Additional Covid-19 Restrictions: Fair Economic Support

Alun Cairns Excerpts

Wednesday 21st October 2020 Commons Chamber

[Angela Rayner]

I absolutely agree with my hon. Friend. Over the past 24 hours, the people of Greater Manchester, regardless of their political persuasions or colours, have been absolutely dismayed by the way in which our democratically elected Mayor has been treated, but this is about the treatment not just of our Mayor but of the people of Greater Manchester. This is not some spiteful little game; this is about people’s lives, people’s loved ones and people’s jobs. They have spent years building up our economy in Greater Manchester. This Government choosing the path that they have chosen has done one thing for Greater Manchester: it has completely brought us together in saying that this Government and Prime Minister must do the right thing by the whole of our nation and support everywhere, not pick us off one by one.

[Alun Cairns (Vale of Glamorgan) (Con)]

What advice would the hon. Lady offer my constituents in the Vale of Glamorgan, where the infection rates are exceptionally low, given that a one-size-fits-all approach has been taken across the whole of Wales? Retailers, hairdressers, personal service providers, beauticians and all those sorts of businesses have been closed, irrespective of the exceptionally low rate. Does that make sense? What does she have to say to those businesses that have invested all their time, effort, money and innovation in creating employment and wealth?

[Angela Rayner]

The right hon. Member makes a point about what the Welsh Government are doing. What they are doing is putting people, business and lives first. They are working with local government and with businesses to bring the R number down. The Scientific Advisory Group for Emergencies has said that the plan for Greater Manchester as it currently stands will not bring the R rate down and that it will lead us into poverty and destitution. When I speak to the experts, they tell me that poverty and destitution have a link to how deadly this virus is. In parts of areas such as Oldham in my constituency that have faced restrictions since July—I have not been able to see my granddaughter because of those restrictions—the rates have gone up. We do not want to plunge our businesses into destitution. I am proud of the Welsh Government’s defence of the people and their support for the people of Wales. I just wish we had a better Government here in Parliament.

Our motion calls on the Government to implement their own promise that workers on the job support scheme extension will receive at least 80% of their previous income. I remember the promises the Prime Minister made, not just in this crisis but before it. He offered levelling up for communities such as mine, but he is not levelling us up; he is letting us down. Under Thatcher, we were consigned to managed decline, but now it feels like mismanaged decline. And it is not just a conflict between the north and the south, or between London and the rest. The elected leaders of our nation’s cities, regions and countries have been treated with the same contempt, from Wales to Wigan.

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[The Chief Secretary to the Treasury (Steve Barclay)]

I beg to move a manuscript amendment, to leave out from “House” to the end of the Question and add:

“recognises the virus is spreading differently across the country which supports the need for a regional and local approach; acknowledges the fact that repeated national lockdowns should be avoided given the cost they have on mental wellbeing, access to NHS treatment, and jobs in the economy; supports the Government’s Job Support Scheme which protects the jobs and incomes of those in affected businesses; recognises the extra financial support provided to Local Authorities for enforcement, local contact tracing and businesses, and approves of Government trying to work with local representatives to improve enforcement and Test and Trace.”.

May I begin by expressing my condolences, and the condolences of colleagues on these Benches, to the hon. Member for Ashton-under-Lyne (Angela Rayner) on the loss of her aunt?

The hon. Lady was right in her opening speech to talk about the shared desire of the British people whom we represent to do the right thing. That is why all Members of this House want to protect the lives not just of our family members, but of our constituents and to balance the actions that are needed to do so with protecting jobs and businesses. The best way to make good for the workers whom she referenced in her motion is to reduce the spread of the virus through targeted action. That is why the Prime Minister was right to outline a balanced approach, taking the difficult decisions to save lives and keep the R rate down while doing everything in our power to protect the jobs and livelihoods of the British people. Indeed, the deputy chief medical officer said just yesterday, when supporting the tiered regional approach, that it would be “inappropriate” to enforce a national circuit breaker as it is not

“consistent with the epidemiological picture.”

In fact, to be fair, the shadow Health Secretary was right also to talk about the wider damage of a national lockdown on our economy and society.

[Alun Cairns]

The evidence from the deputy chief medical officer in England is quite stark, and the statements really make people pay attention. Has my right hon. Friend seen any counter-evidence from the Welsh Government to suggest that one size fits all? My constituents in the Vale of Glamorgan have to face the lockdown of all businesses, as we did in March, in spite of the area having exceptionally low infection rates.

[Steve Barclay]

What was clear from what the deputy chief medical officer said was the importance of targeted action. There has been concern in respect of the Welsh Government, but I recognise that all leaders are balancing these difficult decisions. That is why I pay tribute to the leadership in Liverpool, Lancashire and South Yorkshire, who have worked constructively with the Government.

Oral Answers to Questions

Alun Cairns Excerpts

Tuesday 15th September 2020 Commons Chamber

[Helen Hayes (Dulwich and West Norwood) (Lab)]

What assessment he has made of the potential effect on levels of unemployment of withdrawing the (a) coronavirus job retention and (b) self-employment income support schemes.

[Alun Cairns (Vale of Glamorgan) (Con)]

What steps his Department is taking to support self-employed people affected by the covid-19 outbreak.

[Gerald Jones (Merthyr Tydfil and Rhymney) (Lab)]

What assessment he has made of the financial effect of the covid-19 outbreak on people who were not eligible for either the coronavirus job retention scheme or the self-employment income support scheme; and if he will make a statement.

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[Rishi Sunak]

The furlough scheme, as it is currently constructed, is flexible. It was a key demand from business groups and unions, which we responded to. As the economy is slowly reopening over the late summer and autumn, the furlough scheme has adapted to that, allowing businesses to bring back their employees in a flexible fashion, and that is exactly what they are currently doing.

[Alun Cairns]

I congratulate my right hon. Friend on the introduction of the self-employment income support scheme in particular, but does he recognise that it cannot continue indefinitely? Does he also agree that the self-employed are some of the most innovative individuals in our economy, and it is time to release their innovation to kick-start us?

[Rishi Sunak]

My right hon. Friend is absolutely right. Now that we have begun to reopen the economy, it is right that our support becomes differentiated and the focus shifts to getting people back to work. It is not possible to sustain this level of intervention. I fully agree with him: those who are entrepreneurial and self-employed deserve our support, and they will continue to get it as we drive our recovery out of this crisis.

Stamp Duty Land Tax (Temporary Relief) Bill

Alun Cairns Excerpts

2nd reading & 2nd reading: House of Commons
Monday 13th July 2020 Commons Chamber

[Dan Carden (Liverpool, Walton) (Lab)]

I welcome this opportunity to debate one of the key planks of the Government’s summer economic update presented to this House last week.

As the Opposition, we have repeatedly said that we will work with the Government where we can to support people through a crisis the like of which none of us has ever known. That is exactly why we called on the Chancellor to abandon his one-size-fits-all approach to support for businesses and workers. It is why we called on him to recognise that this is a sectoral crisis that affects some areas of the economy much more than others, and it is why we called on him to come forward with a full back-to-work Budget that would really target Government support to those who need it most.

Instead, what we got was a limited statement that fell far short of grasping the scale of the challenge the country faces at this time of national crisis. We got blanket giveaways, such as the job retention bonus that risks handing billions of pounds to companies for employees who would have been brought back to work anyway. And we got this Bill, which the Government hope will get the housing market back on its feet and support wider economic growth.

