Mr Robert Goodwill (Scarborough and Whitby) (Con)
It gives me great pleasure to respond to the Members who have contributed to this debate. I stand as the Treasury Minister who sits next to the Chancellor at all the meetings at No. 11, even if I am generally not allowed to speak in the House.
My hon. Friends the Members for Congleton (Fiona Bruce) and for North Swindon (Justin Tomlinson) raised the issue of improving financial literacy and education for the young. Over the past decade, people’s financial habits have changed considerably. High personal debt coupled with low savings are something that we need to address, especially when they are looked at in the context of the financial crisis and the ageing population. There is no point in giving consumers detailed information about annual percentage rates and other financial data in connection with products if they do not understand what an APR is. When one sees the rates of interest charged by credit and store cards or doorstep lenders, that brings home the need for better financial education.
As a Government, we want people to take greater personal responsibility for their finances. As my hon. Friends said, giving people access to financial advice and education is an important part of that. That is why we have tasked the Consumer Financial Education Body, or CFEB, to deliver a free financial advice service by spring next year. That will improve financial literacy and help consumers to take charge of their own finances. It may even save a few marriages along the way.
A vital component of the service will be the annual financial health check, to provide people with a holistic overview of their finances. In tandem, the CFEB supports financial education through the “Learning Money Matters” programme, which offers free advice and resources to schools that want to teach personal finance education. I remind the House that finance education is currently part of the personal, social, health and economic education syllabus for key stages 1 to 4. However, I was concerned to hear that the son of my hon. Friend the Member for Congleton did not receive that tuition as part of the syllabus. As a parent, perhaps she could get in touch with her parent governor or head teacher to ensure that it is covered in future. I was pleased to hear how the banks are interacting with local schools to provide that type of tuition.
I, too, have received an invitation to the all-party parliamentary group on financial education for young people. I certainly look forward to attending on 31 January, along with my hon. Friend the Member for Chippenham (Duncan Hames) and the hon. Member for Walthamstow (Dr Creasy), who are the co-chairmen of the group. As a fan of Martin Lewis, who appears regularly on GMTV, I know he reaches 6.4 million people through his website and his appearances—dare I suggest that that is fewer people than are watching this debate?
The hon. Member for Cumbernauld, Kilsyth and Kirkintilloch East (Gregg McClymont) raised the issue of the HMRC settlement. As an employer, I know Cumbernauld well because the name appears on the prepaid envelopes when I send off my tax to that particular office. The office employs 1,500 staff and I am sure that the hon. Gentleman will be pleased to know that it has a key role in debt management and collection, and that there are no plans substantially to reduce numbers in that office.
As with all Departments, HMRC will deliver on its efficiency savings programme by concentrating on the core elements of the service it provides. In the case of HMRC, that means ensuring that resources are more efficiently focused on collecting revenue and providing a better service to the British taxpayer. As part of its settlement, HMRC will therefore improve the pay-as-you-earn system, so that there is greater use of real-time information, and extend its online resources to reduce the demands placed on contact centres.
HMRC will reinvest the £900 million in savings to tackle avoidance, evasion and criminal activity. Those savings will be recycled into activities working against tax avoidance, evasion and criminal attack to collect additional revenue of £7 billion per annum by 2014-15. That will deliver a more robust criminal deterrent against tax evasion and will increase the number of criminal prosecutions fivefold. There will also be a crackdown on offshore evasion, with the creation of a new dedicated team of investigators to catch those hiding offshore money. We wish to clear the backlog of PAYE cases by 2012 and stabilise the service in order to recover and improve customer service. Central to that will be undertaking the next stage of consultation on improving PAYE through the use of real-time information to bring improvements to employers and taxpayers. Of course, in the past, that has resulted in underpayments and overpayments, some of which had to be written off and some of which had to be collected at great expense.
Mr Goodwill
I think I will just continue. I have a very detailed brief that I am sure my right hon. Friends the Chief Secretary or the Chancellor will put into a detailed response. Given the time, I cannot go into the issues in detail, but there are a number of tables that I am sure will reassure the hon. Member for Cumbernauld, Kilsyth and Kirkintilloch East. Suffice it to say, the work force and change plans are still being developed. Until those plans are completed, HMRC cannot say what the position will be on redundancies or exits.
Gregg McClymont
I thank the Minister for his response. From what he said, can I take it that the Department will write to me with the detailed figures? Is that the position?
