The Economy and Living Standards

Charlie Elphicke Excerpts

Thursday 12th June 2014 Commons Chamber

[James Morris (Halesowen and Rowley Regis) (Con)]

rose—

[Charlie Elphicke (Dover) (Con)]

rose—

Oral Answers to Questions

Charlie Elphicke Excerpts

Thursday 1st May 2014 Commons Chamber

[The Parliamentary Under-Secretary of State for Culture, Media and Sport (Mrs Helen Grant)]

I thank the hon. Lady for her comments and I am sorry that I could not attend the event—I wanted to but I had a clash. I believe a Conservative won the event, and that is always welcome. As she well knows, sports governing bodies, including that for basketball, have received large amounts of public money—taxpayers’ money. It is certainly no gravy train and if sports cannot deliver increasing participation, it is absolutely right that the money should be diverted to those that can do so. I do not believe that doors are ever closed for ever and I would be happy to have a chat with her about the proposal she makes.

[Charlie Elphicke (Dover) (Con)]

T6. Many private sector companies are big supporters of the arts in Britain. Will the Secretary of State tell the House how important he believes that support to be?

[Sajid Javid]

As usual, my hon. Friend raises an important point. Support from the corporate sector for the cultural sector is very important. It amounted to around £110 million last year, almost a fifth of total investment. In the past couple of weeks, I have been to the Globe, which is supported by Deutsche Bank, and the Matisse exhibition at Tate Modern, which is supported and sponsored by Bank of America. Just yesterday I went to the Vikings exhibition at the British Museum, which is supported by BP. It was held in a new exhibition hall, which received the majority of its funding from the Sainsbury family.

Oral Answers to Questions

Charlie Elphicke Excerpts

Tuesday 29th April 2014 Commons Chamber

[Andrea Leadsom]

The hon. Gentleman is right to point out that there has been an enormous challenge since the financial crisis. Banks still have a long way to go to work out their balance sheets and to ensure that they are again lending to small businesses. RBS announced recently that it has the single goal of becoming the No. 1 SME bank in the UK. Banks are focused on that issue and it is vital that they are.

[Charlie Elphicke (Dover) (Con)]

Does the Minister agree that Labour’s crash caused a massive problem in our banking system, which hurt the ability of banks to finance businesses, and that with the long-term economic plan it will become easier for banks to find the reserves that they need to get more money to business and to help grow the economy further?

[Andrea Leadsom]

My hon. Friend is absolutely right. The financial crisis caused a massive problem in our banking sector. The measures that have been brought in by this Government, such as the funding for lending scheme and the improved impetus towards bank competition, are helping to improve the situation for small businesses—the lifeblood of our economy.

Finance (No.2) Bill

Charlie Elphicke Excerpts

Tuesday 8th April 2014 Commons Chamber

[Charlie Elphicke (Dover) (Con)]

Small businesses do not tend to pay so much in corporation tax. That is not the main burden they suffer—that is the burden of business rates and payroll taxes. Will the hon. Lady therefore join me in welcoming the action that the Government have taken on business rates and payroll taxes, which will really help small businesses?

[Sheila Gilmore]

I am glad that the hon. Gentleman is interested in business rates, the subject we are discussing. Our suggestion is that in order to make a real difference to those businesses, we can go far further in the way we deal with business rates.

Rather dramatic statements are made that a suggested change of 1% in the rate of corporation tax will result in companies—on the basis of that alone—changing their plans, leaving the country or not coming here. These statements are made but it is not clear whether there is evidence for them. The impact of the 21% to 20% change in corporation tax is not—or so it would appear in the initial period at least, according to the OBR report—to increase take from corporation tax, but to decrease it.

--- Later in debate ---

[Mr Gauke]

Indeed it has. I will say more about some of the other measures we are taking to make our tax system more competitive, but overall it is clear that our tax system—in terms of being open for business—has moved in the right direction over the last four years. It is important that we maintain that momentum and do not put it at risk by trying to reverse some of the progress we have made.

[Charlie Elphicke]

According to a report in City A.M. this morning, the British Chambers of Commerce has said that we are seeing the strongest investment and export growth for nearly a century. Did my hon. Friend see that report?

[Mr Gauke]

Indeed I did, and I heard the head of the BCC make the same point in a radio interview this morning. We are moving in the right direction, and this afternoon’s figures from the IMF are extremely significant. I hope that Members in all parts of the House welcome the news that the United Kingdom is the fastest-growing major advanced economy this year.

Finance (No. 2) Bill

Charlie Elphicke Excerpts

Tuesday 1st April 2014 Commons Chamber

[Danny Alexander]

The measures that my right hon. Friend the Schools Minister has introduced are not actually in the Finance Bill, and I hope that their impact will not be seismic in the literal sense, but I agree with my hon. Friend that they will make a serious difference to schools in his area and in other historically underfunded areas of England that have been campaigning for a long time for a fairer level of funding in their schools. I am glad to hear that my hon. Friend welcomes those measures.

[Charlie Elphicke (Dover) (Con)]

Are not the most important aspects of the Bill the things that it will do for the least well-off? The previous Government abolished the 10p tax rate, resulting in the least well-off paying higher taxes. Is it not right that this Government are helping those people?

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[Danny Alexander]

I am grateful to my hon. Friend for his comments, and he is absolutely right. The tax system we inherited was, as with so many other parts of the previous Government’s economic strategy, full of holes and leaking revenues all over the place. The Labour party had spent all its time on a prawn cocktail offensive in the City, sucking up to the banks, rather than concentrating on making sure that everyone in this country paid the proper amount of tax. As a result of action we are taking, we are raising—so far—an extra £60 billion in this Parliament, and before the election we expect tens of billions more to be raised in revenue that would not have been raised had we accepted the Swiss cheese that Labour left us.

[Charlie Elphicke]

May I support my right hon. Friend in taking no lessons from the Labour party, which, when in government, was too often the tax avoider’s friend? It allowed a culture of industrial-scale tax avoidance to come into existence, and tax revenues were depleted by its neglect of the system.

