Finance Bill

George Howarth Excerpts

Tuesday 28th June 2016 Commons Chamber

[Sammy Wilson]

I am reluctant to get involved because I know that the Chair will call me to order, but perhaps you will indulge me, Mr Howarth, and allow me to answer the point. I do not share the hon. Gentleman’s views about the detrimental impact of Brexit. Indeed, for businesses in Northern Ireland, where we have become export-oriented, it opens up the opportunity to look to those parts of the world where there are growing economies and allows us to make our own trade deals with them. I believe that Brexit will be of benefit to us and—

[The Temporary Chair (Mr George Howarth)]

Order. I understand the connection that the hon. Gentleman is making, but he is about to strain it beyond the limits.

[Sammy Wilson]

I was about to say, Mr Howarth, that the reduction in corporation tax will be an additional means by which we can capitalise on those opportunities.

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Question proposed, That the clause stand part of the Bill.

[The Temporary Chair (Mr George Howarth)]

With this it will be convenient to discuss the following:

That schedules 11 and 12 be the Eleventh and Twelfth schedules to the Bill.

Government amendments 30 to 35.

Clauses 73 to 75 stand part.

Government amendments 36 to 38.

That schedule 13 be the Thirteenth schedule to the Bill.

Clause 76 stand part.

Government amendments 39 to 64.

Amendment 181, in schedule 14, page 432, line 45, at end insert—

“169VS Expiration of Chapter V provisions

(1) The provisions of Chapter V of part 5 of this Act shall remain in force until five years after their commencement and shall then expire, unless continued in force by an order under subsection (2).

(2) The Secretary of State may by order made by statutory instrument provide—

(a) that all or any of those provisions which are in force shall continue in force for a period not exceeding 12 months from the coming into operation of the order; or

(b) that all or any of those provisions which are for the time being in force shall cease to be in force.

(3) No order shall be made under subsection (2) unless—

(a) a draft of the order has been laid before and approved by a resolution of both Houses of Parliament,

(b) the Secretary of State has laid the report of a review of the operation of Investor’s Relief before both Houses of Parliament.”

Government amendments 65 to 68.

That schedule 14 be the Fourteenth schedule to the Bill.

Amendment 182, in clause 77, page 135, line 17, leave out “£100,000” and insert “£50,000”.

Government amendment 184.

Clauses 77 to 81 stand part.

New clause 2—Review of remuneration of investment fund managers—

“The Chancellor of the Exchequer must commission a review of ways in which the law could be amended to ensure that no element of the remuneration paid to an investment fund manager may be treated as a capital gain, and that such remuneration shall be treated for tax purposes wholly as income, and must publish the report of the review within six months of the passing of this Act.”

New clause 11—Entrepreneur’s relief: value for money—

“The Chancellor of the Exchequer shall, within six months of the passing of this Act, publish a report giving HM Treasury’s assessment of the value for money provided by Entrepreneur’s Relief.”

[Mr Gauke]

The final session of today’s debate considers a number of changes to capital gains tax, along with Government amendments and one Opposition amendment.

Clause 72 will provide an incentive for people to invest in companies by reducing the main rate of capital gains tax from 18% to 10% and 28% to 20% on most gains made by individuals, trustees and personal representatives. The Government want to ensure that companies can access the capital they need to grow and create jobs, and want the next generation to be backed by a strong investment culture. We believe the best way to encourage this is to let investors keep more of the rewards when their investment is successful. At 28%, our higher rate of capital gains tax is among the highest in the developed world. We do not want high tax rates to deter investment. The lower capital gains tax rates introduced by this clause will make it more attractive for people to invest in companies, helping those companies to access the capital to expand and create jobs. Gains made on residential properties that do not qualify for private residence relief, and those from carried interest, will remain subject to the 18% and 28% rates. Retaining these rates will create an incentive for individuals to invest in companies rather than in property.

