Office of Tax Simplification
Lord Wharton of Yarm Excerpts(15 years, 6 months ago)
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Urgent Questions are proposed each morning by backbench MPs, and up to two may be selected each day by the Speaker. Chosen Urgent Questions are announced 30 minutes before Parliament sits each day.
Each Urgent Question requires a Government Minister to give a response on the debate topic.
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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?
Finance Bill
Lord Wharton of Yarm Excerpts(15 years, 6 months ago)
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Matthew Hancock
Unfortunately, those from whom the previous Government had borrowed so much did not see a credible plan from the Labour party. That is why we have had to introduce the emergency Budget, so that we could put that credible plan in place. Since the election, there have been downgrades in the debt of many of our competitors, so it is critical that we have managed to put that triple A rating on to a sustainable basis.
I want to go through three reasons why a fiscal consolidation can lead to growth. The first, of course, concerns interest rates. The long-term interest rates at which many companies around the country borrow—they include those in my constituency, and no doubt those of all other Members—have fallen. In fact, since the election the 10-year rate has fallen from 3.88 to 3.44%, which represents more than a 10% fall in the funding costs of companies up and down the country. Of course, that was not taken into account in the two productions of the Office for Budget Responsibility analysis, which is why a direct comparison of the two is, as stated by Sir Alan Budd, misleading.
James Wharton (Stockton South) (Con)
I would like to echo my hon. Friend’s comments about interest rates, but also add that low interest rates have a beneficial impact not only on our economy and businesses, but on the very individuals and families whom the right hon. Member for Birmingham, Hodge Hill (Mr Byrne) talked so much about. The most disadvantaged in our society will benefit most from the positive outcomes of the fiscal and economic policy approach that we have taken.
Matthew Hancock
My hon. Friend is getting a reputation for making extremely good interventions, and that was one of them. Fiscal consolidation also means that interest rates can be held lower for longer by the independent Bank of England, which is a second important channel through which economic growth can be supported, and not opposed, by fiscal consolidation.