(10 years, 5 months ago)
Commons ChamberThe answer is no, of course we will not rule that out, because we have a clear commitment that if there is any proposal to transfer powers, we will have an in-out referendum in the next Parliament. That is our position. I gave the Chancellor the answer once, he did not listen and I gave it to him again.
Is not the reality that the Prime Minister’s attempt to appease Tory Back Benchers has failed and that it has not worked very well with the Front Benchers either? Just a few months ago, just after the Budget, the last time we had such a debate, we had read stories in the newspapers about the Education Secretary trying to undermine the leadership ambitions of the Mayor of London—it was briefed, I believe, to The Mail on Sunday at a lunch. Last week, it was the Home Secretary who was targeted by the Education Secretary, this time to The Times over lunch. The first time, the Education Secretary explained that he was tipsy. He has obviously been on the sauce again. There is a pattern here: a rival to the Chancellor tops the “ConservativeHome” leadership poll and the Education Secretary is sent out to try to stop them at all costs. Now we know that when the Chancellor and the Education Secretary have a late-night chat about the Prevent strategy, they are talking about a rather different prevent strategy from the one that we are talking about. It is pretty clear who the Chancellor has tried to prevent through all his interventions.
I am grateful. If the right hon. Gentleman’s economic message is being listened to, why did the Labour vote in Harlow decline by 20% over the past two years, and why did Labour lose three council seats in safe Labour wards? Is it not because Labour betrayed the working classes and voted against our tax cuts for lower earners, our fuel duty freeze and our council tax freeze?
I respect the hon. Gentleman and his views, but the main message of my speech so far has been a warning against complacency, and I suggest that he heeds that warning. [Interruption.] As should the right hon. Member for Chelsea and Fulham).
As I said, the challenge that this Queen’s Speech should have risen to, but did not, is how we can ensure that we generate a secure recovery that delivers more good jobs for our country. The huge disappointment was that that was not the subject of this Queen’s Speech. We know that there is no quick fix and that we have to earn our way to rising prosperity. We cannot turn our face against change, Europe and the world, but nor can we succeed with a race to the bottom whereby British companies simply try to compete on cost and the Government see their role as simply removing regulation, undermining job security and hoping it will work. That will not generate the low and middle-income jobs that we need in the future. Our view is that we can succeed only through a race to the top, by backing innovation and investing in skills, making our economy more competitive and dynamic and earning our way to higher living standards for all.
That is what is so revealing about the Labour party’s performance in the past half hour. The shadow Chancellor started by reading out the article in the New Statesman this morning and trying his piece on new politics, but within about 10 minutes it all descended into Bullingdon club jokes, and the hon. Member for Dudley North (Ian Austin) having to withdraw his comment. The shadow Chancellor then descended into the normal slapdash that we have got used to in the House. Incidentally, there is a striking echo of what went wrong with the Leader of the Opposition’s speech at the beginning of the Queen’s Speech debate. That is because he is unable to engage in the serious economic argument about what needs to happen in this country.
When a hard-working person in Harlow considers the economy, he will leave his house in the morning on the way to work probably knowing that his mortgage is low and fuel duty is frozen. When he gets to work he will see more people in work and more apprentices, and when he looks at his pay packet, he will see that his tax bill has been cut by hundreds of pounds.
My hon. Friend is right. By reducing income tax and increasing the personal allowance, by freezing fuel duty—something he campaigned on powerfully in this Parliament—and above all by having an economy that creates rather than destroys jobs, we are holding out the prospect of economic security and better prosperity for our country in the decade ahead. That is what we all want to secure.
(10 years, 7 months ago)
Commons ChamberWe will explore that point later, but let me take my hon. Friend’s intervention.
Is my right hon. Friend aware that a person on average wages pays roughly £1,200 a year in taxation just to pay the welfare bill, not including pensions? Does he agree that the welfare cap is fair on lower earners?
It is absolutely fair. That is what the cap is about—building a welfare system that is fair to those who need it and fair to those who pay for it.
