The Economy
Nigel Evans Excerpts(13 years, 5 months ago)
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Mr Deputy Speaker (Mr Nigel Evans)
Order. Mr Birtwistle, just to save your legs, I do not think that Mr Blenkinsop is keen on allowing you an intervention.
Tom Blenkinsop
Figures published on 10 June show that the seasonally adjusted index of production in April 2011 fell by 1.2% when compared with April 2010. In addition, the seasonally adjusted manufacturing figures saw output fall by 1.5%, and in my area, again, Teesside beam mill has shut down, the Ensus biofuels plant is on a four-month shutdown and the former Enron-run Teesside power station has been half mothballed. That has all happened during the tenure of this Government. We heard from the Chancellor how he believes that the economic ramifications of his policies occur within weeks, so it would be quite refreshing to hear Ministers take responsibility for the manufacturing downturn in my area.
Prospective packages from INEOS have been blocked, because it is looking for certainty, and a Government who rely on a weak pound for exports to lead their economic recovery are living in a fantasy land, given the constant credit squeeze from the Asian growth markets. The governing parties are quite willing to take the credit for manufacturing output increases, but they are still below 2008 levels and also match other manufacturing increases across the globe. They have nothing to do with the Government’s policies; they are about manufacturing at this moment in time across the globe.
The British Chambers of Commerce described the latest trade figures as “mediocre”, adding that
“the monthly underlying fall in the volume of exports is a matter for concern.”
What concerns me is that a Government who laud the benefits of manufacturing are also imposing ahead of their EU competitors a carbon floor-pricing policy that will stifle the very industries on which they rely for their growth. How are the Government going to get tax revenues from those industries when they no longer exist or move abroad? That is the stark reality, and we have to wake up to the fact that the biggest sectoral exporter in the country is the chemical industry, which will also be the most affected industry as a result of that policy.
In last year’s Budget, the Chancellor chose to increase VAT to 20%, despite the Tories repeatedly denying in their election that they had any plans to do so. The Treasury’s own figures show the estimated impact of the rise in VAT. The 2.5 percentage point rise will cost an average couple with children £450 a year and a pensioner couple £275 a year.
The rise will also have an impact on growth. The Office for Budget Responsibility forecasts that the increase in VAT to 20% will have the effect of reducing GDP during this financial year by about 0.3%. If we had a temporary reduction in VAT across the board, we would provide a boost for consumers by putting more money directly into people’s pockets, and we would be able to maintain it until there were certain figures, proved empirically, to show that an economy recovery was beginning.
The fact that this Government are not prepared to give former regional development agency assets to local enterprise partnerships, which are supposed to be this country’s local economic drivers, is an absolute demonstration that the Chancellor has no confidence in his own economic plan. The LEPs will have no rights to those assets, and that means that the Chancellor has no confidence in those local businesses that are engaged with them.
Alun Cairns
The hon. Gentleman talks about the number of people looking for jobs in his constituency this year compared with last. What would he say to the Welsh Government about that, and what is their responsibility for it? They have contributed to the greatest decline in Welsh gross domestic product over the past 12 years, making Wales the poorest part of the UK, which it was not previously.
Mr Deputy Speaker (Mr Nigel Evans)
Order. Before the hon. Member for Pontypridd (Owen Smith) answers that intervention, I ask hon. Members please to keep interventions very short, because a lot of hon. Members wish to speak.
Owen Smith
Thank you very much, Mr Deputy Speaker.
I completely reject that entirely false characterisation of the Welsh economy. Most importantly, the Labour Government in Wales understand that growth will deliver improvements to our economy, not austerity, cutting or increasing the viciousness of the circle. The hon. Member for Vale of Glamorgan (Alun Cairns) ought to read The Times from this morning, because it is not only Labour Members who are worried that they have got no economic plan for growth from the Chancellor, but the chief executive officers of this country. On page 2, a reflection on the CEO summit states:
“There is...a real fear that a long, slow, feel-bad recovery will leave Britain a helpless bystander as the new economies of Asia, Africa and Latin America storm ahead.”
What does the article go on to say? It says that we need a plan for growth, that plan A is not working, and that we need an industrial strategy that highlights growth sectors, just as the Labour Government in Wales have highlighted life sciences, digital economy and advanced manufacturing.
We need to target and invest in such sectors in a serious, intelligent and structured way, but we are not doing so. As the CEO of Vodafone, which is not exactly a Marxist-led workers’ co-operative, says in The Times today, we in Britain have a “faith” that
“the market will sort it out”—
a misplaced faith that the market is always the answer. That is another lesson that Conservative Members have not learned. The market alone cannot deliver growth in this country. The Government need to intervene and direct intelligently. That is what history teaches us.
Finally, I was not going to talk about banking reform, but the Chancellor ended his speech by saying that Opposition Front Benchers did not talk about it, which admittedly they did not. We will wait and judge Government Members and the Chancellor by what they do on banking reform, but we do not know exactly what will happen on that yet, do we?
We know that the Chancellor has cancelled the bonus tax, and we know that he is talking about looking at banks’ capital-to-asset ratios and trying to ensure that the leveraging they have on their debts is brought into line, but we will see whether the Government make good on those promises, whether they go beyond Basel III and whether they do what the OECD, which has been prayed in aid several times today, is telling them to do and split off high-risk investment banking from commercial banking. These are the tough decisions that have to be taken by a party that likes to listen to its erstwhile colleagues in the banking sector—there are probably a few Conservative Members who used to work there. These are the people who speak and whisper in the Chancellor’s ear. He is not listening to ordinary working people in this country. He needs to start doing that, understand the pain he is causing and move to plan B.
Andrew Griffiths
Returning to the point about manufacturing, is my hon. Friend aware that under the premiership of Tony Blair and Gordon Brown, we saw a sharp—
Mr Deputy Speaker (Mr Nigel Evans)
Order. The hon. Gentleman must refer to another hon. Member by his constituency.
Andrew Griffiths
Does my hon. Friend agree that manufacturing declined more sharply under the previous Government than it did under the premiership of Margaret Thatcher? Under the Labour Government, we saw an unprecedented decline in manufacturing.
Mr Deputy Speaker (Mr Nigel Evans)
Order. To enable more Members to contribute to the debate, the time limit for speeches is now being reduced to six minutes.
Nic Dakin (Scunthorpe) (Lab)
It is a pleasure to follow the hon. Member for Ipswich (Ben Gummer), who enriched us by deploying such a rich lexicon in dissecting the motion. Indeed, this debate is, in part, about language. I began my working life as a teacher of English, and although I have moved on from that, I can still identify a good yarn when I read or hear one, and that is what the Conservatives have been spinning since the general election. They have been spinning a good yarn—a seductive fable—but in truth it is a Tory tale of woe, with brief Lib Dem notes in the appendices. Regardless of how seductive and engaging people have at times found this yarn, it is not an accurate account, because the reality is very different.
The truth is that the country is facing difficult times because there has been a global banking crisis that required strong and decisive action to avoid a global catastrophe. That action was partly led by the then Prime Minister of this country. The situation is still challenging for our economy and others across the western world, as we have heard in the debate, but we must tackle the challenge in a sensible way.
In the general election campaign, the people of this country had every opportunity to hear the different arguments about how best to tackle that challenge, and they mostly supported candidates who proposed addressing the deficit in a serious and sensible way by halving it over the lifetime of a Parliament. The electorate voted for more candidates who supported that than Conservative candidates who, quite fairly, proposed a different approach. This is in part a sorry tale, therefore, because there is no mandate for the Government position.
