Surplus Target and Corporation Tax

Alan Brown Excerpts

Monday 4th July 2016 Commons Chamber

[Mr Osborne]

I completely agree with my hon. Friend. We are well placed because we have got behind Britain’s businesses, large and small. The essential decision that we—he and I and our colleagues—took collectively six years ago was to push for a private sector recovery, rather than to continually pump in Government money to try to sustain the economy. That approach has been vindicated by the record numbers of jobs and businesses created and our record growth compared with other advanced economies.

[Alan Brown (Kilmarnock and Loudoun) (SNP)]

A few weeks ago, we were told that a punishment Budget would be presented to Parliament if there was a leave vote. We are now told that we do not need one and that we can cut corporation tax. The contingency plan that the Chancellor is taking credit for is actually the work of the Bank of England, which presented him with the chance to go into hiding in the aftermath of the leave vote. Given the failure to meet targets and the number of U-turns, is it not the case that the Chancellor is making up a plan as he goes along?

[Mr Osborne]

The contingency plans that we had in place were joint plans of the Treasury and the Bank of England and require the authorisation of a Chancellor in certain aspects. Based on the assessment we made before the referendum of the different models available to the UK, we now have to make a decision about how we want to proceed as a country. I am clear that we want the closest possible economic links, so that vital industries—not just manufacturing, but financial services, which is important to the Scottish economy—are able to trade as freely as possible with our European neighbours.

Oral Answers to Questions

Alan Brown Excerpts

Thursday 9th June 2016 Commons Chamber

[Mr Evennett]

I was delighted to be in the right hon. Gentleman’s constituency to experience the moving ceremonies for the Jutland centenary commemorations. It is vital that we engage everybody, particularly young people, so that they might learn about what happened.

[Alan Brown (Kilmarnock and Loudoun) (SNP)]

I welcome the Department’s work to engage young people so that they might understand the suffering and sacrifice. What steps is it taking, however, to make young people understand the wider implications of world war one, such as the Balfour agreement and the redrawing of boundaries in the middle east, and how, in Europe, it sowed the seeds for world war two?

[Mr Evennett]

It is important that we get across the whole of this, and what the hon. Gentleman says is very important. At the moment, we are determined to focus on the particular events being commemorated, but more widely we also want to make people, particularly young people, aware of our 20th century history, of people’s experiences and of the tragedy of war.

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[John Mc Nally (Falkirk) (SNP)]

5. How long the House spent voting in the 2015-16 Session.

[Alan Brown (Kilmarnock and Loudoun) (SNP)]

6. How long the House spent voting in the 2015-16 Session.

[The Deputy Leader of the House of Commons (Dr Thérèse Coffey)]

The Government do not collect this information and do not have the information available. However, the House publishes a record of the time taken on all types of business in the House, and that will be available in the next Sessional Return when it is published in due course. As has been published, hon. Members had the opportunity to participate in 269 Divisions during the last Session, but the total time taken for all business that gave rise to one or more Divisions was 471 hours and 46 minutes.

[Dr Coffey]

The Government made sure that on Monday a decent amount of time for debate was protected rather than compressed. On having a decision time, as in the Scottish Parliament, I suggest that separating decisions on an important piece of legislation from the discussion of them is not to the benefit of that discussion. We should try to ensure that we vote on matters that the House has debated. As we have seen in many debates, people have changed their minds as a consequence of listening to what was said.

[Alan Brown]

One of the defences the Leader of the House has previously given for the current voting system is that it allows Members to grab a Minister in the voting Lobby. The thing is that guys on the SNP Benches are never in the same voting Lobby as Ministers. The 269 Divisions in the last Session meant that we spent roughly 60 hours of our time hanging around in the voting Lobbies, which is equivalent to a football player’s entire season in the premier league, so are we going to see electronic voting or the continuation of an inter-party league?

[Dr Coffey]

The hon. Gentleman has made an estimate based on the information I have just given him, but a lot of Members value the opportunity to see each other in the Lobbies. I recognise what he says about SNP Members often being in a different Lobby from the Government, but perhaps he should learn from his more experienced neighbours on the Labour Benches, who certainly use the voting process to grab Ministers when they leave the Lobby. Frankly, this Parliament spends more time scrutinising legislation than any other Parliament in the world, and I genuinely believe that our voting system is appropriate for that.