(10 years, 9 months ago)
Commons ChamberThe hon. Member for Leeds West (Rachel Reeves), who opened this debate, is right about one thing: it was a mistake for my party to have opposed the minimum wage. I am glad that we support it now. If we are honest about our mistakes, the Opposition need to be honest about what went on: that it was a mistake to abolish the 10p income tax rate; that median real wages stopped rising from 2003; and that the value of the minimum wage did not decrease from 2010 but from 2008. All of us have made mistakes in these areas, and the Opposition should have welcomed the fact that we have taken 2 million lower earners out of tax altogether.
Does my hon. Friend agree that it was also a mistake to put in petrol price rises year after year—Labour would have added the equivalent of 64p a gallon by this time—which dig directly into hard-working people’s pockets?
My hon. Friend is right; our party has a relentless focus on helping the lower paid. We should support the minimum wage because we are the party of aspiration and working people, and increasing the minimum wage eliminates the poverty trap, cuts the benefits bill and encourages more people to get back into work. If we do just one thing, it should be to increase the minimum wage at least to reflect the increase in inflation over the past few years.
I also urge the Government to institute a regional minimum wage—in addition to the national minimum wage, not as a substitute for it—because of the different costs of living in different parts of the country. I am talking about the differing costs not just from north to south, but within regions. That has been done in other countries, such as Canada and the United States, where individual states can set minimum wage rates above the federal minimum. We need to consider such an approach seriously.
My hon. Friend and I represent constituencies in Essex, where the cost of living is higher than it is in other parts of the country. Does he agree that we often see people trapped in a life on benefits because it does not pay to work as a result of the loss in housing benefit owing to higher property prices?
My hon. Friend makes an important point, and the Conservative party is the workers’ party. We are here to get people out of dependency and back into work, and the Labour party is the party of benefits.
Although it is important to support a fair wage, we must not hurt small businesses—the Secretary of State was exactly right on that. We should move towards a living wage, but there are ways of doing it. The important thing is to put the burden on government to achieve the living wage, not on businesses. I support the minimum wage and the living wage, but we have to make sure that they are not raised to unsustainable levels. Labour’s solution of offering companies tax breaks if they pay employees the living wage for a year is said with the best of intentions, but it has flaws because it does not fully offset the cost. Many companies would still be unable to meet the additional cost of paying their workers an extra £2 an hour. It would also only last a year, so many people would not benefit in the long term.
We should remember that 5 million low earners in Britain are earning less than £10,000 a year. To achieve the living wage, we need to look at two ends of the equation. First, we could reintroduce the 10p income tax band. That would halve the income tax bill for those on the minimum wage and significantly reduce the cash gap between the minimum wage and the living wage. It would also cost less than raising the personal allowance, and ensure that people continue to pay into the system while letting them keep more of their own money. Alternatively, we could continue raising the threshold of income tax. Those are the ways to get people up to a living wage, and I am happy with either solution.
National insurance is the one tax that is still taken directly out of lower earners’ pay packets. A worker who earns around £7,500, which is around half of what the Government say they need to live on, still pays national insurance. We should take a small step to help the lower paid by increasing the national insurance threshold, so that it is in line with income tax for employees. The 2020 Tax Commission found that nearly three-quarters of company bosses said that national insurance contributions curbed the rates they paid their staff.
A bigger step would be to remove altogether national insurance and income tax from the national minimum wage, which would mean that someone working 40 hours a week would be earning just £10 a week less than someone who is currently earning the living wage. If we did that, national insurance and income tax could be merged into just one tax.
Although some argue that we need to maintain national insurance because of the contributory principle, it effectively acts as a double income tax, and a contributory system could be transferred into any consolidated form. Such a system could have enormous benefits, such as a simplification of the tax system, greater transparency, fewer administration costs and it would leave workers with more money in their pockets. It would be costly, but there would be benefits, such as people spending more and being less reliant on the state for welfare and encouraging people back into work. It would benefit all low-paid workers, especially those who work just part time. It should be the long-stated aim of my party to try to introduce this over a number of years.
