Autumn Statement 2023

Lord Harrington of Watford Excerpts

Wednesday 29th November 2023 Lords Chamber

[Lord Harrington of Watford (Con)]

My Lords, I join the long line of people welcoming my noble friend to the Treasury and the Front Bench today. I have a lot of respect for her personally and she has done the jobs she has held within government extremely well. Before she was in this House, she had a very noble cause as well, which we worked on together in 2016. I hope that her current position is more successful for her than that was for us.

I am here today to speak about a document. For those who got all their papers from the Printed Paper Office, or from the Table Office in the House of Commons, there was a separate one buried deep within them called the Harrington Review of Foreign Direct Investment. I feel that I should restrict my comments to that, and I will happily test any Member of this House to see whether they have read it—I am looking at the Minister. It is only 125 pages. I do not think that it will get in the Amazon bestseller list of books, but I feel it is of some significant interest, not least as the Chancellor in his Autumn Statement fully accepted its principal recommendations. What the report has brought out will be a basis for some reorganisation of government to make it more friendly towards foreign direct investment.

The background to the review is that the Chancellor asked to see me and said that he was disappointed that we were losing some significant foreign direct investment deals. That does not mean that it is a disaster—we are good at foreign direct investment—but he wanted me to look deeply into some of the deals that we had lost, find out exactly the reasons why and come up with some recommendations to deal with them. Of course, it is very easy for some people to say that it is all because of Brexit—I would have liked to have said that—and for other people to say that it is all because of corporation tax. However, the evidence we got from interviewing more than 200 companies—sovereign wealth funds, pension funds and multinational companies, mainly—is far more complex.

This country basically has what I call a 15-love advantage, as in a tennis game: the clichés about companies liking the rule of law, the language and the fact that they can get executives who want to live and work here are absolutely true. That is where the 15-love comes in. However, there is then a story of a number of factors that seem to get in the way of investment. The grant system, the investment system that the Government have, which is comparatively generous—more generous than I first thought—is very difficult to get hold of. It takes a long time, and there is a general feeling that prospective investors are moved from one department to another. There is then a series of other obstacles, such as planning, visas, skills, the grid, et cetera. These are all well documented.

With the time available—noble Lords are very fortunate, as my last speech on this subject was 55 minutes long and I have only three more minutes to go—I note that we have a number of suggested solutions to this: restructuring the government, having a senior-level committee for investment chaired by the Chancellor and having an Investment Minister over three departments. Their responsibility would basically be to supervise all investment decision processes from the beginning of the inquiry through to their completion. Each relevant department would have a Minister and a senior member of the Civil Service, part of whose responsibility would be to push forward investment. No longer would the Home Office say that it deals with visas and the investment angle is not really its problem; nor would the DfE say that it does skills but does not take investment decisions into consideration.

In the end, I found in the evidence I received that the view of some Members of these Benches about the future of how government should organise itself—basically to do as little as possible, cut taxes and leave it to the market—is completely fallacious. In a business—as far as attracting investment, the Government are one—you must do what your competitors do. People have a small-state fantasy about countries such as Singapore and others—that we can be Singapore-on-Thames. But these countries get totally involved in investment decisions, and many of them throw money at companies to entice them to come here.

We are not market-makers but market-takers, and we must do what our competitors do. We must give companies the incentives to come here; we must provide a quick and efficient package to include the money, energy and all the things they look at for an investment decision; and, above all, we need consistency of policy. This has been shown with net zero: policy on internal combustion engines has changed three times since we published the industrial strategy in 2016. We need consistency of policy and very efficient government machinery to deliver it. I hope all noble Lords will read the report, and I look forward to discussing it in future.

Loan Charge

Lord Harrington of Watford Excerpts

Thursday 11th April 2019 Commons Chamber

[Richard Harrington (Watford) (Con)]

What can I say in two minutes, Madam Deputy Speaker? Well, I will do my best.

I am a person who is naturally a bit cynical when constituents come to see me and I try to see both sides of the story, but in this case I had more than 160 constituents in the group in Watford to do with the loan charge. I commend Her Majesty’s Revenue and Customs—rather like the hon. Member for High Peak (Ruth George), I sometimes still call it the Inland Revenue—for its efforts to deal with tax evasion, but it seems to me that in this case it is not tax evasion. These were schemes put forward by accountants and schemes where people took on employment and were told that that was the way they had to do it.

[Mr Jim Cunningham (Coventry South) (Lab)]

Does the hon. Gentleman agree that action should be taken against the employers who forced these people into these schemes and the financial advisers who sold them the schemes in the first place? I have had lots of constituents on at me about that. [Interruption.]

[Richard Harrington]

My right hon. Friend the Member for Hemel Hempstead (Sir Mike Penning) says, “Spot on.” I too fully accept the validity of the hon. Gentleman’s intervention.

Clearly, these schemes were not correct. The way to deal with this is to say that if people went into this because they were reasonably advised to, or told to by their employers, then even if they are liable, HMRC should have the flexibility, on a humanitarian and a mitigation basis, to say, for example, that the money should be paid back over a lengthy period—monthly, quarterly or whatever. I am sure that HMRC does not wish to bankrupt people, ruining their lives and so on.

My right hon. Friend the Minister is himself a man experienced in business who is very aware of the ways of the world. I am sure that he knows the difference between criminal tax evaders and people like my constituents in Watford and other hon. Members’ constituents. Because of that difference, HMRC should have the flexibility to deal in a humanitarian way with these unfortunate people.

