Rachel Reeves
MP for Leeds West and Pudsey · Labour · United Kingdom
“I thank my hon. Friend for his question and his work on the Treasury Committee. On pensions reform, through the Mansion House accord and Sterling 20, we have got pension funds to commit to investing more in British businesses, both through British venture schemes and in British infrastructure.”
“I thank my hon. Friend for her question. As Members will know, this Government are working on plans with our NATO allies for a multilateral defence mechanism. We have already signed a treaty agreement with Finland and the Netherlands, and we are working closely with Scandinavian, Baltic and eastern European countries.”
“At a time of great global uncertainty, it is more important than ever that we deepen ties with our closest allies and biggest trading partners, whose values we share, and whose interests are bound to ours.”
“Today the Government have responded to the covid counter-fraud commissioner’s recommendations in a report that I commissioned, which confirms that the Conservative Government left the door open to more than £10 billion of pandemic fraud.”
“As I just said, the DIP will be published before the summit. It will involve more money spent more effectively, and it will meet the scale of the challenges we face. Frankly, I will take no lectures from the Conservatives, who left our armed forces, in the words of their former Defence Secretary, “hollowed out”.”
“I thank my hon. Friend for bringing the story of Darren and Nicole to this House. I hope that they and their children will benefit from the change I made to the two-child limit for universal credit, as well as from the rolling out of free breakfast clubs to all primary schools, and the introduction of free school meals for all children wh…”
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“It would give them the security of knowing they have had the benefit of impartial guidance before making a decision that could have a huge impact on how comfortable they will be in retirement. It would have a dramatic impact in helping people to use their pension pots, which they have saved for, wisely. I urge the Government to take that on board to help to ensure that as many people as possible can enjoy a secure income in their retirement.”
“The guidance structure is already in place in the form of Pension Wise, which has received positive feedback, as I set out earlier, from those who have used it; it has the scale and budget to deliver guidance to the full range of consumers who need it. But without action from the Government, take-up looks set to remain low. That is why I am calling on the Government to introduce the default guidance approach. Crucially, that would in no way undermine or inhibit the central purpose of the pension freedoms. Consumers would retain complete freedom to draw down as much or as little of their pension pot as they wish at any time they want. That change would provide a vital safeguard for millions of people when they plan for their retirement.”
“Although I believe all this is critical, we must not take our eye off the bigger picture. The Blake review makes excellent recommendations for the direction of pension reform, and that should be the focus of future Government policy making. In conclusion, failure to address low guidance take-up is likely to lead to negative outcomes for those most at risk of making poor choices, reducing pensioner wellbeing, undermining competition in the retirement market, and having a toxic impact on confidence in the pension system just when good progress is being made through the roll-out of automatic enrolment.”
“Links to the guidance service should be embedded within the pensions dashboard from the start, and the Government should consider how to improve engagement as the dashboard is introduced. That will also encourage consumers to seek pensions guidance at an earlier stage. Currently, people are prompted to seek guidance at the point of, or close to, making a decision on how to turn their pension savings into a retirement income—for example, when receiving a wake-up pack from their provider. Proactively contacting people at an earlier stage in their working lives would also give people more time to make changes to their savings strategies if needed. As with other measures to improve the customer journey, solutions should be tested with consumers to ensure that they are effective and meet their needs.”
“The Government should consider allowing providers to share certain data with each other, so that when a customer is passed from one service to another, the second engagement does not need to start from scratch, with the customer forced to repeat all the information that they had previously provided. Looking further forward, the new pensions guidance body should also link with the pensions dashboard being developed by 2019. The dashboard will enable people to see all their pension savings in one place—that is welcome—help people to engage with retirement planning and prompt them to take action. It is critical, therefore, that there is co-ordination with the new guidance body, so that consumers are signposted and directed to access guidance when looking at their dashboard.”
