HMRC Office Closures
Alison Thewliss Excerpts(8 years, 8 months ago)
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Rob Marris
I agree, and I will come on to that in a moment. We have to look at the debate, and at what is happening with HMRC, in the context of the economy overall and the Government’s finances. In the past five years, national debt has gone up 55%. Instead of it taking five years to sort out the deficit, the Government’s own estimates say it will take 10 years. GDP per capita has stalled. The balance of payments deficit is at the highest it has been in peacetime, at 5% of GDP. Productivity has stalled. Home ownership is markedly down. It is now said that we have the fourth lowest rate of home ownership of any European Union member state. Correspondingly, net household debt is rising alarmingly. That is the economic context; we need to protect revenue.
There are problems, of course: the tax gap, to which I referred; an insufficient number of collectors; and an insufficient number of staff dealing with evasion and artificial avoidance measures. There is the difficulty—created, I have to say, by the previous Labour Government —of the disastrous contract with Mapeley, which is based, I think, in the Bahamas. The ownership of the leases of HMRC offices was transferred to Mapeley in 2001. As far as I am aware, the proposals we heard on 12 November do not address that issue in any way, except to say that we are dumping all the offices. Nothing has been said about what will happen to the leases and so on. Perhaps the Minister, in closing, could tell us a bit more about the intersection between the plans and the wretched leases with the wretched Mapeley.
Staff numbers are markedly down in recent years. According to the Office for National Statistics, between 2007 and 2010, under the previous Labour Government, the number of HMRC staff went down 9%. Under the five years of the coalition Government it went down a further 24.4%—a cumulative drop of 31.4%.
Alison Thewliss (Glasgow Central) (SNP)
The hon. Gentleman may have been contacted by local trade union representatives in his area. The Public and Commercial Services Union came to see me. It understands that HMRC is currently spending in the region of £70 million on overtime. Does he agree that that indicates that HMRC needs more, and not fewer, staff?
Rob Marris
I agree. There are problems with the workforce, to which several hon. Members have referred. The chief executive of HMRC wrote to me on 12 November, saying:
“We expect that 90% of our current workforce will be able to either work in a regional centre or see out their career in an HMRC office.”
That says to me that the chief executive of HMRC reckons 10% will either not transfer or will be made redundant. That is worrying.
Reference has been made this afternoon to response times. In the first two quarters of 2015, 12 million calls went unanswered—half of all calls to HMRC. Only 39% of calls were answered within five minutes. In the third quarter of this year, after an infusion of staff, the rate of answered calls went up to 76%. That is a great improvement—except that the target is 80%, and in 2014-15 the answer rate was 72.5%. I have to say to the Government, and particularly to the Chancellor of the Exchequer, who has a family business, that this is the worst of statism. If HMRC were a business, it would have gone bust with that appalling customer service, but because none of us has any choice but to pay taxes, it remains in business. It should not do so. It certainly needs transforming, but cutting the number of staff does not seem to me, or my party, the way to do it.
On anti-money laundering, London is thankfully a major world financial centre, but we have a huge problem with the regime set up to deal with money laundering and to counteract it. The average HMRC fine in 2014-15 for money laundering was £1,134, according to Transparency International, which I thank. That seems a remarkably low figure, although it is not helped by the fact that 14 different regulators are involved in accountancy. If that is not sorted out, HMRC staff cannot do their job properly in relation to anti-money laundering, let alone tax evasion.
As has been said, since June 2014, HMRC has not had any face-to-face walk-in centres. There are a few teams of mobile advisers—a man in a white van dashing around Northern Ireland or northern Scotland, up to Caithness or wherever—for those who desperately need a face-to-face interview, but that is a very unsatisfactory state of affairs, and not one that encourages the taxpayer to feel confident that they are getting the service they should from HMRC. It is extremely worrying that the number of offices is being reduced from 170 to 13.
Welfare Reform and Work Bill
Alison Thewliss Excerpts(8 years, 8 months ago)
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Hannah Bardell (Livingston) (SNP)
I welcome my hon. Friend the Member for Airdrie and Shotts (Neil Gray) to his position as I move across to the business brief. From his speech earlier, I am sure the social justice team has a very talented member.
I shall speak to amendments in this group tabled by my colleagues, particularly amendments 53, 54 and 55, which clearly state the SNP’s opposition to the Government’s two-child policy. The SNP wholeheartedly condemns the Tory Government’s intention to restrict tax credits to two children, which by definition excludes many of the poorest children in society from our social security system, going against the very principles for which it was set up. The Government’s proposals also stray into an area of policy making that I never thought I would see suggested by any Government who had a shred of compassion for their people. Hidden away in the Red Book were the words:
“The Department for Work and Pensions and HMRC will develop protections for women who have a third child as the result of rape, or other exceptional circumstances.”
No detail was provided. How much disrespect can this country take?
Alison Thewliss (Glasgow Central) (SNP)
Does my hon. Friend agree that it is appalling not only that that appeared in the Budget statement, but that during the consideration of the Bill there has been no explanation of how that will work in practice?
Hannah Bardell
I could not agree more. The two- child policy will hit more than 872,000 families who receive support for third and subsequent children. The Government’s own national child poverty strategy recognises that the risk of poverty is much more significant in larger families than in smaller ones. Currently a third of children living in poverty live in families with three or more children. Perhaps that is why the Tory Government seek to airbrush child poverty from the statute books.
It is easy for this Tory Government to espouse theories and claim that reducing financial support to just two children will make poorer families rethink their “financial choices”. That is based on the falsehood that all children are planned and that it is possible to financially plan for children. I am sure we are aware that that is not the case. What if a second pregnancy turns out to be twins or even triplets? What about the many families who are supported or led by kinship carers? Perhaps the Tories need a biology lesson, or a simple lesson in humanity.
Such eventualities cannot be planned for, so are we telling families across these nations to stop having children, just in case? I have raised many times in Committee, and many of my colleagues have raised on the Floor of the House, the sensitive issue of children resulting from rape and the insensitive Government plan to make women justify their children in front of DWP caseworkers. Many domestic abuse charities have expressed grave concerns, and Rape Crisis Scotland has warned that the plan is “inherently unworkable”. It has asked how DWP workers will prove whether someone has or has not been raped, and said that many women would find explaining that situation extremely uncomfortable. Many women do not report to the police that they have been raped, or go years without reporting it or speaking about it, so they cannot be expected to explain it to a DWP worker.