When Labour left office a year or so ago, the economy was starting to grow strongly: inflation had fallen, and unemployment was falling month by month. As a result, in 2009-10 the Government borrowed more than £21 billion less than had been expected. Yet a year ago today, the Chancellor announced in his Budget speech that instead of following Labour’s plan to halve the deficit over four years—the plan that had been backed by the British people through votes cast in ballot boxes only a month earlier—he would eliminate the structural deficit by the end of this Parliament. That was a reckless decision; it was a choice to go too far, too fast, and the country is now facing great difficulties as a result.
In our debate, my hon. Friend the Member for Middlesbrough South and East Cleveland (Tom Blenkinsop) has highlighted that figures for construction and retail sales have been falling, that the consumer prices index target rate is higher than hoped, and that VAT has stimulated inflationary pressures. We have also heard that we have flat growth and that seasonally adjusted trade figures also remain flat.
The European Commission has just published the full results of a survey that shows a high level of dissatisfaction with the Government’s laissez-faire approach to tackling unemployment. The survey’s 22,560 respondents were asked whether they agreed that the economic crisis means that we should increase public deficits to create jobs. Two third’s of the UK respondents agreed with the statement, which is a much higher proportion than in any other major western country. They agreed that there should be investment in infrastructure. The Government have pulled Building Schools for the Future and various other infrastructure programmes, which has had a devastating impact on the construction industry.
In the community I represent, which is still quite dependent on steel jobs, the collapse in demand for construction has led to Tata Steel’s announcement of 1,500 job losses in its long products business. It is not surprising that Karl-Ulrich Köhler, when he came to Scunthorpe to make that announcement, gave two reasons for the decision: the fall in demand for section steel, both globally and domestically; and the threat of carbon taxes rising in 2013.
The Government’s decisions are having an impact today and for tomorrow on British manufacturing. We need to get behind projects such as the high-speed rail endeavour, which we hope, if it goes ahead, will be built with British steel. The Government have failed to deliver on their promises to invest in the British people. They have brought severe medicine to the country, much severer than was needed. There is real danger that the country will be left in a very difficult situation, after the legacy of an improving economic situation that they were left, which should have been—
Thomas Docherty
On a point of order, Mr Deputy Speaker. Could you clarify whether I could find out from Hansard whether a Member had actually turned up for their own debate?
Mr Deputy Speaker (Mr Nigel Evans)
That is certainly something that you could find out from Hansard, but it is not something that you can find out from me.
Richard Graham
I am glad to see that Opposition Members are focused on the topic of today’s debate.
As I was saying, the manufacturing recovery has softened slightly over the last month or two, but it is still strongly up on where it was a year ago. There is a lot to be done, but I would like now to highlight a few things that this Government have done in my constituency, and on which I am working with my constituents.
Susan Elan Jones (Clwyd South) (Lab)
Conservative Members seem to forget what the Prime Minister said. In speech to the CBI, he said that the Government were sticking to Labour’s spending totals. Just weeks before the collapse of Northern Rock and for several months after it, he said to the Institute of Directors that if it wanted lower taxation and less regulation, he would—
Mr Deputy Speaker (Mr Nigel Evans)
Order. I think that the hon. Gentleman has got the point.
Chris Evans
I thank my hon. Friend. After the debacle of the intervention by the hon. Member for Vale of Glamorgan (Alun Cairns), she proves that we have some sensible voices in Wales.
Let me comment on the blasé attitude that these policies are going to work. That is what Government Members say, but what if they do not? I suspect the Chancellor would say, “Not my fault, guv. It was the snow.” It could be hailstones next time or perhaps it will even be too sunny. I imagine that his plan B is quantitative easing. It is all very well printing money, but the key to it is spending. We have to prove to people—[Interruption.] I mean consumer spending—we will speak about the other issue tomorrow. We need to give people the confidence to spend in our shops and ensure that people are in jobs.
Mr Deputy Speaker (Mr Nigel Evans)
Order. An hon. Member has been accused of misleading the House. I assume that the hon. Lady meant unintentionally misleading it. She should withdraw that comment.
Finance (No. 3) Bill
Nigel Evans Excerpts(13 years, 6 months ago)
Commons ChamberRead Full debate Read Hansard Text Read Debate Ministerial Extracts
Mr Hanson
Good afternoon, Mr Evans. Can I welcome you to the Chair of this seemingly unending Committee, which has been going on for the past couple of days?
I have listened very carefully to the Minister, but I think that the amendment is very modest: we are asking for a report in 18 months’ time, in October 2012, on the impact of the changes. We ask for that, because my right hon. and hon. Friends retain an element of concern that the cut in manufacturing capital allowances will damage some manufacturing sectors. Based on those concerns, we wish to continue to reflect on those matters, and I therefore wish to put the amendment to a Division, so that we can place on the record our concerns about the capital allowance cuts and state that we wish to review the matter very clearly in 18 months’ time, in October 2012.
Question put, That the amendment be made.
The First Deputy Chairman of Ways and Means (Mr Nigel Evans)
Order. I am delighted that Members mention clause 35 from time to time, but it is really quite specific. This is not a general debate on child care or indeed on other policies. Perhaps we could focus more on the provisions contained in clause 35.
Mr Hanson
We have known each other since our elections to the House on 9 April 1992, Mr Evans, and as ever, I shall try to keep to your strictures as the good Chairman that you are. You will note that amendment 8, which you did not select, would have prompted a wide-ranging discussion on the impact on child care. I am trying to focus on clause 35 and not to stray into amendment 8 or the issues that my hon. Friend the Member for Denton and Reddish (Andrew Gwynne) touched on. However, those issues are important when we are looking at the impact of clause 35 on a particular group of people, because that same group of people will lose child benefit and a range of other child care support measures because of their income, and that will shatter the principle of universality that my hon. Friend the Member for Easington (Grahame M. Morris) mentioned.
The Opposition will listen to the debate on clause 35, but we might oppose it. However, there are important points to be examined and answered in detail today. First, how do we use the resource? Secondly, how do we implement the policy? Thirdly, will the Minister answer the challenges made by external bodies about the operation of the clause in practice?
Grahame M. Morris
I am grateful to my hon. Friend: that is a good point well made. There are a number of levels where the Government now have an opportunity to stop, reflect and listen to representations—to steal a phrase from the Health Secretary—about the impact of the policy on the economy. I am sure that that impact was never intended, but it should certainly be taken into account if people now have a perverse incentive not to engage actively in earning a living and making a contribution to society.
Child benefit is a key part of the welfare state, and one that applies the principle of universality to all families in recognition of society’s duty to support not just families, but future generations. I had always assumed that that was a cross-party commitment, irrespective of party political allegiance. However, by taking away £1,000 in child benefit and child tax credits from families earning just over £40,000, the coalition Government are damaging our system of welfare for the future. We know—or at least we suspect—that the measure is more to do with trying to undermine the strong support of middle England and the middle classes for the welfare state. We on the Opposition Benches suspect that the purpose of the measure is to move British politics in a new direction. My concern is that an Americanised system of low taxation with a basic safety net to catch those at the very bottom would be a move in the wrong direction.
The First Deputy Chairman of Ways and Means (Mr Nigel Evans)
Order. This is becoming more of a general debate about the welfare state, which is clearly not what is dealt with in clause 35, which is actually quite specific. I have given a lot of latitude up to now, but we must now focus on clause 35.
Grahame M. Morris
Thank you, Mr Evans. I shall try to ensure that we focus on the clause.
