PARLIAMENTARY DEBATES - United Kingdom Parliament

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711 Debate on the Address 15 MAY 2013 Debate on the Address 712 [Charlie Elphicke] My constituents feel that 5 million in this country could work but do not. They ought to have more investment and opportunity, and more chances to fulfil their potential. That is why the reforms to welfare to make work pay, the reforms to the skills agenda, the reforms to control migration, and the reforms to control, police and secure our borders are important—they give our fellow citizens more of a chance to do well and succeed in life, and to see their potential unleashed. Mr Bailey: I thank the hon. Gentleman for belatedly giving way. His response to my speech—he has attempted to put words in my mouth that I did not say—demonstrates the exact problem within the Government. They are prejudicial and damaging to the carefully constructed and reasoned debate on immigration that we need in order to get a policy that suits our economy. Charlie Elphicke: I thank the hon. Gentleman for his intervention. I have set out my concerns on behalf of my constituents, who raise immigration on the doorstep time and again. They simply say to me, “I want my sons and daughters to have a chance. I want to be able to get a job, do well and succeed in life.” The Conservative party is the party of aspiration and success, and the party of realising the potential that each and every one of us has. I support the Government’s reforms. I also support the Government’s reforms on tax avoidance and evasion. Let us imagine the Labour party’s response if the Government doubled income tax and let “their chums” in big business off the hook. There would be howls of rage, and accusations that the Government are on the side of the rich and attacking the poor—accusations that they are latter-day sheriffs of Nottingham—but that is exactly what happened in 13 years of Labour government. Income tax receipts went up by 81%. The working people of this country were soaked with Labour party taxes. Meanwhile, leaving aside oil duties, corporation taxes went up by only 6%. Such is the legacy of the prawn cocktail offensive, representatives of which are in the Chamber. The Labour Government sold the pass on fair and open competition for smaller businesses in this country in favour of large multinationals. People who work hard for a living were hit with high income taxes while large businesses were allowed to avoid taxes on an industrial scale. That is the legacy of 13 years of Labour. I am delighted that the Chancellor and the Queen’s Speech rightly take action on that. YouGov polls show that 62% of the public consider legal tax avoidance—it is all perfectly legal, is it not?—to be unacceptable. A ComRes poll has found that 84% agree that the Government should crack down on tax avoidance by businesses operating in the UK. Indeed, 60% are prepared to call the bluff of every large corporation that threatens to disinvest from the rich, highly vibrant and successful UK market, saying that the Government should crack down on business tax avoidance even if it caused unemployment and caused some companies to leave the UK. That is how strongly the British people feel. I feel strongly, and I was delighted to hear that my hon. Friend the Member for Redcar (Ian Swales) does, too. The Government are right to deal with the legacy of tax avoidance on an industrial scale. They are right to tackle the problem as an international problem, requiring international action. I therefore welcome the Chancellor’s use of the UK presidency of the G8 to take collective action to deal with tax avoidance and evasion. In particular, we need to reform tax presence. The idea that Amazon is based in Luxembourg defies reality to the ordinary person. They look askance at Amazon warehouses from the motorway and just do not buy the idea that Amazon is based in Luxembourg. The rules need to be updated to cope with the globalised, competitive, internet-enabled world in which we live. Mr Dominic Raab (Esher and Walton) (Con): My hon. Friend is making a powerful speech. As well as welcoming the Government’s initiative on tax evasion and tax avoidance, will he join me in lamenting the fact that criminal convictions for tax evasion plummeted to 107 in the last year of the previous Government? Charlie Elphicke: Absolutely. We need to send a clear message that everyone should pay a fair share of taxes. We have had too much unfairness for too long. It is also important to reform the rules on transfer pricing. Starbucks has been the whipping boy for something that is done on a consistent basis by all large international businesses—accountants call it “supply chain optimisation”. Action to tackle it would be fiercely resisted, but it is something we should do. It is not right that profit parking by international tax planners means that our Exchequer does not receive its fair share. Part of the agenda must be a positive, engaging discussion with the European Union where we say, “Look, these are the reforms we need.” I am pleased to see that the Chancellor has been getting the Germans on board and talking to the French. Indeed, he should talk to the US, because it too is losing tax revenues. Profits that should go back to the States get parked in tax havens, so Uncle Sam loses out as well. This is an international problem that needs to be dealt with internationally. In Europe, a key reform must be to look again at the parent subsidiary directive, which a German MEP recently described as the heartland of tax avoidance, and which is too often abused. We need to ensure that the EU works positively with member states to help to secure their tax bases. The public finances of every member state in the EU are under pressure. Every member state in the EU should see it as in their interest to take effective, international co-operative action to deal with this problem that we all face. It is high time we stood up to large international businesses and said, “We have to secure our tax base.” We have to secure a fair deal for each individual who is living in this country, so that they pay a fair share of income tax while large international corporations pay a fair share of corporation tax. We must ensure that there is a level competitive playing field for home-grown businesses, just as much as there is a level competitive playing field for international businesses. That would be the right settlement and tax framework for the UK and all our European neighbours. 5.1 pm Mr Geoffrey Robinson (Coventry North West) (Lab): I think that some of us who have sat through this debate find it regrettable that, to a large extent, it has been hijacked by the obsessively anti-European faction in the
