Oral Answers to Questions
Alison Seabeck Excerpts(9 years, 8 months ago)
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Danny Alexander
The hon. Lady raises an important question. In this Parliament we are building more affordable homes than has been the case at any point in the past 20 years, and in the next Parliament we will be building even more. However, I do not think any of us should be complacent; we need to raise substantially the level of house building in this country. That is why I welcome the recommendation of Keith House and Natalie Elphicke on a housing finance institute. It is also why I set out around the autumn statement last year moves towards Government taking a direct commissioning role to ensure that we meet a 300,000 homes a year target. That will be piloted at the Northstowe development, which I encourage the hon. Lady to find out more about.
Alison Seabeck (Plymouth, Moor View) (Lab)
I declare an indirect interest, which is on record. Local authorities are at the sharp end of this Government’s failure to deliver the housing that the country needs, particularly affordable rented housing. Labour Plymouth is proactively doing what the Minister has just said—bringing forward land and building 1,000 homes. It has a view on the cap and about meeting the need. Greater concerns, however, surround the announcement of the starter home scheme, which will lead to a massive loss of affordable home building— developers get out of any requirement to do it and the local authority has no say. Can the Chief Secretary please tell the House what the impact assessment of that policy was and the impact on affordable rented homes?
Danny Alexander
The idea behind the starter homes scheme is precisely to offer homes at a discount to young people who want to get on the housing ladder. I would have thought that was an objective that everyone in the House would welcome. If the hon. Lady wants to look at social rented housing, in this Parliament—and continuing in the next Parliament—we have the highest annual rate of social house building than under the previous Government or for the past 20 years. During Labour’s 13 years in office, the number of social homes fell by 421,000; we have increased it by over 300,000.
Autumn Statement
Alison Seabeck Excerpts(9 years, 11 months ago)
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Mr Osborne
My hon. Friend is absolutely right. It is a major reform of stamp duty that gets rid of the very distorting slab system. The current stamp duty system has attracted huge criticism from all sorts of groups, including property websites, those who help people to move home and, of course, home buyers. [Interruption.] The hon. Ladies on the Opposition Front Bench say, “Do it in the Budget.” I am doing it now so that people can benefit from it now.
Alison Seabeck (Plymouth, Moor View) (Lab)
The Chancellor did not pay significant attention to productivity in the south-west in his speech. Our devastated rail line is just getting crumbs from the table, and those are buried in the national infrastructure plan. We have a feasibility study that is semi-permanent, with no guarantee of investment until 2019-20. The Prime Minister said that money was no object when we had the storm damage, but he clearly did not mean it. People in the south-west will not forget and will be angry.
Mr Osborne
What the hon. Lady says does not bear a resemblance to what has been announced this week. The south-west is one of the biggest winners from the infrastructure plan that we have announced, with a massive upgrade of the A303 and the A358. In all the years of the Labour Government, nothing happened to those roads. The Dawlish rail line had problems when the storms came, which I guess says something about the investment that the Labour Government put into it, but I will move on from that. Not only have we repaired the rail line; we are looking at an alternative route to increase resilience to the south-west. We have also provided new trains on the sleeper route and made local road improvements, such as the—
Mr Osborne
This is billions of pounds of investment into the south-west of England that never happened under the Labour Government. The Labour Government completely neglected the south-west of England, and the Labour MPs who represented those constituencies got absolutely nothing from them. Conservative candidates and Members of Parliament are delivering for the south-west.
Oral Answers to Questions
Alison Seabeck Excerpts(10 years ago)
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Priti Patel
It is fair to say, as we have heard today, that devolving power to more local areas enables the regions to take responsibility for the decisions that affect their areas, which in the long run will create good, solid, strong local long-term economic plans.
Alison Seabeck (Plymouth, Moor View) (Lab)
The Minister talks about supporting regional growth and rebalancing the economy, yet promises are being made— £7 billion to Greater Manchester, £7 billion potentially to top taxpayers. That money would sort out transport connectivity issues and help us grow our economy, so will she commit to the Dawlish avoiding line and the resilience measures that we need in the south-west now?
Office for Budget Responsibility (Manifesto Audits)
Alison Seabeck Excerpts(10 years, 5 months ago)
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Ed Balls
I will talk about legislation first, then I will take two more interventions.
Of course, there are a number of detailed issues to resolve. To that end, over the past eight months, I have had a series of discussions with the permanent secretary to the Treasury, with the head of the OBR, and in the normal course of parliamentary business with the Chair of the Treasury Committee and others, and I want to update the House on where I think we are.
First, on the question whether primary legislation is necessary, in the letter that I originally wrote to the head of the OBR, which I quoted a moment ago, I cited the previously declared view of the Chair of the Select Committee, who said that he was not fully convinced that the current legislation would not allow such a role for the OBR. It was uncertain, but he was not fully convinced.
However, the head of the OBR replied to me in October, saying that he had taken legal advice from the Treasury Solicitor’s department and that the view of the Treasury Solicitor was that a change in the law was required—that there would be a need for primary legislation. To that end, I wrote to the Chancellor on 15 October to confirm that we would support any changes needed to the OBR’s charter and primary legislation, and would seek to help him build a cross-party consensus to achieve that. I wrote to the Chancellor and to the Chair of the Select Committee with a proposal for the amendment of the law, with the clauses set out for discussion. I regret to say that so far the Chancellor has not replied to my letter or engaged in that discussion, but as I said, it is not too late for him to do so.
At that time, the Clerks of the House of Commons informed us that with the Chancellor’s support and an amendment to the long title of the Bill, one option would be to table an amendment to the Finance Bill. It is just two clauses, so this change could be made well in advance of the 2015 general election. Regrettably, because there was no engagement on this two or three months ago, that change to the long title did not happen. If there was a way to table those clauses for Report stage next week, we would support a Government amendment to that effect. If not, and the Government wanted to bring forward primary legislation in the autumn, for example through a one-day Bill, we would give such legislation full support.
Alison Seabeck (Plymouth, Moor View) (Lab)
During the recent elections, we saw a lot of public dissatisfaction about what happens in and from this place. Some of that is to do with the lack of transparency and consensus on matters such as this. Would it not send an important message to the public if we had cross-party consensus on openness about manifestos and the figures within them?
