Autumn Statement

Stephen Metcalfe Excerpts

Wednesday 5th December 2012 Commons Chamber

[Mr Osborne]

House building was at an all-time low under the Labour Government—the lowest, I think, since the 1920s or 1930s. That is what had happened. Of course, things such as problems in the mortgage market were created by the banking crisis and the financial crisis. The banking crisis happened, by the way, when the right hon. Member for Morley and Outwood (Ed Balls) was the City Minister. The funding for lending scheme is bringing mortgage costs down. The Firstbuy scheme helps with shared equity, and the new buy scheme is helping people who cannot afford their first deposit, so we have those schemes out there, helping to repair problems in the financial markets. We are also committing money for additional affordable homes and we are providing guarantees to social landlords to build not just social homes, but homes for the private rented sector. We are dealing with the problems that occurred when the hon. Gentleman’s party was in office.

[Stephen Metcalfe (South Basildon and East Thurrock) (Con)]

I congratulate my right hon. Friend on his statement, and I would particularly like to welcome the fund that will allow good schools to expand. Can he tell us when that might be in place, as the need is more pressing in some areas than in others, particularly around Basildon, where I would like to see the Lee Chapel primary school expand rapidly?

[Mr Osborne]

My hon. Friend makes a powerful case for Basildon, its schools and the particular school he mentioned. I will make sure that the Education Secretary hears the argument he makes. The money is available over the next two years.

Oral Answers to Questions

Stephen Metcalfe Excerpts

Tuesday 6th November 2012 Commons Chamber

[Mr Gauke]

Anyone would think that there was a completely different arrangement in 2010, but I am afraid that is not the case. The Government are working at an international level to ensure that multinationals pay the tax that is due, and that profits on their economic activity is paid where it occurs. We are also strengthening HMRC’s capacity in that area and giving it greater skills to tackle the issue. I would have thought the Labour party welcomed the progress we are making when compared with the lack of progress under the previous Government.

[Stephen Metcalfe (South Basildon and East Thurrock) (Con)]

Does my right hon. Friend agree that one way to stimulate additional growth is through better use of the prompt payment code? Will he join me in calling on businesses and public sector organisations to adopt that code and adhere to it?

[Danny Alexander]

I very much agree with my hon. Friend, and we have already raised that issue with central Government Departments. We will certainly reinforce that message. I know that my right hon. Friend the Minister for the Cabinet Office and Paymaster General has been advancing that as part of the reforms to public procurement, and I will pass on my hon. Friend’s concerns to him.

Amendment of the Law

Stephen Metcalfe Excerpts

Thursday 22nd March 2012 Commons Chamber

[Stephen Metcalfe (South Basildon and East Thurrock) (Con)]

I am pleased to have an opportunity to contribute to this most important debate. Before I start, I put on record my appreciation to my right hon. Friend the Chancellor for his statement yesterday, for putting growth at the heart of the Budget, for unashamedly backing business, and for rewarding hard-working families. Those are the areas I want to focus on, but first I want to talk a little about the cut from 50% to 45% in the top rate of tax.

I have to say that I did not campaign for the cut and I was surprised to see it in the Budget, although that does not mean I do not welcome it. As a Conservative, I believe that all taxes should be as low as possible so that everyone can keep as much of their money as possible and spend it how they wish. But I recognise that at a time of national austerity, when public sector workers are experiencing a pay freeze and then very modest pay increases, and ordinary families are struggling with high fuel and energy prices, giving what appears to be a tax cut for the wealthiest in society seems to make no sense. Our hearts say this cannot be right, but if we use our heads, look at the hard facts and stop listening to the class war rhetoric of the Opposition, it begins to make a little more sense.

The 50% tax rate left Britain isolated as the country with the highest income tax rate in the G20—higher than our competitors such as the United States and countries in Europe. It made Britain a less attractive place for wealth and job creators to set up and do business. It encouraged the wealthiest in society to be more creative about where in the world they paid their tax. It saw £16 billion of income deliberately shifted into a previous tax year, meaning that the total take from the 50% rate was only around £l billion. It did not raise the levels of income expected and it made Britain less competitive.

[Richard Fuller (Bedford) (Con)]

My hon. Friend is making a lot of sense. Would he also draw Members’ attention to the HMRC report and the chart on page 23 showing that even with a 45p tax rate we will still have the highest tax rate for top earners in the OECD and G20?

