Alcohol Taxation

Guy Opperman Excerpts

Wednesday 14th December 2011 Westminster Hall

[Dr Wollaston]

That is one of the options. I would like to outline an alternative, but I certainly thank my hon. Friend for that intervention.

Numerous studies around the world have shown public health benefits as a result of price increases and taxation policies, so is it not time for some evidence-based politics? The trouble is that there is no single, simple solution. We know that there are other factors in addition to price: availability, our drinking culture and marketing. Those are all key factors, but today’s debate is about taxation, so I will focus entirely on price, not because the others do not matter, but because they are not within the remit of the Treasury.

It is worth pointing out that most health experts feel that changing pricing is the most effective way of achieving results. I draw the attention of my hon. Friend the Minister to the letter in today’s edition of The Daily Telegraph signed by 19 organisations. I know that the Treasury is aware of the costs to our economy of dependent drinkers and binge drinking, so I will not ask my hon. Friend to respond in detail on those points. As disposable incomes have fallen, so too has the overall consumption of alcohol, but that comes on the back of decades of steady increases. Alcohol remains about 44% more affordable than it was in 1980.

In 2010, a total of 48.4 billion units of alcohol were sold in the UK. Of those, 31.8 billion units—about two thirds; the great and increasing majority—were sold by the off-trade. The widening gap between the price of on-licence and off-licence alcohol is becoming far more significant and is fuelling the rise in home drinking. Harms are not going down as we might expect as a result of the small fall in overall consumption, because of the low-price deals that are still very widely available in supermarkets, garages and convenience stores pretty much around the clock.

[Guy Opperman (Hexham) (Con)]

I congratulate my hon. Friend on obtaining the debate. The north-east has one of the worst rates of liver disease: we have seen an increase of 400% since 2002. I accept entirely the point that she makes about robust regulation in terms of minimum pricing, but does she accept that the local supermarkets in our individual constituencies can make a specific difference on the pricing and availability of alcohol and the way in which it is presented to our constituents?

[Dr Wollaston]

I absolutely agree. Most of the alcohol-related carnage is caused by young binge drinkers and by heavy or dependent drinkers, so the issue is not only about the availability of alcohol in outlets throughout the country. The harm is not going down, because those groups are the ones that are most attracted by the low-price deals.

--- Later in debate ---

[Dr Wollaston]

May I make a little progress? The case against a minimum price of between 45p and 50p a unit may hang on the loss of income to the Treasury. Alcohol duty raised £9.5 billion in 2010-11, which is equivalent to 1.7% of total Government revenue. There is a certain illogicality in the bands set by the European Union, so to a certain extent, as my hon. Friend the Member for Burton (Andrew Griffiths) said, there is great encouragement towards higher strength products.

The amount received by the Treasury is the same whether a product is sold in a pub or a supermarket. VAT is levied on top, but there are no specific data on where and on what products it is levied. Will the Minister set out estimates of the loss of income that would arise from the introduction of a minimum unit price of between 45p and 50p? Will she also set that against the benefits in estimated savings to the Home Office, the Department of Health and the Ministry of Justice that would result from a reduction in alcohol-related harms?

The Department of Health leads on alcohol policy. It has stated repeatedly that it does not wish to disadvantage moderate drinkers on a low income. However, it has failed to point out that harmful drinking disproportionately affects the poorest and most vulnerable in our society, and is a significant contributor to health inequality. A report on the Department’s behalf from September 2011, titled “Narrowing the health inequalities gap”, makes it quite clear that if it were not for alcohol-related deaths, and if we had had an effective policy, the objective to narrow the overall life expectancy gaps for the spearhead local authority areas—the most deprived areas in our country—

“would…certainly have been achieved for males; and would be well on the way to being achieved for females.”

The evidence is not just that low-income groups suffer the most health harms, but that they suffer the most harms as a result of violence in their communities.

If we look at the evidence from some shopping basket data published in a university of Sheffield study, we can see that for

“a 50p minimum price, a harmful drinker will spend on average an extra £163 per year whilst the equivalent spending increase for a moderate drinker is £12.”

In other words, the published data state that such a policy will not penalise low-income moderate drinkers.

The deprived spearhead communities have the most to gain from an effective alcohol policy. A minimum or floor price can be set that is not regressive and is affordable for anyone who is not drinking at hazardous levels. As one of my correspondents pointed out:

“If you can’t afford 50p per unit it is a good sign that you are drinking too much.”

The charge is often made that without an increase in duty the profits will go to the drinks industry and retailers, not the Treasury. I can understand that, but if we can introduce windfall taxes on energy companies, why not have windfall taxes on supermarkets that profit from windfall gains? With more than 31 billion units sold in the off-trade, why not even consider a health levy on unopened bottles, perhaps of between 5p and 10p a unit, targeting just the off-trade? That would be more than enough to allow for decent treatment programmes. Evidence shows that for every pound we invest in such programmes, we save £5 in wider benefits to the economy because of reduced harms.

[Guy Opperman]

Does my hon. Friend think that it would be a good idea to introduce an alcohol Act similar to that which exists in Scotland?

[Dr Wollaston]

I could not agree more.

Finally—I know that other Members would like to come in—there are those who argue that a minimum price is illegal under EU law. If so, why are the Scottish Government so confident that it is not? I draw the Minister’s attention to a reply given by Mr Dalli on behalf of the European Commission to a question put by an MEP on that point. The bones of the reply are that

“the Commission fully shares with the Honourable Member the conviction that there are strong public health reasons for the EU to tackle alcohol-related harm including minimum pricing measures.”

Will the Minister set out today whether there have been discussions with the Scottish Executive on the matter? Will she also comment on what steps the Treasury will take to tackle supermarkets’ plans to undermine Scotland’s decisive action to tackle the carnage caused by alcohol? Tesco recently e-mailed Scottish customers to reassure them that they will still be able to access cut-price deals after the Act is in force, as the products will be delivered from across the border. Will the Minister join me in condemning that e-mail from Tesco?

Yesterday, the Select Committee on Health returned from a visit to Carlisle, and it is clear that the city is expecting an increase in cross-border sales. It would prefer to see us use an evidence-based policy to protect the north-west, which has suffered from the devastating impact of alcohol. There have been many calls for effective minimum pricing and numerous models show the amount of lives and money saved, so I do not want to go over them in detail, other than to point out again that a 50p minimum price could save nearly 10,000 lives a year.

We have shown that Britain is prepared to stand our ground in the EU when it comes to the City of London. Now is the time to put the lives of our young people ahead of the theoretical risk of a legal challenge. A precedent exists in the loi Evin, which the French introduced to protect children from the effects of alcohol marketing in France. It has been challenged repeatedly by the industry in the EU’s courts, but it was upheld on the grounds of the health benefits. I fully agree with that.

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[Miss Smith]

I am aware of that specific point, and I am sure that my hon. Friend and his colleagues will be even more aware of that tonight at the all-party parliamentary beer group’s Christmas party, if I have that correct. If he will forgive me, I will focus on minimum unit pricing in this debate, to deal with points raised by my hon. Friend the Member for Totnes. I shall briefly note that she raised the wider impacts of alcohol. Of course, it is not just the duty system that is important. I direct her to the Police Reform and Social Responsibility Act 2011, which I hope will help with the late-night economy. To make an important point, I direct her to a forthcoming paper from the Department of Health, which, with the Home Office, is responsible for this area, that will consider the wider social and health impacts of alcohol. I have no doubt that she will look at that in some detail.

[Guy Opperman]

A simple question: when assessing taxation in the alcohol strategy document, working with the Department of Health, will there be a difference in the views on taxing supermarket sales compared with the pubs that we all cherish and that are so affected by this?

[Miss Smith]

If my hon. Friend will allow me to come to that, I shall attempt now briefly to answer a number of the questions asked. First, as my hon. Friend the Member for Totnes explained, the Scottish Government have recently introduced a Bill that seeks to bring in a 45p per unit minimum price. She asked why this Government believe that that would be incompatible with EU law, when the Scottish Government do not. If I may quote the specific point: we believe that it could be incompatible with article 34 of the treaty of the functioning of the European Union. I should be delighted to go into more detail on that if she required. That is the position.