Let me be clear from the outset that we do not oppose the principle of additional support for homeowners and buyers, and action to stimulate the housing market. Many people hoping to buy their first home or move home will have been stopped in their tracks by Government advice at the outset of this crisis not to move house—a measure rightly designed to keep people safe. Since then, those wishing to buy or sell have been trapped in a state of limbo for months on end. Many transactions will have collapsed during the hard lockdown period, with significant potential financial losses in conveyancing fees, solicitor fees and other costs involved in buying or selling a home. We understand those difficulties and uncertainties. The impact of the events of the past few months on house prices and on household incomes will mean that many people can no longer afford to move. Their dream home may now have to remain just that—an impossible dream—so it is right that we consider carefully how we can help them, but I do not think the Government have given careful consideration to the Bill or its impact on the housing market.

The Bill existed only in the Chancellor’s mind a week ago. It is a Bill that the Chancellor did not intend to present to the House today; it was supposed to be part of the autumn Budget process later this year. We know that because the Government themselves told us—or at least someone in Government did. We only have to cast an eye back to The Times article last Monday on the Chancellor’s plans for a

“Stamp duty ‘holiday’ to help rebuild economy”,

to be introduced “in the autumn Budget”.

As is so often the case with this Government, whoever briefed the press about the plans had not read the small print. Had they done so, they surely would have realised that announcing a stamp duty holiday three months early would crash the housing market this summer. It was left to others to point out the flaw in the Chancellor’s cunning plan. My hon. Friend the shadow Chancellor was quick to respond, saying:

“Even the possibility of a stamp duty change later this year”

would

“shut down the housing market in one fell swoop.”

Helen Miller, deputy director and head of tax at the Institute for Fiscal Studies, called the plans “mad.” The former Member for South West Hertfordshire and former Chief Secretary to the Treasury, David Gauke, said:

“Even 2 days of speculation”

over such plans would be

“unhelpful but 4 months…would be hugely counter-productive.”

[Alun Cairns (Vale of Glamorgan) (Con)]

I am interested in the theme of the debate the hon. Member is pursuing. The negative connotations that he presents apply exactly to the system that already exists in Wales. The Welsh Government have not yet offered any reduction in land transaction tax, in spite of their being given the resources by my right hon. Friend the Chancellor. Will the hon. Member therefore call on them to follow the model that is being pursued in this place? Or will he say that they should not do it and that people should remain—to use the hon. Member’s phrase—in a state of limbo?

[Dan Carden]

I am grateful for that intervention; I will go through my argument and analysis of the Government’s proposals in the Bill.

We do not know—perhaps the Minister does—who briefed what to whom last week, but the fact that the policy was leaked in advance forced the Chancellor’s hand. Just a day after The Times article appeared, another one in The Telegraph said that the cut would be introduced “immediately”. Policy making by briefing is no way to run a Government; it is either clumsy or irresponsible, or another example of No. 10 advisers running roughshod over the Chancellor.

We would rather the Government focused their energies on helping those people trying to buy or sell their home in such difficult circumstances, which is why, rather than opposing the Bill, we want to probe the Government on who will benefit the most from it. We are concerned first and foremost about whether the Bill will target support at those who need it most. We have serious concerns about the cost to the Exchequer and whether it is justifiable in terms of the Government’s other spending priorities.

We have serious questions about why the Bill includes significant support for second homeowners—plans that were slipped out by the Treasury after the Chancellor delivered his statement. We need to understand why the Government have decided, as my hon. Friend the Member for Bristol West (Thangam Debbonaire) said last week, to direct a huge bung to second homeowners, landlords and holiday-home buyers while millions of people are desperate for support. The provisions in the Bill are an unnecessary subsidy for second homeowners that will only worsen the housing crisis by reducing the supply of homes overall.

Economic Update

Alun Cairns Excerpts

Tuesday 17th March 2020 Commons Chamber

[Rishi Sunak]

I am happy to ask my right hon. Friends the Secretary of State for International Trade and the Secretary of State for Environment, Food and Rural Affairs to have a look at that.

[Alun Cairns (Vale of Glamorgan) (Con)]

I pay tribute to my right hon. Friend for the scale of the package that he has announced, and I recognise the significance of the Barnett consequentials that will come from it. Does he agree that simplicity and commonality are key features? It was only late yesterday that the Welsh Government matched the business rate package, which left—[Interruption.] It left many businesspeople in my constituency anxious before the support was made available. Does my right hon. Friend recognise that commonality will be an important theme?

[Rishi Sunak]

My right hon. Friend makes an excellent point: a simple, common message across our Union would make an enormous difference to people everywhere.

Wales Bill

Alun Cairns Excerpts

Tuesday 24th June 2014 Commons Chamber

[Owen Smith]

I entirely agree. I have been at pains throughout our deliberations to make it clear that, in this Bill, we are being accommodating with regard to borrowing that we understand, but there are real concerns—they are not frivolous—about the benefit for our constituents of Wales having powers that could be misused, particularly by the Conservative party, to cut taxes in Wales in order to engender tax competition across the UK. We think that would bring little benefit but many risks.

[Alun Cairns (Vale of Glamorgan) (Con)]

Is the hon. Gentleman telling us that he is absolutely against lower taxes in Wales, and is he therefore ruling out any Labour Administration using these powers to reduce taxes in Wales at all?

[Owen Smith]

The latter part of that question would of course be a matter for the First Minister, were those taxes to be devolved to Wales, but I think that I have been absolutely clear that we are not in favour of Wales undercutting the rest of Britain to afford benefits to itself. We do not think that would be beneficial to Wales in the long term. Let me be clear: were that to happen, we do not imagine that Wales would continue to enjoy the same degree of welcome support that we receive from the rest of the UK.

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[Jonathan Edwards]

Well, that is the hon. Gentleman’s position. But if the Labour party’s position were to hold true in Wales, there would be a uniform business rate across the 22 Welsh local authorities. There seems to be a slight misunderstanding in Labour’s position.

[Alun Cairns]

Extending that logic beyond business rates, the same would apply to council tax rates. We have seen a 12% increase in council taxes in Wales since 2010, whereas there has been a broad freeze here in England.

[Jonathan Edwards]

The hon. Gentleman makes my point for me. He says that there are 22 local authorities in Wales, all with fiscal powers to change council tax rates and non-domestic rates. The Labour party does not seem to think that is a problem in Wales in terms of tax competition.

In my opening remarks in Committee, I also said that events in Scotland would supersede the second part of the Silk commission’s work and probably this Bill. Although it might appear that I have fortune-telling abilities, I reassure you, Mr Deputy Speaker, that I have yet to acquire such powers. Earlier this month, the Tory Strathclyde commission recommended that in the increasingly unlikely event of a no vote in Scotland in September, the Scottish Government should be given full income tax powers, and powers over VAT and the welfare system. The proposed new powers would make the Scottish Government responsible for gathering 40% of the money they spend. Crucially for this Secretary of State and this Bill, the Prime Minister has fully backed the commission’s proposals and promised to include them in the Conservative manifesto for next year’s general election. Contrary to the Minister’s remarks, the Prime Minister said that there was no reason why these powers should not be transferred to Scotland after the general election. Ruth Davidson, the leader of the Conservative party in Scotland, has said that this was going to be in its 2015 manifesto. Therefore, Treasury Ministers’ revelations might be revealing in terms of the debate in Scotland over the next few weeks.

The Secretary of State finds himself in an uncomfortable position, as this Bill represents the Tory offer for Wales. The people of our country can easily compare and contrast what is on offer for Wales with what is on offer for Scotland. Furthermore, the BBC is reporting that all three Westminster parties are pledging an agreement of joint travel, promising more powers for Scotland. Yet, this Bill does not even take us in Wales to where Scotland is now. Wales is not a second-class nation and there is no more powerful message in Welsh politics than equality with Scotland. This Bill is far from being a settlement that will last a generation; if the Tories want to survive in Wales next year, this Bill is unlikely to make it past the Lords in the autumn.

