Finance (No. 2) Bill — House of Lords, 2015-03-26
Topic: Macroeconomics
Bryan Davies (Labour, Centre-left): My Lords, we live in a strangely surreal world with regard to this Finance Bill. My noble friends and noble Lords on the government side will recall when they were in the other place long days and nights spent on Finance Bills, watching dawn break across the river as we struggled with the issues presented by their depth and significance. This Finance Bill went through the Commons in one day. The Budget was debated. There was a very good debate in the other place over several days. Of course, yesterday in this House we had four hours of excellent contributions to the general issue of the economy and what the Budget represented in relation to that economy. But I can scarcely for the life of me engender the same degree of intense scrutiny of this one little Bill. Even the Minister was able to dispatch it in 20 minutes or so In any case, this Finance Bill is a pretty mean-spirited effort. The Chancellor tried to boast and establish the fact that living standards were not lower than they had been in 2010. It is a strange thing to boast about—that there has been no growth in living standards since that time. In the area where he suggested that there had been some progress, others, such as the Resolution Foundation think tank, challenged his figures and indicated that far from there being income growth for people, incomes had fallen We know who has been hardest hit over these past five years—young people, in particular, and middle-aged people with low-paid jobs. There are plenty of those about. We know that there are 1.8 million zero-hours contract jobs at present. I do not know how the Government can be proud of a low-wage economy that has slumped to that level but that is what faces us. When the Minister blithely says that the Government are increasing the personal allowance, he ignores the fact that for 5 million people that is utterly and totally irrelevant as they do not earn enough to pay tax. The changes in the allowance are of absolutely no relevance to them at all. However, the more you earn, of course, the more relevant the changes become. It is typical of the Government to look after the better-off while doing very little to help the less well-off What does this mean-spirited little Bill mean? We had the Chancellor trying to talk about success in a land where food banks proliferate. In my old stomping ground of Oldham, rickets has emerged in recent months. Is that the society over which this Government wish to preside? Are the Government content that the pay of chief executives of FTSE companies and of some people in the public sector has increased to the extent that it has while those at the other end of the spectrum experience the difficulties that I have mentioned? We know of chief executives in local authorities who earn considerably more than the Prime Minister. We are also well aware that high salaries are paid to some officeholders whose posts were never distinguished by high earnings in the past. For example, a university vice-chancellor can earn £640,000 a year. I have great respect for British universities. They have done tremendously good work. However, one has to ask questions about the relationship between vice-chancellors and the rest of the scholastic community when their incomes almost equal those of FTSE chief executives. One also has to ask questions about the differential between vice-chancellors’ pay and the average pay of university staff. We hoped that the Government would address some of these issues. When they did address them, on the whole they rewarded the very rich with further tax cuts I am grateful for the fact that three of my noble friends have spoken in this debate. I note that no one from the government Back-Benches thinks that it is worth speaking in support of this Bill, although their presence may be an enthusiastic endorsement of what the Government are doing. However, it is a pretty limited endorsement. At least, three of my noble friends have sought to address the Bill. In all honesty, their talents would have been better deployed yesterday because my noble friend Lord Haskel, who spoke so eloquently about the fundamental issue of productivity, a phrase which I do not think passed the Chancellor’s lips at all—