As Conservatives, we are on the side of hard-working people, which is why we capped taxes for 20 million-plus lower earners. It is right that the Government increased the personal allowance, but if the slogan “For hard-working people” is to mean something, we have not only to become the workers’ party but to shout from the roof tops our support for the minimum wage. A real-terms rise in the national minimum age, a regional top-up and raising the national insurance threshold would give us legitimacy as the party standing up for millions of workers.
As I recently outlined, I am not in favour of a statutory living wage, but I am in favour of raising the minimum wage.
A rise in the minimum wage, as national wage growth returns, fundamentally leads to a smaller state, as has been outlined by Labour Members. Now that the Government have reduced business taxes—national insurance, corporation taxes and small business taxes—and brought in last year’s rebate, the time is right to look at how we can create a sustainable growth in the wages of the lowest-paid by giving the taxation that the Government were taking back to the people who are creating the wealth in companies. That means that the potentially inflationary pressures will not occur because the Government are not taking tax from a company just to give it back to a worker.
My hon. Friend talks about the Government cutting business taxes. Does he agree that they have also raised taxes for the rich by increasing capital gains tax from 18% to 28% and increasing to 45p the 40p rate that existed in the 13 years under Labour?
My hon. Friend puts it most eloquently, as always.
This is an uncomfortable truth for Labour Members. [Interruption.] They have been yelling and shouting this afternoon, and they are at it again now as soon as they do not want to hear an inconvenient truth. The hon. Member for Vale of Clwyd (Chris Ruane) put forward the false premise that Government Members are saying we should increase wages for the people at the top and cut them for those at the bottom—no Government Member has ever made such a comment; it was a disgraceful thing to say—but failed to mention that under his party’s Government, the noble Lord Mandelson said that he was perfectly comfortable with people getting “filthy rich”.
(10 years, 11 months ago)
Commons ChamberWherever the noise was coming from, I should say that, of course, house building and construction is important in every sector, social and private. That is why, in the autumn statement last week, we announced both the increase in the housing revenue account—something for which my party, the Liberal Democrats, has campaigned for some time—and the extra funding for large sites to unlock another 250,000 new homes in the private sector.
As well as supporting the building of social housing, will my right hon. Friend continue to support the right to buy, given that over 30,000 tenants have benefited from right to buy, including many in Harlow?
The right to buy is an important part of the coalition Government’s housing programme. It has been substantially improved by the commitment to one-for-one replacement for social housing when each house is sold. If that policy had been in place under the previous Government, we would not have seen a net loss of 421,000 social homes throughout their time in office.
(10 years, 11 months ago)
Commons ChamberI am glad that my right hon. Friend the Chancellor will not have to stuff his Christmas turkey this year, given that he so comprehensively stuffed the economic policy of the Opposition.
I thank my right hon. Friend for the excellent fuel duty freeze. Does it not show—along with the right to buy and the lower tax for lower earners—that we are the party of aspirational working people, and the true exponents of white van Conservatism?
I agree with my hon. Friend. For the people of Harlow, thanks to his assiduous campaigning, we have not only frozen fuel duty to make it 20p per litre less than it would have been had there been a Labour Member of Parliament for Harlow and a Labour Government, but helped people on low incomes by lifting them out of income tax, ensured that businesses can expand, and cut business rates for those on the high street. We have done all those things to help people who want to work hard and get on, who are exactly the people whom my hon. Friend represents.
(10 years, 11 months ago)
Commons ChamberThe report published by the Money Advice Service, which the Government trumpeted as an organisation that was set up some while ago, is very startling. Certainly, the number of people in my hon. Friend’s constituency who are suffering from indebtedness is exceptionally high. In my constituency, over 40% of people are struggling to make ends meet when faced with these crippling burdens and debts.
Whenever the Government introduce fundamental measures to help with the cost of living, such as freezing council tax, freezing fuel duty and cutting it in 2011, and cutting taxes for lower earners, why do you vote against them?
I do not know whether you voted against those measures, Mr Deputy Speaker, but we appreciate any efforts to help alleviate the cost of living. Does the hon. Gentleman believe that when people fill up their tank at the petrol station, they think, “How grateful we are to the Conservatives for the cost of petrol today”? When it comes to the cost of living—[Interruption.]
