Tax Avoidance

Anas Sarwar Excerpts

Wednesday 11th February 2015 Commons Chamber

[Anas Sarwar (Glasgow Central) (Lab)]

I start by congratulating my right hon. and hon. Friends on tabling the motion. The subject is one of extreme importance not just to the United Kingdom, but to the global tax justice campaign. I shall focus my remarks on the international aspect and consequences of what we are proposing today, not just on the domestic consequences.

It is a shocking statistic that three times as much is lost in tax receipts to developing countries as the entire aid budget combined—three times as much. Proper tax systems in developing countries and proper tax regimes in well-off countries like the United Kingdom would reduce our need to spend abroad and would lift people out of poverty and create opportunity. I pay tribute to all the non-governmental organisations that have championed the Let’s Make Tax Fair campaign. I have enjoyed working with them personally, as I know have members of the shadow Treasury team. I want to put on the record our thanks to organisations such as ActionAid, Christian Aid, Oxfam, the Global Poverty Project, the National Union of Students, the Jubilee Debt Campaign and many others that have been leading the way on this important issue.

I think that all of us on the Opposition side agree with the campaign’s three key principles and would wish to implement them if we have the privilege of being elected to government on 7 May: first, making it harder for companies to dodge UK taxes and ensuring that they are not getting unjustified tax breaks; secondly, ensuring that UK tax rules do not incentivise companies to avoid tax in developing countries; and thirdly, making the UK tax regime more transparent, and tougher on tax dodging.

I believe that those principles have the support of public opinion in the UK. A poll conducted last year showed that 84% of the public reported being angry at multinationals avoiding tax and 74% believed the Prime Minister should be demanding international action to tackle tax evasion and avoidance. We need a domestic commitment to international projects. We have already made a commitment to double our current spend in developing countries to help them expand their own tax bases, but we must look at what we do in this country and the negative impact it can have globally.

I think this Government’s biggest failure has been the lack of global leadership and advocacy on this issue on the international stage. The previous Government championed the extractive industries transparency initiative and the cancelling of third-world debt. I think that the same energy and vigour need to be shown by the next Government. However, we can be a credible advocate for global tax justice only if we get our own house in order, and the reality is that it is not in order. A perfect example is our overseas territories and Crown dependencies. That is why we are pushing for a public register of beneficial ownership, not only for the UK but for our overseas territories and Crown dependencies. I congratulate the Leader of the Opposition on making that position clear for the first six months of the next Government.

Let me mention two shocking statistics, both from Christian Aid’s beneficial ownerships scorecard. First, three British overseas territories are among the 20 jurisdictions that are most used by the corrupt—they are the British Virgin Islands, the Cayman Islands and Bermuda. Secondly, the Crown dependencies of Jersey and the Isle of Man also feature on the list, making UK-linked jurisdictions the most used for grand corruption. We cannot credibly say on the international stage that we are champions for tax justice while that is happening.

Another shocking statistic, this one from Reuters, is that between $21 trillion and $32 trillion in private financial assets is held in tax havens, and an estimated 30% of that comes from developing countries. Nearly $1 trillion a year in capital flows out of developing countries, making Africa a net creditor to the world, which in itself is a shocking statistic.

We therefore call for strong action on country-by-country reporting. We will look to get international action to ensure that multinational companies operate in an appropriate way. If we cannot get that action, I congratulate the shadow Treasury team on saying that we will push for unilateral action here in the UK so that we can fulfil our obligations to the poorest and most vulnerable, not only in this county but around the world, and finally make extreme poverty history.

Oral Answers to Questions

Anas Sarwar Excerpts

Tuesday 11th March 2014 Commons Chamber

[Danny Alexander]

I am delighted to hear about the success in reducing youth unemployment in Rugby, which is a consequence of the coalition Government’s decisions to make sure that we have the right climate for businesses to invest, grow and create jobs, which is in stark contrast to what the Opposition did in office.

[Anas Sarwar (Glasgow Central) (Lab)]

2. What recent discussions he has had with the Governor of the Bank of England on a currency union with an independent Scotland.