I should like to deal with the important point made by my hon. Friend the Member for Hexham (Guy Opperman). No one wishes to hit pubs unnecessarily. I take the examples about the behaviour of supermarkets that have been given. Like hon. Members, I am wary of those. If an indirect tax were introduced, it would be difficult to distinguish between points of sale. I am happy to come back to hon. Members in more detail on why that is difficult, but it is not as straightforward as saying that we want to hit supermarkets and not pubs; it is about how to set up an indirect tax.

On that note, as hon. Members will have heard in other debates, it is difficult to find ways to vary VAT on similar products. Again, I am happy to come back with more detail on that if required. On price distortion and perhaps distasteful practices at the border, the UK Government will look into that closely. My hon. Friend the Member for Totnes asked whether we will discuss matters with the Scottish Government. We will be watching the situation extremely closely in the service of seeing what works and what we can assess among these complex policy and legal issues.

I will go briefly to a couple of other questions that my hon. Friend asked me: have we received representations from public health representatives on the duty plus VAT measure? I regard that measure as a starting point, as a first step. She rightly notes that it introduces a principle and a starting point. Treasury officials are very closely involved in discussing such matters with the Department of Health and, as I have already mentioned, the Home Office, which is also responsible in part for alcohol. I hope that reassures her.

We have mentioned supermarkets. I shall briefly turn to whether a windfall profit tax could be introduced as a method of trying to tackle some of the harms. First, this is about evidence. It is questionable whether windfall profits are likely to arise, and therefore whether there would be something to tax, as a viable approach. That question rests on carefully analysing the evidence, policy and legal issues and what is possible.

Finally, I hope that I have set out that the Government have taken some action and made some starting points. The Government are keen to hear evidence on the matter and will observe carefully what is going on in Scotland and elsewhere.

Question put and agreed to.

Northern Rock

Guy Opperman Excerpts

Monday 21st November 2011 Commons Chamber

[Guy Opperman (Hexham) (Con)]

I too was in Newcastle last week, when the foundation, local people, the Labour party and the cheering staff members in Northern Rock’s building in Gosforth were confirming—as were the unions—that this was a great deal. Is the Minister surprised that no mutual came forward, and will he explain once more why none would be willing to do so in the circumstances?

[Mr Hoban]

We went out of our way to encourage that. We spoke to various organisations that are keen to promote the idea of mutuality, but none of them could produce a workable model that would enable us to give money back to the taxpayer, and, as I have said, no mutual came forward with a bid in the final round. That was not for want of trying on our part. Clearly there was not the interest in the mutual sector in acquiring Northern Rock that people assumed to exist.

Arch Cru Compensation Scheme

Guy Opperman Excerpts

Wednesday 19th October 2011 Westminster Hall

[Alun Cairns]

The hon. Gentleman has made an extremely powerful point. This is the first debate on Arch Cru, and certainly on the FSA and its change to the successor bodies. Those who have responsibility for this matter need to bear in mind the strength of feeling among investors and the number of people who have turned up to this debate. This issue will not go away until investors feel that they have received justice.

The regulator, the Financial Services Authority, arguably failed in its duty as did the investigators and negotiators. Clearly, there was a position of conflict. It angers me that at every meeting and in every communication, the FSA points its finger at the independent financial advisers. In view of the FSA’s four strategy objectives, passing the buck to the IFAs is wholly inadequate. The pricing and fund performance would have been integral to the advice provided by any independent financial adviser.

In a meeting last week, the FSA told me that the obligation of suitability lies with the IFA. It is unrealistic for IFAs to have the capacity to interrogate individually all marketed funds, products and pricing strategies, or to speak to the financial directors and auditors of every firm on which they advise, when the FSA, with all its resources, failed to protect investors from wrongdoing in this respect.

[Guy Opperman (Hexham) (Con)]

Independent financial advisers may be being criticised, but is my hon. Friend not surprised that the Serious Fraud Office has not been more involved in this patently criminal investigation?

[Alun Cairns]

I pay tribute to my hon. Friend for the role he has played in uncovering many of these issues. I will come on to the Serious Fraud Office in a moment.

--- Later in debate ---

[Guy Opperman (Hexham) (Con)]

Thank you, Mr Owen, for calling me to speak.

The victims in this case are savers, widows and pensioners, who we must not forget and who we are fundamentally elected to fight for. It is definitely in the Government’s interests—is it not?—to encourage proper saving and proper investment. One can use this particular disaster—it is nothing less than that—to encourage proper investment in proper companies.

I am very pleased that, along with other colleagues, I have this opportunity to speak today on an issue that dozens of my constituents whose lives have been irreparably damaged by CF Arch Cru have contacted me about.

I must thank the hon. Member for Rutherglen and Hamilton West (Tom Greatrex) for securing this debate. A lot of us have tried to secure such a debate. I also want to thank him because he gave his address in a measured, reasonable, all-party tone. That is welcome, because hon. Members are united—in every part of the country and in every democratic and political process—in their view of the disaster that has occurred.

I must also thank my hon. Friend the Member for Vale of Glamorgan (Alun Cairns), who has campaigned tirelessly on this issue. He has sought debate after debate after debate on this issue and was, frankly, pipped at the post by the might of Scotland in the form of the hon. Member for Rutherglen and Hamilton West, who snuck up the inside rail and secured this debate. However, I know that we are all working together, which is a wonderful thing to see.

Obviously I speak as a constituency MP, but I also speak as someone who, for approximately 15 years, was employed on a repeat basis by Her Majesty’s Government as a prosecutor of fraud trials. I worked for the Attorney-General and the Serious Fraud Office, and I bear the scars of involvement with cases such as Blue Arrow and Guinness, and particularly a scam in relation to a company called Moneywise, which was investigated by the Financial Times. In that case, I spent six long months in Guildford Crown court bringing fraudsters to justice and recovering money. It was another case where people were defrauded by supposedly safe investments and money was taken from them. We successfully brought prosecutions for conspiracy to defraud.

I do not know the inner details of the particular case that we are discussing today, because only those involved, the Financial Services Authority and others have full access to the documentation. It is easy to make glib comments, but, speaking as an informed observer, I would seek the involvement of the Serious Fraud Office. With respect, there seems to be only two choices in relation to official actions and official offences committed here. Either the Minister is appropriately referring this matter for an inquiry under section 14 of the Financial Services and Markets Act 2000 or—frankly—the Serious Fraud Office needs to get off its backside and investigate this matter properly, bringing people who are committing these particular offences to justice. Clearly, there is the potential—I can go no further than that—that criminal offences of conspiracy to defraud have taken place.

An awful lot of questions have been raised, and I do not want to repeat the points that other hon. Members have made, but we come back to the question why an investment advertised as a

“safe and cautious fund—ideal for pension transfer”

has so damaged people’s lives. We must move on to the simple question how to stop it happening again.

To deal first with the compensation package, given that the funds were suspended in March 2009, one might have imagined that it would have been put forward a little earlier. The delay by those involved and their dilatory tactics are to their discredit. However, the £54 million package is inadequate. Let us be blunt: Capita is a substantial company. There may be arguments about whether the company in question is limited within the confines of Capita’s many companies, or about the parent company not being responsible for the individual failings of individual people in other lesser companies in the group. Those may be perfectly legitimate comments, and if Capita wants to take that high financial moral tone with us, so be it. However, it needs to grasp that it has a simple choice in this Parliament. Either it provides 100% compensation or it will find that it has few friends in this House. The £54 million is frankly not sufficient. This is not like Equitable Life, because this is not a situation in which a company has run out of money. Capita has not gone bust. To quote one investor who wrote to me:

“The current package is barely a pinprick on Capita’s little finger.”

[Sir Peter Bottomley]

I hope that hon. Members will not mind my saying that this calls to mind the troubles of Arthur Andersen, where one problem in one country led to the destruction of a very good business in a number of other countries.

[Guy Opperman]

I endorse those comments. Capita will need to look over its shoulder after today’s debate.

[Tristram Hunt]

Does the hon. Gentleman not think, then, that the Government have a role to play in relation to the extraordinary award of contracts to Capita?

[Guy Opperman]

I accept that they have a role to a degree. The hon. Gentleman is being a little naive, because the provision of certain services by a perfectly reputable part of the company is satisfactory, and he is far too intelligent not to know that. However, we must deal with individual mismanagement by parts of the company, which happened in years gone by, and the hon. Gentleman knows that companies have obligations in relation to such matters. The matter can be pursued either as a civil obligation in the High Court or by way of criminal compensation arising out of a prosecution. Alternatively, it can be dealt with under section 14 of the Financial Services Act 2010. However, it is over-simplistic to say that just because the Government provide contracts to an organisation that is performing perfectly satisfactorily in some respects, they cannot be involved in seeking other compensation.

