Finance (No. 4) Bill

Greg Knight Excerpts

Wednesday 18th April 2012 Commons Chamber

[Mr Stuart]

In truth, if we were starting with a blank sheet the tax system would look nothing like it does today, but we are not starting with a blank sheet. We have an industry with the characteristics I have described, yet at this of all times we are about to introduce VAT. Will it raise £500 million or £1 billion towards the massive deficit left to us by Labour? No. At best, it will raise £45 million a year while damaging the economy in east Yorkshire and in rural areas across the UK. As a practical politician, keen though I am on tax simplification, it is not obvious to me that this particular simplification is justified now. It is not, and the Government should think again.

The Government are consulting; they accept that they do not have all the answers and the proposal is out for consultation. The shadow Chancellor may not take it at face value that the Government are serious and that they are consulting properly, but I do. I have met the Chancellor and he has told me that that is the case, so I call on the Government to listen to the representations from the Chamber today and to those that will come from the industry over coming days and weeks, and to think again. Given the appalling inheritance from the shadow Chancellor, there is no embarrassment in looking hard at every area. There is a good intellectual case for the proposal in theory, but in practice it is a bad idea. It will not bring in enough money. It threatens many jobs and it should be rejected, as I am sure it will be.

[Mr Greg Knight (East Yorkshire) (Con)]

There is a lot to be said on the issue, so does my hon. Friend agree that the Government would be wise to extend the consultation period?

[Mr Stuart]

My right hon. Friend is right. Having secured from the Chancellor an absolute commitment that there will genuinely be consultation, I ask the Government to extend the period and allow us to make the strongest possible case. It will also allow us further to expand the coalition in the House. Ministers will be aware that there is strong feeling in the Committee today that the proposal should be reconsidered. I look for a sign that they recognise the strength of feeling in the Chamber. The proposal does not make economic sense; we have not one but two enterprise zones in east Yorkshire. Why? It is because of the difficulties of unemployment in our area.

We have had great news. In all the years under the Labour Government when they spent so much money, did they reduce the tolls on the Humber bridge? No, they did not, but this Government have made the right decision. They are putting in commitment. This is a Budget for growth. It is a Budget that takes people out of tax. It is a Budget that reduces corporation tax. It is a Budget that will create employment in east Yorkshire, which is why we must make sure we get all the detail right. I am grateful that the Government are consulting. I recognise that it is a sign that they see room for manoeuvre. I want them to extend the consultation period and I look forward in due course to their finding other ways of dealing with the vast deficit left behind by the incompetents who sit on the Opposition Front Bench.

Consumer Insurance (Disclosure and Representations) Bill [Lords]

Greg Knight Excerpts

Tuesday 6th March 2012 Commons Chamber

[Mr Chope]

The hon. Member for Nottingham East (Chris Leslie) has again done the House a service in raising this issue. He has spoken of the need for proportionality. I disagree with the way he has worded his amendment, however, as it is rather hard in law to place a duty on an insurer to “show regard” to a principle. Given all the other qualifications in the amendment, it would, in practice, by unenforceable.

[Mr Greg Knight (East Yorkshire) (Con)]

Is the hon. Member for Nottingham East (Chris Leslie) not making rather heavy weather of this matter? Will not the market take care of it? If one insurer on its own presented reams and reams of questions, and the others did not, surely the potential customer would simply go elsewhere.

Amendment of the Law

Greg Knight Excerpts

Wednesday 23rd March 2011 Commons Chamber

[Mr Jones]

I am sorry, but yes I would. If hon. Members are going to make comparisons, they should compare like with like. Whoever writes the central office briefings does one thing all the time. They compare our economy with that of Greece or, as the hon. Gentleman just did, they compare the British economy today with that of the 1970s. That is complete nonsense.

The central point—some Liberal Democrats are starting to wake up to this, including the Deputy Prime Minister—is that although there is a need and a desire to reduce the deficit, there is also an ideological drive to have a smaller state and to put into practice the ideological prejudices that the Conservatives have yearned to implement for many years. The people of this country will suffer from that. Is there an alternative? Yes, there certainly is.

[Mr Greg Knight (East Yorkshire) (Con)]

This trip down memory lane is very interesting, but, if he does not support the expenditure cuts, will the hon. Gentleman tell us how much more he thinks we as a nation should be borrowing?

Fuel Prices and the Cost of Living

Greg Knight Excerpts

Wednesday 16th March 2011 Commons Chamber

[Ms Angela Eagle (Wallasey) (Lab)]

I beg to move,

That this House recognises that rising world oil, food and commodity prices are increasing the cost of living and adding to the squeeze on families on low and middle incomes across Britain; believes this has been compounded by the Government’s decision to increase VAT to 20 per cent., which will cost a family with children an annual average of £450, has helped to push up the consumer prices index annual inflation to 4 per cent. and, according to the House of Commons Library, is adding £1.35 to the cost of filling up a vehicle with a 50 litre tank; notes that the AA announced last week that the cost of unleaded petrol has now reached an average of £6 a gallon and that the fuel duty stabiliser promised in the 2010 Conservative Party manifesto has not yet been announced or implemented; further notes that the previous administration regularly postponed planned fuel duty rises when world oil prices were increasing sharply, as they are now; and demands that the Government takes immediate steps to reverse January’s VAT rise on road fuels, using the extra £800 million from the bank levy and securing the appropriate EU derogation, in order to provide relief to hard-pressed motorists and, at the time of the Budget, looks again at the annual duty rise due in April.

It is a great pleasure to follow my hon. Friend the Member for Liverpool, Walton (Steve Rotheram), whose ten-minute rule Bill seeks to address an issue that is close to the hearts of all of us from Merseyside.