On a point of order, Mr Deputy Speaker. The hon. Gentleman has said that his Government tried to help motorists, but he inadvertently forgot to mention that they raised fuel duty 12 times.
I assure the hon. Gentleman that that is not a point of order. He has made that point on many occasions and I did not need reminding.
Thank you for calling me, Madam Deputy Speaker. This is the first time I have spoken in front of you, and it is an honour to do so.
I am delighted that the Labour party has initiated this debate. I say to Labour Members “Bring it on!” I am glad that they have at last woken up to the cost of living crisis. While many of us were going on about it for a number of years, they were talking about predistributions or other “chattering classes” subjects that no one understood. While we were cutting and freezing fuel duty, cutting taxes and raising thresholds for lower earners, and increasing taxes for the rich by, for instance, increasing capital gains tax, they were voting against all those measures. They created a handout society, whereas we want to create a “hand back” society, and to give people back their own money through lower taxes. They created a society of dependency: a society of high tax, high debt and high borrowing.
My hon. Friend is making a very passionate speech. I know that he feels strongly about these matters, and has campaigned strongly on them in the past. Does he agree that, although our hon. Friend the Financial Secretary made an outstanding speech, what was omitted from it was a reference to the importance of the employment allowances that will allow a first-time employer to take on a new employee, thus helping even more people into the workplace?
My hon. Friend is absolutely right. That is another example of why we are the party of small business. Labour showed during its years in office that it was, as Peter Mandelson said, the party of the filthy rich and of big business, sucking up to bankers in the City—Fred the Shred, Flowers and all those kinds of people.
The main elements of the cost of living are jobs, pay and energy. Let us look at the Labour Government’s record. They scrapped the 10p rate of tax under Gordon Brown in 2008. They talk about wages, but median wages stopped rising in 2003, in times of plenty, and hourly pay rose at only a quarter of the rate of economic growth. They increased fuel duty 12 times while in office, and the cost of bus travel increased by 59%. Council tax increased by 67%, and energy bills doubled. That is the record of the Labour party, which says that it wants to help with the cost of living. Sadly, it has nothing to show for it at all.
Energy and fuel prices are among the key indicators of the cost of living. As we have heard from the Minister, this Government have cut fuel duty and said that they will freeze it for the lifetime of this Parliament—an historic move. Of course, I would like the Government to do more and to cut fuel duty further, and I hope that when economic conditions allow, that will be the No. 1 tax cut. We need to continue to help hard-pressed motorists.
On energy, let us remember that there were about 17 energy companies under Labour; now, there are only six. Labour decreased competition, but we are doing things to increase it. I believe that the Government should do more on VAT, particularly through renegotiating our VAT rates with the European Union. They should also consider imposing windfall taxes—de facto fines—on some of the energy companies and passing the money back to the consumer. They should also cut Labour’s green taxes, which make up 17% of the average energy bill.
My hon. Friend is making a powerful speech. I understand that Labour intends to make energy its focus in the forthcoming EU elections. I intervened on the hon. Member for Nottingham East (Chris Leslie), but he declined to answer my question. Does my hon. Friend agree that we should look not only at the six energy companies but at how we make energy in this country? We now need to import it, and we are over-reliant on expensive energy imports because the previous Government failed to replace the nuclear fleet in time. They did nothing during their 13 years, and that energy offering went down from 25% to 15%. That is why we now have to pay more for expensive oil and gas from abroad.
As always, my hon. Friend hits the nail on the head. It is funny how we hear in the media that energy prices fell under the right hon. Member for Doncaster North (Edward Miliband), because they actually doubled during Labour’s time in office.
There were 2.5 million people, including 1 million young people, unemployed when Labour left office. That did not happen over 18 months solely as a result of the recession; it was happening even in times of plenty. Under this Government, youth unemployment in my constituency has gone down by 7.6%, long-term unemployment by 4.3% and overall unemployment by 4.4% over the past 12 months. This Government are helping with the cost of living and helping people to get back into work. I met a chap who was helping me with my car at Halfords, and he told me that he was going to vote Conservative for the first time in his life. When I asked him why, he said it was because the Conservatives helped people who work. That is what this party is all about. We are the party of hard-working people. We are the party that helps people with the cost of living.
