Oral Answers to Questions
Steve McCabe Excerpts(11 years, 11 months ago)
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Mr Gauke
My hon. Friend is right to highlight the fact that we have introduced a range of measures that will have an impact on all parts of society, including the highest earning 10% to 15% through the child benefit changes. Of course, we look to do whatever we can to support families. That includes providing free early learning for three and four-year-olds and extending the 15 hours a week of early years education and care from 2012-13 to all disadvantaged two-year-olds.
Steve McCabe (Birmingham, Selly Oak) (Lab)
Is cutting maternity pay part of the Government’s strategy to support stable families?
Oral Answers to Questions
Steve McCabe Excerpts(12 years ago)
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Mr Gauke
My hon. Friend is right to raise the issue of energy prices. The Government are doing what they can on that front. We are supporting Ofgem’s work in ensuring that there is competition in the energy markets, and of course we are determined to do what we can to get people on lower tariffs.
Steve McCabe (Birmingham, Selly Oak) (Lab)
Does the Minister accept that the Government’s increase in VAT has led to 5p on a pint of beer and 3p on a litre of fuel?
Mr Gauke
We have to take action to try to deal with the deficit that we inherited, and let us not forget that. The hon. Gentleman mentions fuel. Because of the steps that we have taken on fuel duty, petrol pump prices could be as much as 10p lower per litre than they would have been had we stuck with the fuel duty escalator that we inherited.
Business and the Economy
Steve McCabe Excerpts(12 years, 6 months ago)
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Vince Cable
May I first congratulate my hon. Friend, who I think was one of the prime movers behind the legislation and was very persistent in demanding it? Of course, I have no control over the parliamentary timetable, but given that the Bill is small and there is a consensus, it should go through very quickly.
Steve McCabe (Birmingham, Selly Oak) (Lab)
On that point, will the right hon. Gentleman make clear the circumstances in which there will be penalties? That seems to be the proposal’s grey area. Previously he seemed to be more interested in naming and shaming. Is he now saying that in order to protect people the adjudicator will have the power to fine and to impose sanctions?
Lorely Burt (Solihull) (LD)
I would like to respond to this section of the Queen’s Speech on behalf of my Back-Bench Liberal Democrat colleagues.
On the day before the Queen’s Speech, when the rose garden became a tractor factory in Essex, the Prime Minister set out the coalition’s aims for the coming year. We are certainly not in a rose garden now, either metaphorically or in reality. The tractor symbolised the heavy work that we have done and still need to do to get our country out of the slough of debt that we inherited. It also symbolises the change of emphasis away from the financial sector—although this is still an important part of our economy—towards something that we are very good at, although one feels that the Opposition had to some extent written it off: manufacturing.
In the past two years, the coalition Government have been doing plenty of heavy lifting. We have already put in place many policies designed to help companies to grow. Indeed, our recovery is predicated on growth. We have already established the regional growth fund, created a record number of apprenticeships, cut red tape through the red tape challenge and the one in, one out system of regulation, cut corporation tax and exempted micro-businesses from £350 million-worth of regulation. There is still much to do, though.
Steve McCabe
On the regional growth fund, how many of the successful bids in the west midlands have achieved funding to date?
Lorely Burt
I am slightly confused by the hon. Gentleman’s question. Will he repeat it?
Steve McCabe
Does the hon. Lady agree that out of 72 bids, five of which were approved, one company has received funding? Is that a measure of success?
Lorely Burt
There is a lot of due diligence to be done so that we do not waste taxpayers’ money.
Opposition Members might agree that we have to be fair to employers and to the work force. Liberal Democrats seek a balance to ensure that staff can achieve their full potential and have a home life as well as a work life. Unlike some in the Chamber, we are not in the pockets of the unions, but seek to work with the unions and with management to achieve fair outcomes and fair rewards. We will extend the right to request flexible working, and entitlement to parental leave will be shared. All parties bemoan the fact that we often lose female talent when the babies come along; now there will be no point in employers discriminating in recruitment against women of child-bearing age. Both men and women will be entitled to parental leave. That is one small step for equality.