Clauses 73 to 75 make changes to ensure that entrepreneurs relief on capital gains tax rewards business owners and entrepreneurial investors while safeguarding the effect of measures introduced last year to prevent abuse of the relief. The Government are committed to supporting enterprise and entrepreneurship, but they are equally committed to fairness in the tax system. Entrepreneurs relief allows certain capital gains to be taxed at 10%, rather than the normal rates, and plays an important role in supporting the enterprise culture of this country, but, as with all tax reliefs, we need to make sure that it is not being claimed in circumstances where it does not achieve its intended purpose.

These changes will improve the targeting of the anti-abuse rules introduced in 2015. The changes in clause 73 will allow relief for gains on disposal of a private asset used in a business in cases of genuine retirement or where members of the claimant’s family succeed to the claimant’s business. These changes will level the playing field for family-run businesses and allow them to be passed to the next generation without an unfair tax charge.

The changes in clause 74 will allow someone selling their business to a limited company to claim relief on the goodwill of that business, providing they have only a small stake in the company. The relief will still be denied where the former proprietor or partner could continue running the business through the company and benefit directly from future profits and business growth. Entrepreneurs relief on gains on shares is due only where those shares are in trading companies or the holding companies of trading groups. Clause 75 amends the definition of a trading company to ensure that relief is available for shares in a company that has no trade of its own but which holds shares in a trading joint venture company where the investor effectively holds 5% or more of the joint venture company. The further changes made by these clauses will be backdated to the date on which the 2015 changes came into effect, meaning that no one who has made a genuine disposal for commercial reasons should be disadvantaged by the new rules.

The Government have tabled several minor amendments to the clauses. Amendments 30 to 33 simply move one of the new conditions introduced by clause 73 to a different place in the relevant statute. Amendments 34 and 35 correct two unintended retrospective effects of clause 73. Without the amendments, someone who made a disposal after Budget day 2015 and was eligible for entrepreneurs relief could find themselves deprived of that relief by changes announced at Budget 2016. Amendments 36 to 38 clarify the commencement provisions for the new rules introduced by clause 75 and ensure that the new definition of a trading company supersedes the definition used by the Finance Act 2015. These amendments do not reflect any change in policy and will have no impact on the costings of the measures.

Now is an appropriate time to address new clause 11, tabled by Opposition Members, which proposes that my right hon. Friend the Chancellor of the Exchequer publish within six months of the passing of the Act a report of the Treasury’s assessment of the value for money provided by entrepreneurs relief. Opposition Members will be aware that the Government keep all tax policy under review. This includes entrepreneurs relief, as demonstrated by recent action taken to ensure that the relief is effective, well targeted and not open to abuse, and we will continue to act where appropriate. I can inform the Committee that officials have for some time been developing a detailed research programme designed to identify taxpayers’ motivations for using entrepreneurs relief, and I expect the results to be published at some point in 2017. I do not believe it is necessary to legislate for a review, so I hope that the Opposition will not press the new clause.

Clause 76 and schedule 14 introduce investors relief and apply a 10% rate of capital gains tax to gains accruing on the disposal of qualifying shares held by an external investor in an unlimited trading company for at least three years. Many companies struggle to attract the long-term external investment they need to grow and expand, and this can be particularly difficult for unlisted companies, which is why, on top of cutting the capital gains tax rates, the Government are introducing this additional financial incentive to invest in these companies over the longer term. Investors relief has been designed to help unlisted companies attract inward equity investment from external investors. This clause and schedule apply a 10% rate of capital gains tax to gains accruing on the disposal of qualifying shares held by an investor in an unlisted trading company or trading group. The investor must not be an employee or officer of the company at the time of subscription. In addition, the shares must have been newly issued after 17 March 2016 and held for a period of at least three years starting from 6 April 2016. The amount of relief is capped, with individuals subject to a lifetime cap of £10 million on qualifying gains.

We are today making a number of amendments to this clause to ensure that the rules surrounding the relief are fair and clear, and to extend the scope of the relief to prevent market distortions and unlock further sources of capital. Amendments 39 to 41, 43, 44, 50 and 61 will ensure that trustees of a settlement as well individuals who choose jointly to subscribe with other individuals are able to subscribe for investor relief qualifying shares. In the case of trusts, amendment 51 includes rules that prevent individuals from creating multiple trusts, each with a £10 million lifetime limit.