“It would enable guiders to alert consumers to the existence of fraudsters who use techniques such as cold calls and text messages to con people into placing their savings into wholly inappropriate investments. The Government must take a number of additional actions to support that. The Government must work with industry to introduce a system to allow pension providers to book guidance appointments directly for their customers, or to put them through, if they can make contact by phone, to the appointment booking service without a break in service. Such handovers should be based on ensuring that the customer journey is as smooth and continuous as possible and that as many people as possible get the right guidance.”
“They are doing this while promoting their own internal help lines.” The whole point of Pension Wise is to be readily available to the people who are making the decisions, but they are not directed there by their pension providers and will probably never find out about it. So what is needed is a new approach whereby customers who decide to cash in their pensions must either seek guidance from Pension Wise or actively opt out of doing so before progressing. That would not only improve outcomes for customers, but dramatically reduce the opportunities for mis-selling, cut the risk of savers falling foul of financial scams and other potential abuses, and help people to make the right decisions at such an important time in their lives.”
“Pension Wise has run three national marketing campaigns across TV, radio, print and digital media, but take-up, as I said earlier, remains low at just over 10%. Such problems must be addressed. That is why I call on the Government to issue new guidance to make sure consumers seek proper guidance before drawing on their pension pots. At the moment, the so-called wake-up packs sent to DC pension customers ahead of retirement are often more successful in driving consumers to the providers’ own product solutions than directing people to the Pension Wise guidance service, something that Baroness Altman has pointed out: “I have seen the retirement packs from some of the better pension providers who are hiding away Pension Wise.”
“Poor buying decisions have also been identified by some organisations and consumer groups to the National Audit Office, which in its report on mis-selling described the concerns as being centred on regulatory approaches that are “based too much on monitoring and implementing detailed disclosure requirements, rather than assessing whether consumers truly understand what they are buying.” If disengagement and low take-up of guidance remain the norm, it reduces competition and undermines confidence in the new pensions market. Again, I stress that this is a real concern when we have consumers without the information to make the best decisions, and a pensions industry that is not necessarily helping people to make the decisions that are best for them.”
“All this makes it difficult for many people to be in a position to make ‘informed’ choices.” Demand-side weaknesses and lack of knowledge from people making decisions are compounded by the repeated failure of parts of the pensions industry to, in my view, treat customers fairly. Mis-selling in the UK retirement market has been catalogued at length by the FCA and its predecessor, the Financial Services Authority.”
“Meanwhile, the Pensions Institute’s “Independent Review of Retirement Income” states: “It is important to be aware of the risks involved in the generation of retirement income from pension savings”— such as investment risk, inflation risk and longevity risk. It continues: “Following ‘freedom and choice’, these risks are now borne directly by DC scheme members” in a way that they were not when everyone had to annuitise. It continues: “Even with improved financial education, it is unlikely that many people will fully understand some of these risks. This is because some risks have to be experienced before they can be genuinely understood, and often it is too late by that stage to do anything about them. In addition, many people will have problems understanding the full range of product choices that are now available.”
“Most shocking of all, just 3% said they understood what income drawdown is quite or very well. These are people in DC schemes who have to make big decisions, yet they do not seem to have the knowledge about the products they have to choose between. Research by the Pensions and Lifetime Savings Association found that 53% of people incorrectly believe drawdown products offer a guaranteed income. The majority of people believe that a drawdown product is a guaranteed income, which it most definitely is not, while one quarter believe that drawdown carries no investment risk at all, which is incredibly worrying.”
“We estimate that the aggregate benefits that consumers miss out on by not shopping around and switching is the equivalent of between £115m and £230m of additional pension savings.” The OECD has suggested that, although the pension reforms might increase pensioners’ control of their money, which I welcome, they could be “detrimental to both retirement income adequacy and incentives to work” because of “myopic behaviour and insufficient financial literacy”. What is more, research from the International Longevity Centre-UK suggests that there is limited knowledge about relevant financial products and services. Only half of those with a DC pension said they understood what an annuity is “quite” or “very well”. Just one third said they understood what a joint life annuity is quite or very well.”