Let me quote some figures from the House of Commons Library that give some detail on the implications of the clause. The Library has calculated that some families will be £1,700 a year worse off owing to the Government’s proposed tax and benefit changes. The Chartered Institute of Taxation has warned of the
“considerable increase in the effective tax burden of those on incomes in the £40,000 to 50,000 bracket”,
which the clause deals with. The Chartered Institute of Taxation also said that
“increasing the tax burden on middle-income households while withdrawing tax credits and child benefit from them will result in their being squeezed proportionately more than those on higher incomes”.
In addition to families on more than £40,000 a year losing benefits, as set out in the clause, families will lose £450 a year on average because of the VAT increase. Added to that, child benefit has been frozen for three years, which equates to a real-terms cut of more than £75 this year for a family with three children, and the baby element of the child tax credit, which is worth £545 a year, has been scrapped. Added together, that all amounts to a quite astonishing attack.
The Chancellor’s answer to cutting the deficit has been to shrink growth and cut support for families and the most vulnerable. In my constituency, take-home pay is almost 20% lower than the national average. Young men and women have struggled to raise families in my area, which has been blighted by unemployment for more than three decades. The previous Government not only provided greater financial support for those struggling families; they also invested in schools and communities, and tried to revitalise and diversify the economy and create new jobs. The programme offered by this Government, and particularly the provisions in clause 35, will turn the clock back to the 1980s, not only for Easington and large parts of County Durham and the north-east but for many of the great cities in the north and for many people who aspire to raise themselves up and to progress.
My contention is that the clause breaks with the principle of universality and that that is likely to be followed up with tax cuts as a pre-election sweetener. In that way, the Government are beginning the process of undermining our welfare state, which they appear to have opposed in one form or another since its foundation 60 years ago. The last Labour Government significantly increased income-related support for families through tax credits, and they also systematically increased child benefit and maintained their commitment to progressive universalism. The Chancellor has frozen child benefit for three years, ditched progressive universalism and hiked up VAT—
The First Deputy Chairman of Ways and Means (Mr Nigel Evans)
Order. The hon. Gentleman is now going much wider than clause 35. Does he wish to resume?
Grahame M. Morris
Yes, I will try to bring my remarks back to the clause.
I am fully aware that the amendment that was tabled in the name of my hon. Friends on the Front Bench was not selected—[Interruption.] We shall not be able to talk about it in the debate. Getting back to clause 35, we would require the Government to look at how their policies of tax and spend are affecting families right across Britain—
The First Deputy Chairman of Ways and Means (Mr Nigel Evans)
I thank the hon. Member for his advice, which I am not going to take. We are talking very narrowly about clause 35.
Grahame M. Morris
I am sure you will be pleased to hear, Mr Evans, that I shall conclude my remarks in a few moments.
Grahame M. Morris
I am glad that my right hon. Friend has taken the opportunity to place that excellent point on the record.
I hope that the Government will take the opportunity to take a breath and reflect further on clause 35 rather than digging into the position announced last October, as the provisions will not be implemented until two years from now. Why does the Chancellor not agree to look again at the effect of his taxation policies? He has an opportunity to do so before 2013. He needs to reflect on the impact of the removal of child care tax relief, child benefit and child tax credits, which, taken together, mark an attack not just on families but on the welfare state as a whole.
The First Deputy Chairman of Ways and Means (Mr Nigel Evans)
I now have to announce the result of the deferred Division on the Budget report and the UK’s convergence programme. The Ayes were 249 and the Noes were 139, so the Ayes have it.
[The Division list is published at the end of today’s debates.]
Andrew Gwynne
It was not my intention to speak in the clause 35 stand part debate. Having listened to my right hon. Friend the Member for Delyn (Mr Hanson) and my hon. Friend the Member for Easington (Grahame M. Morris), however, I have decided that it is important for me to do so.
As has already been said, the clause introduces schedule 8, which introduces changes to the higher rate taxpayer relief for child care. That was first announced by the Government and, as my right hon. Friend the shadow Minister said, Labour does not oppose it, except for the important point—I bear in mind your earlier strictures on not extending the debate too widely, Mr Evans—that the measure has a wider impact on the Government’s child care policy and how it fits in with the Budget measures.
I have some sympathy with the notion of expanding child care places for two-year-olds. The previous Labour Government made greater provision for early years education, which has been incredibly beneficial to those children. I declare an interest in that all three of my children went through early years education under a Labour Government and, thanks to that Government’s investment, they are doing brilliantly at primary and secondary school.
Andrew Gwynne
I entirely understand what my hon. Friend has said. There is a real inconsistency in the Government’s approach. While I think it commendable to raise additional money to target early years provision, particularly in constituencies such as mine, I also think that the Government’s so-called family-friendly approach is deeply questionable. As I said earlier in an intervention, when the Prime Minister was Leader of the Opposition he made it clear that he would be proud to lead the most family-friendly Government in history. Whether the Government are family-friendly is, of course, a matter for debate and conjecture. I can only say that the constituents who regularly come to my advice bureau seem to have been clobbered time and again by the changes that the Government are implementing, many of which—
The First Deputy Chairman
Order. The hon. Gentleman is much too wide of the mark again. If he cares to look at page 21 of the Bill, he will see that clause 35 is only 11 words long and is drafted quite precisely. Will he now please focus on the clause?
Mr Hanson
As I mentioned in my speech—it is further confirmed by the Institute of Chartered Accountants in England and Wales—the provision in clause 35 is based on an estimate of whether the employer will have earnings that exceed the higher rate limit on a particular payday. That causes some difficulties with fairness because there will be people who work part time, who change circumstances or who are on maternity leave for part of the year and the implementation of this is as potentially worrying as the policy—
The First Deputy Chairman of Ways and Means (Mr Nigel Evans)
Order. The shadow Minister is talking about the schedule, which, as he knows, will be discussed in the Public Bill Committee.
Andrew Gwynne
Having heard your ruling, Mr Evans, I would not wish to stray on to the issue of the schedule. Suffice it to say that HMRC is often very good at making a complicated system far worse, as we have seen in the past with tax credits. That is straying quite wide of clause 35, however.
Let me bring my comments to a close. The Government’s intentions are good—they want to invest more in early years—but I think they are going about it in the wrong way. Their wider family-oriented policies are deeply flawed and clause 35 fails the fairness test. We need the Government seriously to rethink the range of family policies that they have introduced in the Budget, of which clause 35 plays an important part.
Mr Robinson
Did my hon. Friend attend Prime Minister’s questions, given that she said that “redistribute” was a word heard more often among Opposition Members, and redistribution is perhaps a policy more often pursued by the Opposition? The Prime Minister ruled out redistribution almost unilaterally as a means by which we could help—
The First Deputy Chairman of Ways and Means (Mr Nigel Evans)
Order. I listened to the Prime Minister at PMQs, and I did not hear him refer once to clause 35. This is rather specific. I know that the hon. Member for Stretford and Urmston (Kate Green) wants to talk about the broader generalities, but that is not what clause 35 is about; otherwise the debate would be very general indeed.
Kate Green
I am grateful, Mr Evans. I am mindful of the provisions in clause 35, which is specifically about taxation and tax breaks for child care. This is about redistribution, and I will say in passing—just one sentence, I promise—that I am proud of Labour’s record on redistribution. We do not talk about it as loudly and proudly as we should in my view, but a set of redistributive policies since 1997 took 600,000 children out of poverty.
To return to the meat of the clause, I am proud of the way in which we redistributed spending in favour of families and children, particularly the spending that we directed towards building significantly increased child care provision. That is a significant creation of child care provision. It is not perfect, as a number of families are still not provided for, but by any measure it was a step change in provision and a fundamental change in the child care landscape which resulted from Labour policies over the past 13 years.