[The Chief Secretary to the Treasury (Danny Alexander)]

Both the Chancellor of the Exchequer and I have regular discussions with the Governor of the Bank of England on a wide range of issues on the UK economy. As I said last week in Edinburgh, there will not be a currency union between Scotland and the rest of the UK. The shadow Chancellor has also made that clear. A currency union would not work for the rest of the UK or for an independent Scotland.

[Anas Sarwar]

Not keeping the pound could mean higher mortgages, more expensive car loans, higher credit card bills and uncertainty about how pensions and benefits are paid, yet we have no credible answers from the nationalists. Standard Life, RBS, Lloyds, Aggreko, Allianz, BP, Shell, Citigroup, the CBI, the Institute of Directors and many others say that the currency plans are bad news for Scotland. Can the Chief Secretary tell us: are they scaremongering? Is it bullying? Is it bluff and bluster? Are they part of some Unionist conspiracy, or are they reflecting the concerns of people across Scotland?

[Danny Alexander]

There is no bluff, bluster or bullying on this issue. Businesses, the Treasury and the political parties are making it clear that, on the basis of the evidence, a currency union would be bad for Scotland and bad for the rest of the United Kingdom. The hon. Gentleman rightly lists a range of businesses that have looked at their business models and recognised the damaging effect that independence would have on them. It is important that those businesses feel able to speak out to explain to their shareholders and workers how they see it, because people in Scotland should have every bit of information we need when we cast our votes in the referendum in September.

Currency in Scotland after 2014

Anas Sarwar Excerpts

Wednesday 12th February 2014 Westminster Hall

[Ian Murray]

Mrs Riordan, I apologise again for wasting another intervention through the nationalists not telling us what plan B would be. Let me tell them what the currency will be in England and Wales. It will be the pound sterling. That is what they will keep.

[Anas Sarwar (Glasgow Central) (Lab)]

The former deputy leader of the SNP, Jim Sillars, said that the SNP’s currency union plans were “stupidity on stilts”. After listening to the hon. Member for Na h-Eileanan an Iar (Mr MacNeil), does my hon. Friend think that Mr Sillars might have been speaking about him?

[Ian Murray]

My hon. Friend is absolutely right: it is stupidity on stilts. Economist after economist, academic after academic, politician after politician and business after business has said that the SNP’s currency union plans are completely barking on stilts.

--- Later in debate ---

[Anas Sarwar (Glasgow Central) (Lab)]

It is a pleasure to serve under your chairmanship, Mrs Riordan. I thank my hon. Friend the Member for Edinburgh South (Ian Murray) for securing the debate and for his powerful and passionate speech. I also thank the hon. Member for Dundee East (Stewart Hosie), who in stating the successful trade statistics between Scotland and the rest of the UK made the case for Scotland to be part of the United Kingdom, not independent.

The currency that Scots would use after separation goes to the heart of the independence debate and cuts to the core deception in the SNP’s argument. There can be few more important issues than the currency in our pocket, the money that our businesses trade in, the cost of borrowing money or, indeed, how much money individuals, businesses and the country have to spend. It is not just a matter of what we spend in shops; it is about what people’s pensions and benefits are paid in, what businesses across the common UK market trade in, and what we borrow more of to buy a house or a car.

The proposals on currency put forward by the nationalists are rooted in assertion and baseless opinion, and in a determination to bluff and bluster their way to 18 September, when every credible expert on the issue has exposed the flaws in their currency union proposals. They used to be very clear about what sterling meant to them. We all remember when Alex Salmond said that

“sterling has been a millstone around Scotland’s neck”

or that it

“is costing Scotland jobs and prosperity.”

However, now that those arguments do not suit the cause, they have been conveniently dropped and he says:

“Retaining the pound under independence is something I believe is in Scotland’s interests”.

The nationalists have made those shameless U-turns and about-faces because they are determined to win the vote on 18 September.

