Liam Byrne
MP for Birmingham Hodge Hill and Solihull North · Labour · United Kingdom
“The loss of 4,000 jobs at Jaguar Land Rover is a body blow for workers, families and communities across the west midlands, so I commend Richard Parker, the Mayor of the West Midlands, for moving quickly on Monday to put £500,000 on the table to help ensure that everybody gets back to work.”
“I wholeheartedly welcome this well-rounded statement from the Foreign Secretary, and put on record my thanks to the new Prime Minister for the hard yards that I know he has put in over recent days and weeks.”
“I am grateful to my hon. Friend for giving way, and I offer my warmest congratulations to her on her appointment to the role; she will be a brilliant Minister.”
“Let me start with a word of thanks to my hon. Friend the Member for Chester North and Neston (Samantha Dixon), who is not in her place, who said quite rightly that an awful lot has changed since the Bill was first introduced to this House. Indeed, a lot has been revealed over the course of the summer.”
“The effect of new clause 34 would be to ban off-ramping, ban new forms of digital currency transactions and ban memecoins, which are exactly the kind of measures that Ministers now need to bring forward. If we want to take the crypto system out of political finance, this is what we need to do.”
“No doubt we will learn that Mr Cottrell was in fact on the electoral register when that money was passed. No doubt we will discover that his mother, Fiona Cottrell, declared and did not disguise the fact that the money had ultimately come from her son.”
The complete record
Every one of 5,360 lines we hold for Liam Byrne, in date order, each linked to its source. Free to read, in full, without an account. Page 72 of 108.
“The House would therefore be right to ask what measures exist in the Finance Bill to help. On close inspection, there appears to be no help at all for exporters, yet the Chancellor needs Britain’s exporters to grow their trade abroad by £100 billion for his plan to come true. That is the equivalent of our trade with America rising threefold, our trade with China rising by 20 times or our trade with India rising by 40 times. It is fair to say that that is not a bet that any of us would take.”
“My hon. Friend is absolutely right. Like so many words that we heard during the election from those now in government, those ones turned out to be rather empty. Perhaps we would not be quite so worried about what we have heard from the Chief Secretary this afternoon if we did not know that the risk of failure for this Budget was so great. The Office for Budget Responsibility, which is supposed to know, has said that there is just a 40% chance of the Chancellor hitting his growth forecast for next year, yet the VAT increase in the Bill will tax consumption so hard that we will be forced to rely on a history-making burst of exports and business investment. Last week we heard that just once since 1966 have we had the kind of rise in investment and exports on which the Chancellor will be banking in each of the next three years.”
“Precisely. We need the German Government to contribute to growth right across the European area. One would have thought that the Deputy Prime Minister might have a word to say about encouraging the German Government to do more to help British exporters, but there we are—not a word about that from him.”
“I have not brought those figures with me to the Chamber, but the hon. Gentleman will know that exports from this country have grown strongly over past years. That is precisely why, as we came through the crash, we said that we needed to rebalance our economy, which is why we fought so hard for investment in companies such as Sheffield Forgemasters and why we said that we needed new investment in manufacturing—all investment that has now been cut back.”
“We were promised in the Budget a four-year plan to bring down the rate of corporation tax to 24%, but clause 1 offers us just a one-year plan. We do not know whether that is a wheeze to avoid an unhelpful valuation of deferred tax assets—the Chief Secretary to the Treasury was silent on that point—but is it not more likely that the Treasury is simply hedging its bets? The Government promised us certainty on corporation tax, and all we have got is more risk. The truth is that business is not going to bet on a one-year deal when this country’s recovery demands a longer-term planning horizon. The Chancellor might be a gambler, but Britain’s business community is not.”