Only last week, none other than the Financial Times stated in its editorial that the UK should move to a federal model, noting that

“the status quo is not an option.”

It added that Wales should be included in proposals for full fiscal and policy autonomy. Today, we will endeavour to put forward amendments that will strengthen the Bill considerably. As the Westminster parties have decided to torpedo the Silk commission, we will also put forward amendments that go beyond its recommendations and reflect the rapid change of the constitutional debate within these isles. We will seek to divide the House on our later amendments in the next group, so that the people of Wales can contrast Plaid Cymru’s ambition for Wales with the apathy of the Westminster parties.

First, however, I will speak to our amendment 9, which is a straightforward, probing amendment. It would make the Welsh Government responsible for 100% of the income tax revenue gathered in Wales, rather than having the meagre 10%-90% split income tax-sharing arrangement on offer in this Bill. My Plaid Cymru colleagues and I have already tried to maintain the integrity of the original cross-party Silk commission recommendations. We tabled relevant amendments to the Bill in Committee, but they were either voted down or abstained on by Labour MPs who would not support what their colleagues in the National Assembly had been saying.

I mentioned the fact that the Tory Strathclyde commission has reported its conclusions. It recommended 100% devolution of income tax to Scotland. The report was fully endorsed at the highest levels of the Conservative party, with the Prime Minister himself giving it his full backing and saying that its recommendations would be included in the Conservative manifesto at the next UK general election. I need not point out to the Secretary of State, therefore, that what his party is offering to Scotland reveals what is on offer here to be completely behind the times.

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[Mr Jones]

I could rehearse the remarks that were made on the last occasion we discussed this issue, but the point that my hon. Friend the Member for Forest of Dean (Mr Harper) was making was that his constituents access the health service in Wales. They wish to access the English health service, but at the moment they have difficulty doing so. I would have thought that the hon. Gentleman would want to facilitate my hon. Friend’s constituents’ access to the English health service, rather than continuing to snipe.

[Alun Cairns]

The shadow Welsh Secretary mentioned cancer waiting times, but does my right hon. Friend the Secretary of State agree that that is a very narrow element of this? The patient experience involves diagnosis, and the waiting times for diagnosis are much longer in Wales. If we take into account the total waiting times in Wales for cancer treatment, the picture is very different from what was suggested.

[Mr Jones]

My hon. Friend makes an important point. The shadow Welsh Secretary ought to understand that there is huge public dissatisfaction with the Welsh Government’s performance on health in Wales. I suggest that, rather than trying to engage in guerrilla warfare on individual points, he has a word with his Assembly colleagues and urges them to do more to deliver a decent health service for the people of Wales.

Despite Labour’s focus on dual candidacy, at its heart the Bill is about driving forward economic growth in Wales, and it illustrates the centrality of economic recovery to everything this Government do. The Bill provides the Welsh Government with additional levers and incentives to deliver economic growth. As well as providing opportunities for the Welsh Government, it increases scrutiny of them. Since devolution, the Assembly and the Welsh Government have been accountable only for how they spend taxpayers’ money; now, they will become more accountable for how they raise it. The challenge for the Assembly and the Welsh Government will be to use the tools we have given them effectively and efficiently. Part of that challenge will be deciding if and when to seek the agreement of the Welsh electorate, in a referendum, to devolving an element of income tax. I urge the shadow Secretary of State and his colleagues in Cardiff Bay to abandon their opposition to a referendum, and the Assembly to trigger a referendum sooner rather than later.

We are 87 days away from probably the most momentous decision in the 300-year history of our Union. The referendum in Scotland has significant implications for devolution in Wales. The majority of us in this House sincerely hope that the people of Scotland will vote to remain part of the Union. A no vote will allow those of us who believe in the Union to consider how best to strengthen it and to enable all parts of our United Kingdom to prosper.

In Wales, the recommendations made by the Silk commission in its second report provide opportunities to consider further devolution. As the commission acknowledged, the key legislative recommendations should be matters for the next Parliament, and it will be for political parties to set out their proposals at the 2015 general election. That will provide a mandate for the next Government to implement the changes they have committed to, and will enable Parliament to consider changes to the Welsh devolution settlement in the context of strengthening our Union.

As well as its financial reforms, the Bill makes some highly welcome improvements to the Assembly’s electoral arrangements, making them fairer and more equitable. Assembly terms will be changed from four to five years to make it less likely that Assembly and parliamentary elections occur on the same day. Members will no longer be able to sit simultaneously in both the Assembly and the House of Commons, enabling Assembly Members to concentrate on representing their constituents in the Assembly. The Bill overturns the clearly unfair ban on dual candidacy introduced by the Labour party, which is seen by constitutional experts and the public alike as partisan and anomalous.

This Bill marks a significant strengthening of the Welsh devolution settlement. It bolsters the democratic institutions in Wales, and ensures that the Assembly and the Welsh Government are more accountable to those who elected them. It provides the tools for the Assembly and the Welsh Government better to support stronger economic growth. I commend this Bill to the House, and I trust that the House will support its Third Reading.

Oral Answers to Questions

Alun Cairns Excerpts

Tuesday 24th June 2014 Commons Chamber

[Andrea Leadsom]

This Government have taken great steps to improve competition and I am delighted that, currently, the regulator is talking to 25 new applicants for new banks. We are also taking steps to ensure that those who get turned down for credit have the opportunity to go to other challenger banks to access other sources of finance. I am sure that the hon. Lady will welcome the steps that the Financial Secretary to the Treasury, my right hon. Friend the Member for Loughborough (Nicky Morgan), is taking to improve particularly the support the Government are giving to female entrepreneurs.

[Alun Cairns (Vale of Glamorgan) (Con)]

Increasing competition in the sector is key to improving lending. The Minister mentioned that the Prudential Regulation Authority is looking at 25 new applications for licensing to be banks. How does this compare with the decade before 2010?

[Andrea Leadsom]

My hon. Friend may know that in May 2010, when Metro bank was granted a full banking licence, that was the first new full banking licence for over 100 years, so the fact that the regulator is talking to potentially more than 25 new banks is very good news for competition and choice in the UK.

Financial Services Authority and Connaught Income Fund

Alun Cairns Excerpts

Wednesday 7th May 2014 Westminster Hall

[Alun Cairns (Vale of Glamorgan) (Con)]

It is a pleasure to serve under your chairmanship for the second time today, Mr Brady. I welcome the Minister to her role, and welcome her involvement in this important issue.

As you can see, Mr Brady, this debate has drawn much attention from colleagues and investors alike. Naturally, investors want explanations of what went wrong and why. Colleagues who have looked into the case recognise the scale of the wrongdoing, and want to know how it happened and about any recourse available to their constituents.

This issue has developed over some time, but this is the first time we have had the opportunity to raise concerns about it and ask questions on the record. The Connaught Income Fund was launched in April 2008. It was promoted and operated by Capita Financial Managers Ltd, which was also the custodian of investors’ assets. Its original name was the Guaranteed Low Risk Income Fund, series 1—something that proved not to be the case. It was a UK-based unregulated collective investment scheme. By definition, these funds are not subject to direct regulation. However, elements of the process and funds were regulated, which means that the regulatory framework and responsibilities are not necessarily straightforward—in fact, they are complex—and that there is a responsibility on the Financial Services Authority.

[Guy Opperman (Hexham) (Con)]

I congratulate my hon. Friend on securing this important debate. Both he and I have fought Capita for more than three years following the Arch Cru disaster, which entailed similar losses, and several constituents of mine lost money through Connaught. Does he agree that it is appropriate to invite the Minister to seek the police’s involvement and to find out whether an investigation should take place?