[Stephen Metcalfe]

I think my hon. Friend has just done that.

The higher tax rate made Britain less competitive, and if we are less competitive, it means less growth, fewer jobs, reduced prospects for economic recovery and fewer tax cuts for the rest of us. Despite the perception, therefore, that this cut benefits the wealthiest, I believe that it benefits us all. Having a top rate of 50% rather than 45% raises only £100 million in direct tax, whereas the other Budget measures introduced yesterday raise five times that amount—£500 million.

We should not listen to Labour on this matter. Its aim is to reignite the class war and divide Britain along the lines of envy for its own political gain. I want to say to the people of South Basildon and East Thurrock, “Ask yourself this simple question: what is in the best interests of you and your family? If you answer economic growth, better job prospects, low interest rates or lower taxes, welcome this change, because it goes some way to delivering those aims.” On its own, however, it is only a small step. To achieve real growth, we need more, and I am pleased that we are getting more. The Chancellor both confirmed existing growth measures and announced new ones. As a member of the Science and Technology Committee, I am pleased that the science budget is receiving continued support. Investment in science and technology is vital if we are to emerge from financial austerity. New technologies, deployed for our own economic gain, can provide both jobs and growth. I therefore welcome the maintenance of the £4.6 billion science budget. I believe—I think the Chancellor does too—that science and technology form the basis of our future competitiveness.

Investment in sectors that Britain excels in is also vital. Investments such as in the Francis Crick Institute at St Pancras, the establishment of a UK centre for aerodynamics, which will encourage innovation in the aircraft industry and help design and commercialise new ideas for decades to come, and the £100 million of support, alongside the private sector, for investment in major new university research facilities are important parts of that support.

Also important are the changes to research and development tax credits to encourage businesses to invest in innovation and technology. We also need to improve links with small businesses and the research base to assist in the commercialisation of research and, I hope, capture the value that can come from that. These will be the key drivers of economic growth, and the Government should continue to strive to create the best possible operating environment in which this can take place to encourage greater investment and international interest. We want the international research community to see the UK as the best place to invest in science and technology. I am therefore pleased that the Science and Technology Committee will be looking at how we can bridge the valley of death—the chasm between concept and commercialisation.

This goes wider than just science-based businesses, however. We want all businesses to see the UK as the best place to set up and do business, and I welcome the measures that the Chancellor has taken to ensure that this becomes a reality. The reductions in corporation tax, the introduction of corporation tax relief for video games, animation and high-end television, and the investment in broadband provision and infrastructure are all welcome additions to the growth programme.

[Mr Iain Wright]

Notwithstanding the 1% cut in corporation tax, what impact will the 5.6% rise in business rates have on growing businesses and economic growth?

[Stephen Metcalfe]

Obviously, any rise in cost base will have an impact, but we are working hard to reduce that to the absolute minimum, and we are putting in place a framework around which businesses can grow that will mitigate the 5.6% rise.

We all welcome the investment in infrastructure, which will be a driver for growth, although I add the caveat that I and my constituents remain wholly unconvinced that an airport in the Thames estuary is the right solution to maintaining our hub status. I would therefore encourage the Government to listen to my hon. Friend the Member for Solihull (Lorely Burt), who made a very good bid for that increased capacity in Birmingham.

I also want to put in a plea for small and medium-sized enterprises. In 2009, they accounted for 49% of private sector turnover. SMEs are vital to the economy. Cutting corporation tax, abolishing Labour’s job tax and offering support through the national loan guarantee scheme are all welcome, I am sure. However, if SMEs are to operate at their full potential, regulation, red tape and bureaucracy must be cut. They have been strangling the economy for too long. I am therefore encouraged to see measures that will allow greater freedoms for businesses in this area. My right hon. Friend the Chancellor’s announcement yesterday that he plans to reduce the number of UK SMEs required to undertake an audit and to reduce the burden of financial accounting for UK businesses has to be welcome. I hope that the consultation on a new cash basis for calculating tax, which the Federation of Small Businesses has welcomed, will benefit many small and micro-businesses, allowing them to concentrate on growing their businesses, rather than spending time, money and effort fulfilling requirements that were designed for much larger businesses.

[Bob Stewart]

As an expert, my hon. Friend will be able to confirm this, but I have heard that about 10% of what small businesses do is taken up with bureaucracy—filling in forms, and so on. Does he agree that we need to avoid that?

