Oral Answers to Questions

Alun Cairns Excerpts

Tuesday 28th January 2014 Commons Chamber

[Nicky Morgan]

The right hon. Gentleman seems to have forgotten that if the last Labour Government had continued in office prices would have been even higher, because it is this Government who reduced fuel duty.

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

3. What recent fiscal steps he has taken to support small businesses.

[Damian Hinds (East Hampshire) (Con)]

4. What recent fiscal steps he has taken to help high street businesses.

--- Later in debate ---

[The Chancellor of the Exchequer (Mr George Osborne)]

We heard today that our economy continues to grow and we know that there is currently the greatest number of businesses in the UK on record—around 400,000 more than at the general election. We have supported that by reversing the previous Government’s increase in the small companies tax, undoing their jobs tax, cutting red tape, freezing fuel duty, taking the smallest firms out of business rates and helping the high street, and in a few months’ time, we will have our employment allowance, a £2,000 cashback on jobs, which will take almost half a million small firms out of employer national insurance altogether. Unlike others, we are unabashedly pro-business.

[Alun Cairns]

Small businesses recognise the supportive economic framework that the Chancellor has set out, such as reductions in corporation tax, national insurance and business rates, among many others, by recruiting more people than ever before. Will the Chancellor reassure me that he will not follow any advice from the shadow Chancellor, who called for a plan B and predicted a double and even a triple-dip recession?

[Mr Osborne]

There is no danger of that. In the last few days, even the Labour Ministers who served with the shadow Chancellor are not prepared to follow his advice. The important point here is that we have supported a private sector recovery, small businesses are absolutely at the centre of that, and the Prime Minister yesterday, at the Federation of Small Businesses, reinforced the point that we are there to do more to help small businesses and we encourage them to come forward with ideas for the Budget.

Annuities for Pensioners

Alun Cairns Excerpts

Tuesday 7th January 2014 Westminster Hall

[Richard Graham (Gloucester) (Con)]

Today we are covering a subject that in many ways is both dull and important. “Annuity” is a difficult word, which lacks a simple definition, and it is not something that a man or woman under the age of 50 would wisely bring up in discussion with friends. However, 400,000 people this year will buy an annuity. That figure will grow substantially over the years, and anything that affects such a large percentage of our country’s population is therefore worthy of the first Westminster Hall debate in 2014. Annuities are dull, but important, and absolutely ripe for review and improvement. It is therefore timely that Mr Speaker has chosen the subject for the first Westminster Hall debate of the year, and it is a pleasure to participate in it under your chairmanship, Mr Dobbin.

I will first outline annuities and their market as it is at the moment, who buys them, for whom they are best and least suited, and whether we need them, before looking at specific issues raised by recent investigations and considering what more might be done to improve the world of annuities. Historically, pension structures have required individuals to bring certainty to our savings, effectively by exchanging whatever pool of savings we have for known income, by drawing an annuity or by having income draw-down—two technical terms already, which are perhaps better described as “income for life”. That is what an annuity was designed to deliver, and it is derived from a complex calculation that involves bond yields, longevity and charges. In due course, I will return to discuss the last especially.

The concept of an annuity is relatively simple: to provide older people with the certainty of knowing what their income will be in an otherwise uncertain world of costs and, perhaps, care. In a world of defined-benefit pensions, we had such certainty, but that world—outside the public sector—is going fast, so certainty of income is a bigger issue than it was, and in today’s world many people are searching for it. We might therefore imagine that an annuity is the product for today. As auto-enrolment expands, reaching about 8 million new pension savers, net of opt-outs, the number of new annuity customers will surely grow. It will be a slow burn, because most of those auto-enrolling over the next few years will not reach annuity-type age for some decades, but eventually the figure used in the media—the number of annuity customers doubling—will be reached. As a result, instead of more than 1,000 new customers a day in 2014, before long there will be 2,000 new buyers of annuities every day.

