Legal Aid (Rural Wales)

Albert Owen Excerpts

Wednesday 26th June 2013 Westminster Hall

[The Lord Commissioner of Her Majesty’s Treasury (Mr David Evennett)]

I warmly congratulate my hon. Friend the Member for Ceredigion (Mr Williams) on securing the debate. I have been asked to respond on behalf of the Ministry of Justice by my right hon. Friend the Lord Chancellor and I will of course ensure that he is aware of the representations and comments made this afternoon by my hon. Friend and by other hon. Members present. I am delighted that the Under-Secretary of State for Wales, my hon. Friend the Member for Preseli Pembrokeshire (Stephen Crabb), is able to be with us at this important debate. I am well aware that the Wales Office has received many representations from Welsh MPs on these matters. I would like to point out that my right hon. Friend the Secretary of State for Wales has discussed these issues with the Lord Chancellor and we are sensitive to the interests and needs of the Principality.

[Albert Owen (Ynys Môn) (Lab)]

I apologise for not being present at the very beginning of the debate. Is the Minister saying that he is looking favourably at a Welsh dimension to the whole consultation process? In addition to that, we are talking about rural areas that are on the periphery—areas that have lost court services and lost other forms of access to justice.

[Mr Evennett]

I am grateful for that intervention. Of course, we are aware of and sensitive to the issues that are being raised. We will obviously take into account everything from the debate and the consultation.

The Government must always be mindful of the impact of their policies on those affected by them. Debates such as this are most welcome, as they help to strengthen and improve Government policy by ensuring that hon. Members’ expertise and local knowledge are fully considered. Before I respond to the substantive parts of the debate, I would like to make three general points about the changes that have been consulted on in respect of legal aid.

First, the Government will continue to uphold everyone’s right to a fair trial. We do, however, have a duty to look at how the system is working, taking into account the taxpayer, legal aid applicants and the legal profession as a whole. Secondly, access to justice and access to taxpayer-funded legal aid should not be confused. We have a duty to ensure that all public expenditure is justified. Thirdly, the Legal Aid Agency would ensure, as part of the tendering process, that all providers were capable of delivering the full range of criminal legal aid services under contract across their procurement areas. Quality-assured duty solicitors and lawyers would still be available if these changes were implemented, just as they are now.

I would like to outline the rationale behind the legal aid proposals and their potential impact in Wales. In its programme for government, the coalition set out its intention to undertake a full review of the legal aid scheme. Following consultation, the Government’s final proposals culminated in the Legal Aid, Sentencing and Punishment of Offenders Act 2012. As well as reducing the scope of the civil legal aid scheme, the Act made sweeping reforms to the central administration of the legal aid system. Through the introduction of the Legal Aid Agency, we have strengthened accountability and introduced a more rigorous approach to financial management. We estimate that those and other reforms will save about £320 million per year by 2014-15, but our legal aid scheme remains one of the most expensive in the world. Legal aid spending in Wales has increased, as it has dramatically in England.

Finance (No. 2) Bill

Albert Owen Excerpts

Thursday 18th April 2013 Commons Chamber

I urge my right hon. and hon. Friends on the Front Bench to turn their attention to the central issue that the Opposition have rightly highlighted. I know that the Government are doing that, but I want them to look at splitting up RBS and creating banking competition in the market so that we can finance a better recovery and get some growth in output from the banking sector at the same time. They need to focus on tax rate cuts that would produce more revenue rather than those that would produce less. Although we would like lower taxes, we cannot afford less revenue and the Opposition have hit upon the one tax reduction that would produce less revenue, as I think all forecasts would rightly show. I trust that the Opposition’s good intentions will be welcomed, but that their proposal will be dismissed, because I simply do not think that it would trigger the fast growth that they want and that they have not even bothered to define.

[Albert Owen (Ynys Môn) (Lab)]

I always listen with interest to what the right hon. Member for Wokingham (Mr Redwood) has to say in these debates and he has been very consistent about low taxation over a number of years. I agree with him that external factors such as banking and energy costs are suppressing growth in our country, but I also think that the domestic economy needs a boost and he did not offer any solutions. Small businesses on our high streets are all asking for help from the Government and I believe that the proposed new clause would help them. Money is being taken out of the economy at a time when we need to be putting money back into it.

[Mr Redwood]

The hon. Gentleman makes a fair criticism of my remarks, but to stay in order I did not mention the changes to energy policy necessary to have cheaper energy or the changes to other taxes that I would like implemented to boost to the economy.

[Albert Owen]

As a member of the Energy and Climate Change Committee, I understand the difficulties. I realise that one of the major problems—the price of crude oil and gas—is external and that we could have a wider debate about that, but I am talking specifically about the need to boost the domestic economy.

Small businesses tell me that high street names are folding, first, because they have tight margins, and secondly because, although footfall might be steady, people are spending less money. The 2.5% increase in VAT is making a real difference and taking money out of people’s pockets. I support raising personal income tax thresholds as a way of helping the low-paid, but it can have no impact if cancelled out by a VAT increase. That is what business tells us. A small business leader in my area makes a little joke about the Chancellor: every time that that business leader goes out with his wife, daughter and son-in-law, he has to take the Chancellor with him, because one-fifth of the bill is shared with him. That is not a good state of affairs. If business people are starting to think like that, it means that confidence has been eroded. One way of providing the necessary boost to confidence in the domestic market would be to reduce VAT temporarily.

Those are not just my words; they were also the words of the Prime Minister before the general election, when he said that VAT was a regressive tax, which it is. I am in full agreement with him. The Deputy Prime Minister—there are not many Liberal Democrats here today—said that putting up VAT during a recession would be a bombshell for the economy, yet that is exactly what the Government have done. I have argued consistently for keeping VAT, which is a regressive tax, as low as possible in order to stimulate the economy.

[Mr Robin Walker]

I admire the hon. Gentleman’s consistency, but does he accept that this was a matter of debate during the general election because the then Labour Chancellor was clearly preparing to raise VAT to 20%, as he has subsequently admitted? It is wrong to imply that his party has been as consistent as him.

[Albert Owen]

That argument is completely wrong. It might be Conservative central office’s take on it. The previous Chancellor suggested a VAT rise, but was outvoted by the Cabinet. He was just one individual. The current Prime Minister, however, was clear that he would not put it up, but then did. The hon. Gentleman cannot accuse the previous Chancellor of making an argument and then blame the last Government for not listening to him. It was the leader of the Conservative party, now the Prime Minister, who turned circles on this issue.