Ed Balls
I agree with my hon. Friend, and that is why we support the role that the OBR plays. The Government proposed an independent OBR, a reform that we supported, and in that spirit we want to extend its role, as happens in other countries. It is not unreasonable, and it would exactly help with the issues of trust to which my hon. Friend refers.
Oral Answers to Questions
Alison Seabeck Excerpts(10 years, 5 months ago)
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Mr Osborne
Whatever their motivations—I think my right hon. Friend is right—we are absolutely clear about the results. It will put people out of work and ensure that investment does not come to Britain. We are against plans to increase corporation tax. Indeed, I think that most people from around the world would look on in bemusement if Britain were to increase its business taxes, as the Opposition propose. To come to the point, the Treasury and Her Majesty’s Revenue and Customs are now providing more dynamic modelling of the effect of tax cuts on investment and growth, and cuts in corporation tax and fuel duty are shown to have positive impacts on the economy.
Alison Seabeck (Plymouth, Moor View) (Lab)
High profile companies operate schemes that lead to the UK economy losing out, and not benefiting to the fullest extent. Is the Chancellor aware that Google AdWords is de-ranking small firms if they do not stump up substantial funds? It means not only that Google’s profits go up, helped by its tax arrangements, but that the profits of small firms, such as those in my constituency, go down, and the Exchequer is the net loser. Will he please discuss that with his colleague, the Secretary of State for Business, Innovation and Skills?
Mr Osborne
I will make a general point, which is that the internet has provided an enormous opportunity for many small businesses, because it has dramatically cut distribution and start-up costs and created all sorts of opportunities that did not previously exist for small businesses in Britain. If we believe in free markets and technological change, we should believe in the innovation that that brings. Specifically on the tax issue, we are working internationally—this cannot be done in one country—to ensure that the international corporate tax system reflects the digital economy and international business of today. We are helping to fund that OECD work, and we are expecting the first conclusions this autumn.
Finance (No. 2) Bill
Alison Seabeck Excerpts(10 years, 7 months ago)
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Catherine McKinnell
My hon. Friend’s point goes to the heart of the matter. It demonstrates what is wrong with this policy and how ill-conceived it is.
Alison Seabeck (Plymouth, Moor View) (Lab)
The intervention from the hon. Member for South West Bedfordshire (Andrew Selous) was interesting, but should he not acknowledge that only one in six of those families will benefit from any of this?
Catherine McKinnell
My hon. Friend makes an extremely good point. Our opposition to this measure is that it disproportionately impacts on women and benefits men and that it does not recognise five out of six households with children up and down the country who are, as we know, struggling to make ends meet.
Mr Jackson
I will give way later, because I am sure the hon. Lady will not forget my comments.
The purpose of clause 11 is not to try to make people get married, but to remove the obstacles to those who wish to marry, which is different. Marriage should at the absolute minimum be a credible, accessible option for all eligible couples. However, the failure of our income tax system—unlike that accessed by the majority of people living in Europe—to recognise marriage means that the fiscal obstacle to marriage is a real concern. The size of the couple penalty in this country, as outlined by the Institute for Fiscal Studies, is deeply worrying.
Mr Jackson
No, I will not give way—not even to the hon. Lady.
As others have noted, the social policy charity Christian Action Research and Education conducted an annual international tax comparison for 2012—the latest year for which we have comparative data—which demonstrated that the burden on a one-earner married couple on an average wage was a significant 45% greater than the OECD average.
It is not acceptable that we should make the option of marriage inaccessible in this country, and so much more so than the OECD average. Clause 11 will take a vital first step in the direction of addressing that problem, but the limited nature of the partially transferrable allowance means that it will only begin to erode the incentive not to marry. We must go much further in the next Parliament to create a genuinely level playing field. Given the huge public policy benefits of marriage, there is a compelling case for a nudge to marry, although a level playing field would be a massive step forward.
Alison Seabeck
I am sorry, but how many people in this Chamber thought, “Oops! I can’t get married because I’ve got a fiscal obstacle in the way,” given that the average cost of a wedding is about £10,000?
Mr Jackson
I know that this debate is apposite because the hon. Lady recently tripped along the path of happy matrimony, on which I congratulate her, albeit belatedly. I am not sure whether the issue of £3.85 came into it for the right hon. Member for Greenwich and Woolwich (Mr Raynsford).
If I could move on before we dwell too long on the hon. Lady’s love life, I have read in many places that the provision discriminates against widows and widowers, people who leave abusive relationships and working couples. The hon. Member for Newcastle upon Tyne North regurgitated that argument earlier, but it completely misunderstands the policy.
First, if the widow or the widower was the homemaking spouse, their personal allowance would not die with their working spouse; it would automatically return to them so they could benefit if they re-entered the job market. Secondly, dual-earner couples already benefit from individual personal allowances, so they are already benefiting from both allowances. Thirdly, on those leaving abusive relationships—this is a very important issue and it would be remiss of the hon. Lady not to raise it—if a marriage ends, the homemaking spouse, who had previously transferred the tax allowance to their spouse in paid employment, would be required to take back their allowance because the marriage had ended. It would not be stolen from them by their former spouse.
If the argument is that this policy does nothing for widows and widowers, my response is that that is true of many policies. Most policies have a sharp focus: if we responded to every policy solution by saying, “What about those who won’t benefit?” the implication would be that we should introduce only polices that affect everyone equally. However, in the real world, where we often need specialist and focused policies, that is simply not possible. There is nothing to stop us bringing forward another policy specifically to help widows and widowers—I am sure that Treasury Ministers are listening on that issue—and public policy makes provision for them in other ways. Many widows and widowers were once in one-earner families and will therefore welcome clause 11 for family members who are now in such a position. In short, I warmly welcome clause 11.
On the current drafting, the failure to make provision for a tapered withdrawal of the 10% transferable allowance is an oversight that should be corrected for fairly obvious reasons. I very much hope that the Exchequer Secretary will put that right through a Government amendment on Report.