However, Liberal Democrats would say that in some areas the pendulum has swung too far in the direction of the employee. Some employees take advantage of, and try to play, the employment tribunal system, which has become clogged up with cases waiting to be heard, costing time and money and causing stress for all. New legislation will put a greater emphasis on conciliation and give employers longer to give underperforming employees a chance, before the spectre of the unfair dismissal tribunal looms.
Clearing away unnecessary regulation is a big job, and we have already started. We will reform the competition regime by creating a powerful new body to enable the speedier prosecution of anti-competitive behaviour. We are also taking action on executive pay. If there is one thing that really bugs the British worker, it is seeing overpaid executives getting even more for even poorer performance, so we will give shareholders the power to exercise greater control over executive pay through binding votes.
Steve McCabe (Birmingham, Selly Oak) (Lab)
Like a number of other Members, I doubt very much that this is a Queen’s Speech for our times. I do not think that my hon. Friend the Member for Stoke-on-Trent Central (Tristram Hunt) will be writing about its radicalism and imagination in the years to come.
On procurement, Adam Marshall of the British Chamber of Commerce said that the Government need to realise that they are a major consumer, a maker of markets and guardian of the country’s infrastructure and skills policies. Yet this is a Queen’s Speech with nothing to offer on those issues. There is no Bill to demand that those who win large Government contracts should have to provide apprenticeship places. The Under-Secretary of State for Defence, the hon. Member for Mid Worcestershire (Peter Luff), is happy that tankers will be built in South Korea, employment, industrial and economic factors will be dropped from the MOD’s value-for-money assessments, and no action will be taken to prevent a repeat of the Thameslink fiasco.
There are no measures for jobs for young people, no actions to force energy companies to put the elderly on the lowest tariff rather than trying to bamboozle them with an array of complex charges, and no measures to tackle rip-off Britain—the hidden charges of the banks, the private landlords, the insurance industry and the airlines. They are what matter to real people—the people I listen to in my constituency of Selly Oak.
We have heard about the regional growth fund. Almost everything that the Government have achieved to date has resulted in unemployment rising and job prospects falling, and youth unemployment being returned to that depressing picture of the ’80s, which wrecked the health and hopes of a generation. Given what the National Audit Office has told us about the regional growth fund, I strongly caution the Deputy Prime Minister to be careful about what he seeks to trumpet around the country.
The Secretary of State managed to glide over plans to make it easier to fire rather than hire, but I remind him that it was the Under-Secretary of State for Business, Innovation and Skills, the hon. Member for North Norfolk (Norman Lamb), who said that it would be madness to throw away employment protection in the way that is proposed, and it could be very damaging to consumer confidence.
On banks, the Secretary of State omitted to mention that on the key issue of restructuring it will be seven years before we see the proposals fully implemented—so much for urgency. Having already sold off Northern Rock for a song, is it true that we are about to see a massive loss to taxpayers on Royal Bank of Scotland shares?
On the groceries Bill, the Secretary of State will take reserve powers. We already have a voluntary code; we do not need more window dressing. I hope that he makes a better job of the green investment bank than the Government made of the solar energy industry, where reckless decisions wiped out 6,000 jobs and wasted the investments of many small business men, including a large number in Selly Oak.
The Government have ducked the key social issue of long-term care for the elderly, despite promising legislation, and on parents and children I am keen to know exactly what they hope to achieve. What red tape will they scrap in relation to childminders? Will it be Criminal Records Bureau checks, restrictions on the number of children, or floor space requirements per child? That is going back, not forwards.
I am interested in plans for parental leave. We must now be assessed as individuals for tax purposes, as families for child benefit eligibility, and we can have transferable allowances for leave. How much red tape and how many inconsistencies does this involve?
I would like to hear more about the personal budget that the Government plan to give parents of children with special education needs. How will parents qualify, what will the budget replace, and how can we be sure it is not another gimmick to make people compete for fast-disappearing services?
On adoption, no one wants to see children languishing in care, but I am for the child. I want a charter for children. There are plenty of older children, disabled children, children with learning difficulties, and children with severe emotional problems languishing in our care system. We need to concentrate on them as much as focus on making adoption easier for couples.
What on earth will Boots parenting vouchers deliver? What will they cost, who will make a profit, and who will use them? It would also be helpful if the Government, given the succession of local difficulties with friendships and contracts, just came clean on the relationship of Octavius Black to the Prime Minister and other Ministers.
