Oral Answers to Questions

Baroness Morgan of Cotes Excerpts

Tuesday 5th November 2013 Commons Chamber

[Huw Irranca-Davies (Ogmore) (Lab)]

1. What assessment the Office for Budget Responsibility has made of the effects on the economy of recent changes in energy prices.

[The Economic Secretary to the Treasury (Nicky Morgan)]

The Office for Budget Responsibility has not published any assessment of the effects of the recent energy price increases on the economy. The OBR’s last published forecast, “Economic and fiscal outlook” was issued in March 2013, and an updated forecast will be provided alongside the autumn statement. The Government are committed to doing all we can to keep energy bills down to support hard-working families.

[Huw Irranca-Davies]

I welcome the hon. Lady to her post. Is she aware that last year wholesale energy prices rose by 1.7%, but energy bills by 9.1%? Is it not time that the Government stopped defending the big six energy companies and actually called for a freeze on prices while we reset the energy market?

[Nicky Morgan]

It is very interesting to hear what the hon. Gentleman says, but the first thing he needs to do is explain to his constituents why he voted for the decarbonisation target, which is going to add £125 to energy bills. Secondly, it was the last Labour Government who created the big six. We started off with 20; they left us with the big six. Thirdly, this Government have set out very clearly how they will help households—by reviewing green levies, by encouraging switching, which I am pleased to see the Leader of the Opposition has taken up, and by increasing competition.

[Harriett Baldwin (West Worcestershire) (Con)]

I, too, welcome the Minister to her post. She will know that one of the energy bills that my rural constituents have to struggle with is for petrol. Will she tell us whether the Office for Budget Responsibility has done an assessment of how much families are saving by our avoidance of the 13p fuel hike planned by the Labour party?

[Nicky Morgan]

I thank my hon. Friend for her question. The OBR does an assessment of all taxes and their impact on the economy. The policies that this Government are pursuing in recognition of the pressures on household budgets mean that filling up the average car is costing families £7 less at the moment, and by the end of this Parliament it will cost them £10 less.

[Mr Brian H. Donohoe (Central Ayrshire) (Lab)]

Does the Minister accept that the best answer to this question is to freeze energy prices? Surely that is the answer.

[Nicky Morgan]

I thank the hon. Gentleman very much indeed for his question, but the energy price freeze suggested by the Leader of the Opposition is actually an energy price con. It has been made very clear that the prices will go up beforehand and up afterwards, and the Leader of the Opposition has made it clear that if wholesale prices go up, he will have to stop the freeze. That is a price con; it is not sustainable; we are fixing the problem.

[Mike Thornton (Eastleigh) (LD)]

Will the Chancellor of the Exchequer join me in congratulating the Eastleigh Liberal Democrat borough council on the large part it has played in bringing the local unemployment rate down below 1,000?

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[Paul Goggins (Wythenshawe and Sale East) (Lab)]

4. If he will introduce a time-limited exemption from air passenger duty on new long-haul routes from uncongested airports.

[The Economic Secretary to the Treasury (Nicky Morgan)]

The Government are always open to ideas that promote regional growth. The Airports Commission will shortly publish a report on the best use of existing airport capacity in the short to medium term and the Government will take its findings into account in our response.

[Paul Goggins]

I am grateful to the Minister for her answer, and I welcome her to her position. As part of the growing links between the north-west and China, Manchester airport is seeking to develop a new route to Beijing, but one of the major obstacles is the very high level of UK APD. Will she take a careful look at new research by York Aviation, which has concluded that a time-limited exemption from APD on new long-haul routes from regional airports would make the Manchester-Beijing route immediately viable?

[Nicky Morgan]

I thank the right hon. Gentleman for his question. The Government will always take a look at the evidence. In fact, we debated APD in the House only the week before last. In October 2012, Her Majesty’s Revenue and Customs published modelling on price differentials at UK airports, and it showed that even large price changes have a relatively small impact on total passenger demand, but I am sure he will welcome my right hon. Friend the Chancellor of the Exchequer’s announcement of the £800 million investment in Airport City in Manchester, which will create over 16,000 jobs. The involvement of Beijing Construction Engineering Group as a partner in this project is the latest in a line of new partnerships being forged between the UK and China.

[Mr Nigel Evans (Ribble Valley) (Ind)]

Manchester airport is second only to Heathrow in terms of airport capacity, but it is operating at under half capacity, yet Heathrow is full. Boris Johnson talked yesterday to the CBI about getting these new routes out to China and Asia, but instead of forcing people from the north-west to fly down to London in order to fly to China, why cannot we get people to come from London up to Manchester to fly out on all these new routes that we need?