Tax Avoidance (HSBC)

Lord Harrington of Watford Excerpts

Monday 9th February 2015 Commons Chamber

[Mr Gauke]

On HSBC generally, there are clearly questions that need to be answered about what happened at HSBC between 2005 and 2007. HMRC has been taking action against about 1,000 people who were involved in this matter, where there is evidence that they have broken the UK law. HMRC will continue to take action in the event of any further evidence arising; I make that point about our approach. On Lord Green, what I would say is that he was a successful trade Minister. There is no suggestion, and no regulator has suggested, that he was at fault with regard to what happened with the Swiss subsidiary.

[Richard Harrington (Watford) (Con)]

The Government should be congratulated on the results they have achieved in collecting taxes that had been avoided and evaded because of a lax regime before they came to power. This is really two points. First, should blame be cast on this Government for something that happened, and does need investigating, when the previous Government were in power? Secondly, on the appointment of Lord Green, there was presumably at least the same level of due diligence as there was when the last Labour Prime Minister put him on his close business policy advisory committee.

[Mr Gauke]

My hon. Friend makes two good points. For the good of the public finances, we have taken tough action to deal with tax avoidance and evasion, and we will continue to do so, because that is what the British people expect of us.

The Economy

Lord Harrington of Watford Excerpts

Wednesday 26th November 2014 Commons Chamber

[Richard Harrington (Watford) (Con)]

It is a pleasure to speak in this debate. I want to concentrate on a few things that the shadow Minister, the hon. Member for Nottingham East (Chris Leslie), said. I hope that one day, while driving from London to Nottingham, he will decide to turn off the M1 and head towards Watford, because then I could show him that, in reality, many of the claims made in this lengthy Opposition motion are not quite correct.

[Mr Thomas]

If my hon. Friend the Member for Nottingham East (Chris Leslie) accepts the hon. Gentleman’s invitation, perhaps he will take him to Watford tube station, where they could discuss the impact of the increase of up to 38% in the cost of fares for outer-London commuters that the Mayor has recently imposed.

[Richard Harrington]

Just to correct the hon. Gentleman, some of the tube fares for areas outside London are set by the owner of the stations, London Midland, rather than by Transport for London. I know that he did not mean to mislead us on that point.

The shadow Minister claimed that working people are worse off today than they were under the magical mystery tour of the previous Labour Government. I am not sure where that claim comes from, but I imagine that he, like the shadow Chancellor, bases his statistics on the retail prices index, comparing it to wages, which most credible economic sources no longer use as an indicator because it does not include the huge increase in the personal allowance and tax cuts of £700 per person.

To get back to reality, when somebody who has been unemployed for a long time, or indeed who has never worked, gets a job, it will not necessarily be a highly paid one. If the hon. Gentleman accepted my invitation to come to Watford, he could visit the local jobcentre—he might be hoping that I will be enrolling there next May—and see that long-term unemployment has fallen by 44% and youth unemployment has halved. Nobody could say that those working people are worse off than they were before 2010.

[Richard Graham (Gloucester) (Con)]

My hon. Friend makes a powerful point about getting people back into work and about youth unemployment, which has also been halved in Gloucester. Does he agree that the rise of apprenticeships provides an important opportunity for young people to develop skills sets that will enable them to have a bright future? There are 5,000 new apprentices in Gloucester, and I have no doubt there are many more in Watford.

[Richard Harrington]

Indeed there are. I totally agree with my hon. Friend and am fully aware of all the work he has done on apprenticeships in his constituency.

When I started running jobs fairs in Watford in 2010—I hope that the shadow Minister is listening—70% of the 2,500 people who came were unemployed and were looking for a job; the others were already employed but were looking for a better job. Last year, 70% of the 4,000 people who came were already in employment and were looking for a better job. To take a Watfordian lesson from that, those people’s real wages will go up in the normal progress of things, now that, as a result of the long-term economic plan, the economy is beginning to move and people are getting back into employment.

The Opposition have set a national minimum wage target of £8 an hour by 2020. Perhaps I have misunderstood —I hope the shadow Minister will explain when he winds up the debate—but on current trends the national minimum wage will be more than £8.10 by 2020 anyway. I do not think he is pledging to cut the national minimum wage in 2020 if he is in government. I recently met Julia Unwin of the Joseph Rowntree Foundation and John Cridland, a former member of the Low Pay Commission, and in fact, they seemed to think that Governments planning to set a minimum wage target is exactly against what the Low Pay Commission does. When they explained to me how they calculate what the minimum wage should be, after negotiations with employers and all the different interested parties, they said that they really wanted the calculation to be taken outside of politics and that they were quite worried about the shadow ministerial team’s proposal.

I wish I had time to go through each point in this rather lengthy motion, but as my time will be up in five minutes—and, indeed, as there is an election in five months—I do not think that I have time to do the task justice. I will instead focus the rest of my remarks on some key points. The real raising people’s wages is not done directly by the Government. Governments do not set wages in quite the way the Opposition imply. What really matters is making available the types of jobs that people are trained to do.