Kate Green
My hon. Friend is right. She highlights another of the Government’s key strategic objectives, an objective that commands great support and interest across the House, but the Government fail to put in the infrastructure and the investment that would enable them to deliver such an objective. Again, that is a matter of regret.
Any parent will say that child care remains an enormous challenge for families, particularly in terms of helping parents to access the labour market, but much more broadly than that. We know that UK parents already pay the highest child care charges of any parents in the OECD. That is probably why in the OECD report just last week on progress on child poverty across the OECD nations, it was specifically identified—
The First Deputy Chairman of Ways and Means (Mr Nigel Evans)
Order. This is turning into a general debate on child poverty and that is not what clause 35 is about. It is about higher earners. I am sure the hon. Lady has read the clause. Will she speak just to clause 35, please?
Kate Green
I beg your pardon. This was not intended to be a general discourse on child poverty. There was a specific reference in the OECD report to the importance of child care, and it is specifically that element of the report that I feel is relevant to the clause, but I entirely accept that we are discussing the implications particularly of the provision to remove the tax break for higher earners. My point is what do we do with that money. That must be a financial consideration too.
Kate Green
Indeed, and that does not make good fiscal sense. It cannot be sensible for public money to be invested but then not exploited for the benefit of the community, those families and, indeed, the economy. In the context of this Finance Bill debate, that surely has to be at the heart of our scrutiny of its clauses.
It is also important that we understand just how much is going on to make it even more challenging for parents to afford child care, and therefore why it was all the more important to use the funding that the tax break before us is saving in order to replace some of the funding that is being lost for the provision of child care.
The First Deputy Chairman of Ways and Means (Mr Nigel Evans)
Order. Just to inform the House, I am not going to allow a general debate, either, about what the money could have been spent on. We are talking about the merits, just simply, of clause 35.
Kate Green
I am grateful.
What is important about the legislation behind clause 35 is that it retained all parents, higher-income parents as well as lower-income parents, in a single integrated child care market. It ensured that all parents received some financial support that helped to create, expand and ensure the quality of that market.
When lots of families participate in a child care market, the market is sustained, secure and improved in terms of what it can offer to families, and that is important for raising the aspirations of families and children, a particularly important strand of the Government’s social mobility strategy. If we are to remove higher-income families from the ambit of the child care market, and Opposition Members all understand why the Government might choose to do so, it is very important indeed that we recognise the potentially deleterious effects on the quality of the child care market for those families who remain within it—those families whom we want to remain within it because of the improvements that it can secure for children’s outcomes. Importantly, therefore, when removing that tax advantage we must be very careful to ensure that we compensate for any damaging effects that its removal might have on the general landscape of child care provision, including its quality and its availability for other families who remain within its ambit.
This is very much a debate in the context of a Finance Bill. It is therefore a debate about what works most effectively for the economic strength of the country, and it is very much a debate about how best we come through the recovery and start to promote the return of the growth that we all hope to see. We have just begun to see it return hesitantly and slowly, but we now want to see it improve.
Kate Green
My hon. Friend leads us into really important territory: the issue of universal provision. If we are going to start to eat into that universal approach, for good reasons, we have to be very mindful of and careful about the consequences, so my hon. Friend is right to highlight the consequences for social cohesion, which is a key fundamental of good economic growth.
We are not going to do well as a national economy if we have to compensate all the time for a fractured society, a society of strains and tensions, in which the public pick up the cost all the time in order to remedy the damage that that causes. My hon. Friend is therefore absolutely right to point out that undermining the universal approach has potentially dangerous consequences for our economic performance down the line—[Interruption.] I sense that the Chairman fears that I am straying slightly—
Kate Green
Not slightly—straying from the ambit of clause 35.
My hon. Friend’s point is correct: fundamentally, the clause removes a universal approach, an approach that keeps everyone in the context of the child care market and the wider social community. That is a really important point.
It is also important to recognise that we are talking about developing children’s long-term economic potential. I do not like to think of our children as future economic actors—I like to think of them enjoying and making the most of their childhood now—but they are the next generation of providers and sustainers of our economy and community care for us in our old age. Removing this financial support from some families and not placing it in the child care market means that some children will be more likely to lose the advantages that good-quality, professional, formal child care can bring.
Andrew Gwynne
My hon. Friend is adding great expertise to the debate with her background in this area of policy. Although clause 35 was a mechanism that was suggested by the previous Labour Government, is not the difference between our approach and that of the Government that we would have invested the money raised back into child care provision?
The First Deputy Chairman
Order. I am not going to allow any further discussion as to what the money could have been spent on. This debate is simply about clause 35. I know that the hon. Lady has expertise in this matter, so I ask her to restrict herself to clause 35, which relates to higher earners’ child care.
Kate Green
I am grateful, Mr Evans. I was mindful of your earlier injunction not to stray into a discussion of what the money be spent on, and I do not intend to do that.
Grahame M. Morris
I wonder about the specific impact of clause 35 on bankruptcy and personal insolvency, given the loss of tax credits for middle-income families who will be faced with quite considerable personal burdens. That is part of the transfer of debt from the state to the individuals in low-income families, as highlighted by my hon. Friend and by my hon. Friend the Member for Walthamstow (Stella Creasy). The Insolvency Practitioners Association highlights the rapid increase in the number of personal insolvencies and bankruptcies, and perhaps the increasing cost of child care will be a factor—
The First Deputy Chairman of Ways and Means (Mr Nigel Evans)
Order. Interventions must, by definition, be short. That was wide of the mark and does not need a response.
Kate Green
We are aware of the difficulty in planning the paying for child care. Parents are often required to pay a lump sum at the beginning of term or for a group of sessions. They are often required to pay for sessions that they subsequently cannot use for various reasons, but there is no money-back guarantee. Parents will often pay for sessions for more than one child, but there is no financial advantage to them; there is regrettably no bulk discount when buying child care.
Removing money from parents that they could have used to meet some of the burden and the lumpiness in the structure of the way that child care charges are often levied will be a real financial burden on family budgets. Some families will take on debt to meet those commitments, because parents will always try to put their children’s best interests first. If they are happy with their current child care setting, they will do all that they can to keep their child in that stable child care place.
Even if parents are worried that they might be unable to afford that place because of the loss of the tax advantage but can see a time coming when they could resume paying for that place, they will none the less not want to give up that child care place. If they think that they can afford the place again in six or 12 months’ time because their economic prospects might improve, they will stagger on through those six or 12 months, desperate to keep their child in that child care place for two reasons. First, they know that child care places are like gold dust and that, if they give one up, they might not get one back again very easily. That is certainly the case in some parts of the country. Secondly, they know that it will be good for the child. If a child is thriving, doing well and prospering in a settled, high-quality child care place, a parent will make all sorts of sacrifices elsewhere to sustain that child in that place.
Finance (No. 3) Bill
Nigel Evans Excerpts(13 years, 6 months ago)
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Chris Leslie (Nottingham East) (Lab/Co-op)
I beg to move amendment 9, page 41, line 27, at end add—
‘(2) The Chancellor shall review the bank levy and publish a report, before 31 December 2011, on—
(a) the Government’s analysis behind the rate and threshold chosen for the bank levy;
(b) the adequacy of the bank levy in the context of other reforms to the wider banking system; and
(c) the total tax revenues expected from banks across all categories of taxation in each year from 2011-12 to 2016-17.’.
The First Deputy Chairman of Ways and Means (Mr Nigel Evans)
With this it will be convenient to discuss clause stand part.
