(15Â years, 2Â months ago)
Commons Chamber
Natascha Engel (North East Derbyshire) (Lab)
I beg to move,
That this House has considered matters to be raised before the forthcoming adjournment.
Thank you for calling me, Mr Deputy Speaker; I thought that this moment would never arrive. A total of 66 Members want to participate in the debate, including our newest Memberâmy hon. Friend the Member for Inverclyde (Mr McKenzie)âwho is hoping to make his maiden speech. [Hon. Members: âHear, hear.â] It is unfortunate therefore that two Government statements, important though they both were, have taken almost two hours out of Back Benchersâ time. To set an example of brevity and to prepare us for all the constituency carnivals and fairs at which we will be spending most of our time during the recess, I hereby declare the debate open.
We are now coming to a maiden speech, and I remind hon. Members not to intervene on it.
Business, innovation and skills
Order. Time is pressing, so I am introducing a four-minute limit.
Let me first pay tribute to the hon. Member for Inverclyde (Mr McKenzie) and commend him on his maiden speech. It was good to hear from a Member who, like me, was born in the constituency that he represents. Given his description of his constituencyâs stunning natural beauty, it clearly has similarities with Cleethorpes.
I will be as brief as possible, Mr Deputy Speaker. The economy of northern Lincolnshire could be described as âstutteringâ at the moment. It has taken many knocks, but it has the potential of a new dawn from the renewables sector. Despite its name, Cleethorpes is a highly industrialised constituency, containing Immingham docks and much of the Humber bank. Associated British Ports operates the Grimsby-Immingham docks complex, which is the largest in the country. However, expansion and regeneration are being held back by transport infrastructure that is in urgent need of improvement.
The northernmost town in my constituency is Barton-upon-Humber, which is just 20 minutesâ drive from the centre of Hull, but Humber bridge tolls are a tax on jobs. The free movement of labour is restricted. It is totally unrealistic to expect someone in Barton to accept a job in Hull paying the minimum wage, and even more unrealistic to expect people to take part-time work.
The hopes of all local people are resting on the current Treasury-led review, which is due to report in November. The business community and local people are encouraged by the work of the review team, and by Ministersâ determination to deliver a sustainable solution that may well be based on a social enterprise model. It is essential to have lower tolls in the relatively near future; we do not want promises that may never materialise.
In the East Halton and Killingholme area of my constituency sits the site of the proposed south Humber gateway developmentâin which Able UK Ltd has invested ÂŁ100 millionâalongside the largest undeveloped deep-water channel in the UK. It is thought that ÂŁ1.5 billion of private sector development may follow, much of it in the renewable sector. That would offer an opportunity to develop a cluster for the sector, involving the construction of wind turbines. The ports of Immingham and Grimsby are ideally located for the service and supply of offshore wind farmsâand offshore is where we want them to be, rather than in the countryside.
A major problem with the gateway development is the bottleneck in the planning process. It has been caused by a number of Government agencies, notably Natural England. Such agencies, including the Environment Agency, must appreciate that planning issues are commercial issues, and that they must move at the same speed as the demands of investors and developers. The current leisurely pace is not acceptable.
Northern Lincolnshire has taken a bit of a body blow in recent times, with the announcement of 1,200 job losses. Many of those jobs were done by my constituents at the Tata Steel works in Scunthorpe. It is encouraging that the Secretary of State for Business, Innovation and Skills will be visiting the steelworks tomorrow. It is also encouraging that the Prime Minister has taken an interest, and we eagerly await a meeting with him. I hope, however, that Ministers will be able to give us some confidence that not only the Secretary of State and the Prime Minister, but the Government as a whole, will support the local infrastructure. The highways, particularly the A160 route to Immingham, urgently need an upgrade, and it is desperately important for that to be included in the first phase of the next building programme. I hope that the Minister will be able to assure me that he will press our case with transport Ministers at the earliest opportunity.
The area is building itself up for the renewables sector. There are great training prospects at the Grimsby institute, Lincoln university and other institutionsâ
(15Â years, 2Â months ago)
Commons ChamberOn a point of order, Mr Deputy Speaker. I just need your guidance as I have a particular general point that I wanted to make. It pertains to clause 13 but I would normally have made it on Second Reading. Will you immediately call me to order if I seek to raise it?
I think we will need to listen to what the hon. Gentleman has to say.
The stand part debate on clause 1 will be quite broad.
Paul Flynn (Newport West) (Lab)
May I raise an issue in support of the points that many people have made about the role of the monarchy outside the well-known ceremonial roleâthe crucial role of Head of State? This matter gets little or no attention. The Conservative historian, Robert Rhodes James, a former colleague of ours, gave a lecture in Cambridge, which was largely ignored, about a time when the role of the monarchy might have been absolutely crucial in our history. It was at the time when the skids were under Margaret Thatcher and everyone wanted her to go and tearful members of the Cabinet were coming to No. 10 Downing Street asking her to go. Robert Rhodes James, who was a very distinguished and respected Member of the House at that time, said that the Conservative party suddenly became terrified because there was a possibility that Mrs Thatcher might call a general election and she could not have been stopped by the Conservative party, the Cabinet or the House of Commons.
Order. We are talking about the allocation of time. I know that history is part of time but I am not sure it is relevant to the Bill.
Paul Flynn
This point is crucial to why we need extra time. This issue is virtually unknown, but it is important because the only person who could then have stopped Margaret Thatcher from acting in her own interests rather than in the national interests, as she might well have been elected, was the Queen. This is a question about the personality of the monarch, because the strong personality of the monarch might have been vital then. This matter is so important that we should have a greater allocation of time and a full debate.
(15Â years, 2Â months ago)
Commons ChamberThe Committee will have seen from the provisional selection list that I have selected a number of manuscript amendments tabled by the Minister this morning. I would not as a rule select such manuscript amendments without good reason. I can see no reason why they were not tabled in the proper time, but in the unusual circumstances of the Bill, I am prepared to select them.
Clause 1
The Sovereign Grant
Paul Flynn
I do not think it is fair to blame the monarch for the way in which the measures were rushed into the House. Normally, if there is a change to business, a business statement is made to the House as early as possible; I cannot remember one being made at all in this case. Most hon. Members had other pressing business on that day, and only those who were here in the morning had any idea that the measures were going ahead.
