Tax Credits (Working Families)

Lord Evans of Rainow Excerpts

Tuesday 7th July 2015 Commons Chamber

[Shabana Mahmood]

My hon. Friend has made a powerful point, and I agree with all that she has said.

[Graham Evans (Weaver Vale) (Con)]

When Gordon Brown introduced tax credits in 1998, he said that the cost would be £2 billion. It is now £30 billion. Will the hon. Lady tell us whether that is too much, too little, or about right?

[Shabana Mahmood]

I think that what we are talking about is the cost of making work pay in the economy that we have at the moment. As I will explain in more detail later, the Government are doing things the wrong way round. As was pointed out by the Chair of the Work and Pensions Select Committee, my right hon. Friend the Member for Birkenhead (Frank Field), we must establish a higher-skill, higher-wage economy before we remove the support for those who are stuck on low pay. I would prefer people not to be in that position.

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[Graham Evans]

Working tax credits of £30 billion—my hon. Friend may have noticed my question to members of the Opposition Front-Bench team whether that was too high. They did not answer. Does not the whole debate show that Labour is the party of welfare?

[Mr Gauke]

I fear that my hon. Friend is right. Given what we inherited, it was necessary to introduce wide, comprehensive reforms to reward work and allow people to fulfil their potential. We have cut taxes. We have capped benefits so that no household earns more in out-of-work benefits than the average household earns by working. We are simplifying the benefits system through the roll-out of universal credit. We tightened the rules to prevent abuse of the system and, perhaps most importantly, we ensured that there were decent, full-time jobs for people to go to. At the same time, we have ensured that benefits continue to help the most vulnerable.

Before I set out how we will continue to help working people to achieve their aspirations, I shall say a few words about tax credits. Tax credits have helped to support many of our most vulnerable families. Over the past five years, we have channelled the support they provide towards the people who need it most—for instance, by increasing the disability element of tax credit in line with the consumer prices index. The next five years will see us continue to roll out universal credit, which will simplify the complex web of benefits and tax credits currently in place.

Productivity

Lord Evans of Rainow Excerpts

Wednesday 17th June 2015 Commons Chamber

[Greg Hands]

It is a bit churlish to debate the precise details like that. The fact remains that car production in this country is extremely impressive. We should celebrate that throughout the UK, including in Scotland.

[Graham Evans (Weaver Vale) (Con)]

Will my right hon. Friend give way?

[Greg Hands]

Let me make a bit of progress.

The high productivity that I have mentioned is very good, but we need to be equally honest about the areas where we can do better. We need to improve our literacy and numeracy skills, and our OECD position for intermediate skills needs to rise. To match the highest rate of female participation in the workforce in the G7, which is in Canada, or in the OECD, which is in Iceland, we would need over 500,000 or 2.5 million more women to enter the labour force respectively. Our gross value added growth is still too reliant on London and the south-east. We are not building enough housing, and our investment in roads and rail has not yet undone the effects of the decades in which we under-invested. All that means that our economy needs to find an extra gear.

We should view this debate in the context of the broad decreases in productivity growth across the OECD over the past few years. We are not unique in this regard. Other G7 countries, including Germany and Italy, have seen their measured productivity per worker fall since 2007. We have to accept that productivity is a major challenge, but it is not a new challenge—it has been around for decades. To meet that challenge, we must look calmly and seriously at the variety of factors that affect productivity, and put in place wide and ambitious long-term reforms.

Importantly—the hon. Member for Nottingham East needs to engage with this point—those reforms must not jeopardise other elements of our economic growth. That is the approach that the Government will take in our productivity plan, because productivity is not an end in itself, but a means to an end. It is all about prosperity. When we publish our productivity plan, I hope that the Labour party will see fit to support it, because we agree that improved productivity will be good for living standards across the country and help us to meet our fiscal commitments, which is a point that he raised.

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[Chris Leslie]

rose—

[Graham Evans]

rose—

[Greg Hands]

I give way to my hon. Friend the Member for Weaver Vale (Graham Evans) and welcome him back to the House after his fantastic election result last month.

