Beer Duty Escalator
Alison McGovern Excerpts(11 years, 6 months ago)
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Stephen Gilbert (St Austell and Newquay) (LD)
I am grateful to have been called to speak in this timely and important debate. I pay tribute to my hon. Friend the Member for Burton (Andrew Griffiths) for his work on this issue, and to my Liberal Democrat colleague, my hon. Friend the Member for Leeds North West (Greg Mulholland), for the work that he does with the all-party save the pub group. I also thank the Backbench Business Committee for responding to the legitimate calls from the public for the House to debate this topic.
I share the concerns expressed by other Members about the inevitable effect of the beer duty escalator, and I join them in calling for a review. Without a review, I fear many more pubs in my beautiful constituency might close, leading to job losses, mostly among younger people. The loss of these important institutions in our communities might also lead to cultural decline.
The pub is a gathering place for the local community. As has been said, it is the equivalent of this Chamber out there in the country, where debates are held every day. It is a place where people can gather to drink safely and responsibly. Speaking for my constituency, the pub is also part of Cornwall’s legendary charm. Many Members will have been to Cornwall and walked down the narrow streets and sat inside the solid granite walls of our local pubs, rich in history, legend and atmosphere. We need these pubs to survive to keep Cornwall full of character and competitive in the tourist market. Having spent the past few weeks talking to constituents about this subject, I can confidently say that if the beer duty escalator continues without review, jobs, community spirit and the local economy will be under threat.
The beer and pub industry contributes £45 million a year to the local economy in my constituency. St Austell brewery is a fantastic local family business that has more than 160 years of history, that runs 170 pubs, predominantly in Devon and Cornwall, and that employs a significant number of my constituents. Since the beer duty escalator’s introduction in 2008, the brewery has seen a 23% reduction in demand, and on an annual turnover of about £100 million, it pays £25 million in tax. The burden is too high not only for that brewery but for the countless independent and unique pubs from coast to coast in the heart of Cornwall. Some 2,500 people are employed in the sector in my constituency.
Alison McGovern (Wirral South) (Lab)
The hon. Gentleman is painting a wonderful picture of pubs in Cornwall. Does he agree that it is important that we visit and support not only local pubs, but local breweries such as the Brimstage brewery in Wirral, which has an excellent relationship with local pubs, ensuring that people in Merseyside can drink good, local beer?
Stephen Gilbert
The hon. Lady is, as ever, a firm advocate for her local brewer, just as I am for mine. I take on board the point she makes; she is entirely right.
I will not detain the House for too long, but it must be recognised that beer tax in the United Kingdom is high compared with that of equivalent countries in the European Union. Ours is nine times higher than France’s and 13 times higher than Germany’s. British consumers pay 40% of the total EU beer duty, and beer duty has increased by 42% since 2008. Of course, I share my right hon. Friend the Chancellor’s view that we are all in it together, but we need to redress the balance and ensure fairness.
Oral Answers to Questions
Alison McGovern Excerpts(11 years, 8 months ago)
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Danny Alexander
I am grateful for my hon. Friend’s endorsement of the policy. The coalition Government have committed to increasing the personal allowance to £10,000—a policy that was on the front page of the Liberal Democrat election manifesto—but I agree that the long-term objective, which I and my party share, should be to link the personal allowance to the minimum wage. However, a considerable cost would be attached to that.
Alison McGovern (Wirral South) (Lab)
May I bring the Chief Secretary back to the reality faced by my constituents, who see their cost of living rising all the time, with food prices increasing in the shops, and Government borrowing rising nationally? Which part of the Government’s record is he least proud of?
Danny Alexander
As the question that the hon. Lady is following up on concerns the personal allowance, let me limit my answer to that, Mr Speaker. Her constituents, in common with other Members’ constituents, are benefiting from the fact that the Government have introduced the most radical policy for many years by putting more money back into the pockets of hard-working families across the country. She would do well to accept that.
Professional Standards in the Banking Industry
Alison McGovern Excerpts(11 years, 10 months ago)
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Mr Davis
Absolutely. The Select Committee on Culture, Media and Sport and its inability to reach a unanimous view has been held up as an example. In my entire time as PAC Chairman—and, I think, that of all the subsequent Chairmen—there was never anything other than a unanimous outcome, because of the factual basis of the inquiries. That is what this inquiry must have. It must rest on the facts, which is why the Committee will need forensic accountants, lawyers and investigating teams. It will, I think, need one change in the law. It will need protection for whistleblowers, as we do not have that, but the same would be true of a judge-led inquiry. That would open the inquiry up to its full extent.
Let me make one more point about judge-led inquiries—it goes back to the Leveson inquiry and is slightly embarrassing for those on my side of the House, but I shall make it anyway. Judge-led inquiries cannot work around a criminal investigation without paying attention to it, and that can cramp what they do. If Members did not see it, I recommend that they look back at the evidence given by Andy Coulson and Rebekah Brooks, both of whom were facing potential criminal charges. Those were wholly useless days at the Leveson inquiry because the QC involved had to tiptoe around the issues. That might apply to almost every witness who appears before this inquiry, thanks to the issues facing it, so we must bear it in mind that we cannot solve that with a judge. We will solve it through a different mechanism that either approach would have to use and that, frankly, would be in camera hearings with those witnesses. Although the conclusion will have to be wide, open, wide ranging, honest and transparent, that might not be possible for the evidence-taking.
Although a House inquiry will be faster than a judicial inquiry—there is no doubt about that, for the reasons the Chancellor has given—there is the simple problem that any inquiry will have trouble completing by Christmas.
Mr Davis
I have taken one intervention and I cannot take any more.
Whatever the inquiry, it will take a long time, because it is a big issue, and it has to be got right. If it is got wrong and the inquiry is handled badly, and it turns out not to be well managed, it will do enormous damage to the City of London and the entire economy. If it is got right and it leaves the City of London with a reputation for clean and honest dealing it could be the single most important thing that happens under this Government.
Finance Bill
Alison McGovern Excerpts(11 years, 10 months ago)
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Catherine McKinnell
It is nice to receive a considered intervention from a Conservative Member. The 100,000 jobs would be created through support from the future jobs fund. They would be guaranteed jobs paid at the national minimum wage for six months to give young people a real chance of getting on to the employment ladder.
