Finance Bill

Jonathan Edwards Excerpts

Monday 1st July 2013 Commons Chamber

[Geraint Davies]

In essence this debate is about political choices and not just the technical efficiencies of marginal rates of tax. When this Government took over from Labour in 2010, two thirds of the deficit had been created by the banking community and a third by pump-priming in response to the financial tsunami after a history of sustained growth under the Labour Government. The new Government decided to focus not on growth, but on cuts to get down the deficit, which was a fundamental error that has led to a flatlining economy. They then had to decide who should bear the brunt in order to pay down the deficit—80% in cuts and 20% in taxes—and the answer that the Conservatives and the Liberal Democrats came up with was that it should be the poorest who were hit hardest.

The recent spending review and infrastructure plans replayed the same Tory agenda: the cuts will hit hardest in the poorest areas, including Wales and the north, and 80% of the investment in infrastructure for growth will benefit London and the south-east in order to shore up the Tory and coalition votes. This new clause is about making a move in the other direction so that the very rich make a slightly greater contribution, which will be redistributed to people in the middle and at the lower end of the income scale.

[Jonathan Edwards (Carmarthen East and Dinefwr) (PC)]

The hon. Gentleman may have read an Institute of Welsh Affairs blog today by Gerry Holtham, the well-respected Welsh economist, who was scathing in his criticism of the hon. Gentleman’s party for adopting Tory austerity policies. How concerned is the hon. Gentleman, on the back of his criticisms of the UK Government’s austerity policies, about the fact that his party has adopted the very same strategy?

[Geraint Davies]

A moment ago I talked about Arab oil sheiks and now I am going to talk about Welsh milk shakes. On a serious note, what the Labour party has said is that when we take over in 2015, should the people of Britain give us their confidence, as I hope they will, we will inherit—this is self-evidently true—the current Government’s spending plans for 2015-16, so we will carry them out. As we make progress, I hope that the focus will switch to growth more than cuts, as it did after we inherited the Conservative party’s spending plans when we took over in 1997. We ran with those plans for a year and then we had consistent growth. The economy grew by 40% from 1997 to 2008 before the financial tsunami caused by sub-prime debt. I imagine that we will do the same in 2015. We offer no apology that we will have fiscal discipline alongside a focus on growth and that we will get people into jobs to pay down the debt. We will also change the composition of cuts to the rich and poor in certain areas.

--- Later in debate ---

[Jonathan Edwards]

It has been a number of weeks since we debated the provision in earlier stages of the Bill. My concern about the mansion tax policy, which I support in principle, is whether agricultural land would be included as a part of the estate that would be taxed. Does the hon. Lady agree that we must ensure that farmers are protected?

[Geraint Davies]

But only Welsh farmers—[Interruption.]

--- Later in debate ---

[Chris Evans]

I am sorry, Mr Deputy Speaker. Much as I think the Liberal Democrats believe that the world revolves around them—[Interruption.]

[Jonathan Edwards]

Let me try to help the hon. Gentleman out. He will be aware that in Wales we had a council tax revaluation for domestic properties in 2005. Does he think that a similar evaluation for England might achieve the objectives of a mansion tax and probably raise far more?

[Chris Evans]

I find myself in shock, but I agree with a member of the Welsh nationalist party. There is some merit in that idea, which is something we can look at.

This new clause presents an opportunity for the Conservatives to reverse the inequality that I have talked about—the two Britains that are starting to emerge in our society. If we agree with a mansion tax, we will be able to fund a tax cut for millions of people. We support the increase in personal allowances, but the reintroduction of the 10p tax would mean that work pays once again. I know that the Tories will say that we abolished it. We must be big enough in politics to admit that we got something wrong, and we got it wrong when we abolished the 10p tax rate, which would give the lowest in society an opportunity to go out to work and make work pay. This is what I mean when I talk about how difficult it is to get back to work once someone is out of it. We can do this today.

--- Later in debate ---

[John Mann]

I do so wish I had been offered the chance to sit on the Finance Bill Committee in order, day after day, to be able to get into the details and hold the Government more to account, although sadly next year ends with a 4 and I am unable in any year that ends with a 4 to sit on a Finance Bill Committee.

[Jonathan Edwards]

Following the G8 summit, the Prime Minister said that the provisions of the summit would raise about £1 billion for the Exchequer, which leaves about £29 billion unaccounted for, according to HMRC. Has the hon. Gentleman’s Front-Bench team informed him how much new clause 12 would raise for the Exchequer?

[John Mann]

I am sure that it will be a damn sight more than that.