“No, I am going to make another important point, on which the hon. Gentleman might want to comment. The question of business investment is vital—it relates to the argument at the heart of the Budget—and I hope that we will have a good debate on it this afternoon. Business investment is the subject of clause 1, which offers, I am afraid to say, no salvation through investment allowances, which drive up investment and which manufacturers say make the world of difference. This is what the senior economist of the Engineering Employers Federation had to say about investment allowances: “For smaller companies…there will be cashflow consequences …that will hurt their ability to reinvest in their own competitiveness.” That is because the Government have withdrawn such allowances. What, then, of corporation tax?”
“It would be, but it appears to be absent from the Bill. The economic gamble that the Chancellor has taken in the Budget is quite clear to the business community and, I think, to the House. There is also the question of who pays. The Chancellor is fond of taking the approach that we are all in this together. One writer called that the equivalent of a chorus line from “High School Musical”. However, the Finance Bill disabuses us of any notion that that claim might actually be true. It is now quite clear that the price of this Budget will be paid by people’s jobs, and that the greatest price will be paid by the poorest in this country.”
“I look forward to hearing the hon. Gentleman’s contribution to the debate a little later. It was not quite clear whether he was talking about marginal deduction rates or other impacts of the tax system but, like me, he will have noticed table A3 on page 69 of the Red Book, which shows that the marginal deduction rates for people on a 90% deduction rate, for example, have not gone down as a consequence of the Budget; they have gone up.”
“That is why we are so passionate in our objection to the attack on the poorest people in this country contained in this Budget.”
“I was empathising with the hon. Gentleman until his final sentence. As he will know, over the past 10 to 15 years up to 2006, just four countries out of the entire 20 or 30 members of the OECD succeeded in reversing inequality. They were Turkey, Ireland, Mexico and the United Kingdom. The attack on inequality was always a central mission for the Labour Government. Yes, of course we wanted to go further, but we were proud of our record of lifting 900,000 pensioners and 500,000 children out of poverty, of legislating to restore the earnings link and of introducing innovations such as tax credits. In constituencies like mine—and, I suggest, the hon. Gentleman’s—which suffer from a high rate of unemployment, that help is beginning to make a difference.”
“When the Chancellor stood at that Dispatch Box a couple of weeks ago, he told us that he would not hide things in the “small print” and that he would give it to us “straight”; he was so straight and so open that he kept the Treasury advice out of the Budget altogether. Yet even that picture might not reflect the entirety of the Budget’s impact.”
“I look forward to the hon. Gentleman telling us later how the increase in VAT is going to support the argument that he is trying to prosecute. I hope that he will also reflect on the cost of this Budget to jobs. The official figures for job cuts as a result of this Budget are bad enough, but the real figures are even worse. We have already watched the extraordinary spectacle of the Office for Budget Responsibility tell the Chancellor that employment will be 100,000 lower as a result of Budget measures, but then the real figures were published in The Guardian —not in this House, but in The Guardian —from which we learned that secret Treasury papers say that the Budget will cost 1.3 million jobs over the next five years.”
“My hon. Friend is absolutely right. Some Front-Bench Labour Members believe in redemption, and we have not given up on the hon. Member for Bermondsey and Old Southwark (Simon Hughes). That is why we are looking forward so much to hearing his contribution later this evening. [Interruption.] I hope he is not going to dispel the image I have of his virtue and integrity.”
“That is not cutting public debt, but adding to it—in pounds and pence and in the unquantifiable misery of wasted human lives. It is, I am afraid, a philosophy that is all too familiar. It is a distant echo of 1992, when a Tory Chancellor told us that unemployment was “a price worth paying”. Back in 1989, another Tory Chancellor, the now noble Lord Major—”
“I will cling on to my image of the hon. Gentleman’s integrity and await his contribution a little later. I remain convinced that, for him, redemption is still possible. I was about to say in response to my hon. Friend the Member for Chesterfield (Toby Perkins) that the reality is that the impact on jobs might be even worse than we saw in the Red Book, or even worse than we read about in The Guardian , because the Chartered Institute of Personnel and Development tells us that it forecasts that unemployment could continue to rise up towards 3 million. This Finance Bill hits growth so hard—this is a point that I hope the hon. Member for Bermondsey and Old Southwark in particular will reflect on—that, buried in the back of the Red Book, we learn that the Chancellor has had to raise £9 billion of extra taxes to pay for the lost growth.”