Amendments 45 to 49 clarify how to determine the number of shares that qualify for investors relief when a disposal is made that consists of a mixture of qualifying and non-qualifying shares. Amendments 52 to 60 and amendments 65 to 68 clarify the provisions that deal with share disposals, share exchanges, elections, subscriptions and the distribution of value to existing shareholders.

Finally, some investors may wish to monitor and protect their investment through a seat on a company’s board. Amendments 42 and 62 to 64 allow such an investor to become a director after their investment has been made as long as they are not remunerated in that capacity. They also allow an individual who becomes an employee of the company to access relief in most situations after 180 days of the share issue. Investors relief is designed to attract new capital into unlisted companies, enabling them to grow their business. It will help to advance this Government’s aims for a growing economy driven by investment and supporting businesses to grow.

Let me turn to the Opposition amendment that was tabled by the hon. Member for Feltham and Heston (Seema Malhotra), but is now being taken up by her successor—and may I congratulate the hon. Member for Salford and Eccles (Rebecca Long Bailey) on her promotion? Amendment 181 seeks to end the relief after a period of five years, with the option of an additional 12-month extension if agreed by both Houses, subject to the Chancellor laying a review of the operation of the relief before both Houses. The amendment is unnecessary when the Government rightly keep all tax policy under review in line with normal tax policy-making practice. There would be limited merit in conducting the review within five years; the first data on the uptake of the relief in its first year of operation would not be available to HMRC until 2020-21. The Government believe that legislating for a review within five years is unnecessary and inappropriate. I therefore hope that amendment 181 will be withdrawn.

Clause 77 relates to shares given to employees who accept employee shareholder status. It places a lifetime limit of £100,000 on the capital gains tax exempt gains that a person can make on disposal of those shares. The limit will apply to shares received under arrangements entered into after 16 March 2016. The change will enable employee shareholders to realise the significant growth in the value of their shares without paying any capital gains tax, while helping to ensure that the status is not misused. The clause provides for fair and consistent treatment of transfers of shares to a spouse or partner. The change will benefit the Exchequer by £10 million in 2019-20 and £35 million in 2020-21.

It is also an appropriate point to address amendment 182, which was tabled by Opposition Members. It proposes that the lifetime limit be £50,000 rather than the Government’s proposed £100,000. This is not a change that the Government would welcome. The introduction of a cap of £100,000 where there was none before is, we believe, a significant change. The level of the cap is a matter of weighing up two policy objectives—ensuring that employee shareholder status is not misused, and encouraging and rewarding entrepreneurship. The Government believe that setting the cap at £100,000 strikes the right balance. It encourages entrepreneurship by allowing an exemption from capital gains tax which is still generous while reducing the likelihood of abuse by ensuring that the benefits for individuals are proportionate and fair. I therefore invite hon. Members to reject amendment 182.

The Economy and Work

George Howarth Excerpts

Thursday 26th May 2016 Commons Chamber

[Mr George Howarth (Knowsley) (Lab)]

I begin by thanking the Chancellor for the £5 million he earmarked in the Budget for Shakespeare North. May I press him a little further and ask him to waive the VAT on the construction costs?

I want to talk today about the link between poverty, economic progress and education. Before doing so, however, I should perhaps say a word about my position on the EU referendum. In the previous referendum, in 1975, I chaired the “Huyton says no” campaign. That merry band of naysayers was a fairly eclectic group consisting of Labour party Young Socialists, the Communist party of Great Britain and two Tories who ran a ballroom dancing academy. Fortunately, the people of Huyton sensibly listened to our local MP at the time, Harold Wilson, and voted to stay in.

The argument that I want to advance today takes its inspiration—fittingly, in the centenary year of his birth—from Harold Wilson’s “white heat of technology” speech. Key to his argument in 1963 was that we needed to adapt to changing economic realities by embracing the challenges presented in science and technology. It also included an element about the importance of education as a pathway out of poverty. My argument is that we now face a similar challenge. How do we compete in a rapidly changing global economy? Do we, as some international corporations would suggest, adopt zero-hours contracts and other insecure forms of employment, or do we incentivise innovation and educate and train our workforce to take advantage of the opportunities that innovation creates? The first option is, in my view, a self-defeating race to the bottom.