One Government policy that has not been mentioned today, but which I think is directly relevant to the debate, is the founding of the university technical colleges, one of which was recently opened in Watford. The good thing about the UTCs is that half the curriculum is set and designed by local employers, so jobs are available in those fields. Hopefully, the children graduating from those schools—it is early days yet—in addition to getting the more formal academic qualifications, will be halfway into a job and not on the ground floor, because they will already have had years of training. In Watford’s case it would be in tourism and events management—Hilton Hotels is very much behind this—or in IT. They will not just be leaving school, looking for a job and getting in at the bottom.

I hope we all accept that the real problem is the skills shortage, which has been a problem since the second world war, if not before, so it has not been caused by a particular Government. The Education Act 1944 tried to do something about that, but it never seemed to happen. The UTCs might seem a small step, but they are an important way in which more children can get into the right kind of employment from an early age. I realise, of course, that on its own, that really is not enough.

The real way to raise living standards is by having long-term stability and confidence in the economy. It might seem strange to hear me quote Bill Clinton. I do not think he has been to Watford, but if he happens to pick up Hansard and see my offer to the shadow Minister, I would be happy to make exactly the same offer to him—it is just off the M1. [Interruption.] Indeed, Mr Clinton probably has not been to Nottingham either. His speech to the Democratic party’s 2012 national convention in Chicago is one of the best political speeches I have ever heard, apart from the Minister’s response to the shadow Minister today. He said—you will be delighted to hear that I will not attempt an American accent, Madam Deputy Speaker—something along these lines: “So let me get this clear. You all agree that the last guys screwed it up. You may think that the current guys have made slower progress than you had hoped and have not done all the things they said they would do. It hasn’t happened as quickly as they wanted it to. So the answer is to bring back the guys who screwed it up, right?” That thought, for me and my constituents, is a very important one.

We go from Bill Clinton in Chicago to the shadow Minister in Nottingham. If both of them had been to Watford and seen the reduction in long-term unemployment, the doubling of apprenticeships and the 400 new businesses that have been created since 2010, they might both have cause to pause for thought. I hope that will be borne in mind when the Opposition wind up the debate.

Finance (No. 2) Bill

Lord Harrington of Watford Excerpts

Tuesday 1st April 2014 Commons Chamber

[Richard Harrington (Watford) (Con)]

I want to probe the hon. Gentleman further on his answer to my hon. Friend the Member for North East Somerset (Jacob Rees-Mogg). Does it mean that he believes that the last Labour Government made a mistake by not raising the top tax rate to 50% for most of the 13 years that they were in power, and that they should indeed have done so?

[Chris Leslie]

I know that Government Members like to expunge history from their memory banks, but there was a global banking crisis—I know this is a shock to some of them—which, from 2008 onwards, caused significant fiscal impact, which reduced revenues into the Exchequer and meant that tax rates had to be reappraised. It was at that point that the 50p rate was felt necessary, as one of the measures of fairness that we needed to put in place. I am proud that that Government took that step. It was not universally popular, as I know from Government Members, but necessary in order to help to reduce the deficit, whereas the Government chose to raise VAT and pull the rug from underneath growth that was beginning to come through in 2010.

I want to continue to scrutinise some of the details in the Finance Bill, because it contains a number of troubling changes. On capital allowances, my hon. Friends intervened on the Chief Secretary, and I also asked whether he thought it was a mistake that when taking office the Government reduced capital allowances—investment allowances—for businesses from £100,000 to £25,000. Yes, they are going back up again, but yet again we see more chopping and changing, more inconsistency; temporary measures, not giving the stability to business that it needs to plan for the long term. The Chief Secretary says that it was not a mistake that they should go down and now they are going up, but that, I am afraid, is typical of Liberal Democrats who like to face both ways on these matters.

In chapter 2 we have the married couple’s tax allowance. The Chief Secretary is deep in conversation, but I want to give way to him in a moment specifically on the issue of the married couple’s tax allowance. [Interruption.] From a sedentary position, he says that he will not intervene, but this is a critical point because I am not quite clear on his view of the married couple’s tax allowance. The Chancellor was apparently in a little bit of doubt about it, but the pressures from Conservative Back Benchers were such that they needed this transferrable allowance, which will help only about a third of married couples because it is available only to couples where one person is in work but the other does not use all their tax-free allowance. There are a number of other ways in which that amount of money could have been allocated. He could have decided to do it through the personal allowance—I know he is keen on that policy—perhaps a 10p starting rate of tax. Does the Chief Secretary agree with the implementation of the married couple’s tax allowance? This is his opportunity to set out the Liberal Democrat attitude to these things. I will give way to him. The record will have to show that, for whatever reason, the Chief Secretary does not want to stand up and sing the praises of the married couple’s tax allowance in this particular agenda. Yet again, he is stifled by his capture by the Conservative party, unwilling to speak his true mind on these issues.

On the employment measures in the Bill, such as they are, yesterday the Chancellor was full of rhetoric about full employment, yet the Government have come forward with no new policies to deliver this. The number of young people out of work for 12 months or more has nearly doubled since the Chancellor and Chief Secretary came to office, and we have a record number of people who want to work full time but are being forced to work part time, a Work programme that is so spectacularly unsuccessful that people are more likely to go back to the jobcentre than find work, and only 5% of disabled people on the Work programme have found work through that programme. We clearly need compulsory starter jobs for the long-term unemployed to help them to repair their CVs and to get back into work and on to the ladder to a long, sustainable career.