This is a Queen’s Speech that confirms what the electorate know: it is a coalition that does not listen, does not care and does not have a clue.
IMF
Steve McCabe Excerpts(12 years, 6 months ago)
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Mr Osborne
The rate of interest would be set at the time the IMF called upon the loan, if it were to do so. It is only a contingent loan that will be available if the IMF needs it. The mechanism for setting the rate of interest for the IMF is well known. As I have said, countries do not lose money when they lend to the IMF—that is certainly Britain’s experience and that of other countries. Thanks to the actions the Government have taken, we are borrowing money at what is pretty much the lowest rate that anyone doing my job has ever borrowed money.
Steve McCabe (Birmingham, Selly Oak) (Lab)
If the rich EU countries that created the euro will not accept the risks associated with it, what is the moral case for saying that Britain and a host of other poorer countries should bail it out?
Finance (No. 4) Bill
Steve McCabe Excerpts(12 years, 6 months ago)
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Steve McCabe (Birmingham, Selly Oak) (Lab)
If the hon. Gentleman is not successful with his amendment, will he take his constituent’s advice and ask his colleagues to vote against the proposal in its entirety?
Cathy Jamieson
I will be as brief as possible, as I am aware that there is not much time left.
There are two key issues: the principle of what child benefit is supposed to be for, and the practical implications of the Government’s proposals. I want to emphasise the word “child” because we have lost sight of the fact that we are talking about children. The Child Benefit Bill introduced in May 1975 by the then Labour Government, with all-party support, was intended to offer a universal, non-means-tested, cash-free tax benefit for the good of all children. At its simplest, it was designed to ensure that mothers had money paid regularly into their purses, giving them at least some form of stable income, and that the money would be used for their families.
Steve McCabe
Like the hon. Member for Christchurch (Mr Chope), a constituent of mine, Mrs Morris, contacted me. Her family’s income falls just above the threshold. They have four children to feed and clothe, and a mortgage, bills and fuel costs to pay, and they are going to lose £3,000 as a result of this measure. How can any reasonable person say that is fair?
Cathy Jamieson
My hon. Friend makes a very interesting point, and I shall come on to address the effect of this measure on many families on that borderline.
Many Members will have come from, or know, families for whom child benefit—or the family allowance, as it was called in days gone by—was a lifeline. No doubt some on the Government Benches will characterise our position as Labour trying to give more cash to high earners.
Amendment of the Law
Steve McCabe Excerpts(12 years, 7 months ago)
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Mr Sam Gyimah (East Surrey) (Con)
Listening to today’s debate, I have heard little from Opposition Members to dissuade me from the conclusion I arrived at yesterday after hearing the Chancellor’s speech: that this is a fiscally responsible and fair Budget, but one that continues to build the foundations for our long-term growth and prosperity. What the Government are doing for growth and prosperity will be the focus of my speech. First, however, I want to make a few comments about fiscal responsibility allied to fairness.
I am pleased that the Chancellor chose to stick to the plan—a framework within which all the Government’s decisions are being made. At the beginning of this Parliament, the Chancellor made the right decision, to pay the debts of the past and, after a decade of uncontrolled borrowing, to tighten our belts. It is encouraging that the Chancellor continues to stick to that plan, which was initially unfashionable but has now entered the international mainstream.
The task facing us is not easy, and it will continue to be challenging. The gap between how much we earn and therefore take in and how much we spend has fallen from £156 billion—an all-time high, set just before the coalition came to office—to £126 billion. We have therefore made a lot of progress in balancing the books, but we must not take our foot off the gas, which is why I am glad the Chancellor continues to stick to his plan in this Budget.
It is interesting that Opposition Members no longer call for a plan B. A year or so ago not a day would pass without their calling for that. They are no longer calling for it because plan A is working: the deficit is falling and we are beginning to see private sector-led job creation. That is why the Chancellor is right to stick to his plan and to focus on being fiscally responsible. Very few western Governments could these days have announced the Budget that he has just delivered, and he has been able to achieve that because of his past decisions.
Steve McCabe (Birmingham, Selly Oak) (Lab)
The hon. Gentleman says plan A is working. Does he agree that it must have been an oversight not to mention at the outset that it would result in damaging growth and therefore pushing up unemployment and the costs of some areas of borrowing?