This debate is an opportunity for the Government to give a lead on what they will do, and they need to answer some questions. I want to discuss examples involving a couple of my constituents. The point has been fairly made that the losses have been suffered by people who are not wealthy. We are not standing up for toffs and fat cats, but for people who have lost £1,000, £2,000, £5,000, £10,000 or £15,000— people who have lost their life savings, and who were encouraged to put their money in.

[Nicky Morgan (Loughborough) (Con)]

My hon. Friend is making a powerful argument, building on some other powerful speeches. He is right about the people involved, and the same is true of my constituents, who are not wealthy but who were doing the right thing. Our party and all other parties have asked people to make provision for their pension and retirement. Those people were doing the responsible thing, and they had their fingers badly burned. Confidence has been mentioned, and the Government must address that.

[Guy Opperman]

I totally endorse that point, and that is where the Government definitely have a role. They can use the inadequacies of the present case to highlight their intention to come down hard on those who mismanage investments as in this instance, to give investors confidence in other investments in the future. Sadly, that should have been done previously, and such scams and difficulties have been bubbling over for the past 20 years.

My constituent, Mr Ian Robinson, transferred his entire pension pot of £90,000 into Arch Cru on the advice of an independent financial adviser. He thought it was a sensible policy. In 2009, his funds were revalued down to about £55,000; they were then frozen; and the remaining capital was eroded over the next two years. He will be lucky to get 40% back under the compensation package. Another constituent, who wants to remain nameless, worked all his life and built up a business. He sold it and thought that he and his wife had a successful pension pot of several hundred thousand pounds. They put all of it—savings and pension—into Arch Cru. After the devastating effects of what happened, he and his wife have been living off a state pension and with the current offer of recompense they will be forced to downsize to enable them to live from any capital that is released. They will have lost hundreds of thousands of pounds, which they thought was securely invested to provide a gentle but secure return, and they will be lucky to be able to leave anything to their dependants. If my constituent agrees to the package at this stage, he will have less than half the compensation needed to put him and his wife back in the position they were in prior to their investment. In the current climate, we should support such hard-working people.

Much could be said about the dilatoriness of the process, because, as other hon. Members have mentioned, nothing has really happened since suspension in March 2009. I shall briefly discuss Capita. Others have spoken eloquently and forcefully about its inadequacy in its role. One constituent told me:

“This is not just a case of an investment that has underperformed due to the Global Financial Crisis but one where there are serious misgivings in relation to the management and governance of the funds”.

That is certainly how I see the matter—it is potentially a criminal investigation. Capita was paid as trustees to oversee the management of the funds, which we all agree it simply did not do. Therefore why is Capita not fully accountable for the extent of the losses of the people whose money it was managing? Clearly it is vicariously liable and has an obligation.

Hugh Aldous has prepared a report on Capita, and I recommend that anyone who has not taken on board the full level of ineptitude should read it. It is clear from the report, in which Hugh Aldous makes multiple observations, that the net asset values of several of the cells that were invested in were overstated at least from 2007 onwards. He reported that the condition of the physical assets was far worse than

“we reasonably expected and, in some cases, frankly appalling.”

It seems inexplicable that small investors should suffer so severely with an inadequate package.

Several hon. Members have spoken about the compensation package, and the Minister must address two points. Why on earth has a closed offer been made, when it is also time-limited? That is wrong. The Minister must assist hon. Members by giving the reason for that and telling us whether the Government will do anything about it. Everything would change if the Minister were to say that it is an interim offer. If it were an interim offer, so that the victims of the scam could receive the £54 million paid down in the usual way, with the right to continue to take civil action if they wanted to pursue matters further, I would say, “So be it.” However, to tell them that it is a time-limited £54 million offer and they can take it or leave it is wrong.

The FSA has supposedly been making great efforts to ensure that companies can meet their commitments when they fall down. There are regulations to protect consumers. The FSA is a publicly funded body. It exists to protect investors, and it has not done so in this case. It should surely have launched a proper investigation. My hon. Friend the Member for Vale of Glamorgan has called for a proper investigation, and I repeat that call. The FSA seems reluctant to admit that Capita has failed in its duty as an authorised corporate director.

[Naomi Long]

The hon. Gentleman is making some strong points. Does he agree that in this crisis it is the failure of the regulatory aspect that has caused the biggest ripples in public confidence? People took the FSA’s regulation of the funds and the advice they were given at face value, which created a level of confidence that did not match the confusion about what was happening within the fund. The FSA has not only failed people but caused a crisis in public confidence.

[Guy Opperman]

I endorse the hon. Lady’s comments about the authority.

There are tremendous financial consequences here, but there is also a human one. All hon. Members—I have been here for only 18 months, but others have been here for many years—will have gone through the pain, difficulty and correspondence in relation to Equitable Life. To be fair, this situation is not the same, but it is similar in that constituents have written to me because they have given up. One told me about a retired couple in ill health who have already given up, because

“they have not the energy or the mental resolve to fight this”.

The Minister had an extremely difficult job with Equitable Life, and I applaud the fact that he did the best he could in very difficult circumstances. This matter, however, is far simpler, and I hope that he takes on board the four key points. First, will the inquiry be a section 14 inquiry? Secondly, why is the offer a closed one? Thirdly, why is the offer deadlined and time-limited? Fourthly, does the Minister agree with a large proportion of hon. Members—I say this based on the comments that have been made during the past hour and 11 minutes—that Capita has a simple choice: either it gives 100% compensation, or it is left with no friends in this House?

[Albert Owen (in the Chair)]

I shall call the Front-Bench spokespeople at 10.45 am. I now call Duncan Hames.

--- Later in debate ---

[Mr Hoban]

No, I will continue. I have three minutes left and more points to make.

The FOS is bound only in respect of complaints made against Capita, HSBC and BNY Mellon. Complaints made to the FOS about other parties to the investment chain, including independent financial advisers, can still be heard by the FOS. The limitation on the FOS applies only to complaints made about the three parties. That is a clear signal to investors that they can make further complaints about other parties. Investors are free to pursue action through the courts and to challenge the IFA who advised them to invest in Arch Cru funds over whether that advice was appropriate. Numerous people have already done so. If they are not satisfied with the IFA’s response, they can go to the FOS. If a complaint has been upheld but the adviser is no longer in business, investors can also complain to the Financial Services Compensation Scheme and apply for compensation.

[Guy Opperman]

Will the Minister give way on that issue?

[Mr Hoban]

No, I cannot. I have two minutes left. My hon. Friend and others asked about section 14, which I would like to address; I am sure that he will be grateful if I do.

I have yet to be persuaded that a section 14 inquiry is appropriate. It certainly would not be appropriate to announce one while enforcement action is being taken against any party to the matter. The powers are available where it appears that significant damage has been done to the interests of consumers that might not have occurred but for a serious failure of regulation. It is worth pointing out that the power has never been used. Throughout the life of the Financial Services and Markets Act 2000, many issues have not been examined.

As I have said, it is not the FSA’s role to ensure that no firm ever fails, to approve the investment strategy of every OEIC operating in the UK or to ensure that all investments are sound. The FSA does not audit or sign off an OEIC’s accounts. That responsibility rests elsewhere. It was the FSA, through its ARROW inspection, that identified the issues in Arch Cru.

It is vital that everyone engaged in the matter—the regulator, industry players, IFAs and others—reflects on the lessons learned. Many issues emerge, including the scheme’s complexity and consumers’ need for better financial education and better-quality advice. We look carefully at every lesson learned from such cases, and that is reflected in our thinking on the operation of the FSA.

Fuel Costs

Guy Opperman Excerpts

Monday 7th February 2011 Commons Chamber

[Stephen Phillips (Sleaford and North Hykeham) (Con)]

This has been an interesting debate for a number of reasons. However, I begin by apologising to the hon. Member for Dundee East (Stewart Hosie) for missing the opening part of his remarks in introducing the debate.