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[Chris Leslie]

I love it when Liberal Democrats start talking about VAT. Of course, the hon. Gentleman promised to oppose the VAT bombshell, and my hon. Friends will remember the picture. I do not know whether he was driving the van that went round Parliament square at the time; perhaps the Chief Secretary was in the driving seat. Yet the hon. Gentleman has the temerity to ask what our position is on VAT. I cannot promise to get rid of the VAT increase that they have put in place, contrary to the manifesto on which he stood—yet another Liberal Democrat broken promise. When Labour makes promises in our manifesto at the next general election, we will make sure that they are fully funded and that the sums add up. If we do make promises, everybody will be clear where the money will come from—[Laughter.] Government Members do not like that idea, because it is so foreign to them. They are so used to making promises that they do not recognise the concept of trying to be honest and straight with the electorate.

[Charlie Elphicke]

Will the hon. Gentleman give way?

[Chris Leslie]

I will give way to the hon. Gentleman in a moment, but I ask him to bear it in mind that it is important to be open with his constituents about the full picture of what has been happening with tax and benefit changes. He needs to answer a question prompted by the independent Institute for Fiscal Studies, which has calculated the impact of all the tax and benefit changes since 2010 on his constituents. Its conclusion is that the typical household is £900 worse off after those tax rises and cuts to benefits and tax credits. Does he disagree with the analysis of the independent IFS?

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[Charlie Elphicke]

The hon. Gentleman says that his pledges will be fully funded come the manifesto, but does he not accept that the fact that the Opposition have so far spent the bankers bonus tax more than 10 times does not give this House or the people of this country much confidence that they will be able to add up when we get to manifesto time?

[Chris Leslie]

I shall have to send some details to the hon. Gentleman, because he is obviously not fully aware of the situation. I would never accuse him of misleading the House, as that would be unparliamentary, but perhaps he is unintentionally giving an impression that is not correct. We have said that we would repeat the bank bonus tax, which was very successful in 2009 and raised a significant amount of money, and spend it on starter jobs for the long-term unemployed. He should know about long-term youth unemployment because in Dover it has rocketed since he was elected.

[Chris Leslie]

I am grateful to my hon. Friend for addressing that point. Yes, such transparency would help a great deal. Let us elevate the level of public debate and allow an independent assessment of those policy costings. The public can then decide for themselves and make a judgment about the relative merits of the various policies in the manifestos of the major political parties. I know that in his heart the Chief Secretary to the Treasury agrees. I know that he realises that the Chancellor is standing in the way because the Chancellor wants to run the general election campaign by means of smears and falsehoods, giving a false impression of the policies of the other political parties. We must grow up and raise the standard of debate. Let the OBR be the judge of these things. Ministers can talk among themselves and perhaps negotiate concessions so that when we come to the Committee stage of the Bill, we may be able to reach cross-party agreement on that point.

[Charlie Elphicke]

rose—

[Chris Leslie]

I forgot to give way to the hon. Gentleman. Long-term youth unemployment has gone up in Dover by 125% since he has been its Member of Parliament.

[Charlie Elphicke]

Long-term youth unemployment did go up in my constituency by 300%, and in the hon. Gentleman’s constituency by 400%—in the previous Parliament. Will he welcome the fact that long-term youth unemployment in my constituency has fallen by 22% in the past year and in his constituency by 15%?

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[The Exchequer Secretary to the Treasury (Mr David Gauke)]

indicated dissent.

[Charlie Elphicke]

rose—

[Chris Leslie]

No, nothing is forthcoming. Perhaps the hon. Member for Dover (Charlie Elphicke) can help us on that.

[Charlie Elphicke]

The hon. Gentleman referred to the article in The Daily Telegraph but did not explain it fully to the House. It shows that the Chancellor is keen to see foreign banks paying a fair share of the levy. It is not about letting off the major clearers; it is about ensuring that all banks in the UK pay a fair share. Surely that is right.

[Chris Leslie]

That is a very interesting explanation. There is a shift in policy, which is to let certain banks off the hook when it comes to the bank levy. Perhaps the hon. Gentleman is right and that is a strategy. I have given the Minister an opportunity to explain what exactly the Government’s plan is, but he will not put it on the record. We will have to explore that in more depth in Committee.

While we are on the financial services sector, let us look at what the Government are doing in clause 107, which relates to stamp duty reserve tax. My hon. Friends might begin to wonder what that is all about, especially when we say that it is known as the schedule 19 charge, which refers to the 1999 Finance Bill. Many people think, “Oh well, we’ll see what comes of these taxes.” But the schedule 19 charge, set out in clause 107 of this Bill, seeks—this is the priority of these Conservative and crypto-Conservative Members—to give a tax cut of £145 million to the investment management industry by abolishing stamp duty reserve tax. At the same time, my hon. Friends’ constituents are having to cope with the bedroom tax, extra council tax charges and the VAT increase. Despite the hardships they are facing, the priority of the Chief Secretary and the Exchequer Secretary is to give away £145 million by abolishing stamp duty reserve tax. I know that they have been lobbied heavily on that.

We will oppose that change, because we think that the Government should be using that resource to help scrap the bedroom tax, if indeed it is raising any money—I have my doubts about that. The National Housing Federation states that it might well be costing more than the Government planned. We certainly should not be giving away that money, especially at a time when the investment management industry, which holds £5.4 trillion in collective funds, increased its holdings by about 7% in 2013. I do not think that £145 million is an unreasonable sum to ask from a sector that has been doing very well in recent years. We should be making sure that we pursue a fair policy and so will oppose that clause.

We then come to the Bill’s tax avoidance measures. We know that the Government have a bad record on that—[Interruption.] Well, they do. The oh-so-successful Exchequer Secretary, who cannot even manage to get the amounts of money he promised from the banks, cannot manage to get from the Swiss the £5 billion he promises through the Swiss tax deal. The Chief Secretary stood up a moment ago and said that he would get only £1.7 billion. We had a deal with the Liechtenstein Government, which we projected would bring in £2 billion; in fact, it has brought in £2.5 billion. When we have tax deals with tax havens, they work. However, when the Exchequer Secretary gets his fingers on these things, it is amazing how it all goes wrong—it is his reverse Midas touch.

The Government have fallen into bad habits in pencilling into the Red Book projections of revenues from the avoidance measures that involve what the OBR calls particularly uncertain assumptions. The Government are, of course, quick to spend the projected money; Paul Johnson from the Institute for Fiscal Studies calls such moves the Chancellor’s manoeuvres, always relying on revenues that are by nature uncertain. It is important that we scrutinise whether the supposed tax avoidance deals will deliver what the Government say.