[Nicky Morgan]

I thank the hon. Gentleman for his question. As I said, we will always look at any evidence that people want to send us. We want to encourage new links between the UK and China, and the Mayor of London made some interesting points. The point is that we have to change prices a lot in order to change passenger behaviour, and we would need to look at that further.

[Mr Angus Brendan MacNeil (Na h-Eileanan an Iar) (SNP)]

Is the Minister aware of the success of Barcelona airport in gaining more than 20 international routes in the past year because of a 100% APD reduction? Does she think that such a reduction would help Scotland to regain the millions of passengers it has lost owing to this Government’s APD costs?

[Nicky Morgan]

The hon. Gentleman will be aware that there is no APD charge from airports in his constituency. As he knows from our recent debate, APD makes an important contribution to the deficit reduction plans; we will always keep it under review, but it is a very important part of this Government’s attempts to rebalance the economy.

[Stephen Gilbert (St Austell and Newquay) (LD)]

APD can also have a disproportionate effect on regional airports operating lifeline routes with modest passenger numbers, such as Newquay’s. Will the Minister factor that into the discussions she is having with colleagues on the future of APD?

[Nicky Morgan]

I thank the hon. Gentleman for his question. We will always look at the evidence, and if cares to write to me, we will certainly take that into account.

[Graham Evans (Weaver Vale) (Con)]

5. What estimate he has made of the number of jobs created in the private sector in the last 12 months; and if he will make a statement.

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[Mr Dave Watts (St Helens North) (Lab)]

10. What assessment he has made of the effect of his spending plans on the cost of in-work benefits.

[The Economic Secretary to the Treasury (Nicky Morgan)]

The latest forecasts of benefits and tax credits are available online via the website of the Department for Work and Pensions. They are consistent with the Office for Budget Responsibility forecasts and reflect the Government’s wider policy.

[Mr Watts]

Will the Minister explain why she is allowing companies that are making massive profits to pay poverty wages that need a subsidy from the taxpayer through in-work benefits? Why does she not stop those companies sponging off the taxpayer and adopt a Labour policy of requiring companies that can well afford it to pay a living wage?

[Nicky Morgan]

It seems that even the shadow Chancellor has questions about a living wage policy, saying in 2010 that he was not sure about it. I am surprised that the hon. Gentleman did not talk about the fact that in the north-west and Merseyside 306,000 people have been taken out of paying income tax altogether as a result of this Government’s policies.

[Mr James Clappison (Hertsmere) (Con)]

It was the case, was it not, that under the previous Government work simply did not pay because people who got into work found that a huge proportion of their extra income and, in some cases, all their extra income was clawed back by the complex benefits system? Will my hon. Friends redouble their efforts to make sure that work pays?

[Nicky Morgan]

I thank my hon. Friend for his question. He is absolutely right. This Government believe that work should always pay. By 2010, nine out of 10 working families had been made dependent on the state by the previous Government. This Government believe that families should keep more of their hard-earned money to spend on the things that are important to them.

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[The Economic Secretary to the Treasury (Nicky Morgan)]

This Government recognise the pressure on households, but the fall in living standards is a consequence of the economic crisis left to us by Labour. The only way to raise living standards is to stick to our economic plans and deliver a recovery that works for all. Britain has turned a corner: the economy is growing, the deficit is falling, and jobs are being created. Last year, UK take-home pay was the highest in the G7 and the third highest in the OECD.

[Steve McCabe]

That is a very interesting answer. Why does the Minister think that the 15% cut in wages suffered by British workers over the past five years is more than in any comparable five-year period and the second biggest in the G20?

[Nicky Morgan]

It is interesting to note that the main fall in wages and salaries came in 2007-09, when growth fell from 5.7% to less than 1%. Of course the Government understand that the situation is very difficult, but I am surprised that the hon. Gentleman has not welcomed the fact that the claimant count in his constituency has fallen by 11% under this Government, whereas it went up by 75% under the previous Government.

[Andrew Bridgen (North West Leicestershire) (Con)]

Will my hon. Friend tell the House by how much those on low and middle incomes are going to be better off because of this Government’s decision to raise the personal allowance to £10,000 from April 2014?

[Nicky Morgan]

I thank my hon. Friend for his question. The average taxpayer will be better off by £700 a year as a result of these changes.

[Sir Tony Baldry (Banbury) (Con)]

15. What recent steps he has taken to increase competitiveness in the banking sector.