UK Parliament / Open data

Amendment of the law

Proceeding contribution from Alan Simpson (Labour) in the House of Commons on Wednesday, 22 April 2009. It occurred during Budget debate on Amendment of the law.
Given the perilous state of the world economy in which the Budget has had to be presented, I wondered whether the Chancellor would open his Budget statement with reference to words used by someone else. I could have pictured him opening with the following remark:""I would say to the House, as I said to those who have joined this Government: 'I have nothing to offer but blood, toil, tears and sweat.'"" I would not have begrudged him if he had gone on to include the following words:""We have before us an ordeal of the most grievous kind. We have before us many, many long months of struggle and of suffering."—[Official Report, 13 May 1940; Vol. 360, c. 1502.]" However, this was not a Churchillian Budget and it did not contain a national mobilisation to deal with the severity of the threat that we face. That threat is not only the current credit crunch and global economic collapse. As my hon. Friend the Member for Brent, North (Barry Gardiner) pointed out, it is the sense that as we get through this stage of the crisis we will encounter a series of crises waiting for us in the pipeline. Those will primarily be ecological and resource crises; we will find ourselves facing peak oil, peak phosphates and peak water. Those ecological crises, which involve the limits that nature sets on the way in which we construct our view of economics and society, will profoundly change the whole way in which we have to think about the role of government, governance and economics in the 21st century. The right hon. Member for Haltemprice and Howden (David Davis) rightly said that we have been living through an era of delusionary economics. My only disagreement with him comes from the fact that one cannot confine that era to the past 10 years, because it is a 20 to 30-year period in which the politics and the economics of the UK have been caught up in the age of avarice. We have presumed that everlasting growth could be based on everlasting consumption, based on the creation of limitless debt. The prophets of that sort of economics are those who brought it crashing to its knees. They were not the bulk of constituents in any of our constituencies; they were the people in the glittering towers of the global finance industry who demanded global deregulation of financial movements on a colossal scale and whose collapse is now requiring everyone else to pay for their profligacy. My disagreement with the right hon. Gentleman came when he described today's capitalist system as a parody of Marxist market regulation. In a sense, I would have welcomed anything in the past 20 or 30 years that was a parody of Marxism, but we have not seen any such thing. What we have seen is, in a sense, a squandering of conventional and ecological resources to the point where we face a need to mobilise the remaining resources that we have in a quite different way. The Budget that we required today needed to be based around three components: honesty, a degree of equity, and something approaching the visionary. I give the Chancellor credit for the attempt at honesty about the circumstances in which the Budget was constructed, but in truth the Budget only tiptoed towards equity or to anything that might be construed as visionary. One of the starting points for the equity agenda is the need to recognise—difficult as it may be for colleagues on the Labour Benches—that the tax gap between the richest and the poorest has actually widened in the 10 years or so that we have been in government. The poorest 20 per cent. of the population pay some 39 per cent. of their incomes in taxation in one form or another. The tax contribution by the richest 20 per cent. has fallen to an average of 35 per cent., and the very rich pay a considerably lower percentage. I had hoped that the Chancellor would use the Budget as an opportunity to remove dramatically some of the tax cushion constructed over the past 20 years that featherbeds the extremely rich. The opportunities were there to be bolder than he was today. In my opinion, the Budget should have removed the ceiling on national insurance contributions, which would have given the Chancellor an extra £11 billion of retained revenues in the Exchequer. If the basic rate tax allowance had been applied to all pension savings, rather than the higher rate, the Exchequer would have an extra £6 billion. If we were to attempt to end the profligacy of self-reward in the bonus culture, share-option offers and short trading, we could have introduced a 75 per cent. tax on all such activities. That would not stop those activities, but people would be taxed for the damage done by that short-termist and speculative approach to the UK's economy. I read an article last week that powerfully made the case for the presumption of a minimum tax obligation. For those earning more than £100,000 a year, the presumption would be that a minimum of 35 per cent. of those earnings would be paid in tax. For those earning more than £200,000, the presumption would be that 45 per cent. tax would be paid. The collection from those shifts in taxation presumptions would give the Exchequer an extra £25 billion with which to mobilise a shift in how we spend, or invest, our way out of recession. For the record, I should say that I would support those hon. Members who would willingly vote—on a pragmatic as well as a principled basis—to abandon the commitments to the introduction of ID cards, which would save £12 billion, and the Trident renewal programme, which would save £75 billion in lifetime costs. There are much better uses for those resources, which the nation now needs to mobilise very differently.
Type
Proceeding contribution
Reference
491 c317-9 
Session
2008-09
Chamber / Committee
House of Commons chamber
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