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Politics Home, 28 May 2016



Voters have clearly been misled by some of the woefully inaccurate claims made during the EU referendum campaign.

That conclusion was among the findings of our Treasury Select Committee report published on Friday and it was the one that grabbed the headlines.

Our cross-party committee found Vote Leave’s assertion that Brexit from the EU would save £350 million a week, with that money poured into the NHS "highly misleading” and that its decision to carry on repeating that bogus claim "deeply problematic”.

In my personal view, it’s shameful that key voices in the Leave campaign like Michael Gove, Iain Duncan Smith and Boris Johnson have pedalled this myth to the public.

As Vote Leave knew only too well, and as our report pointed out, their fantasy figure of £350m does not take account of Britain’s rebate and payments that flow back into the EU. Let alone include the economic costs of walking away from our biggest trading partner.

Time will tell if their supporters continue to repeat that figure in light of our report.  But given the attitude of those at the head of the Vote Leave campaign, I won't hold my breath - especially after those at the head of the Leave campaign had to be dragged before our committee.

There was a distinct lack of cooperation with our parliamentary inquiry from Vote Leave’s chief executive Matthew Elliott and its campaign director Dominic Cummings. As our cross-party report concluded, their behaviour was “appalling” and at odds with their campaign’s claim to respect the primacy of Parliament.

The campaign mounted by Britain Stronger in Europe has not been blameless - and we make criticism of their numbers too. But it is Vote Leave which has been guilty of the most luridly inaccurate claims.

Aside from our analysis of the claims and counter-claims, I hope our report has brought some clarity ahead of the most important vote that has faced us in a generation.

Mark Carney, the Governor of the Bank of England, said Brexit posed the 'biggest domestic risk to financial stability'.  Of all the evidence we heard, I think it was his that was the most compelling.  

The Bank of England is rightly cautious with its language.But his warnings about the possibility of rising inflation and mortgage rates as well as the damage to our prospects for economic growth left our committee in no doubt about the risks of Brexit.

We are only just recovering from the last recession. Many families, especially those on middle and modest incomes, simply cannot afford another recession with the wage cuts and unemployment it would undoubtedly bring.

The European Union is not perfect. Both sides of the debate have used numbers which exaggerate their case and made the public sceptical about every claim.

But our report is clear about the economic evidence for staying in the EU and clear about the flimsy and fraudulent arguments of the Leave campaign.

Under the Tories, not enough is being done to help ordinary people, to protect workers’ rights or tackle tax avoidance.

Being in the EU makes our economy stronger and more secure. It helps bring investment and good quality jobs - including those in manufacturing to this country. And it protects worker and consumer rights against Tory attack.

Being outside of the EU,especially when we are being led by a divided Tory government would be a dangerous risk.

I hope our report has helped bring some clarity about the truths and myths about the EU and will help us all make the right decision on 23rd June.

We all need to do our best to ensure that public debate on this issue is honest and well informed. I have no doubt that if we do so, the choice will be clear.
Rachel Reeves is a member of the Treasury Select Committee and the Labour MP for Leeds West

Referendum campaign must be 'honest and well informed'

Politics Home, 28 May 2016    

Labour List, 27 May 2016


Yesterday in Parliament we voted on the Government’s programme of legislation for the year ahead, as set out in the Queen’s Speech.

The background to yesterday’s debate about its economic measures is the critical decision our country faces about its relationship with Europe. The evidence I have heard as a member of the Treasury Select Committee has left me more convinced than ever that a vote to leave would scupper any hopes and well-laid plans we might make for our economy, and place our future prosperity and stability in very grave jeopardy.

But this looming question not only casts a shadow over yesterday’s debate about the future of our economy. It has also cast a blight over this government’s ability to take our country forward. For the measures listed in the Queen’s Speech were themselves the product of a Tory Party that is tied up by its own internal divisions over this issue.

Now is the time for a bold programme to address weaknesses and imbalances in our economy – our low levels of savings, investment and exports; our lagging productivity and competitiveness. Now is the time to put ourselves at the head of what Andrew Haldane and others have called a “fourth industrial revolution” driven by technological advances that are transforming the way we work and live.