The annuities market will therefore soon have 500,000 customers a year, predominantly in their 60s and 70s, making what for most will be the second most important financial decision of their life—the first being their home. As Ros Altmann has pointed out, as things stand with an annuity, unlike buying a home, there is no going back: someone buys it and that’s it—no change, no transfer, no flexibility and no equivalent of renting out, moving on, selling or downsizing. An annuity therefore best suits customers who know exactly what they are looking for—because they are well versed in the language of annuities, such as open-market options, enhanced annuities or comparisons with income draw-downs—and perhaps already have a defined benefit pension and are looking to convert a smaller defined contribution pot, which is a modest percentage of their total savings.

Such customers use the comparison tables of the office of the Pensions Advisory Service, provided by the Money Advice Service. They shop around for alternatives offered by online and household-name providers. They know that they will keep the same wife, husband or partner for ever, that they will live long enough for the income draw-down to exceed the capital exchanged and the commission charges, and that, ideally, both partners will exceed the lifespan expectations of their current health and the geography of where they live—alternatively, perhaps they will buy their annuity in a poor city and thereafter move to an idyllic village where people live longer. Such a customer should do well in the current world of annuities. Unfortunately, he or she is as exotic and rare as a sacred ibis on the banks of the river Severn in my constituency.

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

I pay tribute to my hon. Friend for securing the debate and for the way in which he is presenting it. He rightly highlights the fact that the transaction is extremely complicated—that is exceptionally important—and he has used a range of phrases that are commonplace to financial advisers, but not necessarily understood by the clients. Does he accept that the retail distribution review, although perhaps painful in the short term, will deliver significant benefits over the longer term, but that the charging structure and the change in the culture might well put some people off seeking advice for annuities, thereby making this extremely complex transaction far more difficult for the average punter to decide on?

[Richard Graham]

My hon. Friend has spent a lot of time working in the sector and knows the issues well. He is absolutely right to highlight the unintended consequence of the retail distribution review, which in a sense is to put people off the idea of buying up-front advice on a complex product such as an annuity. For those who have a relatively small pot of savings, such as £20,000, £30,000 or £40,000—a lot of money for some people—the idea of paying £400 or £500 for advice is not attractive. My hon. Friend is right to highlight that, because it is one of the issues.

I drew attention to the perfect customer for an annuity; let me now give the other side of the coin. By contrast is the customer who is told by the provider of their direct contribution pension—his or her only modest source of savings—that they need an annuity, has no idea what an annuity is and asks the pensions provider what they can offer; who has no idea whether that offer is good, bad or indifferent, goes for the cheaper of the options available, probably leaving out any cover for his or her partner and certainly any provision for inflation, and forgets to mention perhaps a hereditary heart weakness; and who moves from a suburb to the inner city to be closer to shops and a hospital, lives for a few years and then dies, having drawn only a small percentage of income from a capital sum that has now disappeared, leaving their wife, husband or partner on the state pension. For what purpose did he or she save?

With longevity the way it is, we might argue that such a customer scarcely exists, as we would all hope, but the reality is that some of his or her characteristics are a reality—as the Pensions Advisory Service has confirmed—especially in the understanding of what they are buying. Ros Altmann has estimated that insurers will often keep between half and three quarters of a pension fund they take over and convert it into an annuity.

I did a quick reality check on the word “annuity” in a Gloucester pub last weekend. Of the 22 people I asked, six said it was a financial thing like a pension, one of those said it gave income and most of the rest said they had no idea. I accept that it was a bad weekend for Gloucester rugby, and trying to discuss annuities in a pub was pushing my luck, but I do not believe that the people of Britain know what an annuity is or that the average response would be any different. Why is an annuity useful? Do people have to have one? The answer is no. How do they go about getting one? An annuity is potentially the second biggest financial purchase of our lives, so the current state of information about them is worrying.

In any market that size—£12 billion a year is big—if a customer feels that he or she has to buy something but does not really know what it is, the definition of good value is elusive. Customers need a lot of knowledge to pick the right product and the market is dominated by a handful of big names, so there is a danger of high charges, a lack of transparency and inadequate protection. The annuities market more than lives up to all those risks. I rang the Pensions Advisory Service yesterday to get some initial advice—just one man in his 50s ringing in to ask questions about annuities. I got good general advice on a whole number of issues, but when I asked about charges, I was told confidently, “You will never be able to work out what the charges are.” I asked the helpful adviser whether he thought that was right. “Not for me to say,” he replied, which was fair enough. However, it is right for hon. Members to raise and challenge the situation on behalf of our constituents, who ought to know what they are being charged for a product as important as an annuity.