Mr Gyimah
It is precisely because plan A is working that in this Budget we can afford to lift 2 million people out of tax—2 million people who were penalised by the 10p tax introduced by the last Labour Government. Because plan A is working, 24 million of the 30 million workers in the UK can get a tax cut—a very important tax cut in very difficult times. The hon. Member for Birmingham, Erdington (Jack Dromey) said that he would compare his record with our record any day. I say to him that we are lifting 2 million of the poorest people out of tax, while the previous Labour Government penalised them. Our record certainly stands up to scrutiny on that.
Labour has now quietly dropped its plan B, and is instead opportunistically opposing our measure on the 50p tax rate. However, Labour does not say that it would reinstate that rate if it were elected to office tomorrow. It is also saying it would somehow give child benefit to higher rate tax payers.
Steve McCabe (Birmingham, Selly Oak) (Lab)
I begin by apologising to you, Mr Speaker, to the respective Front Benchers and to other colleagues for the fact that I will not be here for the end of the debate. No discourtesy is intended, but I have a pressing constituency engagement.
As I listened to the tail end of the Business Secretary’s speech, I heard him outline the many problems confronting the economy and he cited the banks as one of the remaining problems. It strikes me that for that reason, it is important that Government Members try to appreciate that my constituents in Selly Oak, who work long hours for low pay or care for sick children or elderly relatives, will struggle to understand why one of the key tax give-aways in the Budget will amount to £325,000 a year for one of our leading bankers. He is hardly on his uppers, so people will find that very difficult to understand.
If the central argument about the 50p tax rate is that it has not raised much, that is because people have been avoiding it. The decision to cut the rate amounts to rewarding and reinforcing tax avoidance behaviour. What will prevent the group of people involved from trying to avoid the next band of tax? That is the problem—the Government are saying, “Because they avoided it, we’re going to reward them.”
I now turn to something that the Chancellor did not address. One of the most pressing problems of this age is youth unemployment—all hon. Members share that concern—and I was surprised the Chancellor did not take advantage of the opportunity in the Budget to do a bit more. The Government like to tell us about the number of apprenticeships, but most of those are not for people in the 16 to 18 age range. The vast majority that have been created tend to be for older people. There was an opportunity in the Budget to offer more incentives to small businesses to take on young people, but it was missed. Successful manufacturing companies in my patch such as B.H. Leake, Birmingham Powder Coatings and Cameron Price have all told me that they would like to take on a young person or apprentice, but they find the system extremely complex and apprenticeships difficult to fund. Something to improve that would have been welcome indeed.
I welcome the news on the loan guarantee. I hope the initiative is more successful than others. Quantitative easing has given the banks plenty of money; the problem is that they are still not passing it on to small companies. In the same vein, I welcome the proposals to give support to the computer games and animation industries. That is a really good thing that the Chancellor has done. I hope we get the details of how it will work soon, and that it will not turn out to be mired in complexity and red tape, because that would be a tremendous setback.
There is another area in which the Chancellor could have helped young people. National Express is keen on a travel card for young people. It has been in talks with the Government and was directed to the National Apprenticeship Service, which directed it to learning providers, who said, “We don’t have the budget. Go back to the NAS.” There is quite a lot of evidence that the cost of travel inhibits young people from finding the jobs they are looking for. Anything we can do on that front, Minister, would be most welcome.
I shall conclude by mentioning one other thing. I was relieved that the Chancellor said there will be a White Paper on social care. We cannot afford for that issue to be kicked into the long grass. If it is not tackled in the next year or so, it will not happen in this Parliament, and we will not address the problem.
Child Benefit
Steve McCabe Excerpts(12 years, 8 months ago)
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Mr Christopher Chope (Christchurch) (Con)
The purpose of this short debate is to use the force of argument to put further pressure on the Government to abandon their policy of taking child benefit away from children who have a parent who is a higher rate taxpayer. I also wish to address the alternative approaches if the Government wish to raise even more money from higher rate taxpayers.
Last Thursday, the lead in The Daily Telegraph was, “Penalty for paying off student loan early is lifted.” The following words were attributed to a Downing street source:
“This is hopefully good news for tens of thousands of families, as well as many Conservative MPs who had raised concerns about the penalties.”