Rather than the measures in the Bill, we need action to deliver starter jobs, guaranteed for the long-term unemployed. The number of young people out of work for a year or more has doubled and we need compulsory starter jobs for those who have suffered unemployment, which is a scourge not just on society but on their career prospects. We need action on child care. Free child care should be extended from 15 to 25 hours, paid for through a proper collection of the bank levy.

We need a help to build scheme to counter-balance the Help to Buy scheme. There is a serious risk—as the Chief Secretary knows, even the Governor of the Bank of England has concerns about these things—of a lop-sided recovery unless we match the boosting of demand with the boosting of supply. A help to build scheme particularly focused on ensuring that small and medium-sized construction companies can do better is one way to make a big difference.

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[Charlie Elphicke (Dover) (Con)]

It is a real pleasure, as always, to follow the hon. Member for Bolton West (Julie Hilling). Listening to her speech, and indeed that of the shadow Chief Secretary to the Treasury, the hon. Member for Nottingham East (Chris Leslie), I was reminded, given recent events in Ukraine, of the charge of the Light Brigade in the first Crimean war, which we fought some years ago. They were very game, very determined and, in complete denial of the situation in which they found themselves, carried on regardless. It was fascinating to listen to the shadow Chief Secretary’s amazing negativity about the changes the Government have made. The Government have turned around the very difficult situation that they inherited.

The hon. Member for Bolton West seems to have a somewhat short memory, to put it gently. She was quick to blame the problems on everyone else, but slow to acknowledge any responsibility on the part of the previous Government. It is important to remember that there were problems in the UK’s banks due to the extremely poor and dislocated regulatory system put in place by the previous Prime Minister. There were problems with this country’s finances, and not just since the 2008 recession, because the previous Government ran a structural deficit from 2002 onwards, which left this country massively exposed. They said that they managed the crisis so well, but the UK, as some of us recall, had one of the largest budget deficits in the developed world. They spent the good years introducing more welfare and more spending, rather than controlling welfare and spending and making sure the UK’s finances were in a good state while the sun shone.

[Mr Kevan Jones]

The hon. Gentleman, who was not a Member in the House at that time, belongs to a party that throughout that whole period was calling for less banking regulation, not more. I know that he is one of the new Members who have been programmed to think that way by Tory central office, but the facts are that the GDP debt in 1997 was 42% and by 2008 it was down to 35%. Those are the facts, irrespective of what Tory central office tells him. He cannot deny the facts.

[Charlie Elphicke]

The hon. Gentleman knows perfectly well that his Government ran a budget deficit for a very long time. Running a budget deficit is understandable when coming out of recession, but not in a time of economic success. The previous Labour Government’s irresponsibility left this country badly exposed.

[Mr Jones]

I am sorry, but the hon. Gentleman must look at history. The previous Conservative Government ran a budget deficit for about 16 of their 18 years in office. In 1997 the deficit was nearly 8%. He has to look at the facts. The previous Tory Government ran a deficit even in good times.

[Charlie Elphicke]

Let us talk about those good times. Before the downturn in the ’90s, the national debt was at least 10 points lower than before the latest crisis.

[Jacob Rees-Mogg]

Surely the hon. Member for North Durham (Mr Jones) is forgetting that the success of the Labour party in the first two years came because it followed Conservative spending plans.

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[Charlie Elphicke]

Indeed.

There was Labour’s crash. We hit the wall in 2008 and were left overexposed in a bad place with an economy that had been run very badly for a long time. Then the Labour party has the cheek—

[Mr Kevan Jones]

rose—

[Charlie Elphicke]

I have given way quite a lot. I think we have heard enough from the hon. Gentleman for a minute. Will he allow me to develop my points?

The Labour party, having learned nothing and forgotten nothing, has the gall to say that when we woke up in spring 2010, with a new Government, everything should immediately have been fine. Recessions are not like that; they continue for some time. It takes time to fix the car after it has been driven into the ditch. The absence of any sense of responsibility from the Labour party for the difficulties that it left and the toxic legacy that the Government inherited is, frankly, extraordinary. Government Ministers have done great work to turn things around and fix things. We cannot hand back the keys to the people who crashed the car when they remain in denial as the Labour party does today.

[David Rutley]

Was not the real crime of the previous Government that they became completely absorbed in what Lord Turnbull—not Conservative central office—said was complete wishful thinking? Through successive periods of economic growth, the Labour Government lost sight of the fact that there would inevitably be a bust after a boom, and that they would have to prepare for it. They missed that obvious challenge, and we are having to clean up the mess.

[Charlie Elphicke]

The Labour Government were delusional. I recall them saying for a long time that they had abolished boom and bust. It is great shame that the right hon. Member for Kirkcaldy and Cowdenbeath (Mr Brown), the former Prime Minister, is seen so rarely in these parts these days; it would be interesting to hear his take.

[Dr Thérèse Coffey]

Where is he?

[Charlie Elphicke]

Since he was bundled out of Downing street, he has been in the attic of Portcullis House but has been in the Chamber very rarely indeed. That is a shame.

One might think that the Labour party, having had four years to reflect, might not only accept full responsibility but try to develop its own economic plan. Saying how dreadful everything is but having no plan to take things forward is no plan to take to the country in a general election.

As I listened to the comments of the shadow Chief Secretary to the Treasury, a question struck me: what does the Labour party have to say to the person who worries about their job, wants their business to succeed and would like their kids to do well? The party is adopting policies that are so anti-business and so unimaginative about any kind of job creation—other than spending the same money 10 times over and claiming that as a new pledge. It has so little to say to the country and about the future; all it can do is sink into a sea of negativity.

[Julie Hilling]

This is the sort of speech that raises my blood pressure. Where does the hon. Gentleman believe the recession started? Does he agree that the global economic crash started in America? Does he accept that his party in opposition argued for less financial regulation? What would he have done when the crash came—let the banks go and leave everything else to go into a depression?

[Charlie Elphicke]

I apologise to the hon. Lady if I have raised her blood pressure. In England, the NHS will look after her very well; it has an increasingly good record.

I turn to where the Labour party has managed to get to. We have set out a clear economic plan, through which we have successfully cut the deficit by a third and cut taxes on average by £705 for hard-working people. We have managed to support business and cut business taxes, which the anti-business Labour party has taken to opposing of late. It says it supports the welfare cap, but in media interviews it wants to exempt this and that benefit from it. We have managed to take firm action to control immigration and we have plans for better skills for our young people, to give them a better future.