Oral Answers to Questions

Alan Brown Excerpts

Tuesday 7th June 2016 Commons Chamber

[Damian Hinds]

I think that I detected a revised figure in my hon. Friend’s assessment of our net contribution to the European Union. The fact is that for every pound that is paid in tax in this country, a little over a penny goes to the European Union. That is a cost—it is not a trivial cost, and I do not belittle it—but what comes with it are the trade benefits, the enhancement of our economy and the protection of jobs and investment that we want to see.

[Alan Brown (Kilmarnock and Loudoun) (SNP)]

7. What steps he is taking to increase exports.

[The Economic Secretary to the Treasury (Harriett Baldwin)]

Over the last six years, UK Trade & Investment has more than doubled the number of businesses that it helps. It now aims to help a further 100,000 firms to export by 2020.

[Alan Brown]

I thank the Minister for her answer, but it did not make it clear what is actually being done to increase exports. The Chancellor promised that his growth strategy would be underpinned by a doubling of exports to £1 trillion by the end of the decade, but to date his targets have been missed, and the export figures are moving in the wrong direction. What will the Government do to turn that dire performance around?

[Harriett Baldwin]

My right hon. Friend the Chancellor mentioned earlier the important work that UKTI is doing in not only promoting the Exporting is GREAT brand around the world, but, now—across the whole Government—encouraging all our embassies around the world to focus their resources on increasing the potential opportunities for our world-class exporters.

Budget Resolutions and Economic Situation

Alan Brown Excerpts

Monday 21st March 2016 Commons Chamber

[Alison Thewliss]

I absolutely agree with my hon. Friend and with other colleagues from that part of the world, who are also here. I understand that the Edinburgh and south-east Scotland city deal team put in their bid in September last year. To open negotiations only now is an unacceptable delay in a region that needs that stimulus.

Select Committee reports on city deals have mentioned that they are often dictated by political imperatives. It seems as though Edinburgh’s deal sits nowhere in those political imperatives. We have waited and waited with bated breath for an announcement on the Edinburgh and south-east Scotland deal, but we have had no certainty about how well the plans have been received. It would be good to have an announcement soon, because the purdah period for the Scottish Parliament elections is imminent. There will then be a further purdah period for the EU referendum.

The people of Edinburgh deserve to know how their deal is being received and when work can get under way. It would be a shame if the ambitious proposal in the bid for £1 billion to improve infrastructure, skills and innovation were put on hold by an EU referendum. That £1 billion of investment could unlock an additional £3.2 billion of private sector investment in Edinburgh and south-east Scotland. Because the bid team is working collaboratively with Edinburgh University, surely the potential impact of the city region deal to the UK’s productivity and growth is deserving of an announcement of significant funds very soon.

There are fledgling deals in other parts of Scotland as well, and I would welcome early engagement by the UK Government in those deals. This morning, I met people involved with the Ayrshire growth deal, which involves ambitious proposals for the area to bring in greater science, technology and innovation and to make the most of the Prestwick hub—

[Alan Brown (Kilmarnock and Loudoun) (SNP)]

And beyond.

[Alison Thewliss]

There is lots of potential in the area, and indeed in Kilmarnock. The growth deal should help to encourage young people to stay in the area and to make their lives there, and it should attract back families who have moved away.

There are many ways in which Scotland looks at issues differently. Our population of 5 million allows us fleetness of foot and innovative thinking. In local government, housing, homelessness, city deals and a host of other areas we can lead the UK. I hope that the SNP’s involvement in this Parliament, however long or short that involvement may be, will allow Members to look to Scotland for ideas of civilisation.

Enterprise Bill [Lords]

Alan Brown Excerpts

Wednesday 9th March 2016 Commons Chamber

[Alan Brown (Kilmarnock and Loudoun) (SNP)]

Will the hon. Gentleman give way?

[Bill Esterson]

I am not going to take any more interventions at the moment. We have not got very long, because the Minister took so much time, and a lot of Members want to speak.

The Minister claimed that the Bill would help workers, but 91% of shop staff oppose longer Sunday opening hours and only 6% want more hours on Sundays. Listening to the Minister in Committee, we might have been forgiven for thinking that the figures were the other way around. The Minister says that he is improving workers’ ability to opt out of Sunday working. Let us just go through some of what happens now. Staff who apply for jobs with some retailers are asked whether they will work Sundays. Failure to say yes can mean no interview. Staff who are still in their notice period who try to opt out of Sunday working can and do lose their jobs. Staff who try to opt out of Sunday working can and do lose hours. Staff who want to opt out come under pressure from managers and colleagues not to do so. The reality is that staff already have to work on Sundays in too many large retailers when they do not want to, when they would rather spend more time with their children or—as most people want to do on Sundays—enjoy leisure time or rest. What happened to the family test?