[Graham Evans]

I am grateful to my right hon. Friend. Will he remind the House of the previous Labour Government’s record over 13 years? In 1997, 20% of GDP was from manufacturing, but by 2010 that had dropped to less than 10%.

[Greg Hands]

My hon. Friend is right that the previous Labour Government had a dreadful record on manufacturing, and that is one of the key challenges—this reads through to productivity—facing us this Parliament.

Royal Bank of Scotland

Lord Evans of Rainow Excerpts

Thursday 11th June 2015 Commons Chamber

[Graham Evans (Weaver Vale) (Con)]

I am delighted to welcome my hon. Friend to her place. Will she remind the House who gave Fred “the Shred” Goodwin a knighthood for services to banking?

[Harriett Baldwin]

I thank my hon. Friend for a good question that reminds us not only of the failure of the banking regulatory system under the previous Government, but of the rewards for failure. Labour allowed Fred Goodwin to walk away with an enormous pension and a knighthood.

The Economy

Lord Evans of Rainow Excerpts

Thursday 4th June 2015 Commons Chamber

[Chris Leslie]

The clue was at the beginning of the hon. Gentleman’s intervention. Labour leaders do work well together in local government, and when we hear the Chancellor’s response to this debate they might find that there are a few surprises and a hidden agenda with a bit of a sting in the tail for them over the next few months.

What about the rest of the spin in the Queen’s Speech, such as extending the right to buy? Everyone is in favour of home ownership, of course, but the scheme proposed by Ministers is so badly thought through, throwing housing associations into chaos, that even the Mayor of London—for it is he—has called it the “height of insanity”.

There was a further piece of spin, of course: a tax lock designed purely to stop the Chancellor raising VAT again. Do not get me wrong, we welcome any effort by the Chancellor to legislate against his own record and his own worst instincts, but this legislation does nothing more than prove that he does not even trust himself on tax. Of course, it does not give any guarantees about other stealth tax rises elsewhere, nor does it prevent him from acting on his other instinct of always prioritising tax cuts for the very richest over those for those on middle and low incomes—[Interruption.] Conservative Members are all shouting from the Back Benches, but the Chancellor’s eyes are down on his notes. Is the Chancellor planning to cut that top rate of tax from 45p on earnings of more than £150,000? I will give way to the Chancellor if he can clarify for us whether that is his plan. Will he cut that rate of 45p for those earning £150,000, or not?

[Graham Evans (Weaver Vale) (Con)]

rose—

[Chris Leslie]

Perhaps the hon. Gentleman knows the answer.

[Graham Evans]

Why in 13 years of the Labour Government did they not increase the top rate from 40p to 50p?

[Chris Leslie]

We have heard those arguments. I was asking the Government whether they plan to cut the top rate of tax of earnings of £150,000 from 45p, and perhaps down to 40p, and there is silence from the Government Benches and from the Chancellor. Perhaps he will come to that later in his speech.

The Queen’s Speech was high on rhetoric but was in reality the usual combination of diversion and distraction. As ever with this Chancellor, there is more than meets the eye. All the rhetoric is just the tip of a Tory iceberg, with 90% of their real agenda hidden below the surface, still invisible from public view. That agenda will not even be partly revealed until the emergency Budget on 8 July. Until then, serious questions remain unanswered about what drives the Government, and in what direction.

The trajectory of overall cuts set out in the March Budget goes beyond what is needed to eradicate the deficit by the end of the Parliament. According to the Institute for Fiscal Studies, the Queen’s Speech still leaves us totally in the dark about more than 85% of the Chancellor’s planned £12 billion of welfare cuts. Just this morning, the IFS criticised the Government for giving a

“misleading impression of what departmental spending in many areas will look like”.