[Alun Cairns]

I pay tribute to my hon. Friend’s work on Arch Cru as secretary of the all-party group on the Arch Cru investment scheme, and on his involvement in issues relating to Capita. He raises pertinent points that I will come on to, so I am grateful for his contribution.

[Albert Owen (Ynys Môn) (Lab)]

I am grateful to the hon. Gentleman for giving way to me so early. I have to leave, having been in the previous debate with him for an hour and a half.

Is the hon. Gentleman as concerned as I am that so little information is available on Capita, and particularly on the signing-off of the information memorandum? That is a matter of great concern to a number of my constituents and, I am sure, to constituents of hon. Members of all parties.

[Alun Cairns]

I am grateful to the hon. Gentleman for raising important points about Capita that I will come on to. A central factor is what knowledge it had at various stages.

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

I congratulate the hon. Gentleman on securing this debate. Is this the same Capita that won the personal independence payments contract with the Government, for Wales and the west of England?

[Alun Cairns]

I am grateful to the hon. Gentleman for his contribution, but of course Capita Financial Managers Ltd is different from other subsidiaries of Capita. The parent company will be the same; there are several subsidiaries. The point was well made, and I accept it in the way that it was intended.

I should like to pursue the matter a bit further before accepting any other interventions, to provide some background. The proposition was that investors’ money would be loaned to borrowers requiring short-term residential bridging loans. Loans would not exceed modest loan-to-value guidelines, no sub-prime lenders or properties would be financed, and all loans would be secured by first charges against those properties. Specifically, there was to be an average loan-to-value rate of 56%. People were told that it would seldom be above 70% and that anything above 80% would have guaranteed exits. All interest and fees would be taken up front, and there was a guarantee from Tiuta, a company that I will mention shortly, to meet any shortfalls.

The borrowers would pay an interest rate of 17.9%, while investors would receive quarterly distributions of between 8.15% to 8.5%. Capita appointed Tiuta plc and Connaught Asset Management Ltd, both UK companies, to identify suitable borrowers and approve the loans. However, investors’ funds were used differently. Money was transferred to Tiuta, rather than being released directly to the borrowers’ solicitors. It is even suggested that there was no differentiation between the firm’s funds and those of the investors; investors’ money was used to meet the working capital needs of Tiuta, and to pay directors’ salaries, bonuses and pension contributions.

In many cases, where bridging loans were made, the borrowers, properties or loan-to-value ratios were not as committed to in the promotional literature. It is believed that Tiuta proposed loans and drew down the money, but did not proceed with the lending. It is suggested that Connaught provided a monthly statement to Tiuta’s management accountant, switching the true loan book and the approved one.

In March 2009, Capita became aware that the original information memorandum was misleading. The fund should not have been described as low-risk, the guarantee from Tiuta was of no value, the money was used largely for purposes other than bridging loans, and the auditors of the fund were not engaged. In addition, the loans that had been made were not as described and were being rolled over.

In August 2009, after Capita met Connaught’s senior management, investors were informed by Capita that it was resigning as operator of the fund. It was to be replaced by Mourant Fund Services Ltd, but for some unknown reason Mourant did not complete the transaction. Perhaps it became aware of the problems with the fund.

[Guto Bebb (Aberconwy) (Con)]

I congratulate my hon. Friend on securing this debate. Is it not a significant concern for all of us who have been looking at this issue that, in 2009, it became apparent that Capita had significant concerns about the way that the fund was being operated, but those concerns were not conveyed to those who had invested in the fund?

[Alun Cairns]

I pay tribute to my hon. Friend for his support in investigating this matter. He raises an important point. There is a serious question about what Capita did and did not know, and what it should have communicated to the investors, to whom it had a responsibility.

[Bill Wiggin (North Herefordshire) (Con)]

I draw the House’s attention to my entry in the Register of Members’ Financial Interests. My constituent, Mr Sudworth, who is a victim of this fraud, asked me a question; I wonder whether my hon. Friend knows the answer. Does the Financial Conduct Authority outsource some of its work to Capita?

[Alun Cairns]

I am grateful for my hon. Friend’s question. I do not have the answer, but he points to a general defensive approach that has been taken by the FSA and the FCA. We are seeking greater transparency to get the answer to many such questions, so that we can identify where the responsibility lies.

Perhaps Mourant became aware of some of the issues that have now become apparent. Instead, Capita passed responsibility on to Blue Gate Capital Ltd, which agreed to the appointment in September 2009.

George Patellis was appointed chief executive of Tiuta in April 2010. He became concerned about the quality of the financial reporting at the company. In January 2011, a shortfall of at least £20 million was identified, suggesting insolvency. He also became aware that Tiuta had retained the proceeds when some loans had been redeemed, and of Land Registry DS1 inconsistencies.

Mr Patellis appointed BDO to investigate in January 2011, and it confirmed his initial concerns. He then resigned and alerted the FSA to the situation, to report financial irregularities at Tiuta. As a result, a case was opened by the FSA and supervisory engagement with Tiuta began. The FSA required Tiuta to engage investigative accountants to monitor its financial performance. That may relate to what my hon. Friend the Member for North Herefordshire (Bill Wiggin) mentioned. Tiuta was responsible for reporting to the FSA monthly. However, instead of undertaking independent investigations, BDO, which had secured the role, relied on information supplied by directors of Tiuta, which then produced a series of reports that persuaded the FSA that the firm should be allowed to continue to trade.

In May 2011, the FSA issued a consumer alert because marketing materials indicated that the fund was low risk, and that returns were guaranteed. The marketing material was amended for independent financial advisers, and Blue Gate was made aware of the issues with the security of the loans. In March 2012, Blue Gate notified the 1,200 investors that the fund had been suspended due to an inability to pay quarterly interest payments to investors. Tiuta was placed in administration in September 2012.

It is suggested that investors face losses of at least 70% of the £106 million that was invested. In addition, investors have to date lost up to £20 million in unpaid quarterly distributions. Since then, a number of MPs have written to the FSA—and now the Financial Conduct Authority—and the Treasury to establish whether there is a regulatory responsibility to investigate the fund, and whether there is any potential for compensating investors.

Having considered the background, I will make a number of points and ask a few questions of the Minister. Although I recognise that the Connaught fund was an unregulated investment scheme, various elements were regulated, as I mentioned at the outset. The advice process was regulated. I am not suggesting for a minute that advisers were responsible for the failings and misappropriation of funds. There is a need, however, to clarify where their responsibility ends.

In fairness to IFAs, they depend on the key financial documents, which were not accurate or adhered to, yet questions should be asked about why unregulated funds were recommended to investors in the first instance. The time for advice on such funds is clearly very limited. What did Capita know in August 2009 when it sought to pass on its responsibilities? What action did Capita take to ensure proper management of the fund at earlier stages? If Capita had doubts or questions, why was that not communicated to investors? Was Capita’s letter to investors misleading, or did Capita withhold information indicating there was unsecured and unauthorised lending from the fund?

[Guy Opperman]

Is it not incumbent on the Minister to clarify the legal position of investors on that specific point? If investors are to sue for their loss, they need to know the date of the knowledge of the fund’s decline. Secondly, they need to know the state of the assets at that time and the extent to which the FCA will assist in the recovery.

[Alun Cairns]

There could clearly be a statute of limitations that affects investors, on which I hope the Minister can offer advice.

There was obviously a gap between Capita’s original letter of 20 August 2009 advising investors of its intention to pass responsibility to Mourant and the letter of 24 September advising that Blue Gate would become responsible. Should Capita have suspended the fund when it realised that it was not being managed in accordance with the financial information documents?