“Critically, evidence suggests that poor outcomes are likely for consumers who do not seek professional support with their retirement options. UK and overseas analysis shows that factors such as disengagement, underestimation of how long people will live and weak financial capability lead to poor outcomes. Although it is too early to say what the new pension freedoms will mean for outcomes, the FCA estimated the losses from failing to shop around when people were required to buy an annuity: “The majority of consumers (60%) do not switch providers when they buy an annuity, despite the fact that we estimate 80% of these consumers could get a better deal on the open market, many significantly so.”
“They have a shared objective of ensuring that all consumers can access the help they need to make effective financial decisions. As the review says: “Both industry and consumer groups also felt that many people, even those who did not necessarily want or need regulated advice, would benefit from more support and guidance in financial decision-making.” In addition to those efforts to bolster the pensions guidance offering, welcome regulatory scrutiny will also be applied to the evolving retirement market, with the FCA identifying pensions as a priority area in its 2016-17 business plan. Although those are welcome developments, the results will arrive too late to benefit the 1.5 million people expected to access pension savings before spring 2018.”
“That represents only around 12% of DC pension customers who have accessed their pensions since the reform came in. That is deeply troubling, and I am interested in what the Minister has to say about improving the use and take-up of the service. Put another way, almost nine out of 10 people are not seeking advice or guidance from Pension Wise when cashing in their pensions. That figure is worrying and suggests that millions of people are not getting the impartial guidance they need. If that is the case, as it seems to be, we should be alarmed about the quality of financial planning guidance that some people are getting and the subsequent impact that could have on their standard of living in retirement. The Government published their “Financial Advice Market Review” in March and their plans for a new comprehensive pensions guidance service.”
“In each appointment, impartial guidance is given on pension options and tax and there is a discussion of the options that may be most suitable for the client. The ratings from those who have used the Pension Wise website are positive. The gov.uk performance site shows user satisfaction at 89%. I pay tribute to all those who work at Pension Wise for providing an excellent service. However, the problem, and the reason for the debate today, is not the effectiveness of Pension Wise; it is how few people are using the service. The Financial Conduct Authority estimates that fewer than one in five consumers are using it. In response to a recent parliamentary question I tabled, the Government revealed that there have been 61,000 completed appointments since launch.”
“We recognised that annuities did not work for everyone, but that reforms must be accompanied by the provision of guidance to help people to make important and difficult decisions about how to use their money. In response, the Chancellor committed to a new guarantee enforced by law that everyone retiring with defined contribution pensions would be offered free, impartial, face-to-face advice on how to get the most out of their choices. That commitment materialised to some extent—although it was guidance, not advice—in the form of Pension Wise, a single guidance service launched to coincide with the introduction of the pension freedoms in April last year. The Pension Wise service offers face-to-face or phone appointments to those aged 50 or over with a DC pension.”
“At best, it just becomes a tax-favoured arrangement for operating a multi-purpose spending pot and once the money has been spent for one purpose, it cannot be spent on another. At worst, it becomes a honey pot for thieves and other opportunists: while you cannot steal someone’s pension, you can steal their pension pot, as a number of people are now discovering. Lying between these extremes are millions of people who are now in control of their pension fund and who will be trying to do the best for themselves and their families…many of these people could well find themselves in the same kind of control as a yachtsman in the middle of the Atlantic in a force nine gale.” When the pension freedoms were announced, we in the Labour party were clear that we would in principle support reform.”
“The Pensions Institute’s “Independent Review of Retirement Income”, which I commissioned from Professor David Blake when I was shadow Secretary of State for Work and Pensions, warned that: “The unifying thread that runs through funded pension scheme is the requirement to annuitise enough pension wealth, at the appropriate age, to provide an adequate lifelong income in retirement when combined with the state pension – which is the rationale for establishing a private-sector pension scheme in the first place. It is this requirement which makes a funded pension scheme different from any other type of savings scheme. When annuitisation becomes optional, that unifying thread is no longer present and there is a real danger that the pension system begins to unravel.”