[Jonathan Edwards]

My party shares with the SNP many of those criticisms. They are not about currency but monetary policy: the way that the Bank of England’s monetary policy has been directed towards pushing the financial sector in the south-east of England, rather than promoting the manufacturing-based economies of Wales and Scotland.

[Anas Sarwar]

The hon. Gentleman fails to realise in making that criticism of how the Bank of England has operated and the effect on Scotland and Wales that the nationalists’ currency union plans after independence would have exactly the same effect. Decisions about the interests of the people of Scotland would still be taken in this place; the choice is whether we should have a voice here at the same time. The hon. Gentleman is undermining that voice.

[Mr Bain]

Scotland’s First Minister wants to frame the debate as him against the elite, but perhaps I can share the views that a voter in my constituency expressed to me in Edgefauld road in Springburn on Saturday afternoon. She said, “If you get the details about the currency wrong, it is ordinary working people like me who suffer the biggest hit.” Is not that right? Is not that what happened in Ireland when living standards declined by 20% between 2007 and 2011, and is not my hon. Friend right to campaign in favour of the pound?

[Anas Sarwar]

I could not have put it better. Yes, this has an impact on business and big institutions, but the price will always be paid by the poorest and most vulnerable people. I and my Labour colleagues stand shoulder to shoulder with those people throughout the United Kingdom. The nationalists will throw everything into this debate—every assertion, opinion, myth, allegation, contention and baseless claim—so that they can win on 18 September. They do not have any recognition of reality; they are much more the Walter Mittys of Scottish politics. The only thing that they have been clear on is the willingness to hand over control of monetary policy to another country; in the words of the Governor of the Bank of England, they would “cede sovereignty”.

It is important to look at the first letter sent in May 1997 by the then Chancellor, my right hon. Friend the Member for Kirkcaldy and Cowdenbeath (Mr Brown), when he made the Bank of England independent. In paragraphs four and five of that letter, the point is made that

“The Bank is there to fulfil the objectives of the UK Government, as set out by the UK Government and not as determined by the Bank.”

So the Bank is there to support the economic policy of the UK, and after Scottish independence, it will be there to support the economic policy of the rest of the UK, not that of the Scottish Government. The Bank of England would go by the political will of the Chancellor of the Exchequer—whether the current Chancellor or the future Chancellor, the current shadow Chancellor, my right hon. Friend the Member for Morley and Outwood (Ed Balls). The Bank will follow that remit and not the remit of the current Scottish Government or, indeed, a future Scottish Government.

What does that mean for Scots? If someone has a mortgage, their interest rate will be controlled by the central bank of a foreign country, with no input or influence from Scots, no accountability and no say on inflationary targets or the cost of money supply. Likewise, if someone has a car loan, a credit card or an hire purchase agreement for a new suite or a new washing machine, all those things will be controlled by a foreign Government, with Scots having no say or influence, and with no accountability.

[Margot James (Stourbridge) (Con)]

I thank the hon. Gentleman for giving way. He is making a very passionate speech. In addition to the points that he is making, there are the lessons from the European currency union and the debate within that union about the central bank having pre-budget approval of all the budgets proposed by member states. Can he envisage that applying to Scotland as well if those plans should unfold?

[Anas Sarwar]

I thank the hon. Lady for that intervention. What I envisage is Scots making a confident and passionate no vote on 18 September and working together with our friends and colleagues in the UK to create the right kind of economy that works for everyone right across the UK.

The reality is that the cost of borrowing money would be in the hands of an institution over which the people of Scotland would have no say—none. If a Scottish business wanted to invest, the cost of borrowing that money would be controlled not by the Scottish Government but by the Government of Scotland’s biggest competitor and trading market. That is like British Airways setting the trading conditions and pricing policy of Virgin Atlantic. There would only be one winner in such an arrangement.

Is it any wonder that business organisations are horrified at these proposals? It is not that long ago that the SNP would churn out press release after press release attacking the UK Government, UK politicians or the Monetary Policy Committee, saying that the interest rates being set were not suitable for Scotland. What on earth does the SNP think would happen after independence?