Order. I have sympathy for the hon. Gentleman, but we have just decided on the process that we are following; we now have to stick with where we are.
Mr Osborne
All I would say is that I have followed the advice of the House authorities throughout. The procedure has been unusual. People have said that this is the most important change since 1760, but of course in the early 1970s the House made some significant changes, so we are partly following procedures laid down then.
Let me get on to the substance of the Bill. Everyone has now had a chance to read it. Amendments have been tabled by Opposition Back Benchers, Opposition Front Benchers, and Government Front Benchers, and I shall say something about that. We have basically accepted some of the amendments that the shadow Chancellor and his team tabled, and I will explain why later.
I will begin, as we should do on such occasions, by putting on the record the Houseâs gratitude for the service that the Queen has provided to our country over many decades. Indeed, her time on the throne recently exceeded that of George III and she now has Queen Victoria in her sights. The recent visit by the Duke and Duchess of Cambridge to Canada and California reminded us that other members of the royal family also make an enormous contribution. As I said a couple of weeks agoâit is a view shared by nearly everyone in the Houseâwe want a system that provides the Queen with dignity and allows her and her family to do their official jobs, which in her case is Head of State, but to do so in a way that is accountable, transparent and delivers value for money for the taxpayer.
The current system of financial support has some very serious shortcomings. It is very inflexible, so money saved in one spending area such as travel cannot be spent in another area such as the maintenance of royal palaces. It is not very transparent, as the National Audit Office is not the auditor of royal finances; that is done by the permanent secretary to the Treasury. I pay tribute to my hon. Friend the Member for Gainsborough (Mr Leigh), the former Chair of the Public Accounts Committee, for the work it did in recent years to look at value for money studies on particular areas of royal financing, which has been quite opaque and which this Bill seeks to change. Critically, the current system has relied on a reserve of public money that was built up over the past 20 years and is now depleted. That was a crucial part of the royal householdâs annual funding for the continuance of their official duties. That money has run out, so in other words the system is broken and we have to fix it.
(15Â years, 2Â months ago)
Commons ChamberI beg to move amendment 10, page 1, line 9, at end insertâ
â(3) By 31 March 2012 the Office of Budget Responsibility, in consultation with HMRC, will report to Parliament on the revenue of the 50 per cent. rate of income tax and its impact on the UK economy.â.
With this it will be convenient to discuss the following:
Amendment 14, page 1, line 9, at end insertâ
â(3) A report on the impact of the current rates of income tax on inequality in the United Kingdom, also taking into consideration all other direct and indirect taxes including duties and excises, council taxes and mandatory charges for the use of cars and televisions and making specific reference to the overall tax rate of taxpayers grouped by decile in the United Kingdom and by each individual constituent country shall be prepared by HM Treasury and laid before the House of Commons not later than 1 December 2011.â.
Amendment 30, page 1, line 9, at end insertâ
â(3) All public sector employees whose earned income does not exceed ÂŁ21,000 shall be entitled to a ÂŁ250 reduction in tax liability for the tax year 2011-12.â.
I do not intend to detain the House for long on these amendments, although they are important. I particularly welcome amendment 30, which stands in the name of my hon. Friend the Member for Hayes and Harlington (John McDonnell) and my right hon. Friend the Member for Birkenhead (Mr Field), and which I will touch on briefly. Clause 1 deals with rates of taxation and, if approved, will set the rates for the next financial year at 20%, 40% and a special rate of 50%. Amendment 10, which is simple and straightforward, has been tabled by the shadow Treasury team because we want to shed a little light on how the Government will report on their future plans for the 50% rate of tax.
We already know certain key facts. We know that the Chancellor has asked HMRC to collect tax receipts for this financial year and that he has assessed the revenue levels of the 50% rate for this year. In Committee, the Exchequer Secretary said:
âThe Chancellorâs Budget statement to the House on 23 March simply highlighted the fact that he has asked Her Majestyâs Revenue and Customs, as part of that ongoing work, to see how much the additional rate actually raises. HMRC will look at all the available evidence about the impact of the 50% rate, including data from the 2010-11 self-assessment returns, which will become available next year.âââ[Official Report, Finance (No. 3) Public Bill Committee, 10 May 2011; c. 22.]
My concern, which I will put directly on the table, is that the Government have already prejudiced any decision on the 50p rate of tax by stating clearly that they believe it will do lasting damage to the economy. We want further explanation of the methodology that they will use to consider the 50p tax rate for future Budgets, and I think that the best organisation to do that is the Office for Budget Responsibility. The Government set up the OBR and gave it a number of key roles, one of which I have helpfully drawn from its own website. Under the heading âWhat we doâ, it states:
âWe scrutinise the Treasuryâs costing of Budget measures: During the run-up to Budgets and other policy statements, we subject the Governmentâs draft costings of tax and spending measures to detailed challenge and scrutiny.â
All the amendment would do is formally recognise that role in relation to the Governmentâs forthcoming review of the 50p additional rate.
The Chancellor has said to the House of Commons, the public and anyone who will listen that he sees this as a âtemporary measureâ and that it will do âlasting damageâ to the economy. He has signalled that he will abolish the 50p rate as soon as he can, in line with Conservative thinking before the election. However, the timing remains uncertain. I believe that the Chancellor has pre-empted the review. When HMRC undertakes the review, it will do so on the assumption that at some time around 2013 the Chancellor of the Exchequer will abolish the rate on incomes above ÂŁ150,000.
(15Â years, 2Â months ago)
Commons ChamberOrder. The right hon. Gentleman is in danger of straying intoâ
No, I will finish. Individual names are being attached to what is being said, and that is not what we should be doing. This is a general debate on the civil list, and we should not refer to individual members of the royal family or to individual amounts spent.
Mr MacShane
There, to some extent, we have it. I accept fully your rulingâ
Order. I will go on to the next speaker if the right hon. Gentleman does not accept it.
