LIBOR (FSA Investigation)

Helen Goodman Excerpts

Thursday 28th June 2012 Commons Chamber

[Mr Osborne]

I am grateful to my hon. Friend for sharing his CV with the House. [Interruption.] At least he did not work for the shadow Chancellor. The answer to his question is that we are publishing the consultation next week.

[Helen Goodman (Bishop Auckland) (Lab)]

The Chancellor has very sensibly said that he will look at how fines are used, but his answer to my hon. Friend the Member for Ilford South (Mike Gapes) about calculating how much people have lost is somewhat disappointing. Can he not look into whether the fine money can be used to compensate people? Surely he is not expecting every individual to make their own case against a large institution such as Barclays bank?

[Mr Osborne]

I am happy to take away, because it has been raised by several Members, the issue of the total impact on the economy and on individuals. I would point out to the hon. Lady that that might be extremely difficult to work out, because the LIBOR rate was manipulated up as well as down. Sometimes the rate was too low for the true market price, and sometimes it was too high. It was manipulated by its derivative trading floor to suit the particular position that the bank had taken on that day, and that is why it is a difficult calculation to make. The FSA has made it clear, however, that that contributed to a risk to the country’s financial stability, and the cost of that is enormous.

Interest Rate Swap Products

Helen Goodman Excerpts

Thursday 21st June 2012 Commons Chamber

[Helen Goodman (Bishop Auckland) (Lab)]

I do not know who my hon. Friend met, but I wonder whether the stories he heard were like that of my constituent Mr Les Wood. He borrowed £9,000 from HSBC and has since repaid £133,000 to HSBC—a totally disproportionate sum.

[Chris Leslie]

That story has been repeated time and again. For those of us who might have come across the problems in anecdotes related to us in our surgeries, today’s debate has revealed that they were not one-off cases; there was a pattern.

Let us remind ourselves of what the banks have been doing. They saw an opportunity in new firms ambitious to succeed and to grow, and in firms in need of loans to invest in new plant and processes. The banks sought to attach complex hedging products to the loans, allegedly giving the impression that that was a requirement of the loan—we have heard how many times businesses were told it was part of the package deal—and that credit could not be obtained otherwise. Small firms were told that the products were just insurance policies: the upside protections were emphasised, but the downside risks were hardly mentioned. Then, when the course of the economy took a turn—we will not go into that today—leading to interest rates plummeting over the past couple of years, the firms were forced to pick up the punitive costs of the downside risks of the hedges. The banks have profited significantly at the expense of small firms.

Today we have heard revelation after revelation of breathtaking abuse of the small firms that have been caught out—firms up and down the country, from chip shops to child care centres, builders to bed and breakfasts. I pay tribute to The Daily Telegraph business section, which has pursued this issue tenaciously. It highlighted the case of Adcock and Sons, a Norfolk electrical retailer that took out an interest rate swap on a £970,000 loan. The product, known as an asymmetric leverage collar, cost the business £2 for every £1 of benefit it offered. As The Daily Telegraph reported, what really rubbed salt into the wound was that the arrangement resulted in Barclays Capital profiting by £100,000.

This is not just a story of product asymmetry; it has many other facets. For example, as we have heard today, agreements are too often not made in parallel with the line of credit, but extend way beyond the end of the loan. Guardian Care Homes has been mentioned: it had two swaps whose term exceeded the loan by 10 and 15 years respectively—totally ridiculous. We have also heard about the punitive costs of servicing the swaps, and the back-breaking breakage fees—sometimes 50% of the total loan cost, averaging, we are told, about £1 million just to reverse out of the agreements.

Questions have been asked today about the competence of those selling these specialist products and the commissions that skewed their judgment. Banks were, at best, taking advantage of what we in the trade know as “information asymmetry”—in other words, unsuspecting customers and cunning banks—but at worst their behaviour was extortionate. Court action to try to obtain a remedy has not been easy: we have heard about gagging clauses in out-of-court settlements, where they have been made. Those problems are compounded by the fact that the clock is ticking on people’s right to complain and pursue redress.