Almost 20,000 of my constituents in Gloucester are between 50 and 64. For all of those people, some understanding of annuities would be useful. It is not good enough to have a product for which people will simply never know the charges. The situation for annuities sits oddly beside that for their stepbrother or sister, the pension. Huge efforts are being made to clarify, and make as simple as possible, all the costs and charges for pensions; to estimate a management fee that is neither rapacious nor drives investment managers to the lowest common denominator; and, above all, to make charges transparent to the client. The status quo is tantamount to an insurance firm—everyone is under the same roof, in the same organisation—saying, “Right, over here is a team of investment managers managing pensions: you need to be squeaky clean, work out all the costs and charges and report them completely. Your margins will be tight. Over here, in this corner, we have the annuities guys: your pricing is roughly what you want it to be, and there is no need to explain or declare anything.” That has to be wrong. When such efforts are being made to ensure transparency about money coming into a pension, it is especially strange that, at the moment, the system does so little for moneys coming out of a pension and into an annuity.

For today’s debate, we have the benefit of the detailed investigations by the Financial Conduct Authority’s consumer panel and The Daily Telegraph. The latter found that differences between annuities offered amounted to as much as £1,444 a year on a pot of £100,000. The FCA’s consumer panel found that commission charges vary by up to £1,000, which might, for the cynical, explain why the industry is so shy when it comes to explaining what the charges are.

The FCA found in general that the industry was “very dysfunctional”, with “possible exploitative pricing”—up to 6% of a customer’s pot could go in commission. In a rebuke to any of us who thought that the answer might simply be to provide more information, the consumer panel found that customers are put off by the mountain of jargon and “information overload”. Frankly, I am irresistibly reminded of the endowment mortgage I was obliged to buy in the 1980s: however it was explained, it was absolute gobbledegook, and there were high commissions, often from one insurer to another. The consumer panel found that 3.5% commission for an introduction from Zurich to Legal & General seemed to be the going rate for annuities today. In the 1980s, if someone wanted to buy a house, they had to have an endowment mortgage. Later on, of course, the fabulous projected investment returns did not materialise, the mis-selling was investigated, fines were levied, the product was binned and the financial sector moved on. Will we see a repeat of that?

I chaired a seminar recently on annuities and asked the Association of British Insurers whether there was a danger of any of its members being sued for mis-selling. There was a long pause before the answer came: “Not yet.” It is therefore not surprising that the FCA consumer panel has recommended urgent regulatory and Government-led reforms to protect and benefit millions of our constituents.

I will turn now to what changes have already been made, and then move on to what could or perhaps should be done next. I start by recognising what the Government have already done. Some of the changes made by the Treasury should have been made a decade ago. For example, it has removed the default retirement age and the effective requirement to purchase an annuity by the age of 75. That is a vital change: it means people no longer have to buy an annuity, and, if they do not, they can take 25% of their savings tax-free and draw an income from the rest. That is a serious option for many people. The starting point of a debate on annuities for every individual should always be whether an annuity will be useful and helpful to them, and what the alternatives are.

There have also been changes to the capped draw-down rules—more jargon, I am afraid, but those rules have been reformed, and that matters within the sector. The Treasury has also encouraged the ABI’s new code of conduct for retirement choices, which has come into play and has made modest steps forward on explanations and general advice, but I do not believe that that is enough. At the same time, the Department for Work and Pensions has promoted open market options and obliged DC schemes to provide what it calls a “wake-up pack” of information, pre-retirement.

Autumn Statement

Alun Cairns Excerpts

Thursday 5th December 2013 Commons Chamber

[Mr Osborne]

I very much support my hon. Friend and his campaign to make sure that the university thrives in Stafford, and I commend him for identifying this as such an important issue for our country. Some 60,000 people a year have the grades, have the ambition, are willing to take out the loan and want to go to university, but at the moment we say no, because of a Gosplan system that has been in place. We get rid of that today. There will be a big increase in student numbers—of course quality will be maintained—and that will be great for the people he represents.