The reality is that what the SNP is offering Scotland is neither right nor fair for Scots. That is the real democratic deficit on offer in this election. The other reality, and the reason why the SNP does not want to outline plan B, is that it knows that its entire White Paper is based on the assertion that sterling is kept. If sterling is lost, the entire White Paper comes into disrepute.

[Mrs Linda Riordan (in the Chair)]

Order. Before I call the last Member to speak, I remind her that I will call the shadow Minister to speak at 3.40 pm.

Cost of Living

Anas Sarwar Excerpts

Wednesday 27th November 2013 Commons Chamber

[Alec Shelbrooke]

I am most grateful for the hon. Lady’s intervention because she makes the point that I wanted to make. I did not say that the living wage would cost jobs; I said that it would inflate wages. Many would argue that a lot of people already earn the living wage, and that a statutory living wage would benefit all those underneath. But we are all well aware how many people, especially our friends in the unions, would demand a 40% pay rise if it was to go through.

Ultimately, there is nothing to be gained by inflating wages artificially, as we did in the 1970s. I remember my parents telling me that when they were teachers in the 1970s, they got a 25% pay rise when Harold Wilson came to power in 1975 but it was worthless the following year. The goal is always slightly out of reach. We must tackle the cost of living, and ensure that people’s real wages and real net income can advance to meet it.

[Anas Sarwar (Glasgow Central) (Lab)]

The hon. Gentleman’s Government have said that work must always pay, but we still have people who are in work living in severe poverty. More important than just having a job is the level of income, and that is why wages are so important, and that is why the living wage is so important. Does he not recognise that point?

[Alec Shelbrooke]

I could not agree more. What I am saying is that we need to grow an economy to ensure that we can get to a living wage, and that at the same time we should be looking at how we reduce the cost of living.

Why is the cost of living so high today? That is the fundamental question. Fundamentally, the cost of living comes down to one very important point—energy. We have had a lot of debate in the House this afternoon about whether to have an energy freeze, but if we freeze energy prices for a fixed period, prices will get ramped up before and after the freeze, as happened with the beer price freeze in the 1960s. We must take a more long-term view.

How did we end up where we are? It is my personal view—I support what was in our manifesto, and I wish we had moved further on it—that we need to start replacing our power stations, and at the moment nuclear power stations are by far the best way forward. It has taken a lot of effort and lengthy negotiations to get to one nuclear power station; we should be building five or six. But at the same time the world oil price is rising, and will not go down despite what anyone thinks. To put it in context, in 1998 a barrel of oil was $5 a barrel, and yesterday Brent crude was $100 a barrel—I am sure the hon. Member for Dundee East (Stewart Hosie) will correct me if I am wrong. I believe that if oil reaches $140 a barrel, there is more economically recoverable oil in the North sea than has already been extracted. That is the reality of the situation.

Energy prices will not come down, so it is no good having a freeze for a period, because energy prices permeate every aspect of the cost of living—the price of food in the shops, the price of getting to work. We always talk about the petrol price, which has a big impact on getting to work, but we must do everything that we can to reduce the cost of getting goods to the shops, because that hits people’s wages. Since the start of this recession we have been on a wage freeze, if not a wage reduction, to prevent the runaway unemployment that we saw in the past.

What frustrates me in debates such as the one we are having today is not just the barrage of criticism from the Opposition of the way in which the Government have implemented their policies. That is fine; that is what we are in the House for. We are here to say that we have a route, we are sticking to it, and we think that it is working, and the Opposition are here to say, “We don’t agree.” But I have not heard any real alternative in the Chamber today. The closest we got—one of the more sensible speeches today—was the contribution by the right hon. Member for Oldham West and Royton (Mr Meacher), who is no longer in his seat. He actually came up with some suggestions. I did not agree with them—I thought they were pie-in-the-sky thinking—but at least he stood there and put forward some policies.

