Consumer Rights Bill

Lord Wharton of Yarm Excerpts

Tuesday 28th January 2014 Commons Chamber

[James Wharton (Stockton South) (Con)]

I welcome this important Bill. We have heard much about its impact and the positive benefits that it will bring to consumers, and I will talk about that shortly. When I was even younger and a law student studying the myriad regulations and legislation that made up consumer protection, I remember spending many a sober hour late into the night trying to get my head around a very complex area of law, which was beyond the reach of many lay people who would not have been able to devote the time that I, as a student, could. Occasionally, I suspect, it was also beyond my reach as a law student. Therefore, it is welcome that we see a real and genuine attempt by the Government to consolidate much of that regulation and legislation into a clear and straightforward Bill which will, I hope, become a clear and straightforward Act, and will empower consumers and enable them to enforce the rights to which they are entitled.

As a starting point, this consolidation Bill, which is part of what it is, is welcome. Compared with other consolidation Acts, such as, to recall again my days as a young law student, the Trade Union and Labour Relations (Consolidation) Act 1992—a monster of an Act, which tries to do many things and to bring together many pieces of legislation, and is so complex that it is very hard to decipher—this is clear and straightforward. We know what it says and what it means. We know what it means for our constituents and what it will mean for consumers in this country and for our economy. That is a positive benefit.

It is also worth noting that the Bill updates our consumer law for the 21st century—not my words, but the words of the chief executive of Which?—because it talks about protection for digital downloads and digital content. It is a glaring omission that our consumer regulations have not been able successfully and adequately to keep up with what is now such an important part of our economy. In 2012, more than £1 billion was spent downloading digital content, and more than 16 million people who did that had a problem of one sort or another with what they downloaded. That is not a good situation, but it is even worse when we have a regulatory framework that does not address it and does not directly give people the sorts of rights that they need in order to be protected in an increasingly important part of our economy.

[Andy McDonald (Middlesbrough) (Lab)]

Given what the hon. Gentleman has just said, does he welcome the European directive on alternative dispute resolution?

[James Wharton]

The hon. Gentleman makes a good point. I welcome the fact that competition regulation can be properly done across borders, across Europe, in a way that allows us to continue to trade together and to have a functioning free market within the European Union. I welcome the directive. It is something that we can do ourselves, and are doing ourselves, but that does not mean that I am against it in principle. It is an important point. This is something on which we can unite across the House because it is about getting the right deal for our constituents. This is about protecting people, some of whom—we have heard examples of constituency casework—are vulnerable, are pressured by unscrupulous sellers and need protection in the form of legislation, and others of whom, while they may not be vulnerable, find themselves, through unfortunate circumstances, with goods or services that do not meet the standards that they expect. It is right that we have a clear and straightforward framework that offers them the protection that they should be able to expect to rely on. That is what the Bill does, and that is what the Bill extends to digital content, which is incredibly welcome.

I do not intend to detain the House for long, but it is important that, on behalf of law students throughout the country and consumers in our economy, we recognise that the Bill does a good thing. It simplifies and consolidates an important area of law and regulation, and it will make life better for people who buy goods and services and rely on the functioning economy that lies behind the selling and providing of goods and services in this country. I welcome it. I hope it will gather support across the House and that it will be successful and become an Act.

Public Service Pensions Bill

Lord Wharton of Yarm Excerpts

Monday 29th October 2012 Commons Chamber

[Jackie Doyle-Price (Thurrock) (Con)]

I am pleased that Labour Members have acknowledged the need for the Bill and the need to reform our public service pensions. I was struck by several good points made by the hon. Member for Dumfries and Galloway (Mr Brown) and the right hon. Member for Wentworth and Dearne (John Healey), although I found the desire to pit Government Members against public servants disappointingly partisan. I have to advise Opposition Members that Government Members equally respect the contribution of our public servants. We have retired teachers and former armed service personnel here, and we greatly value their contribution. What sits behind the Bill is the desire to make public service pensions secure and beneficial for the long term.

Given that we are all living longer, it is simply necessary to ask people to pay higher contributions. Unless we do so, we will have to find more money from all taxpayers to support the deficit and the provision of public sector pensions. That is simply not fair. The cost to the taxpayer of public service pensions has risen to £32 billion a year, which is an increase of a third over the past decade. They cost just under 1% of gross domestic product in 1970, but the figure is 2% today and, without change, it will continue to rise. The average 60-year-old now lives 10 years longer than was the case in the 1970s, so it is simply not sustainable to leave pensions as they are.

We are tackling the challenge of funding public sector pensions at the same time as we are attacking our structural deficit and the aftermath of a financial crisis. That has led some of our public servants to conclude that they are being asked to bear the consequences of the actions of the bankers, but that is simply not the case. We are where we are because our current system is not financially sustainable, and it is disappointing that Opposition Members allow people to think otherwise. Even without the deficit, and even if the financial crisis had never happened, we would have to reform our public pensions to make them affordable and to secure their long-term future. With these reforms, our public servants will be guaranteed a secure pension with terms that are as generous as those enjoyed by anyone.

The need for change is simple. We all need to make provision for our own retirement, and if we do not put more in, the taxpayer will have to. The Bill will cut the costs to taxpayers by nearly half, while continuing to ensure that the public sector receives the best pensions available. The Bill is therefore a good deal for taxpayers and a good deal for public service workers. It is frankly unfair to expect future generations to pick up the tab by paying more taxes, especially when they are already dealing with the consequences of financial irresponsibility by facing higher taxes and higher house prices. I want all people—whether they work in the private or the public sector—to be able to keep more of what they earn and to pay less in tax. All taxpayers will benefit if we can reduce the burdens on the state and make public pensions self-funding.