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[Richard Harrington (Watford) (Con)]

Rather than try to compete with the shadow Chief Secretary’s negative attitude towards the Bill and his extended romp through it, I feel it is my role—my position is somewhat more humble than his—to stick to two or three brief points and ask the Government and him to think about them.

Although I applaud the Bill’s pension clauses, I think that two particular issues should be addressed in addition to what was said in the Budget statement. The first relates to the provision of advice and information to people who choose an alternative to the previous system whereby, for good and bad, the decision was handled by an insurance company through the annuity system. Something has been published about Government money being spent on helping to provide advice or information, but my fear is that that will turn out to be a call centre somewhere, with people who may be trained only in a limited way having to advise people on the biggest decision of their lives and finding it very difficult to do so.

Regulations were brought in by the Financial Services Authority for the smaller independent financial advisers who, for better or for worse, provided such a function for people retiring with small pension pots. A very open policy by Adair Turner and Hector Sants, part of the previous administration at the FSA, in the form of new regulations relating to the retail distribution review and the disclosure fees, has effectively eradicated the very low-level IFAs—those dealing with very small pension pots—simply because it was impossible for them to charge enough money to be able to give proper advice. I understand that, because it is just economics, but my fear is that no one or no company has adequately replaced that kind of advice, let alone in relation to what the Government are about to do.

I hope that the Exchequer Secretary and his colleagues will give that some attention. I know some money has been allocated, but for most people it is the most serious decision they will ever take, except possibly when buying a house. There must be a mechanism, whether private or Government-funded, to provide good advice. For wealthier people, there is a very sophisticated wealth management business—IFAs are very good, and I am sure that different firms around the country do an excellent job—but given that the average pension pot is probably about £20,000 to £25,000, it is a very important decision for people who have saved into it all their lives. A lot of thought must go into how such people are informed, although I accept that, for regulatory reasons, there is a big difference between information and advice.

[Mark Field]

My hon. Friend makes a very important point that is worth stressing. In the midst of more and more regulation, standardisation and almost a utilisation of all facets of the financial services industry, we are moving away from the very personalised advice that the sort of clients to whom he refers so desperately require.

[Richard Harrington]

I thank my hon. Friend, who characteristically makes a very good point. The problem is that to give the kind of detailed personalised advice that people want, the fee has to be at a certain level to reward professionals for doing the job, but smaller pension pots make that very difficult. That is nothing to do with regulation; it is simply about being able to charge the correct amount for their time. I hope that there will be alternative systems, although they may not perhaps give quite the bespoke advice that is available for people with larger pots. In other fields, such as accountancy, there are ways in which people can get good advice without having to spend the vast amounts of money available to those with larger pots.

My second point about changes in pensions legislation is just a thought. Many billions of pounds will become available that would have been dealt with directly in the insurance market through the annuity system. Have the Government given any thought to providing a facility involving national savings in which the Government or an organisation acting on their behalf deal with it on a managed fund basis? There is a similar system in Australia and New Zealand, where there is a kind of sovereign wealth fund that comes from people’s pensions pot, accrued together, with the necessary caveats about risk, a portfolio approach and all such matters. The Government thereby take advantage of the savings system, so that people can retire with a very good, solid and Government-guaranteed choice—of different types of products and risks—about what to do with their money. It would be very simple, with perhaps one or two choices; it obviously could not compete with the great panoply of schemes of the large fund management companies. It would be simple so that people could understand it, and I hope that it would provide a vehicle for funds that are safe and give a good return for the public, while also providing the Government with extra funds, as happens with National Savings & Investments.

On the Budget generally, which I support fully, my fear is that this country still lacks a business culture. Both this Government and the previous one quite rightly focused on small and medium-sized enterprises, businesses and apprenticeships, with different schemes and systems to try to help them. When I speak at schools in my constituency—as for all hon. Members, they are a regular feature in my diary—it is interesting to talk to young people about what they want in life, yet very few of the brighter ones seem to desire to go into a business environment. Those who do have such a desire tend to be interested in graduate schemes with larger multinational companies or the professions. There is nothing wrong with that—some of them, heaven forbid, want to be politicians—but these are the very people whose families often have small businesses in my constituency, and there are 1,600 businesses in Watford that employ between two and seven people. It seems to me that the establishment—schools, parents and everyone else—very much look for brighter young people to go into the professions and find alternatives to self-employment.

It is very hard to change that culture, but I want to commend the Government for what they have done to help small businesses and to help people to start up businesses. Wenta in Watford—the Exchequer Secretary may be familiar with it, because it is near his constituency —is an incubator for many start-up businesses. I saw several of them when I was there only a couple of weeks ago, including a small business started by James Morgenstern in which, in arrangement with Google, people who find an image of a building on Google Earth can then see a video of its interior. He started it in his bedroom and has now moved to an office at Wenta, and the business will expand.

To use James Morgenstern’s business as an example, his next big step is to have a first employee. I can speak with a little authority, because many years ago—I am probably about the same age as his parents or, depressingly, his grandparents—I was in that position. One starts a business and it is all great: one does everything oneself, being up 20 hours a day, and all that—it is a great pity that the shadow Chief Secretary is not in his seat at the moment, because he would be very interested in this, so perhaps I should brief him fully outside the Chamber—and the next step is to have a first employee.

