Amendment of the Law

Ian Murray Excerpts

Wednesday 23rd March 2011 Commons Chamber

[Ian Murray (Edinburgh South) (Lab)]

On a point of order, Mr Deputy Speaker. A former Chancellor of the Exchequer, Mr Hugh Dalton, resigned in 1947 for leaking part of his Budget to a journalist when on the way into the Chamber to deliver it. Given that we have heard nothing in the Chancellor’s statement today that had not already been trailed in the media on Monday, Tuesday and this morning, please will you, Mr Deputy Speaker, use the good offices of the Speaker to make sure that senior members of this Government make important statements to the House before going to the media?

[Mr Deputy Speaker (Mr Lindsay Hoyle)]

The principle is clear, and it will have been heard by those on the Treasury Bench. We must now move on.

Budget Responsibility and National Audit Bill [Lords]

Ian Murray Excerpts

Tuesday 22nd March 2011 Commons Chamber

[Chris Leslie]

If the hon. Gentleman will allow me, I will make a little progress, because I want to ensure that other Members have the chance to comment in this debate.

One reason we feel it necessary to put the concept of a growth mandate in the charter for budget responsibility is our anxiety that the current Chancellor of the Exchequer and Treasury are slightly blinkered when it comes to growth and employment. We know that in all probability, the Chancellor will announce tomorrow that the OBR is to downgrade the growth forecast. [Hon. Members: “No!”] Yes, my hon. Friends may be shocked at that piece of advance news, but apparently it says on the front page of the Financial Times today that the growth forecast for 2011 will be downgraded from 2.1% to 1.8%. The British Chambers of Commerce has also downgraded its 2011 gross domestic product forecast and is now expecting GDP growth of only 1.5%, down from a forecast of 1.9%. Other consensus forecasters are moving in the same direction.

[Ian Murray (Edinburgh South) (Lab)]

Will my hon. Friend explain to the House, and particularly to us new Members, whether the OBR has reduced its forecast at any other time in the past year?

[Chris Leslie]

It is a one-way journey, unfortunately. The OBR started with high expectations of growth soon after the general election, and at every stage at which it has made adjustments, the spiral of the economy’s growth prospects has descended.

--- Later in debate ---

[Mr Cash]

I am very glad to be able to follow that advice. In order for the provisions contained in the amendments to be inserted in the Bill, it is essential for the House to be aware of the implications of judicial authority, the assertions of the Supreme Court in that context, and the sovereignty of Parliament. There is, for example, the question of fiscal policy and the charter, which is set out in clause 1(2) and to which the question of economic growth and job creation would be added by the amendments. Clause 6(3) states:

“The Office must, in the performance of its duty under section 4, act consistently with any guidance included in the Charter by virtue of this section.”

I am deeply worried about the legal status of the charter in this context.

As for fiscal policy, I remind the House that the other day, probably for the first time since 1640—Pym and Hampden and all that—the Government passed a motion saying that we were only primarily responsible for it. I voted against the motion—as did my hon. Friend the Member for Bury North (Mr Nuttall) and a number of others—but the whole House should have voted against it, because in fact we are exclusively responsible for fiscal policy, and that is what the Bill is supposed to be based on.

What worries me particularly is the inconsistency with fundamental questions that are in the background, involving the primacy of European law, sovereignty and judicial authority. I need make no further points, because in a nutshell, if those issues cannot be reconciled with what is in the Bill, and if the duties of the Office for Budget Responsibility are to examine and report on the sustainability of the public finances, to prepare “fiscal and economic forecasts”, to make assessments and analyse sustainability, and to act consistently with the charter as a matter of law, we are surely entitled to ask: which law will prevail?

Obviously, I agree with all the ideas that are being presented. We all want an efficient economy, we all want jobs and we all want growth. We cannot survive without growth, and we cannot generate the revenues to pay for the public sector without that growth in the private sector. What worries me is that all those ideas are being imposed through a Bill, rather than through the judgment of Ministers who are accountable to the House of Commons, and should not be required to refer back to the judicial authority of the courts or the alleged primacy of the European Union.

I fear that we are embarking on one of those Lewis Carroll-type situations. I am reminded of “The Hunting of the Snark”. Members may recall the phraseology. We know that we want it, we know it is there, but the question is, what is it going to do? I have a serious problem with the Bill for that reason. I fear that we are engaged in a process of wishful thinking rather than achievement, and that we are being locked into a withdrawal from parliamentary accountability—and, as some Members may know by now, I regard that as the ultimate test of our democratic system.

[Ian Murray]

It is a pleasure to follow the hon. Member for Stone (Mr Cash). At the end of his contribution he referred to wishful thinking. Labour Members certainly think the Chancellor’s gamble with the UK economy is wishful thinking. The recent reduction in GDP came as a shock to everyone, and serves to highlight some of the wishful thinking indulged in by those on the Treasury Bench.

I think that everyone supports the establishment of the Office for Budget Responsibility. One of the best measures taken by the Labour Government was the courageous step of making the Bank of England independent. We have all seen the benefits of that, in good times as well as bad, as it can now make decisions for the benefit of the economy, rather than the benefit of the Government.

In the establishment in law of the OBR, the Bill should focus on more than just deficit and debt issues. Clause 1(1) states that the Treasury must look at

“the formulation and implementation of fiscal policy and policy for the management of the National Debt.”

That narrow focus takes us away from what we need most, which is economic growth. It does not even give the OBR the ability to take account of various specific objectives the Government may want to achieve, such as on child poverty or unemployment, or in terms of the impact on the economy of decisions made by the Chancellor and his team.

[Justine Greening]

To reassure the hon. Gentleman, may I point out that the OBR is free to consider the impact of any Government policy on the sustainability of the public finances? It therefore does have the discretion to conduct analysis that it may think necessary to assess whether the public finances are in a sustainable state.

--- Later in debate ---

[Ian Murray]

I am grateful to the Economic Secretary. As I have said previously in the House, she is one of the more capable Ministers, but she does occasionally fail to see the wood for the trees, and I would point out to her that the OBR’s remit is purely fiscal, and its fiscal forecasting may not always take into account what is happening on the ground in all the local communities that we represent.

That brings me neatly to my next point, which is about independent forecasting. That is certainly no panacea, nor is it a substitute for the judgments made about the public finances by the Chancellor and Prime Minister. We need to be able to hold the Government to account on the accuracy of the forecasts and the consequences of the judgments and choices that they make. The Conservatives have repeatedly claimed that the Labour Government fiddled the figures, but that is not borne out by the statistics published by the Library. In all the years before the crash, in only two years did the growth forecasts fall below the range that the Treasury had published, so the Treasury was dealing with those issues. The Government are wrong if they believe that the OBR would have prevented a crisis, or that it will protect us from the consequences of some of what in my view are the Chancellor’s misjudgments.