[Simon Kirby (Brighton, Kemptown) (Con)]

Is it not true that we have not only a plan but a long-term plan that is credible and believable and is beginning to show some success? If Labour Members have a plan, perhaps they might tell us about it.

[Charlie Elphicke]

I completely agree. It is a major problem for Labour Members that they are unable to welcome any positive move. They look around and must surely see that a recovery has been building and the situation is improving, but all they can do is stick their heads in the sand and issue a cry of complete and utter denial.

Some years ago, the Leader of the Opposition said that the Conservative plans would mean the loss of 1 million jobs. Far from that, 30.19 million people are in employment, up by 1.3 million since the election. There are 1.7 million new jobs in business. We have an employment rate that is up since the election and an unemployment rate that is down since the election.

Then Labour Members moved on and sought other ground on which to go around stirring up negativity and spreading apathy, as they do, up and down the land. They thought they might find a more profitable situation in drawing a distinction between full-time and part-time jobs. For a while, as we repaired their damage, that rather seemed to work for them, and they thought there was some profit in it. They glossed over the fact that during the previous Parliament the number of full-time jobs fell by 320,000, because they found that inconvenient and wanted to seize on the problems of people in full-time jobs as the economy recovered. Unfortunately for them, the number of people in full-time employment has been rising. In the past year it increased by 430,000, and there are now more people in full-time employment than there were at the time of the general election. Then, there were 21 million people in full-time employment; today, there are 22.1 million people in full-time employment. This Government have done well not only on jobs but on full-time jobs.

Seeing that that line of attack did not render profit to them, Labour Members then thought they would start talking about long-term unemployment and seize on the long-term unemployment figures for young people, which the hon. Member for Bolton West, who would have made a very good cornet at the charge of the Light Brigade, said were going up. Unfortunately for her, that is not the case. During the previous Parliament they did go up, across the country, by 311%, but in the past year they have gone down by 30%. Their whole theory about long-term unemployment does not work.

I congratulate the hard-working people of Birmingham, Ladywood, who saw their long-term unemployment among young people rise by 103% under the previous Labour Government but have seen it fall by 4% since this Government were elected and by 31% in the past year. In my constituency of Dover, the figure went up by 700% under the previous Labour Government. That was a very sad, despairing thing. So much hope was taken away from so many of the young people I represent. I welcome the fact that the figure has fallen by 22% in the past year.

Bit by bit, the Opposition’s case disintegrates—nowhere more so, hon. Members may be interested to learn, than in the constituency of the Leader of the Opposition, who gave such a fascinating response to the Budget the other day. In his constituency, long-term unemployment among young people rose by 1,600%—not under this Government but under the previous Government in which he served as a Cabinet Minister. Since the general election, that figure has fallen by 9%, and it is down by 31% in the past year alone.

The Opposition have no long-term economic plan, just pure negativity. In each negative case they raise, every figure or statistic they snatch at seems to disintegrate in their hands. They would have better spent their time putting forward a true alternative economic vision for this country than seeking to attack a Government who have been trying to fix the problems that this country has had and repair the toxic legacy that they inherited.

I turn now to the cost of living—after all, that is the latest part of the Opposition’s case. They are keen to point out that wage inflation has not kept up with real prices. That has been the case after every single recession, which is why I made the point that in 2010 we were not simply going to get an immediate, overnight repair after Labour’s crash—it was going to take some time. We now stand on the threshold, as the time is fast approaching when wages are likely to outstrip inflation. We have seen the latest figures: inflation is now at 1.7%, down from 2.8% a year ago. Wages have grown 1.4% in the three months to January when compared with a year ago. The moment is therefore approaching when the cost of living argument will face a challenge of its own. What will the Labour party say then? What case will it take to the country, as people see that the Conservatives’ work to repair the country’s finances and the value of work is taking hold?

Of course, Labour has also latched on to the issue of energy prices, but we have seen the Government’s action to undo the hard work done by the Leader of the Opposition when he was Secretary of State for Energy and Climate Change in putting green levies on to our electricity bills. Those have been rolled back and we have seen a positive impact and a positive announcement from SSE, which has pledged a freeze until 2016. Again, that is positive action from the Government, who understand the challenges that people have faced because of the legacy we were left.

We have seen council tax frozen. We have seen the fuel duty rises planned by the previous Government held back. In this Finance Bill we have seen particular help for the least well-off, with the increased personal allowance. I have long been an advocate for increasing the personal allowance, to take the least well-off out of tax all together. The allowance is rising to £10,500, which is welcome.

It is not just about hard-working people, however. We also need to be concerned about people who are retiring. The work we are seeing on pensions—with a higher flat-rate pension and a move to get people out of the annuity requirement, to give them greater choices about what to do with their hard-earned, hard-saved money—is really attractive as well.

This Finance Bill does a great job in extending the Government’s work on recovery and ensuring that we are set fair for the future. Thankfully, it was not a give away Budget and it is not a give away Finance Bill. It should be, and is, steady as she goes: the work is not yet done. This Government recognise that much has been done but there is much yet to do. This Bill is a key part of the way back for Britain and of the kind of future that we can build, for people who work and for businesses that are growing today, and also for our young people tomorrow.

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[Mr Bain]

I hope that when the hon. Gentleman speaks to his constituents in Redcar, he will remind them of the entirety of the record of the previous Government, who of course oversaw a dramatic decline in pensioner poverty and a huge fall in child poverty. Those policies did work. The inheritance we were left on both counts in 1997 was a disgrace that should have shamed Conservatives who were Members of that Parliament.

[Charlie Elphicke]

Will the hon. Gentleman give way?

[Mr Bain]

I cannot resist giving way to the hon. Gentleman.

[Charlie Elphicke]

In fact, in the previous Parliament the relative figures for child poverty rose and the gap between rich and poor rose, but those numbers have reduced since this Government have been in power.

[Mr Bain]

Over the entire period of the Labour Government, pensioner and child poverty were lower than they were in 1997. If the hon. Gentleman examines the records from the Institute for Fiscal Studies, he will see that that is clearly the case.

Charter for Budget Responsibility

Charlie Elphicke Excerpts

Wednesday 26th March 2014 Commons Chamber

[Ed Balls]

The Chancellor said three times that Labour was proposing a rise in business taxes and that is untrue, Mr Deputy Speaker.