I am very pleased that the measures taken by this Government have helped somebody to take that step. There have been different schemes relating to national insurance, and in particular schemes that have made it very reasonable for small companies to take on apprentices, who are given a tailor-made programme. To get to employees Nos. 1, 2 and 3—after employing only oneself—is the biggest step for a small business. From the point of view of the economy, in reducing expenditure on welfare, while people benefit from earning money themselves and eventually pay tax, that step is most critical. Many of the measures in this Budget and in previous Budgets will help with that.

In the end, most people set up businesses for one reason. It may be a noble reason or a selfish reason, depending on one’s perspective, but people set up businesses to make money for themselves and their family. When I speak to students in my constituency, I always commend those who want to be teachers, social workers and doctors because when they graduate, they will give their lives to help other people in society. However, to those people who put their hands up and say that they want to become rich, live in a big house and get a Ferrari—there are a few of them—I say that, provided that they pay their taxes and employ people, they will benefit society just as much as the first group of people. I really believe that. I believe in everything that the Government have done in the Budget and in the Finance Bill to help people to do that.

The tax cut for millionaires is a mantra for the shadow Chief Secretary. I am sure he is having his cup of tea and saying the same thing to anyone around the table who cares to ask. However, I do not believe that what he says holds water, because we want people to become millionaires. I want my constituents to want to become millionaires. By the way, on the first million, they will pay about half a million in tax and will hopefully spend another 200 grand on the Ferrari. Can we please let people become millionaires? The Government should help people to generate wealth and a lot of tax to support the people in this country who really need help.

[Mr John Redwood (Wokingham) (Con)]

Are not people who set up businesses performing a public service in their own right? They are not just given a million pounds because they want a million pounds. They have to open a chemist shop and provide pharmaceuticals to people or whatever. Is that not as much of a public service as anything else?

[Richard Harrington]

My right hon. Friend makes a valid point. That is another benefit. That is another way in which setting up a business is a public service.

Many of the things that the Government are doing involve not only the Treasury, but other Departments. I mentioned the pension changes, which relate to the Department for Work and Pensions. There are also changes in skills and education. The new university technical college in Watford completed on its property in Colonial way today. That has been put together by David Meller of the Meller Education Trust, who has several projects in the area, and myself. It will provide pre-apprenticeship education for businesses in the area that have jobs and that want trained people.

The UTC is sponsored by the Hilton hotel group, which is based in Watford. In fact, it runs the world from Watford. Everyone in Watford thinks that they run the world from there, but Hilton actually does. For the sake of clarity, people should understand that that excludes the United States, the rest of the world being a region of the United States in many people’s perception. The important point is that such firms are thinking, “If we want skilled employees to build up our business, we need them to be trained from quite an early age.” Hilton and Twin Technology, which is an IT company, are the two main sponsors of the UTC. They helping to design the courses because they are prepared to guarantee that there will be work experience and apprenticeships for people who come through the college. The Government have helped to facilitate that through the Budget and the Finance Bill.

In the dream world of the Opposition, they say, “Hey, everybody should get a job and it is guaranteed for a year.” No one has explained to me where those jobs will come from. I saw people working in the park as a result of the last Government’s attempt at that. People were taken on for a year to help the park keeper, but the job disappeared because it was not really a job. I am pleased that this Government have done their best to avoid that trap.

[Stephen Doughty]

The hon. Gentleman is giving a slightly confusing impression of such schemes. I have met small businesses in my constituency that have benefited from taking on workers through the Jobs Growth Wales scheme, which they would not otherwise have done. The scheme therefore benefits the business and the person who is in a job, getting experience and developing themselves. There would otherwise have been a lost opportunity.

[Richard Harrington]

I respect the hon. Gentleman’s view. I described my experience of the last scheme and he has spoken of his personal experience. I am in favour of that kind of scheme. When I was very young and starting out in business, I was able to take on one person under the old youth training scheme, which was much maligned by the Labour Government afterwards. I paid her £30 a week and the Government made up the balance. It was a very simple scheme and not as sophisticated as the schemes that we have today. That person is still in employment, although I am no longer anything to do with the company. She was 17 at the time and is now 40. That shows how old I am, but it also shows that such schemes can work for people. In my experience, the jobs that were provided under the last scheme would not otherwise have existed. It did not subsidise a job that would have been there anyway. However, I am perfectly happy to accept his point and his experience.

[Mr Kevan Jones]

I do not think that the hon. Gentleman has looked very closely at what we did in government. The scheme that my hon. Friend the Member for Cardiff South and Penarth (Stephen Doughty) referred to is more akin to the scheme that the last Labour Government had. The alternative is that people are sat at home doing nothing. I agree with the hon. Gentleman that if people do not get a work ethic early on, but have two or three years sat on the dole, it is even harder for them ever to get into work.

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[Richard Harrington]

The hon. Gentleman is absolutely right. There is a consensus that it is not acceptable if people who are on jobseeker’s allowance do not have to do anything towards getting a job. We can deal with that either by the Government providing a job through a direct subsidy, as the Opposition suggest, or through the current system.

[Mr Jones]

Will the hon. Gentleman give way?

[Richard Harrington]

If the hon. Gentleman will bear with me, I will make a bit of progress first.