Even with these changes, our public pensions will continue to be among the best available. They will also be progressive. A switch to career average pensions across the board will reduce taxpayer liability while letting employees keep their defined benefits. The pensions will also be fairer to all. Final salary schemes disproportionately benefit those on the highest earnings, and many low-paid workers will get a better pension under the Bill. I am pleased that the Government have made changes to benefit the lowest earners, meaning that 15% of our public sector workers will not have to make an increased contribution. I am also pleased that benefits that have been built up will be protected and that members will continue to receive a guaranteed benefit in retirement.

[James Wharton (Stockton South) (Con)]

I am listening to my hon. Friend’s speech with great interest. We have already heard a lot about retrospection and the importance of certainty. Is it not the case that the reforms will hopefully give long-term certainty about the affordability of public sector pensions, so that future Governments will not have to review these pensions yet again and people will be able to plan properly for their retirements?

[Jackie Doyle-Price]

I completely agree with my hon. Friend. It is important that we bite the bullet now and lay the foundations for future security. If we delay, we will be asking for more contributions from taxpayers and workers themselves, so it makes perfect sense to deal with the problem. We cannot postpone the inevitable, and Government Members are not prepared to do so.

I am sure that many Members will have received representations on these issues. Most of those that I have received have come from police officers who are worried about the changes. Most public sector employees have recognised that the terms under which they were paying into their pensions were not sustainable in the longer term, not least because they have seen what happened to the pension provision of their friends and family members in the private sector. People in the private sector would have to contribute more than a third of their salary each year to get an equivalent pension, so I am not surprised that only a third of public sector workers voted to strike over this issue last November.

Beer Duty Escalator

Lord Wharton of Yarm Excerpts

Monday 2nd July 2012 Commons Chamber

[Gavin Williamson (South Staffordshire) (Con)]

It is a great privilege to have secured this debate this evening. It is an even greater pleasure to see so many hon. Members in their places as we start this Adjournment debate at this late hour. One could say that an Adjournment debate is akin to an after-hours lock-in, but probably without so much pleasure or enjoyment. We are all here because we care passionately about both the brewing industry and, of course, our pubs right across our constituencies and across the nation. We care about them because we know they are part of the fabric of our nation. We all have concerns about the beer duty escalator and the impact it is having on the many pubs and breweries across the land.

We have to go back to 2008 to see the introduction by the last Labour Government of the beer duty escalator, which saw beer duty rise by inflation plus 2% each year. This, sadly, has been carried on, and it is having a detrimental impact on our pubs and breweries.

[James Wharton (Stockton South) (Con)]

My hon. Friend makes a very good point, and I congratulate him on securing this important debate. He will be aware that it has been predicted by the British Beer and Pub Association that the escalator could cost as many as 5,000 jobs. When he talks about a detrimental impact, does he think it important for the House to recognise just how significant that detrimental impact could be on such an important industry?

[Gavin Williamson]

My hon. Friend makes a valid point about the impact on jobs in the industry of the beer duty escalator, which I was coming on to. In my constituency of South Staffordshire, 1,286 people are employed in breweries and pubs—whether in the fantastic brewery of Enville, the brewery of Kinver, the Morton brewery in Essington, the Marston’s brewery in neighbouring Wolverhampton, or in the 86 pubs scattered across the constituency. Unfortunately, however, these pubs have declined in the last few years, and I am afraid that the beer duty escalator has had an impact in that respect.

Budget (North-East)

Lord Wharton of Yarm Excerpts

Tuesday 17th April 2012 Westminster Hall

[Ian Mearns (Gateshead) (Lab)]

I thank the Speaker’s Office for allowing me to initiate this debate, and also the many Members who have come along. The debate has created significant interest, particularly in our north-east region.

In the Chancellor’s millionaires’ Budget, which will hand back tens, if not hundreds, of thousands of pounds to some of the richest people in our society, including some of his Cabinet colleagues, it is clear who will suffer the most. It will be the poorest, those looking for work when few new jobs are available, pensioners, families, the hard-working, the squeezed middle and the working poor.

Following the Chancellor’s Budget speech, the Treasury produced a briefing highlighting the measures that will benefit the north-east of England. The region has borne the brunt of this Government’s policies. February 2012 figures show that unemployment in my constituency has risen from 8.3% to 10.5% since the coalition took office, and in the latest Office for National Statistics survey, up to January 2012, the figure for the north-east as a whole has risen to 10.8%, yet the Treasury’s briefing runs to a grand total of three measures that it claims will specifically benefit the region.

Although the first measure—the increase in personal allowances—is welcome, it can hardly be regarded as specific to the north-east. The second measure is that Newcastle will receive the princely sum of £6 million, and become a super-connected city. Perhaps the Chancellor and the Treasury do not realise that Newcastle, as important as it is to the entire region, is not the entire region—in fact, it has about a tenth of the region’s population. Finally, in the month when the north-east is losing its regional development agency, its local enterprise partnerships will receive a paltry £10 million from the Growing Places fund.

In the Budget statement, the Chancellor notably consigned to the dustbin of history the phrase, “We’re all in this together.” The imbalance in this Budget means that most of us are in this together, but the few at the top of society will be exempt from it all. The regional disparity is all too plain to see. In the three south-east regions— London, the south-east and the eastern region—nearly 195,000 taxpayers will reap the benefit of the Chancellor’s higher-end tax giveaway, but in the north-east the figure will be fewer than 5,000, and about 4,000 in Wales.