[Charlie Elphicke (Dover) (Con)]

Will the shadow Chancellor give way?

[Ed Balls]

Let me answer the hon. Member for The Wrekin and then I will come to the soon to be ex-hon. Member for Dover. [Interruption.] If hon. Members quieten down, I will answer the point. Since 2010 there has been a 129% rise in long-term youth unemployment: that is young people on the claimant count who have been out of work for more than 12 months. That figure has gone up by 129%. That is the truth. It is a fact, and I will place the information in the House of Commons Library. There has been a 129% rise since 2010 and I think the hon. Member for The Wrekin should support what I am about to say.

[Charlie Elphicke]

Will the shadow Chancellor give way?

[Ed Balls]

No.

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[Ed Balls]

In the constituency of Ipswich there has been a 140% rise in long-term youth unemployment over 12 months, and long-term youth unemployment is a real problem. I am glad the hon. Gentleman intervened because I was reading his Hansard remarks from 2012 when he said that asking the Office for Budget Responsibility to audit the parties’ manifestos at the next election was the right thing to do. He said there was no reason why that could not be done. I will come back to him in a moment on that one.

We support the welfare cap. We will make different and fairer choices to keep the social security bill down and tackle the root causes of higher welfare spending. Let me explain—

[Charlie Elphicke]

Will the shadow Chancellor give way?

[Mr David Burrowes (Enfield, Southgate) (Con)]

Will the shadow Chancellor give way?

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[Ed Balls]

All the evidence shows that action to get young people back to work, especially the long-term unemployed, pays real dividends. It is what we mean by tackling the root causes, and it is the right way to implement a tough welfare cap. That is the approach we will take.

[Charlie Elphicke]

rose—

[Ed Balls]

Oh, he is back again. Go on then, have your go.

[Charlie Elphicke]

Is the shadow Chancellor committed to a welfare cap on the same benefits and of the same numbers as this Budget—yes or no?

[Ed Balls]

Yes.

Let me end by discussing the role of the OBR, because that is also set out in this charter. Page 5 states:

“The Coalition Government’s major reform to the fiscal framework has been the creation of the Office for Budget Responsibility”.

We agree with that, which is why we have proposed a reform to enhance the OBR’s role and allow it, as the hon. Member for Ipswich has advocated, independently to audit the tax and spending commitments in the manifestos of the main political parties. Why has the Chancellor not used the opportunity of this updated budget responsibility charter to make that reform? If he were to think again, he would be joining not only me, but the Chair of the Treasury Committee and the Chief Secretary to the Treasury, who have both supported this reform. We need legislation in the Finance Bill to make that happen.

Budget Resolutions and Economic Situation

Charlie Elphicke Excerpts

Wednesday 19th March 2014 Commons Chamber

[Charlie Elphicke (Dover) (Con)]

It was a rant.

[Mr Redwood]

The Leader of the Opposition’s rant, as my hon. Friend says, had just one basic message: the wrong belief that the Conservatives want tax cuts for the rich and misery for everybody else. What we want is tax cuts for everyone, and what this and the previous Budget offer is tax cuts for everyone.

Let me explain how we have different types of tax cut for people at different levels of income. We take those on the lowest incomes out of tax altogether, so they get a genuine tax cut: they go from paying something to paying no income tax at all. The House is, I think, united on the wisdom of that. At the top end, we cut the rate, and what happens is that the rich and successful people actually pay more tax, not less. That seems to me to be magic, because then everybody is happy—or they should be. Only the very jealous should be miserable, because what we then have is the rich staying here, investing here, creating jobs here, creating more money here and paying more tax because the rate is lower. What is not to like about that proposition?

What is odd is that the Labour party in office, until the last couple of days, knew that and kept the top rate of tax below the level that we inherited and below the level we have now fixed. It is a bit rich that Labour is now complaining that we are light on the rich, given that our tax rates are collecting a lot more tax from the rich and are higher than the rates that Labour imposed. Indeed, we could collect even more tax from the rich if we brought the rates down a bit more, which I hope, come a Conservative Government, we might be able to do. Surely what we want is to maximise the revenue from such people, not to make a political point and drive them abroad, so that we have a society with less money, fewer jobs and less creativity.

I am pleased that the Chancellor made some moves on energy. We need a much bigger and stronger industrial recovery than we have generated so far. The first thing we need to do to have such a recovery is to ignore the advice of the Green MP, and to go for cheap energy. America is going for cheap energy, and it is re-industrialising very quickly. America is now super-competitive against companies in the European Union. A leading chemical major in Germany has recently said that it will put more of its investment abroad, outside the EU altogether, because, in the light of the energy crisis, the gas feed stock is uncompetitive. We need to find that gas and to get it out as quickly as possible. We need to match the United States’ shale revolution if we wish to save our high-energy-using industries and to re-industrialise and give some hope to the northern cities in particular, with their long tradition of industrial activity, because they need much cheaper energy.

We need to do more for savers, and I am delighted by an elaborate and interesting set of measures from the Chancellor on saving. Savers have had a miserable time after the collapse. Rightly, successive Governments and Governors of the Bank of England have kept interest rates on the floor, as they had to do, to try to stimulate activity and to prevent a worse collapse than we experienced in 2008, at the height of the crisis. That has been very bad news for savers. The tax changes will help savers, and the pensioner bond offer, if the rates are around the level we are now looking at, makes sense and would be a bit more attractive and something for pensioner savers to look forward to. I also welcome more flexibility for pensioners generally. Annuities are not good news at the moment, and if people can put that off or have a better choice, that may well be an excellent answer.

This Budget needs to be good for savers, for industry and for exports, and we are going in the right direction. It will help to promote a bit more growth, and only if we get a lot of growth will we get out of this debt bind.

--- Later in debate ---

[Charlie Elphicke (Dover) (Con)]

It is a pleasure to follow the hon. Member for Dumfries and Galloway (Mr Brown). I want to start by welcoming the Budget and reflecting on the legacy the Chancellor inherited before bringing us to where we are today. Let us not forget that we had a deficit of £156 billion a year, which has now gone down by a third to £109 billion a year. There was a structural deficit from 2002 onwards, and throughout the Labour years there was a total failure to regulate the banks and our banking system, which left it massively exposed, and unemployment rocketed.