What training will a DWP worker have to deal with rape victims? It is clear that this is an unrealistic, ill thought out and unhelpful proposal. In evidence before the Select Committee on Work and Pensions, stakeholders described it as “unpalatable”, and the hon. and learned Member for Holborn and St Pancras (Keir Starmer) wrote in The Guardian recently:
“A rape test for welfare is a chilling way to save money”.
I could not agree more. It just goes to show that at the height of the Tories’ insensitivity, they will quite literally leave no vulnerable group untouched in their scramble to, as they put it, balance the books. The policy will ultimately result in a complete abuse of rape victims’ privacy, leading to potentially serious emotional damage for children should they become aware that they are a child resulting from a rape. The SNP amendments would see the policy abolished, and we urge the Government to remove the two-child policy from tax credit and universal credit to ensure that no victim or child goes through the torment associated with having to justify a third child due to such an horrific crime being inflicted—
Finance Bill
Alison Thewliss Excerpts(8 years, 8 months ago)
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Mrs Main
The Minister may well explain that to the hon. Gentleman, but I personally do not want to have to go cap in hand asking for derogations. I would like this country to decide that it is a ridiculous illogicality to have different tax rates on similar-looking pads that could be used for interchangeable purposes. I would not wish to have to go and ask, “Please, European Union, can you allow us to do what we would like to do, which is to free up our women from this taxation that only affects them: a femi-tax?” I would like us to have the ability to do it.
I hope that the Minister will explain to all hon. Members here and to all the women out there in the country why, if they go and buy a mild incontinence, bladder weakness or “Oops moment” pad—call it what you like—and use it as a sanitary towel, they will not be taxed, because they do not understand it, and nor do I. It is time that we stood up to the European Union. If it does not like us doing that and having to ask, “Please can we have permission for a derogation?” then perhaps we need to consider this matter when we are deciding whether we wish to stay in the European Union.
Alison Thewliss (Glasgow Central) (SNP)
Members may have seen the images circulating on the internet of groups of world leaders with the men photoshopped out, where Angela Merkel and Hillary Clinton cut lonely figures. A version has even been done of the House of Commons. I imagine that some of these Benches would look pretty bare this evening if we took away the men.
That is a stark reminder that despite much progress, we still have a long way to go before gender equality is realised. That is desirable not just for its own sake but because without women the issues that disproportionately affect women do not get resolved. VAT on essential women’s sanitary products is one such issue: it affects only women. I dare say that if it did affect men, it would have been resolved long before now. Every month when I purchase a box of tampons or towels, the Chancellor benefits. Women, on average, begin menstruating at age 12 and continue until age 52. That represents a significant sum of money spent by every woman in the country over their lifetime. This seems particularly unfair for younger women who may not even be old enough to work. That is why our new clause mentions women under 25, who will most likely be in lower-paid jobs or not yet working at all.
I do not know of any woman who exclaims on a monthly basis, “I have my period—what a luxury!” For women, these items are not treats, and they are certainly not optional. Any number of female colleagues here today may have their period and nobody knows, and that is quite right. But people would certainly know all about it if, like the brave London marathon runner, Kiran Gandi, we came into this House deliberately forgoing sanitary protection. That is no doubt an uncomfortable prospect for male Members of this House, but I would say, “Good. I did not come here today, or any day, to make you feel comfortable but to challenge any status quo that I feel is unjust, and I am not done yet.”
I want to highlight the particular case of maternity pads. As the hon. Member for St Albans (Mrs Main) said, it is illogical that incontinence pads are zero rated but maternity pads are not. Such pads are essential for women who have just had a baby; they are absolutely essential for post-birth lochia for up to 10 days after birth. I do not understand why these items are not treated as medical items and similarly zero rated.
Sir William Cash
Can the hon. Lady explain—I am genuinely curious—whether these matters have been raised in the Scottish Parliament and what is the attitude of the Scottish Government?
Alison Thewliss
As I suspect the hon. Gentleman well knows, the Scottish Parliament does not have jurisdiction over this matter, but the SNP feels sufficiently strongly about it that we put it in our party manifesto for this place, and the First Minister has been vocal in speaking out in support of zero rating for sanitary products. We would very much like this to happen, and we will give any support that we can in the Scottish Parliament as well as from our Benches here.
This issue has been very protracted over many years, and this House cannot resolve it alone, but we can make a start. VAT has already been reduced by a previous Labour Government, and we have a good deal of cross-party support here tonight. I think that we can do much better than the Prime Minister, who, during the election campaign, described this as a “difficult” issue and said that he “can’t remember the answer”. The answer, of course, is that we can take a lead on this. In June 2015, the European Commission, which is yet to have a female President—perhaps that would make a difference on such issues—gave an answer that was not entirely positive. It set out the background to its reasons why this cannot be done, but it also said:
“As part of its upcoming work on a definitive VAT regime based on the destination principle, the Commission will assess the functioning and possible improvements to the system of reduced rates.”
So we have an opportunity to get involved in this debate to say that this is an important issue for us as a nation and for women across Europe.
We have an opportunity and an obligation to try again to resolve this issue. Members may not know this, but the Republic of Ireland entered the European Union at the time of a 0% rating on sanitary products that it was able to retain in much the same way as we have derogations in different areas, so there is already a precedent within the EU of a zero rating in a European member state. I urge the Government to take a lead on this for women across these islands and across the EU. Let us end this bloody unfairness.
Mr Bernard Jenkin (Harwich and North Essex) (Con)
This debate is like history coming back to me, because not only does the hon. Member for Glasgow Central (Alison Thewliss) now represent the constituency that I stood for in 1987, but I was first made aware of this issue by the hon. Member for Walthamstow (Stella Creasy), who, when she was an A-level student in my constituency, berated me for the inequality of this tax. Ever since, I have been convinced that it is an unjust tax. Indeed, on that occasion I raised the matter in the shadow Cabinet, which was then under the leadership of William Hague. I got a very frosty and uncomfortable reception for raising such a matter in a semi-public meeting, including from some of our right hon. and hon. Friends who are female and hold extremely senior positions in Government to this day.