This regressive taxation hits the most vulnerable in our society. According to the Office for National Statistics, 9.7% of the money the poorest 20% spend goes on VAT, and they spend more on VATable goods than the richest 20%, for whom that figure is 5.8%. It is an unfair tax, as well as one that takes money out of the economy.

The Conservatives have been consistent in shifting from direct to indirect personal taxation. It was Anthony Barber who introduced VAT, at 10% I think, and a later Chancellor, in 1979, who raised it from 8% to 15%, which had a negative effect for many years. In 1984, it went up to 17.5%. As I said, in opposition, the Conservatives said that they would not do this, yet it was one of the first things they did. They are not getting the revenue yield they expected, because the economy is in such dire straits—it is stagnating, in many ways. My hon. Friend the Member for Kilmarnock and Loudoun (Cathy Jamieson) talked about wage freezes and other impacts of Government policy. With a policy of reducing VAT, the Government could actually do something, instead of blaming the previous Government, the European Union or other external factors. Here is an opportunity for them to use one of the levers of power at their disposal.

I hope that the Liberal Democrats will support us. They have made such a big issue of it in the past. There is only one Liberal Democrat here today, the hon. Member for Eastleigh (Mike Thornton), but I would be happy to take an intervention from him, if he feels as strongly as his party did—not him personally—before the general election. It is a big issue. I talk to small businesses, and they tell me that the rate of VAT is having a negative impact on their businesses. Everyone in the House wants to stimulate the economy, and here is a way of doing it relatively quickly.

There is evidence that along with other measures—it cannot be seen in isolation—the previous Government’s VAT reduction from 17.5% to 15% actually helped the economy at a difficult time. The car scrappage and other short-term schemes were also introduced to boost the economy. The Government should be considering those sorts of things, rather than just blaming others. The economy is at a difficult juncture. Unemployment is rising again, after temporarily falling: 2.54 million people are on the dole—that is mass unemployment—and are not spending. Helping them, with their small incomes, by reducing VAT would have a big impact on the economy. The way forward is to create more jobs and get them back to work.

The Government have said—I am sure that the Minister will clarify this matter—that it is not possible to reduce VAT, but that is not the case. I have heard them mention on numerous occasions a mechanism by which Europe can prevent them from reducing VAT, but it could be done as a temporary measure. There are also many variations, zero-rating exemptions and concessions that could be applied to VAT.

[Mr Gauke]

I want to help the hon. Gentleman on this point. There is flexibility when it comes to reducing the rate, but the difficulty is that if one plucks a particular item, such as petrol, and reduces VAT on that alone, as his party advocated, it would need to be consistent with the VAT directives and that would require a derogation, which would take some years. The concerns we raised related to the ill-thought-out specific proposal that those on his party’s Front Bench put forward a year or so ago.

[Albert Owen]

I am grateful for that clarification. I recall that Labour Front Benchers said at the time that the proposal was specific to one thing, but this is a flexible measure. We can exempt certain goods from it. Yes, there are the European directives, but we could do this immediately and in doing so send out a positive message to the country and the business community and increase footfall in our shops and high streets.

The argument about reducing tax and increasing yields is perfectly legitimate. Some say that reducing corporation tax automatically boosts business, but it also results in a drop-off in the money that the Treasury takes. Nevertheless, it seems to be a favourite of the Conservatives, and I, too, support it. I support having a low-tax economy and reducing many of these taxes, but we should be consistent and do the same with VAT. The increase in it was supposed to raise several billions of pounds, but it has failed to do so because spending has fallen.

I support the proposal to reduce VAT. Action is need and needed now. The Chancellor could do it, and if he wanted to, he could do it straightaway. I accept that the poorest in the country, on the lowest wages, will benefit from the change to income tax thresholds, but they will lose out overall. The TUC is not alone in making this point. The Institute for Fiscal Studies has said that the combined tax increases, of which there have been several, both direct and indirect, will make the average family £900 worse off. If families are worse off in this country, spending is reduced and the economy is bound to contract. That is basic economics. We need to stimulate the economy, and one way of doing it correctly is to reduce VAT temporarily from 20% to 17.5%. Let us get the economy moving. The Chancellor has the power to do it, and he should support the new clause.

[Mr Stewart Jackson]

It is always a pleasure to follow the hon. Member for Ynys Môn (Albert Owen). I am not sure that it is necessarily a pleasure for the Whips, because the Committee will know that in the last Budget I was not exactly that supportive of my party on VAT, having opposed VAT on caravans and, by virtue of my being the Member of Parliament for Peterborough, on ecclesiastical buildings.

--- Later in debate ---

[Mr Jackson]

The hon. Lady anticipates my next point. By any respectable indicators over the past few years, the cash reserves that British business has for investment are enormous. The issue is business confidence. To develop that point, parts of the economy are doing significantly better than others and have not been affected by this cyclical change, which has lasted since the onset of the Northern Rock crisis of 2007-08 and the wider banking crisis.

I am a Conservative, so of course I am in favour of tax cuts. Would that we were in a position to have a tax cut by virtue of the Opposition’s new clause 2, but let us make no bones about it: it is an unfunded tax cut—if it walks like a duck and swims like a duck, it is a duck. I always thought that Labour’s credo in recent times was not to support unfunded tax cuts. With all due respect to the hon. Member for Kilmarnock and Loudoun (Cathy Jamieson), who is a very competent, proficient performer at the Dispatch Box, she failed to answer the points raised by me and the hon. Member for Dundee East (Stewart Hosie) and say where the money would come from. We are talking about £100 billion of indicative funding, which has to be found from somewhere. It is all very well saying, “We’re going to have a progress report at the end of this Parliament to see how things are going,” but once we put in place that tax cut, we would cut off that income stream. We would then have to find other ways to fund core expenditure.

[Albert Owen]

I hear what the hon. Gentleman is saying, but he referred to a figure of £100 billion, which is the total VAT take. We will not lose all of it: there will be a 2.5% reduction.

[Stewart Hosie]

A 10% reduction.

[Albert Owen]

Yes, a 10% reduction. The hon. Gentleman is talking about losing that, but unemployment is going up—these are the factors—and we will be paying more out of the Treasury for those things. We are talking about stimulating the economy, which I understand is difficult to quantify, but it would be positive.

[Mr Jackson]

The hon. Gentleman might say that, but it is incumbent on Her Majesty’s loyal Opposition to specify the amounts and where the cuts would be made in other ways. It is not acceptable to dodge the issue, and that goes even for the simple question of what is “strong growth”. At what stage would that be measured? How would we quantify “strong growth”? It is rather mealy-mouthed.