[James Wharton (Stockton South) (Con)]

Is it not the case that nearly 1 million taxpayers in the north-east will benefit from the personal allowance increase, and that it is the poorest taxpayers in regions such as ours who will benefit?

[Ian Mearns]

That would be the case if it had not been for the hikes in VAT, which as an indirect tax particularly disbenefits the very poor in regions such as the north-east. There are significant figures showing the genuine disbenefits of that for poor people.

When William I sought to quell the north following the Norman conquest, he developed a slash-and-burn policy to subjugate the unruly barons and the Saxon citizenry, and the people of the north-east could be forgiven for thinking that the Government had developed exactly the same approach—a 21st-century scorched-earth policy for the north. In just two years, they have abolished our Minister for the north, our local authorities have had to deal with massively disproportionate cuts, our regional development agency has been eradicated and there has been a miserly investment in transport and infrastructure projects, at the same time as disposable income has been sucked out of our pockets and our high streets. My local Gateshead authority has had to cut £70 million from its budget—equivalent to £88 per head of population—losing 1,500 staff into the bargain. The average cut for the 12 north-east councils was £84 per head of population, while the 12 least-deprived local authorities in England, including Windsor and Maidenhead, Richmond upon Thames, West Berkshire and West Sussex, each lost an average of less than £20 per head of population, so we are clearly not all in this together.

Almost every aspect of the Budget looks as if it was designed to have a negative impact on the north—on our people and on our businesses. VAT on takeaway food not only most affects people with the lowest incomes but has reduced the value of Tyneside businesses, including Greggs plc, which saw £20 million to £30 million wiped off its share value when the “pasty tax” was announced. I have no doubt that the measure will also have a negative impact on the work of the Greggs Foundation, which last year donated £1.4 million to support breakfast clubs for 65 north-east primary schools, at least four of which are in my constituency. The foundation also supports youth groups in some of the most deprived communities of the north-east, and also in Scotland and Wales. So much for the big society.

In addition, the Government’s welfare benefit changes will have a massively disproportionate impact on regions such as the north-east. Currently, 11,000 people in Gateshead claim incapacity benefit and, together with the numbers on jobseeker’s allowance, almost 24,000 people are claiming out-of-work benefits. National figures show that of those people undergoing the work capability assessment, 37% have been found fit for work and 34% have been placed in the work-related activity group of employment and support allowance, but for the vast majority of them in the north-east there is no real prospect of work in the near future. If the national figures are mirrored in Gateshead, almost 8,000 people will be moved off incapacity benefit and receive lesser benefits, if anything at all.

I am told by Gateshead council that the introduction of universal credit will result in 14,500 tenants having to manage a larger personal contribution each week, which will increase demand for budgeting and money management skills, and risk more tenants being unable to manage their household budgets and resorting to expensive borrowing, including legal and illegal loan sharking. The risk of non-payment of rent, based on a calculation rate for sums not covered by housing benefit, could result in an additional £20 million not being there to be collected by local authorities, which are already struggling to cope with the punitive cuts they have endured.

Benefit reductions for under-occupancy will affect 3,478 of our current tenants in Gateshead—18% of all those with the Gateshead Housing Company. Of those, nearly 3,000 have an extra bedroom and could therefore face a 10% to 15% reduction in their benefit, and the 815 who have an extra two bedrooms could face a 20% to 25% reduction. If we magnify those numbers across the region, we could be dealing with a widespread social crisis.

[Ian Mearns]

My hon. Friend hits on an appropriate point. Regarding how out of touch the coalition is with the vast majority of people in regions such as the north-east, its lack of understanding of how the housing market works in such places is absolutely spot on.

I am a north-east Labour MP, so I suppose that no one will be surprised to discover that I am not impressed by the Chancellor’s support, or lack of it, for the region. However, the north-east’s business community is equally unimpressed. The North East chamber of commerce has said:

“The extra cut in corporation tax is welcome and will help stimulate investment in the UK. However, relatively few North East firms will benefit from this, and we would have preferred to see a greater focus on strengthening investment allowances and cutting employment taxes, to address the two key weaknesses in the North East economy.”

Although it does not deal specifically with the north-east, the Federation of Small Businesses wrote to me when it found out that I had secured this debate, asking that I highlight its concerns. The FSB said:

“We asked for a Budget with long-term measures to help to instil confidence, rather than a barrage of micro-measures that have a limited impact on the ground. We are pleased with some of the actions to cut the burden of red tape, help to get our young workers into employment, and measures to improve access to finance…However, petrol prices remain a major concern for small businesses and we would have liked some further action on reducing the level of fuel duty to help struggling small firms.”

The cost of fuel, although important to all UK businesses, is crucial to maintaining competitiveness in regions such as the north-east. One local business that makes plastic milk bottles informed me that its biggest cost is the cost of fuel. Let us face it: in effect, that business’s biggest cost is transporting its product, which is 90% fresh air, around the UK. Given the geographical location of the north-east and the vital importance of manufacturing employment, was it too much to ask that the Government reduce fuel costs for businesses and maintain jobs in the regions?

The Federation also commented that it welcomed the enterprise finance guarantee scheme, but said that recent figures clearly show that lending under the scheme is falling rather than rising, and that the Chancellor must do a lot more to encourage banks to increase their lending to small firms without requiring the excessive personal guarantees that deter small businesses, particularly in areas such as the north-east.