713 Debate on the Address 15 MAY 2013 Debate on the Address 714 coalition parties. It is not that Europe is not important, but the debate is about the Queen’s Speech and a reflection on the Government’s record after three years in office. Rather than intruding on the private grief of Government Members caught up in their internal and agonising debates, I would much rather say to those on the Treasury Bench that, in all seriousness, they have to face up to the fact that after a full three years in office they are responsible for the economy: they are responsible for the situation we are in, and they are responsible for getting us out of it. Unless they accept that responsibility, they will never accept the measures that are necessary to find a way out of the chronic situation in which we still find ourselves. Three years ago, after only a few months into office and after they brought in the cuts that went too far and too fast, the Chancellor was already crowing that the plan was working and the recovery was on track. We know what the recovery was meant to achieve: central to all economic policy is growth. In the three years to date, we were meant to have achieved 6% growth, but have achieved only 1.1%. I wonder whether the Government realised that what they were committing themselves to, and which after three months they thought was working, would achieve only one-sixth of their central economic objective. Those who have doubts about whether they should change course should reflect on that. Had they realised what that would achieve, they would never have embarked on it. The only way forward is to change course. Of course, as my right hon. Friend the Member for Morley and Outwood (Ed Balls) pointed out, to do that would mean going back on so much of what they proclaimed to be absolutely essential, and that is impossible for them to do. Time is limited for all Members, so I want to concentrate on just two aspects of economic policy where the Government’s incompetence and failure is hard to explain. The first is investment. What the Government call the national infrastructure plan has been variously described by conservative organisations as “hot air”, “complete fiction” and, by the chairman of the CBI, as “lacking all delivery”. Where does this leave investment? One cannot understand the Government’s failure, because there is no cross-party debate on investment or conflict over it. Less still is there any doctrinal argument such as we have on economic growth or financial policy—on the components, predictors or causal factors of, say, bond yields in 30 years and so on. Everybody in the House I have ever heard speak on this has said, “We must have more investment,” because traditionally the UK has not invested in R and D or fixed equipment and plant as much as we should have done or as much as our competitors. There is no argument about that. Stephen Barclay (North East Cambridgeshire) (Con): I am struck by the hubris of the hon. Gentleman, who is a former Paymaster General. The report on the extension of the private finance initiative by the Public Accounts Committee, which is chaired by a Labour Member, found that the previous Labour Government wasted more than £1 billion. Half, or more, of the PFI projects in the housing sector came in at double their original budget. He needs to accept his party’s record on major infrastructure projects. Mr Robinson: Here we go again. I do not know of any major infrastructure project that has not run over budget. As my hon. Friend the Member for Huddersfield (Mr Sheerman) said, let us see what happens to HS2. They all run over budget. Some terrible PFI deals were done—there is no question about it—but all Government Members ever do is say what Labour did badly. We have admitted that we did many things badly. We failed on certain things, but it will not help to get the Government’s plan going to say, “Oh, look what you did when you were in office.” Nothing could be more pathetic. That is what I am trying to get through to the Government. They are now in charge, and they now have to face up to their own failures and the things that need to be done to put them right. I come now to what those things are. I have mentioned how the Government budgeted for 6% growth, but in fact have achieved about 1% growth. It could not get much worse than that. Under their national infrastructure plan, they have about 567 projects in the pipeline, ready to go, but in three years they have achieved seven of them, or 1.2%. Everyone agrees that these projects are good ideas, so why can they not get these things done? We own one of the banks outright—I shall come to the banks in a moment—and we have a substantial stake in another, but the Government have created their own business bank. It could be investing in some of these projects, but against a background in which bank lending to businesses has fallen by £4.8 billion in the last quarter alone, they are offering £300 million through the British business bank. It is no wonder they are not getting the projects through. It is no wonder they are failing. Stephen Barclay: With respect to the hon. Gentleman, who is a senior Member of the House, he is just not engaging with the facts. Public investment as a share of GDP will be higher on average over this <strong>Parliament</strong> and the next <strong>Parliament</strong> collectively than under the last Government. On housing, which was my previous example, his party’s record was absolutely shocking, whereas our build to rent fund is addressing some of these issues. Action is being taken. He is ignoring his own record as a former Treasury Minister and the action that this Government are taking. It is remarkable. Mr Robinson: The Chancellor produces that tired statistic every time we mention investment. Let us take construction. The last time the level of house building was this low was in the 1920s. Overall, the level of construction has fallen 11% in the last year. This is against a background of a chronic need for the jobs and growth that investment can supply. We need a major uplift in the level of investment. It is higher, marginally, than it was 10 years ago, but so it ought to be. It is pathetic that they continue not to face up to the reality of the failure of their own programme. As long as they do not, they will not succeed. Would the hon. Member for North East Cambridgeshire (Stephen Barclay) really have embarked on this plan if he had known that, instead of 6% growth, we would end up three years down the road with 1% growth? Would he? Of course not: nobody on the Government Benches would have done that, and if they had, they would have needed their brains tested—perhaps they need them tested anyway. That is the truth of it. Then we come to the failure of Merlin and the question of the banks. Instead of making the Royal Bank of Scotland a national bank to invest in such projects, all the Government want to do is flog it off
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