The issue of fuel costs touches not only those living in regions that the devolved Administrations are largely responsible for governing, but many rural constituencies across the country, and certainly my constituents and members of the public across Lincolnshire. The reason is that it costs—and has done for a long time—a great deal of money to run a car, given the current fuel prices. However, a car is not a luxury to my constituents and people living not only in Wales, Scotland and Northern Ireland but in rural parts of England. In those places, a car is a necessity. Owing to the state of public transport, people cannot live their lives without at least one car—certainly, they could not do so without great difficulty.

Much of my constituency is made up of rural areas dotted with small villages and farms, which means that I live in a beautiful part of the country. However, it also means that it takes a great deal of time to get to the doctor’s, the supermarket or anywhere else that one needs to get to in order to live one’s ordinary life. Public transport has got worse over the past few years, and will continue to get worse owing to the state of the deficit left by the previous Government and the need for this Government to deal with it. That will not be conducive to better public transport over the next few years, and will exacerbate the problems caused by high fuel prices.

I would like to echo a point made by the Economic Secretary. The Labour Government left us with the worst possible fiscal position. The simple fact is that we are paying debt interest of £120 million a day in circumstances where 1p on fuel raises only £500 million. It does not take a very good mathematician to work out that were we not paying that debt, we would not need the level of fuel duty or VAT that we do—with all that that has meant for the current fuel crisis. I heard no apology in the remarks of the hon. Member for Bristol East (Kerry McCarthy) or explanation of why we have been left with this debt legacy and of what it means, in the context of this debate, for my constituents and others all over rural Britain who are paying the price for the previous Government’s failure, inter alia, through the cost of fuel.

[Guy Opperman (Hexham) (Con)]

Does my hon. and learned Friend think that it was right for the leader of the Labour party to indicate that he would not have implemented the previous two fuel rises in the current circumstances?

[Stephen Phillips]

I have not seen the comments made by the right hon. Member for Doncaster North (Edward Miliband). However, he was at the heart of the previous Administration, with all that that meant for the legacy inherited by this Government. Whatever opportunism Labour Members pursued—we saw it last week during the forestry debate from a party that sold off 25,000 acres of forest without any guarantees of rights of public access—we understand that it is the duty of the Opposition to oppose. However, I do not understand many of his policies, and I do not expect that I understand this one any better than any of the others.

We have heard about two mechanisms that might serve to address some of the difficulties associated with current high fuel prices. The first is the derogation. The Government have done more to take that forward during the few short months they have been in office than the previous Government did during the entire time they were in office. I congratulate my hon. Friend the Member for Caithness, Sutherland and Easter Ross (John Thurso) and his predecessor who have done so much work on this matter. It is gratifying that we at last have a Government who are beginning to take this issue seriously and to negotiate on it in Europe. I hope that in due course we will see this derogation.

On behalf of my constituents, I would like to hear from the Exchequer Secretary that the pilot, whatever that might be, is rolled out not just in the remote rural areas referred to in the amendment—the Inner and Outer Hebrides, the Northern Isles and the Isles of Scilly—but in areas of England affected by high fuel prices.

--- Later in debate ---

[Mr Weir]

Indeed; I will come to that point later if I have time.

It is not only the businesses but their employees and the other people who live in the rural areas who are suffering in many ways. My constituency comprises small towns and villages, and many people have to travel to get to work. They have to use their cars to do so.

[Guy Opperman]

rose—

[Jim McGovern]

rose—

Terrorist Asset-Freezing etc. Bill [Lords]

Guy Opperman Excerpts

Monday 15th November 2010 Commons Chamber

[Guy Opperman (Hexham) (Con)]

I remind the House of my former profession as a barrister, and I compliment the hon. Member for Dwyfor Meirionnydd (Mr Llwyd) on his outstanding contribution to the debate. I could agree, in broad terms, with much of what he said.

In the case of re M, Mr Justice Ognall stated:

“We live in an age when funds may be transferred from jurisdiction to jurisdiction as rapidly as it takes me to speak this sentence.”

Those sentiments encapsulate the difficulties and predicament that we face today. How do we fulfil the UK’s duty to be at the heart of the international fight against terrorism, while protecting the basic human rights and freedoms that Britain has always prided itself on advocating in both theory and practice? We know that the legislation derives from United Nations Security Council resolution 1373, a European directive and the decision in Ahmed v. HM Treasury. Experience shows that most individuals who are engaged in or intent upon serious offending can often live with the authorities taking away their guns or explosives, or with their liberty being taken away, but what hurts them is taking away their money, because that is what fuels so much of the offending and allows the criminal or terrorist to operate.

The Bill goes a long way towards fulfilling that duty: it enables the Treasury to freeze the assets of those suspected of involvement in terrorism, with such decisions being made at national level on the basis of advice from specific law enforcement, security and intelligence agencies. Of course that means that much will rely on the accuracy of the advice received, but I suspect that the vast majority of the British public will not find such a proposal fundamentally objectionable. It should be borne in mind that many of these decisions have to be taken rapidly in circumstances where the stakes are high and the potential consequences for both sides are catastrophic.

UN resolution 1373 specifically states that we should “freeze without delay”. I suggest that the specific content of the resolution is such that there is a real desire to move at great speed. However, that must be seen in the context of our commensurate duty to be at the heart of the international effort against terrorism. Secondly, it must meet the expectations of the British public, by making the work of the terrorist organisation that much harder.

Although other anti-terrorism measures may be already on the statute book, they do not fulfil the obligation set out in resolution 1373. There will be—and this is accepted—an improvement. There are rights of appeal and judicial review that give safeguards to those caught by an order. It should give some confidence to the wider public that a specific individual has his rights properly preserved. It should also be noted that legislation such as this should never be judged by specific statistics. The right hon. Member for Leicester East (Keith Vaz) quoted specific statistics in his speech, but this type of legislation acts as a preventive measure that dissuades individuals involved in terrorism from using the UK banking system. Prevention is clearly better than cure.

The new Bill provides the power to freeze assets on a preventive basis on a reasonable suspicion of involvement in terrorist activity. Where that threat is involved, it is difficult to envisage how any other test could effectively be applied. The test is also subject to the safeguard that even if the Treasury considers there to be reasonable grounds for suspecting a person to have been involved in terrorist activity, that person’s assets can be frozen only when it is considered necessary for public protection.

I want to deal with three final points in relation to the legislation. I will not go into the detail that others have in the past. First, how will designated persons fund their appeal? At present, they are in a position whereby their ability to fund their appeal is effectively non-existent. Such legislation has cropped up in other matters of asset freezing down the years.

Secondly, and most worryingly, the definition has gone from “reasonable suspicion” to “reasonable belief”. That is, at best, a marginal change. Many a good lawyer would argue that there is almost no difference there. What is quite clear is that that is less than 50%. Something that is less than 50% always concerns any lawyer—it does not matter whether we are talking about a human rights lawyer or someone who is against the whole idea of terrorists in every particular way. When we talk about less than 50%, we have to ask what we are dealing with. Are we dealing with something that is 49%, 40%, 30%, 20% or 10%? That discrepancy is a concern, and I hope that it is addressed when it comes to the individual protestations of change that will be put before the House at a later stage in consideration of this Bill.

Finally, there must be a more wholehearted review of all these matters. We keep enacting piecemeal legislation after individual Acts have been passed over a period of time. It is not a good situation to have specific Acts dealt with on a specific short-term basis. My concerns are assuaged by what the Supreme Court said in the Ahmed case. It quashed the terrorism order on the grounds that the inclusion of “reasonable suspicion” as a threshold was not necessary or expedient. It noted that “reasonable suspicion” was not specifically referred to in UN Security Council resolution 1373, and it concluded that the general words of section 1 of the United Nations Act 1946 did not give anyone the authority to make an order that interfered with fundamental rights on the basis of a “reasonable suspicion” threshold. However, and I suggest that this is the key point in relation to why the Government are going ahead on this basis, the Supreme Court did not condemn the terrorism order on wider grounds of incompatibility with human rights. Those members of the court who commented on the arguments in the Ahmed case suggested that the Terrorism (United Nations Measures) Order 2006 was disproportionate and dismissed such arguments. I hope that we will go forward with a greater sense of will so that when the Macdonald report and other such reports come before the House, we are in a position to consider everything together.

