurity that that engenders. We now have 1 million people on zero-hours contracts. That is not a society that any of us should be living in or should want to live in.
Somehow, we have to find a mechanism to address the grotesque levels of inequality that our community is now facing. Unless we shape up to that challenge, we will potentially have a change in the nature of our politics, as people get angrier and angrier. We know who exploits that anger: usually it is the far right more than anyone else. In addition to that, we will be ashamed of ourselves for not acting urgently on this matter.
Therefore, how do we ensure urgent action? Of course, I agree with all the policies to ensure that there is a long-term investment plan to get people into jobs that are high-skilled, highly productive and so on, but the link between people having a job and lifting themselves out of poverty has unfortunately been broken, particularly because of low wages. We have also seen the degeneration of our public services because of austerity over the last 12 years, and those public services are therefore no longer available to many people who once depended on them.
We have to introduce an emergency programme of measures to lift people out of poverty and secure long-term investment in our public services, and the redistributive element of a one-off wealth tax, which my hon. Friend the Member for Leeds East has put forward, is one component of the emergency programme that we desperately need. That way, we would be able to use resources directly to lift people out of poverty, to restore some of the cuts that have taken place with universal credit, and to make sure that people get properly funded, particularly if they are providing the public services that we desperately need at the moment. They must have decent wages.
Now is the time to consider all these options. I have always thought that the best mechanics for taxation in this country have been Tory Chancellors. If you look back on the decision to level up capital gains tax with income tax under Nigel Lawson, I think that was the right thing to do then, and it is the right thing to do now. It could give us anything between £17 billion and £24 billion, which would be more than was included in the national insurance increase. It could have covered the social care and health costs for which we need an injection of funds.
Rab Butler introduced an excessive profits tax in this country during the Korea war. It was not just a windfall tax on one sector; it was across the economy for anyone who was profiteering, and the money was put back into funding our public services and helping people out of poverty. All those measures are available to us.
In addition, we need to look at the City of London, because it is obscene the bonuses that are being paid out. Therefore, we need either a tax on those bonuses or a financial transaction tax, so that we have a regular income and the City pays its way. Because of the appalling levels of inequality, the drift towards higher levels of poverty, and the implications that it has for so many within our community, the argument for a one-off wealth tax on that scale—affecting 1% of our population but supporting 99%—is unarguable at the moment. Therefore, there needs be a proper consideration of it.
This is a Westminster Hall debate, but I hope that it extends beyond this debating Chamber and into the main Chamber, and that it becomes a feature of some of the demands in the run-up to the November Budget—the emergency Budget that we now need to tackle the real suffering that our community is experiencing at the moment.
Sir Edward Leigh (in the Chair)
I remind Members, please, to keep under six minutes; otherwise, not everybody will get in.
Sir Christopher Chope
It is a tax related to the wealth of the property in which someone lives. If there is only one person living in that property, there is a 25% discount, but there is no discount otherwise. It is solely related to the capital value of the property, and that is why, in a sense, it is a wealth tax. I know that this is an inconvenient argument for those who are campaigning for a wealth tax, but let us be under no illusions: the council tax system is essentially an embryonic wealth tax, although the levels are much lower than the hon. Member for Leeds East (Richard Burgon) referred to in his introduction to the debate.
I do not know anybody who would be subject to the tax that the hon. Member for Leeds East suggests. He mentioned people who say they would love to be able to pay more tax. As I said in my intervention, there is nothing to stop all those socialist millionaires who have a bit of a conscience and who are arguing that everybody else other than themselves should pay more tax making their own contribution. There is nothing to stop the hon. Gentleman setting up a trust fund into which they could pay, so they could then contribute more than they are able to contribute at the moment. Why not do that?
If people want to pay more towards the costs of the state and are in a position so to do, there is a voluntary system out there. I am sure the Financial Secretary to the Treasury, my right hon. and learned Friend the Member for South East Cambridgeshire (Lucy Frazer), will draw our attention to the fact that the number of voluntary contributions made to Her Majesty’s Revenue and Customs is rather modest compared with what it could be on the basis of what those supposed billionaires want to do.
Let us keep the wealth creators in our country. Let us praise the work they do, the jobs they create and the contribution they make to our overall wealth as a nation. Let us not deter them and drive them away elsewhere. I am very much against a wealth tax and I hope the Minister will make it clear that it is in no way on the Government’s agenda.