Instead we have a thin and flimsy offering of gestures and half-measures that don’t begin to measure up to the scale of the challenges we face, or the ambitions we should have for our country. The government’s proposed bills on pensions, savings and market reform exemplify this lack of vision.

First, the promised Pensions Bill is more notable for what it leaves out than for what it achieves.

Indeed, we learned yesterday that the Government is considering changing the measure used for British Steel pension increases because the £485m million pension deficit at Tata is deterring potential buyers. Of course, the Government must do all it can to rescue Tata and protect the jobs there. But ministers must convince us that any changes will not put at risk the hard-won pension security of thousands of other workers.

As for the proposals included in the Queen’s Speech, it is right that we tighten up regulations to ensure proper protection for members of trust-based schemes. And the plight of members of the BHS pension scheme shows that the task of adequately protecting ordinary workers and savers from the incompetence and irresponsibility of those who would gamble with their retirement may be unfinished business.

But so much more needs to be done to get more people saving enough for a decent retirement. I remain disappointed that we will not be undertaking the necessary reforms to pensions tax relief that could dramatically improve incentives for modest and lower income savers.

A flat rate, set at 33 per cent, would have helped more people build up a pension without reducing the overall level of fiscal support for saving. It could have been rebranded as a “two-for-one” saving scheme: for every two pounds saved, the government contributes another one. But the Chancellor abandoned his plan to reform in the face of internal Tory resistance – putting his personal political ambitions before the long-term interests of millions of pension savers.

Second, in the “Lifetime Savings Bill”, I welcome the government’s effective u-turn on its abolition of the last Labour government’s Savings Gateway, under its proposed “Help To Save”. And the new Lifetime ISA could be a useful new option for younger savers, especially the self-employed.

But we need to do much more to turn Individual Savings Accounts into the accessible platform for broad-based saving they were intended to be. Currently 60 per cent of the tax-free return on ISAs goes to the highest 15 per cent of earners.

The government should introduce a lifetime allowance of £500,000 for ISA investments, just as there is a lifetime allowance on the amount that can be saved in pensions. The fiscal saving could be redirected to supporting saving by lower earners, for example by matching the first £100 they put into an ISA. Instead, George Osborne seems to be focused on increasing the annual allowance, which HMRC statistics show will primarily benefit those on very high incomes.

Third, we are told that the Better Markets Bill will increase competition in areas like energy and banking. Reforms like this are key to raising innovation and productivity. But we have yet to see the evidence of the government’s commitment to stand up to vested interests on behalf of ordinary businesses and consumers.

Last week I wrote to the Head of the Financial Conduct Authority on the issue of exploitative overdraft charges extracted by banks. According to MoneyFacts, the average unauthorised overdraft fee now stands at £57.50 a month. In 2014 UK banks made £1.2 billion from these charges. The Competition and Market Authority’s own analysis also shows that over half of overdraft users went into an unarranged overdraft in 2014, 10% of whom used it for nine months or more.

But its disappointing report on this practice does not go nearly far enough. And that’s why I have asked the FCA to step in where the CMA has fallen short, and set a cap on unarranged overdraft charges.

In so many other ways this government’s measures are falling short of what our country needs. The Digital Economy Bill settles for a bare minimum broadband guarantee when our economic competitors are investing in networks delivering one thousand times the capacity. The Neighbourhood and Infrastructure Planning Bill establishes a National Infrastructure Commission that will preside over falling levels of public investment in infrastructure.

In my own city of Leeds, we have seen the consequences of the government’s lack of ambition with the recent shambolic cancellation of a much-needed trolleybus network. We are now 5.5 months since the floods in Leeds – some businesses, such as Sheesh Mahal, still have not re-opened because of the extent of the damage. People are asking what the government are doing to protect the city of Leeds and the Kirkstall ward which I represent.

We need to think bigger, and aim higher, if we are to realise the potential of the British people and secure the opportunities and lasting prosperity they deserve.

So we must win the vote to remain in the European Union. But then the work of building a fairer, stronger, more resilient and more productive economy needs to begin.