However, we have to face up to some uncomfortable truths, one of which is the decline in manufacturing in the UK. In 1972, 32% of the UK’s GDP came from manufacturing. By 1997, that percentage was down to 14.5%, and by 2013 it had dropped further to 10.4%. The economic levers available to the Chancellor and the Government need to be remorselessly focused on creating incentives for innovation, using not only the taxation system but the export guarantee system and everything else available to ensure that the opportunities that exist in the world are brought within the reach of our country.

We also need to talk about education. We have serious problems with education in Knowsley. I do not want to go into too much detail, but we have a serious problem of under-attainment at GCSE level.

[Andrew Gwynne]

I just wonder how many secondary schools in Knowsley are academies.

[Mr Howarth]

That is the point. Out of the six secondary schools in Knowsley, four are already academies, so that is clearly not the solution to the problems we face. My own belief is that we need to start from scratch and completely rebuild the education system. Nothing should be protected from proper scrutiny or from modernisation. The curriculum, the public examination system, educational institutions and even the underlying philosophy behind education need rigorous questioning and frankly need to be radically redesigned to meet the real challenges that we face in the world. If we do not do that, areas such as Knowsley will continue to lag behind. We can, however, make bigger and bolder choices to meet the challenges and harness innovation and education as the twin engines of tackling inequality, deprivation and the random economic effects associated with where people live. Surely there is only one choice, and that choice must be progress.

Budget Changes

George Howarth Excerpts

Monday 21st March 2016 Commons Chamber

[Mr Gauke]

As always, I appreciate my hon. Friend’s spirit of helpfulness but I am afraid that I do not agree with him. It was a manifesto commitment by our party that we would fulfil the 0.7% target.

[Mr George Howarth (Knowsley) (Lab)]

Harold Wilson once said that a week was a long time in politics. How long is a long-term economic plan? Three days? Four days? Five?

[Mr Gauke]

Let us be clear: this is a Government who have turned the economy round and delivered this country as the fastest-growing major western economy in 2014. We are forecast to be the fastest-growing again. We have record levels of employment. The deficit will be down by two thirds by the beginning of the next fiscal year. That is what this Government are delivering and will continue to deliver.

Electoral Law

George Howarth Excerpts

Tuesday 2nd February 2016 General Committees

[Chair]

Before we begin, it may be helpful if I remind Members of the procedure in European Committees. The proceedings must conclude no later than two and a half hours after we begin. I will begin by calling a member of the European Scrutiny Committee to make a brief statement about why the Committee decided to refer the documents for debate. I will then call on the Minister to make a statement followed by questions for up to an hour, although I have some discretion to extend that time if there is an appetite to do so. The Committee will then debate the Government motion, and I will put the question on that motion when the debate or the time available is exhausted, whichever comes first.

Does a member of the European Scrutiny Committee wish to make a brief explanatory statement about the decision to refer the documents to the Committee?

[Mr Jacob Rees-Mogg (North East Somerset) (Con)]

May I say what a pleasure it is to be serve under your chairmanship for the first time in the new year, Mr Howarth?

The proposed Council decision, which is, I am glad to say, subject to unanimity and ratification by member states, aims to harmonise certain aspects of the conduct of European Parliament elections in member states. Initiated by the European Parliament on the basis of article 223(1) of the treaty on the functioning of the European Union, its more significant measures include common deadlines for establishing lists of candidates and electoral registers; making members of regional parliaments and legislative Assemblies ineligible for election as MEPs; proposals concerning the gender equality of candidates; proposals on electronic and postal voting; some mandatory 3% to 5% thresholds for winning seats; proposals relating to voting by EU mobile citizens and their data; incorporating the spitzenkandidaten process, under which there is a pretence of electing the Commission President; and making provision for detailed implementing rules. However, it does not include aspirational proposals, only set out in the European Parliament’s resolution, such as a common minimum voting age of 16 and a common voting day.