The Chancellor had the most difficult inheritance in this country’s history in many ways. He has turned things around these past four years so that this country is now on the path to recovery. The economy is growing, jobs are up and the future looks promising for Britain. In the past, the roof was not fixed while the sun was shining, but while it has been raining we have been furiously fixing the roof and doing so with some success.

Areas such as my constituency of Dover and Deal do not have enormous amounts of money and there is a lot of deprivation. The rise in the personal allowance to £10,500—it was £6,475 when I was elected—will make a real difference to those constituents of mine who are not well paid. It will make an enormous difference for people without a lot of money.

The freeze in fuel duty will make a massive difference for the many people in my constituency who have to travel by car. It is now 20p lower than it would have been under the previous Government’s plans. A freeze in council tax year after year makes a massive difference to my constituents, after it had doubled in previous times. Moreover, given that unemployment in Dover and Deal rose by 50% in the previous Parliament, it makes a massive difference to my constituents that it has fallen by 20% in the past year alone: more jobs, more money, more aspiration and more success. Aspiration matters, too: the number of apprenticeships has risen from 440 when I was elected to 880 today, so there are more chances for our young people.

Not everyone in my constituency is extremely badly off; there are areas where people have more money and are trying to find somewhere to save it in order to get a return. I greatly welcome the fact that we are incentivising ISA saving with a £15,000 limit. It is really important that we encourage a savings culture in this country. Let’s face it: it was destroyed by the pensions tax and everything that followed in previous times. We have to rebuild that savings culture, the idea of a rainy day fund and the ability of our constituents to take more responsibility.

What this Government have done is not just about practical help in terms of more jobs, more money, more prosperity and fewer taxes. In my constituency they have made a much bigger difference in terms of infrastructure and investment. When I was elected, the port of Dover was about to be sold off, having been stuffed in a car boot sale by the previous Prime Minister in a desperate bid to raise some cash. It was going to be sold off to the French or whoever—we did not know who. Our hospital had been decimated over the past decade and was not fit for purpose. A new hospital was needed and had been talked about for years. There were stalled construction sites all over Dover and Deal. I ran a campaign against “coming soon” signs, because they had said “coming soon” for so long—for the past decade—that one of them had rotted away and had to be replaced.

Fast-forward to 2014 and the port has been saved: we are now talking about a community-led port that can get the investment that the port of Dover has needed for so many years. A new hospital is being built, which will make a practical difference to people in their daily lives and will open its doors next year. More jobs have made an enormous difference to people. A compulsory purchase order has been served on Burlington house, which scars the seafront of Dover. That is making a difference and giving people more confidence and hope and a greater sense of belief in the town’s future. A fast train now rolls up at Deal—which was previously considered a village—and shortly will do so all day long. That kind of infrastructure makes a massive difference to people’s prosperity, success and aspiration.

Whereas in previous times the regional South East England Development Agency spent £20 million building a business park near Deal without anything on it—there were not even any buildings—now the coastal communities fund and the Homes and Communities Agency are supporting the Hadlow college project at the former pit site of Betteshanger, which promises to create 1,000 new jobs. That sort of practical help on the ground, which goes beyond high-level policy discussions, makes such a very big difference to people in their daily lives.

That is why I regret hearing the Leader of the Opposition’s speech. He reminded me of Marshal Foch saying, “My centre is collapsing, my left is in retreat and my right has gone altogether”—because all the Blairites have been chased away, sacked and discredited or have resigned. The Labour party’s lurch to the left has done it no good whatever. In its centre, Labour Members have no economic policy, except for more spending, more welfare, more debt and more taxes. Those discredited policies of the past will not take this country forward. To try by sleight of hand to say that they will have a current surplus—thinking that people will not notice a 25 billion quid bit of wriggle room and that he will get away with it—is not the right way to do it. The Leader of the Opposition should have come to the Dispatch Box today with a plan and a positive case, but all he did was rage against iniquities largely created by his party in past times or during the previous Parliament.

[Mark Garnier (Wyre Forest) (Con)]

My hon. Friend will also have noticed that the Leader of the Opposition referred to nothing having been done to reform the banks. He seems to have been asleep for the past four years, during which banking reform and financial services legislation has gone through and a huge amount has been done to reform the banks. Does my hon. Friend think that the Leader of the Opposition has been asleep or has just ignored what has happened?

[Charlie Elphicke]

My hon. Friend asks a very important question about what the Leader of the Opposition has been doing for the past four years. He has certainly not been preparing a high-quality response to this Budget, that is for sure.

Even though the Leader of the Opposition wants to say, “Situation excellent; I am advancing”, not only is there a complete hole or collapse in the centre of the Labour party, with the Opposition having no long-term economic plans, but on its left flank, which is in retreat, Labour Members are talking about the cost of living. What will they say if wages rise above inflation in a few months’ time? It little behoves them to talk in that way, because people will start to see through everything they say. They are now saying that long-term unemployment is terribly high and all that sort of thing. However, when they talked about high unemployment, it started falling, and when they then talked about the lack of full-time jobs, people started getting such jobs. The risk is that the number of long-term unemployed will start to fall in a few months’ time, and they will have to look for another selective statistic to cite. Such talk will not do them any good, because people will see through it.

It is therefore time for the Labour party to think more carefully and more long-term about what it can offer this country, because right now it can offer very little indeed. This Government can and rightly do now say that we cannot give back the keys to the people who crashed the car, particularly when they are still drunk, still will not listen and still have not learned anything, but will carry on and do it all again.

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[Luciana Berger]

Oh, goodness! As my right hon. Friend the Member for Tottenham (Mr Lammy) said, I was very generous in giving way. I come back to the point that one in three councils do not have enough places to deliver the Government’s promised child care for disadvantaged two-year-olds. Today’s announcement will not come into effect until next year. I reiterate that parents need help now, because child care costs are putting parents off going back into work. I am very disappointed as a result of what we did not hear from the Chancellor today.

I listened closely to the Chancellor’s announcements on energy bills, but the best deal in a broken market is not a good deal. Energy bills have gone up by about £300 since 2010. As I said before, my constituents are facing the choice between heating their homes and eating. The Liverpool Echo, my local newspaper, carried out a special investigation last week that highlighted the experience of Merseyside pensioners, who are being plunged into fuel poverty by rocketing energy bills. Under the Government’s new definition of fuel poverty, my constituency is among the top three in the country for that challenge. Where was the help for those people with their energy bills in the Chancellor’s Budget? There was none.