As we have discussed, this is not the first time that Capita has needed to answer questions about its role. As the authorised corporate director of Arch Cru, Capita was forced to compensate investors to the tune of £32 million. Terms, how that sum was reached and Capita’s responsibilities and failings have still not been disclosed, but a sum of that size suggests some form of culpability.

Questions should be asked about the actions taken by the FSA, and now the FCA. Some investors believe that the FSA and FCA have taken little action, but the Minister’s predecessor, my right hon. Friend the Member for Bromsgrove (Sajid Javid), advised me in general terms of some of the work they undertook. That needs to be published to reassure people and to allow further questions to be raised about what could have happened.

[Chris Ruane]

Does the hon. Gentleman believe that the FSA has let down Connaught investors? Is he aware of the case of Burges Salmon, which was a similar scam of which the FCA has washed its hands and for which it has taken no responsibility? Does he think that the FCA needs to be looked at?

--- Later in debate ---

[Alun Cairns]

I am not familiar with that case, but greater transparency on the FCA, into which the FSA has now evolved, would be helpful and may dispel the criticisms. We simply do not know the specific actions that it took, if indeed it took any at any point. I hope that there has been more than evolution; there needs to be a different culture at the FCA to ensure that the failings of the past are not repeated.

What about the FSA’s actions following the intervention of George Patellis? The Financial Services and Markets Act 2000 gave the FSA a statutory duty to maintain market confidence, ensure public awareness, reduce financial crime and protect consumers. We can also ask questions of the police. Surely there are sufficient grounds for the police to investigate the matter, given the misappropriation of funds.

Finally, is the Minister able to advise us of any statute of limitations that falls on investors? That is the point raised by my hon. Friend the Member for Hexham (Guy Opperman). Ultimately, is any recourse available? In closing, I underline that although the saga has gone on for an awfully long time for investors, this is our first opportunity to discuss it in Parliament. I would like to think that this is the start of parliamentary scrutiny, and certainly not the end of the matter. I look forward to the Minister’s response.

Wales Bill

Alun Cairns Excerpts

Tuesday 6th May 2014 Commons Chamber

[Mr Harper]

I always congratulate people on bringing investment into the United Kingdom. I am sure that the Welsh Government work hard to do that. But I am also sure that those businesses are mindful of the competitive corporation tax regime created by my right hon. Friend the Chancellor, which has provided a good base in the United Kingdom from which to do business. That competitive corporation tax regime does not just benefit companies in England; it also benefits companies in Wales, Scotland and Northern Ireland. That competitive tax regime is one that we want to see go further.

[Alun Cairns (Vale of Glamorgan) (Con)]

I cannot let the shadow Secretary of State for Wales get away with championing the success of inward investment and talking in percentage terms. We need to recognise the low base and the Welsh Government’s poor performance in recent years in attracting inward investment. Clearly, any growth needs to be recognised, but we also need to recognise the failure over the last decade, which compares significantly with the previous record.

[The Second Deputy Chairman of Ways and Means (Dawn Primarolo)]

Order. We are now going just a touch wide of the amendments, which are specifically about new powers and the process for them. The hon. Member for Forest of Dean (Mr Harper) is also ranging quite widely, so I would be grateful if he addressed the amendments.

--- Later in debate ---

Has further consideration been given, and have the Government, therefore, come to the same judgment as they have for Scotland? We would like to see the statement in the Command Paper result in a reality that gives the Welsh Government the same treatment as the Scottish Government in respect of bonds. On that note, and in reiterating the importance of borrowing to the Welsh Government, I conclude my remarks.

[Alun Cairns]

I want to sound a note of caution. I support the intentions of the Bill and I respect the case that has been made for the amendments, but those amendments could be seen as seeking almost limitless borrowing powers. As my hon. Friend the Member for Forest of Dean (Mr Harper) observed, borrowing powers need to be related to the amount of money that can be raised and to repayment. As we learned from the financial crisis of 2008-09, even when financial matters seem to be positive, changes can occur. Limits must therefore be set and a sensible approach adopted to borrowing across the whole of the United Kingdom, and particularly in respect of any institution that has a relatively limited capacity to raise its own funds, given that some of the Opposition parties do not seek to develop innovative and effective ways of using the extended powers granted by the Bill to raise funds by tax competition.

The £500 million capital borrowing limit set in the Bill, supported and approved by the Treasury, is sensible, amounting to £125 million a year. I want to bring an element of reality to the debate. Much of the focus has been on the need to improve the M4 motorway around Newport.

[Mr Harper]

Given that the £500 million capital limit is in the Bill, and given the strong case made by the official Opposition, it perplexes me that they have not tabled any amendments to change that capital limit, which they spoke so strongly against.

[Alun Cairns]

I am grateful to my hon. Friend for making that point. It is obvious where Plaid Cymru stands on the matter. The hon. Member for Arfon (Hywel Williams) made his case. I disagreed with it, but it is a respectable case which stands with the party’s politics in general. It seems inconsistent to make strong criticisms of an element of the Bill but not to table amendments seeking to improve the Bill or to make it more relevant, according to the Opposition’s argument.

The priority that has given rise to much of the debate about the need for greater capital spend in Wales is the need for improvement of the M4 around Newport. I pay tribute to the Chancellor and his efforts to encourage the Welsh Government to look positively at the need to improve that link. Many Members have spoken of the need for better infrastructure in and out of south Wales.

I remind the Committee that there was a commitment to such improvement pre-1997, by the then Secretary of State for Wales, my right hon. Friend the Member for Richmond (Yorks) (Mr Hague). That was to be funded entirely out of the Barnett block. The Barnett block at that time was £7 billion. It has now grown to about £15 billion. The shadow Welsh Secretary argues that Welsh projects cannot be funded without a significant increase in capital borrowing for such projects. Pre-devolution, without borrowing powers, those projects were to be funded out of the Barnett block as it was.

[Guto Bebb]

My hon. Friend makes an important point in relation to the proposed improvements to the M4. It should be noted that when the Bill was announced, the Secretary of State made it clear that this borrowing power should be for the M4 and also the A55. The Welsh Labour Government in Cardiff keep talking about the M4 and forgetting about the A55 and the needs of north Wales.

[Alun Cairns]

I am grateful to my hon. Friend for making that point. As a strong champion of north Wales he, along with the Secretary of State, will always ensure that improvements to the A55 are considered at the highest level.

[Mr Llwyd]

I, too, stake a claim to represent north Wales. On a point of clarification, the present Foreign Secretary was in post in Wales in 1997, before devolution. Now there is a £15 billion block, but that is to deal with health, transport and myriad other things which the old Welsh Office—not the Wales Office—did not have to deal with.

--- Later in debate ---

[Alun Cairns]

I am grateful to the right hon. Gentleman for making that point, but we will have to disagree. The Welsh Office at the time had exactly those responsibilities for transport, health and education. In the first Government of Wales Bill, the powers that the Welsh Assembly inherited were the same powers as had been held by the Welsh Office, which subsequently became the Wales Office. Additional powers have subsequently been granted, but they have been minuscule in proportion to the additional funding that has been provided. Out of a much smaller Barnett block grant, there was ambition for major capital projects. That ambition has gone.

I suspect I know why the right hon. Gentleman is a little bit uncomfortable. It is worth running through some of the history of the improvements that are needed in the M4 corridor. The then Secretary of State, my right hon. Friend the Member for Richmond (Yorks), committed to building that road. It was the right hon. Member for Neath (Mr Hain) who cancelled it after the 1997 general election. It was later proposed by the coalition Administration in Cardiff Bay—the coalition between Labour and Plaid Cymru—and the Transport Minister who cancelled it and who said that the Administration could not fund it was Ieuan Wyn Jones, the Plaid Cymru Assembly Member for Anglesey. That demonstrates the priority that the relevant parties have assigned to that much needed infrastructure improvement.