I congratulate the Prime Minister and Chancellor on introducing this seminal provision. I very much hope that the whole House will recognise its significance in qualifying the individualism of our tax system and reinserting some recognition of the importance of family responsibility. It is a first step that will help to make the option of marriage less inaccessible to those on average and below-average incomes, because it is about social equity as well. We must build on it in the next Parliament; and with a majority Conservative Government, we will.
Alison Seabeck
It is always interesting to follow the hon. Member for Peterborough (Mr Jackson). He and I have recently campaigned jointly on the future of our Land Registry offices, but I am afraid that we will be in different Lobbies this afternoon. I cannot agree with his assessment of the value of this tax change for a range of reasons.
Like many measures introduced by this Government, this one is disingenuous at best. It was brought forward to a fanfare of trumpets, after a great deal of pressure from Conservative Back Benchers, but it is basically unfair. I pick up a sense of that unfairness, which is driven through the tax system, when I do a street surgery every Saturday and in my postbag. That unfairness is what the public have the greatest problem with, whether in relation to the tax system or to other Government changes. It is also indicative of the problems we have seen in the House this week. We in this place do not read the public mood as well as we ought to at times, and this measure is yet another example of that problem.
Mr Burrowes
The hon. Lady is talking about fairness. Who is it fair for—the 80% of people in the OECD area who live in countries that recognise marriage in the tax system, or the 20% who live in countries that do not?
Alison Seabeck
Plymouth has one of the largest percentages of single parents in the country—I will return to that point—and my constituents think that the measure is unfair. How people in other countries view it is entirely up to them, but I can tell the hon. Gentleman that my constituents do not see it as fair.
The transferable allowance—a tax break of about £1,000—discriminates against millions of families, especially those headed by single parents, as well as against non-married couples. We know from the Office for National Statistics that there are about 2 million single-parent households. They find life complicated enough at the moment. They are being hit with the bedroom tax, while some will definitely not benefit from this tax change, and most feel that this Government are not on their side. They face the same challenges as married couples with children, but they face them alone. They have to survive on one income, and they are mostly not single parents from choice. Sadly, death, divorce and separation take their toll on relationships, and financial pressures mount in every one of those circumstances. What have this Government done? They have introduced a measure that will favour just a third of couples and just one in six families with children.
I am almost speechless about this measure. My hon. Friend the Member for Newcastle upon Tyne North (Catherine McKinnell) drew attention to the fact that men will benefit from it far more than women. She highlighted other areas in which men have disproportionately benefited from changes brought in by this Government—this predictably male-dominated Government—and that fact has not been lost on the electorate. Quite frankly, women feel that, for some reason or other, they are becoming second-class citizens in tax terms and all other terms. I am picking that up on the doorstep, and my guess is that we will see it reflected in the ballot box in the elections ahead.
As I said, my constituency has an above-average number of single parents—roughly 38%—who, as I am sure other hon. Members will acknowledge, are struggling to make ends meet. It is wrong for the Government to encourage one type of relationship over another. The policy discriminates against widows, single parents and couples who both work, as well as parents who choose not to marry. Importantly, this tax break might discriminate against children who grow up in single-parent families, and against adults who leave abusive relationships.
In its recent report, “The Home Front”, Demos has argued:
“Evidence shows that it is the quality of relationships rather than relationship status which has the greater effect on…children’s outcomes. There is no evidence of a ‘marriage effect’, rather marriage is probably a proxy for more successful relationships… many married couples do not have children, making this proposal both moralising and inefficient, as it draws resources away from some of the most at-risk families.”
This is a tax change to please the Tory few, but it discriminates against millions of hard-working families. It should be scrapped. We should support the amendment, which demands a closer look at and a review of the measure’s impact, so I will support my hon. Friend in the Lobby this afternoon.
Tim Loughton
I do not think that the Opposition are being honest with us. Last week, they tabled a reasoned amendment declining to give the Bill a Second Reading, one reason being that
“it offers a marriage tax allowance which will help only a third of married couples, rather than a 10 pence starting rate of tax which would help millions more families”.
Coming from a party that dispensed with a 10p tax rate when it was in government, those reasons show inconsistency and brass neck, while the opening speech of the hon. Member for Newcastle upon Tyne North (Catherine McKinnell) made a good case for extending the transferable married couple’s tax allowance to make it fairer and more inclusive.
Amendment 3 does not offer outright opposition. It is a fudged amendment, which calls for a review, including
“a calculation of the proportion of married couples and civil partners who are eligible…;…an assessment of the impact…;…the cost to the Exchequer…; and…an assessment of alternative tax reliefs”.
For starters, we know all that. There is a contrast between that and the Labour Opposition’s new clause 1 on child care provision, which was considered yesterday. It asked for a different sort of tax relief or public subsidy, but it did not have any conditions attached to it about a review after six months, a calculation of the proportion of people who benefit, or an assessment of its impact.
The Opposition are entirely disingenuous and inconsistent. Why do they not just come out and say, “We fundamentally—completely and utterly—disagree with and oppose the concept of transferable married couple’s tax allowances”? Why have they not done so in the amendment that we are debating? That would have been more honest, and we could then have had a proper debate. I think that the Opposition are being disingenuous.
Tim Loughton
I am talking about married couples, which now take different forms. As we have already discussed, the definition includes same-sex marriages, civil partnerships and conventionally married couples. That is to whom the allowance should apply, which has never been in doubt. The allowance is about making it easier for parents to choose the best way to bring up their children. Frankly, it is insulting to describe the measure as discriminating against single parents.
Tim Loughton
I am about to address the hon. Lady’s point. She may then want to intervene.
Most single parents are not single parents by design or intention. Many are single parents because they have been deserted, subjected to violence or for other reasons, and they are doing an incredible job of bringing up children in very difficult circumstances. We are doing things for them and we probably need to do more for many of them. However, that should not preclude our wanting to do more for people who get no recognition whatever in the tax system, who are also often bringing up children in difficult circumstances. Just because one is in favour of introducing a transferable married couple’s tax allowance, the implication is not that one is in some way against people who happen to be single parents or to be bringing up children on their own. It is a typical Labour argument that if someone is for something, they must be against something else. This is about achieving a much more level playing field for people who choose to engage in a relationship of marriage.