In recent months, Opposition Members have done their best to raise these issues. In the Financial Services Public Bill Committee, we tabled amendments that would have given small firms better access via the FSA to the super-complaints power and stronger collective proceedings powers. The Financial Secretary, who is not here today—I think he is at a conference in Turkey—rejected the amendments, saying that he did not want to comment directly on interest rate hedges issues as they were a “matter for the FSA”. That response was not substantive, and I hope that the Economic Secretary can rise to the occasion today and respond seriously to the heartfelt concerns that have been raised in the debate.

The Government rejected other amendments we tabled to the Financial Services Bill on the need for a fiduciary duty of care for customers, both individuals and SMEs, when they are taking out these products. The Chancellor has rejected Vickers’ advice—it appears that the banking reform Bill will have nothing to improve customer protection. Vickers, of course, highlighted that in the ring-fenced retail arrangements we should be very careful about interest rate swaps, hedging and derivative products moving into what might be called the normal vanilla nature of banking. That is something all hon. Members might want to spend a little time considering when scrutinising the proposals set out in the White Paper that the Treasury has just produced.

I met FSA representatives yesterday and we talked about its supervisory investigation. I am told that it has been looking at a random sample of 50 or so cases in each of the banks. They have been listening to the tapes of some of the sales calls that took place and looking back at them. I am told that its target is to announce some action by the end of this month, which I sincerely hope it will do. Having listened to the debate and heard the strength of feeling on these questions, it occurs to me that any small businesses that have not yet complained or raised these issues with the FSA must do so as soon as possible. The FSA’s hotline number is 0845 606 1234. I hope that those firms will ring and let the FSA know, because it is our best hope at this juncture.

I am looking for four particular assurances from the Minister today at the very least. First, she and the regulators need to extract from the banks an assurance that no customer who complains will be treated adversely because of the complaint. There is potential for a sense of victimisation, and we need absolutely to get out of that space. Secondly, we should have a moratorium on foreclosures while the complaints of the customer concerned are being considered and their case is under review, because firms are going under and going into liquidation and bankruptcy every single day. We have to ensure that some backstop is put on the process.

Thirdly, we need agreement by the banks that customers who were sold hedges for longer than the term of the loan should have the right to cancel and move out of the breakage fee arrangement. Those are the minimum criteria we need. Also, banks should extend the statute of limitations, the sense that complaints have to be investigated within a particular time scale. The banks should show more grace in these circumstances.

Small businesses are the lifeblood of the British economy. They account for 48% of private sector turnover, employ 14 million people, have a turnover of £1.5 trillion, and of course they make up 99% of UK enterprises. They deserve to be treated better by our banks and to be supported more effectively by the Government. They certainly deserve the full backing of both sides of the House for an urgent solution to this serious problem.

Unemployment (North-east)

Helen Goodman Excerpts

Wednesday 20th June 2012 Westminster Hall

[Mr Wright]

I am sure that we will see a “Focus” leaflet in due course saying that everything in the garden is rosy and that the Liberal Democrats are fighting hard. The reality—my hon. Friend is right—is that where they can make a difference by going through the right Division Lobby, they are failing to stand up for the north-east and for the people who need jobs and investment in our area.

The Government’s determination to depress demand before the economy has had a chance to recover from the global financial crisis is wrong. The effects of such a policy are a double-dip recession made in Downing street and an increase in unemployment. The Federation of Small Businesses in the north-east told me that the ability of small business to offer jobs is suffering directly because of falling sales, as the public sector reduces investment, confidence collapses and firms sit on cash. It is clear, as businesses recognise, that the Government’s policies are making matters worse. Does the Whip not understand that? Can he not see that if the Government pursued a more active role on jobs and growth, there would be more people in work, paying taxes, more companies paying corporation tax, a reduced benefits bill and the deficit being paid down faster. By sticking to an economic plan that is not working—that is clear to all and sundry—the Government must borrow £150 billion more than originally anticipated.

[Helen Goodman (Bishop Auckland) (Lab)]

We have commented on the position of Liberal Democrat Members from the north-east, but has my hon. Friend noticed that Tory Members from the north-east have not even come to the debate?