This is about not only providing those jobs but creating economic growth and putting money into people’s pockets to create those opportunities. That aspect was absent from the Chancellor’s Budget speech, which is all the more shocking because of the seriousness of the problem. At Christmas, the number of young unemployed people reached 1 million for the first time since comparable records began, and long-term youth unemployment is rocketing too. Across the UK, the number of people aged 24 and under who are claiming out-of-work benefits for more than six months has increased by 60% since May 2010, while the number claiming for more than 12 months has more than doubled by over 125%. In this double-dip recession, young people cannot find work because between five and 10 people are chasing every vacancy. Depending on which part of the country they are in, it could be, and often is, a lot worse. The jobs are simply not there for young people to go into.
Yet the Government recklessly cancelled the very programme that was designed to create youth jobs. We want to use money raised from banks to put that right. In opposition, the Government supported Labour’s future jobs fund, which got young people into real, paid jobs. The Prime Minister called it “a good scheme”, and the Conservatives said that they had
“no plans to change existing Future Jobs Fund commitments”.
I apologise to the hon. Member for Beckenham (Bob Stewart) for my response to his intervention; in fact, it is through the real jobs guarantee that we would look to invest in new job opportunities for 100,000 young people. The future jobs fund was the successful scheme that the Prime Minister heralded as “a good scheme” but it was scrapped as soon as this Government took power.
I see that no Liberal Democrats are here for this debate. That is a crying shame and a shocking indictment of their commitment to young people and to making sure that bankers pay their way. The Liberal Democrats also pledged their support to the future jobs fund but swiftly supported the Government in scrapping it as soon as they got into power. In April 2010, in a letter to the Association of Chief Executives of Voluntary Organisations, their then work and pensions spokesperson —now the Minister of State, Department for Work and Pensions, the hon. Member for Thornbury and Yate (Steve Webb)—said:
“We have no plans to change or reduce existing government commitments to the Future Jobs Fund. We believe that more help is needed for young people, not less”.
The future jobs fund was scrapped just one month after that letter was sent.
Let us remind ourselves of what that scheme achieved. It offered every young person up to the age of 25 a job if they had been out of work for six months, with penalties for anyone who refused the opportunity. The jobs were real jobs, paid at the minimum wage, that lasted for six months—and that was guaranteed.
Alison McGovern (Wirral South) (Lab)
Has my hon. Friend read, as I have, the research from the DWP that tells of the impact on young people not only in terms of numbers but in terms of their confidence, dignity and self-worth?
Rushanara Ali
They do not deserve a cut in taxes. I hope the Government will take serious action, otherwise the public, who already feel this way, will rightly believe that this Government are not for them but for the vested interests and the millionaires who make so much money and are not willing to pay their dues or to make the appropriate contribution. I am sure the Government do not want to be on the side of people who are milking the system and making so much money and not making the appropriate contribution.
I call on the Government to pay attention, to listen not just to my party, but to the millions of young people who want a job and an opportunity to make a contribution to this country. We have a plan that could help get them get into real work and would reward those who work hard—a plan that is costed and paid for by asking some of the wealthiest in our society to contribute just a little more. With the economy back in a double-dip recession and economic confidence so low that investment growth has virtually ground to a halt, job opportunities for these young people desperate to find work will not appear without help. I hope the Government will see sense and give young people in Britain the much-needed support that they deserve, by supporting the new clause.
Alison McGovern
I would like to begin my remarks on new clause 13 by agreeing with much of what has been said today by Opposition colleagues. I want briefly to take the House back a couple of years to 2010, when I was lucky enough to secure an Adjournment debate on young people and unemployment, the first such debate I led in the House. For me, it could not have been on a more important subject than the position of young people in the labour market in my constituency. I do not wish to put myself forward as some kind of Cassandra or some awful foreseer of what has come about, but I warned the Minister then that the swift withdrawal of some of the more successful things the Labour Government had been doing to tackle young people’s unemployment would lead to more young people being on the dole. Sadly, that is what has happened. In fact, two years later the ONS tells us that an extra 65,000 16 to 24-year-olds are now without work. That is not just a waste of talent and funds, but a moral shame.
I want to say a few words on that subject and why new clause 13 is so important to young people facing that difficult situation. The Government have had two years to tackle the problem, yet all of us here have to admit that the problem is getting worse, not better, and that action is needed more today than it was in 2010. The Government would not listen then; I beg them to listen now.
Bill Esterson
My hon. Friend has a proud record, before and since reaching this place, of advocating for young people and employment. She is quite right to draw attention to the Government’s record. We should remember that we saw the same thing happen in the ’90s. The Government are going back to exactly the same failed policies of the ’90s. The difference between Government and Opposition Members is that when we were in government we looked after unemployment. We kept unemployment, repossessions and business failures low. Under this lot they have gone up and we are seeing the problems for young people, which is why we need the action we are debating right now.
Alison McGovern
I thank my hon. Friend and neighbour in Merseyside for his intervention. He is quite right. The return to things such as the youth training scheme has been one of the most unfortunate aspects of the Government’s work in this area.
Mel Stride
The hon. Lady makes the important point that youth unemployment is deeply regrettable and has been rising recently, but she skips over the fact that youth unemployment has been rising since 2004, so most of the period of that rise actually occurred on her watch when the kinds of policies she is advocating were clearly not working.
Alison McGovern
The hon. Gentleman needs to be careful about apportioning blame, because although we have seen an extreme rise in youth unemployment over the past couple of years because of the recession—I will move on to the problem of demand in the economy later—under the Labour Government there was successful action to prevent levels of youth unemployment from rising to those we saw in the ’90s. If he wishes to, we can talk at length in the Chamber on another occasion about some of the structural reasons for young people’s unemployment, such as how skills are transferred in different ways, how small businesses recruit differently, which hits younger people more than it does those with experience in the economy, and why those patterns were starting to emerge from 2005. However, in new clause 13 we are trying to establish the urgency of getting money from a particular source and prioritising the needs of young people in my constituency and in his.
The Association of Chief Executives of Voluntary Organisations has done an important piece of work to calculate the cost to the Exchequer of young people being out of work, and, although I hope that Treasury Ministers will have already heard the figures that my hon. Friend the Member for Bethnal Green and Bow (Rushanara Ali) cited, I want to alight on this one. If youth unemployment continues at current rates, by 2022 the cost to the Exchequer and to the economy in lost output is estimated to be £28 billion—on top of the human and social costs. That is a huge figure, and we as a country cannot afford to see this crisis continue.
I shall take a few moments, however, to consider not only the financial cost, huge and important though that is, but the impact of the crisis on individuals, on their pride and on their self-worth. I mentioned earlier the Government’s own research, carried out by the Department for Work and Pensions, into the future jobs fund, and if Ministers have not read it they would do well to do so. The research, first, considered the impact on young people who took part in the future jobs fund programme, and it is a shame that the hon. Member for Dover (Charlie Elphicke) has left his place, because I wanted to ask him—I tried to intervene on him to do so—whether he had met, spoken to or asked the opinion of any young person who took part in the future jobs fund.