[Stephen Williams (Bristol West) (LD)]

If the OBR is such a good idea, why did the previous Government not introduce it during their 13 years in office? But leaving that aside, will the hon. Gentleman concede that if we had had an office for Budget responsibility in the last Parliament, the right hon. Member for Kirkcaldy and Cowdenbeath (Mr Brown) would have found it much harder to dismiss warnings about the economy overheating, because those would have come from an independent office such as that created by this Bill?

[Ian Murray]

I am grateful to my hon. Friend; I get on very well with the hon. Gentleman, so I consider him to be my hon. Friend—

[Thomas Docherty (Dunfermline and West Fife) (Lab)]

Shame!

[Ian Murray]

That may not please every Labour Member, but nobody is objecting to the setting up of the OBR. My point is about the previous Government’s record: in only two years did the growth forecast fall below the range that the Treasury had published. I am not claiming that the OBR does not do sterling work.

That last intervention brings me neatly to my point about what the OBR has been able to do. It serves as a strong antidote to the propaganda about the figures that we have been hearing from the Government. The OBR said that because of the actions of the Labour Government, the deficit in 2009-10 was more than £20 billion less than had been expected. It also said that under the Tory-led Government’s plans there would be 110,000 more people on the dole by the end of this Parliament than would have been the case under Labour’s plans. Those are the OBR’s figures, which is why I am so delighted that it was set up—the hon. Member for Bristol West (Stephen Williams) can check the figures if he wishes. The OBR forecasts based on Labour’s plans until the election were that the economy would grow by 2.6% in 2011, whereas the figure under this Government spirals down to 2.1%—and even that may be reduced when the Chancellor speaks at the Dispatch Box tomorrow. So the OBR has been a good antidote to the propaganda that we have heard from those on the Government Benches.

--- Later in debate ---

[Ian Murray]

One would have thought that the three interventions I have taken were scripted across the Chamber, because the hon. Gentleman leads me to the second point in this part of my speech. I was talking about the deficit and the national debt, so let us dispel some of the propaganda in the OBR’s reports. He is welcome to read both them and the fantastic summary of performance indicators in the economy that the Library has produced. This point shows why it is incredibly important that the OBR should examine a wider set of figures, rather than just fiscal and national debt. Public sector net debt was down to 36.5% of gross domestic product in 2007-08, compared with the 42.5% that was inherited in 1996-97. Most of that borrowing was to do with financing capital investment, and not day-to-day expenditure as the Conservatives claim.

[Stewart Hosie]

Unfortunately that is not quite true, because the bulk of the capital expenditure took place through the private finance initiative. If memory serves, the outstanding balance on the credit card for that is £200 billion—of which, under the Labour Government, two thirds was off the balance sheet.

[Ian Murray]

The figures are there for people to see. I am delighted that we have had a contribution from the hon. Member for Dundee East (Stewart Hosie) on this subject, because in the past four years of Scottish National party government not one brick has been laid to build new infrastructure in Scotland. They have refused even to set up anything to do with building public infrastructure.

[Stewart Hosie]

rose—

[Mr. Deputy Speaker (Mr Lindsay Hoyle)]

Order. We are not going to be drawn into the party politics of Scotland. Let us stick to the amendment.

[Ian Murray]

Thank you, Mr Deputy Speaker. I will resist the temptation to have another go at the Scottish National party in the Chamber, and will take your guidance.

I shall finish on two quick points. First, the level of borrowing before the financial crisis did not cause the recession. Every country in the world was affected, so it does not take a rocket scientist to work out that it was a worldwide financial crisis. The coalition Government’s propaganda—

[Stephen Williams]

Will the hon. Gentleman give way?

[Ian Murray]

I may just carry on, as I know you are trying to get through the speakers, Mr Deputy Speaker.

The coalition would have us believe that the previous Government were responsible for the economic crisis in, to name but a few countries, Germany, France, the US, Japan, Greece, Portugal, Spain, Italy, Iceland, and that member of the arc of prosperity, Ireland.

Finally, I want to give a human story and show why there is a need for a growth factor mandate at the OBR. On Sunday in my constituency I met a family who raised the spectre of what the Government’s changes mean for them and the problems that they face as a result. The OBR reflects these issues in the figures it produces, but not in terms of growth. That family gave me a list, which follows on from a list given to me by someone at Her Majesty’s Revenue and Customs: they have listed the cost of all the changes to their family budget, which amount to a loss of £4,000 a year. One member of the family earns just into the upper tax bracket, and his partner works part-time and tends to look after the children. When the national insurance increase and the child benefit cut—because he is a higher tax bracket earner—are taken into account as well as the increase in VAT and pension contributions, the overall consumer prices index increase to pensions, his public sector pay freeze, the extra cost of fuel going into the car, the increase in utility bills, food inflation and general inflation in the economy, it all has a rather hard-hitting effect on the family budget. That is why I think the amendments are sensible, and why the OBR needs a growth mandate to get the Chancellor out of a hole—because he does not have a plan B, and it does not really look as if he has a plan A, either.

[John Mann]

I shall speak solely to the excellent amendment that my hon. Friend the Member for Nottingham East (Chris Leslie) so eloquently put forward. In doing so, I shall argue why it is in the Government’s interests to accept the amendment. I am certain that by the end of my speech the Minister will wish to accept it and will accede by nodding that she will do so.

The amendment is a pro-Government amendment and would be pro-Government whoever was in government, because unlike the usual party-politicking that we tend to get on Report, particularly early on, the amendment is a highly pragmatic and practical amendment to a process that, as the Government stated when they set up the OBR, was itself meant to be independent, practical and pragmatic. The shame is that we could be in a Public Bill Committee given the paucity of the number of Members present to debate this rather important Bill and an area of the economy that is the most fundamental issue that we face, along with every other Parliament in the world. I know we will not have a green Budget tomorrow, but today the green Benches are largely empty of hon. Members ready to participate in and listen to the debate. That is an indictment of the confidence that Back Benchers from both halves of the coalition have in their Government's economic policies on the verge of the Chancellor’s second Budget.

We have an opportunity to shape the independent analysis that will sit alongside this and all future Budgets, including when, at some stage, the coalition parties are in opposition—although I appreciate that the Liberals are, in essence, already in opposition. It is extraordinary that so few of them are present. If I were a Liberal now—I never will be, but if I were—I would be thinking, “Here is an opportunity, with this amendment, to try to have a smidgen of influence over this tawdry Government.” That smidgen of influence is entirely lacking now, because the Liberals are nothing more than lapdogs to the Tories’ economic policies.

I shall illustrate my point with two examples, the first of which concerns the labour market and issues such as immigration and why it is so relevant to what the OBR is not doing and, I believe, will not do in its report that will be presented with the Budget tomorrow. When assessing job creation, it is essential from a Treasury and from a social policy point of view to ascertain precisely what new jobs there are. In doing so, work should not be broken down to the micro-level of particular kinds of jobs, as policy makers do not need to know that. However, they do need to know about the people who have entered the labour market and were not in it before. If it is projected that just over 1 million jobs will be created in this Parliament, it makes a world of difference if those jobs are taken by young people coming into our economy from the accession countries of eastern Europe, perhaps on a temporary basis, to participate in those elements of growth in our economy rather than being taken by the domestically resident, unemployed, underemployed, retired or partially retired population.