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

Over the time that council tax rates have broadly been frozen in England, my constituents and people across Wales have faced council tax increases in the region of 9%. Will the Chancellor join me in supporting the “Freeze the bill” campaign—the council tax bill campaign—to ensure that my constituents get fair play? This is a tax that politicians can control.

[Mr Osborne]

I absolutely support my hon. Friend and his campaign to make sure that the local council helps local hard-working families by freezing council tax—that is what it should be doing. By bringing this to our attention, he reminds us that there are things we can do to help people, and we are doing them today.

Cost of Living

Alun Cairns Excerpts

Wednesday 27th November 2013 Commons Chamber

[Chris Leslie]

My hon. Friend is correct. The Government are afraid of the energy companies. We are not yet sure why they are so afraid to stand up to the big six, but it is clear that the Chancellor’s solution of simply shifting £100 or so off an energy bill and on to the taxes of all our constituents will not convince people that they have the answers. The switch is so obvious it can be seen in the dark. It is a palliative that merely shunts the costs from a bill payer to a taxpayer. It fails to tackle the root cause of the problem, which, as my hon. Friend has said, is the excessive profiteering of the utility companies. Government Members are going to have to try a lot better than that next week.

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

I am grateful to the hon. Gentleman for giving way. He makes an extremely important point on the need to freeze bills, which is largely what has happened over recent years to council taxes in England. In Wales, however, where the Labour party runs the Welsh Government, there have been council tax increases of nearly 9% over recent years. That is a bill that can genuinely be frozen by politicians. Will the hon. Gentleman stand up to the Labour party in Wales to ensure that my constituents are not forced to pay 9% increases in council taxes?

[Mr Tobias Ellwood (Bournemouth East) (Con)]

That was worth waiting for.

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[Chris Leslie]

I am happy to give way to the hon. Member for Vale of Glamorgan if he wants to explain.

[Alun Cairns]

On a point of order, Mr Deputy Speaker. The hon. Member for Cardiff South and Penarth (Stephen Doughty) has inadvertently misled the House in that the quotes attributed to me are wholly inaccurate. I ask him to withdraw what he said.

[Mr Deputy Speaker (Mr Lindsay Hoyle)]

I do not know whether what was said is true or false, but the hon. Gentleman has put the facts on the record. I am sure that that point can be sorted out later, no doubt over a cup of tea.

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[Sajid Javid]

My hon. Friend has made his point well, and I will not dwell on it further, in the interests of time.

We have also frozen fuel duty. Petrol is now 13p per litre lower than under Labour’s plans. Each time the average motorist fills up their car, they are saving £7 because we have refused to implement Labour’s fuel duty escalator. We are also helping local authorities to freeze council tax, and our tax-free child care plan will mean savings for parents of up to £1,200 per child.

[Alun Cairns]

rose—

[David Rutley (Macclesfield) (Con)]

rose—

[Hon. Members]

For Wales? [Laughter.]

[Alun Cairns]

I am grateful to my hon. Friend for giving way.—[Laughter.]

[Madam Deputy Speaker (Mrs Eleanor Laing)]

Order. The hon. Gentleman is making a brief intervention, and he must be heard.

--- Later in debate ---

[Alun Cairns]

My hon. Friend makes an extremely important point about council tax, highlighting the freezing of council tax here in England. Sadly, in Labour-run Wales, council tax has risen by nearly 9% over recent years, in the same time as it has been nearly frozen here. Will he join me in calling on the Labour Front-Bench team to pressure their colleagues in Cardiff Bay to freeze council tax for my constituents in the same way that he is doing for constituents in England?

[Sajid Javid]

My hon. Friend has made his point very well, and the shadow Front-Bench team will have heard it. If they really cared about citizens in Wales, they would pressure their Government in Wales to take action on council tax.