Just in case hon. Members have not had the opportunity to read the research, however, I shall quote a young person and how they were feeling prior to the introduction of the future jobs fund. They said that they were
“feeling a bit low. I was about four and half, five months, unemployed and I thought ‘oh no, this isn’t good’. Most employers I spoke to, it was like if you’ve been unemployed for more than 2 months, it really puts people off. I knew how to do a job; it’s just the fact that I’d been unemployed for nearly 5 months. Almost half a year, which was quite embarrassing really. I know there was nothing out there, but it was still kind of embarrassing.”
Despite this person realising that aggregate demand and low job vacancy numbers had caused their problem, they blamed themselves, so I ask hon. Members to consider the impact of low self-esteem and poor mental health on the extra 65,000 young people who have become unemployed since 2010.
The research, secondly, asked young people how they felt about their work once they had taken part in a future jobs fund employment placement, and to me the following quotation says it all. On the question of what the most important gain was, one person said:
“Trust in my determination. Self belief, the belief from my employer that I am able to succeed”.
What more important thing could anybody have for success in life than self-belief? When people are left to languish on the dole, such self-esteem is undermined every single day.
Mr James Gray (North Wiltshire) (Con)
I strongly admire the sincerity of the hon. Lady’s compassion for those people, but I am not sure that reading out two or three vox pops necessarily adds to the intellectual coherence and probity of the argument. She admitted a moment ago that youth unemployment was dangerously high during the Labour years. It remains very high, and we are very worried about that, but what does she actually propose we should do about it?
Alison McGovern
I am not sure I know where to start. I am reading out the testimony of young people who have been unemployed. That is not some kind of media vox pop; it is an example of real people who have been affected by the phenomena that we have been talking about, and we should listen to them. If the hon. Gentleman does not want to listen to what I have to say, let him listen to young people in my constituency and in his own, and to how they feel about being thrown on the scrapheap.
I shall briefly discuss bankers’ bonuses, and why the measure before us is an entirely appropriate one to take in order to fund for young people employment that will stand them in good stead for the rest of their careers. Profit-making banks have had a reduction in corporation tax, but I shall not go over the reasons why the tax in question is an appropriate one to levy on their payroll. We have to face the fact that in the City of London we have seen behaviour that cannot be tolerated. For the sake of the future of our young people, what is needed now is some sort of restorative justice to rebalance people’s ability to make a good life for themselves. Young people in this country are facing a more difficult labour market than they have for many years. I beg the Government to listen and take some action now.
Oral Answers to Questions
Alison McGovern Excerpts(11 years, 10 months ago)
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Danny Alexander
I am not sure that the hon. Gentleman’s suggested idea would be an appropriate task for the Office for Budget Responsibility to undertake, but he is right that strike action is costly to the economy. He would also be right to observe that it has not stopped this Government proceeding with the reform of public service pensions, and with pay restraint in the public sector, too, to help deal with the enormous mess left to us by the Labour party.
Alison McGovern (Wirral South) (Lab)
With regard to the problems at RBS this week, my constituent David Robinson has been unable to access his funds, including disability allowance, from his account with thinkbanking. It is an internet-based bank that uses the RBS platform, so he could not go into an RBS branch to resolve his problems. Will the Minister please make contact with RBS about internet banking users and make sure that my constituents—and everyone else—are not unduly affected?
The Financial Secretary to the Treasury (Mr Mark Hoban)
The hon. Lady makes an important point, and I spoke to Stephen Hester this afternoon to find out what progress RBS has made in resolving its issues. It introduced measures to help people who can access branches, but she makes a very important point about internet banking, and RBS is very keen to learn the lessons from those problems and to put in place contingency arrangements for the future. I encourage her to get her constituent to write to RBS, and, if he has suffered additional costs as a consequence of the situation, to make that claim to it.
Jobs and Growth
Alison McGovern Excerpts(11 years, 12 months ago)
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Alison McGovern (Wirral South) (Lab)
I shall start my remarks by talking about the announcement by General Motors about Vauxhall at Ellesmere Port. I represent many, many people who work there and I pay tribute to that excellent work force and the community around them who support them. Whilst I recognise the commitment of all politicians who have helped back Ellesmere Port, in Wirral all of us know somebody—a family member or a friend—who has worked incredibly hard for this, and it is those people I am thinking of most and congratulating today.
I would like to make a few remarks about unemployment. Our commentary on employment, I am afraid, often shows the limits of the way we do our politics. The news, and we ourselves, often obsesses about the figures—the monthly movement up and down—and whilst those are important indicators, of course, it is the trend that really matters. We often worry about the weather when we should be thinking about the climate that we are in, and sadly, the unemployment figures are worse than those for this time last year. According to the Library, the number of people claiming jobseeker’s allowance is now 106,000 higher than in April 2011. That is incredibly worrying. The Chancellor mentioned the figures for two years ago. Unemployment plateaued in 2010. It is growing again now and we need to worry about why.
To add to the problem that we have, our understanding of the impact of unemployment and the lack of the necessary jobs in our economy is limited. I recently tabled a parliamentary question, asking the Treasury what assessment the Department had made of the medium and long-term cost to the Exchequer of the current level of unemployment. That matters because unemployment has a wide range of impacts. The Treasury did not give me as full an answer as I would have liked. I would have liked to know how unemployment impacts on the health budget in the form of increased costs; how much funding is being made available for the regeneration that is needed; and the impact of unemployment on crime levels.
Andrew Bridgen
In the shadow Chancellor’s speech, he made much of the apparent increase in long-term youth unemployment. Is the hon. Lady aware of the cynical way in which the last Labour Government manipulated the figures for long-term youth unemployment by cynically bringing people in for a one-week training course and then restarting the clock immediately after, to keep the figures down? That was a cynical measure, which this Government have stopped.
Alison McGovern
I thank the hon. Gentleman for his intervention. I have thought a lot about youth unemployment over the past years. The former Government oversaw radical improvements, such as our intervention in the labour market with things like the new deal. I find it hard to characterise any of that work, which has been recognised around the globe, as cynical. I find that very difficult to believe.
Bill Esterson (Sefton Central) (Lab)
I wanted to agree with my hon. Friend about the important and welcome news about Ellesmere Port, because like her, I have constituents who rely on the work that comes from Ellesmere Port. In her excellent speech, might she comment on the tax cut for millionaires that is paid for by pensioners? Does she agree that if that tax cut were reversed, the money would be better invested in jobs and growth of exactly the kind that she is calling for?