The Association of North East Councils, which represents the 12 north-east authorities, was also unimpressed, reporting that almost 50% of businesses in the region have no plans to increase staff numbers in the coming months but are hanging on before deciding on reductions. Weakening sales and poor service sector performance are still preventing much-needed growth to offset public sector employment cuts. Job loss in the north-east as a whole is four times deeper than in the rest of the country. None of that has been helped by the complete lack of recognition or action in the Chancellor’s Budget.

This Government are now doing to public services in the north what they did so successfully in the 1980s to our traditional industries of mining, shipbuilding and heavy engineering: bringing them to ruin and laying them waste. If the Government’s plan to replace those jobs is to build the private sector, why are they doing virtually nothing for the north-east? The main problem is not that they are doing nothing but that they are making things worse. For the young in particular, they are removing hope.

The Government have not recognised that for a region such as the north-east, geography and the new politics of the United Kingdom are realities that must be considered. Scotland is just over the border. The Scots at Holyrood still have economic development and tourism strategies and are still offering inward investment incentives, all important determinants whether a company invests in Scotland or the north-east, but the Chancellor and the Secretary of State for Business, Innovation and Skills seem oblivious. For example, Amazon, despite considering a site in the north-east, has located in Edinburgh, purely on the basis of the grants available. Given the existing imbalance in Edinburgh’s favour, the decision to locate the Green investment bank there seems like a political and economic knee in the groin for regions such as the north-east of England.

In last year’s autumn statement, the Chancellor made much of the Government’s plans for our national infrastructure, emphasising the importance of capital spending on infrastructure to support the UK’s long-term growth prospects. He outlined £30 billion in spending, including an immediate increase of £5 billion in Government spending. As one of their central economic priorities, the Government have defined a number of ways in which they wish to rebalance the economy away from over-reliance on public sector jobs and towards private sector employment; away from over-reliance on financial services and towards manufacturing and export industries; away from over-reliance on the south-east and towards more balanced economic growth across the UK.

The Chancellor’s statement emphasised that every region in England will benefit from that infrastructure spending. He even listed a host of road and rail projects in England in his speech. However, research by the Institute for Public Policy Research on the detail behind the Chancellor’s statement paints a different picture. Behind the empty rhetoric and claims of rebalancing, we find that 11 of the 20 largest infrastructure projects will benefit London and the south-east, only five will benefit the three northern regions and more than half of regional transport projects involving public funding will benefit London.

Considered together, London and the south-east account for 84% of planned spending, compared with only 6% for the three northern regions and an unbelievably minuscule 0.04% for the north-east. That equates to £2,731 per head of population for London and the south-east, more than all the other regions combined, compared with £201 in Yorkshire and Humber, £134 in the north-west and just £5 in the north-east of England. A fiver is what we are worth, in comparative terms, in the UK of today. For each £1,000 of gross value added generated in 2009, £81 is being spent on transport projects in London, £38 in the south-east, £12 in Yorkshire and Humber, £8 in the north-west and less than 50p in the north-east.

This Chancellor and this Government have spoken in duplicitous terms, but I now wonder whether they have given up even trying to talk a good fight when it comes to rebalancing the economy. They have clearly been saying one thing and doing another, looking after their home patch while slashing and burning the regions of England. To make matters even worse, they prefer to exemplify the north-east as a basket case. Before this bunch came to office, nothing could have been further from the truth. Thanks to the support of its 12 local authorities and the regional development agency, the north-east had developed an economy that was strong, dynamic and diversified compared with when a Conservative Government last laid waste to it in the 1980s.

However, in a typically knee-jerk, ideological and spiteful reaction, this Government have abolished our RDA, despite the fact that during the last three months of 2011, the north-east enjoyed record high growth in exports. Goods worth £13.5 billion were sold overseas from the north-east, up from £12 billion the previous year. If every other region in the United Kingdom were performing as well in those terms as the north-east, we would be doing rather well indeed.

Only yesterday, I received e-mail confirmation from the largest private sector employer in my constituency—AkzoNobel, known locally as International Paints—that last year it received an essential grant from One North East to support the establishment of its fire protection research and development facility. Recently produced documentation on the legacy of One North East showed that during the past 10 years, the north-east enjoyed the greatest level of economic growth outside London, and that during the last Government, the development agency helped to increase the region’s employment massively and its number of businesses and GVA to among the highest in the country.

Before the RDA’s inception, our regional economy was falling further behind other English regions. Since it was established in 1999, only London has experienced greater economic growth, but this Government have replaced the RDAs with local enterprise partnerships, which have no powers and little or no funding, and the much-heralded regional growth fund, which has delivered only modest amounts of direct aid to companies in the north-east.

From 1999 onwards, employment in the north-east rose at the third highest rate in the country after London and Yorkshire and Humber, and 116,000 jobs were created, representing growth of 11.2%. We also had the highest growth in new businesses, 18.7%, and the highest growth outside London in GVA per head of population. Tourism, conferencing and inward investment were all significantly boosted by the RDA’s “Passionate people, passionate places” campaign. The agency’s work on low-carbon vehicle production and green energy generation are legacies on which we could build if only the Government had a credible policy for the economy.

We had a credible policy for growth in the region, a credible policy for jobs and a credible policy to rebalance England’s economy, which included the idea that the north-east is a place to do business. Sadly, this Government have none of those, and prospects for my region remain bleak. Disposable income is being sucked out of our communities through public sector job losses, wage freezes and benefit cuts.