I congratulate and thank the Prime Minister for having responded to those concerns, which I and many others had expressed on that issue. I hope a similar response will be forthcoming to the even greater and more widespread concerns that are the subject of this short debate.
I recognise that a substantive response may have to wait until the Chancellor’s Budget speech next month. I can assure him that all MPs will be raising their papers if he is able to use similar phraseology about good news for families and Conservative MPs. One essential difference between the two issues is that the removal of child benefit from higher rate taxpayers is something that concerns many more MPs, not just Conservative MPs but MPs right across the house. Many more families are affected as well—anything between 1.5 million and 1.8 million families with, collectively, about 3 million children.
There are relatively few political issues on which, over the generations, there has been a cross-party consensus. One issue is the support for the principle of a universal, non-taxable cash payment for families with children. That is now known as child benefit, which was initially introduced in 1977. Child benefit replaced child tax allowances, which dated back to 1909, and family allowances, which were introduced following the Beveridge report in 1946.
Beveridge regarded a universal system of children’s allowances as a fundamental plank of the welfare state, providing
“help to parents in meeting their responsibilities, and as an acceptance of new responsibilities by the community.”
Beveridge did not support the means-testing of children’s allowances any more than he supported means-testing for access to NHS services.
When child benefit was introduced by the Labour Government, it enjoyed all-party support. Indeed, its introduction proceeded despite the desperate financial crisis at that time, in 1976-77, when this country was under the cosh of the IMF—the IMF was effectively running the Treasury. No politician at that time made the argument that the Chancellor of the Exchequer did in the House on 20 October 2010. He said:
“The debts of the last Labour Government, and the need to ensure that the better-off in society also make a fair contribution, make this choice”—
the removal of child benefit for families with a higher rate taxpayer—
“unavoidable.”—[Official Report, 20 October 2010; Vol. 516, c. 959.]
We have afforded universal benefits for children in families from 1976 to the present day. The state has grown in size since then. Why are we talking about removing this universal benefit at this stage? In my submission, it is avoidable, and must be avoided.
To emphasise just how far the Government are now proposing to go to destroy the previous consensus, it is worth noting that the Child Poverty Action Group, which supports universal child benefit, says:
“Those with children have higher costs than those without and they need additional support at whatever level of income they live on.”
Margaret Thatcher’s Government described child benefit as simple, well understood and popular. Indeed, it has a take-up rate of over 97%.
There was no hint at the last general election that the consensus would be broken. Conservative party policy was set in stone. Indeed, the Prime Minister, as Leader of the Opposition, made this boast:
“I want the next Government to be the most family friendly Government we’ve ever had in this country.”
At a public meeting in Bolton on 5 March 2010, he said that he would not “change child benefit”. He was undoubtedly taking a leaf out of the then shadow Chancellor’s book who addressed the matter at the Conservative party conference on 6 October 2009. He said:
“We will preserve child benefit”.
The early decisions of the coalition Government announced in the June 2010 Budget were consistent with those promises. In his Budget speech, the Chancellor said that
“we have decided to freeze child benefit for the next three years. This is a tough decision, but I believe that it strikes the right balance between keeping intact this popular universal benefit, while ensuring that everyone across the income scale makes a contribution to helping our country reduce its debts.”—[Official Report, 22 June 2010; Vol. 512, c. 173.]
Mr Chope
I will not give way. I want to put my points on record, and it is a very short debate. If I have time later on, I will take some interventions.
The Prime Minister and his predecessors have so frequently professed their support for “hard-working families” that the expression has become a political cliché. How extraordinary, therefore, that the Government are still persisting with a policy that will undermine those hard-working families, especially those families in the squeezed middle. What families could be more hard working than those 55,000 or 60,000 single parent families where the lone parent works long hours in a demanding job to earn more than £43,000 a year, thereby qualifying as a higher rate taxpayer and a victim of this policy? Such families also often have very high child care costs. In the league table of hard-working families, they are closely followed by two-parent families where the breadwinner supports a spouse who cannot work, whether because of disability, long-term sickness or the need to support a child who is disabled or sick.