Alison Seabeck
I thank the hon. Gentleman for giving way. If he will allow me, I will read a text that I have received from one of my constituents. She says:
“As one of YOUR 38%…nonsense I and kids should be disadvantaged because I chose to leave abusive relationship and bring them up alone in happy home!”
I am really sorry, but that is the view of the public on this measure.
Tim Loughton
That is the view of one constituent who has not yet listened to the whole debate. Introducing a married couple’s transferable tax allowance in no way disadvantages that constituent. [Interruption.] In what way is she financially disadvantaged? It is a typical Labour response to say that if someone is in favour of something, they must be anti something else. I am in favour of doing a lot more for constituents who find themselves in that position through no fault of their own and who need help, support and recognition. However, there are also many married couples who need support in bringing up their children, often in difficult circumstances. Just because we want to help them, it does not mean that we are disadvantaging somebody else.
Alison Seabeck
Does my hon. Friend share my concern that the new Financial Secretary to the Treasury and Minister for Women voted against same-sex marriage, and therefore takes a slightly ambiguous position on the matter?
Steve McCabe
I am afraid that is true. I know that some people will not be comfortable with having to be reminded of that, but it happens to be the case.
To return to the point that the Government’s position is slightly misleading, we know that the Prime Minister himself has been confused about it. Like his hon. Friends, he thought that he was introducing a policy for all married couples paying the basic rate of tax. I can imagine that, in this day and age, it is pretty hard for the poor Prime Minister to keep up with the all the shifts and machinations in his Government, but surely there is something wrong with a policy that deludes even the Prime Minister into thinking he is giving a tax break to all married couples paying the basic rate, which he is not. Thank goodness we have had the opportunity to set the record straight in this debate; otherwise the poor man might have gone around the country perpetrating that calumny. People might have begun to doubt his work on other things, as well—his whole judgment might have come into question. Thank goodness we have had the chance to challenge that idea.
We certainly need to review the policy, because were it to be extended to the nearly 9 million married couples who pay the basic rate of tax, as the Prime Minister implied, it would cost considerably more than the Chancellor’s projections. For that reason alone our amendment, which asks for a review, is crucial. We need to know exactly what the policy will cost and what it would cost were it to meet the Prime Minister’s aspirations.
As we have heard, the policy will give £200 back to 3.4 million couples, but other Government policies will have made the average family £974 a year worse off by the time of the election. Some 85% of the tax allowance will go to men. Perhaps that harks back to the good old days of Tory marriage—I do not know—but in this day and age I do not think the policy will be broadly accepted by women up and down the country. As we have heard, it will not be available to married couples whose income falls below the personal allowance. [Interruption.] I think the hon. Member for Suffolk Coastal (Dr Coffey) has something stuck in her throat. If she wants to intervene, I—
Jim Shannon (Strangford) (DUP)
In the past, both here and in Westminster Hall, I have spoken frequently about issues such as child poverty, food poverty, benefits for single parents, social exclusion and other social problems. On this occasion, I want to express my support, and that of my party, for the married couple’s transferable tax allowance. We gave a manifesto commitment to support it in our Parliament, and we are pleased to be able to support it today as well.
I respect the opinions of Labour Members, and I do not wish to be divisive. I want always to be respectful to Members whose opinions may differ from mine. However, I have a hard-held opinion about this particular issue. I want to help everyone, but I think it is time that married couples had an opportunity to see some benefit from legislative change. Those who support the recognition of marriage in the tax system have waited a long time for the Government to introduce this policy. I expected it to be introduced a long time ago, in view of the Prime Minister’s enthusiasm for what was a headline manifesto commitment, but I am very pleased that, at long last, it is being introduced now.
We have heard some excellent speeches from Members on both sides of the House. I particularly commend the way in which the hon. Members for East Worthing and Shoreham (Tim Loughton) and for Peterborough (Mr Jackson) set the scene. I recall a debate in the House about two years ago to which the hon. Member for Congleton (Fiona Bruce) and I contributed. That was one of my early introductions to the cut and thrust of politics here. Most of the Members surrounding me opposed what I was saying, but I held fast to my opinion, and I am very pleased to be able to express it again today.
Let me begin by highlighting some of the powerful public policy benefits of marriage. I shall then explain why I consider clause 11 to be an appropriate public policy response, albeit rather modest—I should have liked to see more.
Alison Seabeck
As always, the hon. Gentleman is talking a great deal of common sense. Marriage is indeed something to which most people aspire. Let us be honest: it is a great institution. However—I think he was starting to make this point just now—the Bill is neither one thing nor another. It does not really achieve what most Government Members want, and it certainly does not deal with the concerns of Opposition Members. I should welcome his views on that.
Mr Burrowes
I hear what the hon. Lady says, but I am afraid that will not wash with the electorate. The reality is that the Labour Government abolished recognising marriage in the tax system, and Labour now needs to make up that lost ground and join the mainstream in the other OECD countries and across the world. The Opposition need to recognise that people support marriage.
Alison Seabeck
The hon. Gentleman is robustly sticking to his guns. All young people aspire to marriage. I aspired to marriage when I was 17, and I thought that my marriage was going to last for ever, because that is what everyone hopes. Does the hon. Gentleman accept, however, that this tax change will not deal with the fact that people whose marriages break up after, say, five years will lose the tax break at that point? How is that fair, when they are still bringing up their children?
Mr Burrowes
As I said, we need to look at ways of supporting such couples to stay together, not least for the sake of their children. Too many children see their parents breaking up. We need to look at the evidence in support of marriage, because these decisions need to be based on evidence rather than on moral judgments. We have heard statistics relating to adults’ and children’s health and well-being, which I will not repeat. Members have talked about public health benefits, and mention has been made of smoking and other issues. Leading research has stated:
“If marriage were a drug it would be hailed as a miracle cure.”
Why are the Opposition so keen to avoid a basic measure to recognise marriage in the tax system? Members should not take my word for all this. Let us go across the Atlantic and hear what Barack Obama wrote in “The Audacity of Hope: Thoughts on Reclaiming the American Dream”:
“Many single moms—including the one who raised me—do a heroic job on behalf of their kids. Still, children living with single mothers are five times more likely to be poor than children in two-parent households. Children in single-parent homes are also more likely to drop out of school and become teen parents, even when income is factored out. And the evidence suggests that on average, children who live with both their biological mother and father do better than those who live in stepfamilies or with cohabiting partners.”