The Chancellor has pointed out on several occasions the need for improvement. He named the project in statements and in the Budget on one occasion to provide encouragement to the Welsh Government to improve this vital artery into south Wales.

[Owen Smith]

The hon. Gentleman’s argument would have more force were it not for the fact that only today in the Welsh Assembly the Minister for Finance, Jane Hutt, announced £1 billion-worth of further spending on infrastructure, several hundred million pounds on the Heads of the Valleys road, and £200 million on a new cancer hospital at Velindre that will no doubt benefit the hon. Gentleman’s constituents. Far be it from me to suggest that he might be out of date and no longer keeping up with matters in the Assembly, but that would appear to be the case.

[Alun Cairns]

Not at all. I welcome those announcements. I wish there had been an announcement about improvement to the infrastructure in my constituency, and I wish there was to be improvement to the main infrastructure coming into Wales along the M4 corridor, but today’s announcements are obviously positive. However, we need to underline the delays that take place on that artery, that investment is essential and that borrowing powers need to be granted. Improvement should have taken place well before now. The original commitment was made pre-1997 but the Labour Administration cancelled it and the Welsh-led Labour Administration have not built it since. We should consider the delays, the accident records, the damage to the south Wales economy, and the hauliers based in my constituency who have had to set up on the Avonmouth side of the border because of the lack of investment and ambition over the past 15 years on the part of the Welsh Labour Administration.

[Wayne David]

Does the hon. Gentleman not accept that borrowing powers are vital because the Welsh Government’s capital budget has been cut by one third because of central Government cuts?

[Alun Cairns]

The changes to the capital budget are nowhere near the cuts that the last Labour Chancellor proposed to make leading up to the Budget. We need to compare like with like, and we need to consider the financial circumstances at the time. One of my early points was that limitless borrowing powers simply cannot be granted because of the changes in circumstances that take place. The point has already been made that if we are asking the Treasury to stand behind the debt that is being taken on by the Welsh Government, the Treasury obviously needs to be able to support that and a sensible limit needs to be provided. The capital sum of £500 million is sensible, certainly in the first instance, but we need to be pragmatic about that over time.

Finally, the Administration’s infrastructure commitments, particularly the electrification of the Great Western main line, demonstrate the priority placed by the Government on the east-west link along south Wales, which has not been forthcoming since the M4 was cancelled all that time ago.

[Paul Murphy (Torfaen) (Lab)]

If I was an independent observer listening to the previous two Conservative Members’ contributions to the debate, I would wonder whether they wanted borrowing at all. The hon. Member for Vale of Glamorgan (Alun Cairns) seemed to be very lukewarm on the issue, and questioned whether all this should really come out of the revenue budget. My hon. Friend the Member for Caerphilly (Wayne David) made it perfectly clear: 33% of the capital budget has been cut. There is no question in my view, or in the view of probably all the parties represented in the Assembly, including the hon. Gentleman’s party, but that there is a need for capital spending on infrastructure in Wales, including hospitals, schools and all the rest of it. The hon. Gentleman seems to have a lukewarm attitude towards it.

[Alun Cairns]

rose—

[Paul Murphy]

I will give way in a second because I want to refer to what the hon. Member for Forest of Dean (Mr Harper) said. He did not really like the idea of what he termed “popular” capital projects. He gave the impression that the Welsh Government would go round Wales seeking out the most popular issues with which to woo the electorate. That is a complete load of baloney. There is a consensus among Assembly Members about what they want: the M4 relief road is one and the A55 is another, but there are others too, including the Velindre and other hospitals. I absolutely welcome the clause. The Government have done well in introducing it. The Labour Government should have done it. I was Secretary of State for five years and we should have done it then, but things move on and the Government have done the right thing, although I question the mechanics of it.

[Alun Cairns]

I want to set the record straight. I am merely sounding a note of caution over limitless borrowing powers. The figure of £500 million is sensible and pragmatic, and it needs the Treasury’s support. After the recent financial crisis, we need to recognise the risks of unlimited borrowing.

[Paul Murphy]

I agree with the hon. Gentleman on that, but I still direct the independent observer, from wherever he or she may come, to the beginning of his speech where he spoke about the benefits of dealing with these things, which the right hon. Member for Richmond (Yorks) (Mr Hague) dealt with before the 1997 general election, out of revenue. That is impossible given the strain on the revenue budget these days in Wales. The capital budget has to come out of a separate pot.

I want to emphasise the points made by my hon. Friends the Members for Pontypridd (Owen Smith) and for Llanelli (Nia Griffith) and others about the calculation of the £500 million.

--- Later in debate ---

[David T. C. Davies]

I absolutely think that my constituents deserve the highest standard of care possible. There is a very easy way for them to get that, and that is for them to be able to choose it.

[Alun Cairns]

Does my hon. Friend agree that the shadow Welsh Secretary is being somewhat selective in focusing on one element of cancer care? Once the patient has seen the consultant, there is a regular need for medication, and accessing cancer drugs in Wales is much more difficult than in England because Wales does not have the cancer drugs fund. When we are considering cancer care, we need to look at the whole package rather than just one small element.

[David T. C. Davies]

My hon. Friend is absolutely right. Labour Members, or at least their colleagues in the National Assembly for Wales, are incredibly reluctant to deal with the issues and go into the detail in the same way as my hon. Friend. We have seen that in the decision of the Assembly’s Health and Social Care Committee to start taking votes on which witnesses they are prepared to listen to and which they are not. As somebody who has chaired a Select Committee for a number of years, I have heard witnesses give all sorts of evidence. I have often sat through whole inquiries in which I have disagreed with virtually every single word of evidence I have heard, but I never try to prevent people from coming in, because I believe that if people have something to say, we should welcome them, and that if I happen to have a different view, I can put it to them and challenge them on the facts. I have never heard of anything as outrageous as a Select Committee, which is supposed to operate in a non-political fashion, taking votes to bar people from giving evidence. That is absolutely disgraceful behaviour.

That is also reflected in the behaviour of some Assembly Ministers, who, rather than make the arguments the hon. Member for Pontypridd (Owen Smith) is trying to make, decry anyone who criticises the NHS as being anti-Welsh. There is nothing anti-Welsh about Members of Parliament for Welsh constituencies trying to demand the best possible health care for their constituents. I also thoroughly welcome the support I have received from the Prime Minister and the Health Secretary, who have rightly spoken out about this issue because they believe it is wrong and disgraceful that people in one part of the United Kingdom receive health care that is so much worse than that received by people in another part of the United Kingdom.

Budget Resolutions and Economic Situation

Alun Cairns Excerpts

Wednesday 19th March 2014 Commons Chamber

[Ian Lucas]

The fundamental mistake was the demutualisation of organisations such as Northern Rock by the Conservative Government in 1986 and the years thereafter. The hon. Gentleman should be arguing against such decisions, so that we can start creating institutions like local building societies again.

Our current banking system is not the only model of banking. In Germany, the Sparkassen model was affected much less than most economies by the 2007 recession. Local banks known as Sparkassen operate within geographically restricted areas and provide both retail and business banking there. Notwithstanding the existence of ordinary multinational banks, over 20% of ordinary local residents choose to invest in their local Sparkassen.

I welcome what the Chancellor said today about ISAs, but I believe that people would invest in local banks and institutions that supported the local economy and created jobs for young people. We want to see that happening, which is why we support the development of regional banks. Ever since the Conservative Government started to demutualise in the 1980s, destroying institutions such as Northern Rock, the Leeds Permanent building society and the Halifax building society, the move has been ever more towards centralising investment by the banks in this country. Local economies have suffered as a result.