We need proper reform of the energy market. We need to freeze bills so that we can do what needs to be done to ensure that we know the cost of the energy that is generated by the six companies that generate 70% of the energy in the UK. At the moment, we have no idea of the true cost of that energy. We need to create a transparent pool, so that we are all fully aware of what the companies are generating and the cost of that energy. We also need a regulator with teeth, which we do not have at the moment. There needs to be a means by which people can properly compare and contrast prices, as they can for mobile phone bills. That is not possible at the moment because we do not have single standing charges and unit prices that can be compared. Again, there was nothing from the Chancellor to help not only households and individuals but businesses that are struggling to pay their energy bills.

On the day of the Budget, we have also heard the unemployment figures. The hon. Member for Dover (Charlie Elphicke) just talked about the statistics, but when we talk about long-term youth unemployment, we are talking about young people in my constituency who do not have employment, which will have long-term effects—[Interruption.] The hon. Gentleman gesticulates that the number has come down. In my constituency, the number of long-term unemployed young people—those who have been out of work for more than a year—has gone up by more than 60% since 2010. That is a waste of the talent of our young people and has long-term implications not only for them but for the wider economy. The young people who are not employed at the moment bring a cost to our economy of £3.2 billion over their lifetime. In my constituency, 835 young people are out of work, and I wanted more from the Chancellor to address that situation properly. We know that the current schemes are not working, and that less than 20% of young people locally are getting into work. We need to do everything we can.

[Charlie Elphicke]

Will the hon. Lady give way?

[Luciana Berger]

I will not, because I have less than a minute left.

Labour’s policy is to provide a jobs guarantee by repeating the bankers’ bonus tax. I listened to the Chancellor to hear whether he might do that, but there was nothing on that front, even though Barclays alone has increased bankers’ bonuses by 10% to more than £2.5 billion. Would not some of that money be well invested in the young people of our country, to ensure that they are in work and have a chance throughout their lifetime? We need to get the long-term unemployed, including the young long-term unemployed, off benefits and back into work. A jobs guarantee through repeating the bankers’ bonus tax would have achieved just that.

My constituents will be dismayed by the Chancellor’s Budget. I am sad that he could not find it in himself to acknowledge the cost of living crisis that millions of people are experiencing every day, including in my constituency. The Government are so out of touch, and today’s Budget has reinforced that.

Oral Answers to Questions

Charlie Elphicke Excerpts

Tuesday 11th March 2014 Commons Chamber

[Sajid Javid]

When the last Government were in office, unemployment among young people rose by 45%, so we are not going to listen to any ideas that Labour Members may have about it. The best way of cutting unemployment, whether long-term or otherwise, is to establish a growing economy that creates jobs. In the last four years, our economy has seen 1.3 million jobs created, and more people employed than at any other time in history.

[Charlie Elphicke (Dover) (Con)]

Youth unemployment in Dover and Deal has fallen by 25% in the last year, having increased by 50% in the last Parliament. Does that not show that it is important for us not just to have a long-term economic plan that is working but to do more to repair the damage done by the last Labour Government?

[Sajid Javid]

My hon. Friend is absolutely right. We need to stick to our long-term plan to ensure that we have a growing economy that creates jobs and gives people the financial stability that they need, and the biggest risk to that plan would be our adoption of Labour’s policies of more borrowing, more spending and more debt.

Payday Loan Companies

Charlie Elphicke Excerpts

Monday 20th January 2014 Commons Chamber

[Charlie Elphicke (Dover) (Con)]

It is a real pleasure to follow the hon. Member for West Bromwich West (Mr Bailey) who made an interesting and well-informed speech.

My general philosophical approach is very much that we want to build a land of opportunity and aspiration where anyone can do well and where they have the tools to succeed and achieve and even reach for the moon. There is a flipside to that form of opportunity politics—that Conservatism—and that is that we also need to protect people from being taken advantage of. In too many cases, there is a history in this country of lax regulation, which has enabled people to be taken advantage of: water and power companies not properly regulated with rising bills; the banking system was not properly regulated and spawned payday lending; a tax system that was lax and weak and allowed industrial-scale tax avoidance, which was unacceptable; and employment law that is not properly regulated, even though it was previously reviewed and zero-hours contracts were allowed to carry on. In too many cases, this Government need to protect people and make sure they are not taken advantage of. In many instances action has been taken, however, and I welcome the action on payday lending announced by the Chancellor.

The problem is not a new one; it has been around for a while. I remember a client phoning me up back in 2006 and saying “I’m thinking of buying a payday lender.” I said, “What is that? I haven’t heard of it.” He explained what it was and I said, “This is a car crash in the making.” He said, “It’s great: it’s a rising a market and I can make lots of money out of it.” I said, “Don’t do it. People will not understand. It will not be acceptable, and sooner or later it will cause a massive scandal in this country and an enormous row,” and that has turned out to be the case. I am glad to say he did not take on that business, but many others did: they saw an opportunity and took it, and what has happened is wholly unacceptable in too many cases.

Many people say we should not take any action on payday lending because that will drive people into the hands of loan sharks, but the evidence from the Bristol university department for business was that when customers could not access short-term loans, most would either go without or approach a friend or relative for help. It showed that a small number would try to borrow from other short-term lenders, but that the use of an illegal lender was not an option that the vast majority would consider. It does not seem right, therefore, to say that most people would end up going to loan sharks.

I want briefly to look at the international comparators. This is not simply a UK problem. It is a problem worldwide, and many other countries have taken action to try to deal with it. The hon. Member for West Bromwich West spoke movingly about advertising and related issues. I want to talk about interest rate caps and what we can do to control the excessive amount of money that is often demanded by payday lenders.

The USA has introduced caps, and the overall result has been substantially to restrict the market. Payday lending has been dramatically reduced as a result. Other countries have gone down different routes. Canada, for example, has introduced substantial regulation for short-term loans and established a payday lending education fund. It has also introduced a two-day cooling-off period during which customers can cancel their payday loan, and banned the inclusion of fees in the value of the loaned amount. The payday loan industry has set up its own industry body. There are also rules banning the rolling over of payday loans; the issuing of multiple payday loans to the same customer; the taking of collateral as security; and the charging of an interest rate greater than 90 cents a week for the first 13 weeks. Canada has thus produced a system of regulation that involves capping amounts of money, rather than capping interest rates.