Let us look at the wider context. Interest rates are historically low. Perhaps the hon. Gentleman is not old enough—or maybe he is—to know that in 1975 they were 27%, under a Labour Government. Inflation was substantially higher through most of the ’70s and ’80s. We now have big cash balances, lower interest rates, relatively low inflation, lots of money in the economy and quantitative easing, which has been in place for many years. Even if we accept the traditional Keynesian view—that just pumping money into the economy will deliver growth, jobs and prosperity, which seemed to inform the argument that the hon. Member for Kilmarnock and Loudoun made—we should accept that it has not worked so far through quantitative easing, with the balances that are available. The issue is business confidence.

In the wider context—wider even than that—between 2000 and 2010, public expenditure rose from roughly £450 billion to more than £700 billion. That is the context in which we should look at these fiscal changes. It is not as if we have starved the economy of money in the public sector. The difficulty for the hon. Member for Ynys Môn in arguing in defence of the Government at that time is that the economy was so unbalanced. It was focused disproportionately on the housing market, public expenditure and financial services. Part of our challenge as a Government is to try to rebalance the economy, so that it can make people prosperous and create jobs across wider economic activities, which is happening organically on its own.

Those on the Opposition Front Bench also fail to take into account the other, bigger policies that the Government have embarked on. I will not pretend that things such as the national insurance holidays or the regional growth fund have been an enormous success. I serve on the Public Accounts Committee and we have been critical of things that the Government have pursued in some areas. Nevertheless—the hon. Gentleman alluded to this—the Government are looking at tariffs for utility bills, the beer duty escalator and the fuel duty escalator. We are looking at substantial changes that will have a fiscal impact on welfare, through the universal credit and so on making work pay, rather than paying for idleness and allowing people’s talents to be wasted. We are also putting money into the mortgage market and assisting new house building. Some 42,000 of my constituents had a tax cut last week as a result of the massive fiscal changes that this Government have made, with 2,000 of my constituents paying no tax at all and 24 million people affected. It seems rather unfair not to take that on board.

I also alluded earlier to the progressive nature of our tax changes. Whatever we say about them, it cannot be argued that we have not looked at the top 5% or 10% of income earners in this country to ensure that they are paying a significantly higher share than others. They are the people who will specifically be more worse off than anyone else, whether the hon. Gentleman likes it or not.

--- Later in debate ---

[Mr Gauke]

It is a great pleasure to serve under your chairmanship, Sir Roger.

I will deal with new clause 2 in a moment, but what has driven this debate, initiated by the Opposition, is the cost of living. That is an important matter for our constituents and the Government recognise the pressures that households face. We are taking action to support households with the cost of living, within the fiscal constraints that exist.

A key part of that has been to increase the personal allowance. Clause 3 will ensure that the benefits of that increase are shared fairly. In 2010, when the coalition was formed, individuals could earn just £6,475 before they began to pay income tax. Thanks to the actions of this Government, from April next year, the figure will be £10,000. That is an increase of £3,525, which means that the personal allowance will have risen by more than 50% in just four years, thereby helping our constituents with the cost of living. Our priority has been to help those on low and middle incomes, and we have. The changes in clause 2 mean that a typical basic rate taxpayer is already nearly £600 better off in cash terms under this Government. From next year, that figure will rise to more than £700.

That is not the only action that we are taking to help households with the cost of living. The fuel duty increase that was planned for September will be cancelled. The Finance Bill keeps fuel duty frozen at current levels, maintaining the longest freeze in fuel duty for 20 years. That is helping households and businesses with the cost of motoring. Fuel duty is 13p per litre lower than it would have been had we implemented the Labour party’s planned increases. We have also taken action to help local authorities in England to freeze their council tax for the third year in a row and to cap rail fares for commuters.

[Albert Owen]

The Minister and his Front-Bench colleagues are always talking about the freeze in fuel duty, which I welcome and for which I campaigned. However, has the Treasury made any calculations on the extra 2.5p in each pound that ordinary hard-working families spend on their petrol at the pump because of their measures?

[Mr Gauke]

Of course, that has been far outweighed by the steps that we have taken to reduce fuel duty. The net effect has been a substantial reduction in the amount of tax collected for every litre of petrol.

New clause 2 returns us to the big, fundamental economic argument that we have been having for some years on deficit reduction. I could deliver the standard speech that we give in such circumstances about how it is a strange way to deal with a debt crisis to try to increase borrowing. However, this is one of those rare occasions when the Opposition have put forward a policy and we have an opportunity to ask questions about it. I know that the hon. Member for Kilmarnock and Loudoun (Cathy Jamieson) will be keen to enlighten the House on the policy she has set out in new clause 2, and if I may, I will ask a number of questions—[Interruption.] I am sorry; there seems to be some objection from the Labour party. New clause 2 is being proposed by the Labour party. I want to ask questions about the policy behind it, so let me ask those questions.

First—this is the point raised by my right hon. Friend the Member for Wokingham (Mr Redwood)—new clause 2 states that VAT will be reduced until “strong growth” is achieved. What is strong growth?

Oral Answers to Questions

Albert Owen Excerpts

Tuesday 12th March 2013 Commons Chamber

[Danny Alexander]

As my hon. Friend knows, as a fellow rural MP I fully understand the pressures he describes, which is why we have taken the action I set out in my previous answer. He will also know that the pressures on the public finances remain substantial. I would remind him and the House that 25 million working people in this country will see the largest ever increase in their income tax personal allowance, meaning that the income tax cuts delivered by this Government will amount to £50 a month from April.

[Albert Owen (Ynys Môn) (Lab)]

One of the biggest hits on petrol prices has been the VAT increase. The hon. Member for Chippenham (Duncan Hames) is absolutely right that there are now record prices at the pumps. Will the Minister consider temporarily lowering the VAT rate, to help hard-working families across the country?

[Danny Alexander]

With all respect to the hon. Gentleman, I am not sure that he has reflected upon the substantial fuel duty escalator that was baked into the public finances when his party was in office. We have dealt with those increases on a case-by-case basis and reduced fuel duty by a penny. I think that is the right action to support motorists, families and small businesses alike.

Food Banks (Wales)

Albert Owen Excerpts

Tuesday 12th February 2013 Westminster Hall

[Kevin Brennan]

The hon. Gentleman is absolutely right, and I am aware of that fact, but he will find that families spend their money on things that do attract VAT, which has a direct impact on their disposable income and, therefore, on their ability to buy food.