Rachel Reeves is Labour MP for Leeds West and a member of the Treasury Select Committee.

Queen’s Speech showed the typical Tory failure on pensions and infrastructure

Labour List, 27 May 2016  

The Times, 16 May 2016


The governor of the Bank of England said yesterday that the leave campaign is in denial about the impact Brexit would have on the UK economy. Today Vote Leave are also guilty of deception.

Their most recent claim – that the single market doesn’t work for Britain – is one of the weakest political arguments I have ever seen. Knowing that they are losing the argument, Vote Leave are resorting to make-believe.

They claim that the EU isn’t working for British exporters. But this is based on highly selective and misleading use of statistics.

In fact, ONS data shows that the UK’s total exports to the EU grew 44 per cent between 2004 and 2014, the most recent decade for which data are available. That was an increase in value of almost £70bn – greater than the value increase to the whole of Asia combined.

This is greater value growth than to any individual country, and more than all major regions such as to the whole of Asia or the Americas, North and South.

Similarly, ONS figures for the 15-year period 1999-2014 show a 73 per cent increase in total UK-EU exports, with goods exports increasing by 43 per cent. This is particularly impressive considering that the financial crisis happened during this period. In the past year, as the TUC recently highlighted, exports to the EU have increased in importance as growth in emerging market economies has slowed.

It is true that UK trade with the rest of the world, not the EU, has been growing as a proportion of our overall trade, but this only undermines Vote Leave’s central claim that we must leave to trade more with non-EU countries.

The fact remains that the EU is the UK’s main trading partner, and that fact is unlikely to change, in or out of the EU. Almost half of our goods exports go to the EU. If Britain leaves, this trade would be under threat as new trade barriers – whether tariffs or regulations – would be imposed.

And what would the impact of that be? Why not listen to experts, rather than Vote Leave’s back-of-the-fag-packet figures? Both the IMF and the Bank of England have said that leaving the EU could send our economy into recession. And those hit hardest would be working families on low and modest incomes – as was the case in the last recession, from which we are only just recovering.

No wonder every major trade union is calling for a vote to remain. And PricewaterhouseCoopers has also shown that almost a million jobs could be lost in the event of a vote to leave. The Treasury has shown that families could be worse off to the tune of £4,300 and public services could be hit by £36bn in cuts; £250bn of UK trade and £200bn in investment would be at risk.

The reason is that the EU’s single market is the world’s largest free trade area and the best economic relationship Britain can have with Europe. It allows us to trade without tariffs right across the continent, gives us a say over the rules of doing business and gives us full access to service sectors that are so vital for the UK economy. Our home market increases from 65 million consumers to 500 million and British firms can do business in Berlin under the same rules as in Brighton.

This is vital to the livelihoods of millions of workers employed in exporting sectors, and every other worker, taxpayer and public service user who depends on the trade revenues, GDP growth and tax revenues they generate.

No alternative to membership of the single market is remotely as good for Britain. The other countries in Europe are not going to give Britain a better deal than the one they have, because it is not in their interests to do so. It would be like allowing a former member of a club to use the facilities without paying the membership fee or sticking to the rules, a deal not available to actual members.

If we leave the EU, our home market will shrink from 500 million consumers to 65 million, we will be cut off from certain sectors and we won’t have a say over the rules of doing business across Europe, leaving all the power in the hands of our European competitors. Even if we negotiate a trade deal like Canada’s, it will take many years to achieve and will be inferior to our current arrangement, involving tariffs on some goods and barriers to service trade.

The uncertainty while the deal is negotiated will hit our economy hard – costing jobs, driving up prices and making it harder to fund our public services. Leaving the single market is simply not a risk worth taking.

Rachel Reeves, MP, is a member of the Treasury select committee

Vote Leave are guilty of deception: the single market is vital for Britain

The Times, 16 May 2016  

This evening Rachel will be appearing on the panel of the Radio 4 show 'Any Questions?'

The political debate and discussion is being hosted by Colyton Grammar School in Devon. Tune in to Radio 4 at 8pm this evening (Friday 13th May) , repeated on Saturday 14th at 1.10pm. 
The other guests will be the former leader of the Liberal Democrats, Lord Ashdown, former Defence Secretary Dr Liam Fox and the Green Party peer Baroness Jenny Jones. 