--- Later in debate ---

[Kerry McCarthy (Bristol East) (Lab)]

As my right hon. Friend the Member for Delyn (Mr Hanson) said at the beginning of the debate on Second Reading, we support the Bill in principle and will not press it to a vote tonight. It is a measure that we would have introduced ourselves, had we still been in government, to meet our international obligations and to replace the temporary legislation and put it on a permanent footing.

The Bill has been subject to thorough scrutiny in the Lords, but in the Committee sittings next week we will not shirk from our duty to examine it robustly. As my right hon. Friend said, we will table amendments. The report of the Joint Committee on Human Rights has only just been placed before the House—I think it was available on Friday—and it contains some suggested amendments that we may table, as my right hon. Friend indicated to the hon. Member for Aberavon (Dr Francis), who chairs the Joint Committee. We will keep some of the issues under review in the light of the review being carried out by Lord Macdonald and the internal review.

It is a shame that the hon. Member for West Suffolk (Matthew Hancock) is no longer in his place. I think he slightly misunderstood some of the points made in the opening remarks made from the Opposition Benches. We did not say that the Bill was being rushed through with undue haste. That point was made by my right hon. Friend the Member for Leicester East (Keith Vaz), the Chair of the Home Affairs Committee. He did not speak in the debate—[Interruption]. I thought he had just made a number of interventions, but I stand corrected. He is such a frequent speaker in this place that I lose track of when he pops up and when he does not.

There was also a misunderstanding on the part of the hon. Member for West Suffolk about the amendments that we might table in Committee, but I hope that he will decide to become a member of the Committee and that we will be able to take up those points with him then. I should point out that it is certainly our intention to co-operate with the Government to try to get the Bill through.

I shall now turn to my notes on what my right hon. Friend the Member for Leicester East said—which does indeed confirm that he spoke in the debate—and a fascinating contribution it was, too! He said that the Home Affairs Select Committee would look into this issue more generally after Lord Macdonald had reported, and that it would examine issues such as control orders and the wider civil liberties questions. He also asked the Minister a number of questions about whose accounts had been frozen and whether the 205 such accounts related to 205 separate individuals. He also said that not much money seemed to be involved. I hope that the Minister will be able to respond to those points in his closing speech.

The hon. Member for Cambridge (Dr Huppert) is a member not only of the Home Affairs Select Committee but of the Joint Committee on Human Rights, so he has a double interest. He said that he intended to table some amendments in Committee, which presumably means that he wants to be a member of the Committee. I am not sure whether the Liberal Democrat Whips will be quite so enthusiastic about his doing that, but we look forward to seeing him next week if he is allowed. He raised some important points tonight, as did the hon. Member for Hexham (Guy Opperman), particularly about the test of reasonable suspicion being replaced after 30 days by one of reasonable belief. He said that that was still a lower standard of proof than that of the balance of probabilities. That is an important point, and it has been discussed in the other place.

[Guy Opperman]

rose—

[Dr Huppert]

rose—

[Kerry McCarthy]

I am spoiled for choice! I shall give way first to the hon. Member for Hexham.

[Guy Opperman]

I have no issue with the fact that I have been chosen over Cambridge. Do the Opposition have a specific view on what the percentage is? The hon. Lady will recall that the hon. Member for Cambridge (Dr Huppert) and I mentioned this in our speeches. Is it 40%, 30% or 20%?

[Kerry McCarthy]

Would the hon. Member for Cambridge like to intervene now, so that I can answer both hon. Members at once?

Savings Accounts and Health in Pregnancy Grant Bill

Guy Opperman Excerpts

Tuesday 26th October 2010 Commons Chamber

[Kerry McCarthy]

My reference to the hon. Gentleman related just to the fact that he used the term “ladies” quite frequently during the debate, which is actually charming in its own way.

Earlier today, after a heavy morning spent in the Finance Bill Committee, by way of light relief I watched a video that had been posted on the ConservativeHome website in January this year. It was one of those videos that the Conservative party was very fond of when it was on a mission to convince the British voters that it really had changed and was no longer the nasty party. It featured the then Leader of the Opposition, now the Prime Minister, of course, in his shirt sleeves talking with well-rehearsed spontaneity to an audience carefully chosen to seem like a random cross-section of the general public. He said that he wanted this Government

“to be the most family friendly Government we’ve ever had in this country and that is about everything we do to support families and it’s about supporting every sort of family.”

What have this Government, in collusion with their friends from the Liberal Democrat party, done to support families? For a start, what have they done to support children? The so-called emergency Budget and the spending review take away almost £7 billion from funds to support children, three times the amount the bank levy is estimated to raise. According to the Institute for Fiscal Studies, families with children will lose the most from what this Government plan to do by 2014-15. The poorest 10% of families will lose 7% of their income. The Government are freezing child benefit, cutting child care tax credits, restricting the Sure Start maternity grant to just the first child and, of course, axing the child trust fund and the health in pregnancy grant under the Bill that we have considered today.

What about when the children get a bit older? Education maintenance allowances are being abolished, school spending per pupil is being cut in real terms and the IFS has said that the pupil premium could widen funding inequalities. As the End Child Poverty campaign said after the comprehensive spending review, it was

“a dark day for any family struggling to stay out of poverty, or deep in it already and fearing things will get worse still.”

[Guy Opperman (Hexham) (Con)]

Will the hon. Lady give way?

[Kerry McCarthy]

I am afraid I do not have time.

What about the impact on women? Our research has shown—we have had to do our own research, because this Government seem to have abandoned any notion of doing real and meaningful equality impact assessments, and I pay tribute to my right hon. Friend the Member for Normanton, Pontefract and Castleford (Yvette Cooper) for her work on it—that the cuts hit women twice as hard as men, without considering the impact of cuts to public services. We know that 65% of public sector workers are women and that two thirds of the public sector redundancies arising from the spending review are expected to be women.

Of the £16 billion cuts in total, £11 billion comes from women. Some 72% of the emergency Budget cuts will be met from women’s income, and in the CSR cuts £5.7 billion will be taken from women compared with just £2.7 billion from men. A million more women claim housing benefit than men, 70% of tax credits are paid to mothers, 94% of child benefit is paid to mothers and 90% of lone parents are women. So much for being family friendly. So much for looking after every sort of family. So much for doing everything they can to support the family.

My hon. Friend the Member for Chesterfield (Toby Perkins) stole my line earlier when he talked about the Government believing in women and children being first when it came to cuts. The phrase “women and children first” comes from a mariners’ saying when a ship is doomed to sink, and what we are discussing today is just the tip of the iceberg.

The Bill might be tiny in terms of written content—it is just three pages and four clauses—but it does a huge amount of damage. It scraps the support that we have given to families to help them save through the saving gateway. It scraps the chance a child from a poor family had to enter adult life with a little pot of money to help them fulfil their dreams and ambitions, something that hon. Members on the Government Benches, with their multi-million pound trust funds, could never hope to understand. It snatches away money from pregnant women—money that was designed to help them have healthy, happy pregnancies and healthy, happy babies.

We on the Labour Benches will carry on fighting for those families and for children who were not born with a silver spoon in their mouth, and we will oppose the Bill tonight.

Draft EU Budget 2011

Guy Opperman Excerpts

Wednesday 13th October 2010 Commons Chamber

[Kerry McCarthy]

I will not repeat the point about the hon. Gentleman not being in the Chamber on many occasions when we have had similar debates. As with any public spending, it is important that there is some measure of outcomes, so that we can be sure that there are demonstrable changes and that objectives will be achieved as a result of the spending programmes. We are committed to that. To use the argument about the accounts not being signed off to dismiss everything good that the EU has done and all the initiatives on which we are working with our European partners is tantamount to throwing the baby out with the bathwater, as I said earlier. The argument is used as a red herring by those who are against the entire European project.

[Guy Opperman (Hexham) (Con)]

The hon. Lady has referred to many good things about the European budget. Is she, in her shadow ministerial role, able to identify anything that she would cut?

[Kerry McCarthy]

I shall come on to that point, if the hon. Gentleman will bear with me.

We support some of the structural and cohesion funding, but we agree with the Government that budget levels should be realistic and reflect absorption capacity. In certain areas throughout the EU budget, planned spending levels are indefensible, and, in response to the question that was just asked, we believe that spending under heading 2 on the preservation and management of natural resources should not be a priority in the current economic climate. We do not support that scale of spending on agricultural intervention, and we will support the Government’s close scrutiny of it.