On 13 January, the European Scrutiny Committee recommended a reasoned opinion on the proposed Council decision. The reasoned opinion procedure, introduced by the Lisbon treaty, allows national Parliaments to object to a draft legislative act if they consider that it breaches subsidiarity. That principle requires that decisions should be taken as close to the citizen as possible. National Parliaments have eight weeks from transmission of a proposal to submit a reasoned opinion. If such opinions represent one third of all votes of national Parliaments, they constitute a yellow card. The initiator of the proposal, in this case the European Parliament, must review it. The EU Committee in the House of Lords has also decided to recommend a reasoned opinion. The Government have expressed some subsidiarity concerns, saying that some aspects of the proposal are best decided at national level. Their main concern appears to be that uniform practice for European parliamentary elections would be inconsistent with domestic electoral practices, making it difficult for the UK to hold European parliamentary and local elections at the same time, resulting in further reduced turnouts for European parliamentary elections.

The European Scrutiny Committee concluded in its reasoned opinion that there is no detailed subsidiarity statement in the draft legislative act, so the European Parliament has failed to comply with an essential procedural requirement; there is, in any case, insufficient substantiation in the resolution and the European “added value” assessment; and the proposal’s objective of creating a uniform electoral procedure to enhance the European Parliament’s democratic legitimacy through electoral equality is undermined by harmonisation at a level of detail which divorces the European Parliament’s electoral procedure from well-established and recognised domestic procedures. Bearing that in mind, the European Scrutiny Committee has raised specific objections questioning the European Union’s “added value” benefits of all of the significant measures outlined, excepting the measures on spitzenkandidaten and implementing rules.

The European Scrutiny Committee was not assisted greatly in this task by the Government’s inadequate subsidiarity and financial assessment of the proposal for the reasons set out in paragraphs 1.7 and 1.8 of its report, and so asks the Minister to comment on that.

[Chair]

I call the Minister to make an opening statement.

European Union Referendum Bill

George Howarth Excerpts

Tuesday 8th December 2015 Commons Chamber

[Mr Jenkin]

I have to be mindful about whether that is taking us beyond the scope of what we are discussing, but it reminds me of a very controversial element of the Government’s conduct of the Scottish referendum, and I have some sympathy with arguments that have been made on this point. I refer to the use of a permanent secretary to give a speech on behalf of the Government’s view while this was purporting to be the publication of advice to Ministers. Such advice should never be published. On any orthodox analysis, the opinions of civil servants in the form of advice to Ministers should never be published, but this was used as part of the propaganda. Many Scottish National party Members would regard that as a gross misuse of civil servants during a referendum period, and we need to try to avoid that.

I leave two questions for the Minister as he responds to this debate on Lords amendments 5 and 6. First, what does “publish” actually mean? What do the Government intend to do by way of the publication of these two reports? Are they just to be White Papers or are they to be propaganda circulated by the Government in some way much more widely? Secondly, how will he ensure that this is done in the highest spirit of impartiality, using that word in the way most people would expect it to be used? How is he going to ensure that these publications are genuinely objective and not just a means of advancing one side of the argument against the other?

[Mr George Howarth (Knowsley) (Lab)]

Does the hon. Gentleman not accept that the Governor of the Bank of England giving advice, for example, with the Monetary Policy Committee on interest rates, is in a very different position from other public officials, because his advice is often made public? It is perfectly clear that if he has any advice on this, it should be a matter of public interest.

Finance Bill

George Howarth Excerpts

Tuesday 8th September 2015 Commons Chamber

Question proposed, That the clause stand part of the Bill.

[The Temporary Chair (Mr George Howarth)]

With this it will be convenient to discuss new clause 2—Report on the removal of the Climate Change Levy exemption—

“(1) No later than 6 months following the passing of this Act the Chancellor of the Exchequer shall publish a report into the effect of the removal of the Climate Change Levy exemption on renewable energy generators.