Business investment has not recovered since 2007, and the City still dominates the economy. The growth that we are seeing in the UK is growth of the kind that led to the problem in the first place. We can all see the train coming down the track. We know what kind of a recovery this is, and we need to do something about it. The people I represent are not benefiting from the recovery at all. Women in my constituency are still earning less than they were in 2010, and men there have also seen a reduction in their incomes since that time.

[Alun Cairns (Vale of Glamorgan) (Con)]

Will the hon. Gentleman give way?

[Ian Lucas]

I must make some progress; I have a particular point that I want to make.

This Government are not even addressing those issues. They do not seem to understand that they exist. Nothing that the Chancellor said today will help the people I represent. They are fed up with inequality in this country, and with the massive support that is given to those in the City and those who earn millions of pounds a year, who are so remote from the lives of my constituents that they can have no understanding of how the rest of the country works.

Believe it or not, there was a time when the Prime Minister supported a move towards greater equality. He quoted “The Spirit Level” in 2009, before he was elected, when he was trying to present a positive face for the Conservative party for the election. Those days are long gone.

We need to take responsibility ourselves. Inequality is the issue of the time. I am a member of the Nationwide building society.

[Alun Cairns]

Will the hon. Gentleman give way?

[Ian Lucas]

I will not give way; I have a particular point to make.

The chief executive of the Nationwide building society was paid £2.3 million last year. I have written to him asking him to support a motion within the society that his salary should be no more than 75 times the rate of the lowest paid employee in the organisation. This is a mutual society that we should all support. He has refused, and I as a member, acting as an individual, intend to present a resolution to the annual conference of the Nationwide building society. A mutual organisation should respect the principles of mutuality and should accept that it is not appropriate for investors’ money to be used for that level of executive pay. If people want executives paid at that level, they can go and bank with Barclays. When I shifted my account to the Nationwide building society, I did so because I believed in mutuals. I want my chief executive’s pay, like that of the chief executive of the John Lewis Partnership, who operates precisely on those terms and has been in his position for many years, to be linked to that of other employees in the organisation.

I am looking for support. Members in all parts of the House can join my campaign. I need 500 signatures by 4 April, and I hope the Chancellor of the Exchequer will consider joining it, if he is a member of the Nationwide building society. We need to ensure that the people we represent know that we understand that this country faces a cost of living crisis and that individuals are worse off now, and that we will not put up with increased executive pay of millions of pounds for people who are not supporting the local economies in our constituencies.

--- Later in debate ---

[Alun Cairns (Vale of Glamorgan) (Con)]

I would like to say that it is a pleasure to follow the hon. Member for Liverpool, Wavertree (Luciana Berger), but I do not recognise the biased and party political points that she made. Her speech was loaded against the positive news, which should be welcomed, about measures to help people in her constituency and others who need the Government’s help and support. I hate to think of the contributions that she and many other Opposition Members would have made if we had not been able to look forward optimistically to the sustainable growth that the Government have helped craft through their difficult decisions over recent years.

As we look optimistically at that growth, it is hard to believe the predictions that the Opposition have presented to us over recent years. We all remember the “too far, too fast” line, and then there was “flatlining”. We then had predictions about a double dip and even a triple dip; then they predicted that there would be a million jobs lost. That shows the Opposition’s lack of credibility, following their previous prediction about having ended boom and bust. They simply have no economic credibility, so their criticisms of an important building block in delivering sustainable economic recovery and growth show them for what they really are.

Of course the growth is welcome, but I am also extremely impressed by the nature of the recovery. Deficit reduction is important in itself—after all, it is the fundamental building block in creating confidence. The deficit has already been reduced by a third, and the Office for Budget Responsibility predicts that it will have been reduced by half by later this year. Of course, that in itself will not deliver sustainable economic growth, so we need to examine the data that are available beneath the deficit reduction figures.

The growth that we are experiencing is quite remarkable, and, again, it undermines the arguments that Opposition Members have made in recent years, and particularly today. The UK is now the fastest growing major economy in the world, and the fastest growing of the OECD nations. Even more than that, all sectors of the economy grew last year. We have to go back to 2007 to find the last time that happened, which demonstrates the balance of the economic recovery we are experiencing, be it in services, construction or manufacturing. Those are important sectors that demonstrate how growth in the economy is serving all parts and sectors of the UK, including those who are employed and those who seek employment. We are all sharing in the success.

All those who spoke from the Opposition Benches mentioned inequality and tried to highlight the differences between those who have and those who have not. However, they missed a really important line from data provided by the OBR and the Office for National Statistics, which is that we now have the least inequality in the United Kingdom for 28 years. That completely exposes all the anecdotal and selective evidence that has been presented. We have the lowest rate of inequality for 28 years, which is something Labour Members should be glad about.

If we examine the data further, we realise that the unemployment figures presented today were remarkable. Unemployment stands at 7.2% across the United Kingdom. It is unheard of for the rate of unemployment in Wales to be lower than the national average. In all my life I cannot remember unemployment in Wales being lower than across the rest of the United Kingdom, yet it now stands at 6.7%, so the gap between unemployment in Wales—my nation—and the rest of the United Kingdom is not just 0.1% as it was last month. I am absolutely delighted, and I hope that Labour Members from the Principality will join me in welcoming that success. It demonstrates that growth is serving every nation of the United Kingdom, and every sector in our country.

If we look at growth figures from the north-west, Wales or anywhere over the past two years, we see that all regions and nations of the United Kingdom have experienced levels of growth. Again, that shows that growth is not dependent on the dominance of London and the south-east, as was the case during the 13 years of the Labour Government.

[Geraint Davies]

As has been said, Wales has the highest level of poverty in the UK, with more in-work poverty than out-of-work poverty, and it is the most affected by the horrendous bedroom tax. The Tories are putting the boot into Wales, which is why we will kick the hon. Gentleman and the Government out next time.

[Alun Cairns]

I am grateful to the hon. Gentleman for making such an important point about poverty in Wales, because it needs to be recognised. However, even in the darkest, most difficult days, when coal mines and steel plants were being closed and things were extremely difficult for those communities, Wales was not the poorest part of the United Kingdom. After 13 years of Labour control, Wales is sadly the poorest part of the United Kingdom, but it is now experiencing higher and faster growth than most other parts of the UK. That goes to show that the UK Government are playing their full part in our turning the corner and getting out of the cul-de-sac that the Labour party left us in. That was what Labour left us.

We talk about balance across the economy, but more needs to be done to strike that balance in every way, and the Budget has taken a significant step in that direction. There has been significant support for manufacturing, including a £7 billion package that provides elements for capping the carbon price support scheme. One benefit of that £7 billion will be the £50,000 cut in energy prices or costs for a mid-size manufacturing plant. There are hundreds of those in Wales, including several in my constituency, and as a result of the Budget they will get a £50,000 cut in energy costs.

[Mark Field (Cities of London and Westminster) (Con)]

Does my hon. Friend also recognise today’s important initiative in relation to export credit guarantees, which will encourage particularly small and medium-sized enterprises looking to export beyond the shores of the United Kingdom? That will make a significant difference in the high-resolution manufacturing industry, which is so well catered for in the part of the UK he represents.

[Alun Cairns]

I am grateful to my hon. Friend for underlining that point. I was going to come on to it, but his intervention presents me with an opportunity to highlight again the balance that the Chancellor is determined to restore to the economy to ensure that every part of the country and every sector within every part of the country is playing a part in promoting the economic growth and is sharing in and generating the prosperity.