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[Hannah Bardell]

I am pleased that we have the opportunity to debate the extension of Sunday trading hours. Since the original proposals were withdrawn by the Government, my colleagues and I have been engaging widely with people and organisations on both sides of the debate. Contrary to media speculation and the misinformation peddled by Government Front Benchers, the SNP has, as we said we would, reached our conclusions on the basis of the evidence that has been presented to us.

There are a variety of views across this House and across the country. I intend to outline my concerns about the effect of the UK Government’s proposals on workers’ rights and benefits in Scotland and the UK. However, I should say at the outset that my SNP colleagues and I have no objection to the principle of extending trading hours on Sundays. After all, in Scotland, as has been said many times, we already enjoy unrestricted trading hours on Sundays. It is important to note that in the past, restraints on Sunday opening in Scotland have existed, but they have largely been social rather than legal. There are, of course, areas of Scotland where there is greater religious observance and Sunday opening hours are more restricted but, in general, the practice of longer opening hours on Sundays, particularly in retail, is now well established throughout Scotland, and some evidence suggests that that has been the case since the late 1980s.

The UK Government’s proposals represent the uniform deregulation of trading hours restrictions across these islands. That is not necessarily a bad thing, but without adequate legal protections, which we and others have called for, the employment protections of workers and their remuneration would be threatened.

The Government’s impact assessment, which was published only this morning, identifies more than 450,000 retail workers across the UK who receive premium pay, but in the 44-page assessment, the Government dedicate just one paragraph to that and dismiss out of hand the concerns of workers and of USDAW. Even now, faced with defeat, the UK Government refuse to offer assurances about premium pay. They engage in ping-pong politics, looking for ways to get the numbers through the Lobby.

[Alan Brown]

My hon. Friend rightly underlines the point that we have always made about the long-term erosion of premium pay. A sham of a pilot has been offered, but does my hon. Friend agree that that cannot address the long-term erosion of premium pay? Nobody participating in a pilot is going to take away premium pay—they will have to wait until the pilot is finished.

[Hannah Bardell]

I entirely agree.

My SNP colleagues and I made it clear in November last year that we would oppose the UK Government’s proposals, and we oppose them now. We challenged the UK Government to think again about how they could provide the necessary guarantees and safeguards to shop workers in Scotland and the rest of the United Kingdom. I was pleased that the Government tabled a new schedule in Committee—it now forms part of the Bill, although it is threatened with removal—that sought to amend the Employment Rights Act 1996 to give more explicit protection to shop workers opting out of Sunday work, including protections against such workers being discriminated against. Our Labour colleagues have referred to the legal opinion that they obtained.

SNP Members welcome the extra protections for workers. They show that the UK Government can, when they want to, listen and, on occasion, act to do the right thing. The SNP commissioned its own legal opinion from a leading Scottish silk to examine the protections in detail. We are satisfied that they represent a significant increase in employment protection across the UK, and those protections would not have materialised without the SNP’s opposition.

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[Alan Brown]

My first time on a Bill Committee was during the passage of this Bill, and the journey has certainly been interesting from start to finish. In Committee, as outlined by the hon. Member for Cardiff West (Kevin Brennan), we had a vote that was not a vote and then a re-vote, but that will hopefully not be the future. Today, it was good that the Secretary of State gave the SNP complete credit for the Government defeat. We are happy to take that, but it was actually the result of work across the House and the amendment of the hon. Member for Enfield, Southgate (Mr Burrowes).

I was slightly frustrated by today’s proceedings, because I hoped to table an amendment relating to cash retentions, which is a big issue in the construction industry. It represents another missed opportunity for the Government. Our attempt to table an amendment proves that we are not about grabbing headlines, and we have been serious from start to finish in what we are doing.

[Pete Wishart]

I do not know whether my hon. Friend has some words of consolation for the Secretary of State, who seemed to be unduly upset about the temerity of SNP Members to come to the House and vote in the interests of Scottish workers. Does my hon. Friend have any advice to help him to get over his grievance?