[Albert Owen (Ynys Môn) (Lab)]

I congratulate my hon. Friend on securing this important debate. Visitors to food banks in my constituency tell me that, because they are paying VAT on other things, particularly on peripheral items such as fuel, they have less money to spend on food. That is the reason why they come into food banks for the first time. Those people are in work and often work long hours.

[Kevin Brennan]

Yes, indeed. That is a continuing process. The consumer prices index figures were released today. CPI is 2.7%, which is 1.2 percentage points above rises in income for people in work. There is an impact on everyone, including people in work. As we know, as VAT is a regressive tax, it has the greatest impact on those on the lowest incomes. Also, because their marginal propensity to consume is much higher than that of people on higher incomes, VAT is a particularly hard tax on them.

Some 90% of the food in food banks is donated, mainly by the public via supermarkets, Churches, community centres, schools and other organisations. I pay tribute to the efforts of food banks, many of which are run by the Trussell Trust, including the one in Ely in my constituency, which I have visited. They are intended as a crisis intervention for families in need. As I said in response to an intervention, the problem is not what food banks do but the scale on which they must now do it.

Food goes to distribution centres, where food bank volunteers gather, weigh, account for and issue the food. Food is issued only to recipients with vouchers, and vouchers are issued by front-line service officers trained in the assessment of need. Issuing organisations include, among others, citizens advice bureaux, Jobcentre Plus, GP surgeries, social services, housing officers and now, as I said earlier, Members of Parliament and, I suspect, Welsh Assembly Members, too.

A voucher gives just over three days’ worth of food, and vouchers are typically issued in batches of three. As we heard, the trust operates 23 food banks across Wales, nine of which opened in the last year, and four more are expected to open in Wales by Easter this year. There are now more than 270 food banks across the UK. In 2011, some 7,173 adults and 4,038 children in Wales used a food bank, and in 2012, the numbers rose to 18,721 adults and 10,328 children. The trust forecasts that the number of people relying on food banks in Wales will rise to 40,000 next year.

The trust collates information about the people using food banks. The consistent main reason cited for using a food bank, accounting for between 40% and 45% of usage, is benefit changes and delays in benefit payments. About one quarter of usage is accounted for by low-income families, and about one tenth by debt. As we have heard, food bank usage has exploded over the past two to three years. It is sad but typical that the Prime Minister recently tried to suggest that food banks expanded by a greater amount under the last Government than under this one; that abuse of statistics was skewered by Channel 4’s feature, “FactCheck”, which I recommend to hon. Members.

The trust forecasts that this year, 250,000 people across the UK will use a food bank. Hundreds of thousands of Welsh families face a cost of living crisis worsened by the Government’s policies, including welfare changes that are likely to make the crisis even worse. The Welfare Up-rating Bill alone will hit 400,000 low and middle-income households in Wales, including 170,000 families in Wales who currently receive working tax credits. It is estimated that 140,000 people in Wales will be worse off under the Government’s change to universal credit and 40,000 will be hit by the bedroom tax; I know that hon. Members are already getting a lot of traffic in their surgeries about that issue.

The Office for Budget Responsibility has shown that between 2010 and 2013, inflation will have risen by 16%, whereas average earnings will have risen by just half that, or 8%. The TUC estimates that four-year wage stagnation will cost the average worker £6,000. Wales has some of the highest energy bills in the UK, and more families are having to choose between heating and eating. As I said, the VAT hike alone added £450 a year to average household bills. Low economic growth has created fewer opportunities, and unemployment is forecast to rise in the next two years. Public sector job losses are forecast to reach 1 million by 2017. Meanwhile, in April, the Government will give more than 8,000 millionaires an average tax cut of £107,000, and the top 4,000 earners in Wales will benefit from a cut in the additional rate of income tax.

I have a few questions that I hope the Minister will answer in his response. What does he think best explains the explosion in food bank use in Wales? Is it the cost of living crisis facing Welsh families, or the notion that more people have suddenly decided that they want a bit of extra food, to quote No. 10? On the “Politics Show” this weekend, the Welsh Office Minister in the House of Lords, Baroness Randerson, said that the Government are reducing the deficit in the fairest possible way. What exactly is fair about the bedroom tax, which will hit 40,000 people in Wales while taxes are cut for millionaires? What impact does the Minister think the Welfare Up-rating Bill will have on the number of people in Wales relying on food banks? Has he made any estimate of that?

Does the Minister agree that the growing number of food banks in Wales is a symptom of the cost of living crisis facing Welsh families? Does he accept that the Government’s failure to get the economy moving is likely to have led more people to rely on food banks? What does he think the expansion of food bank usage in Wales and across the UK tells us about the success or otherwise of the Government’s policies? Does he think that the number of people in Wales who rely on food banks is likely to rise or fall over the next two years? I hope that he has made some estimate in preparation for this debate.

We never thought to see the return of the charity handout as a mass means of feeding the poor in Wales. Is the Minister proud of his Government’s big society, or ashamed of its small-minded demonisation of the poor?

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[David T. C. Davies (Monmouth) (Con)]

First, I should like to deal with comments made to me directly by the hon. Member for Cardiff West (Kevin Brennan). I received an invitation to visit a food bank in Chepstow, but it was during the parliamentary week and I made it clear that I was unable to take a day off from here. I am more than happy to visit it at any time, however, and I hope that that will be arranged.

Of course there is poverty. There is poverty in Monmouthshire and in the whole of Wales. I spent many years in the Welsh Assembly making the point that there is a great deal of poverty in Monmouthshire, although that usually fell on deaf ears among Labour Members of the Welsh Assembly, who assured me, practically, that the place was full of millionaires, although it never has been and it certainly is not at the moment. There is a great deal of poverty in rural areas. I hope that matter will be addressed.

One of the most important things that can be done to address this matter is dealing with the completely unfair local government funding formula, brought about by the Welsh Assembly in about 2000, which has caused a catastrophic loss in income for local authorities, particularly those in rural areas. As the hon. Gentleman will no doubt be aware, the local government funding formula for Wales, introduced by a Labour Welsh Assembly Government in about 2000, does not take proper account of the costs of dealing with rurality or the extra costs involved when trying to deliver goods and services in rural areas, and it does not take proper account of the age of the population. Sadly, those who live longer are much more likely to incur costs on the local authority than those of us who are younger and in better health. If those two issues were addressed in the local government funding formula, it would go a long way towards stamping out poverty in parts of Wales, particularly in the rural areas. I hope that the hon. Gentleman joins me in campaigning against that disgraceful, unfair local government funding formula, which did so much to remove cash from rural areas of Wales.