[Mr Wright]

I am grateful to my hon. Friend for highlighting that point. I had noticed that the hon. Members for Stockton South (James Wharton) and for Hexham (Guy Opperman) have not bothered to turn up for the debate, which shows the importance that they attach to economic enterprise, growth, jobs and unemployment.

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[Helen Goodman (Bishop Auckland) (Lab)]

It is a pleasure to see you in the Chair, Mrs Brooke.

I congratulate my hon. Friend the Member for Hartlepool (Mr Wright) on securing this extremely important debate. I am beginning to think that this Government have adopted a Marxist attitude to the unemployed. They are the reserve army to be marched on to the pitch at a moment that is convenient and off at a moment that is inconvenient. They seem to subscribe to the lump-of-labour theory: this is the lumpen proletariat, there to be used and abused. What that demonstrates is a moral failure and an economic failure.

It is a moral failure because no account is taken of the individuals who are unemployed—the level of unhappiness, the level of stress, the level of anxiety. A young man came to my surgery recently. He used to hold down perfectly good jobs. He has now been unemployed for 12 months. He is being driven crazy—literally crazy. He is suffering from mental illness. He shouts at everybody—he shouts at my staff; he shouts at the jobcentre staff—and who can blame him? He is 30, living at home on £56 a week and the vacancy to worker ratio is 1:9. He does not have a realistic chance of getting a job.

It is an economic failure because we are wasting people and wasting people’s skills. One of the worst things is the constant denigration of unemployed people—not just cutting benefits, but treating unemployed people as though they are workshy. Nothing could be further from the truth. In my constituency, 2,920 people are on jobseeker’s allowance, but the statistics show that there are 6,400 people who want a job. That tells us that there is a huge need and a mismatch.

We have to ask ourselves: who are the people who are unemployed? They are not a great lump. Not only are they individuals, but they fall into particular categories. One thousand of them are young people; they do not have experience, so it is very difficult for them to get jobs that require experience. Five hundred of them are over 50; where are they supposed to gain new skills when we see the increases in tuition fees and the cuts to adult education? There has also been a massive increase in the number of women who are unemployed—up by 25% in the past year.

That has come about because the Government are putting cuts before everything else. When they do that, it leads not just to spin-off problems for the private sector, but to a complete skills mismatch. Someone who has been working in the public sector in a service job cannot simply be shoved into a manufacturing job and the assumption made that they can do it. Of course they are not qualified to do it.

We need a strategic approach from the Government in both skills and finance, as my hon. Friend the Member for North Durham (Mr Jones) said. When we had a regional development agency, we had not only a strategy, but a source of finance. I think we need some new sources of finance. When we have a Labour Government again, it would be fantastic if we had an RDA that did not just provide grant financing, which is what we had under the previous Government; there should also be some loan financing. Then, small firms like the one described by my hon. Friend could be confident of getting reasonable treatment.

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[Stephen Crabb]

I dispute that. The Government are trying to move away from the one-size-fits-all policies of the previous Administration. We are looking at locally and regionally tailored solutions, where appropriate.

Several hon. Members mentioned today’s labour market figures. I am not as gloomy as the shadow Minister about them. There are reasons for a measure of optimism. Nationally, employment is up by more than 400,000 since 2010. Private sector employment has gone up by 843,000, since 2010, and it has gone up again in the past month. In the past 12 months, in the north-east region, employment overall has gone up by 10,000 and private sector employment has increased by 17,000, which more than offsets the drop in public sector employment. That counters the point that the Opposition made about the drop in public sector employment being a driver of overall unemployment in the north-east region.

Those are encouraging signs, but we recognise that unemployment remains too high. It is true that unemployment in the north-east remains higher than in other parts of the country. Several Members have referred to the fact that it has the highest unemployment figures of all the UK regions.

Long-term unemployment affects only a minority of people, but it is a particular concern because it brings with it the risk of detachment from the labour market and people losing the hope of finding work again or finding that the skills that they had are diminished or outdated.