[Alan Brown]

The Secretary of State could give us further devolution for a start. If we had been given more powers in the Scotland Bill, as we wanted, perhaps the Government would need to worry less about us.

Another interesting aspect of what we have seen today is the Government’s last-minute so-called “concessions”, and we are going to get amendments that we do not know about, in the House of Lords. The Government need to make up their mind whether they are in favour of the House of Lords and what is being done in there or not. Only last week they were not happy with what the House of Lords is doing but today we are supposed to vote with the Government because the Lords will save us—I do not know where we are going with that.

[The Minister for Small Business, Industry and Enterprise (Anna Soubry)]

You spoke in favour in the Committee—

[Alan Brown]

I did not speak in favour of Sunday trading in Committee, because I did not speak about Sunday trading in Committee, and the record will prove that. My hon. Friend the Member for Livingston (Hannah Bardell) spoke in favour of stronger workers’ rights, and that is also there for the record.

I have mentioned cash retentions, and the Minister’s attitude to dealing with that matter is to acknowledge that it is an issue but to say, “Don’t worry, we have a Government review. We will do the review and then we will implement the measures.” We have to put all the trust in the Minister, but we should consider what the proceedings on Sunday trading show. The Prime Minister said, “We won’t be doing Sunday trading” but it was then proposed, even though it was not in the manifesto, and today we have seen last-minute deals. That proves that we cannot have any trust there, which is why I wanted to have a vote about cash retentions.

[Kevin Foster]

I was interested to hear the hon. Gentleman’s comments on Sunday trading. Will people working in Scotland’s largest supermarkets be able to look forward to hours restrictions from the SNP Government at Holyrood, given the SNP’s attitude towards that issue in England?

[Alan Brown]

It is a different argument. The Government did not publish a full, proper impact assessment. The impact assessment that came before me was suggesting that workers might lose up to £1,400 a year and there could be £70 million lost out of the Scottish economy—that is from a published economist. When the Government cannot counteract that, I will go with that information. My conscience told me to vote on that basis and do the right thing.

Let me conclude on the cash retentions. We are seeking a retention deposit scheme similar to the tenant deposit scheme. This has been implemented in other countries— it has just been introduced in New Zealand—and shown to work well. It would protect small businesses. Up to £3 billion is held in cash retentions at any one time, and £40 million was lost in 2015—this is money the small companies could not recover because of bankruptcy in the other companies. Given that this recovery is meant to be based on small and medium-sized enterprises, this was another missed opportunity by the Government. I will leave it at that.

Enterprise Bill [ Lords ] (Seventh sitting)

Alan Brown Excerpts

Thursday 25th February 2016 Public Bill Committees

We tabled the amendment, which would exempt those companies from the Bill. If the Minister has another way of guaranteeing that they will be exempted, we will be interested to hear that. Otherwise, I ask her to listen to the strong and powerful case made by those private sector workers and agree to the exemption to exit payments caps for companies listed in new schedule 3.

[Alan Brown (Kilmarnock and Loudoun) (SNP)]

I thought the hon. Member for Cardiff West set out the logic behind the amendment very well and I agree with all the comments he made. As he said, we have all received representations on this issue; in fact, there was the feel of a 38 Degrees campaign at one point, but that showed the strength of feeling. These are workers who are getting hurt by the law of unintended consequences again.

As has been said, it is middle-income workers—long-serving workers—who are encouraged to stay on site, in a privatised company, to remain there and do this very important work of decommissioning, which obviously has an end date that signifies the end of their work. So it is only right that they should be able to pick up the pension accrual that they expected to get.

If we look back in history, we see that this is about Government striking a commercial deal to privatise a company. The company knows the workload that it is going to get, so it knows its commercial return. Years down the line, these workers should not be the victim of a Government change in policy, when, in fact, the company has managed to pick up the profit it was due over the years. That is very important.

These workers have not had a say in this process. They probably did not want to be privatised in the first place and they should not have their terms and conditions changed further down the line. I certainly support the amendment.

[Anna Soubry]

We need to remind ourselves, of course, that the Government have been clear that ending six-figure payments should apply to all public sector organisations, with few exceptions. Of course, it is the taxpayer who picks up the cost of exit payments and employees who have specialist skills should not automatically be exempt.