The economics of this issue are as important to decision making as the social policy side, which I am sure all hon. Members will recognise is very important. If the majority of jobs being created are semi-permanent, service sector-based jobs in the south-east, particularly in London, and if they are filled by people from overseas, there will be economic and social consequences. One economic consequence will be an overheating of the London and south-east economies.

The failure to take that into account in economic planning was by far the biggest fault line under the previous Labour Government. It is foolhardy of the current Government, with the cheering on the Conservative Back Benches that there has been, to do exactly the same thing given that a tool has been created that would allow that objective analysis—if it were allowed to do that job. If the OBR’s report tomorrow gives a breakdown of where jobs are coming from, how many are in the south-east and London, and how many are new jobs going to people coming into the country for the first time, that will give us far greater certainty about the economic and social consequences. Some of those economic consequences, as well as social consequences, will be an overheated housing market in London and the south-east, which has previously been an impediment to certain forms of growth and to those who have wished to get into the labour market but have not been able to do so.

Oral Answers to Questions

Ian Murray Excerpts

Tuesday 22nd March 2011 Commons Chamber

[Mr Osborne]

At that meeting at Rolls-Royce, John Rose made a very compelling case for how little we had done as a country to support our manufacturing sector. We will set out policies tomorrow to assist, and we have already, as I said, put in place four annual reductions in the corporation tax. More broadly, we have to get away from a model of growth that was pursued over the last decade—based on excessive debt, and growth in one sector, the City of London, in one corner of the country, the south-east. We must have more balanced and sustainable growth in the future.

[Ian Murray (Edinburgh South) (Lab)]

Does the Chancellor of the Exchequer recall saying at the end of 2007:

“Today I can confirm for the first time that a Conservative Government will adopt these”—

Labour’s—

“spending totals…to…the year 2010-11”?

Does he regret calling the article, “Tories cutting services? That’s a pack of lies”?

[Mr Osborne]

We got into office in 2010-11, and we abandoned those spending plans for the years ahead.

Fuel Prices and the Cost of Living

Ian Murray Excerpts

Wednesday 16th March 2011 Commons Chamber

[Ian Murray (Edinburgh South) (Lab)]

It is a pleasure to follow the hon. Member for Worcester (Mr Walker), who talked about disingenuous and spurious policies. I am sure it was disingenuous to promise not to increase VAT before the general election and then to increase it immediately after it. There is nothing more disingenuous than lying to the electorate.

I would like to follow my hon. Friend the Member for East Lothian (Fiona O'Donnell) in talking about some of the personal stories that have been brought to my attention and which relate to the Opposition motion.

[Andrew Bingham (High Peak) (Con)]

rose—

[Ian Murray]

I would like to make some progress.

My constituents wrote to ask me to bring their stories to the House and put them directly to the Chancellor and the Chief Secretary to the Treasury, so I am disappointed that neither of them is in their place. It shows a real disregard for this place when those two senior Ministers are not present to debate such an important issue. Of course the two Ministers on the Treasury Bench are among my favourites, but it would have been nice for my constituents to have had a response directly from the horse’s mouth.

Let us examine what fuel price rises are doing to the cost of living. I shall start with the case of a constituent in Edinburgh South who runs a small business. Let us look at what these particular fuel increases are doing to growth in the economy; in so doing, I shall echo some of the points made by the hon. Member for Worcester. My constituent runs a business in the service sector, so she uses a lot of suppliers. However, suppliers’ price increases are going through the roof, mainly because of additional fuel costs. She told me that some of her suppliers were charging as much as an additional £5 per delivery to cover their own increased fuel charges. My constituent faces a dilemma of what to do about that £5 increase. Should she pass it on to her customers? She finds doing so difficult. Why? Her problem is compounded by the fact that VAT has increased from 17.5% to 20%, which has also impacted directly on prices to her customers.

[Barbara Keeley]

My hon. Friend makes the important point that this debate is about the cost of living, as well as about fuel prices. He also rightly raises the problem faced by businesses in deciding whether to pass the increases on to their customers. My constituents live in one of the 15 most deprived areas in the country. They have an appalling bus service after the network was privatised by the Conservatives. People in that situation, like my hon. Friend’s constituents, will suffer both from increased costs from fuel charges and from having to pay £450 a year in increased VAT. Does he agree that our constituents are suffering heinously from that?

[Ian Murray]

Of course. The poorest suffer disproportionately because they have to use public transport and face the increased costs, while also having to pay more in VAT for all the supplies they buy. Prices are going up because small business issues, such as the one I am highlighting from my constituency, further compound the problem. I noticed that the Economic Secretary was upset when my hon. Friend the Member for Worsley and Eccles South (Barbara Keeley) suggested that she did not live in the real world, but we are talking about what is happening in the real world and I do not think that the Minister’s 40-minute contribution dealt with any of the real issues for our constituents that are happening at the coal face.

The owner of the small business that I mentioned is faced with a dilemma, but it seems that she must increase prices at a time when consumer confidence is at its lowest. People are worried about their jobs, they are worried about prices going through the roof, they are worried about commodity prices, and they are worried about how they are to fill up the family car. It is a quadruple whammy for businesses, which, as I have explained, face increased core costs as well as increased supplier costs, increased prices owing to the VAT rise, and increased borrowing costs. All that is creating unstable consumer demand, which, I am told by small firms in my constituency, is depressing their businesses.

On Friday I was visited by someone who works as a middle manager at Her Majesty’s Revenue and Customs. He has two small children, he is not a high earner by any means, and he and his wife live in my constituency. He described to me plainly how he has been affected by what the Government have done in the past 10 months. It is clear that he is being squeezed from all angles because of this Government, and fuel and the cost of living are part of that. Let me go through the list. He faces increased national insurance contributions, the increase in VAT to 20%, and the fact that his pension will be linked to the consumer prices index rather than the retail prices index, along with the additional pension contributions that he must make. He faces tuition fees for his children, he has lost his child benefit because he is the sole earner in the relevant bracket, and he faces record commodity prices.

[Mr Graham Stuart (Beverley and Holderness) (Con)]

The hon. Gentleman is making a powerful speech about the impact of high fuel prices on his constituents and mine. Like him, I should like to see action from the Government, but will he tell us what he would do to secure the reduction in the deficit to which all the tax rises are contributing? I understand that, because of the legacy of the last Government, the present Government’s net debt will rise in every year of the current Parliament—that, in the final year of this Parliament, we shall still be borrowing more money because of the deficit left to us by the last Government. We should love to be given some idea of how, in the real world, we could both make the savings and deliver the benefit.

[Ian Murray]

I am delighted that the hon. Gentleman has managed to ingrain himself with the propaganda being put out by the Conservative and Liberal Democrat parties about the deficit. He has given me a wonderful opportunity to go back to the start of that list so that he can take it all in.