In the north-east, more than 24,000 people have been claiming unemployment benefits for more than 12 months. That figure is much lower than it was 25 years ago—the hon. Member for Hartlepool referred to the 1980s—but it is still too high, and we are not complacent.

One of the groups that has been hardest hit during the last two years of recession is young people. We have seen encouraging signs recently that youth unemployment might be starting to come down. Excluding unemployed students, it fell by 23,000, to just over 700,000 in the most recent quarter. That still leaves almost 50,000 16 to 24-year-olds unemployed in the north-east, so there is clearly much more to be done.

In April, we announced an additional £1 billion package of support for young people through the youth contract. Very few Opposition Members mentioned the action that is taking place and the fact that, in the past year, some 7,000 young people have benefited from the work experience scheme in the north-east. Nor did they mention the fact that there are 30,000 additional apprenticeships in the north-east, more than 1,000 of which are in the constituency of Hartlepool. It is not surprising that they do not want to talk about it. As Labour Members elsewhere have mentioned, one of the big failings of the previous Labour Administration was that they did not recognise fully the importance of apprenticeships and the link between high-value apprenticeships and upskilling in the economy.

[Helen Goodman]

Surely, the hon. Gentleman is aware that the number of apprenticeships increased tenfold under the Labour Government.

[Stephen Crabb]

In the last 12 months, 67% more apprenticeships were created than in the last year of the previous Labour Government.

Changes to the Budget

Helen Goodman Excerpts

Monday 11th June 2012 Commons Chamber

[Helen Goodman (Bishop Auckland) (Lab)]

The Minister did not mention the reverse on VAT for listed places of worship. My constituency has the oldest Baptist church and the oldest Methodist church, so do the changes announced by the Government on listed places of worship apply only to the Church of England or to all denominations?

[Mr Gauke]

They apply to all denominations, but to provide further clarity we made it clear that we would change the level of grant available under the listed places of worship scheme to reflect the need; after consultation with the Churches, we have increased that number, but there is no change to the tax law relating to VAT for listed places of worship.

Child Benefit

Helen Goodman Excerpts

Tuesday 22nd May 2012 Westminster Hall

[Helen Goodman (Bishop Auckland) (Lab)]

It is a pleasure to see you in the Chair, Mr Streeter. I congratulate my hon. Friend the Member for City of Durham (Roberta Blackman-Woods) on securing this extremely important debate. The more I listen to speeches from both sides of the Chamber, the more problems I see. I want to focus on the independent taxation of women.

Clause 8 of the Finance Bill introduces a tax charge on a child benefit recipient if they or their partner’s income is above £50,000. That is wholly objectionable from the perspective of equality for women. One person is being given a tax bill because another person has a high income. Nothing could be more unjust than that. The Government have said that they want to be family-friendly, but there is nothing family-friendly about this provision. Furthermore, the information-sharing requirements to make the system work will cut across the privacy that is intrinsic to independent taxation for men and women.

Treasury Ministers seem to have taken no account of the fact that people’s family circumstances may change during a year. Incomes may go up or down and, more seriously from the point of view of the independent taxation of men and women, partnerships may come together or, unfortunately, collapse. That will provide something else to argue about, and will be the cause of yet more disputes between partnerships particularly, as my hon. Friends have said, when the tax bill arrives months after the income has been secured by the other person in the partnership.

[Kate Green]

Does my hon. Friend agree that it is surprising that the “most family-friendly Government ever” might want to disincentivise couples from forming households and relationships? If someone is considering moving in with a new partner and realises that his income is a bit higher so the child benefit will be taxed away, he might be discouraged from forming that new relationship.

[Helen Goodman]

My hon. Friend is absolutely right. The permutations and problems are too numerous to mention.

We raised our questions with the Minister during the debate in Committee on clause 8 on 19 April. I asked him specifically whether independent taxation for men and women could be maintained. He responded:

“Independent taxation will still apply, each partner will still have their own personal allowance and tax rate bands, and the amount of child benefit, even if it is received by the taxpayer’s partner, will not increase the amount of income liable to tax.”