Alison McGovern
I thank my hon. Friend and Merseyside neighbour for his question. Like my constituents, I cannot understand this Government’s decision to give tax breaks to millionaires.
Sheila Gilmore (Edinburgh East) (Lab)
In light of the earlier intervention, I thought my hon. Friend might be interested to hear figures, provided to the Work and Pensions Committee yesterday by the Department for Work and Pensions, on the issue of people who had apparently been off benefit. In March 2010, there were 18,000 young people who could have been put in that category, and there are now 4,000 in terms of training allowances. That is a difference of 14,000. As I think my hon. Friend would agree, that hardly explains the rise in youth unemployment.
Alison McGovern
I thank my hon. Friend for that helpful and informative intervention.
When the Chancellor talked about a growing economy, one of my hon. Friends shouted, from a sedentary position, “Not in the north-east.” We need to recognise that worklessness does not impact equally on all communities. That is why when we think about the growth we need, policy needs to be tailored properly to the economy in each and every part of the country, so that the GDP growth we all hope for represents the whole of the UK. I suppose it is entirely possible that the UK will recover, but leave behind heavily blighted areas of our country.
A study of unemployment reveals a key flaw in the Government’s thinking. They have talked about “expansionary fiscal contraction”—in other words, to achieve growth, the Government need to slash their budgets and investment will flow in from foreign shores. I do not believe that that is consistent with the Government’s other stated aim: to rebalance the economy. Finance for those parts of our economy that have strengths in manufacturing but need regeneration is necessarily long term. Government industrial strategy should shelter our industry from global headwinds, not leave us vulnerable.
Fiscal contraction at the pace we have seen has harmed blighted areas that had only recently started to recover from the impact of previous Conservative Governments’ attitude to industry. In my area, I see the impact of the withdrawal of central Government from regeneration and the stopping of regional growth via regional development agencies. The responses built into local government that were designed to target deprivation, which clusters in particular parts of our country, were stripped away in the financial settlement.
In the Budget, the Chancellor introduced measures that took money out of the pockets of people on low and middle incomes in those parts of the country where we want to rebalance. That will not help. Someone in the Treasury has to take responsibility for looking at the macro impact of all the measures that are affecting those places that stand to be the worst affected by this Government. We have had a botched Budget and then a next-to-nothing Queen’s Speech, I am sorry to say. The Government will be judged by the people in Wirral and Merseyside not merely on the GDP figures, but on the actual development we see in our city. We must take account of the differential impacts of Government measures on different parts of the country with different economies; we must not focus only on the national picture.
My question for the Government is: will they meet the test of real economic development? Only that will promote the widespread employment that people want. People will judge this Government on the basis of whether or not they see their friends and family in employment.
Finance (No. 4) Bill
Alison McGovern Excerpts(12 years ago)
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Margot James
My hon. Friend has, in part, responded to the point made by the hon. Member for Stoke-on-Trent South (Robert Flello), and I was going to say that some 5 million older people will not be affected by this measure. We can split hairs on this issue, but I accept that the measure does amount to an additional payment. However, although the allowance freeze results in an increase in tax payable, it does so only by an average of £84 a year. I accept that that is not nothing, but it is a relatively small sum. The measure is raising so much money for the Exchequer by dint of the fact that so many people are in receipt of state pensions. The pain, as it were, can therefore be shared by many, and the resulting amount per person is very small. I apologise for the fact that I shall not take any more interventions, but so many other Members still want to speak.
To address the other point made by the hon. Member for Stoke-on-Trent South, the Government have a good record in protecting people on pensions. We have restored the earnings link. The Labour party had 13 years in which to restore the link, and Barbara Castle called for that every year until her death. We have done it. We have also secured it with the triple lock.
The hon. Member for Leeds West (Rachel Reeves) was ungenerous in arguing that we appeared to be proud of the inflation rate. If she had remained in the Chamber, I would have told her that that inflation has largely been driven by increased oil and commodity prices, which Governments have no control over. It is to the credit of this Government that they were brave enough to say, “We will increase the state pension by either 2.5%, the rate of inflation or the rate of earnings, whichever is the greater.”
Margot James
I am sorry, but I will not take any more interventions.
As a result of that Government pledge, there will be no cash losers from this allowance freeze. We have protected universal benefits, with the single exception of not renewing the temporary increase of £100 in the winter fuel payments. We have protected all the other universal benefits, however, as we promised to do. Some 600,000 of the poorest pensioners have received a warm home discount of £120 extra to help with their fuel bills. We have also frozen council tax for two years running. Council tax has been a bone of contention among older people, many of whom have been hit hard by increases in it over the past decade. We have also protected, and increased slightly, the budget for the NHS. As we all know, older people account for more of that expenditure than any other group and they will benefit disproportionately from the NHS budget increase.
I have already made the point that freezing this allowance will entail a cost of, on average, £84 a year. I accept that that is not a derisory amount for someone living on an income of just over £10,000 a year. However, 5 million pensioners will not be affected by this measure. In fact, the Joseph Rowntree Foundation, an organisation that Labour Members sometimes cite, has said that the media coverage has lost all perspective on this matter, stating that
“you would think it’s doomsday for older people…I’m not sure. I think we’re losing perspective on phasing out the Age-Related Allowances”.
It makes a number of good arguments as to why it takes that view.
In conclusion, I must say that I have received very few critical letters on this subject from pensioners. The vast majority of older people in my constituency are more concerned with the prospects for their grandchildren; the average age of a new home buyer is now 38. They might not have read “The Pinch” by my right hon. Friend the Minister for Universities and Science, which was published two years ago, but he pointed out, among many other things, that those in the generation born after 1970 are the first not to be able to look forward to a better standard of living than their parents. That point is felt keenly by many older people in my constituency. Although they cannot easily increase their income, they accept that their grandchildren are facing a different future from the one they faced. Unlike the Labour party, they know that the alternative to facing down this deficit, with everyone making a contribution to that strategy, is the further impoverishment of their grandchildren, and that is not a price that they are willing to pay.
Brandon Lewis
The hon. Lady has just made a very good argument for cutting taxes and increasing the personal allowance, which is exactly what this Government are doing. The reason why I have chosen to talk about particular issues is that I agree with something my hon. Friend the Member for Stourbridge (Margot James) said a moment ago. Pensioners in my constituency are often concerned about the future for their family—their children and their grandchildren. The work this Government have done has put in place changes, enterprise zones and opportunities for people to increase jobs, as we have seen this month, so there is a real opportunity for people in future.