Mr MacShane
I said that I accept your ruling fully, Mr Deputy Speaker, and I will not say another word, save thatâ[Laughter.] If it is in order, Mr Deputy Speaker, I should like to say that it is not right for this debate to take place in the Daily Mail, The Daily Telegraph and The Independent but not on the Floor of the House. That is all.
Order. There are clear rules for this House that we have to abide by. The right hon. Gentleman might not like it, but that is the case.
Mr MacShane
I actually believe that a plane should be made available for the use of senior Government Ministers, including the PM. He had to scrounge a lift from Prague to Brussels with the Czech President the other day. He got something out of it, but frankly, every senior Minister in most democracies has that mode of transport available to them. Our planes are continually available to any member of the royal family, while elected Ministers come second.
We then have the problem of explaining why the present monarch and the next one are such giant landowners. Is that an issue that we might be able to debate, Mr Deputy Speaker?
Of course we all enjoyed the royal wedding celebration this year and we will enjoy the diamond jubilee next year. Roman emperors promised their subjects panem et circenses: the current Government are doing their best to reduce the quota of panem with their cuts and cruelties imposed on the poor and handicapped, but they are increasing the availability of circenses through the royal shows.
I do not believe that there is any kind of republican mood in the country. It was interesting to hear the oleaginous loyalty, if I may put it that way, expressed by my hon. Friend the Member for Newport West (Paul Flynn), who had a tremendous enthusiasm for the monarchy, which has surprised many of us. I remember the silver jubilee in Rotherham in 1978, when I am told that 41,000 Union Jack flags were sold in the socialist republic of South Yorkshire.
If we look at the European Union, we see that the states that are monarchiesâSweden, Denmark, the Netherlands and even, with all its troubles, Spainâenjoy less partisan and less conflictual politics. When it comes to growth, distribution and a fair social settlement since the second world war, we find that the EUâs monarchies generally have a much better record than the EUâs republics. The royal families, however, are also much cheaper there. In Spain, with its King, Queen and wonderful royal palace where I had the privilege and honour of having dinner with the Crown Prince of the Asturias and the lovely Princessâand Prince Charlesâa few weeks agoâ [Interruption.] The food was free, but I paid for my own air fare. The total cost of the whole Spanish monarch is âŹ8.4 million, while the Queen of the Netherlands gets by on âŹ828,000.
I ask only that we do some comparative analysis before simply continuing with an arrangement that, even with the Chancellorâs proposed modernisations, remains deeply anachronistic.
(15Â years, 3Â months ago)
Commons ChamberI beg to move, That the clause be read a Second time.
With this it will be convenient to discuss the following:
New clause 2âEligible medical insurance contractsâ
â(1) This section has effect to determine whether a contract is at a particular time (the relevant time) an eligible contract for the purposes of section [Medical insurance (pensioner tax relief)].
(2) A contract is an eligible contract at the relevant time ifâ
(a) it was entered into by an insurer who at the time it was entered into was a qualifying insurer and was approved by the Commissioners for the purposes of this section,
(b) the period of insurance under the contract does not exceed one year (commencing with the date it was entered into),
(c) the contract is not connected with any other contract at the relevant time and has not been connected with any other contract at any time since it was entered into,
(d) no benefit has been provided by virtue of the contract other than an approved benefit, and
(e) the contract meets one or more of the three conditions set out below.
(3) The first condition is that the contract is certified by the Commissioners under section [Certification of contracts] at the relevant time.
(4) The second condition is that, at the time the contract was entered into, it conformed with a standard form certified by the Commissioners as a standard form of eligible contract.
(5) The third condition is that, at the time the contract was entered into, it conformed with a form varying from a standard form so certified in no other respect than by making additionsâ
(a) which were (at the time the contract was entered into) certified by the Commissioners as compatible with an eligible contract when made to standard form, and
(b) which (at that time) satisfied any conditions subject to which the additions were so certified.
(6) Where a contract is varied, and the relevant time falls after the time the variation takes effect, subsections (1) to (5) above shall have effect as if âentered intoâ read âvariedâ in each place where it occurs in subsections (4) and (5) above.
(7) For the purposes of this section a contract is connected with another contract at any time ifâ
(a) they are simultaneously in force at that time,
(b) either of them was entered into with reference to the other, or with a view to enabling the other to be entered into on particular terms, or with a view to facilitating the other being entered into on particular terms, and
(c) the terms on which either of them was entered into would have been significantly less favourable to the insured if the other had not been entered into.
(8) For the purposes of this section each of the following is a qualifying insurerâ
(a) an insurer lawfully carrying on in the United Kingdom business relating to insurance;
(b) an insurer not carrying on business in the United Kingdom but carrying on business in another member State and being either a national of a member State or a company or partnership formed under the law of any part of the United Kingdom or another member State and having its registered office, central administration or principal place of business in a member State.
(9) For the purposes of this section a benefit is an approved benefit if it is provided in pursuance of a right of a description mentioned in section [Certification of contracts] (3)(a).â.
New clause 3âCertification of contractsâ
â(1) The Commissioners shall certify a contract under this section if it satisfies the conditions set out in subsection (3) below; and the certification shall be expressed to take effect from the time the conditions are satisfied, and shall take effect accordingly.
(2) The Commissioners shall revoke a certification of a contract under this section if it comes to their notice that the contract has ceased to satisfy the conditions set out in subsection (3) below; and the revocation shall be expressed to take effect from the time the conditions ceased to be satisfied, and shall take effect accordingly.
(3) The conditions referred to above are thatâ
(a) the contract either provides indemnity in respect of all or any of the costs of all or any of the treatments, medical services and other matters for the time being specified in regulations made by the Treasury, or in addition to providing indemnity of that description provides cash benefits falling within rules for the time being so specified,
(b) the contract does not confer any right other than such a right as is mentioned in paragraph (a) above or is for the time being specified in regulations made by the Treasury,
(c) the premium under the contract is in the Commissionersâ opinion reasonable, and
(d) the contract satisfies such other requirements as are for the time being specified in regulations made by the Treasury.
(4) The certification of a contract by the Commissioners under this section shall cease to have effect if the contract is varied; but this is without prejudice to the application of the preceding provisions of this section to the contract as varied.
