As my right hon. Friend the shadow Chancellor pointed out today, it was Labour that supported, and indeed beat down, successive cuts in the main rate of corporation tax, which fell from 33% in 1997 to 28% in 2010. Given that the rate today is 21%, however, we cannot justify another cut for bigger businesses when so many small and medium-sized businesses are under pressure. We want to see a cut that would benefit 1.5 million businesses throughout the UK, and in Wales we are already leading the way in that regard.
A moment ago, I mentioned the success of the Jobs Growth Wales scheme. I want to highlight that success, because there is a big contrast between it and, say, the failures of the Work programme introduced by this Government. As I said earlier, the Government cut the future jobs fund when they came to office. We in Wales, under a Labour Government, chose a different way, without which far too many young people would otherwise be missing out on opportunities for growth, development and experience. They would be sitting idly at home, rather than being out there developing skills and contributing to the economy.
My hon. Friend Pamela Nash has recently done some excellent work on youth unemployment and highlighted that 900,000 young people throughout the country receive unemployment benefits for more than a year—a figure that has doubled under the Government. Again, it is a tale of two approaches. Obviously, we want the jobs guarantee to be funded by a bank bonus tax, learning from the example of schemes in Wales.
I have strongly supported a living wage for some time. I congratulate Cardiff council, which has introduced a living wage and Cardiff university, which took the bold step of introducing the living wage following campaigning by many organisations such as Citizens UK to bring people’s wages up so that they can earn more and cope with the cost of living, and ultimately contribute more to the taxation system and the economy. I am disappointed that the Bill does not make any plans to boost wages such as the Opposition’s proposals to incentivise firms to pay the living wage by giving a 12-month tax rebate of up to £1,000 for every low paid worker who gets a rise. Increased tax and national insurance contributions raised from employees receiving higher wages would fund that scheme. That is about a race to the top. It is about building people up and getting them off social security and into better paid jobs, rather than the Government’s race to the bottom.
Tax avoidance generated some strong remarks from the Chief Secretary when I mentioned it. This morning, we heard that the Business Secretary has lost taxpayers billions in the Royal Mail fiasco. We need to look increasingly carefully at the Government’s great claims about tax avoidance and how much they will get back in various deals and schemes. I wish only that they had spent as much time in the past three years on measures to stop people avoiding tax as they have on cutting taxes for the richest.
I want to respond to the Chief Secretary’s comments. Despite the Bill’s numerous clauses and instruments on tax avoidance, which, I am sure, will be interesting to debate, the amount of uncollected tax rose last year. The Swiss tax deal will raise only a quarter of what the Chancellor claimed when he added it to his autumn statement. Many Opposition Members will treat with scepticism any future big claims about billions that will come from such deals when they are not delivered.
Tax avoidance is significant for the country’s finances and is also regularly raised with me locally. Ordinary taxpayers and businesses throughout the country are concerned about companies and individuals engaging in aggressive tax avoidance and tax avoidance schemes, and about individuals who fritter away this economy’s wealth in tax havens and through other loopholes, rather than contributing.
I will examine the provisions closely and follow the debates with interest. I am unlikely to serve on the Finance Bill Committee this year, although I enjoyed it greatly last year. [Hon. Members: “Shame!”] Indeed, it is a shame. We need to continue to hold the Government’s feet to the fire on tax avoidance. Many of our constituents would want us to do that.
The general anti-avoidance rule has been introduced and there are new schemes about accelerating receipts, but will they generate more money for the Exchequer? It is all well and good to introduce them faster—we all want that—but will more money be raised? A recent report in the Financial Times stated that the Office for Budget Responsibility originally hoped that the tax system would collect revenues worth 38.8% of national income in 2014-15, but that figure has been progressively revised down to 37%. We have to treat some of the Government’s claims about tax revenues and receipts with great caution.
This Finance Bill does nothing to tackle the cost of living crisis that many of my constituents are facing. It does very little to support the small and medium-sized businesses that are crying out for help, and it is continuing with out-of-touch policies such as millionaires’ tax cuts. Instead of learning from the economic and employment successes of the Labour Government in Wales, this Government are continuing to attack and to smear that Government. They would do far better to learn from them.