[Stephen Metcalfe]

My hon. Friend makes a good point. It varies from sector to sector, but that is not an unrealistic figure.

Finally, in the short time I have left, I want to talk about jobs. Businesses are vital for growth, but they are equally vital for tackling unemployment. I am delighted to see that unemployment is beginning to stabilise. Dealing with unemployment, through the building business and enterprise loans, will allow jobseekers to start their own businesses and unleash a new generation of entrepreneurs. However, we should not forget that our existing small and medium-sized enterprises have the potential to deliver sustained employment. We should redouble our efforts to create confidence for businesses to take on staff. I therefore reiterate my call to make it easier for firms to hire staff in the knowledge that employment regulation will support them if things do not work out.

As we emerge from the deepest recession in living memory, I applaud the Government’s commitment to addressing an over-leveraged economy, an unsustainable budget deficit and a broken model of growth, inherited from the previous Administration. Our plan of fiscal responsibility has allowed the UK to surge ahead of the curve. We have become a safe haven in the sovereign debt storm. As a result, we have been able to deliver record low interest rates for families, businesses and taxpayers, yet still remove millions of people from paying any tax at all, by increasing the tax threshold. Although we are not immune from events taking place on our own doorstep, we can—as this Government are demonstrating—steer this country out of a financial quagmire and deliver growth, employment and a future brighter than any alternative the Opposition may offer.

Autumn Statement

Stephen Metcalfe Excerpts

Tuesday 29th November 2011 Commons Chamber

[Mr Osborne]

We are helping companies to train young people through our apprenticeship programme, and I am happy to be engaged in active discussion with the devolved Administration in Northern Ireland about how that help can best be delivered there.

[Stephen Metcalfe (South Basildon and East Thurrock) (Con)]

I thank my right hon. Friend for his statement and welcome his announcement of a national infrastructure plan, particularly in the context of south Essex. There is no doubt that investment in vital infrastructure is a key driver of growth. Will he agree to work with Members in areas that will benefit from the investment, to ensure that we obtain the best return on it both locally and nationally?

[Mr Osborne]

I certainly give that commitment, and I hope that south Essex will benefit from the commitment that we have already given today to work on a third crossing over the lower Thames. There are a number of possible locations for it, but it will definitely help economic activity both north and south of the Thames.

The Economy

Stephen Metcalfe Excerpts

Wednesday 22nd June 2011 Commons Chamber

[Ed Balls]

Let me deal with precisely that point by returning to the subject of the United Kingdom. Notwithstanding what I consider to be a rather tawdry attempt to use what seems to be a political claim that a sovereign debt crisis exists here in the UK to give the Liberal Democrats an excuse to ditch everything in their manifesto and support a Conservative party policy, the fact is that the plan is not working here either.

The Chancellor likes to play this game. A few weeks ago, he told the “Politics Show” that if he “abandoned” his plan,

“Within minutes Britain would be in financial turmoil.”

As I have just said, the Greek Prime Minister’s experience shows that simply talking tough does not make someone credible and does not boost market confidence if the plan is not working.

The reason why there is now a question mark over the Chancellor’s credibility is that in recent weeks and months we have had an economy that has not been growing; fewer people in work and paying tax than there should be; and more people on benefits than there should be. That makes it harder to get the deficit down. We have had stagnant output for six months and we have forecasts being downgraded left, right and centre. This is not about bad news now and short-term pain. All that makes it harder to get the deficit down and undermines our long-term credibility, investment and confidence. As the former chief economist at the Cabinet Office, who is now head of the National Institute of Economic and Social Research, said:

“You do not gain credibility by sticking to a strategy that isn’t working.”

That is the situation we are now in.

[Stephen Metcalfe (South Basildon and East Thurrock) (Con)]

Whichever number we use—the £12 billion or the £51 billion unfunded tax cut—can the right hon. Gentleman tell us where that money might come from, or is he happy to bundle up further debt that we can then pass on to our children and grandchildren?

[Ed Balls]

I have just made it absolutely clear that if we do not have a credible plan that works, it makes it harder to get the deficit down, not easier. Borrowing is now going to be £46 billion higher because of an economic plan that is not working. That is the reality.