“Quite right. Sir John Major told us: “If it isn’t hurting, it isn’t working”. This Bill, and this Budget, will hurt all right—hurt the recovery; hurt families; hurt pensioners; and it will not work, as it will put people out of work.”
“In preparation for this debate, the hon. Gentleman will have compared those employment forecasts with those in the March Budget and will have noticed, like the rest of the world, that they are now 100,000 lower.”
“My hon. Friend is absolutely right. Very few people in the country believe the Budget’s forecasts for employment growth, which is not surprising given how hard the Budget is hitting growth. I want to move on from the economics of the Bill, and the possibility that it may work, to a wider question that I know we will want to debate this afternoon.”
“The Chief Secretary is a politician who is paid to go to work to make his own judgments in his and the country’s best interests. He will have noted reference to the growth of business investment and exports in the OBR’s report and its projections for the future.”
“In a moment. He will know, too, that in only one year since 1966—which is when the Library started to compile figures for business investment—”
“I ask the Chief Secretary to be patient for a moment. The last year in which exports grew as a percentage of our economy in anything like the way that the OBR projects for the next few years was 1974. The Chief Secretary is relying on a unique combination of the business investment that we saw in 2005 and the exports that we saw in 1974. He is assuming that they will come together in perfect harmony in each of the next three years. I must say to the Chief Secretary, very gently, that that is a bit of a gamble for him to take.”
“Before too long, those words will come back to haunt the Chief Secretary and the rest of the occupants of the Treasury Bench. Back on 7 April, the Deputy Prime Minister warned us about hikes in VAT. He said: “let’s remember, it is a regressive tax”. He was right: it is a regressive tax, and we now know that he is a regressive politician for supporting it. I think that it is fair to say—I feel that I can say this among friends—that I know a thing or two about writing something and regretting it later, but the Liberal Democrats did not just write a silly note. They unveiled a whacking great poster on a lorry saying, “Tory VAT bombshell”. Little did we know that they would be the ones not only to prime it, but to set it off.”
“The Child Poverty Action Group tells us that it will drive poorer parents into the arms of loan sharks. The House of Commons Library tells us that nearly three quarters of the £8 billion tax and benefits bill will be paid by our country’s women—and that is before we get to VAT. Clause 3 is the clause that deals with VAT, and I think it fair to say that it is the clause without a mandate. I have come to learn that, after nearly 30 years in the House, the hon. Member for Bermondsey and Old Southwark did not get where he is today without knowing what makes his party tick. I believe that when he said, a week before the Budget, “I hope we don’t have a VAT increase because it is the most regressive form of tax”, he spoke for the majority of his party’s voters and his party’s members.”
“It is not a great triumph for unemployment to fall as an economy returns to growth. The point that I was making is that employment in this country is lower as a result of the Chief Secretary’s Budget, that growth is lower as a result of his Budget, and that the Budget hits the economy so hard that he must raise another £9 billion of taxes, although the Chancellor refused to admit it at the Dispatch Box. I now wish to turn to a question to which I hope we will devote quite some time today: the wider question of why this Finance Bill is so unfair. We now have the judgment of the Institute for Fiscal Studies, which tells us that the Budget is so regressive that its only redeeming features are Labour policies. Age Concern tells us—clearly, starkly, urgently—that it will put older people’s lives at risk.”
“I will in a moment. If Members go to the Deputy Prime Minister’s website—for those who do not have the address, let me be helpful, it is nickclegg.co.uk; it is not a site that I visit quite as much as I used to—they will see that that famous poster saying, “Tory VAT bombshell” is still on the website, available to download. The Liberal Democrats cannot kick the habit of saying one thing and doing another.”
“Will the plan be as fair? The great tragedy of the Budget and the Bill is that there is an alternative, so let me deal directly with some of the questions raised by Government Members. In March, my right hon. Friend the shadow Chancellor set out the fastest and clearest deficit reduction plan of any country in the G7.”