That is absurd, because it is not what independent taxation means. He continued:

“Where there are two high earners in a household and they do not want to tell each other their incomes, there will be a mechanism whereby they can find out whether they have a higher or lower income but without the full details.”––[Official Report, Finance Public Bill Committee, 19 April 2012; c. 617.]

He then said, “my time is up”; he could not explain in any more detail, and we were dismissed. Since then, tax experts at the Chartered Institute of Taxation and the Institute of Chartered Accountants have examined the matter and identified exactly the same problem. The Minister should take account of what hon. Members say. Now that tax experts are saying the same thing, I hope that he has asked his officials to re-examine the matter and can tell us today that he has changed his mind.

When I was first elected in 2005, I had the great pleasure of serving on the Finance Bill Committee with the Minister. He was always telling us what Mrs Gauke thought about things; she is an accountant.

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

She is a lawyer.

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[Helen Goodman]

I want to hear from him today what Mrs Gauke thinks about the proposal, because I do not think that she can be happy with it.

This matter is serious. What the Minister said on 19 April shows that either he did not understand it or that he was misleading the House. In either case, I would like him to withdraw what he said then and apologise for it.

Finance (No. 4) Bill

Helen Goodman Excerpts

Thursday 19th April 2012 Commons Chamber

[Cathy Jamieson]

That is an important point and I will address it straight away. We have to decide whether or not we believe that child benefit is a benefit that should be paid for the good of children. What we are seeing in this measure is an unfair system, which is not providing for children; it is introducing a new form of taxation, as has rightly been pointed out, and people will be facing huge problems.

I was going to deal with my next point later, but I shall say now that individuals with an income in excess of £50,000 are going to be required to inform Her Majesty’s Revenue and Customs as to whether they or their partner are in receipt of child benefit. It is not clear what would happen where someone either does not know or claims not to know whether their partner is receiving child benefit. In the absence of a legal obligation on partners to share information on benefit receipt, it is unclear what the tax authorities are going to do. Perhaps the Minister will enlighten us.

[Helen Goodman (Bishop Auckland) (Lab)]

My hon. Friend is making an extremely important and interesting point. Is she saying that this measure threatens the independent taxation of women?

[Cathy Jamieson]

My hon. Friend makes a very good point. As I have outlined, the problems could be similar if both partners had an income in excess of £50,000. The charge would then apply to the partner with the higher income, and to avoid it being applied twice the partners would presumably have to share information with each other on their incomes and co-ordinate responses in their respective self-assessment forms or HMRC would have to implement some mechanism to link together individuals’ tax records to decide which partner was liable for the charge.

As was mentioned earlier, there would potentially be further difficulties if somebody who did not expect to come within the income bracket for the child benefit charge discovered at the end of the tax year that their income exceeded the limit. It can be quite common for self-employed people to find on preparing their accounts that their income was greater than expected. HMRC would then apply the charge retrospectively, but in order to do so it would need full details of the person’s cohabitation history for the year end. I gently tell the Minister that the potential for disputes is fairly obvious. The living together as husband and wife test is an established feature of the social security system, but we all know from the people who come to our constituency surgeries the problems that emerge. Its extension to the tax system raises a huge range of other issues. Whether a partnership exists will have to be determined on an ongoing basis throughout the year, rather than just at a single point of time, and individuals might not be aware of the need to report changes in their personal circumstances to the tax authorities.

We have already heard that there is a danger that the plan will encourage people to deny the status of their relationship to avoid the child benefit change, which will effectively introduce a couple penalty. That could be a disincentive for a lone parent considering moving in with a higher income person and could create an incentive for couples to split up when one partner has a high income. For people with several children, partnering decisions could have significant financial implications.

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[Helen Goodman]

There are four problems with the proposal that the Government are putting to the Committee this evening. First, it is unfair. The hon. Member for Christchurch (Mr Chope) made it clear that it is unfair as between family patterns of income, unfair as between men and women, and unfair as between those who have children and those who do not.