Japan has introduced an interest rate capping system, set at around 20%, which was implemented in 2010. Australia has introduced an interesting system of payday loan regulations, as many hon. Members will be aware. It has looked at a form of regulation similar to the one we are considering. Those international comparators suggest that we should consider not only an interest rate cap but perhaps a cap involving a particular amount per £100 over a set length of time, and I hope that hon. Members will consider that.

[Debbie Abrahams (Oldham East and Saddleworth) (Lab)]

A bit closer to home, in Oldham—and elsewhere in this country—there are good examples of credit unions. They charge very low interest rates and work in the collective interest, which I am sure we all agree is a good thing. Does the hon. Gentleman agree?

[Charlie Elphicke]

I am in complete agreement with the hon. Lady. Credit unions are a good idea, and mutual finance is a good thing. I am a fan of mutuals, having made the case for my own port of Dover to become a people’s port—a community mutual. We have mutuals in the financial sector in this country, but they are rarely mentioned. What happened to the building society movement? Why is no one fighting for that these days? Building societies are mutual organisations. We should look again at what we can do with them and at the kind of organisations they could become. They are substantial organisations, and this is something we should look at. In Australia, the credit unions have been more successful than they are here. Here, we have a building society movement, and we should look at developing it.

I want to touch on a further concern. Why is the payday lending industry there at all? Why has it arisen? I believe that bank overdrafts have a lot to do with it. Anyone who has an unauthorised overdraft will be charged 20 quid for a letter and 50 quid for the unauthorised overdraft fee, plus an extra amount per cheque or payment. That is wrong; it is egregious. When people have run out of money and cannot get an authorised overdraft, it is the behaviour of the banks that can help to drive them to the alternative credit providers. A practical step would be to look into the banks’ behaviour. We need to strike a balance between protecting customers from being stung by the banks when they have short-term cash-flow problems and making access to irresponsible credit too easy for them.

I propose that the banks should operate a grace period, so that people who ended up with an unauthorised overdraft would not get hit with fees immediately. They should be able to overdraw for a short time without being charged. That would reduce the numbers being forced to seek alternative forms of credit. There should also be a wide-ranging review of the way in which the banks handle overdrafts, and of their ability to help people who find themselves short of funds in the short term. Most of us in the House want to defeat the payday lending industry, and the best way to do that is to provide an alternative for people who do not have much money and who are in real need of assistance. I am also concerned about the EU consumer credit directive. The ability of lenders to operate across EU borders makes it possible for payday lenders to bypass anything that we decide here. That needs to be carefully considered and addressed.

Finally, what more can we do, above and beyond what the Financial Conduct Authority is proposing to look at when it takes over in a few months’ time? We could consider the following measures: setting a ceiling on the total cost of borrowing, rather than setting an interest rate cap; seeking reform of the European consumer credit directive; introducing tougher sentences for illegal lending, including mandatory prison sentences; enabling victims of illegal lending to recover all payments made to the lender, plus extra, rather like what the Labour Government did with tenant deposit schemes; requiring payday lenders to form an accredited industrial body; and requiring banks to give a grace period of three working days before customers are charged for unauthorised overdrafts.

National Minimum Wage

Charlie Elphicke Excerpts

Wednesday 15th January 2014 Commons Chamber

[Rachel Reeves]

Not only are Government Members not 100% behind the national minimum wage; they cannot even bring themselves to say “national minimum wage”.

[Charlie Elphicke (Dover) (Con)]

The Government are asking the Low Pay Commission to review the minimum wage with a view to increasing it. Does the hon. Lady welcome that—yes or no?

[Rachel Reeves]

The hon. Gentleman is a little behind the curve. That is what the Low Pay Commission does: that is what we set it up to do.

The failure to enforce the legislation properly has contributed to a worrying rise in in-work poverty. It used to be thought that if someone got a job, put in the hours and put in the effort, they would be paid enough to keep them and their family out of poverty and have a decent standard of living—that was the deal. But today, for the first time since records began, the majority of people in poverty are in work and the majority of children in poverty are brought up in working households. It is just not good enough that in today’s Britain an honest day’s work does not bring in a decent day’s pay.

--- Later in debate ---

[Vince Cable]

In line with the commitment to enforcement, I think we have produced more resources for that. My hon. Friend the Economic Secretary to the Treasury, who will be summating, may want to say a little more about that, but we recognise that the enforcement authorities need resources to do their job.

[Charlie Elphicke]

I thank my right hon. Friend for giving way. As a Conservative Member of Parliament representing a constituency with a lot of social deprivation, I support the national minimum wage and the work of the Low Pay Commission, which is really important. In response to my intervention, the shadow Secretary of State dismissed the Low Pay Commission and talked about restoring the value of the minimum wage. Does my right hon. Friend know what exactly restoring the value of the minimum wage means and how much that would cost?

[Vince Cable]

I welcome the hon. Gentleman’s support and I know that it is shared among his colleagues. This is a historical issue: it has now been laid to rest. I will talk a little more about the mandate of the Low Pay Commission and the fact that successive Secretaries of State, including me, have respected its judgment, which is non-political, non-partisan and represents both the union and employer standpoint.

Let me talk about the wider economic consequences. The shadow Secretary of State talked with a real sense of righteous indignation about things that are, frankly, blindingly obvious. We have had a massive financial crisis, the biggest in our history—certainly in modern times. As a result, the country is poorer. That is a matter of fact. It is not a polemical point: the country is poorer, and that has been translated into lower earnings. That is simple economic reality and nobody is disputing that.

In the wake of the economic crisis in 2008-09, we now know that British GDP fell by 7.5%. That was more than after the great crash in 1929 and worse than in any other western country. I am not going into the business of who did what when; I am just recording a matter of fact. Recession inevitably followed the financial disaster and real earnings have been affected. The shadow Secretary of State is right on simple matters of fact: real earnings fell by 7% and the minimum wage fell by 5%. That is a matter of fact. What I find so very difficult to understand is that the Opposition Front Benchers—it is not just her; her colleagues are the same—have seen the greatest economic disaster in modern economic history and apparently not noticed it, and they have not taken any account of the inevitable economic consequences. What matters is that the Government of the day seek to mitigate those effects.