Mr Goodwill
Yes, I am sure that that is the case. The first choice is to redeploy, but where that is not possible because of location or skills, exits will be used as a last resort. HMRC will recruit people if it cannot otherwise fill roles with people who have the right skills.
On the point about child benefit changes within a reducing settlement, the changes will be managed from within the settlement. Withdrawing child benefit from households with a higher rate taxpayer can be done within existing PAYE and self-assessment systems. HMRC will therefore not need to contact all 7.8 million households in receipt of child benefit. From a customer’s perspective, that delivery option does not place a burden on all child benefit claimants; it limits the impact to those households containing higher-rate taxpayers.
On the issue of whether the law is too black and white, I stress that tax evasion cannot be tolerated wherever it occurs. I was pleased that the Finance (No.3) Act 2010 closed a number of the loopholes that meant that people were not paying the tax that they should. To be fair, those loopholes were identified by the previous Government.
Much of the debate was focused on the banking system and I am sure that we all have had horror stories brought to our attention by our constituents. One of my constituents was in the Proudfoot supermarket making a purchase of about £5 and the checkout girl accidentally clocked up £50. That was corrected less than five minutes later, but it incurred an unauthorised overdraft fee and the bank refused to back down when contacted by me as the Member of Parliament. Fortunately, when I got the Yorkshire Post on to the issue it finally relented; such is the power of the press.
In response to the hon. Member for Streatham (Mr Umunna), the Government are clear that there should be more competition in the banking sector. The Independent Commission on Banking has been asked to consider reforms to the UK banking sector, including how to encourage greater competition. Following the commission’s report next year, the Government will bring forward specific proposals to foster diversity and increase competition, and I am sure that that will include a role for the mutual sector. I have nothing to add to the answer given by the Financial Secretary earlier, but I am sure that he will write to the hon. Gentleman following this debate.
On cheques, my hon. Friend the Member for Rugby (Mark Pawsey) raised the potential—
Mr Umunna
I raised a number of detailed questions with the Minister, responses to which have not been forthcoming. I heard with interest the views of the hon. Member for Wellingborough (Mr Bone) about the response that the Minister is giving, bearing in mind that he has been called to do this at such short notice. However, I would be grateful if he explained why the Financial Secretary himself is not here, as he was here only a few hours ago. Will he undertake to ensure that I get detailed responses to the issues that I have raised?
Mr Goodwill
I thank the hon. Gentleman for his intervention. First, this has not happened at short notice—it has always been the plan for me to answer this debate. He had an opportunity earlier at Treasury questions to raise specific issues when the majority of the team were there. I am aware that I have only less than a minute left, which is why I want to move on to the next point. I am sure that he will get a detailed response, particularly about the way in which the banks, which are now largely in the public sector, are sold on or whatever. The Government will no doubt be looking at the best value for the taxpayer as well as the best service to business and individuals. I am sure that my hon. Friend the Financial Secretary will write to him, and we will be making further announcements in the House at an appropriate time.
On the withdrawal of cheque facilities, it is true that the number of cheques issued has declined dramatically. More than 11 million cheques were written in 1990, and that figure declined to 3.5 million in 2009. A provisional date of 31 October 2018 has been set for the withdrawal of cheque facilities, with a final decision to be made by 2016. I, too, have received a letter from a constituent, which arrived this morning. It is from Mrs Hunter of Whitby, who tells me that she is over 90 years old and does not possess a computer or a laptop, or even a mobile phone or any credit or debit card, and so will find it very difficult to send money through the post to her family at Christmas or to make payments to charities. Her local post office, which was within walking distance, was closed when the previous Government were in office, so a journey to the Yorkshire building society or the Co-op would require a taxi journey or a bus ride. She is very concerned that elderly people without recourse to cheques will not find it easy to make payments. Similarly, many small businesses find the cheque system very convenient.
The Government believe that suitable alternatives must be in place for all users of cheques before the system can be phased out, and they welcome the new commitments made by the banking industry on 7 December. In those commitments, the industry recognises the importance of having in place proper alternatives to cheques for those who rely on them most, such as the elderly, the housebound, charities and small businesses. The industry has said that a potential alternative to cheque facilities may include a paper system. Of course, if cheques were to be phased out, it would also be the end of the famous phrase, “The cheque is in the post.”
Thank you very much, Madam Deputy Speaker. I hope that all right hon. and hon. Members on both sides of the House have a very peaceful and comfortable Christmas, and let us look forward to a productive new year for the coalition Government.