The other point I wanted to make on energy related to the support for the energy-intensive industries. Dow Corning in my constituency exports 90% of its output. It is a true success story in the Vale of Glamorgan. The high energy prices really did raise some serious questions for the management of the organisation, but this support will be welcomed far and wide within the group and particularly in Barry, where it is the largest employer.

We need to acknowledge that as this recovery has been built, some people have had to pay quite a significant price, including savers, many of whom are pensioners. Of course, low interest rates were essential to deliver the economic growth we all need and on which public services are built. I am particularly pleased that the Chancellor has recognised that it is time for the growth to be shared with our savers and pensioners. Today’s announcements on encouraging saving, and especially the pensioner bond, is significant. A 2.8% return predicted for one year and a 4% return for three years is really quite important for people who want to be able to plan their future and for those who have done the right thing in that they have worked hard and saved hard.

The changes to the ISA are extremely important and very welcome. They will simplify the process, again providing certainty and security: if people work hard, save hard and do the right thing, this Government are on their side.

Finally, I just want to say this: “If you’re a pensioner or about to retire, there is significant help; if you’re employed, the tax allowance will make a big difference; if you’re a saver, there is extra support; if you want to export, there is help available; and if you’re involved in manufacturing, there are significant energy cost reductions.” This is a Chancellor who is building sustainable economic growth as part of our long-term economic plan.

Fairness and Inequality

Alun Cairns Excerpts

Tuesday 11th February 2014 Commons Chamber

[Mr Brown]

The hon. Lady knows as well as I do that it was a matter of days, but this also relates to the comments made by the hon. Member for Aberconwy about the impact of taxation on individuals. For most of that time, there was never a need for that higher rate of tax to be imposed. The hon. Lady knows that it was a Budget decision to raise the rate from 40p in the pound to 50p. Yes, that rate applied only for a matter of days, but the Labour Government had not felt the need to increase it at any other time.

[Alun Cairns (Vale of Glamorgan) (Con)]

Will the hon. Gentleman tell us how much he expects the 50p tax rate to raise in net gains to the Treasury, and how that squares with the comments from the Institute for Fiscal Studies about the policy?

[Mr Brown]

It will definitely raise more than the 40p rate raises at the moment, but the big challenge for Government Members will be whether there will be a reduction from 45p in the pound to 40p in the next Budget. Can the hon. Gentleman tell me whether that will happen?

[Alun Cairns]

I notice that the hon. Gentleman did not answer my question about the comments from the IFS. Does he accept its view that the net gain from Labour’s policy would be negligible?

[Mr Brown]

The net gain will be significant. It will be some 11% more than is currently being raised.

It is notable that there is no mention in the motion of creating a fairer tax system. The Scottish National party’s plans for independence include slashing corporation tax, but it has been unable to provide any certainty on whether it would follow Labour in introducing a 50p tax rate. In fact, the SNP Finance Secretary in the Scottish Government has resisted making the party’s tax policy clear in any way.

We now accept that the driver of inequality has been the rate at which salaries at the top have increased in recent years. Again, however, the motion makes no mention of that. It says nothing about how we are to get to grips with high pay in the UK. The Labour Opposition have accepted the recommendations of the High Pay Commission, and we have outlined three key tests that the Government must meet to show they are serious about executive pay being at such high levels. First, we want firms to publish details on the ratio of employee average salaries to executive pay, and for the Department for Business, Innovation and Skills to publish a league table showing the highest ratios. Secondly, we want to see an employee representative on the remuneration committee of every company. Finally, we would repeat Labour’s tax on bank bonuses to fund a compulsory jobs guarantee for any young person on unemployment benefits for 12 months or more. These young people are not our future—they are part of today, and they need to be employed today and well into the future. That is real action to bring about fairness in our society, but what we have heard from the Scottish National party and Plaid Cymru this afternoon often bears closer resemblance to what those on the Government Benches have been saying.

Yesterday, during a question on economic inequality, Lord Newby stated that

“according to the latest ONS statistics, income inequality in the UK is at its lowest level since 1986. The Government are committed to ensuring that all families benefit from the return of growth to the economy”.—[Official Report, House of Lords, 10 February 2014; Vol. 752, c. 408.]

That is not what far too many individuals and households are actually experiencing. Any economic recovery here in the UK is patchwork in its nature. As I have said in the Chamber previously, there are many rural localities where households are in a desperate plight, with below average earnings.

--- Later in debate ---

[Mr Brown]

I hear what the hon. Gentleman is saying, but there is an element of him trying to rewrite history. We were making progress. I cannot say what he experienced in his constituency, but there were people in my constituency, some of whom had been out of work for a long time, were disabled, or had been seen as people who would never work, who got into employment, and that was thanks to the excellent work of the Department for Work and Pensions staff. We did make progress; it was just that it was not as much as we would have liked.

[Alun Cairns]

Can the hon. Gentleman point me to any Labour Government in the past who left office with unemployment lower than it was when they entered office?

[Mr Brown]

I will be honest with hon. Gentleman and say that I cannot give him that figure. However, I think he is trying to forget that there were almost 3 million people who were unemployed under the previous Conservative Government. We worked massively hard to reduce the levels of unemployment in this country, so much so that, as a Government, we were talking about the potential of full employment in this country, which is a long way away from where we are today.

[Alun Cairns]

rose—

[Mr Brown]

Let me just mention one or two other things. The hon. Member for Suffolk Coastal (Dr Coffey) has left the Chamber, but she spoke about paying down debt. In case the House has forgotten, when we came to power in 1997, there was 43% debt, and we paid down debt as we progressed over the years to 37%.

The hon. Member for Aberconwy spoke about taxation. I do not have a problem, as he has, with a 50p income tax rate, but I do have a problem with value added tax. Our colleagues in the SNP need to be absolutely clear and honest with the people of Scotland: if Scotland achieves independence on 18 September and becomes a full EU member state, the people of Scotland will be looking at VAT on food, children’s clothing, and books and newspapers. That is fact.

The SNP is very good—and I have heard this a couple of times this afternoon—at comparing other small nations with Scotland. It is keen to mention Sweden, and all too often it mentions Norway, but the problem is that they have Conservative Governments. I do not know if that is what it wants in an independent Scotland.

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[Mr Weir]

My hon. Friend makes a very good point.

[Alun Cairns]

Does the hon. Gentleman agree that it is easy for Labour Members to call for an energy price freeze when it involves other people’s money or other companies’ money, but it is different when it comes to council tax rates? They have the power to freeze council tax rates in Wales, but in the past three years we have seen a 9% increase in council tax. Would they not do better to channel their efforts into an area of policy where they have control and could deliver lower bills?

[Mr Weir]

The hon. Gentleman makes his point. I just point out that in Scotland we have frozen council tax for several years. We have also taken action to pay extra money from our already constrained budget to get rid of the effects of the bedroom tax in Scotland. We cannot get rid of the tax itself because that is controlled by the Westminster Government; we can only mitigate the effects.

Another issue I have talked about in the past is the inequality between rural and urban areas and between different sections of society, particularly in relation to energy and the problems of those who are off the gas grid. Far too often when energy is discussed, we focus on the evils of the big six. It may be good to give them a kicking in passing, but there are also serious problems in the off-grid market. All of us who are off grid will have found that prices have rocketed, much higher than the price of energy from the big six companies and from the grid. Pensioners in particular face serious difficulties in paying their winter bills.

I have twice introduced Bills in this House and on two occasions, I think, I have tried to amend energy legislation to tackle the problem by suggesting that the winter fuel allowance should be paid earlier. I do not think it would be terribly difficult, but this Government, like the previous Government, seem to have a horror of doing that and making a real difference to the people affected by the problem.