We have heard statistics to back that up today. Barack Obama went on to say:
“In light of these facts, policies that strengthen marriage for those who choose it…are sensible goals to pursue. For example, most people agree that neither federal welfare programs not the tax code should penalise married couples.”
He did not want to go against the Bush tax plan, and he recognised that it contained aspects of the Clinton welfare policies, but he wanted to ensure that proposals to reduce the marriage penalty would enjoy strong bipartisan support. It is a shame, given the bipartisan support for recognising marriage in the tax code across the Atlantic, that no such support exists here. We should learn the lessons and take a leaf out of the book of Barack Obama.
I mentioned that the children who were interviewed earlier for BBC “Newsround” would have been confused as to why anyone would disagree with this basic measure. Let us look at the recent history, since 2000, when marriage was not recognised in the tax system. We have heard many of the reasons behind the brokenness of Britain under Labour. One was the lack of recognition of the importance of marriage, not so much culturally as financially. That has certainly played a part, which is why there is a commitment at the heart of Conservative policy to reverse the 15 mistaken years of a system that did not recognise marriage.
One of the criticisms of transferable allowances for married couples is that they amount to giving a few privileged people a bribe to get married. It has been suggested that we are being discriminatory, but where is the discrimination in the tax system? According to the Institute for Fiscal Studies, the couple penalty facing those considering whether to marry is significant, at £44.70 a week, rising to over £85 per week for couples with children under 16. It is that group who have been discriminated against for many years. Our limited but important transferable allowance provision will begin to erode the discrimination and create a level playing field for those couples. Far from creating any kind of privilege, it will simply remedy an injustice that has been going on for 15 years in refusing to recognise the huge policy benefits of recognising marriage in the tax code.
We have heard that marriage is popular, but it is not popular only with a privileged minority. It is an aspiration that goes across social cohorts, and particularly among young people, 90% of whom aspire to marriage. Many of those people do not take up the opportunity to marry, however, and we need to look at the reasons for that. The transferrable allowance will not mean that all those people will suddenly get married. They will have to find an appropriate partner, for a start, and their marriage will of course be based primarily on love and being well-matched. The bottom line is an issue of social justice, however. Why are there particular barriers to marriage among poorer communities? People in those communities have just the same aspiration to marry, but fewer of them do so. We have to recognise that financial and cultural barriers are involved.
The Exchequer Secretary to the Treasury (Mr David Gauke)
It is a great pleasure to respond to the debate. I shall make some remarks on clause 11 and on amendment 3 and address some of the arguments that we have heard in this interesting and passionate debate on a subject in which many right hon. and hon. Members have taken a long-standing interest.
Clause 11 introduces a transferable tax allowance for married couples and civil partners. We have targeted the benefit of the measure on married couples and civil partners with the lowest incomes, when one member of the couple has an income below their personal allowance of £10,500. The clause allows individuals to transfer 10% of their income tax personal allowance to their spouse or civil partner, providing that neither partner is liable for income tax above the basic rate. For the year 2015-16, when the measure comes into effect, the amount of personal allowance that can be transferred will be £1,050, significantly higher than the £750 included in the Conservative party manifesto at the last general election. It is also higher than the £1,000 allowance announced at the autumn statement as a result of the Budget announcement that the personal allowance would be increased even further in 2015-16. That means that more people will now be able to gain from the measure and by a higher amount.
Let me remind the Committee of the purpose of the policy. Marriage is an important institution in this country and I have been struck by the contributions from both sides recognising that point. The hon. Member for Newcastle upon Tyne North (Catherine McKinnell) described marriage as a force for good. We have also recently had a debate about marriage in the context of single-sex relationships and, indeed, the first gay and lesbian marriages took place just over a week ago. In that debate, a variety of views were expressed but it was striking how those on both sides of the argument recognised the importance of marriage. Indeed, the hon. Lady made a powerful and persuasive speech on that very issue in the course of those debates. Whether or not one agrees with the decision that the House reached, the strength of views expressed in those debates makes it clear that people believe in the importance of marriage as a building block of our society. The policy we are debating today is about recognising it in the tax system.
That recognition in itself is not a new idea. People born before 6 April 1935 can still claim the income tax married couple’s allowance, which the previous Government abolished for everyone else from 2000, and marriage is already recognised in the tax system in inheritance tax and capital gains tax. I shall come back to inheritance tax a little later. Marriage is also recognised in the income tax system in most other developed countries, a point that has been made repeatedly this afternoon. In fact, the United Kingdom is the only G7 country not to recognise marriage in the income tax system in some form. Now we want to recognise it more widely in the UK income tax system. That formed part of the Conservative manifesto in 2010 and I am pleased that we have now introduced legislation for that policy.
Let me remind the Committee that that is not the only reason for the policy. It also provides a way of allowing lower income married couples and civil partners to feel more of the benefit from our increases to the personal allowance. As discussed in Committee yesterday, by 2015-16 our successive increases to the personal allowance will mean that a typical basic rate taxpayer will be more than £570 better off than under the previous Government’s plans. That could mean a tax cut of more than £1,000 for a couple, but that is the case only if both partners use all of their personal allowance. If one spouse is a low or non-earner, the couple will be able to benefit only from one personal allowance increase. Let me give an example. By April 2015, one couple with each spouse earning £15,000 will see more than £800 more benefit from the personal allowance increases this Parliament than a couple with one spouse earning £30,000 and the second earning nothing. The policy allows us to change that. It gives married couples and civil partners the opportunity to benefit from the £1,050 of the second unused personal allowance, and thus benefit from the increases to the personal allowance, providing further support to some households with a low or non-earner. That will help just over 4 million married couples and civil partnerships, with each couple gaining up to £210 a year.
