International Trade and Geopolitics

Debate between John McDonnell and Richard Fuller

Thursday 20th April 2023 Commons Chamber

[Richard Fuller]

The hon. Gentleman tempts me, but let me answer his question in this way. The 2017 Labour party manifesto was not a hugely sensible document, but a second document was put together by the then shadow Chancellor, the right hon. Member for Hayes and Harlington (John McDonnell), in which he enumerated all the tax breaks that were given to different sectors of the economy, which amounted to an enormous sum. As one who can, I think, claim to be a low-tax Conservative, I suggest that those running a more efficient economy would get rid of almost all of them. They would say to those in, for instance, the carbon fuels sector, “You are on your own now. If you do not have enough money, go to the market and raise the money you need from your own shareholders or from other investors to grow your business.” We have had conversations about the level of debt—the right hon. Member for Hayes and Harlington is now present, so he can correct me if I am wrong. I read his document in 2017, and I thought it was an excellent analysis. One point that the Labour party made at the time of that election, about the need to look at tax breaks for large corporations and sections of the economy as a method of public spending, was spot on. We are not vigilant enough in that regard. My own free-market view is that the fairer the market, the lower the subsidy.

[John McDonnell (Hayes and Harlington) (Lab)]

I apologise, Madam Deputy Speaker. I was not going to engage in the debate, but I was passing and heard a reference to me—

[John McDonnell]

As generous and wise as ever, Madam Deputy Speaker.

To reinforce what the hon. Member for North East Bedfordshire (Richard Fuller) said, we did that piece of work because we wanted to review every tax relief. In opposition, that is impossible to do, but we would have done it in government. The reason was that we were discovering tax reliefs that had been introduced decades earlier that the Treasury had never reviewed to see whether the original purpose had been achieved or whether they should be amended. Example after example was found, and it was clear that the tax relief system was not working effectively or as it was originally planned.

[Richard Fuller]

I am grateful to the right hon. Gentleman for taking part in the debate. I do not think I agreed with anything else in the Labour party’s 2017 manifesto, but the point that he has just made is a point for the ages for whoever is in the Treasury.

In addition to my concern about taxpayers’ money, behind the big funding race between the EU and the US to put amounts of money at risk in a casino of green discovery is an open question about the trajectory of unit costs for the materials that will be required by those sectors that will assist us to achieve net zero. When others are rushing to do something, it is a natural human urge to rush to do it too. We can all remember the shortages of toilet paper at the start of covid, which was a shortage for no apparent reason. Because everyone else was buying loo paper, we all thought we should buy it. As we know, that created a surge in unit cost, which abated and—although I have not checked recently—the cost is now back down to a normal market price. As goes toilet paper—perhaps I should not use that phrase—so goes the unit cost for other items. A significant cost will be experienced by early adopters. My question is whether we would be better off participating in that surge in unit costs in an era of technological discovery, or keeping our money in our pocket until the unit costs come down once the successful discoveries have been made.

We should remember that there will always be opportunities for economic gain and financial success, even if the initial discoveries and the bulk of investment are elsewhere. There will always be international flows of trade. For example, in the 1940s and 1950s, most of the motor industry was in the United States, but in the 1970s the UK benefited because it needed to reshore to the UK. That will be the same in other sectors. Look at value-added: iPhones are made in developing countries, historically mostly in China, but most of the value added is in Apple’s design, and the UK has advantages in that area. We can be thoughtful about such areas, but I wanted to put on the record some questions for the Chair of the Select Committee who introduced this welcome debate.

I know that I have tested everyone’s patience with my opening remarks, so I will address another couple of points before allowing time for others. This issue tilts to the Indo-Pacific region, both through the trade arrangements and the infrastructure. The global review that the Government have done is welcome. Much like the hon. Member for Liverpool, Walton, who talked about the issues in Latin America, before getting involved in politics I spent a lot of time in the Philippines, Korea and Australia. It was clear that in those areas of the world, there is not only great opportunity for the United Kingdom, but a great recognition of the talents that we have and a great need for the various skills that we can provide in economics, defence and other areas.