(5) Where the Commissioners refuse to certify a contract under this section, or they revoke a certification, an appeal may be made to the relevant Tribunal byâ
(a) the insurer, or
(b) any person who (if the policy were certified) would be entitled to relief under section 1 above.
(6) Where a contract is certified under this section, or a certification is revoked or otherwise ceases to have effect, any adjustments resulting from the certification or from its revocation or ceasing to have effect shall be made.
(7) Subsection (6) above applies where a certification or revocation takes place on appeal as it applies in the case of any other certification or revocation.
(8) In this section the reference to a premium, in relation to a contract of insurance, is to any amount payable under the contract to the insurer.â.
New clause 4âMedical insurance: supplementaryâ
â(1) The Commissioners may by regulationsâ
(a) provide that a claim under section [Medical insurance (pensioner tax relief)] (3) or (6)(b) shall be made in such form and manner, shall be made at such time, and shall be accompanied by such documents, as may be prescribed;
(b) make provision, in relation to payments in respect of which a person is entitled to relief under section [Medical insurance (pensioner tax relief)], for the giving by insurers in such circumstances as may be prescribed of certificates of payment in such form as may be prescribed to such persons as may be prescribed;
(c) provide that a person who provides (or has at any time provided) insurance under contracts of private medical insurance shall comply with any notice which is served on him by the Commissioners and which requires him within a prescribed period to make available for the Commissioners inspection documents (of a prescribed kind) relating to such contracts;
(d) provide that persons of such a description as may be prescribed shall, within a prescribed period of being required to do so by the Commissioners, furnish to the Commissioners information (of a prescribed kind) about contracts of private medical insurance;
(e) make provision with respect to the approval of insurers for the purposes of section [Eligible medical insurance contracts] and the withdrawal of approval for the purposes of that section;
(f) make provision for and with respect to appeals against decisions of the Commissioners with respect to the giving or withdrawal of approval of insurers for the purposes of section [Eligible medical insurance contracts];
(g) make provision with resepect to the certification by the Commissioners of standard forms of eligible contract and variations from standard forms of eligible contract certified by them;
(h) make provision for and with respect to appeals against decisions of the Commissioners with respect to the certification of standard forms of eligible contract or variations from standard forms of eligible contract certified by them;
(i) provide that certification, or the revocation of a certification, under section [Certification of contracts] shall be carried out in such form and manner as may be prescribed;
(j) make provision with respect to appeals against decisions of the Commissioners with respect to certification or the revocation of certification under section [Certification of contracts];
(k) make provision generally as to administration in connection with sections [Medical insurance (pensioner tax relief)] to [Certification of contracts].
(2) In subsection (1) aboveâ
âeligible contractâ has the meaning given by section [Eligible medical insurance contracts], and
âprescribedâ means prescribed by or, in relation to form, under the regulations.â.
The new clauses would provide tax relief on medical insurance premiums for people above a certain age. âPensionersâ might be a better description of them. As a very part-time dentist, I must declare a potential interest, but I had better declare a further potential interest, as birthdays keep relentlessly coming upon meâand the rest of us.
As in much of the south-east, life expectancy in Surrey is somewhat higher than the England mean. The average life expectancy in England is about 78 for males and 82 for females, while in Surrey the figures are about 82 and 86 respectively. Moreover, the proportion of those aged 65 and over in my constituency is about one in five, or 20%. It is obvious to me, as one with a professional interest in health and as an observer of my constituentsâ health, that that longevity brings with it a higher demand for health care and imposes large demands on health services, especially cardiac, carcinoma and orthopaedic services. A planeload of Surrey Saga tourists would really set the airport metal detectors buzzing as the hip and knee replacements proceeded towards take-off.
The Mole Valley constituency is served by three good national health service hospitals: East Surrey hospital, Royal Surrey County hospital at Guildford, and Epsom hospital. Those hospitals have expanded in certain health areas to meet the increasing demand for treatment from the elderly, the best example being Epsom, which has a special orthopaedic unit where more than 3,000 hip and knee replacement operations are carried out annually, almost entirely on elderly people from surrounding areas such as Mole Valley. As a result of those medical problems there has been a call for an enhanced and enlarged cardiac unit at Epsom as part of the retention and refurbishment of that much-loved hospital. I have given those two examples to illustrate the increasing demand for national health service care from, predominantly, those aged over 65. That increasing demand is not specific to Mole Valley or even Surrey, but is, to a greater or lesser degree, nationwide among that age group.
My older constituents are also served by private hospital services. Some are relatively local and some are in London, but there is choice for patients. Approximately 12.5% of the United Kingdom population are currently covered by private health insurance, and about 70% of that cover is corporate while about 30% is individual. On retirement, many may wish to take over their corporate private health insurance, but the personal cost becomes a heavy factor. Additionally, many of those who fund their health insurance personally may not feel able to do so when a regular personal income is just a pension or savings. That means that, just as their need for health care is likely to increase, those individuals turn to the national health service and absorb facilities and costs that they would not use if they could be persuaded to retain or take out private health insurance and use the private sector.
Before March 1997, when tax relief was available to those over 60, it was estimated that tax relief was paid in respect of 400,000 contracts to cover about 600,000 individuals.
Charlie Elphicke
I respectfully put it to the right hon. Gentleman that our priority is not to bung ÂŁ200 million at people, as he describes it, but to see real increases in NHS spending as against the cuts that were in the last Budget of the Government whom he long supported.
Order. I let the hon. Gentlemanâs previous question go, but he is drifting way off the mark. This debate is about medical insurance.
Frank Dobson
Let me return to the point. The proposition before us is to divert ÂŁ200 million of taxpayersâ money to a group of pensionersânot to the national health service, or even to the private health care sector, but to those particular pensioners. I cannot believe that many people in this country, at this moment, believe that that is the first priority of anyone sensibleâit is certainly not my priorityâbut that is what we are being asked to say by those who want us to vote for this new clause.