There is no doubt that the Government’s cuts in public services are going too far, too fast and too deep. Everyone knows that the deficit must be reduced, but reducing it over time would protect my constituents from the ideological cuts that the Government are introducing under the veil of the deficit.

Let me return to what is happening to that squeezed middle manager at HMRC. He faces increased national insurance contributions and an increase in VAT to 20%. His pension will be cut because it will be linked to CPI instead of RPI. He faces tuition fees for his two children. He has lost his child benefit because he is a higher-rate taxpayer, and record commodity prices are pushing up food prices. He faces a high inflation rate, partly owing to the increase in VAT to 20%. His salary has been frozen. He has job insecurity. He faces increased energy prices, increased borrowing costs and lower interest on his savings, all because of this Government. Moreover—this brings us back to the motion—the price of fuel means that the cost of filling up the family car has gone through the roof. The Chancellor of the Exchequer is taking an extra £59 million from the Scottish people because of the increase in VAT, which is directly related to the cost of the fuel that they put in their cars.

[Mr MacNeil]

Will the hon. Gentleman give way?

[Ian Murray]

I will not, if the hon. Gentleman does not mind.

Each time people drive down the street, they see the large neon sign at every petrol station, and that is having yet another damaging effect on consumer confidence.

What are we left with? We are left with a broken promise from the Government on VAT, and a broken promise on the fuel duty stabiliser. Many people in East Lothian and Edinburgh South voted for the Conservatives because they had made that promise before the election. Time after time, promises made to ordinary people in my constituency and throughout the country are broken, and it is about time that Ministers did something about it.

Scotland Bill

Ian Murray Excerpts

Monday 14th March 2011 Commons Chamber

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

I want to raise a technical point that was stimulated in my mind by the comments of the hon. Member for Milton Keynes South (Iain Stewart). It is a fairly minor point, but the aim of the Committee is to bring out such points. The hon. Gentleman referred to the Caledonian sleeper situation in which someone got on a train late at night in Glasgow, Edinburgh or somewhere else in Scotland and found that they were in England after midnight. There could also be a situation in which someone got on a train before midnight in Glasgow or Edinburgh, expecting to be in England after midnight, but found, on looking out of the window, that they were in fact in a siding in Carstairs due to the vagaries of the weather—a situation that has perhaps faced some of us in the past.

Leaving that fairly limited example aside, it occurs to me that the issue the hon. Gentleman raises could have wider implications. Take the situation of someone who lives in Dumfriesshire or the borders, perhaps in the constituency of the Under-Secretary of State for Scotland, the right hon. Member for Dumfriesshire, Clydesdale and Tweeddale (David Mundell). That person may live in Scotland but be a night-shift worker in England—perhaps a delivery worker for a retailer or a regular night-shift worker in a factory. Such a person could be defined as being in England, rather than in Scotland, under one definition even though he clearly lived in Scotland—or vice versa. It probably would not be appropriate to amend the Bill specifically to cover this issue, but it should certainly be given some thought. Perhaps the Minister could consider it with a view to giving guidance to clarify how such a situation should be addressed. A large number of people would not be affected in that way, but more than a handful might, so it would be useful to get clarification on such points from the Minister now or later.

[Ian Murray (Edinburgh South) (Lab)]

This evening’s debate has centred around the complexities of this hugely complex legislation. I had not intended to speak, but I, too, was prompted by the contribution of the hon. Member for Milton Keynes South (Iain Stewart), which led me to think about my experience of running a small business with 12 to 14 staff, doing payroll on a weekly basis and the huge complexities of keeping up with changes in legislation and making sure that my staff were aware of such legislation. Hon. Members would not believe the number of staff I have employed over many years who did not understand what a tax code was, how they were taxed on their income and how national insurance was involved.

[Jim McGovern (Dundee West) (Lab)]

Some of the previous speakers, such as my hon. Friend the Member for Edinburgh North and Leith (Mark Lazarowicz) and the hon. Member for Congleton (Fiona Bruce), should remember that these proceedings are televised and that the public hope to understand what we are talking about. My hon. Friend the Member for Edinburgh South (Ian Murray) has kept his contribution fairly simple so far, but I failed to understand some of the earlier contributions.

[Ian Murray]

I am grateful for my hon. Friend’s intervention, which highlights the fact that the Government’s agenda for growth is about growth in the small and medium-sized enterprise sector, and making sure that small businesses in particular can contribute a significant amount to the private sector to take up the slack caused by the job cuts in the shrinking public sector. However, the complexity of the legislation we are examining is detrimental to the many small business owners who will be concerned about the complex process they will have to go through to make sure that they employ people in accordance with the right piece of income tax legislation. Many issues have been raised about travel—I do not call the train the Caledonian sleeper; I call it the Caledonian keep-you-awake, as I have yet to sleep on it—and I hope that the legislation does not include provisions on where someone falls asleep, otherwise my own tax affairs could be rather complex.

We must consider the issue of close connection. People may work in a different part of the UK, but it is not necessarily the place that they call home. Any Scottish MP who has regularly done the trip from Scotland to London will recognise many faces on their train or flight as people who work in London Monday to Thursday. They leave Scotland on Sunday night, and return on Thursday evening or Friday morning to their family. They would not regard themselves as English income taxpayers. They would very much regard themselves as being resident in Scotland. It is where they call home, but, as we have heard from the hon. Member for Milton Keynes South, it would not necessarily be classified as their place of residence for the payment of income tax.

[Jim McGovern]

My hon. Friend will have used the Caledonian sleeper. Does he agree that “Murder on the Orient Express” has nothing to do with that train?

[Ian Murray]

I was about to say that I was delighted to receive an intervention from my hon. Friend, but perhaps I should say that I have noted his comments, and will move on.

I should like to mention Her Majesty’s Revenue and Customs. At my surgery—no doubt this is the case at the surgeries and advice sessions of many right hon. and hon. Members—I have been beset by the complicated problems that my constituents have experienced as a result of their not understanding the HMRC process. Indeed, taxation errors have been made by both HMRC and employers. HMRC is undoubtedly under pressure, with more job losses over the next few years. In fact, I think its work force will have halved by 2015. I hope that the Government will take into account the complexities of the legislation to make sure that HMRC has the resources to be able to deal with it properly. The Federation of Small Businesses has been mentioned by my hon. Friend the Member for Glasgow North (Ann McKechin) in connection with the number of small businesses that use the pay-as-you-earn system. There are problems with self-assessment, which can become complex for someone who satisfies some of the tests of the legislation, but conducts personal business in different parts of the UK.

My hon. Friend the Member for Edinburgh East (Sheila Gilmore) raised the issue of tax avoidance. If there are different income tax rates in Scotland and England, I hope that HMRC will have the resources to deal with that so that people do not deliberately try to satisfy the tests of the legislation to benefit from a different income tax rate on the other side of the border. Many of the constituents of the right hon. Member for Dumfriesshire, Clydesdale and Tweeddale (David Mundell) will be affected by those cross-border issues, as we have heard.