“People are suddenly being asked to make an irreversible decision by weighing up how much to save; how long they will live; how much they need to live on; the risk of investments decreasing in value; how much they will be charged by pension providers; what tax they will have to pay; and what state pension they will receive. Let us not forget, they will have to live with the decision for the rest of their lives.”
“I beg to move, That this House has considered advice and guidance on pension freedoms. I am grateful for the opportunity to have this debate on the crucial issue of advice and guidance in the world of pension freedoms. In 2014, the Government announced one of the biggest shake-ups of the pensions industry in its history. Those changes will, as the Minister knows, affect millions of people. The reforms undoubtedly give people more choice over what to do with their pension pots—one of the most important decisions on their finances—but with those choices come great risks. At the heart of the so-called pension freedoms is the idea that people with defined contribution pensions no longer have to buy an annuity. Instead, they have an unprecedented number of choices when it comes to making financial decisions.”
“Q12. With the real prospect of a recession on the horizon, the offer from the Chancellor is to cut corporation tax, yet companies worry whether they will make a profit in the UK, not how much tax they will pay on it. Can the Prime Minister tell us what immediate action his Government will take to protect people’s jobs and livelihoods right now?”
“The OBR says that cuts in corporation tax have so far had no discernible impact on either business investment or growth. Indeed, in the latest forecast, despite cuts to corporation tax, business investment was revised down. I urge the Chancellor to look instead at helping small businesses or investing in infrastructure rather than going ahead with further cuts in corporation tax, which so far seem to have made no difference.”
“The Treasury Committee’s report on our membership of the European Union looked at the short-run risks of volatility, many of which are now manifesting themselves with sharp falls in sterling, the volatility on the stock exchange and Government bond yields falling to an all-time low. What actions are the Government taking now to protect British jobs, growth and living standards?”
“Her mum and dad said to me that Jo would not have changed a thing. She lived the life she wanted to live. And yet, in her mum’s words: “She had so much more that she could have done”. Jo was struck down much too soon. So it now falls on all our shoulders—the woman I met in a Batley coffee shop, Jo’s friends, MPs, all of us—to carry on Jo’s work: to combat and guard against hatred, intolerance and injustice and to serve others with dignity and love. That is the best way we can remember Jo and all she stood for. But lastly, let me say this. Batley and Spen will go on to elect a new MP. But no one can replace a mother.”
“Jo wanted to make the world fairer, more equal, more tolerant and more generous. We all have better instincts and deepest fears. Jo appealed to our better instincts—our sense that, as she said in her maiden speech, what we have in common is greater than what divides us. On Friday morning, less than 24 hours after Jo was killed, I sat in a coffee shop in Batley just a few minutes away from where Jo had been murdered. A woman came over to me and said that she had not known Jo, but that Jo’s death had made her want to be a bit more like her—a better person, a better mother, a better daughter, a better wife. It is ironic that, having travelled to some of the most damaged, war-ravaged places in the world, Jo died so near to her home. But she died doing the job she loved, in the place she loved, representing the people she loved.”
“She was thinking about standing for Parliament and spent a day shadowing me in my constituency of Leeds West, talking to constituents about their problems, campaigning with local party members and attending meetings. By the end of the day, a lot of people were not sure who was the MP and who was doing the shadowing. Jo had a way with people—a way of relating to people from all walks of life. She had a real way of doing that. Jo’s main hesitation about a parliamentary career was her young family. She worried, as many of us do, about whether she could be a great MP and a great mum at the same time. But when the opportunity came up to represent her home seat of Batley and Spen, Jo felt a special responsibility to step up and do what she could for the place where she was born, grew up and went to school—the place that Jo called home.”