[Albert Owen]

I am sure the hon. Gentleman will mention food banks in a moment. He has dealt with the local authorities, but will he not accept that those are under strain now because of the cuts that the Westminster Government have made to revenue and capital grants to local authorities?

[David T. C. Davies]

I will certainly come to it. I am jumping in rather quickly by not mentioning the 1930s and the Ramsay MacDonald Government, during which time my family were miners, but I wanted to start from 2000. The hon. Member for Ynys Môn (Albert Owen) knows that local authorities in Wales are funded by the Welsh Assembly, and its funding has remained in line with inflation.

[Albert Owen]

It has been cut.

[David T. C. Davies]

Well, one problem is that the Welsh Assembly has found it easy to raise money—taxation through the back door—by reducing the amount of money, proportionately, that it gives to local authorities throughout Wales and expecting them to raise the difference in council tax. The hon. Gentleman will know how the gearing effect works: a small cut in the amount given to the local authority by the Welsh Assembly will result in a much larger increase, proportionately, in council tax to make up the difference.

The hon. Member for Cardiff West mentioned the 50% tax cut for millionaires, a great line that he repeated a number of times. Of course, this came about because Governments of left and right since the 1980s, across the whole world, have accepted—

National Assembly for Wales

Albert Owen Excerpts

Wednesday 6th February 2013 Commons Chamber

[Stephen Crabb]

I completely disagree with the hon. Gentleman. We have said that we are not proceeding with one aspect of the package that we consulted on in the Green Paper because of the outcome of last week’s vote. As I have said, Labour Members will, in time, come to regret that vote—it was a vote against fairness in the electoral system and against reducing the costs of politics at a time when the electorate demand more from our democratic system. There are still some very important issues. I highlighted three a few moments ago that we will consider further. It is right that we do that, and we will be making announcements in due course.

[Albert Owen (Ynys Môn) (Lab)]

The Minister intends to introduce legislation to this House on those three points on the consultation he has already had, which was to do with the fourth point as well—is that how he foresees taking this measure forward?

[Stephen Crabb]

The hon. Gentleman is an experienced parliamentarian and I think he is trying to tempt me to say more than I am able to at this stage. The Green Paper presented a package of changes and proposals. As hon. Members recognise, one significant part of the package is not being proceeded with, so we now have to look at the other elements on their own terms and decide how we can proceed with them, and, if we proceed with them, what would be the best legislative vehicle for them. I am not, therefore, in a position to give him all the information he is looking for this evening, but I am sure we will come back to it.

Oral Answers to Questions

Albert Owen Excerpts

Tuesday 29th January 2013 Commons Chamber

[Greg Clark]

My hon. Friend is absolutely right. The number of hours being worked in the country is at a record level. We should not sneer at people who choose to work part time. That is their option, and they have more opportunities to work part time and full time than they had before.

[Albert Owen (Ynys Môn) (Lab)]

Unemployment in my constituency went up last month and is up on last year, and underemployment is increasing. People in employment want to work more hours and are not working the maximum amount to be classed as people in full-time employment. How will cutting benefits for those people—they receive in-work benefits and are on low pay—help?

[Greg Clark]

The hon. Gentleman will know that, under the Labour Government, the benefits system was a barrier to people increasing their hours. The reforms this Government are making through universal credit will remove that important barrier.

Fuel Duty

Albert Owen Excerpts

Monday 12th November 2012 Commons Chamber

[Albert Owen (Ynys Môn) (Lab)]

I am disappointed by the Minister’s speech—I have heard it several times before. Whenever he addresses the House he uses the same argument: the previous Government got us into a mess. Today, my constituents are suffering from high petrol and diesel prices, which is why the motion, which I shall support, was tabled.

I have consistently supported the hon. Member for Harlow (Robert Halfon) over a period. Indeed, I opposed the Labour Government increasing fuel duties because I thought the timing was wrong.

[Henry Smith (Crawley) (Con)]

Will the hon. Gentleman give way?

[Albert Owen]

I will in a moment, but given the time limit I do want to make some progress.

I want to raise three issues, the first of which is the impact of fuel duty on businesses, especially those in peripheral areas of the United Kingdom. The Government also chose to impose a VAT increase, despite the Prime Minister having told the country before the election that they had no intention of doing so. Every time constituents throughout the country put petrol or diesel in their cars they pay an extra 3p per litre because of the tax introduced by this Chancellor of the Exchequer.

[Pete Wishart (Perth and North Perthshire) (SNP)]

I am genuinely confused. What is the difference between a Labour fuel tax hike and a Conservative one?

[Albert Owen]

Scottish National party Members always use that line on fuel duty, and I am not going to waste my time on it—[Interruption.] If the hon. Gentleman had checked the record, he would know that I have been consistent on fuel duty. I have followed SNP Members through the Lobby on that. Previous Labour Chancellors froze the duty following pressure from people. That is on the record. We can play games about previous Governments, but the serious issue is the cost—

[Henry Smith]

Will the hon. Gentleman give way?

[Albert Owen]

No. I want to make progress. The serious problem is that our constituents are paying 15p per litre more for petrol under this Government than they paid under the previous Government. Government Members can use nonsense hypotheticals, and say, “It would be 10p more expensive under a Labour Government,” but the fuel escalator was introduced by the Major Government. We could use the same argument, and say, “Had we stuck to that, fuel would by so many pence more expensive.” The reality is that it is 15% more expensive today.

[Jim Shannon (Strangford) (DUP)]

Will the hon. Gentleman give way?

[Albert Owen]

I will not give way—I want to make progress.

VAT is hurting families and businesses. Hauliers and small businesses in my constituency are paying extra fuel duty and VAT on their fuel. The impact is on goods—[Interruption.] The Lord Commissioner of Her Majesty's Treasury, the hon. Member for Scarborough and Whitby (Mr Goodwill), says from a sedentary position that they get the money back, but he should listen to businesses. They tell me that fuel duty and VAT impacts on their businesses. Are they wrong? He needs to listen to businesses rather than make silly party political points in the Chamber. That is the reality of the situation: they pay more for fuel.

There is a double whammy because, as the Minister said, businesses also pay more for raw materials. They are being badly hurt. The debate should concentrate on what our constituents are telling us.

[Jim Shannon]

rose—

[Albert Owen]

I will give way once more, and then I need to make progress.

[Jim Shannon]

In Northern Ireland, 25% of every worker’s wage is spent on fuel getting to and from work. Another 10% is spent on heating oil. Does the hon. Gentleman believe that the VAT increase should not go ahead for that reason, and that concessions should be made for people in Northern Ireland, where the price of fuel is higher than anywhere else in the UK?