When I hear politicians pooh-pooh the impact of CPTPP as a small percentage of GDP, I worry that they are missing the deeper point that it is a bigger connection. It is part of a globalisation of what the United Kingdom does. It is a recognition not that the UK is a big global superpower, but that it is seen by people around the world as having its place and having things to offer. We should look at this trade agreement as just the start of us pushing further into that part of the world in all the ways that we can.

I yearn for the day when we can do a similar deal across Africa. Trading with countries in Africa and opening up our markets to goods and services from Nigeria, Ghana, South Africa, Kenya and other growing economies is surely not only in our economic interests but in the interests of humanity. The greatest benefit to humanity in economic terms over my lifetime was made by Nixon’s visit to China and its redirection from Russia towards the west, and the consequent movement of hundreds of millions of people in China and surrounding areas into the global trading system. It has been a great sadness to me that the countries in the continent of Africa have not been part of that. For this generation of politicians over the next 10 or 20 years, I hope that we can look to play our small part in achieving that.

Stamp Duty Land Tax (Reduction) Bill

Debate between John McDonnell and Richard Fuller

2nd reading
Monday 24th October 2022 Commons Chamber

[John McDonnell]

Will the Minister look at the issue of the 100% offset that incorporated landlords now have against profits?

[Richard Fuller]

Of course I am happy to look at all suggestions, including the one the right hon. Gentleman has made.

This measure will mean that around 43% of transactions each year pay no stamp duty whatever, which will help to support the housing market. I say to both Opposition spokesmen—the hon. Members for Ealing North and for Hampstead and Kilburn—that as result of this measure first-time buyers in their constituencies who would not have qualified for zero stamp duty will now qualify, and Labour will today be voting against that. I would also say to the right hon. Member for Wolverhampton South East (Mr McFadden) and the hon. Member for Leeds West (Rachel Reeves), the shadow Chancellor, who are not in their places, that the average mover buying the average house in their constituencies would not have qualified for zero-rate stamp duty land tax before this measure, and Labour will again be voting against that tax cut today.

This measure will boost labour mobility, support hundreds of thousands of jobs and businesses, increase transactions to boost the property industry, and continue the Government’s record of supporting people, including younger people, into home ownership. For those reasons, I commend the Bill to the House.

Question put, That the Bill be now read a Second time.

Air Traffic Management and Unmanned Aircraft Bill [Lords]

Debate between John McDonnell and Richard Fuller

Report stage & 3rd reading
Monday 22nd March 2021 Commons Chamber

[John McDonnell]

I wish to speak to new clauses 1 and 2 and amendment 1, standing in my name. I will seek to be as brief as possible, Mr Deputy Speaker; with your permission, I will aim to speak for no more than 10 minutes. Over the years, I have tried to use every legislative or policy debate opportunity to place the issues of noise and emissions at the heart of every discussion in this House on the future of aviation policy. These amendments seek once again to do just that.

I think I am the only Member of the Commons who can claim to have attended every major planning public inquiry and court case relating to the expansion of Heathrow airport over the last nearly 50 years. Over the years, I have attended as an interested local resident, then as the local Greater London Council councillor, then as the Member of Parliament for the Heathrow area. In addition to the deeply felt worries of local residents about the demolition of their homes and villages, two issues have been the consistent basis of challenge in these inquiries and legal contests. They are the impact of noise, and the impact of emissions on the community in the immediate area, as well as across large areas of London and now more widely.