Pay and taxes are another indicator of the cost of living. There are 3,749 people in my constituency who have been taken out of tax altogether. They are on low earnings. A total of 36,861 lower earners have had a tax cut. I want the Government to do more, however. I want them to raise the threshold at which people pay national insurance, because that would make a huge difference. Let us take people on low earnings out of all tax altogether, not just out of income tax. Nevertheless, the Government have made huge progress, which has been opposed massively and has been voted against by the Labour party. We have to remind our constituents that Labour voted against people on lower earnings getting lower taxes. As I said, median wages stopped rising in 2003, so the previous Government’s record on wages is nothing to shout about. We need to improve the minimum wage; we should have a regional minimum wage top-up, on top of the national minimum wage. We need to reform national insurance as I have described, but at least this Government have started doing the things that are helping to address the cost of living most; we have taken action on energy, jobs and national insurance.
A thing that gets my goat is that the Labour party claims to have the monopoly on compassion. As my constituents found out, the reality is that Labour had a monopoly on failure—on the cost of living, on taxes and on the economy. Through our history, the Conservative party has always been on the side of hard-working people; we have always helped lower earners. Despite the very difficult economic conditions that the Labour party left us, this Government have done everything possible. The Conservatives do not have a monopoly on compassion, but we are the party of aspiration. We give people ladders of opportunity; we give them skills and apprenticeships, the number of which has increased by more than 80% in my constituency. We are giving people jobs, and we are creating a new nation of property owners through the right to buy and the Help to Buy scheme. We recognise that the best way to help the poor and lower earners is not through the dependency culture and welfare society so beloved of Labour Members, but by cutting taxes, cutting fuel duty, freezing council tax, restoring the link between pensions and earnings, and helping hard-working people.
I thank the 19 hon. Members, on both sides of the House, who have taken part in this afternoon’s debate.
It is said that the first step to recovery is admitting you have a problem, and the Opposition had a chance to admit they had a problem this afternoon. This debate has revealed the lack of an economic plan from Labour and the cost of a potential Labour Government. It is clear from what he said that the shadow Chief Secretary to the Treasury does not know the difference between a debt and a deficit. The hon. Member for Newcastle upon Tyne North (Catherine McKinnell) talked about household debt. She might like to know that household debt, as a proportion of income, was 100% in 1997, grew to 150% by 2007 and was 170% by the first quarter of 2008, but has now fallen by 30 percentage points to 141%, as of the first quarter of 2013.
Another falsehood spread this afternoon was that the Government had borrowed more in three years than the last Government borrowed in 13 years. Labour increased public sector net debt by £488 billion during their term in office, but the debt this Parliament has increased by £360 billion. The shadow Chief Secretary to the Treasury talked about record breaking. If he wants to talk about record breaking, how about talking about the record-breaking deficit that his Government left us? What about the broken promise of no more boom and bust. Remember that one? We do not hear that any more. The only honest statement we have heard from a Labour MP was from the former Chief Secretary to the Treasury, the right hon. Member for Birmingham, Hodge Hill (Mr Byrne), who left a note saying, “There’s no money left”. He could not have been more right.
So what is missing from the motion today? There is no mention of the jobs created by this Government, of the 2.7 million people taken out of income tax, of the council tax freeze, of fuel duty cuts, of the deficit falling by a third, of inflation falling or of employment being at an all-time high.
Does my hon. Friend not think it strange that the Opposition, who say they care about the cost of living crisis, voted against cutting taxes for lower earners and raising the threshold? Far from paying for those tax cuts for lower earners through other cuts, as the hon. Member for Edinburgh East (Sheila Gilmore) said, have we not raised taxes on the rich by increasing the capital allowance from 18% to 28%?
My hon. Friend is indeed right. I wanted to come to his speech, because he started by talking rightly about fuel duty and the wonderful campaign he has launched to ensure that households are not spending as much as planned under the last Labour Government. I heard his plea for a further cut. I take note, but I make no promises.