Before the recess, the Newcastle Journal published an editorial headlined “Never mind a Heathrow runway”, which stated:

“It would be a terrible shame if the row over party funding deafened the Government to the findings of the OECD. Its report makes grim reading for the region, but not simply because it highlights the problems caused by rotten infrastructure, poor connectivity and the lack of continuity in government. No, what really hurts is that a Paris-based organisation has been able to recognise basic, obvious, well-known facts that should not have been possible to ignore. Yet successive administrations in London have managed that feat damagingly well. Never mind arguing about a third runway at Heathrow, how about helping the North East instead?”

What are the Chancellor’s answers to these regional conundrums—a brain wave, a stroke of genius, an innovative investment package? No, what we got was the concept of regional pay. If that is the direction that he wants to take, perhaps we could also ask him to consider regionally reduced utility bills for gas, electricity, water and telephones, and while we are at it, cheaper council tax and grocery bills. If the Chancellor or the Prime Minister fancy paying £250,000 for the privilege of dinner with the chief executives of Tesco, Sainsbury’s, Asda and Morrisons, they could ask them, “Could the supermarkets reduce the cost of shopping in the regions, please?” They could also ask representatives of the east coast main line to charge regionally reduced fares for journeys to London.

[James Wharton]

I thank the hon. Gentleman for giving way to me for a second time. When the previous Labour Government introduced localised pay for the Courts Service, did they also introduce the other measures that he has mentioned?

--- Later in debate ---

[James Wharton (Stockton South) (Con)]

Thank you, Sir Roger. It is a pleasure to serve under your chairmanship. I congratulate the hon. Member for Gateshead (Ian Mearns) on his passionate speech and on securing such an important debate. The issue is important to all of us who represent the north-east, in whichever party.

It is important to be clear that the north-east is not a basket case. It is not the end of the world and it is not a place where economic activity does not exist. There are many good signs of progress and economic success in our region. Unemployment in the north-east has been falling for the past two months, against the trend in much of the country, in what Members will agree is a difficult economic climate. There are many examples of significant good news stories, such as the relighting at the weekend of the SSI blast furnace on Teesside. That is very good and positive news, due in no small part to the sterling work of my hon. Friend the Member for Redcar (Ian Swales), who has fought long and hard to see steel-making return to that part of our region.

[Tom Blenkinsop (Middlesbrough South and East Cleveland) (Lab)]

Will the hon. Gentleman also acknowledge that the work to get SSI to purchase the Corus steel plant began in the summer of 2009 and was largely due to the work of the trade union on the site, which led the “Save our steel” campaign, in conjunction with Labour Ministers, who regularly met plant representatives, unlike this Government’s Ministers, who refused to meet work forces at Rio Tinto Alcan and—these are not in the north-east—at steel sites in Kent, such as Thamesteel?

[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—

[Sir Roger Gale (in the Chair)]

Order. I call Mr Grahame Morris.

--- Later in debate ---

[Ian Lavery]

Thank you, Sir Roger. I agree with everything that my hon. Friend said.

We in the south-east of Northumberland are a million miles away from Nissan. The perceived jobs bonanza at Nissan is two bus journeys, a Metro journey and a further bus journey away. We wish that we had the same opportunities as there are at Nissan. We hope that they will come. We have not even got a rail service in my area: there is a railway line but no trains to run on it. We cannot even get to Newcastle, Sunderland or Middlesbrough city centre from where we live, because there are not the transport links and the much-needed transfer links.

I want to focus on a strong appeal to the Minister to hear the case of the people in south-east Northumberland. If we in Wansbeck are to have an opportunity for growth, a Northumberland extension of the North Eastern local enterprise partnership enterprise zone—the port of Blyth and the estuary—needs to benefit from capital allowances and rate relief at the same time. It is not enough to extend the enterprise zone without the provision of the additional allowances and incentives necessary to attract businesses and jobs. We need those guarantees. In addition, with the appropriate allowances and incentives, further extension to the enterprise zone is desperately needed, so that it stretches through Wansbeck as far up the coast as the Alcan site. A failure to do so will place Wansbeck and south-east Northumberland at a distinct disadvantage, by further damaging employment opportunities for our communities.

[James Wharton]

On a point of regional, cross-party unity, I echo the hon. Gentleman’s calls. The enterprise zones are a good initiative of the Government, and I should like to see them extended. Anything that we as a region can do to put pressure on Ministers to extend the enterprise zones and to give us further opportunities for growth is welcome.

[Ian Lavery]

Having enterprise zones surrounding areas such as mine only compounds the entire problem; basically, they incentivise people to stay away. May I appeal to Ministers, on behalf of the young and the old? Please listen, visit the area, help the anxious communities that we represent, give them fairness and a level playing field and give them hope and access to aspiration. Although not the most wealthy people in the country, we are most honest and most sincere. We need the Minister and the Government to act now to save what might be lost future generations.

Fuel Duty (Northern Ireland)

Lord Wharton of Yarm Excerpts

Wednesday 22nd February 2012 Westminster Hall

[Ms Ritchie]

I thank the hon. Gentleman for his intervention. I agree that it is the same fuel type, which is imported directly from the middle east and wherever it is refined before it reaches the ports of Belfast and Derry. I also agree that rural communities are more deeply affected as a result of fuel duty increases. We find little reassurance in the current global situation. Just this week, Iran suspended the sale of crude oil to the UK, and the strait of Hormuz, through which 35% of all traded oil travels, is in a state of great uncertainty. It is not my intention to turn this into a debate on Iran and the middle east, but the point remains that while we rely so heavily on imported fossil fuels we will be somewhat captive to external events. Set against that, the Treasury is not doing enough to ameliorate the consequences of these events for consumers and businesses alike.