[Albert Owen]

The motion calls for a freeze on duty, but Labour introduced a previous debate on temporarily cutting VAT to help hard-working businesses and people across the country. Businesses are being hurt.

We rightly say that road transport is hit hard, but ferry companies—this is a serious point that nobody raises—must, because of the high prices, put fares up and cut back on the time their service takes so they can cut fuel costs. The problems that British businesses face are real. In my part of the world, the extra fuel duties mean problems getting goods to market and getting people to the workplace. This is a real issue for real people. I hope hon. Members remember that tonight.

The hon. Member for Strangford (Jim Shannon) mentioned periphery areas. Northern Ireland has the highest fuel duty in the UK, but it is closely followed by periphery areas of Wales. The hon. Member for Aberconwy (Guto Bebb), who is not in his place, made a political point about council tax in Wales. The reality is that the Government cut revenue and capital spend in Wales, so those authorities have to make their decisions, but they are not responsible for fuel tax. Fuel tax lies at the door of the Government. Incumbents have the opportunity to increase fuel duty when they believe that is necessary and to reduce it when it hurts business and our constituents. Now is the time for this Government to think seriously about that.

The Minister is listening—he says the Government always listen and that they are in listening mode—but he needs to take action, and to tell businesses tonight whether or not he intends do so. It is no use the Chancellor and Government Back Benchers getting together, cloak and dagger, to say that the motion is opportunism. The reality is that many of those same Back Benchers have introduced the same motion and supported it in a Back-Bench debate. We need consistency from Government Members, because they know their constituents are feeling the pinch.

[Mr Graham Stuart (Beverley and Holderness) (Con)]

The hon. Gentleman makes a strong speech. He has shown personal consistency, but it is reasonable for Government Members to say that many of his colleagues show anything but. If he wants this duty freeze, what does he want to do to raise the money? Can tax loopholes instantly provide the money, does he want a cut in Government spending, or is he, like most of his colleagues, in favour of ever more borrowing?

[Albert Owen]

FairFuelUK’s argument is that money is lost to the Exchequer because of the serious impact of fuel duty on businesses. If we had growth in our economy, which all hon. Members want, the Exchequer would get more money, and businesses would be able to reinvest. That is one way. I would like the 4G windfall money to be used to help to alleviate small businesses—[Interruption.] The hon. Member for Scarborough and Whitby says the Opposition have spent the money, but that is not true—we are not sure how much it will be or how it will be spent. I should also point out to him that the Opposition do not spend the money; the Treasury makes those decisions. It is about time the Government took responsibility for their actions rather than making knockabout comments.

My final remark is about the ordinary family. In my part of the UK and many periphery areas, motorists do not go on luxury outings. Motorists are families taking their children to school and students getting to college and university. People in remote areas need their cars for the weekly shop because public transport is not available. It is great when people can take alternative transport, such as in central London and large cities, but that is not a choice in periphery and remote areas.

There is a choice tonight: hon. Members can vote for the motion or the amendment. They should vote for what their constituents want, and do what Members on both sides of the House have been asked to do. They should put loud and clear pressure on the Chancellor. If he is in listening mode, he will listen to the will of the House and suspend the 3p tax increase that he proposes to introduce in January, so that families can have a bit of a break and go into Christmas and the new year in the knowledge that they will have more money to spend, and so that businesses have more money to reinvest.

--- Later in debate ---

[Robert Halfon (Harlow) (Con)]

I believe that, as has been said, fuel duty has become a toxic tax, and that the public have just had enough. I also believe that the Government are listening, and that that is shown by their amendment, as highlighted by my right hon. Friend the Member for Wokingham (Mr Redwood). I am disappointed with Labour’s smokescreen. This debate is really about hiding the record of the shadow Chancellor and many years of putting up fuel duty. I have to say to the hon. Member for Kilmarnock and Loudoun (Cathy Jamieson) that when I was campaigning hard last year, organising and working hard with FairFuelUK to get the Government to cut fuel duty, the Government cut fuel duty in the 2011 Budget but the hon. Lady, the shadow Chancellor and their party voted to keep fuel duty up, so let us have no discussion about who is being opportunistic. I am disappointed that the Labour party has chosen to conduct the debate in this way.

The heart of the debate should be the figures published by the Office for National Statistics almost a year ago. Its data proved that fuel duty is regressive and hits poorest Brits the hardest. It is with that fact in mind that we should consider the recent history, or at least the past five years, of the debate in the House on petrol taxes. In 2007, the shadow Chancellor said:

“In this Budget, we have set out further actions to advance the environment agenda, including…a fuel duty increase of more than inflation”,

and that that

“demonstrates the Government’s commitment to tackling climate change”.—[Official Report, 26 March 2007; Vol. 458, c. 1265.]

I think that that sums up the shadow Chancellor’s principles on the issue. I have to say that he makes the Vicar of Bray look like Gandhi. In reality, the shadow Chancellor’s petrol tax had very little to do with climate change, because families could not change their behaviour to respond to it. Like scrapping the 10p rate, it was a tax on the poor.

That is why I am sceptical when the Opposition motion makes much of the small delays that Labour has sometimes applied to its increases in fuel duty. If one looks at the substance of the Budgets of 2009 and 2010, one sees that it programmed in massive fuel hikes for 2010, 2011, 2012 and 2013. That is what we are dealing with today, and why I have campaigned, with many of my colleagues, to cut the cost of fuel duty. The argument is therefore not about whether we believe that the fuel duty rise should not go ahead—I passionately believe that—but about tactics. It is sensible and right to wait for the autumn statement. Given the Government’s record—they cut fuel duty last year and have stopped two planned fuel duty rises—I believe it is right to wait for the autumn statement.

[Albert Owen]

The hon. Gentleman has been consistent on this issue. He has also been campaigning hard for transparency on fuel duty matters. On that theme, will he tell the House what discussions he has had with the Chancellor? Which report in the newspapers is right: that the 3p rise will not go ahead and there will be a cut, or that there will be a 2p increase in the autumn statement?

[Robert Halfon]

Unfortunately, I am just a brand-new MP and I do not have the luxury of having discussions with the Chancellor. I have no idea what is in his lunchbox, but I do know that the Government have a record of cutting fuel duty. That is something that I am proud of and to which I can give strong support.

Beer Duty Escalator

Albert Owen Excerpts

Thursday 1st November 2012 Commons Chamber

[Albert Owen (Ynys Môn) (Lab)]

It is a pleasure to speak in the debate and I pay tribute to the hon. Members for Burton (Andrew Griffiths) and for Leeds North West (Greg Mulholland) for securing the debate. I am happy to be a co-sponsor of the motion, which is very important.