The system means that people are effectively signing an employment contract when they sign on—I have seen such contracts, and the purpose is to get people looking for work. It is a programme of looking for work and taking up initiatives that have been derided by the Opposition, such as the work experience programme, the Work programme and other things. But I have seen the system work. It provides a lot of jobs in my constituency. However, the principle of what the hon. Gentleman says, which is that people should not be allowed to rot and do nothing while on jobseeker’s allowance, is right.

The hon. Member for Houghton and Sunderland South (Bridget Phillipson) made a good point that was pertinent to her constituency, and she has met people who have applied for hundreds of jobs and been unsuccessful. I accept that and have heard of similar cases. I cannot compare my constituency with that of my hon. Friend the Member for Cities of London and Westminster (Mark Field), or with Kensington and Chelsea, but in Watford—as the shadow Chief Secretary to the Treasury, who is not here, would know as he is a frequent visitor, for which I am grateful—jobs are available. I am not saying there are jobs everywhere, and it is difficult for anyone to get a job, but I accept that in the hon. Lady’s constituency things are completely different.

[Sheila Gilmore]

Is the hon. Gentleman concerned that the number of unemployed people remains relentlessly high, despite the talk about there being lots of jobs? Surely we must try to address that because 2.3 million people are still unemployed. That is a serious situation for all those people.

[Richard Harrington]

I agree with the hon. Lady, but in my constituency the number of those on jobseeker’s allowance has come down from about 3,600 to, I think, 1,700. I have met a lot of those 1,700 people and chatted to them.

[Sheila Gilmore]

Over the past couple of years in particular the number of people on jobseeker’s allowance has dropped, but the number of unemployed people has not. Only 58% of those who are unemployed are now in receipt of jobseeker’s allowance. The two figures are considerably out of synch.

[Richard Harrington]

I spend a lot of time at Jobcentre Plus—if the hon. Lady and her colleagues have their way, I am sure I will be spending a lot more time there after May next year—but I do that for a serious reason, which is to talk to people on jobseeker’s allowance. I have heard the Opposition speak about these matters, and one cannot argue with the Office for National Statistics and statistics such as that. However, I wanted to try to get to the bottom of the issue and—I am genuinely not trying to make a party-political point—that has not been my experience in my constituency.

[Bridget Phillipson]

rose—

[Richard Harrington]

If the hon. Lady will excuse me, I have taken enough of Madam Deputy Speaker’s time.

I conclude by referring again to the shadow Chief Secretary to the Treasury, who is not here. He painted a picture of the problem with millionaires getting pay rises and everybody else being increasingly impoverished. Next time he is in my constituency—as I said, he is a regular visitor to Watford—I would very much like to meet him and show him around because real unemployment has halved. Youth unemployment has dropped to pre-recession levels and is falling, and more than 400 new businesses have opened in the past year. I would like him to come with me to Watford high street and meet Alex and Isabella, whom I met last week. They have just opened an independent coffee shop there. Neither of them has any experience in business, but they are operating on the high street, along with other businesses. Those businesses are real, those jobs are real, and with the Budget and the Finance Bill I believe the Government have done everything possible to help the economy so that the experience of Watford high street becomes not the exception but the reality for many people.

Oral Answers to Questions

Lord Harrington of Watford Excerpts

Tuesday 11th March 2014 Commons Chamber

[Andrew Selous (South West Bedfordshire) (Con)]

3. What recent estimate he has made of the rate of employment.

[Richard Harrington (Watford) (Con)]

11. What recent estimate he has made of the rate of employment.

[Danny Alexander]

Employment in the UK is increasing and, under this Government, has exceeded 30 million for the first time in our country’s history. Over the last year, the employment rate has risen 0.6 percentage points to 72.1%, higher than that in the US, Italy and France, and the EU28 and the G7 averages. In the last year, employment has grown faster in the UK than it has in France, Germany, Italy, Japan, the EU28 and the G7.

[Danny Alexander]

My hon. Friend is right and he draws attention to one Member who told the CBI annual conference that our plan would lead to the disappearance of 1 million jobs—[Hon. Members: “Who was it?”] It was the Leader of the Opposition. In fact, employment has increased by 1.3 million, with more than 1.6 million jobs created in the private sector—proof, if anyone should need it, that our economic plan is working for the United Kingdom.

[Richard Harrington]

I know that the House will be delighted to hear that long-term unemployment in my constituency of Watford is down by 22%. Youth unemployment is down by 33% in the last 12 months alone, and the number of JSA claimants is also down by 27%. Will my right hon. Friend confirm that the Government will stick to their long-term plan and continue to back Watford business with better infrastructure and lower taxes on jobs?

Autumn Statement

Lord Harrington of Watford Excerpts

Thursday 5th December 2013 Commons Chamber

[Mr Osborne]

Of course, it was the Labour Government who left us with six energy companies—[Interruption.] I do think that is relevant, because it is this Government who are seeking the competition that will bring new entrants. Let me address the specific point that the right hon. Lady makes. To compensate for the fact that we are rolling back some of the levies, for example in the energy company obligation, we have set out schemes today that will reward home owners who use energy efficiency measures to improve the efficiency of their home. Those include an additional bonus for solid wall insulation. There is also extra money for public sector organisations and private landlords to make their buildings more efficient. Across the board, we are supporting the insulation industry, but we are doing so in a way that does not penalise people through their electricity and gas bills. That is something that she should support.