That demonstrates an important point about how attitudes change. Whatever we might have agreed to in our original agreements with the European Union that lock this tax in place, albeit reduced by the previous Labour Government to the minimum of 5%—I celebrate that—we are now, within the European Union, operating in a system based on a different principle—the principle that taxes should be harmonised as part of the single market. I refer the House to article 113 of the treaty on the functioning of the European Union, which says:
“The Council shall, acting unanimously…adopt provisions for the harmonisation of legislation concerning turnover taxes, excise duties and other forms of indirect taxation to the extent that such harmonisation is necessary to ensure the establishment and the functioning of the internal market and to avoid distortion of competition.”
So taxation has crept into the idea of being part of the single market. At the point at which this country signed up to the Common Market, or even at the stage of the Single European Act or of the Maastricht treaty, this principle crept into the acquis communautaire of the European Union rather than being something that was expressly agreed by this House.
I very much hope that the Government will negotiate something fundamental on this particular tax, and I am looking forward to what the Minister has to say about it. However, I make no apology for raising the far more general principle that different taxation regimes in different countries represent different social settlements and the development of our societies in different ways at different paces. That is why we are separate nations and separate peoples with separate democracies.
The attempt to use the pretext of the single market to harmonise taxes is one of the most democratically regressive manoeuvres the European Union could adopt. France puts VAT on food and children’s clothes, but this country would not put VAT on such items. Ever since we adopted the cheap food policy following the abolition of the corn laws in the 1840s, that has been part of the fabric of our social settlement. It is the right of an individual nation state to continue to evolve its social settlement, and the conduct of Government and the imposition of taxes are inseparable from that democratic social settlement.
The treaties as currently formulated are a denial of national democracy. This House should not have to go and beg 27 other member states in order to change a rate of tax on an issue that we think is socially important. This is a matter of national democracy, and that is why the treaties are unfit for purpose.
Craig Mackinlay
My sincere apologies, Madam Deputy. [Interruption.] You have taken me way off track now.
In conclusion, the hon. Member for Glasgow Central made an appeal earlier for a message or plea to come from this place to the European Union. I think we have heard that from many Labour Members, too. I am afraid this goes back to the very old times of taxation without representation. Messages are all very well, but surely this sovereign place should be able to choose to set the rate of sales tax or VAT on products such as tampons and sanitary towels. I am afraid that it rather reduces the status of this House to one of being a colony of old, pleading with an empire power.
Alison Thewliss
The Prime Minister has been traipsing around Europe of late begging and pleading with European leaders all around the place. Would it not perhaps have been useful for him to have raised this issue then and saved himself another visit?
Craig Mackinlay
I certainly hope his visits around various European capitals have an awful lot on their agenda. Following today’s debate, I hope this issue will be one such item. The issue is one of exclusivity in setting VAT rates on products important to us in this place, not elsewhere.
Finance Bill (First sitting)
Alison Thewliss Excerpts(8 years, 10 months ago)
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Roger Mullin
Dare I agree? Back to a slightly less humorous point. When we had eight police forces in Scotland, some of them were very small, and at times that created difficulty in co-ordination on cross-border issues with forces south of the border. One benefit is that we now get much greater co-ordination of police forces across the United Kingdom. Terrorism and cross-border co-ordination are two serious areas where the police service is delivering benefits not for merely the people in Scotland, but for the people of the whole United Kingdom.
It seems strange, therefore, that the Government of the United Kingdom has continued to deny every overture made by the Scottish Government for VAT relief. My colleagues in Edinburgh inform me that no fewer than five letters from Scottish Ministers have been sent to the UK Government: two from the Justice Secretary, two from the Deputy First Minister and one from the Minister for Community Safety. There has also been: a letter from the cross-party Convenor of the Scottish Parliament’s Finance Committee to HM Treasury; eight letters from Scottish Government officials; and six meetings or conference calls in which the Scottish Government have sought to have our police and fire and rescue services treated in the same manner as all other forces in the United Kingdom.
We are not asking for something completely unusual or out of order. Since the amalgamations took place, the new transport agency, Highways England, has been granted VAT exemptions, so there is precedent. It is matter of common justice that this should be looked at. In new clause 1, we ask the Government to produce a report and lay it before the House to examine in greater detail some of the problems that arise because the police and fire and rescue services cannot reclaim VAT.
Alison Thewliss (Glasgow Central) (SNP)
It is a pleasure to serve under your chairmanship, Sir Roger. I welcome the support of the hon. Member for Worsley and Eccles South for new clause 3, and I saw the Economic Secretary to the Treasury nodding as well. I therefore hope to get some support on this issue.
My concern with the VAT lock as presented is that it is very restrictive. Our new clause would leave a window open to resolve the injustice of VAT being levied on sanitary products. This injustice has long needed to be corrected and, as a female MP, I feel obligated to use this opportunity to raise the issue. My hon. Friend the Member for Glasgow North East (Anne McLaughlin) informed me that she campaigned on this issue in the 1980s, so it is a long-running one. The fact that it has not yet been resolved is quite disappointing and perhaps reflects a lack of willpower from the men who hold the purse strings in many of these cases. This is perhaps the chance for the Minister to make a difference. In the past, we have seen Jaffa Cakes and Tunnock’s teacakes go to the courts to fight for their zero ratings, and I seek the support of all Committee members to allow leeway for further consideration of this issue.
There seem to be a lot of inconsistencies in the application of the rating. As no one can fully control the manner in which sanitary products are required, it is a bit odd and incongruous that we do not treat them as we do other exempted items, such as medical incontinence pads and babies’ nappies, which I understand are both zero-rated. There is a recognition that those products do not fall under the full rate. Sanitary products are taxed at the 5% rate, but they are not, as the hon. Member for Worsley and Eccles South said, optional or luxury items. I certainly know of no woman who would exclaim, “Wow! I had my period—what a luxury!” We need a recognition that these are essential items that are very much required in households across the country. Indeed, if we were to go without these products, we would see public indignation, as there was when Kiran Gandi ran the London marathon in April without any protection, as a means of protest about the issue.
Another concern for me is that sanitary protection for women who have just given birth is not exempted from VAT. It is charged at 5%, despite being an absolute essential for women who have just had a child and being used for up to six weeks afterwards. These are medical products, in my view, and should also be exempted. We cannot do without them, and it would be both unsanitary and dangerous for our own health and that of our families if we were to go without them. We need a recognition that women across the country use these products. There is no recognition that they are essential items, and a zero rating would go some way to addressing that.