HMRC definitely needs the resources required to be able to deal with that properly, and to put provisions in place to make sure that people understand the system. All too often, as the Member representing Edinburgh South, I have dealt with self-employed constituents who have filled in self-assessment forms and then experienced a hard-nosed approach from HMRC in some pretty dreadful letters. Some letters say that it will send agents round to seek to pin down possessions and sell them to cover the debt when, in fact, HMRC has made an error in its tax coding and the problem has to be sorted out at a different level.

All those issues come together. The measure is welcome, as it gives the Scottish Government and Parliament real accountability for the proportion of tax that they can raise locally in Scotland for the people of Scotland. However, we must be aware that there will be many small businesses, employers and employees who will be concerned about how the measure will operate. If the system is to be accountable and is to operate practically for the benefit of the people of Scotland and for the Scottish Parliament, we must make sure that it is not undermined by a complex set of rules that are easily circumvented as a result of tax avoidance or because genuinely self-employed or small businesses cannot understand it sufficiently. We must put support in place to ensure that they follow the rules properly and so that the measure operates in the most effective manner.

[Mr Gauke]

We have had a lengthy and thorough debate. First, I intend to address the amendments and then set out in a little more detail the various tests on what constitutes a Scottish taxpayer. Finally, I hope to pick up the points that have been made in the debate and try to answer as many technical questions as possible. Whether I will be able to find the solution to the question of whether Mr Stewart senior is a Scottish taxpayer remains to be seen, but I will do my best.

Amendment 68 would require the Scottish Parliament to consult such persons as Scottish Ministers consider appropriate before setting the Scottish rate. I believe that that is inappropriate, as it interferes with the accountability of the Scottish Parliament to the people of Scotland. It should not be for the UK Parliament to tell the Scottish Parliament or Scottish Ministers how they should go about setting the rate of tax. It is for them to decide and ultimately to be accountable for that decision to the Scottish people through the ballot box. There is nothing to stop the Scottish Parliament in its Standing Orders including a requirement to consult or take evidence on setting the rate if it wishes to do so. Rule 6.6 of the Standing Orders of the Scottish Parliament sets the remit of its Finance Committee, which is required to consider and report on, among other things,

“proposals for the making of a tax-varying resolution”.

It will be for the Scottish Parliament to decide whether a similar provision should be made in relation to any proposal to set the Scottish rate of income tax. That is a matter for the Scottish Parliament—it is not something that we should prescribe in Westminster.

Amendment 69 requires the Treasury formally to consult Scottish Ministers, the Scottish Parliament and other persons before it uses its powers to disapply or modify the application of the Scottish rate of income tax. It may help if I describe the purpose of this power. We plan to use it to set some of the detailed rules on the operation of the Scottish rate of income tax, because any changes have to operate within the UK income tax framework, which is a reserved matter. The Scottish Parliament has given its consent to the Bill through the legislative consent motion, which includes that power and the way in which it will operate. It was not raised as a concern by the Scottish Bill Committee in its extensive scrutiny of the measure.

Having said that, I can confirm that HMRC will work closely with all parties concerned, and it has set up three technical groups that include representatives of business and of individual taxpayers. The Scottish Government participates in all those groups, which cover in particular how reliefs for charitable contributions and pensions will be treated. The Government will publish draft legislation in advance, giving all parties an opportunity to comment. That is very much in line with our approach outlined in “Tax policy making: a new approach”, which was published at the time of the June Budget. Tax policy making has been criticised as piecemeal and reactive. I want a new approach, with consultation on policy design and scrutiny of draft legislative proposals as its cornerstone.

I accept the motivation behind the amendment, but I hope that the hon. Member for Glasgow North (Ann McKechin) agrees that this is something we are very much doing already, so the amendment is unnecessary. Proposed new section 80G of the Scotland Act 1998 provides the Treasury with supplementary powers to allow modifications to be made at a later date. It allows, for example, certain types of income or relief to be included or excluded from the Scottish rate to provide the flexibility to be able to respond to stakeholder input and the changing environment.

Subsection (4) of new section 80G gives the Treasury a limited power to make any changes retrospective to the beginning of the tax year. The timing of the Budget cycle is such that many Finance Bills contain proposals that come into effect before Royal Assent. I hesitate to bring back painful memories for the official Opposition, but hon. Members might recall that the previous Government introduced a clause on Report of the Finance Bill 2008, increasing the personal allowance by £600 in 2008-09 in response to pressure over the abolition of the 10p rate of income tax. As is common, Royal Assent did not occur until the summer of that year—until 21 July 2008 to be precise—but that clause took effect from the start of the tax year. A more technical example is section 60 of the Finance Act 2006, which I imagine you recall well, Ms Primarolo. That redefined the income tax exemption for employer-provided mobile telephones, and removed the ability of the family or household of the employee to use such a phone tax free. The clause took effect for the tax year 2006-07, but did not receive Royal Assent until 19 July 2006.

Basic Bank Accounts (Scotland)

Ian Murray Excerpts

Wednesday 19th January 2011 Westminster Hall

[Mr Hoban]

The coalition agreement commits us to tackling the issue of bank charges, and we are working closely with colleagues in the Department for Business, Innovation and Skills.

I want to respond to a couple of specific points. Hon. Members have discussed bankrupts not being able to open bank accounts, and the hon. Lady was right to say that Barclays and the Co-operative bank allow undischarged bankrupts to open accounts. A number of banks are currently reviewing their policies and, in response to a call by the Government in July for banks to reconsider the issue and recognise the problem, the Insolvency Service is working with the British Bankers Association to decide how to address the issue.

The guidelines in law on identification are high level, and banks and financial services institutions have a great deal of flexibility in deciding how to prove someone’s identity. It is not only about having a driving licence or a passport, because there are other ways of doing it. In one of my constituency cases, a letter from the local council addressed to the person who was seeking to open a bank account was deemed to be sufficient proof of identity. I encourage banks to make their staff more aware of the rules and flexibility, and we will continue to raise that matter with the banks and the BBA.

The hon. Member for Islwyn (Chris Evans) asked whether banks are open to people opening basic bank accounts. The work of the financial inclusion taskforce, which sent mystery shoppers into banks, demonstrated that 80% of bank managers are much more open to people opening basic bank accounts. That issue has been a problem in the past, and we must maintain pressure on the banks to ensure that they offer basic bank accounts and do not turn customers away. We must tackle the barriers to people opening bank accounts.

Community investment tax relief is an important way of providing support. That tax is due for review shortly, and we will work with a full range of stakeholders to consider the options available for reform.

[Ian Murray (Edinburgh South) (Lab)]

I am grateful to you for giving way, Mr Hood, and I apologise for missing the start of the debate.

[Mr Jim Hood (in the Chair)]

Order. I did not give way; I was not doing anything.

[Ian Murray]

Thank you, Mr Hood. I will get used to the conventions of this place eventually. The Minister has responded to my hon. Friend the Member for Edinburgh East (Sheila Gilmore) on the subject of basic bank accounts. One point that I regularly heard from the BBA, the Royal Bank of Scotland and HBOS, as it was at the time, was that if the staff in local branches were not able to offer a full bank account to potential customers, they did not then offer a basic bank account. Will the Government consider issuing guidance on that through the BBA to ensure that people who do not meet the criteria for a full bank account are automatically offered a basic bank account?