[Richard Harrington (Watford) (Con)]

In Watford, as I am sure my right hon. Friend the Chancellor is aware, unemployment is coming down every month, the number of apprenticeships has doubled in the past two years, a new university technical college is opening, and the Government are investing significant capital expenditure on infrastructure in the shape of the Croxley rail link. It seems that the shadow Chancellor’s policy is to spend more and borrow more, which would lead to exactly the reverse of what has happened in Watford. I hope that the Chancellor can assure me that he will be undeterred by what has been said today by the Opposition and will stick to his policies that support growth.

[Mr Osborne]

I want to return the compliment that my hon. Friend has paid me. He has been an outstanding Member of Parliament. His jobs clubs have helped many young people and his offer of work experience is helping people to get on the jobs ladder. The rail measures that we have announced today will help his constituents in Watford. He is right that for Watford, a Labour Government would mean higher unemployment, higher mortgage rates, more borrowing and more debt. That would put Watford and the rest of the country back into the economic mess we are taking them out of.

Royal Bank of Scotland

Lord Harrington of Watford Excerpts

Thursday 13th June 2013 Commons Chamber

[Sajid Javid]

The hon. Lady has made a good point overall about the importance of RBS’s operations in Northern Ireland and also in the Republic, which involve lending to both small businesses and consumers. RBS takes those operations seriously, and I know that it has been thinking carefully about how it can improve them further.

[Richard Harrington (Watford) (Con)]

Given Stephen Hester’s excellent career—he had previously spent two years at Abbey National and four years at British Land—and given that he has remained in such an important and high-pressure job for five years, it seems to me entirely reasonable for him to leave after completing the first phase of a major restructuring process, and to hand the business on to a chief executive who is more experienced in long-term matters.

[Sajid Javid]

As always, my hon. Friend has made a very good point. I agree with him that Stephen Hester has done a commendable job. Five years is a perfectly normal period for anyone to remain as chief executive of a major corporation, and that sentiment was reflected in Stephen Hester’s own comments since the announcement of his departure.

Bank of England (Appointment of Governor) Bill

Lord Harrington of Watford Excerpts

Friday 6th July 2012 Commons Chamber

[John McDonnell]

I am pleased that consensus was eventually reached yesterday and that the Chair of the Treasury Committee will now be able to perform his role in that inquiry. The Government’s confidence in the Treasury Committee Chair and its members in respect of that inquiry contrasts with their lack of confidence in respect of allowing the Committee a decisive role in the appointment of the Governor.

It is increasingly clear that the new Governor will have significant responsibility, and it is becoming obvious that we need root-and-branch reform of our financial services and our banking system. Therefore, whatever recommendations come out of the various inquiries, and especially the inquiry that was established yesterday, much of the work of implementing reforms will fall on the shoulders of the new Governor.

[Richard Harrington (Watford) (Con)]

The hon. Gentleman mentions the Treasury Committee’s role in the inquiry into LIBOR, but does he accept that inquiries are the traditional role of Select Committees, and that making Executive appointments is a very different role?

[John McDonnell]

The roles are different, as I will mention later, but the Chancellor did give the Treasury Committee responsibility, in the way it is asking for here, for the appointment of senior members of the Office for Budget Responsibility. Obviously, then, he had sufficient confidence in the Committee to involve it in appointments.

--- Later in debate ---

[Richard Harrington (Watford) (Con)]

I congratulate the hon. Member for Hayes and Harlington (John McDonnell) on bringing forward the Bill. I was slightly worried earlier when I looked up and he had moved over to this side of the House and was having a conversation with my hon. Friend the Member for Altrincham and Sale West (Mr Brady). I thought that perhaps the arguments of my colleagues had been so compelling that he had decided to move. I was concerned about his cynicism—he has been in the House for longer than I—that some of today’s contributions might be intended to filibuster and drag out proceedings. I hope that he does not think that I have that intention, because I have thought carefully about his Bill.

When I read the Bill and the words,

“the appointment and dismissal of the Governor of the Bank of England be subject to the consent of a Committee of the House”,

it seemed to me that it was okay. On the face of it, the Bill would add the Select Committee to the process that is nominally in the name of Her Majesty the Queen, but is really conducted, as we all know, by the Prime Minister, the Chancellor of the Exchequer and so on. It was only when I continued reading and thinking about the subject that I thought that there were a number of compelling reasons not to support the Bill. I do not say that because of dogma or because I have been told to by the Whips or anybody else. I am pleased to have the opportunity briefly to put those arguments forward.

The Chancellor of the Exchequer has announced quite a few improvements in the process for selecting the Governor of the Bank of England. Traditionally, it has been done behind the scenes, nobody has known quite how it has been worked out, and in the end there has just been an announcement. Some of the changes might seem superficial, such as the post being advertised. However, as far as I know, in no other democracy or comparable economy is a post of this magnitude advertised openly in publications such as The Economist. It is also clear who is on the selection panel. It will comprise members of the Treasury and No. 10, and will take the advice of the court of directors, which is effectively the board of the Bank of England. That is not dissimilar to the process for appointing chief executives in most major companies and other significant organisations.

The changes perhaps reflect the way in which society is moving. Every Member of the House to whom I have spoken generally welcomes the increasing transparency in these systems and procedures. I realise that that comes nowhere near the veto power that the hon. Member for Hayes and Harlington is proposing in the Bill, but I do not think that it can be taken as insignificant; it is a step forward.