We are also making it easier for hard-working people to put some of their savings towards buying their own home. Our Help to Buy mortgage guarantee and equity loans are making home ownership a real possibility for aspiring people. Just one month since its launch, more than 2,000 people have put in offers for homes under the mortgage guarantee scheme. More than three quarters of the applicants were first-time buyers, many of them in their early 30s. Since the launch of the equity loan scheme in April, 92% of the 5,000 new homes built have been bought by first-time buyers. This is how we are helping to raise living standards: we create a business environment in which more people can go to work every day; we create a tax environment in which people can keep more of the money they earn every month; and we work with the banks so that every year more people can secure the dream of their own home.

Our plans are improving living standards, but what is the Labour party’s solution? I am sure it will tell the public that the only way is up—and they would be right: under Labour, taxes would go up; mortgage rates would go up; inflation would go up; and unemployment would go up. That is what economic failure looks like.

As I said at the outset, the shadow Minister needs to give the British public more credit. They are a lot smarter than he realises. They recognise that it was the Labour party that got the country into this mess, and that it will take time and difficult decisions to clear up that mess. We, the coalition Govt, have put our faith in the British public, and because of their hard work over the past three and a half years, jobs are being created at a record rate, the economy is growing faster than in any other developed country, and as Governor Carney said just last week, the recovery has finally taken hold. There was never going to be a magical short-term fix, but our sensible, sustainable economic strategy will raise living standards, so let us not lose ground on the progress we have made; let us not allow Labour to take Britain back towards economic ruin. I beg the House to oppose this motion.

Oral Answers to Questions

Alun Cairns Excerpts

Tuesday 25th June 2013 Commons Chamber

[Danny Alexander]

I do not accept that figure, and I tell the hon. Gentleman a very large number of projects are completed or under way that we have announced. There are national road schemes, motorway schemes around the country, local transport schemes around the country, Crossrail under way—tunnelling started in May 2012—and major improvements to over 134 railway stations since May 2010. There is a great deal of investment in infrastructure going on, and he should welcome it.

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

23. Ahead of tomorrow’s comprehensive spending review, can I make yet another plea about the importance of the M4 around Newport? It is the gateway to the south Wales economy and it needs to be upgraded. That is long overdue; it was ignored by the last Government for so many years.

[Danny Alexander]

Let me reassure my hon. Friend that I am very well aware of the importance of that project. We have been in discussions with the Welsh Assembly Government about the matter, and it is very much tied up with the Silk report, and together those two things will help that project go forward.

amendment of the law

Alun Cairns Excerpts

Monday 25th March 2013 Commons Chamber

[Hilary Benn]

I welcome the efforts that my hon. Friend has described. I said a moment ago that this is a responsibility for all of us, but I cannot promise to resist the temptations presented by the Secretary of State, given what he had to say.

Ministers do not want to talk about housing starts, because the figures are bad, so instead they want to focus on completions. Let us have a look at them. The facts are pretty stark. The number of completions in England in each of the first two years of the coalition Government was lower than in any one of the 13 years of the Labour Government. In other words, we completed more homes in every one of those years than the Government have managed in either year since they were elected. Indeed, the Secretary of State has the dubious distinction of presiding over the lowest level of completions by any peacetime Government since the mid-1920s. That is some achievement. No wonder the construction industry has been so hard hit. Eighty thousand construction workers are out of work, and output has fallen by 8.2%, contributing a great deal to the absence of growth in the British economy. The rate of home ownership has fallen, and there are 136,000 fewer home owners than when the Government came to power. That is hitting the youngest hardest, because the average age of a first-time buyer is now 37.

Official statistics from the Secretary of State’s Homes and Communities Agency show that affordable housing starts collapsed in the last financial year by 68%; homelessness and rough sleeping are up by a third since the election; the number of families with children and/or a pregnant woman housed in bed-and-breakfast accommodation for six weeks or more has risen by over 800% since the coalition came together; and 125 councils have had families in bed-and-breakfast accommodation for six weeks or more. As private rents have continued their relentless rise and incomes are squeezed, more people in work have to claim housing benefit to help them pay the rent.

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

I am struggling with an inconsistency on the Labour Benches. The former Prime Minister, the right hon. Member for Kirkcaldy and Cowdenbeath (Mr Brown), said that housing was essentially a private sector operation and that the public sector need not be involved in it.