Sadly, proposals were completely lacking in the shadow Chief Secretary’s speech. There was a constant barrage on what the Government had, he thought, got wrong, but no recognition of the fact that if we are going to tackle the cost of living crisis, we must tackle its root causes. The cost of living is going up because energy prices are high, and that has nothing to do with the six energy companies—there were 14 when the Leader of the Opposition was Secretary of State for Energy and Climate Change, but there were only six by the time he left that office, so it is a bit rich of him to come across saying that it is terrible. The inescapable truth is that the price of oil is not going to come down.

Oral Answers to Questions

Anas Sarwar Excerpts

Tuesday 5th November 2013 Commons Chamber

[Anas Sarwar (Glasgow Central) (Lab)]

Evidence shows that it is not just having a job, but having the right job and the right level of pay that lifts someone out of poverty. So can the Chancellor tell us how many of those new jobs that have been created are full-time jobs, how many do not involve zero-hours contracts and how many actually pay the living wage?

[Mr Osborne]

We have 1.4 million new jobs in this economy. To take on the point about part-time work, there has also been an increase in the number of hours worked in the economy, and a lot of the recent increase in employment has come from full-time employment. Let us compare that with the disastrous situation we inherited from the Labour party, where unemployment was rocketing and youth unemployment was rocketing. Unemployment is now lower than it was at the general election, and many thousands—[Interruption.] That is the fact. Many thousands of young people have come off the claimant count for youth unemployment, too.

Digital Exclusion (Glasgow)

Anas Sarwar Excerpts

Tuesday 2nd July 2013 Westminster Hall

[Ann McKechin (Glasgow North) (Lab)]

It is a pleasure to serve under your chairmanship, Mr Walker.

Last week, the Chief Secretary to the Treasury announced further plans to roll out superfast broadband across the UK, so that it will reach 95% of the population by 2017. No one doubts that Government investment in that type of infrastructure is key to promoting further growth; and, in comparison with other parts of Scotland, Glasgow ranks as one of the best for superfast broadband availability and is also benefiting from the Future Cities spending. However, one reason why I have requested this debate is to caution that collectively we may have become too fixated on the rate of installing hardware, compared with the level and depth of usage by our citizens. The two are interconnected, but very often our strategic priorities and procurement policies do not match those needs together. I believe that the Government should do more to link their substantial investment in broadband with investment in citizens’ participation. I hope today, as well as setting out the scale of the challenge, to suggest some practical ways in which the Government could better adapt their policies to provide a more comprehensive strategy.

I have long taken a close interest—I have done so throughout my years in Parliament—in how Government initiatives and policies, whether lottery funds for community groups, the introduction of tax credits or the recent changes in family migration rules, are understood in my local area. Frequently, bureaucracy underestimates or simply fails to understand how, and to what extent, the general public absorb information and application processes. Many Scottish Members will recall the disaster of the 2007 Scottish Parliament election, caused in part by officials simply deleting one line of instruction at the top of a ballot form.

During the past year, I have spent more and more time with local groups and community activists, talking about the impact of the digital divide, particularly in relation to those seeking work and the forthcoming introduction of universal credit. Last year, Ofcom reported that Glasgow had the lowest level of broadband take-up of any major UK city. My hon. Friend the Member for Glasgow Central (Anas Sarwar) is here today. Sadly, it is not a surprise to those of us who represent a Glasgow seat that it is at the bottom or top of a league table for things that are not very good. There are many historical and economic causes of our city’s ingrained poverty, but in the case of digital access, the scale of the gap should result in a call for action, rather than simply a shrugging of shoulders.

[Anas Sarwar (Glasgow Central) (Lab)]

I congratulate my hon. Friend on securing this important debate. The statistics from Glasgow show that up to 60% of people have access to broadband. That means that 40% do not. Given that access to many Government services is online only, particularly with some of the welfare changes, does she recognise that that could pose difficulties for the most vulnerable people in the city of Glasgow?

[Ann McKechin]

My hon. Friend has raised the point that I was going to raise in the next paragraph of my speech—clearly, he must have had advance sight of it. He has made exactly the right point, because this is a question of social justice, not just access to a certain piece of technology.