Frankly, there is growing disbelief across the country that the Chancellor can protect those in greatest need while keeping his promises to the electorate on child benefit and disability benefits. My hon. Friends will not have failed to spot during Prime Minister’s Question Time yesterday how the Prime Minister, when challenged by my right hon. Friend the Member for East Ham (Stephen Timms) on the question of disability benefits, digressed into all sorts of reminiscences about the campaign trail and how much fun it was going to various meetings. The Prime Minister promised that

“the most disabled should always be protected”

and I will be looking to the Chancellor and the Secretary of State for Work and Pensions to keep the Prime Minister’s promises. The Government might have secured a majority, but they did not secure a mandate for specific cuts to departments or services because those were never explained or set out before the election. Nor have we ever had an explanation of how they will pay for their multi-billion pound pledges on tax and services or, crucially, for the NHS.

The Opposition agree with yesterday’s OECD assessment that a fair approach is the right one to take—sensible savings and protection for those on middle and lower incomes. Cuts that decimate public services would be too big a price to pay, especially as they may even result in higher costs in the longer term. We also heard how 8,000 nurse training places were cut in 2010. The use of agency nurses then proliferated to fill the gap. Is it any wonder, therefore, that NHS trusts now face a deficit of about £2 billion? Part of the reason the deficit is so big is that productivity has been so poor. Britain has the second lowest productivity in the G7, and output per worker is still lower than in 2010. This should have been at the top of the Chancellor’s agenda throughout the last Parliament, but he did not even mention it in his last Budget speech. For the Tories, it seems that productivity just springs magically if the Government just get out of the way, unrelated to any fiscal or policy choices that they make.

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[Mr Osborne]

I am not feeling particularly intimidated by the hon. Gentleman because he is spouting the same old anti-aspiration, anti-sound public finances nonsense that we have heard from the Opposition for the past five years.

Let me make progress and come to the central point. We have to tackle the endemic weaknesses in the British economy that no Government have been able to solve in the past: we are not productive enough and we do not export enough, save enough, train enough or build enough.

[Graham Evans]

rose—

[Mr Osborne]

Let me make a little progress before I give way to my hon. Friend. We do not see enough of the prosperity and opportunity produced by our economy shared across all parts of our United Kingdom. The Queen’s Speech addresses those weaknesses head on. The housing Bill will ensure that more new homes are built and that tenants of housing associations get the opportunity to buy their own homes.

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[Mr Osborne]

As the Prime Minister made very clear yesterday, we will follow the principles that we followed in the previous Parliament, when we protected the most vulnerable in our society and actually increased the amount we were able to give to the most disabled in our country. In every single intervention about economic policy today, in the different debates we have had since the Queen’s Speech, and at Prime Minister’s questions, Labour Members have demanded more public spending, complained about a public expenditure cut, or implied that there should be higher welfare bills. That is what we have heard about over the past few days—more spending and higher welfare bills that can be paid for only by more borrowing and higher taxes on the working people of this country. That would undermine the security that we have restored to our economy.

[Graham Evans]

rose—

[Mr Osborne]

I now give way to my hon. Friend and constituency neighbour.

[Graham Evans]

I wonder whether the Chancellor is aware that, as I speak, IBM is signing a multimillion-pound contract in my constituency of Weaver Vale on high-speed computing, in partnership with the Science and Technology Facilities Council at Sci-Tech Daresbury—the enterprise zone. Does he agree that this has happened only because of our long-term economic plan for reducing the deficit and cutting taxes, that the British people know that only the Conservatives are the party of business, and that the whole world knows that Britain is open for business?

[Mr Osborne]

Let me say how fantastic it is to see my hon. Friend back in his place, because he has fought so hard for his constituency in delivering the Mersey Gateway bridge, the rail improvements in his constituency, and, as he mentioned, the major investments in science at Daresbury, including in high-performance computing. Today’s announcement from IBM shows what happens if we get our science and technology policy right as a country—we attract investment from all over the world.