(2) That report must include information about:

(a) The effect that the removal of the exemption has had on existing generators

(b) The effect that the removal of the exemption has had on projects which were in the planning process

(c) The cumulative effect on investor confidence in renewable energy of this change in the context of wider government policy on renewable energy; and

(d) The effect of these changes on the United Kingdom’s ability to meet its climate change targets and commitments.”

[The Exchequer Secretary to the Treasury (Damian Hinds)]

Clause 45 ends the exemption—[Interruption.]

[The Temporary Chair]

Order. Will Members leaving the Chamber please do so quietly?

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[Alison McGovern]

I thank the Minister for giving way. First, I supported my hon. Friend the Member for Leicester West (Liz Kendall). Secondly, I thought I liked the Minister.

[The Temporary Chair (Mr George Howarth)]

Order. Before the Minister resumes her speech, fascinating and colourful as this exchange is I hope that it will not be too extended.

Budget Resolutions and Economic Situation

George Howarth Excerpts

Tuesday 14th July 2015 Commons Chamber

[Mr George Howarth (Knowsley) (Lab)]

I should start by saying a few words about the three maiden speeches that I have recently heard. All were passionate, witty or lyrical, and one was all three. We will look forward to hearing more from those hon. Members in the future.

I want to concentrate my remarks on young people, especially those in Knowsley. Three years ago I carried out a project over the summer in my constituency. I think we called it, “What young people in Knowsley think”. It is not a very original title, but it summed up what we were trying to do. Without going through the whole process and perhaps spending too much time on an analysis of what we did, I just want to talk about two conclusions that I drew from the questions that we asked some 80 young people.

The first conclusion was that young people in Knowsley are no less ambitious than young people anywhere else in the United Kingdom. Like other people, they want to have their own business, to join one of the professions or to be in the entertainment business. Some of them were remarkably specific about what they wanted to do: one young man wanted to be a diesel fitter in Canada. I never did get to the bottom of that story. In any case, they were all very ambitious.

The second conclusion, however, came from asking the young people what barriers they saw to achieving what they wanted to achieve in their lives. Most of them were between 14 and 18, and it was staggering that at that young age they recognised that in an area such as Knowsley—one of the poorest in the country—the barriers to achieving what they wanted in life were enormous. Some of the barriers were to do with educational qualifications—they thought that they would not get the requisite number of GSCEs to go on to do A-levels or to higher education, and that there was a lack of availability of training in the things they wanted to do.

Others feared that they did not have the right connections to get into professions they wanted to follow. In other words, mum and dad could not buy them an internship in a firm of national accountants so that they could get a head start to put on their CV. I say that not with any sense of bitterness, but at the tender age of 14 to 18 young people in Knowsley already know the limits of their potential owing to the poverty of their background. I am not saying that some will not get out of that—some will—but at that point in their lives they realise that there are enormous barriers to their achieving what they want to do.

What will the Budget do for children and families with children, particularly for those in receipt of tax credits? There are 9,900 such families in Knowsley, compared with the average in English constituencies of about 3,342—we have more or less three times the number. The number of families affected by the changes to tax credits will be nearly 10,000, which is an enormous number. That will have an impact on the children in those families. The percentage of children in families receiving tax credits in Knowsley is 71%, compared with 55% for England as a whole. On top of that—I am grateful to the Children’s Society for these statistics—the Government have allocated just £6.8 million in early intervention funding to Knowsley Council for the current year. That is £10 million less on early intervention than in 2010, yet we know that to overcome the sort of barriers I referred to earlier early intervention support is crucial. Children need that head start at an early age, but fewer resources will be available.

We also know from the Children’s Society that nationally there are 3 million children living in poverty. Some 5,290 of them are in Knowsley alone, of whom 3,840 are living in families who are the working poor. In other words, the families are in employment but they are still classified as being in poverty. I know the Government might like to redefine poverty in such a way that a lot of these statistics fall out of the definition, but there is real poverty in many of those families. We know that from some of the things that have already been mentioned.