Consumers and business are caught in a pincer between the volatile price of a critical commodity and an inflexible Treasury duty regime. With the current instability in Iran, combined with the suspension of the refinery at Coryton, we would be naive to think that there will be no more inflationary pressures on the price of petrol. While the Minister has little control over an uncertain world, I would like to know what plans she has to protect people from the worst effects of those circumstances. Put more bluntly, in the short-term the Chancellor must extend the freeze on fuel duty hikes that was announced in the autumn statement. The measures announced in the autumn statement—the deferral of the 3p increase in duty and the cancellation of the escalator—were welcome short-term measures, but they will do little to mitigate the increased long-term rise in fuel prices. According to Consumer Focus back in March 2011, the 1p reduction in fuel duty was wiped out within days by rising oil prices. There is not the feeling that the Treasury is shouldering its share of the rise in the same way that motorists and businesses are.

[James Wharton (Stockton South) (Con)]

I congratulate the hon. Lady on securing this important debate. I represent a constituency in the north-east of England, which in many ways faces similar economic challenges to Northern Ireland. One issue—

[Mrs Anne Main (in the Chair)]

Order. I ask the hon. Gentleman to confine his remarks to Northern Ireland fuel duties.

--- Later in debate ---

[James Wharton]

Absolutely. As the relative income is lower compared with some English regions, as it is in Northern Ireland, the effect of fuel prices is felt more acutely. Will the hon. Lady clarify whether she is looking for Government measures that are specific to Northern Ireland, or a nationally applicable measure that would benefit everybody in the UK?

[Ms Ritchie]

Naturally, I will be looking for measures that are specific to Northern Ireland because I represent a constituency in Northern Ireland. I understand the difficulties of other regions. As Mrs Main has directed, this debate is specific to Northern Ireland. If the hon. Gentleman will let me progress a little, I will explain where I am coming from.

While we rely on imported oil, fuel prices will always be vulnerable to exogenous pressures and external shocks, but the Treasury has levers at its disposal with which it could mitigate the worst of those effects for consumers. The 3p increase in fuel duty is still approaching in August and the Chancellor’s remedy would seem to be palliative rather than curative. It is a market in which price rises are passed on with alarming rapidity to the consumer, while decreases are notable mainly by their absence. It is like a seesaw with a very heavy weight at one end—a lot of jumping up and down at the other end seems to make very little difference.

The Economy

Lord Wharton of Yarm Excerpts

Wednesday 22nd June 2011 Commons Chamber

[Sajid Javid (Bromsgrove) (Con)]

I found many of the comments in the shadow Chancellor’s speech absolutely astounding. He began by talking about economic illiteracy despite the facts that he was in the Treasury when the previous Government announced that they had abolished boom and bust, and just a few days ago he proposed an unfunded cut in VAT costing £13 billion a year and £50 billion over the course of the next four years—a £50 billion increase in our national debt. Clearly, when he was talking about economic illiteracy, he was talking about himself.

The truth is that in 1997 Labour inherited a golden legacy. National debt was low, growth was robust, and the budget deficit was a third of what it is today and falling rapidly. Now we find ourselves in a situation that could not be worse. The national debt has grown from £350 billion in 1997 to £920 billion today. Servicing that debt costs £43 billion in interest this year—more than we spend on the defence of our country or on the education of our children—and, despite the effect of the fiscal actions that this Government are taking, it will rise to almost £70 billion in four years’ time.

[James Wharton (Stockton South) (Con)]

My hon. Friend is making an excellent point about the levels of debt that the Government inherited. It is also important to put on the record that many economists and observers of the national finances say that the debt may be significantly higher, depending on how we measure it and which liabilities we take into account. The situation we inherited, as bad as it sounds in his description, could be even worse if we factor in all the liabilities that the previous Government left behind.

[Sajid Javid]

My hon. Friend is absolutely right. There are some very reliable estimates of unfunded liabilities of central Government standing at over £1 trillion, which would more than double the national debt—not to mention private finance initiative liabilities potentially worth £300 billion.

How can we prevent this from happening again once this Government have brought down our debt? There is a possibility that some time in the future, the public may, against their better wisdom, elect another Labour Government. Perhaps we should consider capping the national debt at a percentage of GDP, so that future Governments who think that they can spend like there is no tomorrow are held back. I am pleased to announce that on 12 July, I will present a ten-minute rule Bill, provisionally titled the national debt cap Bill, to suggest just such a measure.

We have heard a lot from the Labour party about the cuts being savage and reckless. It is easy to make those accusations without looking at the facts. The fact is that the cuts have not even started yet. The first fiscal year of cuts will be this year. It is important to go into the specific numbers. There will be cuts of 0.6% in real terms this year, 1.1% next year, 1.3% the year after and 0.8% in 2014-15. That averages out as a cut of about 0.9% in real terms each year. That is a total cut of 3.7% in real terms. Although such a cut cannot be dismissed, that is the absolute minimum that is necessary to bring sanity back to our public finances.

Fuel Prices and the Cost of Living

Lord Wharton of Yarm Excerpts

Wednesday 16th March 2011 Commons Chamber

[Alex Cunningham (Stockton North) (Lab)]

Many Members have concentrated on prices at the pump, but there are much wider issues to do with fuel in general and the cost of living, and I want to focus on fuel poverty, which has an immense impact on family life. It is an issue that is close to my heart.