Secondly, the proposal is illogical. Because it is unfair as between those who have children and those who do not, it would be more sensible, in order to have a fairer approach, to address the fact that personal allowances are paid to people on very high incomes. If the Minister is concerned about people on very high incomes, he would do better to shave the personal allowances of people on such incomes, but far from doing that, what he did was cut income tax for those people. That is illogical.

Thirdly, the proposal adds to complexity. I hope the Minister can explain to the House how he will maintain the independence of women’s taxation, given the information-sharing requirements of the new system.

[Seema Malhotra (Feltham and Heston) (Lab/Co-op)]

The point about women’s tax and independence is extremely important. Does my hon. Friend agree, following also the point made by the hon. Member for Christchurch (Mr Chope), that the likely behavioural impact of the changes, which could include women being encouraged or coming under pressure not to work, is that they would contribute to higher female unemployment, which we know is at its highest since 1987?

[Helen Goodman]

I am grateful to my hon. Friend. I was coming to that point. I want the Minister to address specifically the point about independent taxation of women. He was shaking his head earlier. I hope he will explain from the Dispatch Box in two minutes’ time how he can maintain it. My hon. Friend is right. As I said, there is an issue, thirdly, of complexity being added to the system.

Finally, the proposal is completely uneconomic. It will be bad for work incentives. People will think, “No, I’m not going to do extra hours.” There will be arguments in families about who does what. It will also mean that some people will refuse promotions. This is no way to make the British economy more efficient.

[Mr Gauke]

We are somewhat short of time. There are two reasons why we may not be able to do the measure justice. First, the Opposition tabled an urgent question, which took an hour out of our debate—[Interruption.] They may groan, but they did. We had agreed that there would be no statements today to allow us to have a proper amount of time. Secondly, the Opposition included in the debate both the clause and the schedule. They need only have put the clause in for us to have the debate. As a consequence, the schedule will not be scrutinised in the Public Bill Committee.

Clause 8 introduces a tax charge on a child benefit recipient or their partner if their income is above £50,000. The changes that we are introducing in the Bill ensure a balance between reducing the cost to the Exchequer of child benefit and ensuring that those on low incomes are not affected. Opposition Members like to forget that the reason why we are making very difficult decisions is the state of the public finances that we inherited. We must ensure that the measures that we take are both fair and reasonable. It is only right and proper that we ask those with the broadest shoulders to bear the greatest burden. That is why the measure and others announced by my right hon. Friend the Chancellor at the Budget—

Finance (No. 4) Bill

Helen Goodman Excerpts

Wednesday 18th April 2012 Commons Chamber

[Karl Turner]

I shall speak to new clause 6. I am delighted to follow the hon. Member for Beverley and Holderness (Mr Stuart), although I disagree with some of the points that he makes.

This was certainly not a Budget for jobs and growth. For hon. Members on the Government Benches to make that point time and again, as they do, shows me and my constituents how out of touch they are. On the subject of VAT on static caravans, I have three manufacturers based in Hull East. One of them, Willerby’s, the biggest manufacturer, has 700 staff. I said in an earlier intervention that the firm had gone from a full working week to a three-and-a-half day week. The firm tells me that it is probably ridiculous to suggest that there is a possibility of returning to a full working week if the proposed VAT is implemented on 1 October.

I want to address the question of whether there really is an anomaly. I do not think there is. I do not think people buy static caravans for the same reasons that they buy trailer caravans. A static caravan is often a second home, but if I accept that there is an anomaly, surely there should be time for a proper consultation and an opportunity for people to think about the impact on their businesses and jobs. It is the wrong time, while the economy is flatlining, to try to deal with an anomaly, if that is what it is. We need jobs and growth in this country. We do not need a savage attack on manufacturing industry.

[Helen Goodman (Bishop Auckland) (Lab)]

Does my hon. Friend agree that a Budget which increases taxes on static caravans and pasties, but cuts taxes on ski lifts tells us far more about the consumption patterns of those on the Government Front Bench than anything else? The Chancellor said he has never eaten a pasty. Has my hon. Friend found out whether the Chancellor has ever stayed in a caravan?