We very much welcome, however, the Government’s statement that there should be an increased emphasis on development objectives, including on reaching the millennium development goals in poorer countries, and we believe that adequate funding is necessary to achieve those aims.

Finally, we also support the Government in pushing for reductions in the administration budget.

Equitable Life (Payments) Bill

Guy Opperman Excerpts

Tuesday 14th September 2010 Commons Chamber

[Dr John Pugh (Southport) (LD)]

rose—

[Guy Opperman (Hexham) (Con)]

rose—

[Chris Williamson]

There is not time to give way as I want other Members to have an opportunity to speak.

That is hardly a ringing endorsement of the Government’s position, is it? A lot of crocodile tears are being shed this evening. We heard many exaggerated promises in opposition, but the Government are significantly under-delivering now that they are in power. Given the commitments that were made by the Minister and other Front Benchers, as well as virtually all the Back Benchers, they have a moral obligation to do more than they have done so far.

It is a poor show to have misled the political parties and misled people into thinking that they would receive more than they will. As I said, had Labour won the election, people would at least now be receiving some payments. We still do not know when people will receive any payment as a result of the Bill.

--- Later in debate ---

[Charlie Elphicke (Dover) (Con)]

I, too, would like to congratulate my hon. Friend the Member for Congleton (Fiona Bruce) on her excellent maiden speech. I have subsequently spent much of the debate dreaming of Sandbach.

I recently held a public meeting in east Kent for my constituents in Dover and Deal, alongside my hon. Friend the Member for South Thanet (Laura Sandys) and her constituents in Sandwich, Ramsgate, Broadstairs and other parts of her constituency. It was a lively meeting, and I undertook to report to the House the representations that were made to us. There were three clear positions that the Equitable Life victims wanted me to communicate.

The first was that the Chadwick report is not a sound basis for compensation, and that the contributory negligence concept implicit in it is entirely rejected. The second was that the ombudsman’s recommendations should be implemented, even if over a number of years with staged payments. The third was that payments should commence as soon as possible. For my part, I would like to say how sorry I am that the victims have been treated so badly for so long. I welcome the Bill, the compensation scheme and the action that is being taken.

[Guy Opperman]

Does my hon. Friend agree that, in these circumstances, an oral debate and a staggered system of intervention are two of the best ways ahead?

[Charlie Elphicke]

I absolutely agree with my hon. Friend. More than that, I urge Ministers to consider carefully a more generous compensation scheme than that recommended by the Chadwick report. I also urge them to consider making staged payments over some years, given the current pressure on the public finances as the nation today stands pretty much bankrupt. I hope that Ministers will give those points careful consideration when they bring forward the detail of the compensation package.

Budget Resolutions and Economic Situation

Guy Opperman Excerpts

Thursday 24th June 2010 Commons Chamber

[Clive Efford]

I assume that the hon. Gentleman has applied to speak in the debate, but it is clear that I have touched a raw nerve with him.

It is as sure as night follows day that those who support this Budget will want to cut the NHS next. Attacks on what has been describe as an “over-bloated” public sector are attempts to soften the public up in preparation for an unprecedented attack on public sector workers and the people who rely on the services that they provide.

The public sector will be hit in three ways, with a triple whammy—a freeze on council tax, a freeze on pay, and a squeeze on workers’ pensions. The claim that none of those would be necessary if the previous Government had not left the country in the state that the present Government say that they did just does not stand up to scrutiny.

In this Budget we are being asked to vote for taking away £1.8 billion from housing benefit, £1.4 million from disability benefits, £11 billion from the welfare state overall—and £2 billion from the banks. The Government say that they oppose nationalisation, but they have certainly nationalised the cost of the banking failure, and it is the poorest people in our constituencies who will pay the price.

The figures show that £1 in every £7 spent by the poorest 10% in our communities goes on VAT, but that drops to £1 in every £25 for the richest 10%. The IFS has confirmed that Labour’s plans would hardly have touched the poorest 10% at all, but this Budget will reduce their income by 2.5%. Labour’s proposals would have reduced the position of the richest 10% by 7%, but the Budget adds only a further 0.6% of that.

[Guy Opperman (Hexham) (Con)]

Will the hon. Gentleman give way?

[Clive Efford]

No. I have given way twice, and other Members wish to speak.

We can see who is paying the price for the Budget. The Government say that we are all in this together, but some of us are in it more than others, and the poorest are in it up to their ears.

There is no mandate for this Tory Budget. Despite all the coverage that we have read about it, no one has said, “Thank God the Liberal Democrats were there to hold back the nasty Tories.” Everyone says that it is a Conservative Budget—the Budget that the Conservatives would have introduced whether or not they had the rag, tag and bobtail of the Liberal Democrats tagging along behind them. This assault on our public services is founded on the misguided belief that as the pubic sector contracts, the private sector will expand and provide new jobs.

There is no intention of returning investment to the public sector. The dogma that drives the cuts is the same that drove the Tories to attempt to destroy the NHS when they were last in power. Anyone who votes for the Budget is signing up to a Thatcherite philosophy of slashing the public sector and paying no heed to the consequences for the most vulnerable people in our communities. Never again will the Liberal Democrats be able to claim that they are the party that stands up for the underprivileged and a party that is in favour of intervention. This is a Thatcherite Budget and anyone who votes for it will be a Thatcherite: Members on the Government side of the House are all Thatcherites now.

--- Later in debate ---

[Guy Opperman (Hexham) (Con)]

I remind the House that I have declared a previous involvement in manufacturing through my family firm.

Before I talk about the Budget, I wish to say something about the maiden speeches that we have heard. We heard an excellent maiden speech from my hon. Friend the Member for Staffordshire Moorlands (Karen Bradley). Her seat is similar to my Northumberland constituency, and she spoke eloquently about the contribution that can be made by tourism and farming, which I look forward to championing with her. My hon. Friend the Member for Hendon (Mr Offord) also spoke well, and the hon. Member for Kingston upon Hull East (Karl Turner) was a great deal more articulate than his predecessor in the House. My hon. Friend the Member for Camborne and Redruth (George Eustice) said that his family lived in his constituency 400 years ago. The constituency was also the home of Ross Poldark, who found fame and fortune in the novels, and I am sure that my hon. Friend will have a similarly colourful career.

It gives me no pleasure—to a certain degree I endorse what was said by the hon. Member for Streatham (Mr Umunna) on that subject—to speak in a Budget debate when we all face such difficult circumstances. Unemployment has increased considerably in the four Northumberland constituencies. It has increased by nearly 60% over the past five years in the two Labour-held constituencies of Blyth Valley and Wansbeck, and by a similar amount in Berwick-upon-Tweed. Unemployment in Hexham has increased by 67% in the past five years.

I have heard much of what Labour Members have said in today’s debate, but this is not a question of ideology. We are not Thatcher’s children producing Thatcherite views. I assure Labour Members that I did not join the Conservative party until considerably after Mrs Thatcher left office, and I am not in a position in which I want to put forward such a point of view. The ideology behind what we are trying to do to put things right is a simple question of maths. We have outgoings of £700 billion and incomings of £545 billion. Those figures are unquestionable; the issue is how we address the situation.

My ideology arises from the fact that my family came to this country nearly 100 years ago as immigrants with next to nothing. They had no opportunities, save what they could make. In the 1920s—when there was a real recession and things were really bad—my grandfather came home from school to be told by his father that school was no longer an option, and he would have to be withdrawn so that he could work for his father. The three children then began to work for their father in the basement of a small flat in Islington and built up a small manufacturing business on the back of a small gift of £40. I wish to say something about manufacturing. In 1997 we made roughly as much as we consumed in this country—about £160 billion, compared with £150 billion. Now, however, we consume nearly twice what we make.

In Northumberland apprenticeships are struggling. I visited Glendinning’s, a firm in my constituency, shortly before the election. I was told that the firm could not take up the Government’s apprenticeships, for the simple reason that they were so complex and so administratively difficult to implement that it was better off working outside the Government’s scheme and ignoring any Government money.

During the election I went round nearly all the stores in Wylam in my constituency and asked the owners what the effect would be if national insurance went up. Every single one said that if it was increased, they would have to put people out of work.