For example, two weeks ago I spent Saturday morning collecting food for the Big Help Project food bank in Knowsley. As always when I do that, I am struck by the incredible generosity of people. They were going around Tesco, as it happened, buying their own food and then setting aside one or two bags full of food to donate to the food bank. Other hon. Members have referred to food banks. I am a huge supporter of the Big Help Project and I recognise the necessity of food banks because of the situation some families are in—many of them, by the way, are in employment, not on benefits. I never thought—a number of customers in Tesco made the same point to me—that I would live through a time when we saw families dependent on food banks to feed their children.

[Chris Stephens (Glasgow South West) (SNP)]

Does the right hon. Gentleman agree that in many communities across the United Kingdom the food bank is the only growth industry?

[Mr Howarth]

The hon. Gentleman is probably right. In some areas, a food bank has an enormous impact. It is something I honestly never thought I would live to see.

[Mr Anderson]

rose—

[Mr Howarth]

I will give way to my hon. Friend and then I will press on, because I know, Mr Deputy Speaker, that you do not approve of interventions in added-on time.

[Mr Anderson]

Does my right hon. Friend agree that Conservative Members would probably say that going to a food bank is a lifestyle choice?

[Mr Deputy Speaker]

I do not mind interventions, but I want to ensure that speeches come in below 10 minutes.

[Mr Howarth]

I shall try my best, Mr Deputy Speaker.

My hon. Friend is right; of course it is not a lifestyle choice. Who would choose a system where they have to get a voucher, turn up somewhere and give it to someone they have never met before in return for food to take home to their family? It is not a lifestyle choice. Of the 7,000-odd people—a staggering number—who have used the food bank in Knowsley, 700 are in employment. It is definitely not a lifestyle choice for them, and I do not think it is for the others either.

In conclusion, I have set out the reality for many children in Knowsley, and Knowsley is not unique—I am not making that argument—but even at the end of it all, what sort of employment opportunities are available? For many, there are zero-hours contracts under which the person does not know when they are expected to turn up for work, or even how many hours they are going to work, and in some cases—I have spoken to people for whom this is the case—the person gets a call at 11 o’clock at night telling them to go 10 miles away to do a two-hour shift in a packaging factory, the first hour’s earnings from which go on a taxi because public transport does not start until after 6 o’clock. Is that the sort of work these children should inherit? I think not. And these are often major international firms. For those not lucky enough to go into higher education, the other option is a rolling contract. That sounds great, doesn’t it? Why would anyone not want to be on a rolling contract? Actually, it means that every now and then the person gets sacked, so they do not have any continuity of employment rights. Sadly, that is the future for many young people, and this Budget does nothing to take away the fear of that future.

European Union Referendum Bill

George Howarth Excerpts

Tuesday 16th June 2015 Commons Chamber

[Peter Grant]

My hon. Friend makes a good and valid point. Conservatives expressing concerns about possible unfairness in the conduct of this referendum are referring to exactly the kind of unfairness that they and their colleagues were happy to exploit in the Scottish referendum.

[The Temporary Chair (Mr George Howarth)]

Order. The hon. Gentleman is making a debating point, which is acceptable to an extent. However, he should stick to this referendum rather than previous ones.

[Peter Grant]

I stand corrected, Mr Howarth; I apologise.

I turn to amendment 32. I understand the intention behind it, as charities should be doing charitable work rather than being engaged full time in political campaigning. However, let me give one example of its possible unintended and undesirable consequences.

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[Alex Salmond]

On a point of order, Mr Howarth. In a Committee of the whole House, is it a reasonable explanation for not giving way for the hon. Gentleman to say that he has a reception to go to?

[The Temporary Chair (Mr George Howarth)]

As the right hon. Gentleman well knows, that is not a point of order. The hon. Gentleman can give way or not. That is a matter of choice for the hon. Gentleman.

[Sir Gerald Howarth]

It is quite clear that the right hon. Member for Gordon (Alex Salmond) is only distressed because he has not been invited. If he speaks to me very nicely, I might arrange for a wee ticket to be sent to him.