It has been mentioned that this is a European Union issue. My understanding is that Ireland has an exemption for these products, which is something we should look at. It would be useful if the Government were to take a stance on this, push it and send a message out to the rest of the European Union and women right across it, who would see a benefit if this went to the EU for further discussion.
What we are proposing today leaves a window open. I appreciate that we cannot ask for a particular change to be made, but it would leave the window open for negotiation, for further study and for a report, in order, I hope, for the issue to finally be resolved after many decades of campaigning.
Mr Gauke
There are a number of ways in which the European Union and the rules that apply within it could be improved. A strong case is made from all parts of the House that greater flexibility in this context would be helpful, but the point I would make is that we see little indication that other member states, which by and large have higher rates—the average rate is 17%—share that objective. If there is a general move, we would support that.
Other than when an accession country joins the EU and negotiates a zero rate, there is no particular indication that the Commission or member states as a whole are prepared to introduce new zero rates. Indeed, quite a lot of the advice coming from organisations such as the OECD and the general position that the Commission takes tend to be against that, so I do not want to underestimate the difficulties.
Alison Thewliss
I thank the Minister for giving way, and I am glad he was able to make that correction, because I checked whether Ireland had a zero rate this morning on the Irish Tax and Customs website. I appreciate what he is saying about things being difficult, but this is about promoting what is correct and right. I seek an assurance that he will lead on this issue. Changes could and should be made in this instance to correct a long-standing injustice, and I would like to hear a wee bit more about the Government’s ability to do that.
Mr Gauke
I come back to the point that we are not stating that we do not see the case the hon. Lady is making, but that we should not underestimate the resistance to the introduction of zero rates. The UK already has zero rates to a greater extent than most if not all other member states. As I said, zero rates have been possible only on accession, which is why the Republic of Ireland has a zero rate. There is a reason why the Labour Government introduced a 5% rate, not a zero rate. We are supportive and we would like the rate to be as low as possible, but without wider EU reform and greater flexibility in this area—other member states have other priorities—it will be a challenge. I do not dismiss the issue: were we able to progress further, I would be sympathetic, but we should bear in mind the task ahead of us.
With those remarks, I hope that new clause 3 will not be moved when it comes to it, however much I sympathise with the intentions behind it.
Question put and agreed to.
Clause 2 accordingly ordered to stand part of the Bill.
Ordered, That further consideration be now adjourned. —(Mel Stride.)
Finance Bill
Alison Thewliss Excerpts(9 years ago)
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Mike Wood
I am not sure that that intervention was necessarily directed at me. I agree with much of the sentiment behind it, but we have to be firm in the need to continue with reform while, as my hon. Friend says, being aware of the impact it will have. I am sure, like other hon. Members, he will have his attention drawn to that impact very regularly through his mailbox.
The consequences of the complexity of that welfare system did not help the millions who were trapped within the system, with little hope or opportunity to escape and to progress. It is important that the Government’s reforms continue to support people into work, but it is just as important to make sure that it pays to be in work. The Finance Bill moves the Government another step closer to achieving that goal. Securing our finances and ensuring welfare reform are essential to our long-term economic plan. Enormous progress has been made in the past year and in the past five years. We can see the evidence in our communities and in the employment statistics. There are more than 250,000 more people in work in the past year alone and nearly 2 million more in work over the past five years. The economy is continuing to recover and job creation is booming, which is why the measures in the Bill to secure that recovery are so important.
In my constituency of Dudley South, the claimant count has fallen by 29% in the past year, with 584 fewer people out of work and claiming benefits. Across the west midlands overall, the unemployment rate has fallen more than in any other UK region. This is not just a recovery for London and the south-east. The Government’s long-term economic plan offers the best strategy to ensure that that continues. They have shown that they have the courage to take the difficult decisions needed, and to put the measures in place to support working people. The measures we have already discussed go hand in hand with tax cuts for working people: the increases in the personal allowances rising even further than announced in the April Budget, alongside the new national living wage. A new, higher guaranteed wage will mean an immediate pay rise for 2.5 million people.
Alison Thewliss (Glasgow Central) (SNP)
Does the hon. Gentleman consider it fair that people under 25 will not see the benefit of that pay rise? The differential between those earning this wage at the 16 and 17-year-old rate and at the 25-year-old rate has now expanded significantly and could have a detrimental effect on their ability to live their lives.
Mike Wood
The hon. Lady raises a good point, but she should recognise that while the national living wage will be mandatory only for the over-25s, that does not mean that businesses should not pay young—[Interruption.] When the national minimum wage was introduced, there was a lot of controversy regarding the under-21 rates. The evidence, however, did not back up the idea that employers who were paying the national minimum wage rate for the over-21s were necessarily paying the under-21 rate for 18 to 20-year-olds. I would certainly hope that responsible employers invest in and value their workforce, and pay them accordingly.
The introduction of the national living wage will mean that a full-time person in Dudley South will earn an additional £5,000 in wages during this Parliament alone. The living wage will provide my constituents with the financial security of being able to enjoy higher earnings and a bigger wage packet. The message is loud and clear: the Government want people and businesses to succeed, but while we want the regulation of business to be as low as possible, there is a responsibility on employers, as part of that social contract, not to expect taxpayers to subsidise low wages.
The Government were elected in May because of the prospectus we presented to the electorate, which focused on the future. The Bill continues the strategy that will deliver a more prosperous and more successful future. Only by continuing to focus on our businesses, our apprentices, our jobs and our industries can we deliver for Britain. That is what the Budget set out and what the Bill will achieve. The summer Budget and the Finance Bill build on the success of the past five years to secure a better future for Britain and for our constituents.
Budget Resolutions and Economic Situation
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Alison Thewliss (Glasgow Central) (SNP)
It is a dubious honour to be called to speak in this Budget debate—not because I am not keen to speak on behalf of my party and my constituents, but because so many things about it still upset me deeply. I raised the issue last week, but I have yet to receive an answer on the provision set out at the top of page 88 of the Red Book. Specifically, what kind of system will the Department for Work and Pensions and Her Majesty’s Revenue and Customs introduce to ask women who have been raped to prove it in order to qualify for child tax credits? I still seek clarification on that appalling clause, and I hope that the Secretary of State will eventually be able to give it. I know how hard my constituents and people across these islands will be hit by the Budget. I stand here on behalf of my party to do my best to represent them and fight their corner today. I will speak first about the impact on communities, and then I will discuss investment and city deals.