I can remember the claims that were made when the old scheme was introduced. Despite that, nobody was able to adduce any evidence that it added to the number of pensioners who took out health insurance or stayed as pensioners who had health insurance. When it was abolished, the predictions from the national association of scaremongers, led by Bupa and others, created the impression that the whole system would collapse, that hardly anybody would keep using private health insurance, and that legions of the formerly insured would be pouring into every hospital, clinic and doctorâs surgery. That did not happen. The main function of the scheme was to put a few bob in the pockets and handbags of the better-off pensioners, and that is what it did. It had virtually no impact whatever on health care either in the national health service or in the private sector, and I suspect that the situation would be similar today.
If we have ÂŁ200 million to spareâapparently we doâand we want to put it into health care, I would be very happy to see some of it go into my local hospitals so that they were not laying off nurses and doctors and other staff in the next couple of years while having to put up with the ridiculous marketising shambles that the Health Secretary has wished on the country. In case it has not been clear, I am opposed to this proposition and, given the opportunity, will vote against it.
Mark Reckless (Rochester and Strood) (Con)
On that issue, there is clearly a very large deficit, which we inherited from the hon. Gentlemanâs Government. On funding for this proposal, we have seen a 74% increase in our net contribution to the EU, which many Government Members would not like to see paid. The Financial Secretary to the Treasury has made very substantial savings by keeping us out of the Greek bail-outâ
Order. I do not think that we will be tempted down that route. We will stick to insurance.
Thomas Docherty
The hon. Member for Rochester and Strood (Mark Reckless) is always tempting. I suspect that you would rule me out of order, Mr Deputy Speaker, if I pointed out that it was this Prime Minister who went to the European Council and failed to live up to his promises. Therefore, let me move back to the substantive debate, which is being so ably chaired.
This proposal is a Trojan horse. Government Members tried hard to cover up their anti-health service rhetoric, but every now and again it seeped out in their speeches. The national health service is an institution that Labour Members are proud of. It is the greatest achievement in 100 years of the Labour movement. It has transformed our countryâs health. As you know, Mr Deputy Speaker, I am doing an Open university degree in history. [Interruption.] I am asked where I find the time. I have a great wingman in my parliamentary duties. I am currently studying a module on the history of medicine from 1500 to 1930. It is fascinating to see that the pre-war health system that was available to the vast majority of people did not compare one iota to the achievement of the 1945 Labour Government. It was fascinating to hear the disdain of Government Members for the national health service. They are attempting to allow privatisation through the back door and to undermine the national health service. I look forward to hearing what the Minister has to say and whether he agrees with his own colleagues on the issue.
Diolch yn fawr, Mr Speaker. I had an hour-long speech prepared for this debate, but as it is going well past my bedtime, I will try to keep my remarks as short as possible.
I move this new clause with a sense of dĂŠjĂ vu, as only last July I closed a Finance Bill debate on an amendment tabled by my hon. Friend the Member for Dundee East (Stewart Hosie) that aimed to overturn the decision in the emergency Budget to raise VAT to 20% from January this year. Many of the arguments I made then remain relevant, but I will resist the temptation to air the same speech twice. Interestingly, that debate [Interruption]â
Order. Too many conversations are going on in the Chamber, and I am sure that everybody wants to hear the hon. Gentleman.
Thank you very much, Mr Deputy Speaker.
Interestingly, when the House divided on that amendments the Labour party abstained. Since then, it seems that the official Oppositionâs main critique of the UK Governmentâs economic policy has been based on the Treasuryâs VAT policy. I hope that when we divide later the Labour Front-Bench team will set aside its usual partisan approach to votes in this place and will walk through the Lobby with us. As I see the shadow Minister, the right hon. Member for Delyn (Mr Hanson), grinning, I hope that that will be the case.
In the 2010 general election, Plaid Cymru campaigned against a VAT increaseâunlike the Liberal Democrats, who had their tax bombshell poster, we meant it. That is why we tabled an amendment to prevent the increase last year and why we have done the same again this year. Last year, I said that there was both a social and economic reason why the increase in VAT was a bad idea, and I hope to concentrate on those reasons during my speech. We are against the ideological cuts and the rush to achieve a zero deficit within one parliamentary term with the net result of hundreds of thousands of lost jobs and unimaginable pain across our communities. We have consistently expressed our concern at the possibility of what the former Monetary Policy Committee member, David Blanchflower, called a âdeath spiralâ, whereby cuts in expenditure become cuts in receipts.
A countryâs economy is not like a family budget. Although it is good public relations, making misleading references of this sort is a very dangerous game for the UK Government to continue to play. In the case of the state there is a direct link between expenditure and income. Indeed, an overt reduction in expenditure can lead to a reduction in income and an increase in the deficit. Some would argue that we are in that situation already, even before the real cuts start to bite.
The state cannot cut its expenditure and assume that its income will remain constant. We are talking about intrinsic fine balances, which is why it always makes more sense for a state to change its expenditure levels modestly, rather than go cold turkey, as is favoured by the current Government. Four main elements drive economic growth: public sector expenditure; exports; private investment; and the key element as far as todayâs debate on VAT is concerned, which is household spending.
VAT is, in essence, a tax on consumption. Economic growth in the Labour years was largely driven by consumer spending, resulting in a situation whereby personal debt levels in the UK have rocketed to an unsustainable 100% of gross value added, at ÂŁ1.4 trillion.
I shall speak to new clause 10, but before I do so, may I remind the hon. Member for Redcar (Ian Swales) that he fought an election on the Tory tax bombshell? I remember pictures of the Deputy Prime Minister, the right hon. Member for Sheffield, Hallam (Mr Clegg), standing in front of a poster that referred to a Tory tax bombshellâ
Order. I am sure the right hon. Gentleman would want to speak through the Chair.
I remember the hon. Member for Redcar standing with the Deputy Prime Minister in front of a poster that said âTory tax bombshellâ. I find it amazing to hear the hon. Gentleman speak this evening as an apologist for the Conservative Governmentâs imposition of VAT on people in Britain.
New clause 10 calls for a review of the assessment of the impact of VAT on UK economic growth over the next three months. As Members know, last Tuesday we voted on a Labour motion, which was opposed by the Liberal Democrats, to cut VAT on a temporary basis to 17.5% while economic growth is restored. The Conservative party voted against that motion, which would have ensured that we had the VAT cut proposed today.