Amendment 3, which was tabled by the Opposition, commits the Government to publishing a report on the impacts of the policy within six months of the Finance Bill receiving Royal Assent. I do not believe that such a report is necessary, as there are comprehensive arrangements to report on the impacts of Government policy. First, we have reported the impacts of the clause in the tax information and impact note, which was published on the Government website on 27 March. Secondly, as the Committee will know, the Government believe that the impacts of policies should be considered in the round. The Government regularly produce an analysis of the cumulative impact of changes on households across the whole income distribution. That analysis is published by the Treasury at every major fiscal event, and the analysis at autumn statement ’13 and at Budget ’14 will have included that policy. Thirdly, it is worth pointing out that the amendment requires a report on the impacts of the policy within six months of Royal Assent, but the policy will not be in effect then, so we will not have any additional information or data to analyse. For that reason alone, I hope that the Opposition will not press their amendment.
Let me deal in a little more detail with what the amendment would do. It requires a calculation of the proportion of married couples and civil partners eligible under the policy. We have said that we expect just over 4 million couples to benefit, which means that about 300,000 more couples are in a position to benefit than if we had just increased the personal allowance in line with the retail prices index, which was the approach taken by the previous Government. The 4 million couples who will benefit represent just over a third of married couples. The heart of the Opposition’s case seemed to be that two thirds of married couples will not gain from the policy, so what was the point of it? It is worth explaining how the policy is targeted. First, in 3 million couples, one or both partners are higher or additional-rate taxpayers. Some of them can benefit from the changes to the personal allowance, but if we had a policy that extended the transferable tax allowance to higher and additional rate taxpayers, the Opposition would complain that it was not well targeted and that it should be directed at low-earning households. I think that my hon. Friend the Member for East Worthing and Shoreham (Tim Loughton) made the point that the logic of the Opposition’s argument was that we should extend the policy. I know that he takes that view, but it would be rather strange for the Opposition to make that argument.
The second group that does not benefit is the 1.8 million couples in which both partners are non-taxpayers. It is worth pointing out that since 2010 about 350,000 couples have become non-taxpayers because we have taken them out of income tax. It is impossible to provide an income tax cut for people who do not pay income tax. The Opposition argue that what we should do instead is have a 10p rate of income tax, but a 10p rate would not help those married couples either.
Alison Seabeck
I have a genuine question for the Minister. Has his Department looked at the question of whether the change would stand up to a challenge in the European courts on the grounds that it is discriminatory?
Amendment of the Law
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Alison Seabeck (Plymouth, Moor View) (Lab)
The Chancellor talked about an economy that is now improving and I do not think anybody would be so churlish as not to acknowledge that there is some improvement, but he also suggested there is further pain to come and it is clear to everyone outside this place, if not to those on the Government Benches, which people and families are going to bear the brunt of the prolonged period of austerity. It will not be millionaires; it will be low-income families, who are not actually terribly impressed by the raising of the tax threshold when the overall cost of living increases are hitting them a great deal harder and when, for those who will be in receipt of the new universal credit, almost every penny will be clawed back.
Citizens Advice tellingly confirms that those earning around £100,000 will benefit more than those earning the minimum wage. What we need, and what was missing from the Budget, is positive news about infrastructure investment in our region, such as the building of homes that families and first-time buyers can afford to rent or purchase, and major projects such as the diversionary rail line to ensure that the region is resilient in severe weather events. I agree with the hon. Member for Somerton and Frome (Mr Heath) that expectation is elevated in the south-west about what the autumn statement might contain.
The Labour leader of Plymouth city council has made it clear that investment in new signalling to increase line speeds, new rolling stock and improved rail resilience would help to generate some 32,000 new homes and 42,000 new jobs in the south-west. That investment would bring work, taxes would roll into the Treasury, the south-west economy would benefit and large and small firms would feed into the procurement process, supporting all that growth.
Such investment would undoubtedly support the excellent work of our universities, which could without doubt do even more to support entrepreneurs. Plymouth university is working closely across local enterprise partnership boundaries in support of the work being done by Sir Andrew Witty to drive economic growth.
There were some positive measures in the Budget to help business. I welcome the support for exports, as I welcome the reduction in bingo tax, because it is something on which I have campaigned under both the previous Government and this Government. Devon air ambulance will be much better placed to continue to offer its life-saving service following the changes to VAT on fuel. There was no mention of the business rate change, which many small businesses in Plymouth would have liked to see. I have concerns about the pension proposal, given the history of mis-selling and given personal experience of someone who was persuaded, with expert advice, to take equity from their mortgage while they were seriously ill in such a way that after their death, their partner was left in a dire position. The quality of the advice offered is a serious matter. There is also the question of whether people can get advice on more than one occasion.
I was accused by the Pensions Minister, the hon. Member for Thornbury and Yate (Steve Webb), of being patronising because I dared to ask whether women of a certain age—roughly my age—would face disbenefits as a result of some of the pension changes. He failed to answer that question, and he also failed to offer to place the evidence, particularly that concerning women and the wider risk assessment, into the Library for hon. Members to see.
My colleague the Labour candidate for Plymouth, Sutton and Devonport, Luke Pollard, yesterday produced figures showing that in Plymouth the average family is about £1,800 a year worse off because prices are rising much faster than wages. When we consider that the average income in Plymouth is about £20,000, not the £100,000 mentioned by the Chancellor yesterday—he is clearly very out of touch if he thinks that that is an average wage—£1,800 is a huge loss. How is it fair that nurses in Derriford get only a £250 pay rise, while higher- rate taxpayers become significantly better off?
It is the same old Tories. I look back at my father’s election address from February 1974, in which he highlighted tax cuts for the rich paid for by price rises for the rest, rising house prices and rents, and the worst house building record since 1963. Of course, we are now facing the worst housing building situation since the 1920s. The attempts to rebrand the stalled Ebbsfleet development would be laughable if the problem were not so serious. Initially, the Minister without Portfolio, the right hon. Member for Welwyn Hatfield (Grant Shapps) talked about building 22,000 homes there, but we are now being promised only 15,000 homes on a site that has little inherent land value.
If the Chancellor is serious about ensuring that the economy continues to grow and does not falter, he must consider the measures proposed by my right hon. Friend the shadow Chancellor—
Budget Resolutions and Economic Situation
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Mr Bain
I am grateful for the hon. Gentleman’s intervention, but I recall—it clearly was not an illusion—the promises made by the Chancellor and the Prime Minister that the deficit would be cleared under their successful economic plan in five years of this Parliament. The Chancellor told us today that we had to wait an extra four years to achieve that. The illusion is that the Chancellor and the Prime Minister should ever think that they could clear the deficit, given the fiscal policies that they have followed since 2010 and all the harm that that has caused to living standards.