Sir Edward Leigh (in the Chair)
We will have a five-minute time limit now. I call Claire Hanna.
Claire Hanna (Belfast South) (SDLP)
Thank you for calling me, Sir Edward. Thank you, too, to the hon. Member for Leeds East (Richard Burgon) for bringing forward the debate and for his advocacy on the issue.
Tax is a fundamental and necessary tool of the Government and, from my perspective as a social democrat, one that is not being adequately levied by the Government to address the huge and parallel challenges of poverty and wealth inequality. Wealth inequality is one of the most defining issues of our time and, like other seismic challenges, such as climate change, it will only be addressed by concerted, co-ordinated and internationalised action. It is being driven, first, by failures in the tax system to levy tax, and secondly, by evasion and avoidance, which is not just about short-changing the public purse but also has a distorting effect on decent, compliant and locally anchored businesses.
The UK and the world, as hon. Members have outlined, is not short of wealth. There is plenty to go around. The global economy has quintupled over the past three decades. However, due to regressive and outdated forms of taxation, that wealth is accruing in the hands of a tiny number of people at the top, while the wealth of those at the bottom is decreasing. Globally and in the UK, the tax system is essentially rigged for exactly those purposes. We know, too, that inequalities have worsened during the pandemic and, in parallel, that the cost of living has surged, the average salary is nowhere near keeping up and public services—health and education—have deteriorated.
The Government need revenue and they turn to tax—so far, so fair—but who or what they choose to tax reveals a mindset. A state can choose to tax either wealth or income and this Government have chosen to tax income—to tax work, when a wealth tax would garner more resource for the state and, in parallel, help address the issues of income disparity that are driving a lack of cohesion and hampering social solidarity. Taxing income alone will not raise the resource needed to be genuinely transformative in those issues of poverty and climate change or, for example, the challenges within the health service. It will also do nothing to address the widening gap between the richest and the poorest, which, as others have outlined, is part of what is driving populism, fundamentalism and people feeling lost within the political system.
It is welcome that the Government are belatedly pursuing a windfall tax—even if we are not supposed to call it that—to address some of the property bonanzas, but that should not be limited to the energy sectors; the Government should also focus on an individual wealth tax. What do we mean when we speak about the wealthy? Before we even start to discuss at what level a tax is levied, what comes to my mind, when differentiating, is those whose income comes from assets such as rents and dividends, when the rest of society depends on labour and wages. It is wealth that makes money even when somebody is asleep, and often at a faster rate than the one at which many people are able to earn.
The enduring myths about wealth, which we will hear mentioned in this debate, include the idea that wealth taxes would slow down the economy, deter job creation and prompt capital flight. One myth is that, simply by existing, wealthy people create jobs; but we know that in fact it is demand that creates jobs. If we take a billion pounds and give it to one person, about 99% of that wealth will leave circulation. Yet that same billion, distributed among a million people, would continue to circulate around the economy, stimulating demand, and not be locked up in the hands of a small number. So the mega-rich are, in fact, taking capital out of society and spending it on the inflation of existing and essentially non-productive assets, such as land and property. That is what trickles down from the wealthy to the average person who is trying to buy a home to live in or raise their family.
The wealthy and their wealth will not just leave, either, any more than wealth is already leaving the public purse due to our complex and loosely regulated tax systems. A large amount of the wealth in this country is tied up in property; as the hon. Member for Brighton, Pavilion (Caroline Lucas) said, it cannot just up sticks and leave. Tax avoidance is not inevitable; it is a policy choice around where to levy tax and underfund enforcement. Things like the Panama papers and the Paradise papers have given more than enough evidence over the years to show that tax avoidance and evasion are standard practice around the world.
Last week, BBC programme “Spotlight” revealed a niche product called Northern Ireland limited partnerships, which are being exploited on a wide scale for people to avoid taxation and to get up to all sorts of nefarious purposes. One street in my constituency in south Belfast is home to 100 such Northern Ireland limited partnerships, which create not a single job or add a single penny to the Revenue, and which are up to all sorts. However, it was a choice not to close down that loophole.
Sir Edward Leigh (in the Chair)
Order. I am afraid you are over time. I call Jon Trickett.