A family in the last category came to my constituency surgery in autumn 2010 and impressed on me the utter folly of the Government’s proposals. I then engaged in correspondence with the Treasury. On 18 January 2011, the Exchequer Secretary responded to my letter of 16 October—the fact that it took three months to get a response indicates something—in which I had specifically asked the Chancellor about the impact of his policy on those in receipt of carer’s allowance. My constituent’s wife earns slightly above the higher rate threshold, while he stays at home to look after his two children, one of whom has Down’s syndrome. The point that I wished the Chancellor to address was my constituents’ concern that in households where, through circumstance rather than choice, only one parent is able to work, the higher rate tax payer is normally compensating for the lack of earning capacity of the other. As my constituents said:
“This penalises families of those who live the true spirit of social responsibility each and every day.”
After a three-month delay, I received my reply; I had hoped for a better response. It merely asserted that the policy is tough but fair and that affected families are within the top 20% of the income distribution of all families. I immediately wrote back asking my hon. Friend the Exchequer Secretary to address specifically how the impact of the proposals on families such as that of my constituent could be regarded as fair. I am sorry to say that it was another three months—on 12 April—before my hon. Friend replied. He said:
“Inevitably, introducing a simple change to a universal system can create some difficult cases and it would unfortunately be difficult to create an exception for families where one partner is a carer.”
He repeated the assertion that the Government believed the policy to be fair, but how can it be fair to target such families, by asking them to make a greater contribution to reducing the deficit, while exempting families with earnings of up to £84,000 a year that are spread equally between both parents?
Fewer than one in 10 of the families from whom child benefit is to be taken away contain two higher rate taxpayers; I think that the number is 130,000 families. Almost all the remainder, therefore, will or may be in a weaker position to bear such a loss of benefit than those households with two persons earning up to £84,000 a year between them.
When I corresponded with the Treasury, the threshold for higher rate tax was £43,876. Since then, despite rising inflation—there has been a 3.1% increase in the retail prices index in the last year—the starting rate for higher rate tax has been reduced by £1,400, while the threshold for 2013-14 is still unspecified. Therefore, even more families will be affected by this change than was originally envisaged.
The policy that we are discussing today has never been properly thought through. By all accounts, it was included in the Chancellor’s speech at the 2010 party conference at the last minute, after an earlier plan to announce the withdrawal of child benefit from all children over the age of 16 was scrapped. That is why the early estimate of the contribution that this policy will make towards reducing the deficit was £1 billion. That early estimate was wrong, but in typical Treasury fashion the Government now say that anyone who opposes the withdrawal of child benefit must come up with an alternative means of producing £2.4 billion a year to go towards deficit reduction.
It is worth reminding ourselves that families are already contributing to the reduction of the deficit through the freezing of child benefit. That policy alone will save about £1 billion in 2013-14 and the total contribution that it will make during the three-year freeze is about £3 billion. In addition, many of the families who are affected by withdrawal of child benefit will lose £550 a year in basic child tax credit from this April onwards.
In responding to this debate, I expect the Minister to argue that he is in pre-Budget purdah and that he will treat what I have said as a representation, but I want him to say specifically why the Government’s proposal to increase the tax burden on hard-working families is not being defined as a tax increase but as an expenditure reduction. We know that the Chancellor has always been keen to present his deficit reduction plan in terms of achieving a fair balance between Government expenditure reductions and tax increases. Without getting into an argument about the extent to which the original target of expenditure reductions has been missed, I must ask: is it not disingenuous to regard the withdrawal of child benefit in terms other than a tax increase? After all, the antecedents of child benefit lie in the concept that there should be a higher tax allowance for those with dependent children than for those without dependent children. In essence, the Government’s policy is to remove that tax allowance and thereby increase the tax burden.
Mr Gauke
I have a great deal of sympathy with my hon. Friend’s concern. I may or may not be able to furnish him with the numbers that he has asked for. None the less, we have looked at that issue on several occasions. He will not be surprised to learn that we are constrained by European regulations relating to social security payments, which means that we are not able to address his concern in the way that he would like. European economic area nationals can claim child benefit and tax credits as long as they meet the relevant conditions. That is the constraint, I am afraid. There is not the easy choice that he seeks.
Mr Gauke
I am conscious that I have three minutes left and I have barely begun to deal with the various points raised by my hon. Friend the Member for Christchurch, who secured this debate.