The Secretary of State for Work and Pensions once claimed he could live on £53 a week. I am not clear whether he tried, but I know that more than 480,000 people signed a petition asking him to do so. As Members of this House, we are comfortably off. Even if we were suddenly to lose our jobs, as so many hon. Members’ colleagues in Scotland did in May, I suspect that none of us would starve. That is not the daily reality of life for many people across the United Kingdom today. Even when people are in employment, they do not earn enough to live more than hand to mouth. We in this House do not have the right to pull up the ladder and leave them behind. Let us be in no doubt—this is not because our lowest-paid do not work hard enough. Many work extraordinarily hard for long hours doing difficult, dirty and dangerous work. They need our support and they need our respect. Most of all, they need fair pay— a real living wage, not some hastily badged imitation—and access to Government support mechanisms such as tax credits to help them live with dignity. This Government should apologise to the Living Wage Foundation for stealing the campaign it has worked so hard to build.
I was glad to hear of the shadow Secretary of State’s conversion, because an Opposition who oppose opposing are no good at all. I urge all Labour Members to remember the toil of many people in our country struggling to make ends meet when they consider backing the Tories’ Budget. Those people elected Labour Members to stand up for them, not for the Secretary of State.
This Tory Budget has been assessed by groups such as the Fawcett Society as being disproportionately hard on women. The Fawcett Society considers that this Budget gives with one hand and takes away with two, stating:
“Women are going to be pushed further into a poverty trap following a Budget that offers little to help them increase their income…We fear that many more will find themselves in a low benefit, low wage situation that is increasingly difficult to escape.”
The House of Commons Library says that, since 2010, 85% of the £26 billion-worth of cuts made to benefits, tax credits, pay and pensions has been taken from women’s incomes. That is unacceptable. I ask all feminists in this House to consider it very carefully.
The communities I know best are resilient. They look out for one another and make sure their neighbours are okay. They collect for food banks. They donate what little they have to ensure that their vulnerable neighbours are looked after. The sharp increase in food banks in this country is a stark example of a community response to crisis. Visits to food banks increased from 25,899 in 2008-09 to 1,084,604 in 2014-15, according to the Trussell Trust’s figures. This speaks to a crisis in our policies in this nation and a very human response by ordinary people to that crisis. We should not have a requirement for food banks in a wealthy nation such as ours. Being ahead in our GDP and our status is not important when people are starving.
What shocks me most is the role of our social security system in forcing people to use food banks. The Trussell Trust’s figures show that just shy of 30% of people are using food banks because of benefit delays: families cannot feed themselves because of an administrative problem. That is absolutely unacceptable and shameful. Twenty-two per cent. of people use food banks due to low income. These people have jobs, but because of their pay and the uncertainty around zero-hours contracts they do not earn enough to eat. This is not right. We must act and not accept the Tory narrative, shake our heads, and throw up our hands.
The benefits statistics from advice agencies such as the citizens advice bureaux show further evidence of an unfair system that exacerbates the poverty in our communities. In the category of benefits, tax credits and national insurance advice, one single citizens advice bureau in the Bridgeton area of my constituency saw an increase in its caseload from 4,092 in 2011-12 to 7,266 in 2014-15. Its evidence shows that delays are built into the social security system at every stage, through application, mandatory reconsideration, and appeals. When people are supported by agencies such as the CAB, they are far more likely to be successful in those appeals. That clearly speaks to a system that is off-putting and difficult to navigate; it is not people-friendly. On Friday I learned of a person who waited over a year for his personal independence payment case to be processed—a whole year, for someone who needed support more than most. Who picks up the pieces? Neighbours, friends, churches, and community organisations filled the gaps when this Government forced citizens to the brink. The Government’s Budget undermines people’s sense of community and puts unsustainable strain on the vital services so many rely on.
I have seen the impact of cuts to local government over the past few years. During that time, the Scottish Government have done their utmost to protect local government from the worst of the cuts it has faced, but decisions have already resulted in significant detriment to services. Cuts were made to the flesh, with efficiency savings, reductions in office costs, and the need to work smarter. Cuts were then made to the muscle—to the staff—
David Rutley (Macclesfield) (Con)
I am listening to the hon. Lady with interest. Does she believe that there is any room at all for reform of the benefits system or the welfare approach to encourage more people to get into work, or support them into work, or is everything perfect in Scotland?
Alison Thewliss
When the powers this Government have force people into poverty and do not help to support them at their time of need, I say that that is a crisis and that we are hamstrung in our ability to help people. This Government expect the Scottish Government to mitigate the worst of their policies, but we should not exist to do so. Give us the powers, and we will do what we can.
Cuts have now come to the bone. Service provision has been removed, including things that make no logical sense to cut because such low-level interventions save money down the line. Sheltered housing services, which keep the elderly active, and services such as the Glasgow Association for Mental Health, which prevents those with mental health problems from slipping into crisis, have had their funding removed. This makes no sense: we can spend to save by investing at a certain level, but the cuts now mean that local government has to make such choices.
I do not know what the full impact will be of cuts that are starting to amputate huge chunks of our local bodies, but I very much worry that they will threaten the life of the patient. Local government serves both a social and an economic purpose, and the shrinking of public services takes well-paid and useful jobs out of areas and damages small business. In the past few days, the Local Government Association analysis has suggested that a £3.3 billion cut in 2016-17, or some 12%, will mean potentially devastating choices in many areas. These are not arbitrary cuts or figures on a balance sheet; they affect lives.
The proposed housing changes will have a significant impact. In Scotland, we take the attitude that a house is a home. That does not vary depending on whether someone’s house is a bought house or a rented one. I know from my case load that a social rented home in Glasgow is very desirable indeed. The huge numbers on housing waiting lists highlighted by organisations such as Shelter certainly seem to bear that out.
A lot of what has been said in the Budget seems to assume that markets will take care of the housing crisis in this country, but I would turn that contention on its head. The commercial rental market has driven up rents to the point at which people on average or even generous wages cannot afford to live, particularly in this city.