There are many responses to the Budget that we could discuss, but there has been little from the Labour leadership. I have listened to the debates so far, and yesterday I listened to the hon. Member for Harrow West (Mr Thomas), who uttered not one word about what he would do differently. It is all very well saying that the Labour Government were going to cut the deficit by 50% in a number of years—but surely the question is what would they cut, and what would they do differently? The answer to that is fundamentally lacking from the Opposition’s arguments. It is a bit like watching the French football team: everything is wrong, but they have no alternatives.

I have also read in detail the speeches of the shadow Chancellor, the right hon. Member for Edinburgh South West (Mr Darling), and the right hon. and learned Member for Camberwell and Peckham (Ms Harman), who spoke on Tuesday. The only features of which she spoke in support were the capital gains tax measure, the 50p tax and the bank levy.

Earlier today, to support his argument, the right hon. Member for Coatbridge, Chryston and Bellshill (Mr Clarke) quoted the right hon. John Smith saying, “I judge a Budget on what happens to a person living on a council estate.” We have a number of council estates in my constituency, and during the election we constantly articulated the view that to spend £400 a week while making only £300 a week is to head for financial disaster. Everyone can understand that.

We have heard a lot in our debates in the House about various organisations’ comments on the Budget. I represent a north-east constituency. The North East Chamber of Commerce, an august body which represents more than 4,000 businesses and more than 30% of the region’s work force, says:

“The Budget clearly contained a number of painful measures on…taxation and spending. However… Funding for a strategic economic development body in the North East was maintained”.

The NECC continues:

“Reductions in employer National Insurance (NI) contributions and headline Corporation Tax are welcomed by businesses, as is the extra exemption on NI in certain regions”.

It says:

“The Chancellor was right to avoid further capital spending cuts and to confirm spending on the Tyne and Wear Metro”.

The NECC goes on:

“The scale of the public finance deficit clearly required radical action… NECC believes the measures taken broadly support the wealth-creating part of the economy in the North East.”

It adds:

“Freezing public sector pay and reforms to pensions were difficult but necessary decisions to address the deficit and help reduce the need for large job cuts in the region’s public sector.”

The NECC welcomes—[Interruption.] Bless you. I welcome the hon. Member for Washington and Sunderland West (Mrs Hodgson), a fellow north-east Member, who is suffering from hay fever. I am happy to have accepted her intervention, brief though it was.

The NECC has also welcomed the increased thresholds for employer national insurance contributions and changes to the headline rate of corporation tax. The one criticism I put to Treasury Ministers is that, like the NECC, I find it

“disappointing to see no change to empty property rates, which we continue to see having a punitive effect”

on businesses, not only in the north-east, but throughout the country.

On capital spending, it is wonderful to see that the Tyne and Wear metro will go ahead, and that the A1 will finally see some form of action, which has long been supported by many hon. Members—albeit that the money still has to be found.

As I was sitting here this morning representing a fundamentally farming constituency during questions to the Department for Environment, Food and Rural Affairs, there was a brief sighting of an interesting and rarely seen—in the House for the past six weeks—individual, the right hon. Member for Kirkcaldy and Cowdenbeath (Mr Brown). He is not normally seen at DEFRA questions, and like a small badger he nipped in and, alert to a possible cull, nipped out again very quickly, before any of us could question him in any way whatever, whether on DEFRA questions—not something that I necessarily think he would have been seeking to answer—or on Budget matters. It would have been wonderful to have had the opportunity to ask the former Prime Minister just what he had to say about the state of the budget. I would certainly have wanted to make the point that we are set to miss his golden rule by £485 billion—quite a significant miss, one might think. One thing is for sure: when he is brought to account in this House, he will have to answer for the state of the nation and the country’s finances. He may run, but he will never hide from that issue. He has much to account for, and we will ensure that he does so.

I finish by recommending a study of all the finances. Some aspects might be due to other factors, but most of what we now see happened on the watch of the previous Government. I recommend the Budget to the House.

Capital Gains Tax (Rates)

Guy Opperman Excerpts

Wednesday 23rd June 2010 Commons Chamber

[Chris Williamson]

Unemployment certainly fell in my constituency in the 13 years of the previous Labour Government. I will tell the hon. Gentleman this as well: thanks to the measures that they put in place, poverty was reduced in my constituency, people enjoyed the national minimum wage and were able to get health treatment far more quickly than previously, and children were not taught in overcrowded schools, so let us have no more lectures from him.

Let us never forget that everything that I have described has only been made possible by the vacillating Liberal Democrats, who say one thing then do another. Less than seven weeks ago, the Deputy Prime Minister said that his party represented a new kind of politics, with fresh ideas. What we got was a party supporting reactionary right-wing policies instead. Fewer than seven weeks ago, he was apparently opposed to the self-same right-wing policies that he now endorses. This is what he told his party conference on 23 September last year:

“We know what happens when you simply squeeze budgets, across the board, until the pips squeak. We know, because we lived through it before, under the Conservatives. We remember the tumble-down classrooms, the pensioners dying on hospital trolleys, the council houses falling into total disrepair. We remember, and we say: never again.”

In an interview with Jeremy Paxman on 12 April this year, the Deputy Prime Minister said:

“Do I think that these big cuts are merited or justified, at a time when the economy is struggling to get to its feet? Clearly not.”

That is what he said at that time.

Millions of people who rejected the Conservatives’ right-wing policy prospectus were seduced into voting for the Liberal Democrats by the Deputy Prime Minister’s rhetoric. People actually believed that the Liberal Democrats represented progressive values. How wrong they were. People now see that the reality is very different from the Deputy Prime Minister’s rhetoric. People see that he is now so determined to appease his Conservative masters that he is even prepared to sacrifice his own constituents by opposing a Government loan to Sheffield Forgemasters.

That is nothing new. The Liberal Democrats and their predecessors in the Liberal party have assisted the Conservatives into power in four out of the last seven general elections. It is thanks to the Liberal party splitting the centre-left vote in 1983 and 1987 that Margaret Thatcher was able to secure two landslide election victories. Then the Liberal Democrats did the same thing in 1992, forcing the country to endure another five years of Tory rule. The truth is that they are not a progressive party at all; they are merely a collection of self-indulgent political loners.

All the post-war progressive legislation has been introduced by Labour Governments often in the teeth of fierce opposition from the Tories and sometimes the Liberals, too. Examples include the NHS, the welfare state, comprehensive education, equal pay, civil partnerships, the national minimum wage, Sure Start, the ban on fox hunting, and the Open university, to name but a few.

[Guy Opperman (Hexham) (Con)]

Will the hon. Gentleman give way?

[Chris Williamson]

No, I do not have time.

Some of the country’s greatest progressive advances were brought about by Labour when the size of the national debt was far higher than it is today.

I heard Members of the coalition parties, including the Chancellor, eulogising the Canadian experience of cutting its deficit in the 1980s and arguing for the same approach to be adopted here, but their “Ministry of Truth” description of themselves as “compassionate Conservatives” imposing so-called caring cuts defies all reason. The reality of the Canadian experience saw increased homelessness, overcrowded classrooms, pension cuts and a drastic shortage of hospital beds. On one occasion, the Canadians even emptied a hospital and blew it up in a desperate attempt to save money. Is that really what the coalition parties mean by “caring cuts”?

By contrast, the US President has written to all G20 leaders begging them not to cut spending too quickly. Mr Obama says it is critical that

“the timing and pace of consolidation in each country suit the needs of the global economy”.

He adds:

“We must be flexible in adjusting the pace of consolidation and learn from the consequential mistakes of the past when stimulus was too quickly withdrawn and resulted in renewed economic hardships and recession.”

But the Chancellor just does not seem to get it. He is obsessed with implementing an approach that failed in the 1930s, failed in the 1980s, failed in the 1990s and is destined to fail again. He wants to implement an unfair budget that will hit the poorest hardest, undermine the economic recovery, destroy public services and increase unemployment.

David Blanchflower, one of Britain’s top economists, said today that he is

“now convinced that as a result of this reckless Budget the UK will suffer a double-dip recession or worse, not least because there is no room for interest-rate cuts, although lots of additional quantitative easing… from the Bank of England could soften the blow”.

Growth is the key to addressing the deficit, and the Budget is a wasted opportunity. The Chancellor has chosen to penalise the weak and the powerless, instead of making the rich and powerful individuals and institutions pay.