Budget (North-East)

Helen Goodman Excerpts

Tuesday 17th April 2012 Westminster Hall

[James Wharton]

The hon. Gentleman’s generosity in wanting to ensure that everybody who played a part is adequately recognised is testament to his character. The unions played a significant role, as did the Government of the day, when the plant’s closure was announced, as have the Government of today, in delivering the success. It is something about which we can all be pleased in our region and I welcome the hon. Gentleman’s comments.

We have also received the good news that Hitachi will come to Newton Aycliffe to build trains. Nissan has announced that more jobs are being created and more work being done. In my constituency, Nifco has just opened a new factory in Eaglescliffe—a smaller but none the less significant manufacturing investment—and is already considering options for expansion because it is doing well.

More than 47,000 private sector jobs have been announced in the regional media since the last election. Articles in the press report what is said and announced, the levels of investment and the positive news, yet all too often all we hear are the negatives. I am sure that we all agree on a cross-party basis that it is important to take every opportunity to talk up our region and make it clear to anyone who is considering investing there that we are open for business and looking to do business, and that we welcome investment and we want to see the jobs and growth it would create.

[Helen Goodman (Bishop Auckland) (Lab)]

We all agree with the hon. Gentleman that there should be willingness to invest in our region, but does he not understand that it is deeply problematic that only 0.1% of the extra capital investment announced by the Chancellor in his autumn statement came to our region?

[James Wharton]

I was, of course, referring to private sector investment. The hon. Lady makes an interesting point, but we have to look at the figures realistically. A lot of the spending that has been announced is for specific large projects, some of which are in London, such as Crossrail, and some of which will potentially benefit the north-east, such as High Speed 2. Although it is not yet coming to our region, the benefits are real.

The RDA has been mentioned. I have my differences with Opposition Members on that issue. I always felt that the RDA was too focused on Newcastle and as the hon. Member for Gateshead said, we must remember and acknowledge that Newcastle is not the entire region. I welcome the new local enterprise partnerships because they are more localised and more focused on the areas where the growth that we want to see needs to be delivered. From the growth that we are seeing and the investment that is being announced, the signs are that LEPs are already doing a good job. The LEP in Teesside is certainly doing an excellent job. It hit the ground running and is making a difference to securing the growth that we need in that part of our region.

There were, of course, a number of announcements in the Budget that will both directly and indirectly benefit our region. One of the most significant is the increase in the personal allowance. In total, across all the Budgets we have had so far from the Government, 82,000 people have been lifted out of income tax altogether in the north-east region. That significant and welcome benefit will make a real difference to the lives of tens of thousands of families across the north-east who are on the lowest incomes and who most need that support.

The increase in the personal allowance will also, of course, deliver improvements for our regional economy because that money is not being taken in tax and spirited away to London to be redistributed in accordance with the diktat of the Government—whoever they are. That money is staying in the pockets of families in the north-east, so that they can spend it in our local economy, provide a welcome economic boost and create jobs and growth, which is what we all want to see.

In the north-east, the income tax bills of nearly 1 million people will decrease, although some of them will not be entirely lifted out of income tax just yet. The child benefit tapering changes are a welcome mitigation of the impact of the need to control the child benefit bill because of the financial situation in which the Government find themselves. That will benefit 14,000 families across the north-east and is another welcome measure in the Budget that will leave more money in our regional economies and in the pockets of the people who live and work in the north-east and elsewhere. That policy will make a difference to our regional economy and the lives of those who live in the regions.

Negatives in the Budget do exist. Stamp duty land tax is increasing. However, we are lucky in the north-east because only 1% of the properties affected—

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[Ian Swales]

I am sure that the hon. Gentleman has his statistics correct.

I will go on to talk about high-rate tax. The Government have cut from £250,000 to £50,000 the amount of pension contribution that can be claimed against tax. They have put a new limit on reliefs, raised capital gains tax from 18% to 28%, put a new tax on expensive houses and clamped down on tax avoidance. Labour has opposed those measures and charged the rich less in tax.