I was a little troubled by the contribution from the hon. Member for Wakefield, and not because I disagreed with her for one moment about the dreadful accident the day before yesterday at Didcot and the subsequent fatalities. It is undoubtedly the case that many people do dangerous jobs. I am reminded, of course, of all those who work in the fire and rescue service; we often forget that the fire brigades provide the rescue service as well. They do incredibly dangerous work, not only when they are fighting fires but when they are rescuing people. Although it is extremely rare, if it ever happens, that we make firefighters redundant, nevertheless they are also included in this new provision. I do not think that the fact that someone does a dangerous job should in some way exempt them.

The list of exempt organisations will be set out in the regulations, not in the Bill itself, and of course they will need the approval of both Houses of Parliament. The guidance accompanying the regulations will set down the criteria that Ministers, or those who have been delegated the responsibility, must consider in decisions to relax the cap. In other words, there are exemptions that can be made, but they will be determined in a list that, as I say, will require the approval of both Houses.

Regulations relaxing the cap can apply to individual cases and to groups of individuals, to cater for cases where Ministers may wish to consider organisational cases for relaxing the cap. So there is already a mechanism in place for organisations to be considered for exemption. Therefore, the amendment is unnecessary.

The regulations implementing the cap will be in force from October 2016 at the very earliest. However, as I think I have explained—it has certainly been explained in correspondence, but now I will make it very clear again—Magnox employees who are in the current redundancy programme and due to exit by September 2016 will not—repeat, will not—be caught by the cap, and the cap will not affect the core terms of the pension scheme available to Nuclear Decommissioning Authority staff, in other words Magnox employees, such as the retirement age or the basis on which their pensions accrual rate is set.

The hon. Member for Cardiff West used a particular example, of course, from somebody who had quite properly written in, which is absolutely the right thing to do. In relation to that point, I will say that I have indeed had meetings with MPs. I have not met the unions, not because I have any difficulty in meeting unions, but only because—unfortunately—my diary is pretty hectic.

However, I particularly made the point when I met the MPs, and I have made it clear to the unions by way of a letter, that people should please use their MPs to make full representations to me. As we all know, in this place Members can lobby a Minister in a corridor, or anywhere we bump into each other. That is the quickest and easiest way, but it is not a slight on the unions. I have specifically said to Members of Parliament, “Get back to them, and tell them about our meeting. Use your good self to communicate through.”

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[Alan Brown]

The hon. Gentleman spoke about the Minister’s disappointing response. Does he agree with me that one aspect of that response was that firefighters would be affected by the provision on exit payments? Is that not an illustration of what is wrong with this whole premise? They are anything but fat cats.

[Kevin Brennan]

It is. In fairness to the Minister, I do not think that she was saying that they were, but that is the language that the Secretary of State has used and that is the headline that they seek with this kind of policy making by headline. They put things in the Bill that are meant to get them a headline in the Daily Mail and The Sun. That is what it is all about, fundamentally. It is all about political positioning: “We are against these public sector fat cats.” But the reality, when we lift the stone and look underneath that proposition, is that some pretty ugly stuff is wriggling around underneath the stone. There is an example of that in the debate that we are having today. Hard-working people are being betrayed by their Government. They would have made very different assumptions, as my hon. Friends have pointed out, about what this policy meant when they read their Daily Mail and read the headline and even when they read the Conservative party manifesto, because—

Spending Review and Autumn Statement

Alan Brown Excerpts

Wednesday 25th November 2015 Commons Chamber

[Mr Osborne]

My hon. Friend is absolutely right. He is a champion of bringing businesses to Carlisle. I have made a number of visits with him to Carlisle businesses, including a sawmill and construction sites that are providing new homes for people there. He is right that none of those things is possible—people do not build houses and businesses do not expand—if there is no economic security and no confidence in the long-term plan of the Government. We have been able to provide a new enterprise zone for Carlisle, and buried in the detail of the document there is extra support for air routes from Carlisle as well.

[Alan Brown (Kilmarnock and Loudoun) (SNP)]

I ask the Chancellor to answer this question without any bluster about oil and fiscal frameworks. In fact, I ask for a one-word answer. In real terms, over the course of this Parliament, will the Scottish revenue grant suffer a Tory cut?

[Mr Osborne]

The block grant is going up, and there is a big increase in the capital budget. If the SNP had had its way and Scotland had become independent, there would have been savage cuts, because the OBR has just confirmed a massive fall in oil revenue income, which would have devastated Scotland. Thankfully, Scotland is part of a strong United Kingdom.

