Surplus Target and Corporation Tax

Debate between Alison McGovern and George Osborne

Monday 4th July 2016 Commons Chamber

[Mr Osborne]

Of course we keep taxes under review. As I have said, my revealed preference is generally to try to reduce reliefs and reduce headline rates, which I think is the least economically distorting approach, but there are many exceptions to that. One of them has been the investment allowance, which we have increased, and which is particularly targeted at small and medium-sized businesses. It now stands at £200,000 as a permanent annual allowance, which is the highest that it has ever been.

[Alison McGovern (Wirral South) (Lab)]

As ever, the Chancellor is fond of having a pop at the previous Labour Government, but there was a crisis in the markets to which that Government had to respond. This is a crisis made in Government to which the markets are responding. With that in mind, and because he has not answered this yet, will he say what proper assessment he has made of the impact of this cut in corporation tax on our country’s productivity crisis?

[Mr Osborne]

First of all, the problems in the financial markets eight years ago hit this country more severely than almost any other country in the world, and the Government at the time take some responsibility for that. Secondly, the challenge we face is one that was delivered by our democracy. It is a democratic outcome that we accept and respect and we have to make it work for our country. I am determined to make that happen.

As the hon. Lady well knows, productivity growth is a challenge in every western democracy at the moment. Indeed, the US is now predicted to have negative productivity growth. Productivity is still growing in the UK, but we need to do more to improve it. Education reform, welfare reform and transport investment are good places to start.

Oral Answers to Questions

Debate between Alison McGovern and George Osborne

Tuesday 7th June 2016 Commons Chamber

[Mr Osborne]

The hon. Lady is being a little churlish. We committed £6 billion to investment in transport in Humberside and Yorkshire, the area that her constituency is in. Specifically on flood defences, she raised on the Floor of the House very specific schemes that she wanted me to fund. I funded those in the Budget. As she well knows, the future phases do not yet have plans or a price tag, but I have said that in principle we are committed to those as well. If she works with us we will deliver those schemes, which of course were never delivered under a Labour Government.

[Alison McGovern (Wirral South) (Lab)]

The Chancellor mentioned transport investment, yet his Government have presided over a situation in which there is 24 times more transport investment in London than in the north. However, on this occasion, although it pains me to do so, I want to ask the Chancellor to agree with me that people in the north need our country to remain at the heart of Europe so that our cities will keep growing.

[Mr Osborne]

First, it is quite right that we invest in major transport infrastructure in our capital city, which we have done with Crossrail and Crossrail 2, but that has not been to the exclusion of investment elsewhere in our country. In the hon. Lady’s part of the north-west there has been massive investment in electrification of the railways—I note that under the Labour Government only 10 miles of the country’s entire railways were electrified. High Speed 2 will help with fast train journeys to Merseyside as well as to Manchester. Now, with the new Merseyside Mayor agreed, we can go on pouring more money into the infrastructure of Merseyside so that we support private businesses in that area in growing and creating private sector jobs.

Oral Answers to Questions

Debate between Alison McGovern and George Osborne

Tuesday 19th April 2016 Commons Chamber

[Mr Osborne]

I am delighted that we can support the community that my hon. Friend so ably represents in Parliament, and provide money for the upgrade of the M40 junction and a new secondary school to go with the new homes being built in Bicester. Of course that comes as part of a suite: we are investing in new starter homes and in shared equity products for people; our help to buy ISA has been used by hundreds of thousands of people; and the new lifetime ISA will also help young people. Those are all things we are doing to make sure this a home-owning democracy.

[Alison McGovern (Wirral South) (Lab)]

But there is a problem, because the Office for Budget Responsibility says that lifetime ISAs will increase house prices, as they will increase demand and there is relatively restricted supply. Is the Chancellor confident that his measures to increase the supply of housing will mean that the OBR is able to revise that analysis—yes or no?

[Mr Osborne]

I agree that it is vital that we not only help people afford homes, particularly young first-time buyers, but build more homes. That is the plan we set out in the spending review; a big priority of the capital budget was the additional billions we will be spending on building homes—much more than was spent under the last Labour Government.

Oral Answers to Questions

Debate between Alison McGovern and George Osborne

Tuesday 1st March 2016 Commons Chamber

[Mr Osborne]

The assurance I can give is that, alongside the national living wage, we have cut taxes for businesses so that they have more money to invest in their workforce. We have introduced and increased the employment allowance, which helps small businesses in particular. I introduced that increase at the same time as announcing the national living wage. We are of course making big investments in the Southampton economy so that it is a great place to grow a business and employ people. All those things will help the hard-working people my hon. Friend represents so well.

