Finance (No. 2) Bill — House of Commons, 2021-04-19
Topic: Mixed Topics
John Martin McDonnell (Labour, Centre-left): New clause 4 stands in my name and those of several right hon. and hon. Members. As I said in the debate on the provisions for super deductions, if the Government are giving tax breaks to businesses, then the Government, as guardians of the public interest, should demand something in return. The provisions in new clause 4, listed as (a) to (d), are modest demands that many Members, especially those on the Opposition Benches, think should be required of all businesses anyway. It is important that public money supports public goods and good public outcomes, like a fair day’s pay for a fair day’s work, like tackling climate change, in which we all—individuals, Government and businesses—must play a role, and like eradicating the gender pay gap, a process this House began over 50 years ago with Barbara Castle’s groundbreaking Equal Pay Act 1970 The Minister referred to those as "complications". I do not believe that paying decent wages, tackling climate change or overcoming the gender pay gap are complications. I believe they are essential criteria for any policy for the future. If we are to tackle rising poverty—if the Government want to do that—there is an opportunity here to end in-work poverty by guaranteeing the real living wage in companies locating to freeports. We have 4.3 million children in poverty, and most are living in households where at least one parent is in work. Government policy must act to tackle low pay Low pay holds people back and is often linked to insecure work, which is why the Government should also act to end zero-hours contracts. Insecure and low-paid work means insecure housing and instability for children. The Government should put down a marker in this policy for the society we want to be. As things stand, from what we have heard in the debate so far, it is a society for a few to profit and the rest to struggle. This new clause is about hardwiring fairness and justice into our economic system, and about levelling up. It should not be in conflict with any stated aim of the Government, and I hope that they accept the new clause or at least consider the issues about how we tackle this range of policies and use the state to enable that to happen New clause 5 also stands in my name. In its analysis of the Chancellor’s Budget, the Office for Budget Responsibility said of freeports: "Further details have been announced in the Budget but came too late to be incorporated into our forecast. We will return to this in our next" economic and fiscal outlook. So this is policymaking as a leap in the dark. It is not evidence-based, but done on the basis of supposition and, largely, ideology, given what we have heard so far. What I seek to do in new clause 5 is create an evidence base for policy, on which this House can assess the merits and drawbacks of such a policy. There are reasons to be concerned. Many Members of this House will recall the debates about enterprise zones in the 1980s. Those zones did little to benefit local workers and simply transferred jobs and investment, rather than stimulating it. In an assessment of the enterprise zone policies of the 1980s, the Centre for Cities think tank found: "The first two rounds…created 58,000 additional jobs (directly and indirectly), but over 40 per cent of those jobs were created by businesses that had relocated to enjoy the tax cuts" It also found that each job "cost the public purse £26,000 (in 2010-11 prices), which was significantly more expensive than other policies" for job creation that we were being pursued at that time. The same policy was brought back under the Government of David Cameron, championed by the then Chancellor George Osborne. Analysis of those zones by the Centre for Cities showed the jobs supposedly "created" in these zones were often just relocated from elsewhere. Unfortunately, the evidence showed that they were also overwhelmingly low-skilled and low-paid. Tax breaks in underinvested areas are not an industrial strategy. New clause 5 is a simple plea for evidence-based policy making, and one I hope the Government will accommodate in their future discussions I hope the Government will also accept new clause 25 in the name of the Opposition Front-Bench team, because it too demonstrates that evidence-based policy requires policies to be reviewed, and that the evidence base has to be assessed throughout implementation of any particular policy. The case for freeports has not been made and the risks are significant. There are risks of accelerating tax avoidance, and actually doing economic damage to areas neighbouring freeports is a real concern. To leap into a policy with such a lack of evidence and of account taking of past practice is worrying, to say the least This is the last time I will speak at this stage of the passage of the Bill, so I would like to place on record that, after listening to the debates on Second Reading and today, even I am shocked at the undeniable evidence of the scale of corporate capture of this Government, going well beyond anything we have seen under the last two Tory Prime Ministers. The central purpose of this Government, on the basis of these policies—both the super deduction and holding back the corporation tax increase, as well as the freeports—appears to be simply to line the pockets of corporations with taxpayers’ money and to render them free of any effective regulation that would make them accountable to a wider community. I therefore honestly and fervently fear for the future of this country in the hands of this Government.