Order. Mr Hemming, you have had one intervention. If the shadow Minister is not giving way, you should respect that.
When the Conservative party, supported by Liberals who at the general election opposed VAT increases, imposes VAT increases, it does so on businesses and on jobs and hardest on the poorest people in our society. I will now give way to the Minister so that he can explain that.
John Hemming
I agree with my hon. Friend the Member for Redcar (Ian Swales), who is an accountant, that on the basis of expenditure deciles VAT is a mildly progressive tax. I ask the right hon. Gentleman, whose name appears above unselected new clause, 16, which would put VAT up to 20% once things improve, why the Labour party, having opposed VAT at 20%, now believes that it should be at 20% in the long term.
Order. We are not going to get bogged down in the VAT figures. We need to talk about the new clauses in the group. We are drifting into parts where we should not be.
I remind the hon. Member for Birmingham, Yardley (John Hemming) that new clause 10 calls for a review of the impact of value added tax on businesses and families over the next three months. Labour Members voted last week for a temporary reduction in VAT. Labour policy is to have a temporary reduction to tackle the real issues that we all face in our constituencies in relation to jobs, living standards and the future of our businesses.
(15Â years, 3Â months ago)
Commons ChamberOrder. Can we be a little calmer? Mr Bryant, I know you are very excited, but I am sure that people will give way.
Mr Osborne
The shadow Chancellor is a man with a past, but no ideas for the future. The Leader of the Opposition may be uncomfortable having him in the shadow Cabinet, but we are not, because he is going to be a living reminder that people can never trust Labour with the economy again. Meanwhile, the rest of us have got to get on and clear up the mess he left behind.
Claire Perry (Devizes) (Con)
I am grateful to the hon. Gentleman for giving way because I have just joined the debateâ
Order. I know that the hon. Lady is an enthusiastic Member, but she should not just walk into the Chamber, give it about five seconds and then intervene. It is not fair. It is up to the hon. Gentleman whether he gives way, but it is discourteous to everyone else who wishes to speak.
Claire Perry
I apologise, Mr Deputy Speaker, but I have been tied up with constituency business. I just wanted to say that I welcomed the reference to Bill Gross, who, as the hon. Gentleman will be aware, also described the UKâs economy as sitting on a bed of nitroglycerine ahead of the election.
(15Â years, 3Â months ago)
Commons ChamberI beg to move, That the clause be read a Second time.
With this it will be convenient to discuss the following: new clause 8 âFunding formula for Scottish Government (No. 2)â
â(1) Within six months of the day on which this Act is passed, the Chancellor of the Exchequer shall lay before the House a report on the formula for allocating funds from the Consolidated Fund to the Scottish Government, and on alternative ways of calculating the sums to be paid.
(2) Within six weeks of laying the report referred to in subsection (1) above, the Chancellor of the Exchequer shall lay before the House proposals for a new funding formula which would ensure that the funds allocated to the Scottish Government are no more than 5 per cent. below or above the equivalent figure for each of the other nations of the UK.â.
New clause 9âTax on profits of companiesâ
âIn Part 4A of the 1998 Act (as inserted by section 24), after Chapter 4 (inserted by section 30) insertâ
Chapter 5
Tax on Profits of Companies
80L Tax on profits of companies
The Secretary of State shall, within one month of the coming into force of section 80B of this Act, lay in accordance with Type A procedure as set out in Schedule 7 to this Act a draft Order in Council which specifies as an additional devolved tax a tax charged on the profits of companies.ââ.
New clause 19âSpirits, wine, beer and cider dutiesâ
â(1) The 1998 Act is amended as follows.
(2) In Part 2 of Schedule 5 to the Act, in section A1 (specific reservations: fiscal, economic and monetary policy), after the heading âExceptionsâ, insertâ
âSpirits duties, wine duties and beer and cider dutiesâ.â.
Amendment 25, in clause 24, page 16, line 35, at end insertâ
â(c) Chapter 5 provides for an Order in Council to specify, as an additional devolved tax, a tax charged on the profits of companies.â.
Amendment 24, in clause 26, page 20, line 24, at end insertâ
â(3) T is deemed to be in Scotland at the end of a day when T commences a journey in Scotland before midnight and arrives at a destination in England after midnight, irrespective of the time at which the border between Scotland and England is crossed.â.
Government amendments 31 and 15.
Amendment 26, in clause 32, page 25, line 10, leave out
âwith the approval of the Treasury, borrow by way of loanâ
and insert âborrowâ.
Amendment 27, page 25, line 15, at end insertâ
â(1C) In borrowing any sums under subsection (1A), the Scottish Ministers must have regard to any code of practice agreed by them and the Treasury.
(1D) A code of practice agreed under subsection (1C) may include provision as toâ
(a) how the Scottish Ministers are to determine and keep under review how much they can afford to borrow,
(b) the terms and conditions on which sums may be borrowed,
(c) limits on the aggregate at any time outstanding in respect of the principal of sums borrowed.â.
Government amendment 32.
Amendment 28, page 25, line 26, leave out from beginning to end of line 33.
Government amendment 33.
Amendment 29, page 25, line 43, leave out subsection (10).
Government amendments 34 and 35.
Amendment 23, in clause 39, page 28, line 35, leave out from beginning to end of line 2 on page 29 and insertâ
â(2A) Subject also to the provision made in sections 26(1) to (6), 27, 28, 29, 30 and 31 as to how those sections are to have effect, Part 3 shall come into force at the end of the period of two months after the new funding formula referred to in subsection (2) of section [Funding formula for Scottish Government (No. 2)] has been approved by resolution of the House of Commons.â.
Amendment 37, page 28, line 35, at end insertâ
â(c) section [Spirits, wine and beer and cider duties]â.
Amendment 18, page 28, line 40, at end insertâ
â(3A) Notwithstanding any provisions in subsection 3(a), (b) or (c), sections 26(1) to (6) and 27, sections 28 and 29, and sections 30 and 31 can not be commenced without the consent of the Scottish Parliament.â.
Amendment 2, page 29, line 2, at end insert
âexcept new subsections (1A) and (1B) of section 66 of the 1998 Act, inserted by section 32(3), and subsections (9) and (10), which shall come into force on 1 April 2012â.