“We will want to know how much the Chancellor has short-changed our pensioners by uprating pensions this September and then legislating for higher prices in January. We will want to know his estimate of the growth in black market trading by increasing the rewards for unregistered traders. We will press the Government on those questions during discussion of clause 3. We will also want to know the answers to questions on other clauses. Why does clause 1 make corporation tax less certain when we were promised clarity? Why is the measure silent on the regime for North sea oil? Why does clause 2 complicate the tax system when we were promised simplicity? In respect of clause 4, what assessment has been made of the impact of insurance costs for low-income families? Will the reform of pension tax relief bring in as much as Labour budgeted for?”
“Let me come to that point in a moment because— [Interruption.] I will answer the right hon. Gentleman’s question after touching for a moment on some of the questions that we will raise in this debate and in Committee next week. We will want to press the Government on their clause without a mandate. We will want to know what studies have been conducted, as will many Back-Bench Members in the coalition party, on the impact of the new VAT on Britain’s poorest families. We will want to know the impact on pensioners, children and child poverty. We will want to know whether all zero-rated goods will remain zero-rated for the course of the Parliament. We will want to know whether all exempt goods and services will remain exempt for the course of the Parliament.”
“We know that Governments have to govern, so our opposition to the Bill will be careful, but Labour Members will stand up for jobs and for fairness. That is why we will vote against the Second Reading of the Bill.”
“I hear what the hon. Lady says, but she has of course read chapter 6 of the Budget of March 2010 and, like me, she will remember that there was £3.5 million in savings by holding down public sector pay; there was £1 billion in savings through the reform of public sector pensions; there was £5 billion in savings through cuts to lower-priority programmes; and there was £11 billion in savings by revolutionising Whitehall. There was also the promise of a benefits bill that would have been £14 billion lower through falling unemployment, which was only possible as a consequence of growth. She will also remember the precision with which we set out £19 billion-worth of tax increases, which unlike this Bill, did not hit the poorest in her constituency or mine.”
“I am grateful to the hon. Gentleman for giving way—the House has been following his remarks with some care. Before the Liberal Democrats gave their consent to the proposals in the Budget, they will have discussed the matter. In the interests of the debate that he is trying to stimulate, was it ever explained in those discussions that an extra £9 billion of tax must be raised by the Budget because its overall effect is to slow the recovery to such a serious extent?”
“Was my hon. Friend alarmed, as I was, that the Finance Bill says nothing about preserving either zero rating or exempt categories for VAT, including for building services, for the rest of this Parliament?”
“On a point of order, Mr Deputy Speaker. May I ask for your guidance under Standing Order No. 15(1)(a), which says that the proceedings on any stage of a “bill brought in upon a ways and means resolution” including the Finance Bill, are exempt from interruption and may be proceeded with until “any hour though opposed”.”
“Labour’s plan to halve the deficit by 2013, with debt as a share of our national economy falling by 2016, is bang in line with the G20 communiqué announced to the House by the Prime Minister today. I notice that Sir Alan Budd agreed that we were on track to deliver that plan, not least because the public finances were £30 billion better than expected.”
“In essence, the Business Secretary made markets his defence—it was not his fault; the markets forced him—but somehow, he forgot to mention that those were the same markets in which interest rates were falling during the election. The MPC’s minutes for May are, in fact, very helpful. They note that 10-year spot rates were declining, not rising, by about 30 basis points in the month before the election. The tragedy, of course, in the Budget is that there was an alternative. No doubt we will hear from the Chief Secretary a pretence that, somehow, he inherited no plan. Of course, nothing could be further from the truth, because until May he agreed with our plan.”