Ofcom’s 2012 consumer market report showed, as my hon. Friend mentioned, that only 60% of Glasgow’s households had access to fixed broadband, compared with a UK average of 76%. We know that at-home access is vital to allow our citizens to gain the most value from use of the internet. Against that UK average of 76%, it is perhaps not surprising that the Government, in moving to digital by default from this autumn, are working on the assumption of moving 80% of benefit applications online, but let us dig a little deeper into those figures for Glasgow.

Last month, I was pleased to host a seminar at Westminster with the Carnegie UK Trust, which has recently published a report called “Across the Divide” by Douglas White that is an in-depth review of 200 families in the city and how they are affected by the digital divide. There is much to commend in that excellent report, which is instructive not only for Glasgow but for other areas of the country that suffer from high levels of socio-economic deprivation. It should not surprise the Minister that the author pointed to very similar figures in parts of North Ayrshire, West Dunbartonshire and North Lanarkshire, which surround the city area, but I particularly draw the Minister’s attention to the charts at the start of chapter 3, which show the gap, in terms of both age and socio-economic groups, between Glasgow and the UK average. For the social group C2—a group that is often affected by our social security systems—the divide is an astonishing 25%. Against a UK average take-up of 72% for that social group, the Glasgow figure is only 47%. What happens when age is added to the equation? In the city’s entire 35-to-64 age group, only 35% have access to broadband in their house.

In some of the most deprived areas of the city, housing associations and other community groups estimate that only 20% of their tenants at most have direct broadband access. However, as the figures reveal, this issue affects all sections of the community and all demographics. There are a multitude of reasons for the gap, and the report goes into them in some depth, but cost is the primary one. For people on a low income, a fixed phone line is now a luxury that many drop in favour of pay-as-you-go mobile phones. As the Carnegie report showed, the monthly communications budget for the city’s lowest socio-economic groups is about £30, compared with a UK average spend of about £100.

The Government’s aim to move to digital by default is certainly doing more to raise the importance of the issue, but there is a real fear that we simply do not have the scale of resources required, not only for hardware access but for appropriate software and access to training and support. This is not a problem for which a one-size-fits-all approach will work. It needs a comprehensive and segmented strategy, with political commitment over the long term.

Citizens Advice Scotland, in a report issued in May called “Offline and left behind”, which included interviews with 1,200 clients, found that nearly 72% would struggle to apply for a job online and that almost half those who said that they would be completely unable to complete a benefits application online said that the main barrier was that they had never used a computer. Research conducted this year by the Prince’s Trust with young people who fall into the NEETs category—not in education, employment or training—found that one quarter dreaded filling in job application forms online, while one in 10 admitted avoiding computers altogether. As the Minister will be aware, literacy and numeracy levels play a very big part in that.

Having spoken to my local citizens advice bureau, to welfare rights officers and to my own casework staff, who recently attended a demonstration at the local Department for Work and Pensions office, I understand that the anticipated time to complete a new universal credit application is one and a half hours. Moreover, there is no provision to save information if someone wishes to pause the application process. We all have busy lives. There will be times when we are on the computer and we want to pause it, go away and look for some other bit of information and come back to it, but this is the classic “The machine won’t let us do it” approach. Frankly, it is a completely useless IT approach that by now the Government should have banned from any front-of-house application. Even those experienced in these systems are aghast at the complexity of the process.

In addition, as the Minister will be aware, jobseeker’s allowance applicants are regularly instructed to spend multiple hours each week searching online for work, but little assessment has been carried out of the actual availability of free-to-use computers in local areas. Last year, I started to carry out a survey in my own constituency of where free-to-use computers were available and what training or lessons might be appropriate and accessible if people wanted to go online and complete CVs. I then began to realise that I was the only person trying to collate that information and I was eventually contacted by a Scottish Government agency, which agreed to fund the publication of the list, so that we could distribute it to a whole host of community groups and public offices.

