Alexander accused on ‘Budget’ plan

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Published: Thursday 19th March 2015 by The News Editor

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Danny Alexander faced accusations that he was abusing his ministerial office as he set out the Liberal Democrats’ “alternative Budget”.

The Treasury Chief Secretary was harangued by Labour backbenchers as he set out Lib Dem plans for those “left cold” by George Osborne’s Budget.

Despite confirming that the Budget was agreed by the Tories and the Lib Dems, Mr Alexander criticised the plans contained in it to cut government spending to 1964 levels – “the era of Cathy Come Home”.

Prior to Mr Alexander’s ministerial statement, Speaker John Bercow insisted that such statements “have to be ministerial, delivered not in a personal or party capacity but on behalf of the Government”.

But as the Treasury Chief Secretary set out his Lib Dem plan that “borrows less than Labour” and “cuts less than the Conservatives”, he was met with a volley of heckling from Labour backbenchers.

Shouts of “this is an abuse of office” and “this is ridiculous” could be heard as Opposition MPs and others waved the coalition Budget document.

At one point, Labour frontbencher Andrew Gwynne reached across the table separating the despatch boxes with a copy of the red book and dropped it in front of Mr Alexander.

Undeterred, Mr Alexander detailed the Lib Dems’ “better economic plan for Britain”.

He said: “Yesterday the Chancellor set out the final coalition Budget of this parliament.

“The policy measures contained in the Budget document were all agreed between us.

“I secured key Liberal Democrat commitments, including a significant increase in the income tax personal allowance, support for mental health, tax measures to support motorists, scotch whisky and the oil and gas sector because together they make our society fairer and our economy stronger.

“Yet I know that millions of people watching yesterday’s exchanges between the Chancellor and the Opposition leader were left wondering ‘Isn’t there another way to do this?’.

“Because, of course, people want a stronger economy based on a credible plan.

“But people also want a fairer society based on modern public services.

“So to all those people left cold by yesterday’s exchanges, to all those asking themselves is there another way, today I say yes there is, there is a better way.

“Today I set out a better economic plan for Britain – a plan that is based on values of fairness as well as strength, a plan that delivers on our commitment to balance the books in a fair way.

“A plan that borrows less than Labour, cuts less than the Conservatives and enables our country to see light at the end of the tunnel, not a rollercoaster ride but a steady path back to prosperity.

“This sticks to the path that we have chosen in this Government, not lurching away from it by cutting too much or borrowing too much.

“The fiscal forecast published by the Chancellor yesterday would, according to the Office of Budget Responsibility, return government consumption, the effective spending power of the state, back to the level last seen in 1964.

“But the era of Cathy Come Home is not my vision for the future of Britain.”

Mr Bercow had said he would be put in a difficult position if Mr Alexander used “the privilege accorded to ministers for purely party purposes” but he took a back seat for much of the speech.

Before the statement, Mr Bercow said: “The content of ministerial statements is by a longstanding practice not a matter for the chair, nor is my permission required for such a statement to be made.

“But these statements have to be ministerial, delivered not in a personal or a party capacity but on behalf of the Government.

“While some latitude is, of course, permitted, there does come a point at which using the privilege accorded to ministers for purely party purposes would be unfair to the House and put the chair in a very difficult position.

“I know that Mr Alexander will bear that in mind.”

Mr Alexander insisted his statement was “entirely legitimate” because the plans were contained in a Treasury document, but insisted they deviated from the Tories’ “cuts for cuts’ sake” and Labour’s “dragging out the pain”.

He said: “They may not like it but I’m setting out the numbers in the Treasury document published today, which is an entirely legitimate thing to do”.

The Treasury Chief Secretary outlined Lib Dems plans to achieve the £30 billion of savings needed to eliminate the structural current deficit through a combination of tax rises, tackling tax avoidance, departmental cuts and welfare savings.

Mr Alexander’s plans would mean significantly less welfare cuts than under the Tories but also introduce tax rises which the senior coalition partners have not set out.

The plan would allow the current deficit to be wiped out by 2017/18, he said.

Mr Alexander told MPs: “The economic plan that I am publishing today, the Treasury document, has been produced by the Treasury, based on assumptions that I provided, using data from the Office for Budget Responsibility (OBR).

” Our first priority must be to ensure that those with the broadest shoulders bear the largest share.

“So the fiscal plans I’m setting out today are based on a further £6 billion from tax dodgers, an additional £6 billion of tax rises – those in high value property, the banking sector and others should pay more rather than asking those working on low incomes to accept less.

“This would leave around £12 billion of departmental expenditure savings and the remaining £3.5 billion from welfare savings.

“Those measures allow the structural current deficit to be eliminated in 2017/18.

“In fact the coalition’s fiscal mandate is met with headroom of £7.7 billion.”

Mr Alexander said the Lib Dems would then increase spending after 2018, with already announced plans to give the NHS an £8 billion boost and protect education spending in real terms.

He said: “Ten years on from the financial crisis is the right time for the public finances to turn the corner.

“Continuing the pain beyond that date is unnecessary, it is simply cuts for cuts’ sake.

“To go too slowly as the Opposition recommend would drag out the pain for too long.”

Mr Alexander also detailed measures to help achieve the £5 billlion crackdown on tax avoidance announced in the Budget yesterday, including new criminal offences carrying heavy fines for individuals using offshore accounts to evade or avoid taxes and the accountants and other companies who help them do so.