[Mr Hoban]

I do not want to get bogged down in what banks should or should not do. Through its mystery shopping exercise, the taskforce looked at the offering of basic bank accounts, and it will publish a more detailed report this year that will help inform those processes. Obviously, the Banking Code Standards Board will also have an interest in how such accounts are offered.

The hon. Member for Edinburgh East also asked about support for credit unions and post offices working together. There has been much discussion about that in recent months, and there is already a lot of co-operation between post offices and credit unions. For example, credit union current account holders can access their accounts through the post office, and more thought is being applied to that area.

We take financial inclusion seriously, and we want to ensure that more people have access to a bank account and the benefits that that brings. It is important to ensure that bank accounts and financial services work with the grain of how people live their lives. We must look at new technological approaches and the barriers to opening bank accounts. Together, we will take forward the work of the financial inclusion taskforce in conjunction with our partners not only in government but in the financial services sector. If I have not replied to any of the hon. Lady’s points I will happily respond to them by letter.

National Insurance Contributions Bill

Ian Murray Excerpts

Thursday 13th January 2011 Commons Chamber

[Ian Murray (Edinburgh South) (Lab)]

As was pointed out by my hon. Friend the Member for Edinburgh East (Sheila Gilmore), my constituency is at the top of the league in terms of public sector jobs, yet unemployment is less than half that in the constituency of my hon. Friend the Member for Walthamstow (Dr Creasy). Does that not highlight the discriminatory nature of the Government’s policy?

[Dr Creasy]

That is a very good point. I am talking about the public sector workers who are most at risk of redundancy. The people who live in my constituency may not do the same jobs as those who work in the public sector in Edinburgh. They are teaching assistants, nurses, and people working in inclusion units and Sure Start. They are losing their jobs because of the cuts that are being made in local and national Government. People such as civil servants—who knows, perhaps they include the admin assistants in the Minister’s offices—fear for their jobs. They are looking to the Government, who say that the private sector will pick up the pieces following the cuts in the public sector, and they are asking how that will happen. In my region, the answer is very unclear.

This policy could be part of the remedy, and that is the aim of the amendment. It asks, “How can we generate jobs? What are the motives that lead people to set up businesses and industries that generate jobs in the private sector?” Many of us share an interest in whether the private sector could generate jobs as part of the recovery. We think that the policy has failed that test, and needs to be amended. Excluding London and the south-east means excluding a key wealth-creating element of our national economy, and we feel that that is remiss.

I also think that the Government have been remiss in excluding the voluntary sector and charities, and in Committee I supported amendments seeking their inclusion. According to the National Council for Voluntary Organisations, if the voluntary sector could benefit from the change of policy on national insurance holidays, an extra 2,500 charities could be created. Perhaps even more could be created through the big society, given the interest in how the voluntary sector could work in public sector commissioning. Cruelly, however, they have been excluded. The questions “Who are the people who are generating jobs?” and “Where are the places where people who are losing their jobs in the public sector can best find employment in future years?” have not been answered; the test has not been passed.

I ask the Minister to consider amending the policy in the way we have suggested, not least on the basis of his own evidence. He will recall that, in Committee, I was particularly concerned about the way in which the Government had constructed the policy, and the evidence on which it was based. He himself has described it as an uncertain benefit, and his officials have admitted that they did not have much evidence on which to assess whether they could reach all the people whom they wanted to reach, or involve all the businesses that the Minister had hoped to involve. In the impact assessment, the Minister said that he hoped that the policy would help 400,000 businesses, but he has admitted today that only 1,500 have applied so far. In Committee, one of the officials suggested that the number of applications would increase at the remittance stage, but that is not job creation. The jobs would have already been created, and people would be applying retrospectively for remittances. That suggests a challenge to the status of the policy as a job creation measure.

According to the Minister’s own analysis, the inclusion of London and the south-east might well make possible the creation of an extra 300,000 businesses. Before he says that there is no extra money, let me suggest to him that the creation of those extra businesses might enable him to meet his target of 400,000 over the three years. He could then return to the House and reassure all of us who are concerned about the efficacy of the policy that it had succeeded in generating new business in the United Kingdom and forming a key part of our recovery. Let me also encourage him to consider the extra tax take that the Treasury would gain as a result of the creation of all those new businesses, as well as the fact that all the extra national insurance funds could be spent on the national health service or on pensions, as he desired. There are many benefits in considering how the Bill could be amended to include London and the south-east. Let us think about all the people who would be affected by the jobs that this would create, the money it would bring into our national Exchequer and, above all, the economic recovery it could help drive.

I therefore hope the Minister will accept the amendments and acknowledge that they have been tabled in good faith. They are motivated by a genuine desire to make sure this policy is effective. Whether or not we agree with the Government—and we certainly disagree with many of the changes they want to make—I hope the Minister will understand and share our concern that jobs must be the first priority of any British Government in the current economic climate.

--- Later in debate ---

[Mr Gauke]

The right hon. Gentleman knows the state of the public finances that we have inherited. We have pursued the policy that we set out in our party manifesto before the general election and have reversed the most serious effect of Labour’s jobs tax. The Opposition’s policy is to go further—they want a bigger jobs tax. The increase in the rate for employers’ national insurance contributions, which is mitigated by the increase in the threshold, involves the rate going up from 12.8% to 13.8%—I say that for the benefit of any Labour Members, including the shadow Chancellor, who are not quite aware of that. To raise the same amount of tax as the VAT increase would have done, Labour would have had to increase that rate not just to 13.8% but to 16.7%. What do hon. Members think that the impact on the Thames Gateway, east London and jobs in Walthamstow would have been if we had pursued that policy, which the Labour party believes in? It does not have much by way of economic policy, but that is one of them.

[Ian Murray]

Let me give the Minister a little of my experience as a business owner with up to 12 staff. Small entrepreneurs and people who run small businesses in Edinburgh are, like me, far more concerned about the impact on our businesses of the number of customers not coming through our doors because of the VAT rise than they were about any increase in national insurance that the Labour party proposed before the election. I would gladly pay £30 a week more for each member of my staff than have no customers left.

[Mr Gauke]

I do not want to reopen the whole argument on everything that should be done to reduce the deficit, but we have to get it down. I am not sure whether the Labour party grasps the need to get the deficit down, but there is no doubt that it has to be eradicated at some point—even the shadow Chancellor agrees with that. The Labour party believes that national insurance contributions are the best tax by which to do that, but all we have heard from Labour Members this afternoon is why they want a cut—and they want a bigger cut than we are offering.

Bank Bonuses

Ian Murray Excerpts

Tuesday 11th January 2011 Commons Chamber

[Mr Osborne]

It is, of course, important—I said this in my statement—that we have a successful but properly regulated financial services industry, which employs hundreds of thousands of people, including thousands of people in many constituencies represented in the Chamber. It used to be the case—although perhaps it is not the case any more—that senior Labour politicians would at least acknowledge that. That is why I would much rather reach a settlement with the banks, and that is what we are seeking to do. We want a successful industry that pays a proper contribution to the Exchequer and lends more to British business, and that is my objective.