At the terminal 4 inquiry, there was general support for limited expansion of the airport, as long as there were conditions attached to any permission to expand in relation to noise. By the time of the terminal 5 inquiry, a great deal of that support had turned to opposition, as the noise agreements had proved so ineffective in guaranteeing people’s quiet enjoyment of their homes, gardens and open spaces. By that time, much more evidence had emerged about the effect of noise on health, and about air pollution as the cause of severe respiratory conditions, vascular problems and cancers. It was because of the environmental impact that the planning inspector recommended that there be no further expansion at Heathrow after terminal 5. Heathrow Airport wrote to me and my constituents saying that if it was granted terminal 5, it would not need or seek a third runway. Of course that was a lie, and within six months it was publicly lobbying for a third runway.

Subsequently, we have also grown aware of the role that emissions play in climate change. I find it hard to comprehend why, despite our facing the existential threat of a climate emergency; despite knowing that 40,000 people a year die from air pollution; and despite all that we now know about the health implications of noise and sleep impairment, consideration is still being given in Government to airport expansion. We need to ensure that all the aviation legislation we consider addresses the critical issues of noise and emissions, which is what these new clauses and amendments seek to do.

I am grateful to the Minister for writing to me explaining the Government’s attitude to my amendments. On a positive note, I see from this correspondence that although the Minister does not support my new clauses or amendments, he does not disagree with the intention behind them. I welcome his commitment to ensuring that the issues raised by them are addressed in any future review of air navigation guidance and noise policy.

Let me briefly run through the new clauses and amendments, and some questions in response to the Minister’s position. New clause 1 would place a statutory duty on the Civil Aviation Authority to reduce, minimise or mitigate significant adverse noise impacts of aviation. The Minister has argued in correspondence that applying a new general duty to all the CAA’s functions is not desirable because safety must remain the primary duty in the context of section 70(1) of the Transport Act 2000. The intention of the new clause is not to reduce safety as a priority, but rather to raise noise and emissions reductions up the priority order. It should be the duty of all public bodies to ensure that we are safe from noise, air pollution and climate change.

The Minister states that the CAA must take account of any guidance on environmental objectives given to it by the Secretary of State, and that is true. However, the effect of the legislation is to subordinate all the environmental matters to section 70(2)(a) and the duty

“to secure the most efficient use of airspace consistent with the safe operation of aircraft and the expeditious flow of air traffic”.

Noise and emissions are always reduced to being second-class citizens in this ranking order.

The Secretary of State has powers under section 78 of the Civil Aviation Act 1982 to limit numbers and types of craft active during the night period at Heathrow and the other airports designated under the Act, so one question that needs to be addressed now is whether this section should be amended to include limits on numbers and types of aircraft during the day as well.

The Minister referred in correspondence with me to the consultation on noise caps in the aviation strategy Green Paper, and said that noise reduction would be looked at again as we come through the pandemic. I welcome that, but the Green Paper applied to all airports other than Heathrow, and so does not provide communities under Heathrow flight paths with any certainty for the future. I would welcome it if the Minister considered amending the aviation national policy statement to ensure that a noise cap was considered in relation to Heathrow and potential expansion there.

The Minister has stated that noise restrictions should be placed on airports, and not, as in new clause 1, on the airspace around the airport. He argues that the latter would—I quote—“create a significant burden on the airspace change process and add great complexity to the day-to-day management of airspace.” That response unfortunately highlights my concern that enhancing capacity is prioritised over reducing the harm to overflown communities and the environment. In my view, airspace and airport capacity should be increased only subject to strict noise and emission reduction conditions. That is a role that the CAA should have a hand in playing. Giving permission to expand capacity on the basis of asserted benefits that cannot be translated into conditions, and whose delivery the regulator cannot monitor and enforce, is not consistent with the Government’s stated policy on noise or climate change.