According to the House of Commons Library, between 1996 and 2004 the number of households in fuel poverty fell from 6.5 million to less than 2 million, largely due to the measures put in place by successive Labour Governments. Now, in the face of massive increases in energy prices, the number of households in fuel poverty is estimated to be 5.5 million, or more than one in five households

Petrol price rises add to poverty. That is a new type of fuel poverty—if any fuel-poor households can actually afford a car. Domestic fuel prices fell by 17% in real terms between 1996 and 2003, but then increased by a massive 74% in the following six years. Those dependent on oil have suffered particularly badly, especially those who need oil to heat their homes. Our motorists have also suffered as prices have increased. The average standard credit gas bill for a typical consumer in 2010 was £683, which is 80% above the 2001 low in real terms. In 2009 the electricity bill for a typical consumer was £440, almost 50% above the 2003 price.

I know that energy companies do much to promote energy efficiency—mostly financed through a levy on their customers’ bills, I believe—but they, and the Government for that matter, need to do much more. There are several good reasons to do so. More than three out of four of the poorest 10% of households in England were in fuel poverty in 2008; I do not think they can afford a car, in fact. That means that the poor are getting poorer as prices increase way beyond the inflation rate, and inflation is already far too high under this Tory-led Government.

In 2008 more than half a million households needed to spend more than 20% of their income on energy to maintain a satisfactory heating regime. They are those in so-called extreme fuel poverty. Under Labour’s decent homes programme, 750,000 social homes had insulation works and 900,000 had new central heating systems. Warm Front assisted vulnerable people in more than 1.7 million homes, and large numbers of rented homes were improved under Warm Zones, Warm Wales and other initiatives. Now we need to see clear, comprehensive and well-funded initiatives from the Tory-led Government to deal with fuel poverty, because as they squeeze wages, raise taxes—such as those on fuel—cut benefits and hit our people’s pockets in so many other ways, more people will fall back into the group who will see 10% or more of their money disappear on just buying fuel.

This month the Government have announced that they have appointed a fuel poverty tsar, Professor John Hills. I hope that is not just a publicity stunt, as much more needs to be done to address this issue. His independent review will redefine and measure fuel poverty. I hope that does not mean we just change the numbers, and lift many out of fuel poverty by simply changing the way the numbers are added up. It does not matter what the numbers say: if people cannot afford to heat their home or put fuel in their car tank because they have not got enough money, they are still cold and still poor. I hope there will be no dragging of feet on that.

One area in which we may see some recommendations is the need to ensure that privately rented accommodation is properly insulated—and again, we can do that without waiting. Some of our poorest people live in privately rented property, where many landlords are happy just to pick up the rent without investing as they ought to. I hope the Minister will do a bit of cross-Government thinking today, and tell us how this issue will be dealt with under their new plan to tackle fuel poverty.

There are other solutions, and the Energy Bill, which is currently in the other place and is due to come to the House of Commons, may help if sufficient capacity is built in to make things happen on a similar, or greater, scale than in recent years. It allows for the implementation of a green deal scheme from 2012, which will allow householders to install energy efficiency improvements without having to meet any of the up-front costs. Those will be met by energy companies and will be paid back over a period of up to 25 years—but is that really the good news it is made out to be? We need to ensure that the financial environment in which such schemes are taken forward is the right one. Will potential changes to the feed-in tariff in respect of the installation of photovoltaic panels, for example, provide the right financial incentive to deliver that day-time free electricity for householders? We will need to wait and see, but the Government will miss a major opportunity if they mess about with the tariff and negate the incentive that investors and householders need.

I have concentrated on fuel poverty in terms of the household budget. This Tory-led Government are helping to create a new type of fuel poverty. Many people cannot afford to buy petrol or diesel, and that particularly affects the rural communities in my constituency, such as Stillington.

[James Wharton (Stockton South) (Con)]

The hon. Gentleman speaks passionately on a subject about which I know he cares a great deal. He and I represent different halves of the same town, and we often disagree on political matters, but I suspect we share some common ground on this issue, in wanting to see the costs to our constituents brought down at every possible opportunity. Does he agree that if the Government could introduce a fair fuels stabiliser, that would be useful in allowing people who particularly need to be able to do so to plan their budgets and manage their money better, so that they could help themselves by planning their finances and avoiding the problems of poverty that, sadly, we so often see in the north-east?

[Alex Cunningham]

This is amazing, but I find myself in agreement with my colleague who represents the opposite side of the Stockton borough. Any measure that reduces costs for the people whom he and I represent has got to be important. That is particularly the case in places such as Stillington in my constituency, where people need to commute, often to low-paid jobs, and have limited public transport services. They are hit the hardest by the current economic policies.

I hope that the Government will see sense. I hope that they will avoid a fudge on the need for a comprehensive programme to tackle fuel poverty, and I hope that they will reverse the VAT increase at the pump, and introduce the fuel duty stabiliser—and maybe even keep a couple of the promises they made to our people during the election campaign.

Oral Answers to Questions

Lord Wharton of Yarm Excerpts

Tuesday 8th February 2011 Commons Chamber

[The Financial Secretary to the Treasury (Mr Mark Hoban)]

The hon. Gentleman raises an important question about the continued work load of the Financial Services Authority and its work on financial services. He and I would agree that we want better consumer outcomes from retail financial services, and that means that these areas should be reviewed very carefully. However, I am also certain that the outcome of the mortgage market review should take into account the stability of the housing market.