Oral Answers to Questions

Stephen Metcalfe Excerpts

Tuesday 21st June 2011 Commons Chamber

[Mr Osborne]

The hon. Gentleman knows that we made a clear commitment that if the outcome of the referendum in Wales was a yes, we would set up a Calman-like process that would come to an agreed set of proposals—I hope they will be agreed across many parties, as was the case with Calman in Scotland—on greater financial responsibility for the Welsh Assembly. We are engaging in that process now. One reason why Calman has worked well—I know that we will come on to discuss the Scotland Bill later—is that at least three parties in the House of Commons, Labour, the Liberal Democrats and the Conservatives, were able to agree on a set of proposals. I hope that we can achieve similar agreement in Wales.

[Stephen Metcalfe (South Basildon and East Thurrock) (Con)]

I am sure my right hon. Friend is aware that if every small and medium-sized enterprise in the UK employed one additional person, we would have an employment surplus. What plans does he have directly to incentivise SMEs to take on additional staff?

[Mr Osborne]

First, we offer a national insurance tax break for new employees in new companies. We have cut the small companies tax rate, which was due to go up when I came to office. We are also cutting the headline rate of corporation tax by 2% this year and then by a further 3%, making it a 5% reduction over the course of the Parliament.

Oral Answers to Questions

Stephen Metcalfe Excerpts

Tuesday 22nd March 2011 Commons Chamber

[Stephen Metcalfe (South Basildon and East Thurrock) (Con)]

12. What fiscal measures he has taken to support economic growth in the manufacturing sector.

[The Chancellor of the Exchequer (Mr George Osborne)]

Manufacturing is now expanding after years of contraction. In order to support it, the June Budget contained four reductions in the main rate of corporation tax and a cut in the small companies rate from 21% to 20%. The manufacturing sector is expected to gain over £250 million annually when the package is fully implemented. We have committed ourselves to 75,000 more apprenticeships and nine university-based centres for manufacturing. Tomorrow’s Budget will set out further details of the Government’s plan for sustainable, private sector-led, balanced growth.

[Mr Osborne]

As I am sure my hon. Friend knows, in the spending review we allocated £860 million to the new renewable heat incentive, and earlier this month, in the House, my right hon. Friend the Secretary of State for Energy and Climate Change announced the introduction of the first phase of the scheme. It provides financial incentives to support a range of technologies and fuels, including those involving the use of biogas. I hope that that will help excellent companies such as Kirk in my hon. Friend’s constituency.

[Stephen Metcalfe]

Does the Chancellor regret the fact that manufacturing declined by 50% under the last Government? What plans has he to reverse that trend as we rebalance our economy, so that companies actually start to make things again in the United Kingdom, as they are already doing in South Basildon and East Thurrock?

[Mr Osborne]

My hon. Friend is right. The share of manufacturing in our economy halved during the years of the Labour Government. However, there is good news today: the CBI industrial trends survey shows that total order books are growing for the first time in three years. We are determined to move from an unbalanced economy that placed all the bets on the City of London to an economy that grows across the regions and in all sectors.

Equitable Life (Payments) Bill

Stephen Metcalfe Excerpts

Tuesday 14th September 2010 Commons Chamber

[Stephen Metcalfe (South Basildon and East Thurrock) (Con)]

I will do my very best to keep my speech brief, Mr Deputy Speaker.

It is an indication of the depth and strength of feeling that this scandal has created that so many Members wish to speak about it. There is no doubt that it is a scandal. Equitable Life behaved very badly. It hid its debts, it expanded too rapidly, and it had no visible means of support. Ultimately, those actions left my constituents and many other people throughout the country with reduced pensions, and with losses running into many thousands of pounds.

I think it fair to say that no one would have invested in Equitable Life had they known what was happening. The shame is that it has taken so long—nearly a decade—for us to reach a point at which we are actually going to do something about it. I welcome the Bill, I welcome the actions of the new coalition Government, I welcome the establishment of the independent commission that will report in January, and I welcome the stated aim to start making payments by the middle of next year. Those payments, however, must be fair as well as swift. I am glad that, after a decade of delay and prevarication, we are actually going to do something, and I think that all Members on both sides of the House agree that it is time to act.