I have only five minutes, so I cannot list the fine establishments in my constituency. I would be a fool to miss some of them out, so I will not attempt to list them. I do not have any major breweries, either, but I want to give the debate a different dimension and add something new. People have quite rightly promoted their public houses and breweries, but there is an important link between the breweries and the pubs—that is, between the suppliers and the distribution industry. In rural and periphery areas, they are vital in getting the product to the licensed outlets, whether they are clubs, pubs or hotels. In periphery areas such as mine, and in many other parts of the country, visitors make a very important contribution to the local economy. They use the public houses for their leisure activities and we need to put the multiplier effect into its proper context. Hundreds of millions of pounds are generated by the tourism industry and the public house is key to that. It is not just a local pub, but a centre of attraction for visitors.

[Mr Graham Stuart (Beverley and Holderness) (Con)]

The hon. Gentleman is making a very important point, particularly about the knock-on impact of pub closures in rural areas. The Great Newsome brewery, a small brewery in my constituency, has seen six of the pubs it supplies close in just the last two years. Evidence has shown that each pub puts £80,000 into the local community and makes the East Riding of Yorkshire a more attractive place for tourists. The hon. Gentleman is absolutely right and I hope that we will see a change of direction from the Government.

[Albert Owen]

I am grateful to the hon. Gentleman. I am very fond of going to Yorkshire. I went to university there and regularly visit York and the fine pubs in that area, so I might come to Humberside and the east coast at some point.

The suppliers are important small and medium-sized enterprises. A family business in my constituency, Joseph Keegan and Sons, wrote to me. It has been established for many years and supplies the area and its concerns are about beer duty and fuel duty, too. Many companies have been hit by the high levels of fuel duty when transporting their goods, so there is a double whammy of which the Minister must take note in his review.

The motion before the House is very moderate, because all it calls for is a review. The hon. Member for Leeds North West, in his measured contribution to the debate, was right to say that Members across the House have supported escalators when there was a need to do so. The beauty of an escalator is that we can get on or off it when the conditions are right, so the Government would not lose face by coming off it. A previous Conservative Government brought in the fuel duty escalator and then came off it when they thought that was necessary, so that can happen quite simply.

[Andrew Griffiths]

I agree completely with the hon. Gentleman’s point about the rising cost of fuel for brewers. He will also be aware of the rising cost of the raw materials that brewers must purchase and the falling incomes of households across the country.

[Albert Owen]

The hon. Gentleman is absolutely right. We are talking about the business of pubs, clubs, hotels and suppliers, but we must also consider the producers. Much of the problem is beyond the control of Governments and the terrible weather this summer has affected the price of raw materials, and that all has an impact on costs.

I want to talk, as many Members have done, about the social value of the pub as a hub in our towns and villages. My hon. Friend the Member for Hartlepool (Mr Wright), who is no longer in his place, said that Hartlepool once had the highest concentration of pubs in the country, a claim that many of us could make for our constituencies. In the port communities of Holyhead and Amlwch in my constituency there is certainly a tradition of pubs, but they are more than just public houses serving food and drink; they are social hubs. Many local sports clubs meet in the public houses, particularly in the winter when they cannot train. I have known one or two rugby and football clubs that spend an awful lot of time in pubs; they get their business over with very quickly and then get on to the drinking and the sandwiches. The pub is an important place for people to meet in those communities.

I pay tribute to the hon. Members who tabled this important motion. Yes, it is specifically about beer duty, but I am sure that the Minister and the Treasury will take on board all the points that have been made today. It is nonsense to impose a duty that does not make any money for the Treasury. That is the nub of the debate. But many other issues have been raised by Members in their contributions. It is worth emphasising the importance of the pub, but we must not forget the supply chains that help the pub, hotel and catering industries across the United Kingdom, which are major contributors to the British economy.

I will draw my remarks to a close as I know that other Members wish to speak. I do not want to walk past pubs in my constituency with “For Sale” signs outside, and I do not want to see empty pubs; I want to be invited by members of the local community to open a pub, because I want to see a renaissance of the great British pub in both rural and urban communities across the country. The Government can make a difference by having the review and looking at its results and, if it shows that the duty is cost-neutral or loses the Treasury money, they will have my backing for coming off the escalator and putting the emphasis on the great British pub.

Oral Answers to Questions

Albert Owen Excerpts

Tuesday 24th April 2012 Commons Chamber

[Albert Owen (Ynys Môn) (Lab)]

Energy prices and uncertainty surrounding the support for low-carbon energy, alongside uncertainty about electricity market reform, are causing some companies to reassess their business plans in this country. Can the Minister assure us that the Chancellor and the Treasury will support market reform in the next Session of this Parliament and ensure that the subsidies are in place to get the jobs and prosperity that the country needs?

[Miss Smith]

The Treasury supports electricity market reform, as I think the hon. Gentleman knows. He will also know that we have also laid out our support for energy-intensive industries. I have no doubt that he will be able to direct questions about programming to the Leader of the House.

--- Later in debate ---

[The Chief Secretary to the Treasury (Danny Alexander)]

Information is not available at constituency level, but I can confirm that for the east midlands government region 1.7 million people will benefit in 2013-14 from the largest ever increase in the personal allowance, which was announced in the Budget. Some 152,000 people will have been taken out of tax altogether in the east midlands by the policies of this Government.

[Albert Owen (Ynys Môn) (Lab)]

T6. It has been reported in the papers that the Chancellor is prepared to meet with charities so that he can explain his tax hike and tell them how he can get it right in the future. For the sake of consistency, will he also meet with the purveyors of pasties, church leaders and caravan operators and manufacturers so that he can tell them how he will get it right in the future and they can tell him to drop these VAT hikes?

[Mr George Osborne]

What I find extraordinary is that we have a Labour MP supporting the idea that the very wealthiest people in this country pay no income tax. That is an extraordinary thing for a Labour MP to advocate. As I say, we have made reforms in the Budget to improve the tax system and to ensure that people at the very top of the income scale pay some income tax.

Finance (No. 4) Bill

Albert Owen Excerpts

Wednesday 18th April 2012 Commons Chamber

[Peter Aldous]

I shall come to that issue in a moment.

My second point is that HMRC’s analysis fails to take account of the vital role played by static caravan owners in a local economy such as that in Waveney. They are, in many respects, the “anchor tenant” for the whole tourism industry. They come to stay in the area for most weekends, and they do not limit their visits to the summer season. They spend money in local shops, restaurants and pubs, visit the many day attractions in my area such as Pleasurewood Hills and Africa Alive, or spend a day on the beach or boating on the Broads. A reduction in their numbers would have a significant knock-on effect on the many businesses in the area.