[Alison McGovern (Wirral South) (Lab)]

Wage growth matters, but surely it is the bottom line of your payslip that really counts. That is why the Chancellor is wrong to say that this is progressive. The Resolution Foundation has found that, over the next Parliament, those in the top half of our income distribution will benefit more than those at the bottom. How can the Chancellor say that what he has done will help those with the least?

[Mr Osborne]

The hon. Lady seems to be opposing the national living wage. I think it is a progressive policy. Indeed, it was based on work by the Resolution Foundation. If you want a regressive policy, I will give you one. How about increasing the basic rate of income tax? That is what the Labour party is proposing in Scotland—the first sign of what an economic policy would look like under this new Labour leadership. How can an increase in the basic rate of income tax, which would hit people earning over £11,000, be remotely progressive or fair?

Oral Answers to Questions

Debate between Alison McGovern and George Osborne

Wednesday 9th December 2015 Commons Chamber

[Mr Osborne]

I would certainly encourage businesses to relocate to my hon. Friend’s area. He is right about the link road: for decades people called for it, and although for all those years there was a Conservative MP for Bexhill, there was a Labour MP for Hastings for many of those years and nothing happened. Now that we have Conservative MPs in both Bexhill and Hastings, we are getting the investment the local area needs.

[Alison McGovern (Wirral South) (Lab)]

Q10. On 7 September, the Prime Minister told me that he could not remove refugees from the migration target because of the requirements of the Office for National Statistics, but I wrote to the ONS and it told me that in fact this would be possible. Can the Chancellor therefore demonstrate that Britain will do its bit and remove refugees from the migration target?

Oral Answers to Questions

Debate between Alison McGovern and George Osborne

Tuesday 1st December 2015 Commons Chamber

[Mr Osborne]

I will not get into the debate about our membership of the European Union, but what I would say is that—thanks to the hard negotiating of my right hon. Friend the Prime Minister—we have cut the EU budget.

[Alison McGovern (Wirral South) (Lab)]

By some mistake, there does not seem to be any question on the deficit on the Order Paper—[Interruption]—apart from the very interesting question we have just had. Can I ask the Chancellor the question he would not answer in response to the autumn statement: does he believe that by the time he leaves the Treasury for the last time, he will have finally dealt with our country’s deficit?

[Mr Osborne]

That is certainly the plan.

Spending Review and Autumn Statement

Debate between Alison McGovern and George Osborne

Wednesday 25th November 2015 Commons Chamber

[Mr Osborne]

My hon. Friend is right. [Laughter.] Hon. Members may laugh in the Chamber when we talk about the pothole fund, but as constituency MPs, we know that the state of local roads and potholes is an issue of real concern to people. As a result of the extra investment that we are putting into our roads budget, we are able to increase the maintenance budget. We will not just build new roads; we will improve the roads we have.

[Alison McGovern (Wirral South) (Lab)]

The Chancellor should have come to the House today to say that he has finally dealt with the budget deficit, but he overshot that mark by £60 billion. Does he honestly believe that when he leaves the Treasury for the last time, he will preside over anything but a deficit?

[Mr Osborne]

I have set out the projections to achieve the surplus that have been forecast by the Office for Budget Responsibility, and we made a commitment in the Charter for Budget Responsibility that has been set before the House. More broadly, in the five years that I have stood at this Dispatch Box, I do not think that I have heard a single proposal from any Labour MP for a reduction in Government spending. It is not credible to go on saying, “We want to cut the deficit and cut borrowing”—[Interruption.] Labour Members are shaking their heads. Here is a test: every Labour MP who rises to speak should propose a cut in public spending before they propose an increase.

Oral Answers to Questions

Debate between Alison McGovern and George Osborne

Tuesday 16th June 2015 Commons Chamber

[Mr Osborne]

I welcome my hon. Friend to this House, fighting for the interests of north Wales. He is absolutely right that north Wales is a central part of the northern powerhouse. Of course it is a single economic area, a point made in the lead question. I will take a close look at the rail upgrades he is calling for. It is good to see him championing his constituency so soon after being sent to this place.

[Alison McGovern (Wirral South) (Lab)]

In the north, we know there can be no power without resources. Will the Chancellor be truthful with northern authorities and tell us how much more he is about to cut them by in this financial year?

[Mr Osborne]

I welcome the hon. Lady to her new position on the shadow Treasury team. Of course we have to make difficult decisions to balance our budget. If we do not get our public finances in order there will not be any powerhouse in any part of the country, and that is what we are doing. It is disappointing that the Labour party, having worked out that it did not have any economic credibility, has started the new Parliament by opposing all the savings we make. As it happens, in the in-year savings I announced we have protected the local government settlement.