We must also take into account something else. In Great Yarmouth, a prediction listed by our local health teams in the past few years is that our pensioner group will increase by 35% in the next 15 years. That is a huge increase. I fully agree with my hon. Friend the Member for Ipswich (Ben Gummer) that we have to ensure that this country can provide for people in their pensionable years in future. As we face such an increase in the number of such people, the Government must take the decisions that mean we can provide a good and fair opportunity for the future of all pensioners. That is why I also appreciate the Government’s work to move towards a fair and straight flat-rate pension for pensioners in future, on which I congratulate them. The work done in the last two Budgets will make that possible. It will mean that our economy can move forward and that we can make fair and proper provision for people in various age groups.
As the personal allowance for all people, including under-65s who work hard, increases, there will be an impact on pensioners in future. The changes announced in the Budget that simplify the tax system make it clear that there will eventually be a flat, fair and generous rate of allowance for all people. As Opposition Members have admitted, that means that nobody has a cash loss at all. In fact, pensioners under this Government had the biggest increase in their basic state pension ever seen. More than 5 million of the poorest pensioners are unaffected thanks to the triple lock. All pensioners are therefore better off and will receive the biggest ever increase of £5.30 a week. In 2013, they will receive £130 more than they would have received under the previous Government’s plans. Pensioners will respect this Government for that and appreciate the Government’s credibility for putting together a solid economic base to allow it to happen.
That is why the measure should be looked at as a whole, particularly for an area such as Great Yarmouth, where we have a high proportion of pensioners. We must make sure that we can provide for them properly and fairly in the future, and also that the economy can create jobs for their families and increase our economic growth. Being in government is about making tough decisions. Those must be the right decisions, and that is what being in government is about. As we heard today from those on the Opposition Front Bench, opposition is often about opportunism, not about making right or proper decisions.
Alison McGovern
I shall make a few remarks about an important impact of the changes, which is at risk of going unrecognised. I think of that as the cluster impact of the changes. Our country does not have the same kind of people distributed uniformly across the United Kingdom. People of different ages cluster in different areas.
I am deeply proud to represent the Wirral, not least because the area has a higher proportion of older people. It is a great strength of our area. They bring a large amount of expertise and stability, and we should not talk about people living longer as though it was a negative thing. I benefited from having grandparents who lived longer than they might have expected, and I cherished each of those relationships.
With that clustering of older people comes a responsibility to pay attention to the issues that affect them. Even if that was not the right thing to do in and of itself, our local economy in Wirral is highly dependent on the income of pensioners. We have many small independent businesses whose relationship with their customers is important. They have regulars of many years’ standing, and many of those people are retired and on a fixed income, so even if it was not the case that we should care about the needs of older people, the employment of the rest of us in the Wirral and the vitality of some of the local shops is related to the income of older people.
Before I deal with the clustering of the local economy and the attention that Ministers must pay to how our economy works in practice, I want to make a few points about longevity and the increase in life expectancy that we are seeing. We must recognise that this is not a uniform phenomenon. Not everybody in our country is living longer in the same way. There is a social justice element. Poverty is still a pretty strong determinant of the length of people’s life. People such as those in my constituency who have worked in manufacturing might not expect to live as long as those in relatively more affluent parts of the country. My constituency is very mixed, and there are people there who may not be able to expect to live longer as the average increases. That average masks different expectations.
When Treasury Ministers make decisions about, for example, age-related allowances, I ask them to find out how those will impact on different parts of the country and different groups of people. The impact will not be uniform. We are not all uniformly living longer in exactly the same way. The NHS is a wonderful thing, but we still have a heck of a long way to go on public health to make sure that poverty does not limit people’s life expectancy, as it has done in the past and still does.
Ben Gummer
The hon. Lady makes a sensible point. One of the big challenges that faces us in increasing the state pension age and the point at which people retire is trying to understand the different requirements of people who have done heavy manual labour throughout their life or for any part of their life and have had different physical pressures put upon them, and those who have not. But that does not remove the point that most people who are affected by the tax allowance freeze are relatively wealthy pensioners—most of them. Therefore, although this is not a precise instrument, I am not sure that her point addresses exactly what the Minister seeks to do.
Alison McGovern
I shall return to my constituents and tell them that a moment of cross-party agreement broke out over the problem that the hon. Gentleman and I agree exists, where we must rightly consider the state pension age, but that that decision will affect certain people in a completely different way from that suggested by any average figure. I hope that the hon. Gentleman will allow me to respond to his second point by saying that I will remark later on whom the proposals affect and their relative position.
Before making my substantive point about how the economy clusters and how these proposals will affect us, I want to answer the point about inflation made by the hon. Member for Stourbridge (Margot James), who has unfortunately just left the Chamber. She sought to make a case against my hon. Friend the Member for Leeds West (Rachel Reeves), saying that the Government were doing pensioners a great service by increasing their pension on inflation, which has come about because of events beyond our shores, and the Government are just trying to respond to the oil price, and so on. I have no doubt that world events have had an impact on inflation in this country. Thankfully, I do not have to work out which events have an impact on inflation and report that to the Chancellor. That is the job of the Governor of the Bank of England. I have read the Governor’s letters on inflation and he remarks on the impact of the Government’s VAT rise on inflation. If the hon. Lady were here, I would tell her that it is not entirely true to say that the inflation that we face that has caused the Government to be so proud of their cost of living rise for pensioners is entirely beyond our control. It is in part at least down to the Government’s action.
I want now to think about the cumulative impact of this policy and a couple of others on the part of the world that I represent, but also on similar local economies. Some of the Government’s decisions have resulted in a kind of conflagration that means that particular localities face a really difficult economic future.
Charlie Elphicke (Dover) (Con)
The hon. Lady makes much of the fact that age and longevity vary quite a lot throughout the country. She has also made a connection between shorter life span and deprivation. How many of her constituents with a short or shorter than average life span will be affected adversely by the age-related allowance, because it is over £10,000?
Alison McGovern
The hon. Gentleman seems to be saying that if you are poor enough to have a short life span, you are not rich enough to be affected by the change, which is an interesting hypothesis. It is a testable proposition, but it seems entirely wide of the mark.
Alison McGovern
I always try to be generous. In fact, I thought that we were agreeing across the House that the argument about increasing life expectancy cannot be made in such a broad-brush way, but perhaps the situation was not as happy as I had thought it was.
David Mowat
The hon. Lady is making a powerful point about the cumulative impact of policies on particular regions of the country. Her constituency is close to mine. Will she concede that in the last year of the previous Government the north-south divide, measured in terms of gross value added per head, reached its maximum level in the past 20 years? That is something we have to fix in this Parliament, not continue.