[Hilary Benn]

I simply say to the hon. Gentleman that if he cares to look at the record of the Labour Government, he will see that 2 million more homes were built during those 13 years, 500,000 of which were affordable homes that we provided, and 1 million more families were able to buy their own home. That stands in comparison to the Government’s miserable record over the past two years.

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

In the limited time available to me, I intend to explain why I welcome the measures in the Budget, and also why I consider the views of Opposition Members to be highly inconsistent.

Given the lack of growth in our largest trading nations, it is easy to understand why the Chancellor was left with so little room for manoeuvre. After all, growth projections in Germany and the United States—just two examples—have been downgraded. We need to recognise the context of the present position: the scale of debt inherited in 2010, the major issues that confront the eurozone, the local impact of the high prices of commodities such as oil, gas and food and the inflationary pressures that that involves, and the lack of growth in other nations.

[Oliver Colvile]

Did not the last Labour Government create a structural budget deficit as long ago as 2001?

[Alun Cairns]

My hon. Friend is absolutely right. I shall say more about Labour’s inconsistency later.

All the issues I have mentioned have had impacts on the living standards of families throughout the United Kingdom. Decisions such as these are difficult to take, but they must be seen in context.

What I welcome most is the Chancellor’s drive to create the most competitive of economic environments. That will attract investment, and will also continue to encourage the private sector in the UK to invest. The further reduction in corporation tax goes to the heart of a sustained economic recovery, and underlines the economic imbalance that we inherited. The 20% corporation tax rate means that we now compare exceptionally well with our major competitors. In Germany the rate is 29%, in France it is 33%, and in Italy it is 31%. Those are material considerations for anyone who is thinking about where to invest, and for any United Kingdom investor who is thinking of expanding. We should also bear in mind the uncompetitive position that we inherited. The increase in employers’ national insurance rates led to the term “jobs tax”, with which we are now familiar.

The ultimate judgment will come in the grades that the World Economic Forum confers on the competitiveness of the various nations. Having ranked fourth in 1997, we were dragged down to 13th by the Labour party. At last, however, we have recovered enough to rank eighth—and that happened before the announcement of the welcome changes in the Budget. Neither the 20% corporation tax rate nor the employers’ national insurance relief were taken into account.

Other Budget measures that I welcome include the “help to buy” mortgage guarantee schemes. That is an area of policy in which no Government would ideally become involved. However, bearing in mind the context I referred to earlier, the Chancellor had little choice other than to get involved. The scheme will provide a welcome boost to the construction and retail industries and various elements of the service sector, and it will make a significant difference to many families who want to buy their own home.

[Wayne David (Caerphilly) (Lab)]

On “help to buy”, does the hon. Gentleman think it morally correct that millionaires can get support to buy second homes?

[Alun Cairns]

The hon. Gentleman recognises, I hope, that the economy needs to be kick-started. He always refers to the changes to the highest income tax rates and the 5% reduction that will take place next week. However, I remind him that the rate Labour introduced was temporary. If so, when was Labour planning to abandon it? The ultimate question that Labour Members have to answer is, will they reintroduce for the next general election the 50% rate that was in their manifesto? I will happily give way to the hon. Gentleman if he wants to intervene again. Obviously, he does not, because they are not prepared to say whether they will commit to doing that.

I am pleased that the homebuy scheme will be limited to three years because as I said, it is not a policy area that any Government would want to be involved with in perpetuity, because of some of the risks that have been highlighted. It simply is not a public sector initiative that any Government would want to undertake all the time.

If those who want to criticise such initiatives are to have any credibility, they need to offer some form of alternative. It is hard to believe the audacity shown by some Labour Members. Less than three years ago, they were responsible for, or were the loudest cheerleaders for, the policies that led us into this position, giving this country the most debt-ridden, overspent, unbalanced economy in modern history. Manufacturing had declined by more than 20%, public sector job numbers had ballooned and we had the highest debt level of any G20 nation. I notice that the Labour Members who were seeking to intervene and criticise earlier are now staring at their boots.

These initiatives are aimed at promoting growth and freezing or cutting spending. [Interruption.] The Labour critics really need to come up with some alternatives. Until they have accepted their responsibility, they will lack credibility and no one will listen. Even Lord Mandelson recognised that just last week. They came up with some sort of plans in the past. Spending the 4G auction money on 100,000 new affordable homes was one option; a two-year freeze on stamp duty was another. However, that money has already been used—on the national debt—so I look forward to hearing their alternatives.