Any Questions?

This evening Rachel will be appearing on the panel of the Radio 4 show 'Any Questions?'

with Anneliese Dodds MEP


The Times, 12 May 2016


Today politicians from around the world will be arriving in London for the anti-corruption summit.

In the wake of the Panama papers, it is more important than ever that governments across the world do more to tackle global corruption and the use of overseas havens to avoid and evade tax. Oxfam and 300 leading economists have urged the government to use this summit to crack down on tax havens once and for all.

The PM has said that he wants “all those at the summit to sign up to the first ever global declaration against corruption that would commit them to working together to tackle it”.

Sounds good but the Panamanian government won’t be attending the summit because they weren’t invited. Nor were the British Virgin Islands.

In fact, despite repeated calls for the prime minister to ensure his own overseas territories and crown dependencies were here, just four days before the summit, the best he could say was that they were  “in discussions” with them about their attendance.

And commitments included in draft versions of the summit communiqué seem to have been watered down before the event has even started – crucially, the requirement for a public register of ownership for offshore companies has been reduced to a commitment that law-enforcement agencies can access the information.

Of course, the ambition behind this summit is welcome because global challenges can only be confronted with cross-border co-operation – clearly seen by the progress that has been made by the EU over recent months on tackling tax avoidance where Labour MEPs have pressed the case to fight tax dodging with proposals for new, transparent, country-by-country reporting rules.

If the prime minister is serious about tackling abuses, he would support these proposals in Europe. But Tory MEPs voted against proposals for public country-by-country reporting four times last year and look set to do the same again today.

At the EU level, most people now agree that multinationals should be forced to publish exactly where they make their profits and where they pay their tax.

Full public country-by-country reporting, broken down by every country in the world was a key recommendation of a European parliament report at the end of last year, backed and steered through by UK Labour MEPs.

The European Commission listened to these recommendations, and last month announced that large multinationals operating in the EU will have to publicly report on aspects of their business ranging from the number of employees to the amount of tax paid.

They will have to break these figures down for each member state in which they operate and also those that the EU determines to be tax havens.

That was a major victory. The final proposal is not perfect – we would like to see it cover more companies, and more countries – but it is a major first step in the right direction, and we in Labour will push for it to be improved as it passes through the European parliament.

If Cameron really wants to stamp out the types of aggressive tax avoidance revealed by the Panama papers, he could take immediate action to improve the European proposal.

He could announce that the final rules must apply to British overseas territories and Crown dependencies.   That’s what we are calling on him to do.

More than anything, this whole debate shows why we need to work together with our neighbours. There’s no point one country having tough rules if money can be moved to where secrecy prevails.

To be successful, nations must work together if we are to ensure that tax havens don’t deplete our tax revenues. This case should be made ahead of the EU referendum on June 23.  If we were to leave the EU, getting tax havens to open their borders will become much harder to achieve.

Our place within the EU gives us a seat at the table to drive the debate, and work with our EU partners to push for changes that are in our national interests and apply to us all. At the summit today, David Cameron needs to get results.

And then it is time for him and his colleagues to work with the European Union to get tough on all tax havens, and not least on the one third that Britain has sovereignty over.

We must all be clear that unless we have a seat at the EU table after  June 23, we have little way of keeping the pressure on and having our voice heard.

Cameron must work with Europe to really tackle tax avoidance

with Anneliese Dodds MEP   The Times, 12 May 2016

As always, I was thrilled to pop into Kirkstall Valley Primary last week to speak at a special assembly about Parliament. 

Kirkstall_valley.jpgThis was in follow up to a visit made by the School Council a few weeks ago to see me at work in Westminster.
I was really impressed by the how much the children knew and remembered about how MPs are elected and why we have a Parliament to represent people.

There were definitely some future MPs in the assembly, lookout for them soon! 

Kirkstall Valley Primary School

As always, I was thrilled to pop into Kirkstall Valley Primary last week to speak at a special assembly about Parliament. 

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