Alison McGovern
I am so pleased that the hon. Gentleman chose to mention the north-south divide, because it gives me the opportunity to discuss a concept that trips off the tongue so easily but is actually extremely unhelpful in tackling the kind of local economic development that I am asking Treasury Ministers to consider when making decisions. He will know as well as I do that although the north-west, which we both represent, has significant deprivation, it also has some pretty wealthy areas—the Chancellor himself has the honour of representing one such area. The north-south divide, as a concept, masks a whole lot of other inequalities. Again, I mention the inequalities in London. It cannot be said that there is a simple, straightforward north-south divide in this country affecting every locality in the same way; we should have a much more fine-grained analysis. There are places in the north that are extremely successful and places in the south that really need help.
Before I try the patience of the Chair any further, I will return to the importance of age-related allowances.
Alison McGovern
I will give way, and I feel sure that the hon. Gentleman will say what he thinks the Government ought to do to ensure that the cumulative impact of their policies, and their policy on age-related allowances specifically, does not hold back local economic development in parts of Wirral.
Charlie Elphicke
I thank the hon. Lady for giving way again; she is being extraordinarily generous in taking interventions. She is making a characteristically extraordinarily thoughtful speech. It is a matter of great concern that over the past decade and a half, the gap between the least well-off and the richest has grown. There is now more inequality. Will it not help to reduce the inequality between pensioners to increase the basic state pension by the biggest amount ever—£5.30, which is a big jump—and to ensure that the richest pensioners do not get such a high benefit, but do not lose out either, by capping the allowance?
Alison McGovern
That was a long intervention. The hon. Gentleman said that inequality grew under the previous Government. I point him to analysis done, if I recall correctly, by the Institute for Fiscal Studies at the time of the 2010 general election, which showed that the incomes of the lowest on the income scale increased significantly under the previous Government. We can have a discussion about how one deals with the inequality that is created when the incomes of people who earn a great deal of money rise, but I fear that it would not be within the scope of this debate. I am sure that we will discuss that on another occasion.
I will conclude my remarks by talking about the squeezed middle, because it is people on what one would think of as middle incomes who are affected by age-related allowances. In its frequently asked questions section on this policy, the BBC states that
“it is a ‘middle-income’ range of 40% of pensioners who will not get what they might have expected from the tax system.”
Lyn Brown
Is my hon. Friend not astonished by the figure of 40%? If one listens to the Conservative party trying to explain away this awful attack on our pensioners, it does not seem like it is talking about 40% of the pensioners in this country. A very high number of pensioners will be affected by this change.
Alison McGovern
That point was very well made. I am never surprised by the ability of people to brush over things. We have heard this afternoon that this is a minor technical change. As I said, I am quoting the BBC itself—[Laughter.] I know that Conservative Members are not always the greatest fans of the BBC, but it states that
“it is a ‘middle-income’ range of 40% of pensioners who will not get what they might have expected from the tax system.”
Harriett Baldwin
Much as we all love and admire the BBC, not everything that it puts on its website to do with benefit changes is accurate. I am sure that the hon. Lady would want to find a more reliable source.
Alison McGovern
Would the hon. Lady like to intervene on me again, then, and say what proportion of pensioners will be affected, if she thinks the BBC is unreliable?
Harriett Baldwin
A BBC website had a wholly inaccurate story yesterday about the changes to employment and support allowance, so it is not an accurate source. That is the point I am trying to make.
Alison McGovern
Is the hon. Lady therefore saying that the proportion is not 40%? She indicates that she does not know—that is fine.
Ben Gummer
Whatever the proportion of pensioners affected, whether it is 10%, 20%, 30% or 40%, does the hon. Lady think it is right that they currently get a different tax rate from low-earning families who are struggling hard but for some reason seem to be discriminated against just because they are not over 65?
Alison McGovern
The hon. Gentleman, too, is welcome to intervene on me again and say what he thinks the proportion is if he thinks the BBC is wrong. He said it might be 10% or 20%. No? Okay.
Rachel Reeves
Does my hon. Friend agree that it is disappointing that hon. Members will vote on the matter today without having any idea what proportion of older people it will affect? She is correct to say that 40% of pensioners will be affected, and I am pleased that Opposition Members know their facts, unlike Government Members.
Alison McGovern
The great Bill Shankly once said that he was always surprised that people were surprised at surprises. In one sense it is surprising that Government Members seem to question the BBC and yet cannot intervene to tell me that it is wrong. As the BBC states, those affected will be
“a ‘middle-income’ range of…pensioners who will not get what they might have expected from the tax system.”
That is a very important point. Of course we are all concerned about the impact of the recession on the poorest, but there is another factor to consider. People on middle incomes, who might have had certain expectations about how they could live their life, are now being disappointed and do not know what is coming in the future.
People feel that one of the big problems with the Budget is that certain matters that were brushed over and not explained fully have subsequently come out as being pretty serious. The insecurity facing people at the moment, especially those in the middle of the income distribution, is really quite serious, not least because it is not very good for people’s quality of life if they are constantly worrying about what next year might bring financially. How they interact in the economy and their actions as consumers are also deeply affected by that insecurity.
One of the biggest challenges for Treasury Ministers to address is how communities such as I have mentioned in the Wirral and other parts of the country, where time after time Government announcements have chipped away at the money in the local economy, can deal with the insecurity facing people. The Budget will have a significant impact on people’s quality of life.
Fiona O'Donnell
My hon. Friend is making an excellent contribution. Does she agree that when we meet older people in our constituencies, it is inspiring to hear how concerned they are about young people’s future? However, what they see in the Government’s taking money from 40% of pensioners is not an effort to invest in creating jobs for young people. What really hurts is the fact that that money is being used to give a tax break to millionaires.
Alison McGovern
My hon. Friend is right. Of course, older people are worried about the next generation’s future, and they do not believe that the Government are making the right move, not least for the reasons that she gave.
I hope that Treasury Ministers will reconsider the proposal and their approach to local economic development. Economies are geographically centred, and businesses currently face, as I have said time and again, a chipping away of resources in their area. That makes growth extremely hard and I hope that Ministers will consider that.
Finance (No. 4) Bill
Alison McGovern Excerpts(12 years ago)
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Owen Smith
I have absolutely no confidence whatever. My hon. Friend’s point goes to the heart of the dodgy economics in the dodgy dossier. The figure of £100 million is entirely predicated on the assumption that there will almost be a net offset of the £3 billion static loss as a result of the change to the 50p rate, through people deciding to work harder, save less, take their income in the current year, and hide their income less. Those are the behavioural changes that the Government are assuming will take place, but there is no real evidence base for the change. It is fundamentally dodgy.