This Budget will make a difference to families, and help to kick-start the housing sector and to make Britain’s economy much more competitive. I look forward to hearing the solutions that Labour Members will try—

Oral Answers to Questions

Alun Cairns Excerpts

Tuesday 12th March 2013 Commons Chamber

[Danny Alexander]

With all respect to the hon. Gentleman, I am not sure that he has reflected upon the substantial fuel duty escalator that was baked into the public finances when his party was in office. We have dealt with those increases on a case-by-case basis and reduced fuel duty by a penny. I think that is the right action to support motorists, families and small businesses alike.

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

16. Does my right hon. Friend share my concern that minimum unit pricing for alcohol could hit responsible drinkers from some of the most deprived families?

[Danny Alexander]

That matter is under consideration, and announcements will be made in due course.

Financial Services (Banking Reform) Bill

Alun Cairns Excerpts

Monday 11th March 2013 Commons Chamber

[Chris Leslie]

I presume that is almost an apology for the anti-regulatory approaches historically taken by the Conservative party. I do not seem to recall Conservative Members ever saying, “Please, more regulation! Let us have it now. This is insufficient; we must regulate far more firmly.” It does not seem that that was ever part of the lexicon in the approach taken by Conservative Members.

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

In the hon. Gentleman’s preamble, he talked about the shifting of powers to the FSA, and I was somewhat taken aback that he called it a step forward. Would he like to repeat the fact that he supported that as a step forward, or would he like to apologise for that move?

[Chris Leslie]

The Conservative party, I think, voted in favour of the creation of the FSA. I think even the Conservative party recognised at the time that moving from self-regulation—[Interruption.] I apologise if I have got that wrong. It may well have been that it opposed the legislation because it introduced statutory regulation. The state of affairs that existed before was self-regulation—the regulatory environment was not there.

--- Later in debate ---

[Chris Leslie]

I disagree. I think that there was a high-risk, high-return culture in the banking sector—we saw it in the United States, and we saw it here—which Government Members fuelled through their deregulatory philosophical approach.

[Alun Cairns]

Will the hon. Gentleman give way?

Banking Reform

Alun Cairns Excerpts

Monday 4th February 2013 Commons Chamber

[Greg Clark]

I think it important for the responsibility exercised by remuneration committees in particular to have regard to the experience of ordinary working people up and down the country. I see no reason why the way in which bonuses are thought about in boardrooms in the City should be any different from the way in which they are thought about in any other industry.

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

I welcome the Minister’s statement, which confirmed the Government’s policy on ring-fencing the banks and its extension to electrification. Does the Minister agree that some of the products or derivatives of investment banks—particularly fixed-rate mortgages—can offer certainty and security to retail customers, and that we need an intelligent debate about the issue?

[Greg Clark]

My hon. Friend is right, but I think we have already had the intelligent debate. The Government asked the commission to look into that issue in particular and to make recommendations, and the commission expressed the interim view that it was reasonable—as my hon. Friend says—for simple derivatives to be provided from within a ring-fenced bank. However, it wants to reflect further on whether any of its inquiries into the culture of banking may have implications for that. We will await its conclusions.

Oral Answers to Questions

Alun Cairns Excerpts

Tuesday 11th December 2012 Commons Chamber

[Mr Osborne]

Yes, I do, and the CBI has welcomed it. I hope that the hon. Gentleman welcomes the fact that we have record employment in our country—a record number of women are working—and that youth unemployment has fallen recently as well.

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

Benefits have increased at twice the rate of earnings since the onset of the financial crisis. Could the Chancellor reassure me that, in spite of criticisms from those on the Opposition Benches, he will not veer from the 1% commitment that he made last week?

[Mr Osborne]

My hon. Friend has that reassurance. We have discovered an extraordinary thing today, namely that Labour will vote against yet another measure to deal with the deficit. Labour would have a higher benefits bill as a result of that decision and it will have to explain that to the hard-working people of this country.