Chris Leslie
We find ourselves in the Committee stage of the Finance Bill, a rather large two-volume measure that, over the coming two days on the Floor of the House, we will no doubt explore in some detail. The Bill will then progress upstairs to Committee, where more detailed scrutiny will take place.
It is a peculiarity of Ways and Means resolutions and of the way in which proposed finance legislation is scrutinised in the House of Commons that hon. Members who are not Ministers may not table amendments to Finance Bills that would have the effect of raising the level of taxation. That was news to me, perhaps because I was in government and did not think about tabling such amendments, but the rules of order are as they are, so the amendment does not propose—because we cannot—an increase in the rate of the bank levy. Instead, it calls for a review of the rate and the general approach to bank taxation adopted by the Treasury. It seeks to look into the rationale behind the rate that the Treasury has chosen for the bank levy and why a number of other choices were made.
Section 5 of the European Communities (Amendment) Act 1993
Nigel Evans Excerpts(13 years, 7 months ago)
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Mr Deputy Speaker (Mr Nigel Evans)
Order. Three Members are standing; I remind them that the debate must end at 8.43 pm. I call Mr Nuttall.
Amendment of the Law
Nigel Evans Excerpts(13 years, 8 months ago)
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Diana Johnson
Like all hon. Members, I think apprenticeships are an excellent idea. Employers in Hull, however, will tell anyone that the new criteria that have to be fulfilled to take on an apprentice mean that many of the young people cannot get into the workplace. They may be with a training provider, but actually finding an apprenticeship with a business is proving very difficult. I do not know where these 250,000 apprenticeships are going to come from. If the Government can do this, I say “Excellent, we are all supportive,” but to be honest, you are in la-la land—[Interruption.]—or, indeed, in the land of green ginger, which is another very good example.
Mr Deputy Speaker (Mr Nigel Evans)
When the hon. Lady said “you are in la-la land”, she was, of course, referring to me!
Diana Johnson
I meant no disrespect to you, Mr Deputy Speaker. Of course, I did not mean that.
Let me bring my remarks to a conclusion.
Mr Deputy Speaker (Mr Nigel Evans)
Order. By convention, there are no time limits on speeches on Budget day, but many Members still want to take part in the debate. Any Member who speaks at excessive length—for more than about eight minutes, that is—will prevent others from contributing. I ask Members please to show some restraint. There will be other opportunities for them to speak during subsequent Budget debates.
Richard Harrington
No, I must make progress.
I normally agree with everything said by my right hon. Friend the Member for Wokingham (Mr Redwood), who is not in his place, and one might think that, as a Conservative Member, I would have an overwhelming interest in bureaucracy, labour laws, red tape and obstacles to business and that dealing with those things would be my top priority. However, important though they are, I think that they are secondary to the macro-economic factors—they are secondary to stability and the feeling of confidence. Germany is a classic example of that, because despite its labour laws and the fact that it has lots of regulation, manufacturing industry works well there. So I am very pleased that we are concentrating on the other issues.
I am keeping in mind your earlier comments, Mr Deputy Speaker, but I just wish to remind hon. Members that Watford is an average kind of constituency and so has 3,000 businesses, with eight being roughly the average number of people employed in them—these are predominantly small businesses. I believe that this Budget will help the long-term confidence for them, despite short-term growth forecasts, and so it is a Budget very much for the small business. It is also a Budget for the larger business, given the corporation tax measures. However, more importantly, it is a Budget for ordinary people and for their prospects. I believe that it is the best Budget that we could have, given the mess that the Government were left.
Rachel Reeves
I do agree. Of course, only half the plans were announced today, which was disappointing.
We need an approach to business taxation that fosters growth. Although the Government have trumpeted the cut in corporation tax, it has so far been funded at the expense of investment and manufacturing allowances, so while big businesses have benefited from a tax cut, start-up and investment-intensive firms have seen their taxes rise. If we are to create the jobs of the future, we need today’s entrepreneurs to innovate and that is where the limited funds should be targeted.
We also need greater investment in skills and education. Last year, 8 million people graduated from universities in China and India. No other country is cutting investment in universities, reducing the teaching grant by 80% and cancelling partnerships between business and universities, but that is what the Government are doing.
Last week, we heard that the youth unemployment figure is approaching 1 million and it beggars belief that the future jobs fund is closing its doors in the same month that youth unemployment has risen yet again. One in five young people—more in my constituency—now claims unemployment benefit. Today’s unemployment figures are likely to rise further and today’s Budget is bad news for young people up and down the country.
The public recognise the need for austerity, but they also want to know that the Government have learnt lessons from the crisis and are determined to build a fairer and more sustainable economic future. Britain could be a world leader in the jobs, technologies and industries of the future but only if the Government support growth. Today was the Chancellor’s opportunity to show that he understands the needs of businesses and families, but the OBR’s verdict was to downgrade growth for the third time in 2011 and for next year as well. The Government have ignored the wake-up calls. This Budget is a missed opportunity and I urge the Chancellor and his colleagues to think again about what is really needed to ensure that we emerge from this recession with a stronger, fairer economy for everyone in the country.
Mrs Mary Glindon (North Tyneside) (Lab)
The Government have said that they want enterprise zones to support real growth and long-term sustainability. Does my hon. Friend agree that the announcement of an enterprise zone for Tyneside means little for growth or sustainability when the Transport Secretary has said that he will not provide funding for the much-needed upgrade of the A19 Silverlink interchange, which businesses have told politicians is essential for the economic development of Tyneside and the wider region?
Mr Deputy Speaker (Mr Nigel Evans)
Order. The interventions are becoming very long. I have said that we are under real time constraints, as Mr Jones knows as well.
Mr Jones
I do know that, Mr Deputy Speaker, but it is important to get these things on the record.
My hon. Friend the Member for North Tyneside (Mrs Glindon) makes a good point. The two enterprise zones for the north-east will be in Tyneside and the Tees valley. That important piece of infrastructure is somehow supposed to be funded by the private sector, but that is exactly the kind of public expenditure that should be going into the region to create jobs and regenerate infrastructure. My concern about the enterprise zones is that places such as Durham and Northumberland have been left out. If we look back at the old enterprise zones, we see that all we got from them was a shovelling around of businesses and artificial borders. The zones will make it very difficult to attract inward investment to Durham and Northumberland.
As has been said, page 42 of the Red Book shows that funding for the 22 enterprise zones will add up to about £1 million each over their lifetime, which will not in any way help the regeneration of either Tyneside or Teesside. We will have the talking shops of the local enterprise partnerships, but no real money to do anything. The disastrous situation at the moment is that we have £106 million of European regional development fund but no money for One North East, local authorities or universities to match fund projects. The Government’s regional strategy is in a complete and utter mess, and the Budget will do nothing to assist.
One issue that has already been raised is—
Alison McGovern
I will not, if the hon. Gentleman does not mind; I am conscious that other Members want to speak.
Labour rightly instigated a temporary reduction in the rate of VAT to help us through the downturn, but I am now worried because the Tory-led Government have implemented a permanent hike in the prices that ordinary people in my constituency face in the shops. That is clearly having a huge impact on our economy and threatening future growth, as has been illustrated by the reduction in the growth forecast.
On the increase in commodity prices which has also caused inflation, the Chancellor said in his statement that the UK would seek to have an impact on those prices through the G20. It is therefore incumbent on Ministers to explain how they are going to engage with our international partners to achieve that. There is no doubt that those worldwide events are having an impact on the streets of Bromborough, Bebbington, Heswall and New Ferry in my constituency, and I would like to know what action the Government are going to take in that regard.
