Finance (No. 4) Bill

Debate between Michael Connarty and Charlie Elphicke

Wednesday 18th April 2012 Commons Chamber

[Charlie Elphicke]

I completely disagree. The Government are doing a great job. We have had the most difficult year, in which recovery was effectively postponed because the European and eurozone crisis caused massive uncertainty. I will not shirk from the point: that uncertainty has caused businesses to delay the business investment that was expected by about a year. The OBR, in the blue book that the hon. Gentleman says I am waving around, makes that perfectly clear. I will happily take him on on the issue of business investment. The situation has come to pass basically because of the eurozone. Also, the OBR says that business investment for the fourth quarter can be a bit lower than expected but that it often, statistically, bounces. It also says that the Government’s pioneering reduction of business taxes will have a positive effect in helping the country to grow.

The bottom line of economics is that we need to ensure more jobs and money as quickly as possible to help the country to grow faster despite the chaos and financial mismanagement in the eurozone. Let us not forget that Labour, if it had had its way, would have taken us into that chaos and into the euro. If Labour had won the election, it would also have carried on spending at an unsustainable rate and rapidly taken us the way of Greece, Spain, Italy, Portugal and Ireland, which would have put us in an extraordinarily difficult position.

On the revenue numbers, Labour’s central argument is that we should not cut the 50p rate because, first, we need to hit the rich and squeeze them until the pips squeak and, secondly, we are letting money go that would otherwise be brought into the Exchequer and are looking after our rich friends. That is its analysis. However, the summary in paragraph 4.7 on page 84 of the OBR report states:

“The Chancellor’s decision to cut the”

50p rate

“has an estimated direct cost to the Exchequer of £0.1 billion, excluding the impact of ‘reverse forestalling’ as people shift…income from”

one year to another

“to take advantage of the lower rate. The figure is small because the additional rate is now assumed to be close to its revenue-maximising level.”

In other words, it does not make much difference—£100 million here, £100 million there, out of a total budget that I believe is getting on for £700 billion, is a small amount, particularly given that it sends a positive message to aspirants, entrepreneurs and the people who work hard to deliver so much value-added for our country.

[Michael Connarty]

We can all pick selectively from the OBR report—I have referred to it quite a few times—but this is a comment based on the Government’s own estimate that there will be an inflow of £2.9 billion from increased activity by those who pay the 45% rate. There is absolutely no fact behind that yet. It is basically a comment based on a prediction by the Government. In other areas, again and again since they took office, they have been very wrong. It is a hope, not a statement of fact. The actual cost will be £3 billion until the money comes in that the OBR has accepted from the Chancellor’s estimates.

[Charlie Elphicke]

I thank the hon. Gentleman for bringing me on to my next point. The hon. Member for Pontypridd is fond of saying, “Ah, look at the HMRC impact report. It brought in £1.1 billion but the estimate was that it would then have brought in much more.” [Interruption.] Some £3 billion, he says. That was the estimate in the March 2010 Budget, which mentioned an additional £2.6 billion. In the June 2010 Budget forecast, that increased to £2.7 billion. However, when we look in detail at what happened and how much was brought in, it appears that the OBR and HMRC now estimate the figure to be £0.6 billion in 2012-13.

European Union Bill

Debate between Michael Connarty and Charlie Elphicke

Tuesday 8th March 2011 Commons Chamber

[Michael Connarty]

I not only accept it; I fully endorse and applaud it. There is a work programme that comes forward from the European Commission, and it is debated in Westminster Hall, but very few people turn up: that is the reality. We have tried to engage a number of Select Committees by referring to them matters of interest to the European Scrutiny Committee, which continues to be chaired ably by the hon. Member for Stone (Mr Cash). We are trying to engage Select Committees in those issues so that the European Scrutiny Committee and then the House could be advised of any European matters of substance that should be considered.

We could therefore change aspects of the apparatus we use before reaching the point to which the new clause refers, where a Minister is recommending a referendum. When this clause is triggered, the Government will have decided that they want to do whatever it is the referendum has been called to consider. It will be a referendum on a Government proposal, perhaps for a new treaty or a new decision that will change our relationship with Europe.

Let me finish by providing one example. We took a decision a long time ago—it was probably agreed across the Chamber because it was politically sensitive for us not to opt into all of the Amsterdam treaty—whereby we did not become members of the Schengen group of countries. That group is effectively all the European Union countries apart from us. Frontex, the new border police, is now trying to throw a ring around Europe and it is going to be heavily pressurised by migration from other parts of the world—particularly from Africa, and perhaps very quickly from north Africa. We are not a member of Frontex because we are not a Schengen country. We sit on the board—Frontex has been quite nice to us, even though we did not sign up to it—so we asked whether any of our officers engaged in a Frontex operation could have the same protection from prosecution as other Frontex officers. We are told “No, because you are not a member of the Schengen group.” The train is leaving the station very quickly to protect the rest of Europe, and the United Kingdom is running at the back waving a little flag saying “Can we join? But we do not want to be full members.”

We ought to be fully informed of the consequences of decisions such as that. I am not talking about those who are, for reasons of prejudice, Eurosceptic and against doing things on an EU basis, in the belief that they can somehow be done on a bilateral basis with 26 other countries. If we had been fully informed, we would have concluded that membership of Frontex was important enough for us to take the step of joining the Schengen countries and being a real part of Europe.

Although such information and debate would be extremely useful, that will not be made possible by the new clause, and I therefore hope that it will be withdrawn. However, we need to make those changes in the Chamber if our constituents are to understand that we know what we are talking about in Europe, and that we are acting on the basis of analysis and proper information rather than prejudice.

[Charlie Elphicke]

It is a privilege to follow the extraordinarily interesting and thoughtful speech of the hon. Member for Linlithgow and East Falkirk (Michael Connarty). The debate on the new clause has been largely underpinned by a dislike and distrust of the European Union and its works, and I share that distrust. Many Members feel that an organisation that spends vast swathes of our money and imposes massive increases in our budget contributions in return for no obvious value, at a time of great downturn across the continent, is not an organisation that is in touch with this country—or any other country. They do not trust an organisation that feels so remote from the electors of this country and every other country in the European Union. Even in Germany, an increasing number of people are finding the European Union and its works troubling.

--- Later in debate ---

[Charlie Elphicke]

Thank you, Mr Deputy Speaker. I conclude my remarks.

[Michael Connarty]

First, may I compliment the hon. Member for North East Somerset (Jacob Rees-Mogg) on the eloquence both of the construction of his new clause and of his delivery in arguing for it? I believe that the new clause is flawed. He suggested that the evidence that we had received—he kept referring to Lord Justice Laws’ ruling—was correct, but we received evidence from many other people that it was incorrect. It was suggested that we could not establish two tiers of laws just because a judge decided to make a remark in court, and that all laws, including the European Communities Act 1972, stand the same and can have implied amendment and repeal.

If Parliament decided to pass a law here that was contrary to a ruling, directive or regulation of the European Union, it would still stand as a law. The dilemma would then be whether the European Court of Justice would have the right to overrule that decision or whether we would press on our courts our decision in the new Act, which would cause a judgment to be called for in the European Court. If no one called for such a judgment on an Act that we had passed contrary to a regulation or directive of the European Union, it would continue to apply. It would not be knocked down, and no penalties would be imposed on the UK, unless someone called for the European Court of Justice to make a judgment on that new Act. So it was nonsense to suggest that in 1972 we had suddenly created an Act that was incapable of implied repeal or amendment.