“Thus the man who made his reputation attacking casino banks has ushered in casino economics to the Treasury. It is now right to give the Business Secretary a little credit: he at least had the decency to give the House an extended mea culpa for his change of heart. In January, as some hon. Members will remember, he told the House that he agreed with my right hon. Friend the shadow Chancellor about the way forward. Now, he agrees with the Chancellor. At least he spared us the nonsense that, somehow, Britain risks becoming Greece—a country still in recession, with debt twice the level of ours and no ability to devalue its currency. All this is hinged, it seems, on the words of the Governor—words, I notice, that were entirely absent from the Monetary Policy Committee’s minutes for May.”
“I wanted to know whether we had ever had a recovery like the one the Chancellor is gambling on in the next three years, so I asked the Library to do some research, and it said that only once has business investment and trade recovered in the way that he prays for, since the Library started collecting figures in 1966. Now, he is relying on the same performance for the next three years in a row. It is like betting not just on England winning the World cup, but on winning the next three World cups in a row. His strategy is nothing short of a massive bet on a recovery that has been hard-fought by businesses and families in this country. But of course, it has been made possible by the Liberal Democrats’ support, not least the imprimatur of the Secretary of State for Business, Innovation and Skills, who is not in his place tonight.”
“The Engineering Employers Federation said that manufacturers “will now be left wondering where the necessary growth and investment will come from, given the cuts to investment allowances and capital budgets.” Last week, the Chancellor liked to tell us he was all for caution, but now it turns out that he is relying on trade figures not seen in this country since 1974 and only beaten once—in 1950. Yet the prospects for trade in Europe, where half our exports go, are not better than when the March Budget was written; they are worse. Where, exactly, will all those exports go?”
“The Chancellor promised that he would be up front with us, but in the small print of the Office for Budget Responsibility report we see that he is gambling on growth of £192 billion in business investment and exports to pull us through. Last week, he told us he was all for caution, but now we have learned that he is relying on business investment that is higher, not lower, than Labour’s projections, helped no doubt by the cancellation of support for firms such as Sheffield Forgemasters and cuts to investment allowances for manufacturing firms. What do manufacturers think of that?”
“In Toronto, international leaders gathered to agree that the need now was for what they called “growth-friendly” fiscal consolidation, yet at home we are presented with a Budget that suffered the instant indignity of its independent reviewers telling us that it will not speed up recovery, but will slow it down. It will not put more people in work, it will put more people on the dole. It will not move the Chancellor’s party—it is so kind of him to join us—from the 1980s, because at the heart of the Budget is an old calculation: unemployment is a price worth paying. That is a philosophy that the Opposition cannot and will not accept. Only in the fine print of the Red Book does the scale of the Chancellor’s bet become clear.”
“That is not just our conclusion; we have heard it across the spectrum of informed opinion. KPMG said: “This is a kill or cure budget”, which “risks choking off the recovery.” The Chartered Institute for Personnel Development said that it “will curb the demand for the goods and services that…drives business investment and exports.” BNP Paribas—hardly a bedrock of socialism—said: “We expect GDP will be much weaker than the Budget projections”. Lombard Street Research said that “there remain risks that aggressive fiscal tightening causes the UK recovery to stumble.” IHS Global Insight said: “There is undeniably a very serious risk that this accelerated and intensified fiscal tightening could derail a still fragile UK economic recovery.” This afternoon, we have been presented with a contrast.”
“Member for Pudsey (Stuart Andrew) told us about some of Pudsey’s famous sons—if that is the word to describe both Sooty and Sweep; I have never been quite sure—and I now know the home of Britain’s best fish and chips. The hon. Member for Truro and Falmouth (Sarah Newton) was passionate and informed about green energy. The House is in need of those qualities on that subject, and we look forward to hearing more from her. Listening to my hon. Friend the Member for Glasgow Central (Anas Sarwar) brought me enormous pleasure. He captured with brilliance his father’s passion and contribution to this place. He showed us that he is a magnificent successor to his father. When all is said, however, at the heart of the debate is a judgment. The reality is that the Budget has presented us with the judgment of a gambler.”