Times are increasingly tough for millions of ordinary hard-working people and families in our country. Since May last year, we have seen this Government embark on a reckless gamble with our future prosperity. Public expenditure is being cut too deep and too fast, and up and down the country millions of people are really beginning to feel the pinch. Families are facing the biggest squeeze in their living standards for 80 years, and some economists are warning that it could get still worse. Real wages are static, even falling. With recruitment freezes, job losses and rising unemployment, people are right to be worried about the future.

[Mr Greg Knight (East Yorkshire) (Con)]

Will the hon. Lady help the House? Over the past 13 years, in every aspect of Government policy, the Labour Government were deliberately and decisively anti-motorist. Does the motion before the House today represent a seismic shift in policy, or is it, as we suspect, a transient spat of opportunism?

Finance Bill

Greg Knight Excerpts

Thursday 15th July 2010 Commons Chamber

[Mr Chope]

The hon. Gentleman is absolutely right. What he said is no great revelation for young people when they go out and party or communicate with each other via modern means of communication. They know that the risks of getting caught are not that great, and that if they are caught, the consequence will be penalty points on their licence and a fine. They will often be able to pay off the fine over an extended period.

Young people now face very substantial insurance premiums and those from the most deprived areas are often those with the highest premiums. One factor that is taken into account is the postcode. If the chance of someone’s car being stolen is high because of where they live or because they do not have garage, the premium will be higher than for someone who perhaps lives in a rural, perhaps law-abiding community. That is an additional problem that these young people face when it comes to motor insurance.

[Mr Greg Knight (East Yorkshire) (Con)]

This tax will hit not only young people, but people of all ages. Does he agree that those arguing that the motor car is a luxury and that taxes on luxuries are quite acceptable are ignoring the real problems that people in rural areas face? For them the motor car is not a luxury but a necessity.

[Mr Chope]

My right hon. Friend is absolutely right. What he and others are identifying in this debate is an element of confusion in public policy. Compulsory third-party insurance for people who drive cars is a matter of public policy. If such compulsory insurance is required by the law, we are effectively saying as law-makers that it is a good thing to have it. Are we seriously saying as law-makers, “Well, if you comply with the law, we are also going to charge you extra tax for your compliance”? It seems to me that we need more clarity of thought on the matter. If we do not think that insurance is important and necessary, we should remove the requirement for compulsory insurance. I think that motor insurance, and particularly third-party insurance, is not only desirable but essential. If we are to have it, however, why should we also have insurance premium tax on it? In particular, why do we need to increase the insurance premium tax at this time?

The yield from all the increases in insurance premium tax comes to some £400 million a year, but I suggest that the cost ramifications arising from uninsured driving, and the accident and injuries resulting from it, might be on a scale similar to the total yield of the entire increase in insurance premium tax. Because the current system imposes a flat rate on the level of the premium, the higher the premium, the worse the risk and the greater the penalty incurred.

--- Later in debate ---

Without making a meal of it, I believe that we are debating an important matter of principle, and I am delighted that there are so many right hon. and hon. Members in the Chamber to hear it debated. We look forward to hearing more about amendment 15, which I believe is also a useful one. It is surprising that we do not have such a report as is suggested in the amendment before us now as we consider these issues.

[Mr Knight]

I do not think my hon. Friend should gloss over this point too quickly. As he has said, this is a percentage tax, so we are effectively saying that a young driver seeking to insure an Escort RS motor vehicle should pay more in tax than a 55-year-old driver of a Bentley.

[Mr Chope]

My right hon. Friend has particular expertise and knowledge about that particular end of the market. I am sure that the Committee is obliged to him for that information. The point he makes is absolutely correct. If we are thinking in terms of equity and fairness as the guiding words of the day, let us see if we can look again with radical eyes at this whole structure of taxing insurance premiums. Let us see whether the Government accept the amendment today; if they do not, let us see whether they have anything else to put on the table by way of responding positively to the points raised in the debate. We can then decide whether we wish to divide the Committee on this issue or just put down a marker.

--- Later in debate ---

I have set out my basic argument about the tax increase on medical insurance, but perhaps I should draw the Committee’s attention to a private Member’s Bill that will be debated on 4 February 2011. That Bill would give tax relief to private medical premiums, but that wider debate is for another day. There is a question of whether such an approach would lead to more people insuring themselves, which would generate a saving because they would be less of a concern for the NHS, but today we are discussing only whether to impose a 1% tax increase. I hope that the Exchequer Secretary will be able to tell us how much revenue the Treasury would lose if the amendment were accepted and we did not have that 1% rise. If the increase discourages individuals from taking out medical insurance, more people will have to be treated by the state, which is why I argue that the tax increase from 5% to 6% on medical insurance premiums will cost the state more money.

[Mr Knight]

Is not the encapsulation of my hon. Friend’s argument that this is a tax on responsible behaviour? In the case of motor insurance, it is a tax on lawful behaviour.

[Mr Bone]

I agree entirely with my right hon. Friend’s point, but I want to draw a distinction between amendments 18 and 19. Amendment 18 addresses health insurance premiums, and the fact is that if someone does not take out health insurance, the state picks up the bill, because they will go to the NHS. When someone does not take out motor insurance, the responsible citizen picks up the bill through the Motor Insurers Bureau, but that is not quite the same as the position for health. It is clear that if someone might have paid for insurance so that they could go to an independent sector hospital but does not do so, they will be in the NHS and the state will have to pay. I argue that we could send a signal today to the citizens of this country, as part of the big society, that we want them to be responsible and to take out insurance, especially health insurance, which would save the Government money.