--- Later in debate ---

[Mary Macleod (Brentford and Isleworth) (Con)]

I am grateful for the opportunity to speak in this debate on a matter that impacts on the life of every person in the country, every minute of every day. I congratulate my hon. Friend the Member for Harrogate and Knaresborough (Andrew Jones) on his maiden speech, in which he spoke warmly about Yorkshire at its best, and said that his constituency was open for business. He took the words out of my mouth, because I was going to say that my constituency was open for business, and that shows how we need the whole country to be open for business after the Budget. My hon. Friend the Member for Carlisle (John Stevenson) also made his maiden speech, in which he spoke about regeneration. I am sure that he will be just and fear not in his time in the House.

This is a serious Budget for serious times. As my hon. Friend the Member for Bournemouth East (Mr Ellwood) reminded us, this is also a day when England were playing a serious game of football. On behalf of the House I congratulate our team on winning the game, and perhaps they will continue to win throughout the World cup.

I really do not know what planet the hon. Member for Derby North (Chris Williamson), who has just spoken, is on. He should be apologising for what the previous Government did to take the country to the brink of ruin.

[Guy Opperman]

The hon. Member for Derby North quoted some statistics at us about the degree of unemployment in his constituency. I am lucky enough to have the paper on unemployment by constituency from June 2010; handily, it was in my pocket as I walked into the Chamber. Without going back 13 years in relation to the Labour Government, let me say that the paper indicates that in Derby North in May 2005 there were 1,318 jobseeker’s allowance applicants, but that that has now gone up to 2,576—a significant increase, one might think, of 95.4%.

[Mary Macleod]

My hon. Friend is absolutely right. That proves that the Opposition are living on a different planet, and that they have not a clue about what they have really done to the country over the past 13 years.

This emergency Budget is very much about a plan for the future. We have shown that we are bold enough to make the tough decisions that need to be made. The Chancellor has been faced with a deficit of a size that we have never seen before. I commend his Budget and his determination to stick to the principles of responsibility, fairness and enterprise. Not acting to reduce the deficit is simply not an option. We are not in a position to decide whether to deal with debts or go for growth, as Labour would have us believe. We have seen from the recent crises in the eurozone that unless we deal with those debts, there will be no growth. This Budget is about achieving balance in our economy by paring spending to affordable levels and stimulating growth so that we can encourage business and enterprise.

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[Mr Gareth Thomas (Harrow West) (Lab/Co-op)]

Yesterday’s Budget should be judged on three key tests. First, will it protect and enhance economic growth, and nurture an all too fragile recovery from the worst global recession since the 1930s? Secondly, is it fair and will the poorest and those least able to defend themselves be affected the least? Thirdly, less than two months after the general election, does it reflect the election manifestos of the coalition Government? On each of those tests, the Government’s Budget is found wanting.

It would be remiss of me not to congratulate the hon. Members for Harrogate and Knaresborough (Andrew Jones) and for Carlisle (John Stevenson) on their maiden speeches. The hon. Member for Harrogate and Knaresborough made a fluent and interesting maiden speech. Having initiated the first debate on social enterprises in this House, I welcomed in particular his interest in and support for social enterprises. He talked about his constituency being affluent and having excellent schools; perhaps at another time, he might acknowledge more generously the part played by the excellent work of the previous Government in that respect. The hon. Member for Carlisle also made a fluent and interesting speech, offering generous praise to his predecessor, Eric Martlew, who continues to be well liked on both sides of the House. I hope that the hon. Gentleman will forgive me for being unable to share his assessment that the Budget was, although tough, also fair, but I shall come to that later.

This is the Conservative party’s Budget—no one seriously thinks that the Liberal Democrats were the driving force behind it, despite the protestations of the Business Secretary and others—and to listen to the Conservatives, one would think that there had not been a global recession. One would think that there was not a need to protect families or to keep demand in the economy, and that the borrowing and other measures that the previous Government took to stimulate the economy were not needed. We took decisive action to invest in the economy and to create the demand that the private sector needed to minimise business failures and job losses.

As the shadow Chancellor made clear, the measures that we took were continuing to have a positive impact. There was a return to growth—fragile, yes, but it was a return to growth. Unemployment was stabilising and starting to fall, while tax receipts were up and borrowing was lower than expected. The Office for Budget Responsibility has made it clear that the measures taken by the last Government are the reason why the economy is growing now. Indeed, those measures were part of Government spending plans which, as the shadow Chancellor pointed out, the party opposite supported until the end of 2008.

The run-up to the Budget was marked by a remarkable level of dangerous scaremongering by the party opposite. The Chancellor has been marching from one television studio to another and, like Don Quixote, he has continued to tilt away at Greek windmills while the Chief Secretary and now the Business Secretary have been competing to be Sancho Panza, bobbing loyally along behind.

We are not remotely in the same position as Greece, yet time after time, Front Benchers and Back Benchers opposite have sought to raise the spectre of Greece to justify the approach behind the Budget. The truth is that this Budget puts at risk a fragile economic recovery. On the OBR’s forecasts, growth will be down this year as a result of measures in the Budget, and down next year too. Unemployment will be higher as a result of the measures in the Budget, which will cut jobs in the public sector and the private sector too because, as my hon. Friend the Member for Penistone and Stocksbridge (Angela Smith) noted, many companies supply goods and services to the Government. The OBR acknowledges that employment will drop by 100,000 as a result of this Budget, and it is true to say that many outside voices expect the figure to be higher still. With tens of thousands more on the dole queue and employment levels down, it is fair to say that this is a return to traditional Tory politics.

The Budget also fails the fairness test. It savages support for the poorest and most vulnerable. Child benefit will be cut, and tax credits reduced for families on low and modest incomes. Support for families with young children is being axed, and the VAT rise will hit the poorest hardest. The Conservative party promised not to balance the Budget on the backs of the poorest, yet they have done exactly that. The Financial Secretary may not yet be aware of the damning verdict of the Institute for Fiscal Studies on the fairness of this Budget, but it has said that it will

“hit the poorest hardest and…keep on hitting them more and more every year”.

The same point was made with considerable force by my hon. Friends the Members for Pontypridd (Owen Smith), for Ogmore (Huw Irranca-Davies), for Kingston upon Hull North (Diana R. Johnson) and for Derby North (Chris Williamson), and by the hon. Member for Brighton, Pavilion (Caroline Lucas).

[Guy Opperman]

Will the hon. Gentleman give way?

[Mr Thomas]

Given the time, no. I apologise to the hon. Gentleman.

The Budget also breaks clear promises made to the British people by the coalition partners at the election. The now Prime Minister told Jeremy Paxman in an interview in late April that his party had “absolutely no plans” to raise VAT. He recognised then that VAT was regressive and that it hit the poorest hardest. He said:

“It does, I absolutely promise you.”

The Deputy Prime Minister agreed that VAT was “very regressive”. He went further, making fear of Tory VAT plans a memorable part of his election campaigning. Yet now, with the electorate having cast their votes, we have an immediate volte-face from the parties opposite.

As my right hon. Friend the shadow Chancellor made clear, in a classic effort to pull the wool over the public’s eyes, those on the Government Front Bench use Labour measures to try to pretend that this Budget is fair. The charts deployed in the Red Book to justify that fantasy claim fail to acknowledge the scale of benefit reductions that will not have worked their way through fully in the period covered. They certainly do not include the impact of looming cuts in public services that are likely to hit the poorest households the most, or of changes to housing benefit. I have a specific question for the Financial Secretary: will he publish charts showing the impact of the Budget not just in 2012-13 but in future in years, by income distribution?

It is not just Opposition Members who recognise the unfairness of the Budget. Robert Chote, the head of the IFS, has said:

“The Budget looks less progressive, indeed somewhat regressive, when you take out the effect of measures that were inherited from the previous government—when you look further into the future than 2012-13 and when you include some other measures which the Treasury has chosen not to model.”

Some Liberal Democrats—perhaps those such as the Orange Book Liberals—will be entirely comfortable with the unfairness of this Budget. Others on the Liberal Democrat Benches need to find the courage of the convictions that they had before 6 May to challenge their Front Benchers.

This is a Budget that puts economic growth at risk. It fails the fairness test. The poorest will suffer the most. The IFS analysis blows away the pretence that we are all in this together. It is a Budget of broken promises. On VAT both coalition parties broke election promises. It is a Budget that is overwhelmingly Thatcherite in tone and we will not support it.