[Ian Murray (Edinburgh South) (Lab)]

Does the Chancellor of the Exchequer think it fair that pensioners and hard-working families in my constituency are paying 2.5% more in VAT as a result of his Government’s broken promise on VAT, while the bankers get away scot-free?

[Mr Osborne]

We have introduced a permanent bank levy. An argument was made at the general election by Labour Treasury Ministers and the Labour Prime Minister that we should not introduce a levy unilaterally, as it would make Britain uncompetitive. That argument was aired then, and we have now introduced a permanent bank levy. I do not know whether the Labour party supports it or not, but it will raise almost £10 million during this Parliament, and it applies each and every year, rather than being a one-off.

Banking in Scotland

Ian Murray Excerpts

Thursday 14th October 2010 Westminster Hall

[Mr Davidson]

I am sure that those points have been noted by all concerned, including the Minister and the relevant Whip. I want to deal with the report, however, and while such matters are fascinating, the report does not deal with them. I look forward to hearing the hon. Gentleman’s contribution to the debate, which will no doubt cover anything that anyone misses out.

Let me make it clear that the Committee believes that it is of key importance to continue the supervision of banks in Scotland, because the banks’ behaviour and their success will be essential to the growth and development of the Scottish economy. We cannot build up a small or large business sector without having banks in Scotland that are able and willing to lend, understand their markets, and behave constructively and positively. I hope that that covers the point that the hon. Gentleman was making.

We wanted to identify the extent to which lending in Scotland had declined during the economic crisis. Our report contains a series of figures and statements indicating that there was a period when lending was far too loose—the banks had been intent on shovelling money out of the door, almost irrespective of whether the business propositions were viable. We were critical of the way in which bankers often seemed to be incentivised to make loans without due regard to their viability, whether they were for property or to businesses or individuals. The report states that the pendulum then swung too far in the other direction. For a period, banks were unduly restrictive. They were prepared to lend on almost nothing and found excuses to raise charges and interest rates to make it as difficult as possible for money to go out. We have now seen a swing back and there is a degree of equilibrium, but subsequent discussions that the Committee has had have not convinced me that the banks have got it right yet.

Recently, the Committee met representatives from the computer gaming industry in Dundee, the construction and road haulage industries in Edinburgh, and the local chamber of commerce in Dundee. In every case, the story we heard was the same—the banks do not understand us. No one in the construction, road haulage or computer games industries spoke up for the banks collectively. That was interesting, and not a little worrying. Everyone who expressed a view on such matters said that they did not believe that the banks had taken adequate account of the prevailing situation, and did not have a feel for their industry at the moment. They needed loans, floating capital and so on, but the banks were not willing to play along, except at exorbitant rates.

The banks have said that they are making more money available and that part of the difficulty is that lending is going down because companies are choosing to repay debt instead of taking out new debt; but it seems to me that, to some extent, the rates that the banks charge and the conditions that they seek to apply are still inhibiting meaningful lending. The Government and the Committee should give ongoing consideration to that. We have had some responses and updates from the banks involved that seem to paint a picture that is rosier than recently, but we are still receiving feedback from those who want to borrow that the banks are not being as helpful and constructive as they might be. I hope that the Minister and the Committee will be able to work together with the Scottish Parliament to ensure that we develop a mutually advantageous liaison and relationship.

[Ian Murray (Edinburgh South) (Lab)]

Will my hon. Friend comment on the experience that I have witnessed and have been told about since the report was published? A major lending bank in Edinburgh told me that it has more money than it has ever had to lend, but that people are not coming forward to borrow it. I suspect that that might be due to the expectation of those who would like to borrow that they are being priced out of the market, or would not be granted loans.

Another major mismatch in the banking sector is between front-line staff, who have a relationship with industries, and the underwriters in the background. There is anecdotal evidence to suggest that when people seek to borrow money, the front-line staff with whom they have a relationship believe that the criteria have been met, but the underwriters subsequently use different criteria. Has the Committee come across those issues since the report was published?

[Mr Davidson]

The first is certainly true. We have been told that money is available but is not being taken up, and money is being paid back faster than it is going out. We have not adequately explored the point at which decisions are made, not made, or knocked between front office and back office, and my hon. Friend gives us a valuable pointer. Having met representatives from three industries that are significant and important to the welfare of the Scottish economy, and having heard the same story from them all, it seems that something is still not right in the relationship between banking and its customers in Scotland.

When we met the CBI representatives, we did not quiz them as directly as we might have done because it was an informal meeting, but the same sort of message was coming back. I know from meeting various development groups in my local area, including construction companies, that people are concerned about the lack of co-operation that they receive from the banks. That is one area of the report where further work is required, and I hope that the Minister will be suitably co-operative on that.

I will now look at how banks deal with individual customers. We all deal with the public and we are aware from our activities and surgeries that there is a fair number of rascals, chancers, villains and incompetents in most constituencies, except my own. The banks are not necessarily dealing with paragons of virtue on every occasion and there are people who borrow irresponsibly. However, the volume of complaints present at the time of our report seemed far greater than could reasonably be expected. The stories that we have heard since from Citizens Advice, and the experiences in my surgery and those mentioned by my hon. Friend the Member for Dundee West (Jim McGovern), suggest that the banks continue to be less than completely understanding and helpful when dealing with customers in financial difficulty.

A number of examples of bad practice are quoted in the report, and it is perhaps appropriate to mention them so that they are on the record. In its evidence to us, Citizens Advice highlighted:

“Unfair overdraft charges; banks being more aggressive in their behaviour towards debtors; banks encouraging debtors to take out more products as part of their repayment; banks demanding higher repayments from clients in order to repay debt quicker;.”

Banks are also using the “right of set off” to transfer cash around people’s accounts. None of those are examples of particularly good practice. Many of us were worried by the way that banks were utilising call centres to a far greater extent than we believed was justifiable. In many cases, call centres were ringing up customers several times a day, and they often seemed to be in complete ignorance of arrangements that had been made with another section of the bank. Those call centres were often based abroad and perhaps there were difficulties in communication. The people who rang up and talked to the customer seemed to have no flexibility or power to negotiate or discuss matters, but simply reiterated that they wanted money back. Hon. Members will understand how stressful that was to people who, in many cases, were already highly stressed because of their financial position.

To some extent, the assurances that we had from the banks reminded me of Bart Simpson, who, when he was accused of anything, would say, “It wasn’t me, nobody saw me and you can’t prove it.” The banks tended to say, “We never did that, it wasn’t as bad as you say and we don’t do it now.” Clearly, the banks are now at some pains to distance themselves from some practices that have been going on, but I do not think that they have abandoned them entirely. We have been told that banks now show greater forbearance before taking people through the repossession process, and feedback I have received suggests that that is true. The Government are probably in a better position to clarify the figures. That is certainly a matter that we want to pursue.