I shall deal briefly with young people and employment. I know that Members across the House care about the issue, but we need to bring some words of caution to the debate. The Chancellor rightly reserved extra funds for the future training of apprentices, but money reserved does not equal apprentices hired. Other factors are necessary for getting young people into employment. The first, business confidence, is vital: businesses must have the confidence to invest. I refer hon. Members to what I said about the in-built inflationary expectations in the economy and what they might do to investment. It is a matter of great concern. A second necessary factor is growth, and it is worrying to see growth forecasts revised downwards. The Chancellor might have said that this was a Budget for growth, but I feel that it was all words and very little action. A final necessary factor is a change in culture, whereby businesses feel that it is their role to bring on the next generation. The current generation at work should be allowed to share their skills in the informal setting of the workplace to bring on the next generation.
I highlight, as always, the role of my own local authority. Wirral has shown great leadership in the sphere of encouraging small and medium-sized businesses to take on apprentices. However, the local authority cuts, which have been much greater in our area than in others, have put Wirral’s ability to play this role in jeopardy. The Government need to think about how they will bring about this change of culture in practice rather than simply reserve the funds and say they are there if business wants to take them.
Finally, I fear that Britain is seeing the end of any interventionist role for the Government. I feel strongly that the future jobs fund was an excellent answer to youth unemployment, but the Government have withdrawn from it. They say they are reserving funds for apprentices, but they are doing little more than that to encourage businesses to invest. We are also seeing inflationary pressures on the cost of living, which the Governor of the Bank of England relates to the rise in VAT. This is a price hike that hard-pressed families in Wirral and elsewhere can little afford. On those two issues that I have prioritised, I would like to see Ministers taking much more action.
Richard Fuller
I shall be interested to see how Opposition Members respond to what my hon. Friend has said.
I would subject the Budget to the tests specified by the hon. Member for Barnsley Central: the impact that it will have on the most vulnerable, and what it will do for growth. It is difficult to introduce deficit reduction measures that do not disadvantage the poorest. What the hon. Member for Wirral South said about the impact of rising prices on people who were not receiving increases in their pay packets was absolutely right. I say to Ministers that—not necessarily for the purposes of the current year, but certainly as we look forward to next year and the year after that—we must think very carefully about what we will do for public sector workers who have experienced a pay freeze in at least one year, and in some cases in a number of years. Members on both sides of the House will want to hear a little more about that.
As I said earlier when I intervened on the hon. Member for Aberdeen South (Dame Anne Begg), the issue of the mobility component of disability living allowance is also of vital interest to Members in all parts of the House. We must ensure that we protect the most vulnerable people in our care homes. I have met the Minister responsible for the disabled—the Under-Secretary of State for Work and Pensions, my hon. Friend the Member for Basingstoke (Maria Miller)—on many occasions, and I know that she shares my passionate interest in that subject.
In the context of protecting the most vulnerable, let me first urge Ministers to continue to give full support to the welfare reform measures that are being pushed through by the Secretary of State for Work and Pensions. The universal credit will be of major, long-term, significant and beneficial advantage to low-paid and poor people in our country, and it is a measure that those on the Treasury Bench should support in the years ahead.
Secondly, I should have liked to hear a little more about support for our charities. I was very pleased to hear about the £550 million of support that the Chancellor was offering to them in the form of various benefits, but I should have liked him to be more radical. There are many steps that we can take to ease the rules and regulations and break down some of the barriers that prevent social investment from various sources. We should be a bit more open in relation to the way in which money can flow from social investment to outcomes and social impact bonds. I should have liked to hear about personal tax deductions for charitable donations, and I should very much like the Treasury—either directly or through the big society bank—to help charities to procure local government services. They need that support to arm them in their continuing battles with bureaucracies.
The Budget expresses strong support for those who wish to invest in our small businesses. It strongly supports angel investment and mentoring. Small businesses and entrepreneurs want support from people—from local people who may have started up their own businesses—and we will seek to provide it in Bedford and Kempston. We will seek to bring together successful local business people who can provide financial support through the advantages offered by the Budget in terms of angel investment, and through mentoring to provide guidance and advice so that small businesses can grow.
The Budget challenges us. As many other Members have said, we are about to be tested, and to go through very difficult times. It is important for Members on both sides of the House to argue constructively, but we should also rest on the great creativity and ingenuity of our small business people and entrepreneurs, because they offer the future that will achieve growth in this country.
Mr Deputy Speaker (Mr Nigel Evans)
I thank the hon. Gentleman for exercising time restraint.
Budget Responsibility and National Audit Bill [Lords]
Nigel Evans Excerpts(13 years, 8 months ago)
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Justine Greening
The hon. Gentleman keeps talking about the deficit as though it was something that descended upon us. The bottom line is that the UK had a structural deficit. That means that his Government were spending more money on public services than was being generated in taxation, even in the good years, so we were never going to be in a position to start paying off any of our debts, which is why the markets got so concerned about continuing to lend to us. That is a structural deficit, and it is a fact, even if the shadow Chancellor will not accept it, and that is why we have to have a deficit reduction plan in place.
Mr Deputy Speaker (Mr Nigel Evans)
Order. This is a fascinating debate, but not for today. If we could get back to the specifics of the amendments before us, perhaps we could make some progress.
Geraint Davies
I am grateful for your advice, Mr Deputy Speaker, and for the Minister’s intervention. In a way, her intervention makes the case for having growth at the centre of the OBR. I am sure that when she reads her words, which I appreciate were spoken with some emotion and anger, she will wish that she had picked them more carefully.
When we look at the facts and strip out the impact of the international financial crisis, which is about £84 billion in terms of our structural deficit, there was a residual deficit, to which the hon. Lady refers. There was an excess of expenditure over income, but that was taken into account in future planning. There was a savings plan from the previous Chancellor, as she knows, to cut the deficit in half in four years. That was not exclusively reliant on cutting public services and jobs. Rather, it relied on stimulating growth.
The OBR’s estimates of growth have been downgraded. Those higher levels—2.6%—would have provided more fuel to get the deficit down. I recall that the projected deficit in the pre-Budget report was £30 billion less than had been predicted previously. In other words, growth had been occurring faster than was thought. Now it is growing less fast—in fact, it is growing negatively.
Justine Greening
Just on the off-chance, I wonder whether the hon. Gentleman would be able to set out what the £14 billion of cuts were that his party was planning to start in April.
Mr Deputy Speaker (Mr Nigel Evans)
Order. We are going much wider than the amendments. Could we please confine our comments from now on to the amendments before us?
Geraint Davies
The point I was making before I was distracted was why there should be growth in the OBR. What were the previous Government’s plans to get the deficit down? That is what the hon. Lady asked. It is important to recognise that the plans that we had were largely growth plans, which will now not be taken up. I shall give one simple example.
The Government said, “We’ll cut some expenditure. We’ll cut the regional development agencies.” So there I was, going to speak to UK Trade and Industry which, as Members know, is the marketing operation for Britain abroad, about encouraging inward investment and trade with foreign countries. I was talking to UKTI in Germany, as it happens—
Mr Deputy Speaker (Mr Nigel Evans)
Order. We seem to be skiing off-piste every time there is an intervention and trying to tempt Mr Davies on to territory that is not relevant to the amendment.
Chris Evans
If I was in the hon. Gentleman’s position, I would be more worried about whether I will have a job in four or five years’ time. That is what most people are concerned about, but they are concerned about what will happen in six month’s time—
Mr Deputy Speaker (Mr Nigel Evans)
Order. I will tell Members what I am concerned about: no one is talking to the specific amendments before us. If it is at all possible for you, Mr Evans, to mention the amendments now and again, that really would be very useful.