Oral Answers to Questions

Lord Evans of Rainow Excerpts

Tuesday 4th November 2014 Commons Chamber

[Mr David Jones (Clwyd West) (Con)]

1. What progress he has made on his policy to create a northern powerhouse for the UK economy.

[Graham Evans (Weaver Vale) (Con)]

6. What progress he has made on his policy to create a northern powerhouse for the UK economy.

[Paul Maynard (Blackpool North and Cleveleys) (Con)]

9. What progress he has made on his policy to create a northern powerhouse for the UK economy.

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[Mr Osborne]

As a Cheshire Member of Parliament, I know that the north Wales economy is closely connected with the economy of the north-west of England. We have already committed ourselves to reopening the Halton curve, re-establishing a regular direct rail link between north Wales and Liverpool for the first time since the 1970s. That is something that my right hon. Friend asked me to do, and campaigned for. Moreover, High Speed 2 gives us the potential of a station at Crewe, which will greatly increase capacity for journeys to north Wales and reduce journey times. We are ready to listen to further ideas for ensuring that prosperity is experienced in north Wales as well.

[Graham Evans]

For 13 years Labour neglected jobs and growth in the north, including Weaver Vale, thus creating an economy that was dangerously unbalanced. Does my right hon. Friend agree that it is only the Conservative party, with its long-term economic plan, that will deliver job security for the whole United Kingdom, not just the south?

[Mr Osborne]

My hon. Friend is absolutely right. A record number of people are now employed in the north of England, but the gap between north and south grew under those 13 years of Labour government. If the House wants one example of a project that was waiting to be completed but was entirely neglected by the Labour Government, it is the Mersey Gateway bridge, which this Government are now building and to which they are committed—and, thanks to my hon. Friend’s campaigning, there will be no tolls for local residents.

Oral Answers to Questions

Lord Evans of Rainow Excerpts

Tuesday 2nd September 2014 Commons Chamber

[Fiona Bruce (Congleton) (Con)]

1. What progress he has made on his long-term economic plan.

[Graham Evans (Weaver Vale) (Con)]

14. What progress he has made on his long-term economic plan.

[The Chancellor of the Exchequer (Mr George Osborne)]

The Government’s long-term economic plan is working, and the International Monetary Fund expects the United Kingdom to grow faster than any other G7 country this year. But the job is not yet done; there are growing risks abroad from a disappointingly weak eurozone and persistent risks at home from Opposition Members who would abandon the long-term plan and return Britain to the economic mess they left it in.

[Mr Osborne]

My hon. Friend is absolutely right about that. We heard lots of scare stories from the Opposition about how this scheme would be used only in central London and the like. The fact is that today’s figures show that almost 50,000 people have been helped by Help to Buy, and that 80% of those have been helped outside London and the south-east of England. In her own council area, more than 300 families have been helped. Members of Parliament from west Yorkshire would like to note that Leeds is the No.1 location for people using Help to Buy. The scheme is working, it is about backing aspiration and it is about helping people get on in life.

[Graham Evans]

Businesses and families across my constituency will all benefit from recent investments in the Halton curve railway, the Mersey gateway bridge and the Hartree centre for supercomputing in Daresbury. I urge my right hon. Friend the Chancellor to continue the important work he is doing as part of the long-term economic plan to build the northern powerhouse, which will continue to create jobs and economic security in Weaver Vale and across the north of England.

[Mr Osborne]

Of course, I want Weaver Vale and Cheshire to be part of that northern powerhouse, and may I commend my hon. Friend for the campaigns he has fought to get the second Mersey crossing, the Halton curve and the investment in Daresbury? Those are things that Labour MPs, including the one who used to represent his seat, campaigned for for years and got nothing from a Labour Government. We now have a Conservative MP delivering for his constituents under a Conservative Chancellor.

Oral Answers to Questions

Lord Evans of Rainow Excerpts

Tuesday 29th April 2014 Commons Chamber

[Andrea Leadsom]

The legal challenge is in line with all legal challenges of this sort. To protect the British financial services sector, it is very important to try to challenge the proposal. There has been a House of Commons European Scrutiny Committee report on the cost of similar legal challenges. It is not excessive—it is £25,000 to £35,000, or of that order—but the point is that we in this Government are trying to align risk and reward, which is absolutely crucial for the success of the financial services sector.

[Graham Evans (Weaver Vale) (Con)]

3. What recent steps he has taken to make saving more flexible.

[The Chancellor of the Exchequer (Mr George Osborne)]

This Government believe that people who have worked hard and saved hard through their lives should be trusted with their own pension savings in retirement. That is why, following the Budget, we have already given people much greater access to their pension savings and why, from next April, they will have complete freedom of access to their defined contribution scheme.