Jon Trickett (Hemsworth) (Lab)
It is a pleasure to serve under your chairmanship, Sir Edward. I congratulate my hon. Friend the Member for Leeds East (Richard Burgon) on securing this important debate.
I will not reproduce figures already mentioned, but there has been an explosion of wealth, certainly since the banking crash, and before that, alongside a growth in poverty. The two things are interconnected, because the growth in wealth is a function of the increase in poverty. It reminds me of Victor Hugo’s statement:
“The paradise of the rich is made out of the hell of the poor.”
That is the truth of the matter, but it is not simply about poverty. It is also about remuneration for middle and upper-income earners as well as lower-income earners. The truth is that there is a long-term secular decline in the proportion of GDP that goes into wages and salaries. That is the central problem with which we need to wrestle, if we intend to tackle the fiscal crisis that state services are now facing. There are four sources of tax. There is income tax, which is more or less half of all tax raised. There is tax on consumption, which is VAT. There is tax on household property, the council tax. There is tax on capital. The tax on capital is one twelfth of the amount raised from income taxes, and is imbalanced as a consequence.
It is even worse than that. If the amount of money going into the salaries and wages of the 33 million working people in our country is correct—it is, because a graph shows it clearly—the capacity of income tax, which is the largest amount of tax we raise, will be limited and in long-term secular decline. We must do something about that, if we want to continue with public services and tackle inequality. Where is the money going to come from? I do not think for one second that we want to increase VAT in any event, but particularly given the cost of living crisis. Nor do I propose an increase in council tax.
Income tax is in long-term decline for the reasons I have given. Therefore, there is only one other place to go, which is to tax wealth. Two of my hon. Friends talked of a one-off tax on wealth. I am not convinced that that is the right way to do it. First, a very large amount of money, a proportion of individual wealth, would have to be raised on a one-off basis to make a significant contribution. In any event, there is a long-term fiscal crisis, for the reasons I have described. Therefore, we need a regular tax on capital.
I have a further point to make on that, and it has already been made. For some reason, we tax income from work much more than income from wealth. That is wrong, imbalanced, asymmetric and should end. There is scope to do that. I published a paper about a year ago, which is now in the Library, about wealth and a wealth tax. We looked at several different ways of taxing wealth, and there are many. We worked out the median of a reasonably balanced wealth tax, taking account of behavioural changes, because wealthy people will change how they behave. We thought we could raise about £100 billion a year. The document is in the Library for people to look at. That is the central argument that needs to be made. Of course, there is an ethical argument about whether one human can be worth millions of pounds more than another. There is also an argument about inequality, tackling poverty and all those issues, but the central question is how to deal with the long-term fiscal crisis.
I will make one final point before I sit down. The Conservative party will not resolve this. Why do I say that? Tory donors who are among the top 250 richest people in our country have donated to that party £57 million. We all know that whoever pays the piper calls the tune. The Tories are not going to resolve the problem; they are part of the issue. There has to be a debate about these long-term problems, and a wealth tax is part of the solution.
Sir Edward Leigh (in the Chair)
We have to finish at 4.12 pm. Would you allow the mover of the motion two minutes?
Lucy Frazer
I anticipated that point, which is an important one, and we will of course bring forward more statistics for this year in due course.
Sir Edward Leigh (in the Chair)
Order. Minister, could you allow one minute for the mover to say something?
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Rishi Sunak
I know that my right hon. Friend the Secretary of State for Work and Pensions is constantly ensuring that those entitled to those benefits do get them, and I am sure she will keep everything under review.
Sir Edward Leigh (Gainsborough) (Con)
There is ample evidence that the big retailers, which dominate the nation’s forecourts, have not passed on the cut in fuel duty, and we know that from the Platts price. I urge the Chancellor to take action to put pressure on these companies, but given our experience in this matter, does that not rather underline the fact that we Conservatives understand that there are enormous difficulties in interfering in the marketplace and that the best way to help people is an overall reduction in the tax burden?
Rishi Sunak
While I broadly agree with my right hon. Friend that that is the best way to help people over time, in a particular circumstance such as this, and given the types of people we are trying to help, I believe that direct cash transfers are the right way, rather than going through the tax system. I have talked to my right hon. Friend the Energy Secretary about the issue that my right hon. Friend raises. He is right to raise it, and I know that the Energy Secretary is focused on ensuring that the fuel duty cut is passed on.