Richard Fuller
The acting leader of the official Opposition has said that their goal is not to oppose just for the sake of doing so. The hon. Lady has not mentioned anything in the Budget with which she agrees. Does she disagree with the acting leader of the Opposition?
Alison Thewliss
The hon. Gentleman will find that the Scottish National party takes its own stance on many issues and does not follow the Labour party.
The problem with market rents is not, as the Red Book implies at paragraph 1.154, with social rents. I believe that, by and large, council and housing association rents are fair, not subsidised. I was glad that the shadow Secretary of State mentioned the proposed pay-to-stay policy, and I agree with a lot of what she said on that. The policy will drive people out of the communities they call home, push out key workers on modest salaries and all but ghettoise swathes of our towns and cities. The proposals are unfair in that local authorities will not see the benefit of the policy, because their share from increased rents will go back to the Exchequer, while local housing associations get to keep the funds. If the Government insist on pursuing this daft policy, they should at least give an even playing field to all housing providers to allow them to invest in new housing.
I note that there is a proposal to end so-called lifetime tenancies. Long tenancies can contribute positively to the fabric of our communities by ensuring that people stay and make their lives in an area and that they belong to it. They are part of what makes renting with a housing association or a local council attractive, as opposed to the uncertainty of the private sector, where people have to move all the time.
Andrew Bridgen
The hon. Lady is making her case, but is there anything in the Budget with which she agrees? Does she support the new national living wage and the cut in rents for housing association tenants?
Alison Thewliss
I have made it abundantly clear that it is not a living wage; it is a rebadging of the national minimum wage, and it is not good enough. [Interruption.] Would Government Members give me a break?
Long tenancies give a degree of certainty and reduce costs to housing providers, who know that a tenant is there for the long term and do not constantly have to manage the turnover of stock. That is costly for housing associations and local councils to manage, so knowing that a tenant will stay reduces their costs. The Government should think very carefully about this policy’s impact on well-established and strong communities.
This Government seem to be making a further attack on the social rented sector and its tenants, following the distress caused by the bedroom tax. The Joseph Rowntree Foundation has found that only 6% of affected tenants were actually able to move, and that 50% of those who did not move fell into arrears. I am glad that the Scottish Government were able to mitigate that, but it is another example of a policy built to deal with a London problem that did not exist in Scotland, and which simply punishes people for their circumstances. The Scottish Government should not exist simply to mitigate the policies of another Government. That is unfair and unsustainable.
The Government are also in real danger of undermining their own work on city deals. One of the intended outcomes of the Glasgow and Clyde Valley city deal is to help long-term unemployed people back to work, and if the actions of this Tory Government undermine that by slashing benefits and making life harder for people who are looking to work, that will undermine the potential success of the deal. We must co-ordinate and work together. We need job-creating powers in Scotland and more than the simple power to mitigate the wrongheaded approach of this Government.
Although I say that, the hon. Members for North West Leicestershire (Andrew Bridgen) and for Bedford (Richard Fuller) will be glad to find that I welcome the further development of city deals in the Budget. They will go some way to redressing the imbalance in the UK economy, and not before time. Looking at the rhetoric about the northern powerhouse, I would suggest that it is perhaps a final admission of the fundamental failure of the UK economy. London is indeed the giant suction machine that the former Business Secretary spoke of, and the map on page 67 illustrates that investment in the south and east of England is focused through the prism of how best to serve London rather than to build up those areas in their own right and advance the economy.
I have attended Adjournment and Westminster Hall debates on city deals for Aberdeen and Cardiff and I listened with great interest to the debate on elected mayors. I have also followed discussions on the Cities and Local Government Devolution Bill in the other place. I am keen to see the development of deals that meet local needs and have been disappointed in some of those debates to find that the wishes of local people seemed to rank behind the pet project of some local authorities and the requirements of business. If more powers come to cities, it should be to serve the ambitions and priorities of local people to raise their opportunities in life and to make things better according to local demands. They must also be the devolution of funding to match those powers, as devolution and the reform of local government cannot be a cover for passing on cuts.
I am of course delighted to see continued commitment to the city deal for Glasgow and Clyde Valley, which the UK Government established in partnership with the Scottish Government, each putting in £500 million, with £130 million coming from the eight local authorities involved. I hope, too, that the deal will involve listening to local people. It is early days and the work of the joint board is just getting under way. I commend the fledgling city deals for Aberdeen and Inverness, which are mentioned in the Red Book, and ask that attention be paid to potential deals in Scotland’s other cities.
In considering city deals, we must also consider how we support areas outwith large conurbations. Rural areas should not be left behind, and if they are it will only exacerbate the difficulties of rurality. The approach in Scotland has been about collaboration through the Scottish Cities Alliance rather than cutthroat competition, and I believe that that is more productive. Setting regions against one another and failing to seize the opportunities to make links will only waste money in the long run. I note with interest that an Oyster-type system is being considered for Manchester. That is of course welcome, but it should not operate in a way that builds barriers between different regions. There is much opportunity for interoperability rather than running in entirely different directions and I note with some concern the comments made by the hon. Member for Bromley and Chislehurst (Robert Neill) about incentives for businesses. If we are not careful, that could lead to a race to the bottom on standards in different areas.
I would also guard against the temptation to reach for shiny prestige projects at the expense of more sustainable projects that benefit local communities and urge that further attention is paid to the importance of community benefit policies within public contracts. They were used effectively in Glasgow during the Commonwealth games and on other projects and are a simple way to ensure that local people get jobs, training and investment in every large or small infrastructure project that comes along.
A Westminster Hall debate last week touched on the fact that elected mayors had been rejected in some areas in local referendums. It would seem to me to be unwise to overrule that democratic right, but the Under-Secretary of State for Communities and Local Government, the hon. Member for Nuneaton (Mr Jones), said:
“I reiterate that where there is a request for the ambitious devolution of a suite of powers to a combined authority, there must be a metro mayor, but no city will be forced to take on those powers or to have a metro mayor, just as no county will be forced to make any governance changes.”—[Official Report, 9 July 2015; Vol. 598, c. 187WH.]
That seems to make no sense and to disrespect local democracy. People can have the funding, but only if they have the mayor. If people do not want a local mayor and think that the power is better vested in their local authority and local democracy, the Government should respect that. Members might also like to note that there is no such obligation for the Glasgow and Clyde Valley plan to come with an elected mayor.