According to OBR forecasts in June 2010, we should have had growth of 9.1% between then and the end of last year, but we have seen less than half of that—a paltry 3.8%. The Budget, like its four predecessors, has failed properly to address the key factors driving the longest slump in real wages since the 1870s. First, there has been a failure by the banking system to provide liquidity to businesses on the scale required to boost growth in the real economy. Secondly, there has been extraordinarily weak business investment by the standards of previous recoveries. Thirdly, there has been poor export performance, with continuing balance of payments deficits, despite sterling having devalued by a quarter since 2008. Fourthly, there has been declining productivity in seven of the past nine quarters, and fifthly, connected to that, there has been a surge in under-employment, affecting more than 1 million people, who cannot get the hours at work they need to compensate for the collapse in wages in real terms.
The Budget should have begun the work of shaping an economy in which we permanently earn our way to higher living standards. Instead, ordinary people are forced to dip deeper into their savings to pay the bills, or depend on house price inflation, which is set to rise to 9% by next year, to fuel rises in consumer spending.
Alison Seabeck (Plymouth, Moor View) (Lab)
I apologise for arriving rather late for this debate. Does my hon. Friend share my concern that the figures used by the Chancellor to highlight what he described as a narrowing of inequalities were based around 2011, before all these dramatic changes, particularly to people’s benefits, had been made? I think that “disingenuous” is a permitted parliamentary word, so does he agree that that was disingenuous?
Mr Bain
My hon. Friend makes an important point, because there is no data available to the Government post-2012. To argue that the policies that they have followed over the whole four years have reduced inequality is not a fair comparison for the Chancellor to make.
Last year Britain had the fifth lowest level of investment as a proportion of GDP anywhere in the EU. Between 2010 and 2012, business investment was a meagre 3.7%, compared with the nearly 20% forecast by the OBR in June 2010. While investment lags at nearly a fifth below pre-crisis levels, by contrast, surpluses accumulated by large corporations are up by a staggering 7% over that period. The Government have failed to get investment into the real economy to promote the kinds of jobs that are needed to increase living standards.
It is also worth touching on the OBR’s verdict at this stage in the debate. The Chancellor said that the Budget would rebalance the economy, but the OBR says that net trade will contribute nothing to growth over the next five years. Our export share is to fall in each successive year to 2018. Despite the Chancellor’s welcome doubling of the investment allowance today, the OBR has said that that will not raise levels of investment in the economy and will have a negligible impact on growth. It is a damning verdict on the entirety of the Chancellor’s Budget.
The Budget should have begun to meet the challenge of the changes we need to see in the banks to make them serve society, not the other way around—a challenge left unmet by the Chancellor today. It contains no plans to create a further two challenger banks to break the monopoly of existing players in the retail banking sector; no intention to create a proper infrastructure bank to boost finance to businesses engaged in large capital investment projects; and no plans to create a system of regional lending banks to supply credit on a long-term basis to viable small companies in the way that the Sparkassen have done to great effect, in good times and in bad, in the post-war era in Germany.
Today’s Budget fails the test of fairness on many counts. We know that one of the biggest causes of the rise in family incomes over the past four decades has been the rising employment rate among women. Key to that is increasing the supply of affordable child care. The Budget does nothing to increase the supply of child care places. According to the Family and Childcare Trust, the costs of a nursery place for 25 hours a week for a child under the age of two has risen in Scotland by 26% since 2010, and for a child over the age of two it has risen by 31%. Where were the policies today to increase the supply of child care places? They were entirely absent from the Chancellor’s speech. Most of the benefits of the tax relief he proposed will go to couples in the top half of the income scale, while families with average incomes, such as those in my constituency, will get less than £10 extra a week. Barriers to work will remain for many women, and the long-term potential for economic growth and higher living standards will be left unrealised by the Budget.
The Budget also fails the tests of increasing supply in new housing and beginning the task of rebalancing our jobs market by creating new construction jobs to replace the 214,000 that have been lost during the downturn. It fails the test of justice for our young people by not having a jobs guarantee to remove the scourge of long-term unemployment. I met a young constituent in Stobhill in my constituency last Saturday night. His whole family—parents and grandparents—told me of the hurt they felt about his 18-month search for a job, which has been in vain. It is a moral scourge that affects not only the young person involved, but their family and the wider community. In my constituency there are 179 other young people like him, and there are tens of thousands more across the country. The Budget fails to improve work incentives for the lowest paid by reintroducing a 10p starting rate of tax. It fails to reveal how the Chancellor will make good his promise to reach a minimum wage of £7 an hour for the working poor by next October.
In conclusion, this should have been a Budget that reduced inequality, invested in new child care places, invested in science and innovation, dealt with our rising skills gap and reshaped our jobs market. It is clear that if Britain wants such a Budget, it cannot come from this coalition; it can come only from a change of Government, which is long overdue and set for next May.
Oral Answers to Questions
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Mr Osborne
I was in Pudsey the other day seeing a very successful manufacturing business near to my hon. Friend’s constituency. What was interesting was that that business is now exporting to China, which is a total reversal of what we have seen in the textile trade over the last few decades. I am very willing to come and see my hon. Friend and perhaps taste some of that delicious black pudding that the Spanish are buying.
Alison Seabeck (Plymouth, Moor View) (Lab)
Thousands of small businesses are often unaware that they are sitting on a bit of a time-bomb: embedded swaps sitting within personal loans, often sold to them without their knowledge. What will the Chancellor do to bring that back into the Financial Conduct Authority review to ensure that these swaps, which are currently not subject to any regulation, are regulated?
Mr Osborne
The FCA is looking at the whole issue of swaps and how they were sold to small businesses, and clearly, considerable sums of compensation are going to be paid. I will look at the specific point that the hon. Lady makes. If she believes that there is a group that are not currently included that should be included in that work, I will take a close look at it personally and get back to her.