[Graham Evans]

This year’s Budget exposed some people’s innate belief that those who have worked hard and saved all their lives could not be trusted with their own money. Will my right hon. Friend the Chancellor reassure savers in Weaver Vale that he rejects such patronising views, and will he update the House on his plans to let people choose how to spend their own money and to make savings far more flexible?

[Mr Osborne]

I absolutely agree with my hon. Friend. The fact that the Labour party had nothing to say in response reflects the muddled approach: it did not support the measure, but it did not know what to do with a popular Budget proposal. We are absolutely clear that we reject the patronising view, pursued by the previous Government, that the state knows better than individuals how to spend their money. Trusting people, reducing taxes, supporting savers—that is this Government’s approach.

Oral Answers to Questions

Lord Evans of Rainow Excerpts

Tuesday 5th November 2013 Commons Chamber

[Nicky Morgan]

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

[Graham Evans (Weaver Vale) (Con)]

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

[Nigel Adams (Selby and Ainsty) (Con)]

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

[The Chancellor of the Exchequer (Mr George Osborne)]

In the past year, employment in the private sector has increased by 380,000, more than offsetting the fall in public sector employment of 104,000. For every public sector job lost, more than three have been created in the private sector. That confounds the predictions of those who thought it could never happen.

[Graham Evans]

Unemployment in my constituency is lower than it was when I became the MP. With the further good news that Waitrose is creating 140 new jobs in Northwich later this month, will my right hon. Friend the Chancellor set out how small and medium-sized enterprises will benefit from a reduction in national insurance contributions?

[Mr Osborne]

I am delighted by the news of the new jobs being created by Waitrose in Northwich; as my hon. Friend well knows, I represent part of that town. That will be good for the people who live in it, and I hope that some of my constituents will find work there. The employment allowance, which we debated in this Parliament this week, is going to take £2,000 off the national insurance bill of every firm, but the biggest benefit will be felt by the smallest companies; 450,000 firms will be taken out of employer NICs altogether. That is a real boost for business, and it shows how we can help to support the recovery.

Oral Answers to Questions

Lord Evans of Rainow Excerpts

Tuesday 10th September 2013 Commons Chamber

[Mr Osborne]

I make it a practice, like previous Chancellors, not to comment on the exchange rate, but let me make a broader point about monetary policy. At the Budget, I set a remit for the Bank of England to consider the use of forward guidance. Since we last met, the Monetary Policy Committee has, of course, made an independent judgment to take that up and has made a very clear statement about the future path of interest rates.

[Graham Evans (Weaver Vale) (Con)]

T7. Does my right hon. Friend the Chancellor agree that manufacturing surging to a three-year high and investment intentions rising to a six-year high show that this Government are committed to securing a balanced economy?

Oral Answers to Questions

Lord Evans of Rainow Excerpts

Tuesday 12th March 2013 Commons Chamber

[Danny Alexander]

The House will know that the Department for Education has already announced that the first 41 highest priority schools are being funded by direct capital. We will be in a position soon to make a statement about the rest, and we have announced recently additional investment in school places to expand school buildings in areas under pressure. All that adds up to an £18 billion investment programme in schools over the course of this Parliament, which I think is a credit to the Government.

[Graham Evans (Weaver Vale) (Con)]

Does my right hon. Friend agree that infrastructure projects such as the Mersey Gateway bridge, the northern rail hub and High Speed 2 are good news for my constituents, good news for greater Cheshire, and good news for the north of England as a whole?

[Mr George Osborne]

I absolutely agree with my constituency neighbour. The Mersey Gateway bridge, which has been talked about for many years, has now got the go-ahead. The northern hub, which MPs from all parties and on both sides of the Pennines have been calling for, is now funded and will be of particular benefit in the Greater Manchester area. High Speed 2 is controversial, but nevertheless will connect the biggest cities of our country and help reduce the north-south divide in our economy. One piece of good news in our economy recently has been the growth of private sector jobs in the north of England.