We then heard from my hon. Friend the Member for Braintree (Mr Newmark), who gave a characteristically positive speech. I note that unemployment in his constituency, including youth unemployment, is down by 20%, which is definitely something to be recognised. My hon. Friend the Member for Spelthorne (Kwasi Kwarteng) rightly talked about the recovering economy and about how debt had become endemic under the last Government. He is, of course, absolutely right.
My hon. Friend the Member for Tamworth (Christopher Pincher) coined a new phrase that I hope will spread across the Twittersphere and beyond about geeks bearing gifts. I wonder whether he would agree with Charles Clarke, the former Home Secretary, who said of Labour’s energy policy: “My criticism of that particular proposal is I think it is a one-off effort that does not deal with the overall comprehensive issue we have to address. I think there is even a case that some of the recent price rises we have seen might have been a response to the suggestion of a freeze”. That is absolutely correct.
We heard a wonderful speech from my hon. Friend the Member for Hexham (Guy Opperman), who talked about apprenticeships, noting the move from 430 to 690 apprentices in his constituency over the last year. He is absolutely right that for 13 years the last Labour Government failed to tackle the lack of skills necessary for our economy.
(11 years ago)
Commons ChamberI looked at the plans that this Government inherited, and then cut petrol duty in March 2011. We have frozen the duty ever since, and I intend to continue the freeze for the rest of the current Parliament, provided that we can find the savings to pay for it. That is the crucial point: if we do not sort out the economy, if we are not fixing the public finances, if we do not have an economic plan, we cannot have a living standards plan.
Notwithstanding the excellent news of the fuel freeze, petrol pump prices are still under threat from hard-liners at Grangemouth. Does my right hon. Friend agree that extremism in the pursuit of hard-pressed motorists is no virtue?
My hon. Friend is absolutely right. The greatest threat to fuel supplies recently has been the threat of industrial action from the Unite union, led by the chair of the Falkirk Labour party. We now hear the former Labour Chancellor and the former Labour Foreign Secretary saying that Labour should open its inquiry and publish what it finds, and a Labour Front Bencher saying that Labour does not “publish internal documents”.
(11 years, 4 months ago)
Commons ChamberThe welfare cap will be for the United Kingdom, as we have a UK welfare system. It certainly will not be used to target Northern Ireland in particular. We want to ensure that more people in Northern Ireland have the opportunity to work and to get off benefits and although the subject has not featured in these questions, some of the changes we have announced to the jobcentre regime will help in this regard. We will ensure that they are suitably applied in Northern Ireland.
With the increased investment in nursery education, the pupil premium, apprenticeships, NHS social care and pensions, is this not a Government who help people from cradle to grave rather than saddling future generations with debt?
My hon. Friend makes an excellent point. We are doing everything we can to help people get a job, get on in life and aspire to better things, whether that means helping the poorest pupils in schools through the pupil premium, helping troubled families rather than abandoning them, or ensuring that our elderly get help from our social care system. Across someone’s life, we are stepping in to help rather than, as my hon. Friend points out, burdening the next generation with debt that this generation does not have the courage to tackle.
(11 years, 4 months ago)
Commons ChamberWe do not accept those figures. What I will say is that we have been prepared to tackle the biggest deficit in our peacetime history. We have taken measures to put the public finances back on a sustainable footing, with no help from the Labour party, which has opposed every measure that we have taken to do that.
Is my hon. Friend aware that the Government have taken 3,000 low-income people out of tax altogether in my constituency, and have cut taxes for 40,000 low-income residents? Is this not a Government who are on the side of the poor?
(11 years, 9 months ago)
Commons ChamberDoes my right hon. Friend agree that the best way to incentivise people back into work is to cut taxes for lower earners? Will he consider reintroducing the 10p income tax rate that was abolished by the previous Government?
I note and receive my hon. Friend’s bid for consideration in the Budget, but he will know that we have taken people out of tax, which has been important in restoring incentives and the rewards people have for going back to work.