Pub Companies
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Toby Perkins
My hon. Friend’s intervention gives me an excellent opportunity to put on record my gratitude—and that of the whole House and the wider coalition supporting the reform—for his work as Chairman of the Select Committee, which has led the way on this issue. I entirely agree that it is odd that, with such a large body of opinion in favour of the reform, it has been so difficult for the Government to support the recommendation that the previous Government were behind and that this Government said in 2011 that they would support.
Alison Seabeck (Plymouth, Moor View) (Lab)
Many people outside the House are clearly taking a great deal of interest in this debate. We have a lot of independent brewers in the south-west, and some fantastic beers are sold in the local pubs. Many publicans there have raised the issue of the way rents are passed on with little independent assessment. Is my hon. Friend going to say something about that?
Toby Perkins
My hon. Friend has successfully predicted what I am going to say. I will definitely touch on that issue, because it is one of the key elements of the debate.
I also want to take this opportunity to reflect on some of the other contributions that have been made in the run-up to the debate by Members trying to support pubs in their area. The hon. Member for Leeds North West (Greg Mulholland) has been a determined campaigner on this issue. Among his many valuable contributions to the campaign, his article in the Yorkshire Post on 10 May was on message enough for the Liberal Democrat press office to promote it with the message that
“pubco terms are the biggest reason for pub closures”.
That was his view in May 2013, as I know it remains. Now, eight months later, I am disappointed to see that he has signed the amendment proposing that the Government need more time to come to the conclusion he has so consistently and persuasively argued for.
Alison Seabeck (Plymouth, Moor View) (Lab)
It is interesting for me to follow the hon. Member for Tewkesbury (Mr Robertson), who broadened the debate, yet also provided some technical detail. I am sure that both Front-Bench teams will be interested to consider what he said. There has been broad agreement on this issue. What I think frustrates publicans and people who use pubs the most is the fact that, despite that broad agreement, nothing seems to be happening.
The Secretary of State, who is not in his place, listed all manner of surveys, while my hon. Friend the Member for West Bromwich West (Mr Bailey) talked about the detailed work done by the BIS Select Committee over a number of years. Apart from the hon. Member for Leeds North West (Greg Mulholland), very few Members have that level of detailed knowledge of the history and nature of the problem. The House is privileged to have both those Members contributing to the debate.
Pubs are struggling. As we have heard, many have diversified and are successfully running restaurants, for example. I called into a pub somewhere off the A303 and found that an opera evening was going on, apparently with great success. This and other specialist events are all designed to bring the punters into the pub, and provide a good all-round pub experience. Of course, when pubs are well run—and most are—they provide an opportunity for people to drink responsibly. Some Members touched on concerns about alcohol abuse, with some people just boozing at home. We should encourage people to go and drink sensibly in a pub with a responsible landlord, and we want a thriving network of pubs around the country.
Members have voiced concerns about the level of advice and training of the people who work in and run pubs. The hon. Member for East Hampshire (Damian Hinds) made a good point about that, and it is worth looking at as part of the wider process of change.
I find it extraordinary that the Government and the industry have failed to act on the popular demand for change. The case made by the Fair Deal for Your Local Campaign, the Campaign for Real Ale and its members, the Federation of Small Businesses, the GMB and others is an extremely sound one. My hon. Friend the Member for Chesterfield (Toby Perkins) cited the outcome of consultations, returning resounding support for change, with 96% in favour of the main question and 92% in favour of independent rent reviews. From my experience, Governments seldom issue consultations without having a ballpark idea of the answers they are likely to get. I therefore find it almost inexplicable that, despite receiving full and rounded responses on the subject, the Government are still prevaricating. It is extremely disappointing.
We have some fantastic pubs in Plymouth and the south-west, but in other parts of the country, pubs are struggling and closing. We had some recent closures in Plymouth. My local pub, The Ferry House Inn, is diversifying. It serves fabulous food, and it is surviving, which is great. Other publicans across the city, however, are earning little more than the minimum wage. They sometimes work 364 or 365 days a year, and I think it takes a special type of person to take on the challenge of running a pub. The hon. Member for Leeds North West made it very clear that the tie is a distorting influence, in that tenants can no longer get lower rent in return for higher beer prices.
Andrew Griffiths
The hon. Lady says that the tie is distorting. I point her to the Office of Fair Trading investigation, which clearly said that the tie does not distort and that it is not anti-competitive in any way.
Alison Seabeck
The hon. Gentleman raises an interesting point, and it would be interesting to hear what the Secretary of State says in response to that finding, which, to be honest, many Members find rather odd.
My hon. Friend the Member for Chesterfield highlighted other areas of business where there is a relationship similar to the one that exists between the pubs and the companies, but where things are much more open and fairer. Clearly, we need to get pubs put on to that type of footing. This motion encourages a move away from the current position. All hon. Members who enjoy visiting their local pub and drinking a good ale or beer should think carefully and support the motion.
With pubs struggling for a range of different reasons, we need to do something about it. We need to introduce independent rent reviews to stop this double rent charging, to put in place the mandatory free-of-tie option and to set up an independent adjudicator, which would make a massive difference. The Government keep telling us that they are not kicking this issue into the long grass—I have lost count of the number of times that has been said—and that everything is being handled in a timely manner. Timely for whom? The Government should tell that to the 26 pubs that are about to close. They are not acting in a timely fashion. How many pubs will have to go to the wall before we finally get legislation? Let us face it: at the moment, the legislative programme is virtually non-existent, and there is no excuse for the Government not to bring legislation forward. I urge the Secretary of State to get his finger out and do something about it.
Jenny Willott
Thank you, Madam Deputy Speaker. I completely agree; I have to say similar things to my children when they are bickering, as some Members appear to be today.
The two core principles at the heart of the code are fundamental. As the consultation made clear, there is a problem in the relationship between pub-owning companies and their tenants, and that was backed up by pretty much every Member who has spoken today.
Alison Seabeck
On the consultation and the Government’s work on the adjudicator role, have the Government come up with a figure for the cost of that adjudicator? That question was asked by Government Members.
Jenny Willott
As the hon. Lady will know, we are evaluating the responses and we will publish our response as soon as we can. That will give much more information about what we propose to do and the costs and impacts of those proposals.