Robert Neill
The hon. Lady is making an interesting point, but if she trusts local authorities in that regard it is legitimate to trust them to vary certain levels of taxation within an area and to increase their prudential borrowing against a revenue stream. Would she support us on such measures?
Alison Thewliss
Having come from local government, of course I trust it to do those things, but it should not be forced with a gun put to its head.
I will close by asking the Secretary of State to reflect on the purposes of power being devolved, and on how best we support local communities. People will be unsurprised that we in the SNP reject the austerity agenda, and the people who voted for us support our policy. That austerity agenda has already led to so much damage to the fabric of our communities, and there is only so much that people can take.
Jonathan Ashworth
I entirely agree with my hon. Friend. She will recall the Chancellor coming to Derby in February to launch his long-term economic plan for the midlands, one point of which was that the Tories would deliver electrification of the midland main line. The fact that they have now shelved it and there is nothing in the Red Book about when they are going to bring it back on track—excuse the pun—is an absolute disgrace and the Government are letting down the people of the east midlands.
I was talking about tax credits, and let me make it clear that I cannot support a Budget that spends £1 billion giving an inheritance tax cut to some of the richest estates in the country while cutting deeply into tax credits. In Leicester, the diverse city I represent, larger families are very typical and we are going to see further cuts to tax credits, which I fear will increase the already severe child poverty in our city.
A small change to tax credits that has not been remarked upon is the decrease in the income disregard, and I am worried about what it might mean. Conservative Members may recall that in 2002-03 this measure was brought in to deal with the overpayments that were plaguing the system. The problem might not now arise as the Government’s IT systems may have been updated, but I will be interested to know whether Ministers are confident that this small change to tax credits will not lead to the overpayment problems we had in 2002-03.
The increase in the national minimum wage—it is not a living wage, despite what the Chancellor told us at the Dispatch Box—was a bit of a conjuring trick. It was a bit of semantic prestidigitation from the Chancellor—[Laughter.] I say to my hon. Friend the Member for Hartlepool (Mr Wright) that we are intellectuals in Leicester—perhaps it is not the same in Hartlepool. He should just ask my right hon. Friend the Member for Leicester East (Keith Vaz). It was a conjuring trick by the Chancellor—I will stick to that terminology—because he said he was increasing the living wage. It was an increase in the national minimum wage for over-25s—that is a pay increase and of course we would welcome it—but it will be interesting to see what happens to the Chancellor’s gamble on whether the jobs market can withstand that increase and we will watch that carefully. That increase, however, is not going to make up for these tax credits cuts. The Institute for Fiscal Studies said that that is—
Jonathan Ashworth
I hope the hon. Lady does not mind, but I am not going to give way. The IFS said that that is arithmetically impossible. So when the Chancellor tried to pretend that by increasing the minimum wage he is compensating for the loss of tax credits, it was a complete conjuring trick.
I wish to make a couple of final points about trade, which my hon. Friend the Member for Hartlepool talked about persuasively. I agree that we need to do more to increase trade. I am particularly concerned about our trade with India, because we now export less to India than we did in 2010, despite the Government’s rhetoric. I am particularly worried about the state of the global economy. Our current account deficit has widened to 5.9% of GDP, the OBR says that we have the largest annual peacetime deficit since at least the 1830s and we are £367 billion short of the £1 trillion goal on exports. Higher education is a great export of ours, which is why I am deeply disappointed, yet again, by the rhetoric from the Business Secretary telling international students that they should not come to this country to study. For a city such as Leicester, which has two universities and benefits from international students, that is very damaging. [Interruption.] The Chief Secretary to the Treasury is shaking his head, but those were the remarks of the Business Secretary so he should have a word with him.
We know that there is a hiatus in global trade, with commodity prices falling. In the foreign affairs debate during our consideration of the Gracious Speech, I spoke about the problems of China and warned of the frenzies on the Chinese stock market, with millions of Chinese borrowing money that they cannot repay to invest in what they think will be one-way bets. Last Thursday, the Chinese stock market came to a juddering halt. After just three weeks, investors have lost $3 trillion; there has been a 30% fall in China’s stock market, with a loss in value equivalent to the UK’s economic output in the last years. That could deter investor confidence across the Asian nations. We have also seen weakness in the US economy. Investing in China is not a one-way bet. Of course I support the Chancellor’s move to sign up Britain to the Asian Infrastructure Investment Bank, but we will be foolish if we think that investing in China is a one-way bet.
Given these global headwinds—not just in Greece but in China—the weakness in the American economy and falling commodity prices, this Budget was a missed opportunity. In this Budget we should have seen more investment in manufacturing, in higher education, and in science and research and development. Given what we are seeing on the world stage, this Budget may well be considered politically clever for a Chancellor trying to move into No. 10 Downing Street, but I fear it has left Britain ill-prepared in an increasingly uncertain world.
Andrew Bridgen (North West Leicestershire) (Con)
It is a pleasure to speak in a debate in which there have been two excellent maiden speeches by my hon. Friends the Members for Chippenham (Michelle Donelan) and for Somerton and Frome (David Warburton).
There has been much talk about the northern powerhouse, which is, quite rightly, a priority for this Government. I wish to talk about the midlands engine, another key priority, which is powering a significant proportion of the very welcome growth that is being recorded under the stewardship of my right hon. Friend the Chancellor of the Exchequer. The east midlands has a higher proportion of its regional GDP in manufacturing and a higher proportion of those in employment working in manufacturing industries than any other region of our great nation.
My constituency and those that surround it are achieving some of the highest growth rates in the country, which is due in part to infrastructure investments and decisions made by the previous Conservative Government back in the ’80s and ’90s. The instigation of the new national forest and the development of the M42/A42 corridor have allowed my area, and many of the surrounding constituencies, to move on from our coalmining past and build a new economic model, using the huge advantage of our geographic location—at the very centre of the country—our hard-working constituents, and our minerals and other natural resources. Such advantages have seen us become a hub for distribution, which has seen rapid growth over recent years as this Government’s long-term economic plan bears fruit.