Alison McGovern (Wirral South) (Lab)
Does my hon. Friend agree that we are debating the difference between those of us who do our economics using evidence and those on the Government Benches who do it using spurious theory? We should all be responsible; we should look at the evidence and report that evidence. That is why it is important that the Prime Minister should return to the House to correct the record.
Alison McGovern
May I draw my hon. Friend back to his remark about the ethics of this issue? The ethics of whether people feel as though we are all making a contribution turn very much on what is happening around this rate of tax. Paul Johnson from the Institute for Fiscal Studies has said:
“The truth is we still do not know the true effect of the 50p rate on revenues.”
Does not this make it extremely difficult to make the right political and ethical choice at this time?
Chris Bryant
My hon. Friend is absolutely right. In fact, I think she must have been reading my notes, which were very close to her face, because they say that it is completely uncertain how much this will cost. That is, as my hon. Friend the Member for Pontypridd said, at the nub of this. The Government have no idea how much this is going to cost them or how much would have been raised had we continued with the 50p rate of tax for another five years. That rate has not been in place long enough for us genuinely to see how it has affected people’s behaviour. Sometimes, when a new rate of tax is brought in it has a sudden impact that then evaporates two or three years later. There is absolutely no certainty and I say to Government Members, who I am sure are going to march loyally through the Lobby with the Exchequer Secretary this afternoon not because he is persuasive but because they believe in this—[Interruption.] He may be persuasive, but I do not think he is going to persuade me. I say to them that I think this will end up being a divisive measure.
Karl MᶜCartney
In a minute.
One hopes that the Labour party knows and realises that the 50p tax rate it introduced for spurious reasons made our country economically uncompetitive, but it has never let the truth get in the way of a good soundbite, has it? It is not fair to say that the reduction in the 50p tax rate and other measures announced in the Budget are a tax break for the wealthiest because, in total, the measures announced will see the wealthiest paying many times more.
Alun Cairns
The hon. Gentleman has repeated that by “temporary”, the Opposition mean eight years and that it could be even longer. On the one hand, he is not prepared to make a commitment for three years’ time, but on the other, he is prepared to make a commitment for the next three years. That is another inconsistency in his argument.
The Opposition’s strongest argument is about the uncertainty over the change in income when the rate changes from 50% to 45%. To be kind, one would say that the hon. Member for Pontypridd has been selective; some might say that he has not been wholly honest. Everything is uncertain. There is no guarantee about how the economy will grow, nor about how the European or the global economy will grow. There was exactly the same uncertainty when the previous Chancellor, the right hon. Member for Edinburgh South West (Mr Darling), introduced the 50% rate. He predicted that it would bring in three times more than it has brought in.
Alison McGovern
On a point of order, Mr Hood. I believe that the hon. Gentleman referred to my hon. Friend the Member for Pontypridd (Owen Smith) as not being wholly honest. Will you clarify whether that is in order?
The Temporary Chair (Mr Jim Hood)
I thank the hon. Lady for her point of order. It is not a point of order for the Chair if an opinion is expressed by an hon. Member. It is certainly not against the Standing Orders of the House.
Stewart Hosie
We back amendment 1. As the hon. Member for Pontypridd (Owen Smith) said, it is the only way in which we can score out the cutting of the 50p rate of tax. Government Members have made some obscurantist points, as he described them, about why the amendment may not do precisely what is intended, but we would expect the table showing the 2013-14 rates to appear in the 2013 Finance Bill, as the equivalent table does in the Finance Bill every year, whether the amendment succeeds or not.
We believe it is wrong to remove at this point the temporary 50p rate for those earning more than £150,000 a year. I want to say a little about the context in which that extraordinary tax giveaway is happening. The Government say that we are all in it together and point in their various documents to the fact that every decile in society will be worse off and take some share of the burden. However, they then tell us that, almost uniquely, the personal tax-raising measure of the 50p rate is now deemed ineffective in bringing in much-needed revenue to tackle the deficit and debt, which is their primary objective, and in bringing down their borrowing requirements, which they see as an essential part of their plan.
The Revenue has produced an assessment of the impact of the change, which I am certain the Exchequer Secretary will pray in aid to justify the Government’s case. I will come back to that assessment, but first I shall explain why the removal of the temporary 50p tax rate proves that we are not all in it together, and why that single tax cut amplifies the unfairness of the Government’s plans. I hope to expand on the points that the hon. Member for East Antrim (Sammy Wilson) made in his very good speech.
For those on low and fixed incomes, pay cuts, wage freezes and now a shock rise in inflation have meant the erosion of their living standards over some time. They will see no benefit from a tax cut for millionaires. For families in receipt of working tax credit, the new rules mean that their household income will fall by up to £3,800-odd a year if they are unable to find an extra eight hours of work a week. We know from our constituencies that such work often simply does not exist. They will see no benefit or fairness in cutting the 50p tax rate.
Of course, the families who face a fall in working tax credits are those who tend to earn only about £17,000 a year in total. They will see no benefit from a tax cut for millionaires. Indeed, real middle-class families earning £40,000, £50,000 or £60,000 a year—not somewhere over £250,000 a year, as I suspect the Government assume middle-class families earn—are about to have their child benefit removed, even with the taper changes to be proposed.
Before a Liberal gets up to tell me that there have been moves to increase the basic personal allowance from £6,475 in 2010 to £9,205 by 2013, an increase of £3,000 leading to a saving of some £600, I point out that the threshold above which one pays the 40p rate will go down from £37,400 to £32,245 in the same time frame. That is a fall of £5,000, so the fall in the threshold at the top end is larger than the increase in the allowance at the bottom. The net impact is that by 2013, the percentage of people paying the 40p rate will go up to 15% of all taxpayers, or some 5 million people earning more than £41,500. We have never had such a percentage of our taxpayers paying that rate before, and they will see no benefit from a tax cut for millionaires.
That is before we even consider the tax changes for older people. The changes to age-related allowances—the so-called granny tax—will have an impact on some 40% of pensioners. Those above the basic tax and pension credit threshold but below the £30,000 level at which they would not benefit anyway, or some 4.41 million older people, will be worse off. They will be singing in the streets of Raith, as they say, at the millionaires getting a tax cut that they are paying for.
The Government are providing a tax cut for millionaires that is being paid for by those on fixed incomes hit by inflation, poor working families whose tax credits are being cut or removed and middle-class families earning just over the ever-reducing 40p tax threshold. It is hardly fair, it is not right, and we are definitely not all in it together.