“I stand here today to honour a friend and a colleague. Along with shock, anger and grief, I have very many fond memories of Jo. Jo and I knew each other for around 10 years. I have known her husband Brendan for longer than that: we first met at a Labour student conference about 18 years ago, and it was through Brendan that I first met Jo. I remember Jo and Brendan coming round for dinner at my and my husband’s house in London and our visiting them on their boat—first in Ladbroke Grove and later in Wapping. I remember worrying that I had drunk too much wine early in the evening, until I realised that it was the boat that was swaying and not me. I remember talking with Jo about her future shortly after I became an MP.”
“The Chancellor speaks about investment in transport and in flood defences, both of which are crucial in my city of Leeds. Yet last month the Government cancelled the Leeds trolleybus scheme, and in 2011 flood defences were cancelled in Leeds, which contributed to the flooding we saw in December. Earlier this year the Government announced some money for flood defences, but it was just a fraction of what was cancelled five years ago, so I am surprised by the complacency of the hon. Member for Pudsey (Stuart Andrew), and ask the Government to invest properly in flood defences in our city.”
“The current account deficit is at a post-war high of more than 5% of GDP, and 44% of our exports go to the European Union. It took Canada seven years to negotiate a free trade agreement with the European Union. Does the Minister agree that the last thing that exporters need, and the last thing that the one in 10 jobs that depend on our exports to the EU need, is the uncertainty that the referendum is bringing—and, indeed, that Brexit would bring—to them and to those jobs?”
“The Prime Minister says that he is leading on international efforts to crack down on tax evasion, so can he explain why he wrote to the then European Council President Herman Van Rompuy in 2013 and asked him to water down the impact of EU transparency rules by treating trusts differently from companies in anti-money laundering rules, despite warnings that such a move could create loopholes for tax dodgers?”
“I urge the Government to do more, by supporting, not blocking, measures in the European Parliament that strive to meet that objective. The truth is that HMRC’s own figures show that the tax gap fell by £4 billion over the last five years of a Labour Government but has risen by £1 billion under the current Chancellor. The consequences of this Government’s refusal to take the necessary action on UK Crown dependencies —[Interruption.] I am happy to take an intervention instead of having the Minister muttering from a sedentary position.”
“That is having the wrong effects and the wrong people are benefiting. I support ISAs and tax-free savings, but only if they are there to support those people who need to save. What we are seeing is a falling savings ratio, with the most wealthy people being incentivised to save. We need to help those people on more modest incomes to put something aside for their future. This Finance Bill, like those before it under this Chancellor, contains a long list of clauses ostensibly aimed at reducing tax evasion and avoidance. Anything that genuinely advances that end is to be welcomed, but we will judge the Government’s achievements not on the number of clauses in their Bills, but on the real progress made towards closing the tax gap and ensuring that everyone pays their share.”
“In the latest year for which detailed data are available, the average ISA subscription was less than £4,000 in the year. Fewer than one in 10 people who contributed to an ISA were able to save the maximum amount of just over £15,000, with a disproportionate number of those who did so having incomes above £150,000 a year. The trends of recent years suggest that as the Government have focused on raising the annual limit for ISAs, the total amount of cash put into ISAs has increased sharply even as the total number of people contributing to an ISA has fallen. In other words, this is moving ISAs away from their original purpose as a platform to support broad-based saving and investment, and increasing their use as a way to minimise tax liabilities for those with large amounts of cash to move around.”
“But, again, I would argue that with squeezed family finances and tight public finances, this is neither fair nor fiscally responsible. Thirdly, as part of his Budget the Chancellor has chosen to increase the amount any individual can contribute to a tax-free savings account to £20,000 a year, as the hon. Member for Kirkcaldy and Cowdenbeath (Roger Mullin) mentioned. I welcome action to make it easier for ordinary workers and families to save, but we have to ask whether this approach should be the priority when most of our constituents are lucky to earn £20,000 a year and have anything left to save at all. In my constituency, average earnings are just under £20,000 a year, and many people would struggle to put anything aside, let alone take advantage of a £20,000 individual savings account limit.”