And he announced the Treasury had agreed to provide reserve funding of £200,000 a year for the Speaker’s parliamentary placement scheme in both 2015/16 and 2016/17 to ensure its work continues.

“What a farce,” cried shadow Treasury minister Chris Leslie as he began his speech on behalf of Labour.

Directing his remarks to the Speaker, he asked: “Why has he been allowed to use the Government despatch box for his party political pleading?

“Is this a statement of the Treasury’s policy or not? He said he was publishing fiscal plans today – where is that document?

“I thought statements in the House of Commons were supposed to be from ministers speaking collectively on behalf of the Government.

“But he has totally abused that privilege, assembling MPs this morning on a false pretence.

“I know it is usual to have several days of Budget debates in the Commons, but not several budgets.

“I have to ask you on a procedural point what recourse do we have as the official opposition when statements are being made which are not Government policy?”

At that point deputy prime minister Nick Clegg left the chamber, prompting cries from the Opposition benches.

Mr Leslie mocked it had been his “valedictory appearance in the House of Commons”.

He continued: “Can we all have a turn at giving statements and using civil service resources in this way?

“Will we get to vote on both of these budget statements or just one of them?

“Can you [Mr Alexander] at least tell the House how much this morning’s phony exercise cost the taxpayer?

“What better illustration can there be of the shambolic downfall of this miserable Government when you can’t even tell when there are ministers speaking in an official capacity?”

On the measures outlined to tackle tax evasion and avoidance, the Labour frontbencher asked whether they were Government policy or just “things you would quite like to do”.

“Are these genuinely new powers?” he pressed and asked Mr Alexander to now admit it was an error for Lord Green to have been appointed as a minister in the face of all the evidence.

Mr Leslie went on: “You came here today to set out an alternative Lib Dem Budget at the 11th hour, desperately trying to distance yourself from the extreme and hazardous fate that awaits our public services, our police, our defence, our social services and the NHS, if your boss is re-elected.

“So let’s just get this straight. Are you saying you now can’t sign up to the Chancellor’s Budget in the Red Book this time around?

“Because we know, or at least I thought we knew, that the quad of which you are a member had actually signed off on the Budget and the Autumn Statement figures. Are you now saying you won’t be voting for this in the Red Book next week?

“And are you therefore ruling out a coalition with the Conservatives again after the election?

“Don’t you realise how two-faced you look? You [the Lib Dems] want to have your cake and eat it, to be in Government but not in Government.

“It’s too late for this. The Liberal Democrats have backed the Tories all the way, working families have paid the price and now it is time for you to pay the ultimate price for your behaviour.”

Mr Alexander hit back saying Labour’s own economic policy had been a “farce” and confirmed the plans announced had been collectively agreed by the Treasury.

He said no resources had gone into the statement apart from the work of civil servants who calculated the numbers, which he said was entirely proper.

On the tax evasion measures, he said: “These are new laws that are being introduced by this Government, set out in a report today.”

He concluded by saying Labour should get on with apologising for the mess they created rather than indulging in a “pathetic display” in the Commons.

Tory Adam Afriyie (Windsor) said the spectacle had left him “stunned” and pointed out there was not a single Conservative on the front bench with the Liberal Democrats.

He called the display the “Westminster bubble at its absolute worst” and “everything that is wrong with politics today”.

Labour’s Chris Bryant (Rhondda), a shadow culture minister, asked what had happened to the tax relief for orchestras announced in the Autumn Statement.

He said: “Now we learn the Government definition of an orchestra says you only get tax relief if you have woodwind and strings and percussion and brass – all four.

“That means that no string orchestra is included, the London Sinfonia isn’t included, the Orchestra of the Age of Enlightenment isn’t included, nor for that matter is a single brass band in the land.

“So if you want somebody to start trumpeting your orchestra tax relief, aren’t you going to have to change the rules?”

Mr Alexander said he would take back those points to officials in HMRC.

Liberal Democrat Ian Swales welcomed the plans on tax evasion and avoidance and asked: “Do you agree it should no longer be a respectable occupation to advise on and enable people, those who want to avoid paying their share of our schools, our hospitals, our armed forces, pensions and all the other things on which our country relies?”

Mr Alexander agreed, adding: “It has been a matter over the past five years upon which I have championed action in the Treasury.

“Today’s Government announcements show the next stage of that and exactly as you say this country does not and should not tolerate the kind of abuse of the tax system that has gone on in the past.”

Stewart Hosie, depute leader of the SNP, suggested the chief secretary was “trying to pretend he is important” by the number of redactions in copies of his statement.

He added: “You have not laid out a plan that combines fiscal responsibility with fairness, the plan is in the Red Book. It is isn’t responsible, it isn’t fair, it is just another five years of austerity cuts and you know it.”

Mr Alexander said the SNP’s plans would do nothing to sort out the economy, damage the recovery and cause jobs to be lost in Scotland.

He added: “I think the people of Scotland can make up their own minds about that.”

Sir Malcolm Bruce, deputy leader of the Liberal Democrats, said it was entirely legitimate for a coalition that had achieved five years of securing recovery and growth to set out how the next five years could take it forward.

He added: “Can I suggest, if coalitions are to become the norm, we need to find better ways of handling how the two of the coalition parties can present their case to the House.

“This seems a perfectly reasonable way of doing it.”

Published: Thursday 19th March 2015 by The News Editor

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