The Economy

Alan Brown Excerpts

Wednesday 18th November 2015 Commons Chamber

[Harriett Baldwin]

The hon. Gentleman is right to say that this is a serious issue, and I hope that, as one of the more moderate and sensible members of his party, he will be able to convince those on the Labour Front Bench that this is an important issue to tackle.

The Opposition motion also mentions tax credits.

[Alan Brown (Kilmarnock and Loudoun) (SNP)]

The Minister mentioned the fall in unemployment, but is there not a paradox? We are considering closing Her Majesty’s Revenue and Customs offices and reducing the number of people who work for it, when its official figures show a £34 billion tax gap. If we collected that money, it would go a long way towards eating into the deficit. If we then scrapped Trident and the other place we would be nearly there, and we would not need to make cuts.

[Harriett Baldwin]

I would listen more to the advice of the SNP on the economy if it had not projected that the oil price would remain at over $100 forever and fought last year’s referendum on that basis.

Various hon. Members have mentioned tax credits. The British people want to see a lower welfare, lower tax and higher wage economy, and that is what they voted for in May. In the summer Budget, we set out a package of reforms for working people, which included the introduction of the new national living wage, continued increases in the personal allowance and the doubling of free childcare worth up to £5,000 a year for working parents. Of course, we will listen to the concerns raised about the transition period, and my right hon. Friend the Chancellor will set out our response to those concerns next week. But make no mistake, creating a low-welfare, low-tax, high-wage economy is one of the most progressive goals a Government can have, and one that we will continue to work towards.

Guaranteed Income for Retirees

Alan Brown Excerpts

Tuesday 17th November 2015 Westminster Hall

[Alan Brown (Kilmarnock and Loudoun) (SNP)]

It is a pleasure to serve under your chairmanship, Mr Betts. I, too, congratulate my hon. Friend the Member for Ross, Skye and Lochaber (Ian Blackford) on securing this debate. Although I have grey hair, I want to put it on the record that I am quite a way from pension age.

When I first heard of the Government’s pension freedom scheme, I thought it was a political gimmick. I hope that when the Minister sums up she will be able answer all the important questions raised and prove that it is a well thought out and evidenced policy. Otherwise, it is actually short-term isolated thinking.

If we take a step back, we see that when the original annuity system was introduced in the UK, life expectancy was considerably lower than it is today. Back then the state still felt a responsibility to try to ensure that people had a guaranteed income to look after themselves for the rest of their lives in some form of comfort. Just because the annuity system was not always maximised to the benefit of the saver—as we heard, 80% of people could have got a better deal if they had shopped around—does not mean we should scrap the system altogether. Instead, we should look at ways to improve it.

The recent message from the Government has been that people should save responsibly, and I agree. They have helped to force the issue with auto-enrolment. They have also said that people need to work or wait longer until they get their state pension. We are told that that is justified because life expectancy is much higher. There are contradictory messages: the left hand says, “Save. Be responsible. Understand that you might well have a nice long retirement to look forward to, consider and plan for,” but the right hand is saying, “Well done guys—you’ve worked hard. It’s your money—do what you want with it.” The Government should take cognisance of the fact that those are competing messages.

We have heard about the hidden unintended consequences of the pension freedom policy, one of which relates to the recent increases to the state pension age, which particularly affect women. Members will have been lobbied by Women Against State Pension Inequality. These women feel particularly hard done by: they planned to retire at a certain age, they worked all their lives with that plan in mind, but now they feel the opportunity has been taken away by the Government. Some women are now considering whether to access their pension pot early and effectively burn through it until they reach the increased state pension age. I am concerned for the women who stay on in work and, once they reach state pension age, retire and access their pension pot, who might feel that they have missed out by having to work longer and so be tempted to make best use of the money they have put by in a short time. That will not benefit them in the long run.

This is speculative, but another scenario I have considered is the fact that we currently have a housing shortage, combined with a Government who reinforce the message that home ownership is everything and is something to which families should aspire. If retirees have access to lump sums, they might want to access their pension pots to help their family out by getting them on the housing ladder. In the short term, helping their family looks like a good thing, but it will lock their money up for the future, so might not be right in terms of the long-term financial planning for retirees and their dependents. They are not, though, going to get that financial advice otherwise.