This Government, in the great Conservative tradition, are laying the foundations for growth in constituencies of the east midlands. I welcome the Chancellor’s important announcement that fuel duty is to be frozen again. When Labour was in power, it saw fuel duty as nothing more than a cash cow in its war on the motorist. Thanks to the way in which this Government have brought the public finances under control, we have kept the price of fuel down, which benefits my semi-rural constituency. We have no railway stations, so a car is not a luxury, but a necessity. The freeze provides stability to the distribution firms in my constituency, many of which operate in a hub around East Midlands airport. It should be borne in mind that more than 80% of goods are transported by road. By keeping down the price of fuel, we are keeping down inflation and the cost of living across the country.
Thousands of jobs in my constituency are dependent on East Midlands airport, and I welcome the Government’s recognition that action may well be required when air passenger duty rates are devolved to the Scottish Parliament. I believe there is a case for going far further on air passenger duty. The UK has the highest air travel tax anywhere in the world, which puts the country at a disadvantage in the global race. If the Scottish Government were to cut the rate of APD by half, the rest of the UK would be left at a severe competitive disadvantage, with English companies and families paying more to do business or go on holiday than their Scottish counterparts. That would be fundamentally unfair.
Alison Thewliss
It will be a terrible shame if the UK Government have to mitigate the actions of another Government. Now the hon. Gentleman might know how that feels to the Scottish people.
Andrew Bridgen
If the Scottish Government decided to cut APD, that would be tax competition and it would behove the British Government to respond, or we would see airports such as Newcastle and possibly Manchester put under severe pressure. I will urge the Treasury to review APD rates and consider the effects that this could have on decisions made in Scotland. I will also ask the Treasury to look at the effect of reducing air passenger duty for the under-12s and under-16s next year, which has already gone through. When a tax seen as excessively high is reduced, that is often followed by an increase in activity. That reduction will not cost £70 million, because far more families with children will take holidays from the UK.
On the area around the airport, I welcome the fact that the Government are inviting bids for a new round of enterprise zones, as I believe a bid will be coming from my district and the local enterprise partnership to encourage growth and jobs in the area and to take advantage of infrastructure improvements, such as the dualling of the A453 from my constituency to Nottingham. This is a scheme that has been spoken about since before I had a driving licence—a long time ago—but has been delivered by a Conservative-led Government. I look forward to going, this time next week, to the opening of the new dual carriageway to Nottingham.
I welcome the progress being made on the devolution of powers, and the fact that Leicester and Leicestershire are one of the two east midlands combined authority proposal bids that the Government have received. From speaking to those involved, I know that there is great enthusiasm for and interest in this bid in both the county and the city, and I hope this can be translated into action, which will benefit all the people living in Leicester and Leicestershire.
We have a productivity gap in the UK. It should be noted that if the UK matched the productivity of the USA, GDP would be some 31% higher, equating to an extra £21,000 per annum per household. We therefore need investment in skills and infrastructure to narrow this gap, and I support the innovative move this Government are considering to deliver that. A combined authority in my county could contribute to that. Through devolution to such local bodies, we can respond to infrastructure issues and skills shortages far more rapidly and effectively than can officials in Whitehall. I look forward to funds flowing to the regions for such projects.
I welcome the Government’s actions on the development of brownfield sites and on road building, which will be of huge benefit to the building and mineral industries and the two large brick factories in my constituency.
Overall, the Budget moves us another step away from the centralised, welfare-dependent client state created by Labour Governments to a productive economy based on low taxes, high skills, high wages and devolved decision making, and it gives this Conservative Government the opportunity to institute long-term economic and infrastructure decisions in the same way as the previous Conservative Government did, which served my constituency so well and laid the economic foundations that are now being built on, ensuring that the midlands engine is firing on all cylinders.
Richard Fuller (Bedford) (Con)
It is a pleasure to follow an extremely gracious maiden speech by the hon. Member for Cumbernauld, Kilsyth and Kirkintilloch East (Stuart C. McDonald). I particularly noted his kind words for the staff of the Houses of Parliament, which I thought was a particularly noteworthy thing to put in one’s maiden speech, and his kindness to his namesake who took his seat on the aeroplane. The hon. Gentleman follows a man, Gregg McClymont, who was probably one of the most intelligent Members and was one of the most fair-minded, so he certainly has big shoes to fill. He has made a very good start with his maiden speech today.
For me, the test of the Budget is whether it fits with what the good people of Bedford and Kempston talked to me about during the election campaign. As mine was a marginal seat where people had a straight choice between Labour and Conservative, and obviously chose Conservative, I listened intently to what they had to say. Their first and most abiding thought was that they appreciated the need to continue with the Government’s economic policies. They appreciated the stability that those policies had brought to their lives after the tremendous fears about the economy at the time of the 2010 election, when it could have gone either way for the United Kingdom. They appreciated the need for deficit reduction and understood the fundamental point that it is unfair on our children and grandchildren for this generation to continue to live beyond its means, and that somehow, in the fairest way possible, the Government have to find their way to getting the books in balance and to starting to repay the debts. That is the trajectory that was outlined in the Budget.
The second thing that people in Bedford and Kempston told me was that they understood the need for welfare reform and benefit reform to be at the centre of the changes that would be made. As my hon. Friend the Member for Cannock Chase (Amanda Milling) said, for many people, the idea that a benefit cap of £26,000 is somehow fair to them, when they pay their taxes—the median income in Bedford is £19,000—does not strike them as fair. People in Bedford will think that the Government’s proposals in the Budget to reduce the benefit cap, both in London and separately outside London, are fair. They will also see changes such as the limiting of child tax credit to two children, the introduction of a maximum income for staying in council housing and the changes to housing benefit as fair and reasonable.
Alison Thewliss
Does the hon. Gentleman consider it fair that a woman who has been raped will have to declare that to Her Majesty’s Revenue and Customs and the Department for Work and Pensions to qualify for her child to receive tax credits?
Richard Fuller
The hon. Lady repeats a point that one of her colleagues made in an earlier day of the debates on the Budget. We need to examine in this debate the broad range of the impact of the Government’s policies. When the Government make any change, they are moving big blocks around—that is one reason why I am a Conservative, actually. When that happens, there will be specific examples of an impact on people’s lives that the general policy was not supposed to have. The hon. Lady should raise those instances directly with Ministers, so that changes can be considered. However, we should not undermine the entire sweep of Government policy because of a particular example. I have found the Government reasonable in understanding the need for certain changes to benefit policies if they have a deleterious impact on individuals.