New clause 2 would amend the CAA’s duties, as set out in the Transport Act 2000, to require it to achieve net zero emissions and reduce noise impacts. The Minister has asserted that the Government cannot support this amendment because the word “ensure” would make it difficult for the Civil Aviation Authority to accept any proposal that did not reduce emissions and aircraft noise, regardless of the overall benefits of the proposal. However, section 70(2) of the 2000 Act is intended to list all the factors that the Civil Aviation Authority must consider. None is supposed to have a greater weight than the others, and a variety of language is used for the different objectives—everything from “secure” to “satisfy” and “take account of”. Some hierarchy of responsibility seems to be emerging in the discussions about the role of the Civil Aviation Authority and what should be taken into account. I do not see why “ensure” would be any more problematic than, for example, “secure”. We need clarity about the role that the CAA can play in ensuring that we can move towards net zero emissions, because it plays an important role in tackling climate change by developing an environmental aviation strategy.

Amendment 1 would place a transparency duty on the Civil Aviation Authority to publish emissions, noise and health impact information. The Minister has said that assessments covering noise, health, local air quality and greenhouse gas impacts must be submitted by proposers along with any formal airspace change proposal, and he argues that they are subsequently published on the CAA website. My amendment would simply require this information to be published more clearly, alongside the proposed changes. That would help deepen community understanding of the proposals and the alternative options.

Last week, the Government announced kickstart funding for the airspace modernisation strategy. The Minister must ensure that local communities have a genuine voice in this process. It is vital that the redesign of airspace delivers mutually balanced outcomes for the industry and local communities alike. The Government should commit to publishing assessments of the noise and health impacts of concentrated flightpaths before any final strategy is signed off.

I thank the Minister for the courteous way in which he has responded to my amendments to the Bill in correspondence. He offered a meeting, which unfortunately, due to last-minute business in the House to which I was committed, did not take place. However, the issues we are addressing today go well beyond this legislation, so I hope he will agree to meet me and a few colleagues to take the discussion further, as this is so important to communities living close to airports—and, given the concerns we all have about climate change, all our constituents.

[Richard Fuller (North East Bedfordshire) (Con)]

It is a pleasure to follow the right hon. Member for Hayes and Harlington (John McDonnell), who speaks with great authority on this particular topic. I am also grateful, as he was, to the Minister for his kind consideration of the issues I have raised about the Bill as it has proceeded to this point.

I would like to speak to my amendments: new clause 4, which would seek to halt, or essentially cancel, and then start new consultations on airspace changes that are currently under way; and amendments 3 and 4, which speak to the requirement for the Minister and the reviews he proposes to take into account a financial assessment, and within that particularly to take account of the externalities comprising part of that financial assessment. With your leave, Mr Deputy Speaker, and that of the House, I would like to talk through each of those.

Economy and Jobs

Debate between John McDonnell and Richard Fuller

Monday 20th January 2020 Commons Chamber

[John McDonnell]

Quite simply. It is a good question, because we wanted to scrap the tax credits and put direct investment into R&D. Some of the very advisers the Government have called upon, such as Mariana Mazzucato, have been ripping apart some of those tax credits for inefficiency and ineffectiveness. We shared the objective, but we found a different and more effective route.

We have referred in the past to the differentiation between types of investment, and the example that we have used in previous debates is stark. Planned transport investment in London is 2.6 times higher per capita than in the north, so it is no wonder that rail infrastructure in the north has been falling apart. After a decade of decline, the Government at last seem to have at least acknowledged their mistake in refusing to invest in the regions—something we have been crying out for—but we will see what scale of investment is produced after the fine words.

However, this is not just about capital investment in infrastructure. There is also a desperate need for revenue investment in the social infrastructure of our regions and nations. It is interesting that many cities and towns in the north have borne the brunt of austerity. Seven out of the 10 cities with the largest cuts in the country are in the north-east, the north-west and Yorkshire. That came about not by some miracle, but as the result of deliberate Government policy.

Imitation, they say, is the highest form of flattery, so I suppose Labour should be flattered that the Government are now looking to rewrite the Treasury Green Book to reorient investment decisions towards the regions outside London and the south-east—an exercise that Labour undertook two years ago. I suppose we should also be flattered by the Government now following Labour in adopting a fiscal rule that enables them to take advantage of low interest rates to borrow, which we advocated at least four years ago.