Given that constituents have contacted me on this issue, I have obviously looked closely into it, and I must congratulate EMAG on all the work it has done in keeping the issue alive and at the forefront. I have spoken to its members and read its briefings, and I find myself in general agreement with its views. Like many other Members, I signed the EMAG pledge during the election, and I was happy to do so because I felt both that its members had a valid case for compensation and that that had been widely recognised. The real issue now boils down to money, therefore: how much compensation will be made available? Therein lies the problem, of course. We are doing the right thing here today, but we must continue to do the right thing.

I wish to make three points: first, we must be honest; secondly, we must be realistic; and thirdly, we must be compassionate. We must be honest about the level of losses Equitable Life members have suffered. We have had two reports, one from our own ombudsman—we have heard about the £4 billion or £5 billion identified in it—and one from Chadwick, estimating the sum owed at approximately one tenth of that amount. That is a 800% to 1,000% discrepancy. How is that possible? We heard from our own ombudsman earlier in the summer that she thought that was an unsafe and unsound basis on which to continue, and I agree.

In common with many Members, I campaigned during the election on a platform of honesty and realism. We must therefore be realistic and accept that we face extraordinary financial challenges, which were left to us by the previous Government, but we must not use that as an excuse not to do the right thing nor recognise what is the right thing to do. I agree with my hon. Friend the Minister that we must balance the needs of the policyholders with the needs of the taxpayer, but I think we should recognise the full losses that have been suffered before deciding what is affordable.

[Iain Stewart (Milton Keynes South) (Con)]

My hon. Friend is making a very powerful argument. One way in which we may be able to square this circle is by splitting up the Equitable victims between those who require swift payment as they are suffering real financial hardship now and other policyholders who have suffered losses but for whom an immediate payment is not necessary. I should declare an interest in that I am one such policyholder as, God willing, I have 30 years of working life ahead of me. We could consider the situation of policyholders such as me outwith the current spending review period.

[Stephen Metcalfe]

I accept that point—indeed, funnily enough, I was just about to make it. One way we could make this situation more affordable is by splitting up the sums to be paid over the coming years. This Bill presents the opportunity to be a building block in the process of rebuilding trust in politics, because I think we can accept the losses and the ombudsman’s recommendation, but we can also then work out how to stagger the funding of the compensation. There is a sense of realism about the fact that the compensation will have to be scaled back in line with what is affordable, but we should start from a point that reflects the true losses and perhaps then, as has been said, scale back in line with the cuts being experienced by other Departments across government.

Finally, we must be compassionate. I know that my right hon. and hon. Friends share my concern for all those who have been let down by the events at Equitable Life and by the actions—or, rather, inactions—of the previous Government, and I know that my Front-Bench colleagues will want to do all they can to support all of our constituents who have lost so much because of how Equitable Life conducted its business. I acknowledge that we as a nation face the most challenging financial situation since the war, but if we are to share the pain equally at this time of austerity, we must recognise that many who invested in Equitable Life have already been suffering that pain for many years and that they have pinned their hope for justice on this new progressive and equitable coalition.

As a matter of principle, we owe it to those people to do what is right. We said we would do it, so now we must. Obviously, I will support the Bill wholeheartedly, but on behalf of my constituents I ask the Treasury to play fair and find the necessary funds to make good what has become a decade-long travesty.

Oral Answers to Questions

Stephen Metcalfe Excerpts

Tuesday 13th July 2010 Commons Chamber

[Justine Greening]

The right hon. Gentleman is right to raise the issue of poverty, but to pick him up on disability living allowance, just 5% of those on DLA have been receiving it for less than five years. We should be trying to tackle the root causes of poverty, rather than putting people in a poverty trap. I am sure that he would welcome, as I do, the fact that the right hon. Member for Birkenhead (Mr Field) will be leading a review into poverty, to ensure that we can do just that: tackle the root causes of poverty, rather than persist with just the symptoms.

[Stephen Metcalfe (South Basildon and East Thurrock) (Con)]

Will my hon. Friend comment on what she believes the effect on low-income families would be if we failed to deal with the £23,000 per person debt that we were left with by the former Government?

[Justine Greening]

I think that most people on the minimum wage would be shocked to hear that the amount of income tax that they pay every year is less than what the average taxpayer pays in debt interest. The best thing that we can do to help not just people on lower incomes, but all people, whether in or out of work, is to get our economy back on track. That means tackling the fiscal deficit, starting to bear down on waste in public services and also reforming public services, so that the money that we spend—money that taxpayers have provided to Government to provide public services—is spent effectively on delivering high-quality public services that they can use.