“Again, that is not the right priority when the living standards of ordinary people are being squeezed and when our public finances are so stretched. The Chancellor would no doubt protest that that is a price worth paying for the entrepreneurial energy that the capital gains tax cut will unleash, but the official documents reveal that the OBR has made no upward revisions to its forecasts for investment, productivity or growth as a result of the measure, which will cost £2.7 billion. Indeed, the most likely impact of the move will be to increase the incentive to avoid tax by converting income to capital gains. Perhaps the Chancellor has been taking advice from the Prime Minister, who seems to have enjoyed the benefit of some careful tax planning.”
“At a time when the earnings of those on middle and low incomes are being squeezed and public finances remain extremely tight, raising the threshold at which people start paying the higher rate of income tax is the wrong priority. Secondly, the cut in capital gains tax in clause 72 will cost taxpayers more than £2.7 billion over the next five years, but directly benefit only a tiny minority. Just 130,000 individuals will share the gains, the majority being higher rate taxpayers. Around half of capital gains tax is paid by just 5,000 individuals who will therefore receive a windfall and get the bulk of the advantage, so the benefits of this tax break will be pocketed by a relatively fortunate few.”
“Against that background, one might think that a Chancellor who once proclaimed that we were “all in this together” would want to use the Budget and this Finance Bill to target help towards ordinary working families and the low-paid. Instead, we have a package of measures before us that disproportionately benefit the better-off, rather than those who most need support. Let me give three examples. First, fewer than one in five taxpayers will gain from the £2 billion cut in higher rate income tax in clause 2. Those who will gain will also receive the largest benefit from the expensive and poorly targeted increase in the personal allowance in clause 3. The 4.6 million lowest-earning workers in the country will receive no benefit at all from either change.”
“Looking at the deterioration in expected earnings since the Budget just after the general election, the OBR forecasts that the average UK worker will be £823 a year worse off by the final year of this Parliament. Following the downward revisions, the total loss over the course of this Parliament is £2,000, the impact of which will be felt most by those on low and modest incomes. Indeed, because the national living wage is linked to average earnings, somebody on the minimum wage will be £600 a year worse off than when the Government originally announced it. In less than a year, the average worker will be £2,000 worse off over the course of this Parliament and somebody on the minimum wage will be £600 a year worse off compared with what the Government originally announced.”
“That is before we factor in the calamity that the Government have allowed to unfold in our steel industry or the enormous risks to our economy created by putting our membership of the European Union in question. Indeed, just a few weeks after the Budget statement, we have seen even more bad news about not only steel, but the manufacturing sector in general and the worst balance of payments figures that the country has seen since the second world war, with the deficit in the fourth quarter of 2015 reaching a staggering 7%. All that has an impact on living standards. On top of the downward revisions that we saw in November, expected earnings have been revised down in the forecasts for every single year of this Parliament.”
“In 2010, the Chancellor promised us a new growth model based on higher savings, investment and exports. However, notwithstanding what we have just heard from the hon. Member for Somerton and Frome (David Warburton), those fundamentals, which underpin the economy and are the backdrop to the Bill, are not going as well as we might have hoped. Our national savings ratio has hit an all-time low of 3.3%. In the latest figures, investment has been revised down, with a staggering £87 billion wiped off forecast business investment since last November, and public investment is falling as well. Our export performance has deteriorated further, with the gap between the Chancellor’s 2020 target for a trillion pounds-worth of exports and the OBR’s expectations now widening to £357 billion.”
“Instead, at the last minute he decided to raid the disability budget, but then—after that was announced—recognised that it did not really fit with his rhetoric of, “We’re all in it together.” That is why the Budget has unravelled so quickly, but most important—well, not the most important—it is why the political prospects of the Chancellor have unravelled so quickly as well. The highest price for this Budget will be paid by ordinary taxpayers, working families and future generations. That is why I and my colleagues will vote against the Bill this evening. It represents the wrong priorities for our country.”