[James Wharton (Stockton South) (Con)]

T4. The 2010 North East Research and Information Partnership annual jobs report shows a net increase in employment in the region of about 1,300 jobs over the past year. What are the Government doing to ensure that the private sector recovery in the regions continues?

[The Chief Secretary to the Treasury (Danny Alexander)]

The Chancellor announced measures in the Budget on corporation tax and national insurance breaks, particularly for companies in the regions. We have set up local enterprise partnerships, which enable local authorities and businesses to work together to promote their own economic interests, and in due course we will announce the first round of decisions on the regional growth fund, which will help to support exactly the sort of initiatives the hon. Gentleman is concerned about.

Public Accounts Committee

Lord Wharton of Yarm Excerpts

Thursday 16th December 2010 Commons Chamber

[James Wharton (Stockton South) (Con)]

Thank you for giving me an opportunity to contribute, Mr. Deputy Speaker. I also thank other Members who have curtailed their speeches in order to ensure that everyone has a chance to speak in this important debate. I emphasise the importance of the debate, and also that of the role of the Public Accounts Committee. I am a relatively new Member of Parliament and a new member of the Committee. I hope that the right hon. Member for Stirling (Mrs McGuire) will forgive me if I say that I am indeed learning on the job, and it is a very steep learning curve, but I think that many new members are getting to grips with their role very well. I am pleased to count myself among friends on the Committee, even if we are not all hon. Friends on the Floor of the House.

I must make a brief apology to a rather wonderful lady called Julia Whitehill. She is my constituency caseworker, and she worked diligently to arrange the constituency office drinks party this evening, which I have forgone in order to speak in the debate. If that is not a measure of the importance that I attach to the PAC’s work and to the debate, I do not know what is.

I shall touch briefly on just one of the many reports that the Committee has undertaken in the current parliamentary year, because I think that it is of significance to my constituents. Tackling health inequalities has already been mentioned in the debate, and the report to which I refer is entitled “Tackling inequalities in life expectancy in areas with the worst health and deprivation”.

My constituency in the north-east of England is at the centre of much of that challenge. We have real deprivation in my region, and we face real challenges in health care and life expectancy, which need to be addressed. The Committee identified some of the failings in policy that had hampered earlier efforts to tackle the problem, and suggested a number of measures that future Governments might wish to take. It found that the health gap between deprived areas and the general population had widened despite the efforts that had clearly been made—I do not deny the legitimate efforts made by the last Government to tackle the problem, and I do not suggest that it is not high on the agenda for many Members in all parts of the House—and that the Department of Health had not set about its important task with sufficient urgency or focus.

The Committee also found that a failure adequately to address GP shortages in areas of deprivation had led to the widening of the gap, or at least had been a significant contributory factor, and that that was still a problem. It suggested that there were opportunities for the Department to identify new measures to drive up GP numbers in areas of deprivation, including the possible use of the GP contract to give GPs an incentive to go to the places where they were most needed.

The NHS spends about 4% of its overall budget on prevention, but the Committee found—this is a recurring theme—that individual commissioner spending was not readily identifiable; as we find when we look at many Government Departments and operations, the lines of accountability were blurred. Time and again we find that accountability suffers when Governments of whatever political hue push forward with measures that do not properly take into account the lessons the Committee tries to help them understand.

Along with funding shortfalls and other problems which, sadly, I do not have time to go into in detail, we found that there is much work to do and that previous efforts had not succeeded. Across so many Departments, the lines of accountability—the ability to measure what is supposed to be achieved and to set milestones on where we are meant to be going—are lacking in the plans put forward, whether by civil servants, Ministers or political parties. A huge amount of work needs to be done to change the way government functions so that Governments can deliver their objectives, whatever they might be. Whatever our political outlook, we all have an interest in ensuring that Governments work efficiently so that when Ministers pull the levers of power, things happen in the way that is intended. A key aspect of the PAC’s role is identifying where Governments do not deliver in the way they are supposed to, irrespective of policy determination or the lead coming from the Ministers at the top.

I am conscious of the time constraints but I merely wanted to have the opportunity to make this contribution and to put on record my admiration for the work that our wonderful Chairman, the right hon. Member for Barking (Margaret Hodge), is doing in leading us through a challenging set of reports and issues. Our work load is, I think, greater than that of the other Select Committees of this great House at this time, as is the pace at which we tackle it. I am extremely pleased to be a member of the Committee and to have had this opportunity to contribute to the debate. I will end my remarks now in the hope that other Members will also be able to contribute.

Office of Tax Simplification

Lord Wharton of Yarm Excerpts

Tuesday 20th July 2010 Commons Chamber

[Mr Gauke]

Some months ago my right hon. Friend the Prime Minister made a speech identifying those areas in which quangos would be an advantage, and one of those was the ability to provide independent advice in a technical area. This is one of those areas, and we believe that engaging with outside bodies and making use of outside expert advice will actually benefit the creation of good tax law and improve our tax system. This policy is not about grabbing headlines, but improving our tax system because that is what we want to do. We will leave the headline grabbing and the sudden announcements to our predecessors.

[James Wharton (Stockton South) (Con)]

I welcome the statement by my hon. Friend. Does he agree that it is striking that the independent experts who will lend their expertise to the OTS are doing so without being paid, and does that not contrast starkly with the millions spent on ineffective quangos by Labour?