We continue to receive feedback from Citizens Advice and other organisations suggesting that cases continue where one arm of a bank strikes a deal with a customer who is in financial difficulties, but another section continues to pursue the customer, irrespective of the deal done; and irrespective of the bank having been notified that somebody wants to use Citizens Advice or another intermediary as a representative, it continues to pursue the customer directly in order to harass them into making additional payments. There must be a degree of responsibility on the part of the banks. We understand that the banks need to try to recover their money, and, particularly when many of them are state-owned and state-financed to a great extent, we do not want to put them in a position where people can escape their obligations, but a balance must be struck. Paragraph 113 of the report states:

“We conclude that banks continue to use aggressive tactics towards customers who have fallen into debt.”,

We should all be concerned about that. We have been told by a number of bank staff that some of the processes and procedures that I have described continue. That is concerning.

Economic Affairs and Work and Pensions

Ian Murray Excerpts

Tuesday 8th June 2010 Commons Chamber

[Ian Murray (Edinburgh South) (Lab)]

Congratulations on your tenure in your post, Mr. Deputy Speaker. I also congratulate the hon. Member for Wycombe (Steve Baker) on his lesson; I am sure that those in the financial services across the world will read Hansard with interest tomorrow. I particularly congratulate the hon. Member for Grantham and Stamford (Nick Boles). The equality issues that he raised at the end of his speech are ones on which the House is stronger when it works together, and I will welcome the opportunity to take those matters forward with him.

It is an honour and a privilege to stand in this great Chamber of democracy and represent the people of Edinburgh South. My constituents have placed tremendous faith in me, and I will certainly be putting their views, hopes and aspirations forcefully.

Edinburgh South is a diverse constituency stretching from the old mining villages of Gilmerton to the leafy suburbs of Morningside and beyond. Some literary geniuses that hon. Members may recognise live in the constituency—Ian Rankin, Alexander McCall Smith and, of course, J.K. Rowling lived but a stone’s throw from each other in the heart of the constituency. Those literary geniuses are complemented by a large student population, people in academia, public service workers and people in the professions.

The southern part of what is called the Athens of the north was represented in this House for over 100 years by the Conservatives. The area has had many distinguished Conservative Members of Parliament, including Sir William Darling, the great-uncle of the shadow Chancellor. The seat was last held for the Conservatives by the right hon. former Member for Devizes, the Earl of Ancram, who, in 1979, defeated a certain Gordon Brown.

The Earl of Ancram lost Edinburgh South to my predecessor, Nigel Griffiths, and I am delighted to be given this opportunity to pay tribute to him. Nigel was without doubt one of the most hard-working constituency MPs in this House. His dedication to serving his constituents was second to none, and his mantra that everyone knew someone he had helped is certainly true. He leaves behind a long legacy of how a Member of this House should serve, and a couple of other things, too. If anyone has had the unenviable pleasure of campaigning with Nigel and his infamous megaphone, they will know legendary megaphone phrases such as, “Don’t leave it to the folks next door,” and “We are knocking on your door now,” the latter said just as his finger reached the bell. Those are aspects of campaigning that I hope Nigel will continue to employ for many years to come. Nigel was also well known for championing the cause of the disabled and the most vulnerable, and I know he will continue to do that outside this House.

Edinburgh was one of the major centres of the enlightenment, led by world-famous institutions based in south Edinburgh. One of them was the university of Edinburgh, a research-led university with an international reputation. It has long held a principal place in science and engineering research, which is based in King’s Buildings. It has world experts in biological science, chemistry, engineering, geosciences, informatics, mathematics and physics. The university of Edinburgh and the other fine academic institutions in Edinburgh hold much of the intellectual property for what could be a modern enlightenment in science, innovation and green technology, and that must be wholeheartedly supported by Government. The Chancellor’s announcement that he will cut 10,000 university places as part of his £6 billion of so-called efficiencies will do nothing to help our universities to flourish and our economy to grow. There will be a significant knock-on effect for universities in my constituency.

The royal observatory in Edinburgh South houses the UK’s national centre for the production of state-of-the- art astronomical technology. I recently visited it to see the people there making lenses for the most technologically advanced telescopes in the world. They are training them now on the Liberal Democrats to see if they can find anything left of the principles that they stood on in the election.

Edinburgh South also boasts the new Royal Infirmary of Edinburgh, a state-of-the-art teaching hospital built by Labour, and now the centrepiece of plans for the largest biomedical park in Europe. For 150 years, the Royal hospital for sick children has been caring for children in Edinburgh and beyond.

This week is Erskine week. Erskine has provided nursing and medical care for former members of our armed forces for over 100 years, rebuilding shattered lives, restoring dignity and providing first-class care to ex-servicemen and women, both young and old. The Erskine facilities in my constituency are well worth a visit.

I am fortunate to have been elected Member of Parliament for a constituency that boasts some of the best state schools in the country, with the most dedicated and dynamic head teachers and staff. Added to that, there is a plethora of faith and charity groups, which contribute so much to our community.

My constituents are well informed by the wonderful Edinburgh Evening News, a bastion of all that is truth in the Edinburgh journalistic community since 1873. I know that because one of their journalists wrote this paragraph for me.

Many of my constituents work in financial services—banking has been part of Edinburgh’s economic life for over 300 years. The devastation to the Edinburgh economy if our banks were left to collapse, as championed by the Chancellor of the Exchequer, would be incalculable. Time after time, issue after issue on the economy, the Tories called it wrong, and put my constituents at risk. The intervention by the Labour Government, led by my right hon. Friend the Member for Edinburgh South West (Mr Darling), laid the foundations for a worldwide economic turnaround that saved many thousands of jobs for people in my constituency while protecting their savings. The Conservatives have been in government only a matter of days, but we have seen a massive £6.2 billion cut—what they describe as efficiency savings.

Ultimately, this is not a real Tory-Lib Dem coalition; this is a personal relationship between the Prime Minister and his deputy. The coalition is held together by the unnatural empathy and their deep, deep comfort in each other’s personalities, politics and background: two peas from the same pod. In the 1980s, Margaret Thatcher claimed that the Liberal Prime Minster William Gladstone would have felt very much at home with the dominant ideology of the Conservative party. I am convinced that the Deputy Prime Minister would fit in very well, too.

I would like to conclude by paying tribute to my mother, who taught me the values that I hold dear. I was born and brought up on the Wester Hailes council estate in Edinburgh. When my father died suddenly at the age of 39 from a brain haemorrhage, my mother was left with my 13-year-old brother and me, aged just nine. She was written off by the Conservative Government of the day. My mother and many others like her who lived around us were left to fend for themselves, through no fault of their own, when they needed their Government most. I saw first-hand communities ripped apart to the resonance of cheap political soundbites. The first few weeks of this Conservative Government show that they have not changed, and I will fight tooth and nail to ensure that the communities I represent in Edinburgh South do not suffer the excesses of Tory ideology again. I owe that to them, and I certainly owe it to my mother.