“This Budget has unravelled even faster than the 2012 Budget, with the flagship measure—changes to disability benefits—dropped and the changes to pensions tax relief dropped before they were even announced. The flagship measure in the 2012 Budget—the cut in the top rate of tax from 50p to 45p —stayed, but the flagship measure in this year’s Budget was dropped. I believe that the Chancellor wanted to reform pensions tax relief, but could not do so because Tory MPs protested too loudly.”
“It also states that “there are not strong economic arguments” for the cut, which will “push up house prices and possibly rents” and “make it more difficult for younger households to buy a house.” Yet that is a priority of this Government. Meanwhile, the overall cost is set to rise to almost £1 billion a year as the policy is introduced. I believe that the money could be much better used to help ordinary families who struggle to stay in work when their children are young by, for example, creating a universal childcare entitlement for children aged two. That would be a more prudent use of funds when family finances are stretched and so are our public finances. I remember being shadow Chief Secretary to the Treasury in 2012, when we had what we dubbed the “omnishambles Budget”.”
“At a time when wealth inequalities are widening, our savings rate is plummeting and the costs of an ageing society are increasing, that measure would provide a powerful incentive to save for millions more people and definitely help more people than a £20,000 ISA limit. The Bill was also an opportunity for the Government to admit they had made a mistake and to reverse the Chancellor’s expensive and poorly targeted cuts to inheritance tax, due to be phased in from next year. The Treasury’s own leaked analysis confirms that the policy will “most likely benefit high income and wealthier households” concentrated in London and the south-east of England.”
“We spend £34 billion on pensions tax relief and 14% of that benefit goes to people earning more than £150,000 a year, even though they represent a tiny proportion of all taxpayers. Just 10% of the benefit from the relief goes to those in the bottom half of the income distribution. That is why I argued for a 33% flat rate of pensions tax relief, which would be fiscally neutral but fairer to families on ordinary incomes and those who are trying hard to put something aside for the future. It would also give a strong incentive to save by, in effect, providing a simple two-for-one offer: for every £2 people put into a pension, the Government would add another £1.”
“All he would say was that he had “no plans” for further raids on the fragile finances of disabled people, low-paid workers or children living in poverty, but that gives very little reassurance to those who rely on social security because they are sick or disabled and cannot work, or because they are in low-paid work and struggle to make ends meet; nor does it reassure families bringing up children in poverty that the Government will not once again hit their family finances. Perhaps even more problematic than the measures in the Bill are the measures that are missing from it. The House will remember that this was supposed to be the Finance Bill that reformed our unfair system of pensions tax relief.”
“The shadow Chief Secretary to the Treasury cited the Resolution Foundation. It has calculated that the tax and benefit measures already taken by this Chancellor since the election will cut the incomes of the poorest 30% by £565 a year, while increasing those of the richest 30% by £280 a year—and that is before we factor in the impact of any further cuts to social security needed to meet the Government’s welfare cap and fill the multi-billion-pound fiscal hole following their U-turn over personal independence payments. During a sitting of the Treasury Committee I pressed the Chancellor on all of this, particularly the changes to disability benefits.”
“If the Minister is so concerned about the tax gap, why did his Tory MEPs block measures in the European Parliament to crack down on tax avoidance and why did the Prime Minister write to Herman Van Rompuy in 2013 asking for trusts to be excluded. As I say, instead of looking at the number of clauses in a Bill, we should judge the Government by their record, by their actions and by what is happening to the tax gap. Under Labour the tax gap narrowed but under the Tories it is widening. They need to make much more effort to ensure that people at the top and big corporations pay their fair share of tax, but that is not happening under a Conservative Administration. I hope that I have demonstrated that this Finance Bill prioritises tax breaks for the wealthy at the same time as pulling vital support from the vulnerable and disadvantaged.”