How precisely do the Government justify that? It is an inevitable consequence of a financial plan that is seeing the Government fetishise debt and deficit levels to the extent that they plan to take £155 billion a year out of the economy by 2016-17 for fiscal consolidation, through cuts and tax rises. To understand the Tory priorities, we need to understand how the proportion of spending cuts to tax rises is changing, which is very instructive. I hope some Tories will find it instructive, because their constituents will soon be knocking on their doors asking why it is happening.
In 2011-12, spending cuts were planned to be 56% of the total consolidation, the rest of which would be tax rises, which is a pretty reasonable balance. However, the Government are increasing the proportion of the consolidation that is cuts through the next few years to 62%, 69%, 74% and 79%, and up to a whopping 81%—only 19% of the consolidation will be tax increases by 2016-17.
Alison McGovern
In addition to those comments, does the hon. Gentleman agree that there is a geographical dimension? Those likely to benefit from the tax cut are clustered in certain locations in our country, and those who lose money, as he has described—they will also suffer from public spending cuts—cluster in other areas.
Stewart Hosie
That is absolutely right, but I want to be careful in answering. It is not good enough to say that people in the north or Wales or Northern Ireland or Scotland will lose, because unemployment and poverty in London is enormous. The geographical areas are not the ones traditionally described in lazy journalism—it is not that the north is poor and the south is rich—because pockets of poverty and of wealth exist in every single constituency in the country. The hon. Lady is right, however, that there are such pockets.
Even with all the pain and austerity, and the social and economic problems that the Government’s plans will cause, the Chancellor has been able to find a tax cut for millionaires. How does he justify it? Whatever his justification, the measure does not make sense economically, to answer the points made by the hon. Member for Vale of Glamorgan (Alun Cairns), who seemed to think that the measure is economically robust.
The Government’s fiscal rules—that the structural current deficit should be in balance and that debt is falling as a share of GDP in the final year of the forecast—are under enormous pressure. The problem—this is the evidence we ought to look at—is that the deficit in this Budget was forecast in the 2011 Red Book for 2011-12 to be £90 billion, but it is now forecast to be £98 billion. That is £8 billion worse than planned. The net borrowing requirement in the 2011 Red Book was forecast for 2011-12 to be £122 billion; it is now £126 billion. That is £4 billion worse than planned. The national debt or the treaty ratio that was due to peak at 87.2% of GDP—£1.25 trillion—in 2013-14 is now expected to rise, on the same count, to 92.7% of GDP in 2014-15. That is up again; it is worse than the Government’s forecasts. Everything is going in the wrong direction, so this is the wrong time to forgo revenue yield.
Charlie Elphicke
The hon. Gentleman makes that assertion. Let us consider the detail of what the OBR says, leaving aside forestalling. Page 108 of its report, which considers this matter in great detail, states:
“These steps might include labour supply responses (e.g. working less”—
working less hard, basically—
“taking a lower paid job, retiring early, or leaving the country)”.
As we know, many people have given up, upped sticks and gone—driven away by the anti-business, anti-aspiration policies of the Labour party.
Alison McGovern
Will the hon. Gentleman tell us exactly how many people have left the country? If so, what is his source for that statistic?
Charlie Elphicke
I am simply reporting what the OBR has said. I will not pretend that I am an expert on immigration to and emigration from this country. I might represent Dover but that does not mean I count everyone in and out. I have to trust the OBR. Having said that, in the past decade my constituents have complained that an awful lot of people seem to have come in. They are very upset about that and think there could have been more border security. But that is not the key point of this debate.
Oral Answers to Questions
Alison McGovern Excerpts(12 years, 6 months ago)
Commons ChamberRead Full debate Read Hansard Text Read Debate Ministerial Extracts
Miss Smith
My understanding is that, compared with the plans of the previous Government, businesses will pay £3 billion less in employer national insurance contributions and more than £1 billion less in corporation tax, as a result of changes announced in Budget 2010.
Alison McGovern (Wirral South) (Lab)
Small businesses have been frequent attenders at my regular Friday surgeries, and they tell me that business is hard. Now that the hon. Lady’s party’s Chancellor has presided over the slowest economic recovery since the first world war, will she explain to small businesses in Wirral how they are supposed to get out of this mess?
Jobs and Growth
Alison McGovern Excerpts(12 years, 7 months ago)
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Mr Osborne
Okay. The motion tears up the Darling plan—it is £27 billion off the plan set out in the March 2010 Budget. That is the truth.
Mr Osborne
I shall give way to the parliamentary private secretary to the former Prime Minister to defend his record.
Alison McGovern
I will defend the record of our former Prime Minister any day of the week, but will the Chancellor defend his own record, and tell the House how far away he is from his deficit payback plan?
Mr Osborne
The hon. Lady has to defend the record of the former Prime Minister because he never turns up in this House to defend it himself.
The one thing that we want to avoid in a debt crisis is a sharp rise in interest rates, but that is what the motion would bring about. Let me give the House some new information.
Jake Berry (Rossendale and Darwen) (Con)
I am delighted to see that the reshuffle of the shadow Cabinet has had a real effect on its sense of humour. Government Members are of course used to the fake outrage all the time, but the terms of the motion suggest that the Opposition seem to have discovered irony.
I will not support the motion, because it demonstrates the Opposition’s fundamental failure to have any credible economic policy whatever. This five-point plan is a nationalised Ponzi scheme on steroids. Even in itself it would add £3.1 billion to our deficit. The Opposition probably do not understand what a Ponzi scheme is, but they should look at their own manifesto. People in my constituency do not believe that the way out of debt is to take on more debt. They do not believe that the way to reduce their personal liability is to spend more money.
Alison McGovern
The hon. Gentleman is incorrect, because if there were investment it would not be a fake Ponzi scheme—the assets would be real, unlike in an actual Ponzi scheme.
Jake Berry
I never said it was a fake Ponzi scheme, I said it was a real Ponzi scheme. That is the basis of the Opposition’s entire policy.
The markets believe in our plan and want us to stick to plan A: actually, so does every hard-working family in my constituency. They are struggling with personal loans and do not want interest rates to go up. Like so many of us, they are struggling with mortgages and cannot afford that to happen. The Prime Minister has offered real leadership throughout this, and the Chancellor of the Exchequer has been honest. That is in stark contrast to the Labour party’s constant line of “too far, too fast”.
What is the Opposition’s alternative? This five-point plan is simply too little, too late. They believe, “Why repay borrowing today when we can have business as usual and bankrupt Britain tomorrow?”