Finally, I believe that the rationale for the introduction of the tax is flawed. It is claimed that it addresses an anomaly, as touring caravans are subject to VAT while static caravans are not. However, the industry has come a long way since 1973, when the VAT exemption was first made, and I believe that today’s static caravan has more in common with a holiday home than with a mobile caravan. Static caravans are more like second homes in terms of their facilities and the nature of the accommodation, the investment that their owners have made in them, and the way in which they are used—not just for once-a-year holidays, but for regular visits throughout the year.

[Albert Owen (Ynys Môn) (Lab)]

Another consequence of the tax is that those who currently buy caravans to use as second homes would actually buy second homes. That would raise the price of affordable homes, especially in rural areas such as the hon. Gentleman’s constituency.

[Peter Aldous]

I am not sure that I entirely agree with the hon. Gentleman. The problem with many second homes is that they are very expensive. What worries me that, certainly in my area, people would go abroad for holidays. They might even buy a villa in Spain, which really would be cheap, and the whole tourism industry would be affected.

In many respects, the current tax treatment of second homes and statics is, by chance, similar. The former pay stamp duty, while the later pay VAT on movable items only. To change that balance would unfairly penalise this group of people. Many of them cannot afford a second home, yet they are similar to second-home owners in so many ways. Such a move would be regressive in taxation terms.

In summary, I believe that the impact of this proposal will be far greater than HMRC’s assessment implies. It will have a significant negative effect on the economy and on jobs in specific locations around the country, including my constituency. Further, I question whether the anomaly it is intended to address actually exists. I therefore urge the Government to think again, and to allow a vital industry to continue to play a key role in securing the economic recovery.

--- Later in debate ---

[Mr Davis]

The hon. Lady makes a powerful point that I am not unfamiliar with. We have all been in similar battles over job losses at BAE in Brough and, in my constituency, job losses to the tune of 1,700 have been announced in the past six months.

This proposal does not stand up, on the Government’s own criteria. Accordingly, I support new clause 6 and will vote for it when it is put to the test.

[Albert Owen]

It is a pleasure to follow the right hon. Member for Haltemprice and Howden (Mr Davis). Although I agree with the contributions of Members on both sides of the House on the pasty tax and the church buildings tax, I will concentrate on the caravan issue.

As has been said eloquently by the previous speaker and my right hon. Friend the Member for Kingston upon Hull West and Hessle (Alan Johnson), the exemption was put in place for good reason. It has been left as it is because previous Chancellors have understood its importance, not only to manufacturing but to tourism. Those two important industries will be damaged if this proposal goes forward. I do not have the confidence of some Members who have spoken that the Chancellor will extend the consultation and that all things will be rosy. The effect of the proposal will be catastrophic for tourism across the United Kingdom.

[Alex Cunningham (Stockton North) (Lab)]

Chris and Helen Brown set up the Drovers Way holiday caravan park in my constituency just two years ago to diversify their farming business. They have an exciting business model, but they tell me that the VAT proposal will kill their business and put them out of work. What message does the Chancellor have for people like them?

[Albert Owen]

My hon. Friend is absolutely right. The people who have contacted me on this issue are not natural Labour supporters, but business entrepreneurs. The Government have said on numerous occasions that they want to encourage aspiration and to help entrepreneurs and those who want to take risks in business. Those are the very people who will be damaged by this proposal.

[Chris Ruane (Vale of Clwyd) (Lab)]

Does my hon. Friend agree that the problem relates not only to static caravans, but to mobile caravans? A company called Fifth Wheel in my constituency has just invested £1 million in the manufacture of mobile caravans. It has won 10 awards from the Caravan Club of Great Britain in the past 10 years and two awards from the Daily Post. Its legs have been knocked from underneath it by a tax that has been foisted on it without any consultation.

[Albert Owen]

I am grateful to my hon. Friend for making that point. I am referring specifically to static caravans, but he is right to say that this important industry includes mobile caravans.

A business that employs many hundreds of people across the United Kingdom, including in my constituency, wrote to me to say that 60% of its turnover comes from the sale of caravans. The proposal will be a huge knock to such companies.

Because of the time, I shall keep my remarks brief, but I want to raise one issue that has also been referred to by the hon. Member for St Ives (Andrew George). It will predominantly be the young people who work in this industry who will lose their jobs as a consequence of the proposal. Young people face many pressures in rural areas, especially in finding work and finding a home. Many people get a mobile home in such areas because they aspire to have a second home. They then rent it out to other people when they are not using it, which contributes to the local economy. However, in deprived areas where property prices are low, those people may transfer—because they want to come to beautiful places such as the Isle of Anglesey—

[David Morris]

Will the hon. Gentleman give way?

[Albert Owen]

I will not give way again; I have already given way twice and I want to finish my point.

People who visit places such as the Isle of Anglesey, which I represent, want to go to them regularly. They will therefore buy terraced houses or properties at the lower end of the market and force up the prices of those properties. That will put pressure on affordable housing. I do not think that that is an issue that the Treasury has taken on board.

This exemption is not an anomaly, but is meant to help the industry. If that industry suffers, many people in the tourism and manufacturing industries across the United Kingdom will suffer. We have seen headlines about the granny tax, the pasty tax and the charity tax, but this proposal is an Osborne tax. It was made in No. 11 and will have consequences across the United Kingdom. Tonight, Members on both sides of the House have the opportunity to vote it down. That is the strongest and clearest message that we can send the Chancellor of the Exchequer and his lieutenant. That is true not only of the caravan tax but of the pasty tax, which I will also vote against if there is an opportunity to do so tonight. Let us be consistent. The caravan tax will not raise extra revenue for the Treasury, but it will damage jobs, entrepreneurs, coastal areas of beauty that rely on tourism and areas that rely on the manufacturing of caravans.

[Gordon Henderson (Sittingbourne and Sheppey) (Con)]

I should like to draw to the Government’s attention a couple of anomalies in the VAT rules that they have created with their Budget proposals. That is quite ironic considering that the reason that Ministers have given for their proposals to change the current VAT rates for pies, pasties and caravans is to iron out such anomalies.

I start with hot food. The Government propose to amend note 3 in the existing legislation so that

“the current test for ‘hot takeaway food’ which is based on the purposes for which food is heated becomes a simpler and more objective test based on whether the food is above ambient air temperature at the time it is provided to the customer.”

That suggestion is nonsense, and I will explain why.