[Richard Fuller (North East Bedfordshire) (Con)]

As we are in the habit of stealing clothes, as the right hon. Gentleman would present it, the Labour Party had its election manifesto and the costings—two documents that obviously have been consigned elsewhere—but the third document was about corporate tax breaks, so does he suggest that the Government should look at existing corporate tax breaks and reorient them to support investment in other regions?

[John McDonnell]

Again, Labour undertook work to look at exactly that. We looked at the regional impacts and at how tax breaks are distributed unequally around the country. There is an important and exciting piece of work to be done, and some of those issues were considered by the Kerslake review in 2017. There will be some element of consensus on how we can direct future investment, and we can build upon that in the long term, because if anything comes out of the lessons of the past 10 years, it is that we need a longer schedule than just a five-year parliamentary process for capital investment of that scale.

Returning to fiscal rules, the Government have now advocated a fiscal rule that largely follows Labour’s advice, but it is this Government’s third or fourth fiscal rule—I have lost count. Some of them have been adhered to—no, actually, looking back at it, none of them have actually been adhered to, which largely defeats the object of having fiscal rules. It will be interesting to see how long this one lasts and how far it is achieved. The problem is that, even if they use all the headroom that their new fiscal rule allows, they are only paying lip service to the need to invest at scale and for the long term. If we are to tackle the issues of poverty, regional inequality and, yes, climate change, the amount of new investment mooted so far by the Chancellor is nowhere near the scale needed to address the dilapidation of our infrastructure outside London, and it is certainly not at the scale needed if we are to tackle climate change. From what we have heard so far, the maximum amount of increased investment talked about by the Chancellor is less than today’s estimate of the cost of High Speed 2.

The Chancellor’s idea in his Financial Times interview, of splitting the Treasury and sending some of its officials to work in satellite offices outside London, is a pale imitation of Labour’s plans not just for regional offices but to move whole sections of the Treasury to the north, to move the Bank of England to Birmingham and, similarly, to locate a national investment bank outside London. If the Government are going to plagiarise Labour’s policies, they at least have a duty to do so competently.

What all these things have in common is a failure to tackle the root causes of the problems to which the Government pay lip service: the grotesque levels of inequality in income and wealth in our society; the concentration of wealth and power in the hands of a few; the ownership of the economy by an elite, with the vast majority of people locked out of decision making and having no say on how the economy works or on who it works for; and an economy increasingly serving the few, not the many. There is no sign that the Government recognise the root causes of the crisis we face, whether social or environmental—at least, there is no sign of them doing anything about it.

Of course, all these investment proposals will count for very little if the Government fail to secure a post-Brexit trade deal with our EU partners that protects jobs. On that score, it is hardly surprising that businesses’ fears rose when the Chancellor, in his weekend interview, cavalierly threatened to throw our manufacturing sector under a bus, as he rejected the calls from business for alignment with the EU to ensure his own Government’s long-standing promise of frictionless trade. He casually said:

“There will be an impact on business one way or the other, some will benefit, some won’t.”

Let us be clear that if frictionless trade is not achieved in a future trade deal or, worse, if there is no deal, the bulk of our manufacturing sector, including cars, aerospace, pharmaceuticals and food and drink, will be in the “some won’t” category. One recent estimate identified that, in the past decade, we have already lost 600,000 manufacturing jobs.

Today, business leaders and unions have combined to warn the Chancellor that his promise to split from the EU will cost billions and damage UK manufacturing. Bizarrely, he blames the manufacturing companies for not having already prepared for any regulatory divergence coming out of any future trade deal, when no one knows what the deal or the rules will be. There is an element of Samuel Beckett or Kafka here, I am not sure which.

We hear that the Chancellor is the only Minister to be secure in his job ahead of the possible “night of the long knives” reshuffle in February.