We recognise that most higher rate taxpayers are not super-rich. But, as my right hon. Friend the Chancellor has said,
“a system that taxes working people at high rates only to give it back in child benefit is very difficult to justify at a time like this.”
He went on to say:
“We simply cannot ask those earning just £15,000 or £30,000 to go on paying the child benefit of those earning £50,000 or £100,000.”
The debts of the previous Government have to be addressed. Consequently, we have had to make difficult choices. By removing child benefit from higher rate taxpayers, the Office for Budget Responsibility estimates that we will save £2.5 billion a year. The savings mean we can continue to direct child benefit support to where it is needed most, supporting millions of families, and millions of children from birth until the time when they leave full-time education at the age of 18 or even 19.
Oral Answers to Questions
Steve McCabe Excerpts(12 years, 9 months ago)
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Mr Hoban
My hon. Friend raises an issue about resources for the IMF. It is absolutely vital that the IMF has the resources it needs to play its part in ensuring that there is a stable global economy, which is in our economic interest. My right hon. Friend the Chancellor has said that if there is a request from the IMF for more resources, he will look at it carefully. If he agrees to the request, and the amount requested exceeds the limit in place at the moment, we shall seek parliamentary approval, but it is absolutely vital, and in our interest, to ensure that there is a stable global economy, because that is of benefit to the UK economy. I hope that the Opposition have changed the approach they adopted last year of opposing increases in the IMF subscription.
Steve McCabe (Birmingham, Selly Oak) (Lab)
With borrowing set to grow by £158 billion more than the Government planned, how many more miscalculations can the Minister afford before the precious credit rating goes the same way as all the other economic indicators?
Mr Hoban
Let me just tell the hon. Gentleman what Moody’s said in December last year:
“The currently stable outlook on the government’s Aaa rating depends in part on the assumption that the government will stay on track with its fiscal consolidation programme.”
We will stay on track. The Opposition, with their policies on debt and borrowing, would throw this country off course, leading to higher interest rates that would hit families and businesses. We will stick to our course.
Banking Commission Report
Steve McCabe Excerpts(12 years, 10 months ago)
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Mr Osborne
My hon. Friend is right, and she speaks up well for her constituents, who want greater choice on the high street. They want to be able to switch their bank accounts easily, and there are significant proposals in the report to help them do that within seven days and without having to chase up all the direct debits and the like, which will be done for them at no charge. That will be a practical benefit of the Vickers report and the Government’s implementation of it.
Steve McCabe (Birmingham, Selly Oak) (Lab)
Will the Chancellor give the House a categorical assurance that he has now fully recovered from his dangerous flirtation with deregulation, and that he will be able to avoid any further advances from the right hon. Member for Wokingham (Mr Redwood)?
Mr Osborne
If the hon. Gentleman examines what the Government and I have done over the past 18 months, he will see that we want proper regulation that works, enabling consumers to make choices and market forces to operate where appropriate while protecting the British taxpayer, with the Government stepping in where necessary. The report that we commissioned from John Vickers sets out a very important point about the regulation of bank structure that the previous Government did not examine. It represents a significant advance by this Government.
Oral Answers to Questions
Steve McCabe Excerpts(13 years ago)
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Mr Osborne
Of course I do not agree with my hon. Friend on this occasion. The coalition Government have been able to get Britain out of the European Union bail-out that we found ourselves in when we came to office. We have been able to keep the budget increases down—again, in marked contrast with what we found on coming into office. We must now have some serious negotiations to make sure that Britain’s interests are protected in Europe, as the remorseless logic of monetary union—I am sure that he accepts this—leads to greater fiscal integration among eurozone countries. That is the reality of the situation facing us, and I think Britain under this Government will be able to negotiate well in our national interest.
Steve McCabe (Birmingham, Selly Oak) (Lab)
If the Chancellor cannot bring himself to extend the national insurance holiday to small and micro-businesses because the shadow Chancellor suggested it, will that be easier now that the CBI is also recommending it?
Mr Osborne
The CBI has been absolutely staunch in its defence of our deficit reduction plan, and says that it is crucial for business confidence. If the shadow Chancellor wants to make proposals to increase spending and borrowing, which he is perfectly entitled to do, why does he not also make proposals to cut Government spending and to get the budget deficit down? He talks about providing a medium-term deficit reduction plan, but we have not heard one single line item of it.