“She will find a ready audience for both subjects in the House. She spoke with real feeling about the need to draw politicians and civil servants into public life from a wider range of backgrounds. She is right about that. My hon. Friend the Member for Airdrie and Shotts (Pamela Nash) spoke movingly about her memories of John Smith and of her debt to John Reid. I served as one of his Ministers and she got his character absolutely right. She was passionate about her constituents and will clearly be an effective fighter in this place on their behalf. The hon. Member for Thurrock (Jackie Doyle-Price) spoke about her roots and how they have shaped her political outlook. She left us very much wanting to hear more. The hon.”
“We have had some excellent debates in the Chamber since the Chancellor presented his Budget to the House. They have been good debates not least because we have heard the speeches of some extraordinary new Members, and I hope I will be forgiven for dwelling for now on only the maiden speeches we have heard today. The hon. Member for East Surrey (Mr Gyimah) rightly perceived that Budgets are not simply collections of statistics. They are important because they are statements about our ambitions for our country and our communities. I was glad to see the scale of his ambitions for East Surrey and I wish him the very best of luck in the difficult business of delivering them, but he showed us that he needs no shoulders to stand on. The hon. Member for Maidstone and The Weald (Mrs Grant) put the emphasis on family and enterprise.”
“I will give way in a moment, because I want Government Members to hear this: far from the absence of detail in the Budget, the Budget prepared by the then Chancellor of Exchequer and presented to the House in March set out to the last penny £19 billion-worth of tax rises and, yes, £20 billion-worth of spending cuts, including £1 billion in cuts from the reform of public sector pensions, £1.2 billion in savings from welfare, £3.5 billion in holding down public sector pay, £5 billion in cuts to lower-priority programmes and £11 billion in savings through the biggest shake-up of Whitehall in a generation. That was on top of £15 billion of efficiencies in this year alone—all carefully broken down by Department.”
“I will give way to the hon. Gentleman. Does he accept that the nonsense about there being no plan that we have heard in the debate was complete rubbish?”
“It is true to say that no Government would have had an easy time in this Parliament, but the difficulty of the task demands that we do not take gratuitous bets with the nation’s hard-fought recovery and that we pay down the debt in a way that is fair. The Budget fails both those tests, and we will campaign for a plan that is better in this House and beyond.”
“Six days on from the main event, the Government’s progressive credentials already lie in ruins. The price of keeping down unemployment in the worst global recession for 60 years was a price worth paying. It was the price of a national defence in a global storm. When we left office, unemployment was 500,000 lower than people expected a year ago. Repossessions were half the level of the 1990s, and company insolvencies were just a third of the rate they reached in the recession of the early 1990s. We are proud that we got the country though the recession in one piece and that we have delivered a return to growth.”
“Age UK says: “Our research shows that cuts of this scale will be disastrous for older people” and warns that thousands of lives will be lost. What is the impact on children? Save the Children says: “Freezing child benefit…will hurt the poorest parents most, rather than their richest peers”. A 20% VAT rate means driving some of the poorest parents into the arms of loan sharks. The Child Poverty Action Group said: “This is a disappointing budget for child poverty…The increase in VAT is a regressive measure which will impact hardest on poorest families.” Perhaps the final word should go to the Institute for Fiscal Studies. In a phrase that will come back to haunt Government Members, it said that the cuts to benefits will “hit the poorest hardest and keep on hitting them harder year on year”.”
“We can see at whose feet the hon. Gentleman has been training. Our plan was different from the one the Chancellor presented. Unlike the plan that we heard last week, our plan really did have fairness at its heart. Last Monday night, the Chancellor’s spin doctors made fairness his key Budget test, and by Tuesday lunchtime he had failed it. The night before the Budget, we are reliably informed, Lobby journalists were equipped with an analysis of the Budget’s impact on different groups of citizens, yet somehow, someone forgot to tell the press that the picture was only fair because it included Labour measures. The Government would not dare to present a Budget to stand and fall on its own merits; they had to borrow ours. It did not take long to hear why. What was the Budget’s impact on pensioners?”