Chris Evans
Thank you for your advice, Mr Deputy Speaker—I have not been here very long.
Getting back to the amendment, it is important that we have the rationale for growth and know how the Government reach their decisions. We cannot talk about this in the microcosm of a dry subject of forecasts. We cannot debate forecasts in this House; we can only debate judgments on how the Government arrive at those policies.
Mr Deputy Speaker (Mr Nigel Evans)
With this it will be convenient to discuss amendment 6, in clause 8, page 3, line 29, at end insert ‘subsequently’.
May I remind the House that by contrast with the amendments in the previous group, which were very narrow, these amendments are very, very, very narrow? I do not want Members to consider that a challenge to see how long they can make a speech on the amendments. May I also remind the House that we have several days ahead of us when we will be able to talk about the economy, growth, jobs, taxation—and they start tomorrow?
Chris Leslie
It is early, Mr Deputy Speaker, but I understand your point about the ticking clock.
Amendment 2 seeks to require the Treasury to place in the Library the costing methods, models and assumptions that underpin all the revenue projections, implications, yield estimates and so forth from each Budget announcement. Hon. Members will know that the Red Book produced at each Budget contains a number of costing projections, and there is always a fantastic table somewhere towards the end of the document which gives a sense of the revenue gains or losses, depending on each tax or public spending measure in the Budget.
In Committee, it became clear that the Office for Budget Responsibility will have the right to gain some insight into the detailed methodologies that the Treasury uses to underpin the assumptions and costings. The methodologies are therefore publishable, because they can be transferred to the OBR, and all that amendment 2 seeks to do is to share them with the wider world, and in particular with Parliament, because if hon. Members are to scrutinise effectively the assumptions on which the Chancellor makes various decisions, the methodologies and costings used to underpin those calculations should be transparent.
In order to support full and proper scrutiny, and to ensure that we can debate those Budget decisions effectively, we think it a reasonable request that the Treasury should place those costings and methodologies in the Library. It would be inconsistent, given the Prime Minister’s protestations about
“a new generation that understands and believes in openness, transparency, accountability”,
for those models not to be in the public domain. We should not have to rely on freedom of information requests to elicit such information from the Treasury; if the OBR has it, so should Parliament. The amendment is very simple, and we should not simply have to have faith to trust the Chancellor’s judgments. If we are to have such transparency, we should all be able to see right through to the methodologies, and perhaps to challenge and test them.
Amendment 6, on a different matter, seeks to ensure that the OBR, when it does publish its reports, gives those changes to Parliament first. If hon. Members look in the Bill, they will see a simple clause that states:
“The Office must—
publish the report,
lay it before Parliament, and
send a copy of it”—
I am not sure whether it is to be sent first class—
“to the Treasury.”
All our amendment seeks to do is to place the word “subsequently” after the words “Parliament, and”. In other words, Parliament should have those reports first and the Treasury should get them subsequently—although I do not particularly mind if it gets them at the same time.
Fuel Prices and the Cost of Living
Nigel Evans Excerpts(13 years, 8 months ago)
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Mr Deputy Speaker (Mr Nigel Evans)
Order. Members will see that this is a popular debate, and there is a six-minute limit on Back-Bench speeches, with the usual injury time for two interventions.
Justine Greening
On a point of order, Mr Deputy Speaker. The hon. Lady has just made an accusation about what I do or do not know about living in the real world. That goes beyond what I think is a personal comment. She has no understanding of what I do or do not understand. I can assure her that I get on the District line every day to come into work and I know exactly what is going on in the real world. I only wish that the Opposition did.
Mr Deputy Speaker (Mr Nigel Evans)
That is a point for the debate, not a point for the Chair.
Fiona O’Donnell
Thank you, Mr Deputy Speaker. I am obviously going to have to treat the Minister with kid gloves as she is so sensitive.
East Lothian is a largely rural constituency made up of small gatherings of communities that rely heavily on the use of their cars. I suspect that the hundreds of e-mails that I have received over the past few weeks will now be followed by hundreds more, as my constituents will be bitterly disappointed by the Minister’s utterly sterile contribution to the debate.
Nic Dakin
When there were huge economic challenges caused by the great global banking crisis, the Labour Government reduced VAT on fuel and on everything else—they did not put it up and worsen the situation, which is the policy of the parties on the Government Benches.
Let us look at the impact of this tax on growth on people and businesses. Alongside the tax on growth, we have cuts in public services, rising prices, inflation wobbling out of control, cuts to the education maintenance allowance—given to the poorest of our young people so that they can continue and aspire in education—and tuition fees being set at record levels. Unemployment among young people is, on this Prime Minister’s watch, the highest it has been for almost 30 years. That is the Government’s disgraceful economic record.
People on fixed incomes—including pensioners and those on disability living allowance—are hugely worried about the mobility effect of the hike in fuel prices and the difficulties it will make to their lives. Only today, a witness appeared before the Select Committee on Education—David Lawrence, the principal of Easton college in Norfolk—who said, “Higher fuel costs are a disincentive to participation.” That is what is happening in the real world.
Let me quote one letter that I have received this week, which illustrates the sort of correspondence that we all receive from our constituents. It reads:
“I am thirty eight years old, married with a family of six running two small cars to keep the cost down on tax and running costs. The biggest cost that we are finding hard to cover is fuel, since the beginning of last year, average petrol pump prices have risen from just under 111p/litre to almost 128p/litre. Diesel now costs more than 132p/litre, compared to 112.5p a year ago. I would like to explain to you what impact this is having on my ability to drive and go about my everyday life. The price of fuel not only affects work but personally the cost of running my car has significantly increased so that I only can afford to travel to work, any family trips to visit other areas of the region/country I simply just can not afford.
I am employed as a Transport Manager for a local business that relies heavily on local haulage transport companies and also sub-contractors that travel to our region making deliveries. To keep cost down along with trying to keep our CO2 emissions down we use these sub-contractors as back hauliers as a reduced rate. Over the past few months we have seen transport companies we use either going to administration or just closing the business whilst they can pay back the creditors. This has a big impact on the business I work for as we can not be competitive in a tight margin industry we work in.”
That illustrates the difficulties caused in people’s private and working lives by fuel prices getting out of control and their impact on the economy.
In my area, as Government Members who represent Humberside constituencies know, we also have the spectre of the Humber bridge board threatening to put up the cost of Humber bridge tolls—an outrageous suggestion of yet another tax on local people and a tax on local businesses.
Let us look forward at what we can do. There are things we can do and messages about what we can look forward to. I agree with the hon. Member for Devizes that we should be careful not to engage in political posturing. We all, on both sides of the House, do that from time to time—I think she did a little bit, and I probably have, too—but there are practical things we can do. There is no need for the planned fuel duty increase. It should be postponed or stopped completely because of the circumstances that we are in. We can also consider what can be done about VAT. It did not need to go up on everything and there ought to be imagination and resolution in the EU to ensure that VAT is treated properly for people who drive vehicles in this country.
There are things we can do and it is time to do them. It is time to stop talking and time for action.
Royal Assent
Mr Deputy Speaker (Mr Nigel Evans)
I have to notify the House, in accordance with the Royal Assent Act 1967, that Her Majesty has signified her Royal Assent to the following Act:
Appropriation Act 2011.
Scotland Bill
Nigel Evans Excerpts(13 years, 8 months ago)
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Stewart Hosie (Dundee East) (SNP)
I beg to move amendment 37, page 16, line 17, at end insert—
‘(f) Chapter 8 provides for an Order in Council to specify, as an additional devolved tax, a duty charged on fuel’.