Let us talk about business. As soon as the Budget was delivered, Glaxo announced £500 million of investment, including a new factory in Cumbria and new manufacturing facilities at Barnard Castle, Teesdale. That was a direct result of the Budget provisions on pharmaceutical patents. As AstraZeneca has also shown, that will lead to huge investment in—

[Helen Goodman]

The key factor was the patent box changes, which were initiated by the Labour Government in 2010.

[Ian Swales]

I am sure the Minister will respond to that.

Of course our region needs specific help. I welcome the extra £1 billion for the regional growth fund, which has already helped 93 companies in the north-east and is targeted specifically at regions such as ours. Last week’s announcement of help for up to 1,000 jobs in Wallsend in the offshore wind industry was especially welcome.

These occasions usually include a lament from the Opposition for the RDA. However, I shed few tears for an organisation that, in the two years before the general election, spent £148 million on 96 projects in which the directors had to declare an interest, spent nearly £400,000 on gagging orders for 12 staff, and, according to Experian, left Hartlepool, Middlesbrough, and Redcar and Cleveland as the three areas of the country, out of 324, least able to cope with austerity.

Amendment of the Law

Helen Goodman Excerpts

Monday 26th March 2012 Commons Chamber

[Danny Alexander]

I certainly share the hon. Lady’s joy that the new A11 is being built by this Government. It has been campaigned for by Members from Norfolk for many decades and never agreed to before. I just wish that I could say the same for my constituents regarding the long-awaited investment in the A9 that the Scottish Government still are not delivering.

On omissions, we heard a lot of carping from the Labour party about individual measures but there were almost no references to the single biggest measure in the Budget. Opposition Members should follow the money in this Budget. More than three quarters of the money raised in this Budget is being spent on one policy measure alone—the biggest tax cut for people on low and middle incomes in this country for a generation. We have set the goal of raising the personal tax-free allowance to £10,000—from the Liberal Democrat election manifesto to the coalition agreement to the pockets of the British people in this Budget. Next month, the income tax personal allowance will rise to £8,105. That gives real help to the working people of this country this year. Taken with the previous increase that has come through this year already, it will lift more than 1 million low-income people out of tax altogether, but we are going further and faster.

[Helen Goodman (Bishop Auckland) (Lab)]

It is clear that the Government are going further on personal income tax cuts, but it is equally clear that they have not got a strategy for growth. How many jobs will be produced by the cut in the 50p rate?

[Danny Alexander]

First, I am very grateful to the hon. Lady for at least agreeing that we are going considerably further on the personal income tax allowance. That was sadly lacking from most of the contributions from the Opposition. They will also know that the OBR’s forecast that was published alongside the Budget revised downwards the forecast for the claimant count this year, next year and in every year over this Parliament.

As I was about to say, in this Budget we have announced the largest ever increase in the amount that people can earn tax-free—an increase next April of £1,100 to £9,205. That is a tax cut of £3.5 billion for working families and is the biggest ever increase in the personal allowance. It is the biggest income tax cut for people on low and middle incomes for a generation—a tax cut for more than 23 million people. It means £220 for every basic rate taxpayer, or £170 in real terms. The tax bill of someone who works full time on the minimum wage will already have been halved by this Government.

Budget Leak Inquiry

Helen Goodman Excerpts

Thursday 22nd March 2012 Commons Chamber

[Mr Gauke]

I suspect that my hon. Friend is right and apologise to the House for getting that wrong.

[Helen Goodman (Bishop Auckland) (Lab)]

One of the reasons why Budget leaks are particularly serious is that they facilitate tax avoidance. When the Budget speech was leaked in 1984, Lord Howe instituted a police inquiry and everybody working on the Budget was interviewed by the police. Why does the Chancellor of the Exchequer not do the same?

[Mr Gauke]

I know that the hon. Lady speaks with great knowledge on this issue. I agree that it is very important that sensitive information is protected and can assure her that, on the one potentially sensitive area of stamp duty, the Treasury was not involved. If something is announced in the morning, even if it comes into effect at midnight, people still have the opportunity to exchange contracts in the interim period, as indeed was the case when previous Governments raised stamp duty.