This is a very important subject. I want to put on the record my appreciation for the Prime Minister’s having kept his word to the British people that there would be a referendum on Britain’s future in the European Union. That he has brought forward the Bill so early in the Parliament is highly commendable and indicative of his determination. It is indicative of the current spirit of the Conservative party that this moment is completely unlike 1992, in that we are airing our differences of view and our different concerns in this Committee debate in an amicable spirit, as we try to find the best way through.

There is unanimity in this Chamber that if the referendum is to be successful, it must be fair. Not only do we have to arrange provisions to ensure that it is fair, to the best of our ability; it must be seen by the British people to be fair. There would be nothing worse than to carry out this extensive operation and hold the referendum and, in the end, for people on whichever side of the argument not to be satisfied that the conditions that we in this House laid down for the conduct of the referendum had been fulfilled.

It is right and proper for us to be as precise in framing the rules for the referendum as possible. It is in that spirit that I support amendment 53, which was tabled by my hon. Friend the Member for Gainsborough (Sir Edward Leigh), who is no longer in his place, and amendment 10, which was tabled by my hon. Friend the Member for Stone (Sir William Cash) and to which I am a signatory.

My hon. Friend the Member for Stone says that the Electoral Commission does not believe that it is necessary to include amendment 10, which would limit the capacity of the European Commission to have any involvement whatsoever in the referendum. The Electoral Commission has made a number of important and valid suggestions, but I need to be persuaded on that point. We all know from our constituencies that when a project has been funded in any way by the European Union, those socking great stars are plastered all over it as though it has been funded by the EU. Of course, all of us in this Committee know that it has not been funded by the EU at all, but by the British taxpayer with money that we have given to the European Commission, some of which it kindly gives back to us.

We need to be very clear that we do not want the European Commission, in any shape or form, sticking its oar into our domestic debate about whether we should continue to be a member of the European Union or seek our fortune elsewhere.

--- Later in debate ---

[Several hon. Members]

rose—

[The Temporary Chair (Mr George Howarth)]

Order. I have been quite relaxed about Members making interventions but I have noticed that they are getting longer, to the point of being beside the point. Before I call the next speaker, I must point out that I shall now be taking a slightly less relaxed view on interventions.

[John Redwood]

I hope that, when the Government bring the Bill back on Report, they will give further consideration to the question of campaign spending limits. We are all freshly back from an energetic general election campaign, and one of the finest things about the United Kingdom’s traditions that ensure fair and free elections is the fact that we have pretty strict expenditure limits in each constituency. Those of us who were the incumbents fighting to retain our seats were rightly subject to rules stating that we could not use our incumbency in any way, as that would have provided us with an obvious advantage. We could not use our ability to raise more money, for example, because there were strict limits in place.

Those strict limits applied for a five-month period. We had the long campaign period, which was subject to expenditure control, followed by the short campaign period. It is the short campaign period for the referendum that we are talking about today. I believe that it was right to impose the campaign limits early, because political parties are increasingly campaigning well in advance of the general election proper, and it looks as though the referendum campaign will kick in well before the referendum proper. Indeed, there are clearly already stirrings, even before this Bill has passed through the House of Commons.

It is good that we all have to face the challenge from a number of candidates, any one of whom has a reasonable chance of raising the maximum that we are allowed to spend in a given constituency. It is quite a large sum for an individual to raise, but it is quite a modest sum for someone who has a reasonable amount of support or who asks for small or medium-sized donations from a range of people. It is not that difficult for a relatively popular party or candidate to raise the money needed in order to spend right up to the constituency limit, to give them the maximum chance in the challenge.

I understand that the sums will be rather bigger in a national referendum campaign, and that if one side is a lot more popular than the other, that would give it an advantage not only in the vote but in the amount of fundraising it could do. But I do think that, under the current Bill, the very large sums that would be available, because of the way the parties and some of the supporting organisations are thinking, are thoroughly disproportionate. That would give the impression of unfairness, and the British people have a great sense of fairness. Many people on the yes side have a sense of fairness and would prefer it if the referendum campaign were conducted with more equal sums of money, so that the weight and quality of the argument matter more than access to funds and special ways of messaging.