The First Deputy Chairman of Ways and Means (Mr Nigel Evans)
With this it will be convenient to discuss the following:
Amendment 58, page 16, line 17, at end insert—
‘(c) Chapter 5 provides for an Order in Council to specify, as an additional devolved tax, a tax charged on quarrying or mining,’.
Amendment 59, line 17, at end insert—
‘(d) Chapter 6 provides for an Order in Council to specify, as an additional devolved tax, a tax relating to air travel,’.
Amendment 60, line 17, at end insert—
‘(e) Chapter 7 provides for an Order in Council to specify, as an additional devolved tax, a tax charged on the profits of companies,’.
New clause 8—Duty on fuel
‘In Part 4A (as inserted by section 24), after Chapter 4 insert—
“Chapter 8
Duty on Fuel
80O Duty on fuel
The Secretary of State shall, within one month of the coming into force of section 80B of this Act, lay in accordance with Type A procedure as set out in Schedule 7 to this Act a draft Order in Council which specifies as an additional devolved tax a duty on fuel.”.’.
New clause 15—Scottish tax on quarrying or mining
‘In Part 4A of the 1998 Act (as inserted by section 24), after Chapter 4 (inserted by section 30) insert—
Chapter 5
Tax on quarrying or mining
80L Tax on quarrying or mining
The Secretary of State shall, within one month of the coming into force of section 80B of this Act, lay in accordance with Type A procedure as set out in Schedule 7 to this Act, a draft Order in Council which specifies as an additional devolved tax a tax charged on quarrying or mining.”.’.
New clause 16—Scottish tax on air travel
‘In Part 4A of the 1998 Act (as inserted by section 24), after Chapter 4 (inserted by section 30) insert—
Chapter 6
Tax on air travel
80M Tax on air travel
The Secretary of State shall, within one month of the coming into force of section 80B of this Act, lay in accordance with Type A procedure as set out in Schedule 7 to this Act, a draft Order in Council which specifies as an additional devolved tax a tax charged on air travel.”.’.
New clause 17—Scottish corporation tax
‘In Part 4A of the 1998 Act (as inserted by section 24), after Chapter 4 (inserted by section 30) insert—
Chapter 7
Tax on profits of companies
80N Tax on profits of companies
The Secretary of State shall, within one month of the coming into force of section 80B of this Act, lay in accordance with Type A procedure as set out in Schedule 7 to this Act, a draft Order in Council which specifies as an additional devolved tax a tax charged on the profits of companies.”.’.
Stewart Hosie
It is a pleasure to serve under your chairmanship on this second Committee day, Mr Evans. I look forward to what I hope will be a detailed and constructive debate. Given that a Treasury Minister is present, we may receive some intelligent, enlightening and instructive answers from the Government. I am intrigued to see the Exchequer Secretary to the Treasury, along with the Secretary of State and a junior Minister, the Under-Secretary of State for Scotland. Obviously the Government decided to bring in the big guns to do the difficult stuff. I am sure that that will help over the next two days.
There are four taxes that we wish to be devolved: corporation tax, fuel duty, the aggregates levy and air passenger duty. I shall touch on the first two briefly, and say a little more about the aggregates levy and air passenger duty later.
The Bill has been considered by the Committee in the Scottish Parliament. As Ministers know, there was much agreement on many matters, but there was disagreement on a number of others, including corporation tax. I think it useful for this Committee to understand the minority view of the Scottish Committee, which said:
“A major failing of the Scotland Bill is that it does not devolve control over corporation tax, one of the most important economic levers available to a Government pursuing economic growth. In many countries corporation tax has been the key component of a strategy to increase competitiveness and improve growth. Without this power, however, Scotland is missing out on the opportunity to give itself a competitive edge… This situation could soon be worsened by the UK Treasury's consideration of devolving corporation tax to Northern Ireland. The CBI Northern Ireland has stated that cutting corporation tax in Northern Ireland would have a ‘transformational’ impact on the Northern Irish economy—giving an immediate boost to the profits of businesses and generating 90,000 jobs. With control over corporation tax Scotland would be in a position”
to do much the same. The very fact that the United Kingdom Government were taking a similar approach to corporation tax would justify that position, the Committee said.
As Scottish and other Members will know, a significant body of business opinion backs the devolution of corporation tax—
HM Revenue and Customs
Nigel Evans Excerpts(13 years, 8 months ago)
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Jesse Norman
I was not aware of that and I thank my hon. Friend for his remark. Of course, historically, Welsh speakers on the other side of the border were very welcome to come to Hereford to have these issues solved, but unfortunately that option does not exist now.
The point is that it is not simply an issue of the cost cutting that has taken place over the past 10 years; the whole model of public service delivery has relocated that service away from local people and back to call centres, as we have heard. That has happened under the influence of a mentality bred by the consulting firms. In particular, one picks out McKinsey, which did a substantial piece of work for HMRC some time ago. This, I am afraid, has been the method by which this mistaken conception of public service delivery has been promulgated. Services, instead of being brought closer to people, have been removed from them. A use of technology that could have assisted the ordinary man and woman and small businesses in dealing with their tax affairs has ended up impeding them, and that has been a terrible and costly shame.
I would direct the current management of HMRC to what systems theory calls “failure demand”. Failure demand is not the cost of delivering a service, but the cost on the rest of the system when people fail to deliver a service. Failure demand in the Revenue has gone through the roof in the last decade, and the statistic we have heard about the length of time people spend on the telephone dealing with Revenue and Customs is a very precise quantification of this increase in failure demand. Essentially, instead of thinking of the costs on the system as a whole, the Revenue has been pushed into pursuing the lowest unit cost, which has encumbered the whole.
There is a parallel in the manufacturing industry. Historically, General Motors ran a production line and if a substandard car was on it, it would be removed from the line and the line was allowed to continue. The result was that these “lemons”, as they were called, built up over time and required a substantial amount of time to fix. However, the system itself never got any better because every time there was a problem, the lemon—the bad car—was removed from the production line. The Toyota approach was entirely different. Every time there was a problem with a car, the entire production line stopped. One can imagine the result: enormous pain for a time, followed by a dramatic improvement in quality and a dramatic fall in costs, because the system was no longer tolerant of failure.
At the moment, for the reasons we have described, HMRC has a system that is massively and very unhappily tolerant of failure. The Government are picking up this mess and will be seeking to make something of it over five years—I hope they will be doing so over 10 years. I encourage them to address not merely the issue of boosting the tax collection rates, but the failed model of public service delivery that underlies the Revenue and so many of our other public services. The Conservative party is committed to improving public services and this is a very good place to start.
Budget Responsibility and National Audit Bill [Lords]
Nigel Evans Excerpts(13 years, 9 months ago)
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Mr Deputy Speaker (Mr Nigel Evans)
Order. I would be grateful if the Minister answered that question in relation to the Bill before the House.
Justine Greening
No doubt my hon. Friend will be encouraged to learn of our belief that our efforts to cut back-office costs and protect front-line services in Whitehall should be replicated in town halls.
Key to understanding progress against the Government’s fiscal mandate are strong, credible, independently conducted official forecasts. Our first goal is to balance the structural current deficit by the end of a rolling five-year forecast period; our second is to see the public sector debt ratio fall at a fixed date in 2015-16. The measures that we set out in the Budget, along with the departmental allocations that we set out in the spending review, constitute a four-year plan to meet that fiscal mandate. We are currently on track to meet the mandate one year early, in 2014-15.