Secondly, there is the question of how public the scrutiny can be for an executive position. Governor of the Bank of England is an executive position, not a scrutiny position or a non-executive position. It is effectively the chief executive of the Bank of England. I have tried to compare the Bank of England to a business, because most of my experience in life has been in business, from quite small businesses to larger ones, while reading about and observing public life. I am not one of these people who are obsessed with business and who say that everything is like a business. However, some matters of governance are comparable.

This proposal is comparable to the chief executive of a major company being appointed and ratified not just by the board of directors, but by its shareholders, with Parliament as the shareholders. I know that we act on behalf of the general public, but we are a shareholder-type body. There is market sensitivity in big appointments in businesses, but it is as nothing to the market sensitivity that there is when a country’s financial system is involved. I do not think that it would ever be feasible to have this kind of open, televised, broadcast scrutiny for a chief executive’s position, even in a large company. I therefore do not think that it is suitable for the Bank of England.

Another significant point is that the Select Committee system is evolving. There is no doubt about that. The coalition agreement calls for an enhanced role for Select Committees. Most Members from both sides of the House have sat on Select Committees that have scrutinised appointments. As a member of the Select Committee on International Development, I have taken part in the appointment process for the independent scrutineer of the activities of the Department for International Development. An example that has been mentioned often by colleagues, including in this debate, is the appointment process for the Office for Budget Responsibility, in which a veto was used for the first time. However, those are all matters of scrutiny. They are all extensions of the Select Committee’s role in relation to bodies or individuals involved in scrutiny. They do not relate to executive appointments.

If I may use a DFID analogy, it would be difficult to reason that because Oxfam is a major beneficiary of DFID’s money, the International Development Committee should have a veto on the appointment of its chief executive. I do not say that to suggest that the roles of Oxfam and the Governor of the Bank England are of the same magnitude, but the principle is the same. Select Committees scrutinising the responsibilities of people or institutions is one thing, but their deciding on executive roles is completely different.

Parliament is perfectly free to decide that we need an American-type committee system, in which almost every appointment, including to the equivalent of ministerial roles, is approved in public committee hearings. I do not support that view, but I can understand it.

[Jacob Rees-Mogg]

Historically, there was a much better check on appointments to the Executive, because its members had to resign their seats and stand in a by-election. The public scrutinised appointments to the Cabinet, which was a fantastic system.

[Richard Harrington]

For once in my political career, I am completely speechless. I cannot claim before I scrutinise Hansard tomorrow that I fully understand my hon. Friend’s point, but I am sure that, being the person he is, he is absolutely right.

A further extension of the role of the Select Committee would make a fundamental difference to our system. It is not just a question of extent, as is the spreading practice of giving various Committees different scrutiny roles. Select Committees getting involved in hearings on major executive posts would be a fundamental change, and Parliament should discuss it if Members believe it is the right thing to do. That would an interesting and significant debate.

I would oppose the change. We have all seen the hearings that take place in America on the appointments of judges, Secretaries of State and so on, which are watched live all over the world. Although I do not feel that such hearings add anything to the democratic process, a valid argument can be made for them. However, they should not be introduced on a one-off basis in the case of the Governor of the Bank of England, because that would represent a fundamental change to our system. I do not think many people in this country would support judges being publicly appointed, and the same is true of many other roles including, I believe, the Governor of the Bank of England.

Select Committees are very good for scrutiny—that is their role. The Standing Orders, which I probably do not read enough, state that a Select Committee is

“appointed to examine the expenditure, administration and policy of the principal government departments”.

However, the control of executive appointments is quite different. The importance of that point should not be underestimated.

In 2000, in the report “Shifting the Balance”, the Labour Government stated:

“Any indication that a Ministerial appointment relied upon the approval of a Select Committee or was open to a Select Committee veto would break the clear lines of accountability by which Ministers are answerable to Committees for the actions of the executive”.

That is true. I ask the hon. Member for Hayes and Harlington to consider the fact that the Treasury Committee having a veto over the Governor of the Bank of England might allow a Chancellor or Prime Minister to say, “Well, it wasn’t my doing. That wasn’t the candidate I wanted”. That would give them an excuse, whereas now there is direct and clear accountability to Parliament.

I hope that no one, least of all the hon. Member for Hayes and Harlington himself, thinks I am saying that he has introduced the Bill with anything other than the best intentions, but the point about accountability should be considered. I believe in direct accountability, not in our senior elected politicians—or indeed junior ones such as myself—having an excuse to blame somebody else. I fear that that could be an unintended consequence of the Bill.

I believe in extra accountability and in making Select Committees strong, but I cannot support the Bill, because it goes totally against our current system. It is that system itself that Parliament should discuss and debate at length.

Jobs and Growth

Lord Harrington of Watford Excerpts

Thursday 17th May 2012 Commons Chamber

[Ed Balls]

I do not think that introducing a 75p tax rate in Britain would be the right thing to do at all. That is not our policy, but I do not think that cutting the top rate from 50p to 45p will be good for jobs, growth or fairness either.

[Richard Harrington (Watford) (Con)]

I am listening with some perplexity to how the shadow Chancellor referred to the Budget as one for rich people, because I have calculated that in my Watford constituency, nearly 4,000 people have been taken completely out of tax by the increase in the personal allowance. I am sure that the right hon. Gentleman will join me in congratulating the Chancellor on such an excellent measure.