We have heard that the fundamental idea behind pension freedom is that we should trust people, but on balance that is not what the evidence suggests. The Government should look at the evidence from Australia and the United States, which suggests that a large percentage of pension savers spend all their money in a relatively short time. As we heard from my hon. Friend the Member for Ross, Skye and Lochaber, in Australia there are polar opposites in play: 40% of people use all their savings in just 11 years, while at the other extremity is a group of people who are too cautious and do not access their money to give themselves the high quality of life that they should have after saving responsibly. Reflecting that reality, Australia is now moving towards an annuity scheme. That is the red flag that the Government should be paying attention to. The Australian report was published before the Chancellor introduced the changes, so there is no excuse for not taking that evidence on board sooner.

There is more evidence of how people behave when given pension freedom from the United States, where half of retirees have spent their entire pension pot within 17 years of retirement—in real terms that is a really short amount of time. Overall, I fail to see the wider benefit of people having complete freedom when the evidence shows that pension contributions tend to be exhausted rather quickly. Aside from it giving a short-term feelgood factor for some people and a low-level cash injection to the economy because of the additional spend, I do not think complete freedom is the way to go.

I understand that populist policies are almost a necessary evil for Governments. As politicians, we all want to do things that make us popular, and Governments want to ensure that they are re-elected, but Governments should never forget that they have responsibilities. A default pension income for retirees would fall into the category of responsible governance; otherwise, there is a risk that future Governments will end up paying out more money in pensioner welfare. In all probability there will be a higher burden on the NHS because of the higher healthcare costs associated with retirees who have exhausted their funds—they are out and about less and they are stuck in homes that they might not be able to afford to heat. Those knock-on healthcare effects will have financial implications for the state in the long run. We know that the Government are hellbent on reducing the size of the state for the future, so that is counterintuitive. Again, the messages are contradictory.

There is very limited evidence in the public domain on how the new arrangements are working, but what evidence there is suggests that currently the majority of cash sums paid out go to people under 60 years old, and 80% goes to those under 65—so in many cases people well below state retirement age—yet only one in 10 people are accessing the Pension Wise service. At the very least, the Minister should consider the following. People should be given targeted financial guidance and advice before they access their pension funds. They should be made to think twice about making large cash withdrawals, especially when in some cases people are penalised by having to pay a higher tax rate, which again, is not beneficial in the long run. There should be mid-retirement health checks, although to be honest that might be too late for some, which is why we need reform sooner rather than later.

The Government must look again at what is happening now and come up with a compromise to ensure some form of guaranteed income for the future. They should consider the Australian Murray report and at least try to arrive at a mix of flexibility, which can be good for some people, and security for all retirees, so that they benefit from working hard and putting money by.

Tax Credits

Alan Brown Excerpts

Thursday 29th October 2015 Commons Chamber

[Scott Mann (North Cornwall) (Con)]

I thank the right hon. Member for Birkenhead (Frank Field) for securing the debate. This is the first opportunity that I have had to contribute to the tax credits debate.

The primary aim of this Government is to pay down the deficit, reduce public spending and unshackle the £3,000 that hangs around the neck of every child that is born in the UK. The Prime Minister has lifted thousands of people in my constituency out of income tax altogether, given 30 hours of free childcare and introduced the new living wage. I am proud to associate myself with those measures.

When tax credits were first introduced by Labour, they cost £4 billion a year. This year, I believe, they cost £30 billion, so they clearly need reform.

[Alan Brown (Kilmarnock and Loudoun) (SNP)]

Does the hon. Gentleman understand that working tax credits and tax credits are means-tested welfare benefits, so if the welfare bill has gone up, it is because families’ incomes have not risen significantly? That is the real reason why the bill has increased, so we need to get incomes to rise.

[Scott Mann]

I accept the hon. Gentleman’s point, but we are looking to increase the living wage to ensure that people are better off in work than out of work.

--- Later in debate ---

[Alan Brown (Kilmarnock and Loudoun) (SNP)]

I welcome this debate and, for the most part, I welcome its tone, particularly that of the earlier speeches of Conservative Members. I hope that their speeches are a sign of a mood swing across the whole of the Government Benches, although I must say that recent contributions have been in stark contrast. If I may, I will outline some of the previous actions of the House and the contributions of Members during the past week. The focus of the House has had me scratching my head, as I am sure has been the case with my constituents.