It gives me great pleasure to return to the House to discuss the Scotland Bill after the Committee debate in March.
The first group of amendments on todayâs selection list is fairly extensive and addresses several different aspects of the Billâs finance package. I will set out why we have tabled Government amendments and why we will not accept the non-Government amendments.
In Committee, we debated the definition of a Scottish taxpayer for the Scottish rate of income tax. I said that the Government would table a new clause to apply the same definition to the Scottish variable rate, in response to one of the recommendations of the Scottish Parliamentâs Scotland Bill Committee. The reworked definition of a Scottish taxpayer for the new Scottish rate of income tax is a significant simplification. I appreciate that it is unlikely that the Scottish variable rate will ever be invoked. Nevertheless, without the amendment, there would be two separate definitions of a Scottish taxpayer in place at the same time. There is potential for practical difficulties for taxpayers, employers and their professional representatives, who might need to familiarise themselves with one definition for the years up to 2015-16, only to have to switch to a different definition for subsequent years. That is entirely unnecessary.
Applying the definition of a Scottish taxpayer that has been developed for the Scottish rate of income tax for the purposes of the Scottish variable rate will help smooth any transitional issues, and will also make it easier for people to understand whether they are classed as a Scottish taxpayer. The Scottish Parliamentâs Scotland Bill Committee rightly recommended the change, with which the UK Government very much agree, and I commend the new clause to hon. Members.
On a previous occasion, my hon. Friend the Member for Milton Keynes South (Iain Stewart) raised a particular query. He has tabled amendment 24, about which he intends to speak later. I will respond to the issues that he raises after he has had an opportunity to set out his thoughts on that.
Government amendment 31 would make a small, technical change, to which I hope the House can agree. Section 989 of the Income Tax Act 2007 contains several definitions, which apply for the purposes of income tax legislation. It includes definitions of the basic, higher and additional rate of income tax. They refer to the rate of income tax set by the UK Parliament in the year in question. Government amendment 31 would extend those definitions to include the rates applicable to a Scottish taxpayer. As I said, it is a minor drafting amendment, and I do not anticipate its proving too controversial.
The purpose of Government amendment 15 is to correct a technical fault with the Bill so that it is consistent with the Governmentâs policy intentions as set out in the Command Paper, which states that the Scottish Government will be able to borrow to manage the difference between forecast and outturn tax receipts. However, as I explained in our Committee debate on 14 March, the Bill as it currently stands enables the Scottish Government to borrow to manage this difference only for fully devolved taxes, and not the Scottish rate of income tax. That is a technical fault, which the amendment corrects. I hope that it will be accepted.
Let me deal with Government amendments 32 to 35. The purpose of Government amendment 32 is to introduce a power, which will enable the Government to amend in future the way in which Scottish Ministers can borrow, including by way of bond sales, without the need for further primary legislation. The Bill gives Scottish Ministers a new power to borrow, by way of loan, from 2015-16 up to ÂŁ2.7 billion of total debt, ÂŁ2.2. billion of which can be used to fund capital expenditure.
The UK Parliament has an interest in ensuring that Scottish Ministers can borrow efficiently and sustainably because, although interest paid on any loans will be funded from the Scottish budget, it will be included in the UK fiscal aggregates. The Bill therefore gives Scottish Ministers the power to borrow in the most efficient and sustainable wayâfrom the national loans fund, as recommended by the Calman commission. In addition, should Scottish Ministers so choose, the Bill gives them the power to borrow by way of commercial loan where that represents value for money.
Reports on the Scotland Bill by the Scottish Affairs Committee and the Scottish Parliament have recommended that Scottish Ministers should be granted additional borrowing powersâspecifically, the power to issue bonds. The First Minister made the same points in his discussion with my right hon. Friends the Chancellor of the Exchequer and the Secretary of State for Scotland. The reports and discussions have highlighted the discrepancy between the powers of Scottish Ministers and local authorities, which already have the power to issue bonds.
So far, the main evidence that has been provided to the Government in support of Scottish Ministers issuing bonds is âbecause other bodies can do itâ. However, with the exception of Transport for London, the vast majority of local authorities have not exercised those powers in recent history, not least because local authorities judge that they have access to more efficient and sustainable forms of borrowing.
The Government continue to believe that the case against bond issuance is clear cut, particularly in the medium term, given the uncertain outlook and challenging fiscal mandate. All the evidence suggests that further bond issuance would have a negative impact on the UKâs fiscal position.
In the context of the highest deficit since world war two, the Government would consider allowing Scottish Ministers to issue bonds in future only when that does not undermine the overall fiscal position, or have a negative impact on total UK borrowing. If a case is made that Scottish Ministersâ borrowing powers could be extended without undermining the overall UK fiscal position or increasing UK borrowing, the amendment that I am tabling today would allow changes to the borrowing powers of Scottish Ministers to take effect swiftly, by way of an order.
The Government have committed to conducting a review of the costs and benefits of bond issuance over other forms of borrowing to help inform any decision. The amendment would have the effect of, first and foremost, protecting the UKâs fiscal position by continuing to allow Scottish Ministers to access the most efficient and sustainable source of borrowing.
After the Bill has been passed, the Welsh Government will be the only political entity in the British state unable to borrow. Will the Exchequer Secretary address that matter quickly, rather than awaiting some prolonged Calman process, which the Government currently envisage?
I want to make it clear that Government amendment 32 would not grant the power of issuing bonds to the Scottish Government. However, it would enable us to move more quickly should that decision be made in future The Welsh Assembly Government are not alone in their status, although the amendment would enable us to move more quickly should we decide to proceed in that direction.
Amendment 2, which was tabled by Her Majestyâs Opposition, would bring forward the introduction of the capital borrowing requirement set out in clause 32 from April 2015 to April 2012. Amendment 26 would remove the role of the Treasury in approving capital borrowing and the restriction that such borrowing must be by way of a loan. Amendment 27 would introduce a new statutory code of practice, to be agreed between the Treasury and Scottish Ministers, to govern capital borrowing permitted by section 66(1) of the Scotland Act 1998. Amendment 28 would remove the ÂŁ2.2 billion aggregate limit on capital borrowing by Scottish Ministers. Amendment 29 is consequential on amendment 28. As hon. Members wish to remove the borrowing limits from the Bill and the ability to revise those with the approval of the House, clause 32(10) would no longer be necessary, because there would be no such secondary legislation.