Last Thursday morning, the hon. Member for Corby (Tom Pursglove) said his constituents had suggested setting up a public fund for them to make donations towards the restoration of this House. I find that incredible. I know that if I took that suggestion to my constituents, the only way I would raise money would be by getting them to donate to a swear box when I asked them such a question. On the same day, the Leader of the House showed his usual vision by suggesting there was no need to reform the House of Lords. That afternoon, we had the debate on English votes for English laws. Much of that debate was predicated on the fact that, as many Conservative Members said, EVEL is the No. 1 issue for their constituents. Again, I find that difficult to believe, because there is absolutely no doubt that the No. 1 issue for my constituents is tax credits.

As I was trying to relax over the weekend, I heard that the bill for Trident has gone up to £167 billion. Apparently, the figure of £167 billion still does not make the Government flinch. It is a 67% increase, but they do not flinch. At that point, they still looked hell-bent on taking forward the tax credits proposals. Monday night was a lost opportunity to kill the tax credit changes stone dead, but at least the other place flexed some muscle and caused the Government to think again. Obviously, plenty of suggestions have been made about how to take that forward.

I should add that the previous tone of some of the debates on tax credits has been really unhelpful. I welcome the speech by the hon. Member for Aberconwy (Guto Bebb), who condemned his fellow friends for suggesting that one solution for making up the income lost in tax credits was to take two jobs and just work longer hours. That is not practical, and it is actually one way for someone to work themselves into an early grave.

I have already said this, but I want to put it on the record again. Let me be clear that this is the No. 1 issue for my constituents. I am pleased that the SNP has been very consistent in arguing against the cuts in tax credits. In my constituency, an estimated 3,800 working families are currently in line to be affected by the tax credit proposals unless they are amended. In previous debates, we have heard the mantra about having a high-wage, low-tax, low-welfare system, but that has clearly been blown out of the water by independent analysis.

I again welcome the fact that many Conservative Members have acknowledged that and have called for action to make sure we protect those on the lowest wages. However, we should not forget the people who are not working, but are looking to get into work. They are in line to lose £2,000 a year. It is impossible to lose that money and sustain a family. We must remember that a lot of people move in and out of work. They will not only lose money when they are in work, but if they are out of work and need support—if they are on a zero-hours contract or are unfortunate enough to lose their job—they will find that the support mechanism has been cut drastically.

What should we do? Some good suggestions were made earlier. The first thing that we need is a proper living wage. We need to bring the living wage in line with when the cuts are made to tax credits, so that we can balance cuts in welfare and ensure people’s incomes are protected. I suggest that the Chancellor could provide greater support for small and medium-sized enterprises to enable them to take on new employees and help more people into work. I have mentioned the cost of Trident, which we could easily scrap. Even though we welcome the decision that it made the other day, we are still calling for the other place to be scrapped.

It is perfectly obvious that there should be a cut in tax avoidance and evasion. The other night, the SNP put forward a proposal to close the Mayfair loophole. Unfortunately, the Government would not agree, but that should be revisited. We should scrap the proposed right to buy in relation to social housing, and the obscene subsidies that might go to people who opt to buy under the Government’s plans. There is no way that the taxpayer should pay up to £100,000 for somebody to purchase a home in London.

It would have been helpful if the UK Government had allowed the Scottish Government to have better borrowing powers so that we could use them to invest in infrastructure and capital spend, which would create jobs. The UK Government should be building more houses in Scotland. We are already showing the way in building more social housing, which creates jobs and a better standard of living. Building energy-efficient homes means that families pay less for heating, which makes their lives easier because they no longer have to make the difficult choice between heating and eating.

The SNP has suggested other measures, including the reintroduction of the 50p tax rate. We should not raise the upper threshold so quickly. We could have a bank levy and a mansion tax, and go for the complete abolition of non-dom status. The Government do not have to aim to get a large surplus so quickly; they could easily slow down their measures and adopt a more balanced approach.

Overall, we should not be hurting those low-paid workers with families who could lose on average £1,300 a year. There is also the cringeable policy of exempting families who can show that their third child is the result of rape. That has not been mentioned today and I note that Conservative Members have chosen not to intervene on me. It is an obscene policy that nobody can justify or explain.

I ask the Minister to speak to the Chancellor and revisit the whole package, because it will save only £4.6 billion. We need a proper strategic overview, which might get us to a long-term recovery plan based on action, not just the words of those on the Government Benches.