(15Â years, 4Â months ago)
Commons ChamberI did not say anything adverse about it at the time other than that the opportunity was not taken, despite advice I tried to give, to use the treaty opportunity to say to other member states that we would not agree to the treaty and would veto it unless we were taken out of the EFSM; we could then have brought forward the arrangements currently proposed for 2013. That proposition was eminently reasonable, eminently possible and âŹ440 billion was available under the facility, which is in operation until 2013. In other words, the whole EFSM issue pivots on vanity and a determination not to unravel something that cries out for unravelling. It is not just; it is not right; it is completely irrational.
There are going to be further and deeper riots and protests. Worse still, I believe that the Government are contributing towards instability throughout Europe while claiming that within the time frame extending to 2013, bailing out the German and French banksâwe should remember that that is what lies at the root of the problemâas well as Portugal and Greece will achieve stability. It will not. The argument is not only wrong, but totallyâ
Order. We are running out of time very quickly, and I want to enable as many Members as possible to speak. We need to hear about the amendment, so I now call Chris Heaton-Harris. If there are fewer interventions and Members do not use all their allotted time, we shall do very well and get much lower down the list.
Claire Perry (Devizes) (Con)
I speak with some trepidation from the depths of the Maastricht maestros on the Government Benches. If I may echo the point made by my hon. Friend the Member for Stourbridge (Margot James), it is a tribute to many people, surrounding me today and not in the House, that we are no longer part of the euro and that we have been able to establish a healthy Euroscepticism both in opposition and since we came into government.
Let me go back in history to see how we reached this sorry state of affairs. Many Members will remember the debates around the time of the Nice treaty in 2001. Indeed, there are Ministers on our Benches today who urged the Government of the time in the strongest possible terms not to sign up to the treaty as they believed it would give away any future veto on bail-out mechanisms. We were assured at that time by the then Minister for Europe that article 103 made it clear that there would be no bailing out of member states, whether that meant Britain or any other member state. I question whether the Minister for Europe at that point knew what was being done.
In May 2010, the acting Chancellor of the Exchequer signed Britainâs commitment to the temporary European financial stability mechanism. Our total commitment is 12.5% of the putative total of âŹ60 billionââŹ7.5 billion, a substantial sum. Later, I shall address what that means for hard-pressed British taxpayers. First, let me move the timeline further forward one step to December 2010. As has been said several times, the Conservative Chancellor of the Exchequer agreed that Britain would play no further role in a permanent European bail-out facility and also fought for and had implemented a number of stringent requirements for draw-downs from the existing facility.
What will this facility cost the taxpayer? As my hon. Friend the Member for Orpington (Joseph Johnson) said earlier, it is a contingent liability. A number of things must happen before there is any cash bail-out. The entire thing has to go belly up and the countries all have to default. Given that our ranking on this debt is pari passu with the facilities put in place by the IMF, we will have a superior credit position and will be paid first in the unlikely event that there is a partial or full default. It is not a gift or a grant but a contingent liability of âŹ7.5 billion, of which approximately âŹ1.2 billion has been put into the facility to date. The suggestions we often hear from Members on the Government Benches that hard-pressed taxpayers will see further cuts to public services or will not see the schools, hospitals or road repairs that they have been promised are simply fiction. It is not the case.
This amount is a proportion of the EU budget and the budget is agreed for this year, so the liability is capped at this level. There is no further liability under the facility. What is the âso whatâ of this point? It is my belief that the action of this Governmentâs Chancellor has stopped Britain further sleepwalking into handouts, bail-outs, gifts or grants to the European Union. This fund is a eurozone experiment about which we have many concerns and I share the concerns that have been eloquently raised by Government Members about the long-term future direction of countries that are hamstrung by the tightness of their currency conditions and the overall problems with their economies.
A Conservative Chancellor argued for tough conditions and pari passu rating with IMF debt for this facility, the only facility in which we have involvement. If hon. Members consider the conditions under which a country can access the facility, they will see that extremely tight conditions must be met and plans must be made. Although the situation is not ideal, the Government have done far more than the previous Government to put a stop to such developmentsâin fact, they have done the opposite of what that Government did for 13 years. The point that has been made about fighting to ensure that there is equal draw-down from the facility is right and I believe that the amendment also calls for that.
I urge Members on both sides of the House to stop this Eurosceptic scaremongering, to focus on the facts of the debate and to ensure that we collectively never again sign our country up to the sort of bail-out mechanisms and removal of vetoes with which the previous Government left us.
I call Andrea Leadsom. You have two minutes before the Front-Bench wind-ups.
On a point of order, Mr Deputy Speaker. May I put it to you that the Backbench Business Committee is in fact not being allowed to operate as was clearly originally intended when it was established? Because the motion was amended, the Committee was unable to allow the House to vote on the motion that it had selected for debate. What advice can you give to the House on how that matter might be rectified so that in future, as on Opposition days, the motion is voted on before the amendment is taken? What advice can you give to enable that to happen in future?
I recognise that there is a lot of frustration at the way the motion was dealt with today. However, things have been carried out in order. I am sure that the Leader of the House will reflect on the hon. Gentlemanâs comments and think about them, but I am also sure that he will speak to the Committee to see whether there is a way forward for everybody. Hopefully, some amiable agreement can be reached in future, if that is the desire of the Committee.
Mr Davidson
Further to that point of order, Mr Deputy Speaker. Does that not demonstrate quite clearly that this set of Government Whips is just as bad as the previous one?
(15Â years, 4Â months ago)
Commons ChamberWith this it will be convenient to discuss clause stand part.
You have caught me slightly off guard, Mr Hoyle. I was expecting my hon. Friend the Member for Hayes and Harlington (John McDonnell) to participate in the previous debate, but I shall plough on as ever. It is good to see you back in the Chair. I hope that you had a refreshing eveningâs sleep after we had considered earlier matters.