Absolutely no mapping has been done of where computer access is available. I know that the DWP is now trying to establish local job clubs in my constituency and many other areas, where people can access computers on an informal basis. That is all well and good, but it has only just begun that process and it takes time for community groups to find the finance, to get organised and to get the equipment—yet we are facing that radical change in a few months’ time. That is why I urge the Minister to scrap the Government’s aim of starting with a target of 80% of benefit applications being made online. It is unrealistic, grossly unfair and runs the risk of vulnerable people losing essential financial support.

What is the alternative target? I am sure the Minister will respond by saying that there has to be a target. We should all want greater online access for our constituents, because it means not only the ability to apply for benefits and search for jobs, but the opportunity to benefit from cheaper utility costs, new sources of information and knowledge and greater connectivity with the wider community. Such targets are useful to measure and drive success, but they need to be based on evidence, with a clear strategy to improve take-up. There are good examples to follow, and I point to the programme that introduced digital TV switchover as an excellent example: it adapted messages for different segments of the public; it worked with all tiers of government and local community organisations to ensure efficient delivery; and it constantly analysed evidence throughout the project and adjusted its work to suit, to ensure that it became one of the most successful Government programmes of recent years delivering information and change to the entire public.

The question that is always asked in these difficult economic times is, can we find the finance for such work? The answer is yes: to return to the point I made at the beginning of my speech, we need to integrate funding solutions with the provision of the hardware that delivers the service. I suggest that we take a small slice of the funds that we set aside for mass broadband coverage and use it to finance a public community access programme that is fit for purpose.

How do we tackle the depth of the problems faced in my home city? I was struck by the success of a community project that began in Liverpool a couple of years ago, and which has witnessed a substantial increase in usage by the population. There are certainly lessons from its success that we in Glasgow need to learn. Glasgow city council launched a digital participation group earlier this year as part of its new digital strategy, which is good, but we need the UK and Scottish Governments to respond positively to that initiative. Both Governments should look at using Glasgow as a pilot for the wider task of tackling digital exclusion wherever it occurs in the country. We need a comprehensive and segmented approach based on good-quality evidence and clear messaging. We need clear branding, which everyone in the community understands at all levels. The Carnegie UK Trust recommended creating local role models or digital champions.

Government also have a role in assisting local authorities and communities with procurement. Some of our larger registered social landlords, such as Glasgow Housing Association, are piloting special deals for their tenants that directly address the issue of cost, which is good, but given that more and more people are finding themselves in private residential properties or renting from much smaller landlords, we need to extend such schemes to everyone on low incomes. The Government can disseminate best practice, co-ordinate action and ensure that services are delivered to the public we serve. I hope that both Governments and agencies such as Ofcom will assist with a thorough mapping exercise and bring in the expertise and support of the private sector.

I mentioned software and the question of how people with few skills or qualifications can access information on computers if they do not have experience of doing so. We need simplified software that will work for them and to offer support to build their knowledge and experience, rather than just using a couple of apps. Some of the experience has been that those in the lower socio-economic groups, if they have a mobile phone, may use only eight apps in total, so we need to create a deeper and more valuable experience for them.

I appreciate that the Minister has been called in at very short notice to respond to this debate. His colleague, the Under-Secretary of State for Scotland, has advised me that he has a previous and long-arranged engagement with Her Majesty at Holyroodhouse. I well understand why he is otherwise detained, but I should like formally to request a meeting with the Under-Secretary of State in the near future so we can discuss these issues in further detail. I want to be practical today and offer suggestions to the Government that are achievable and will assist everyone. We do not want people or communities to have a digital divide, but to see a new digital era in which everyone can take part.

--- Later in debate ---

[Stephen Crabb]

I hear what the hon. Lady says. All I can say in response is that the Secretary of State and the Under-Secretary of State meet regularly with Scottish Government officials and Ministers, and with city council leaders as well, and if there is a physical capacity issue, in that there is not enough digital infrastructure for the demand, meaning that people who do not have internet access at home cannot benefit from the publicly available services, they can certainly discuss that with them.

As the Minister of State, Department for Work and Pensions, my hon. Friend the Member for Fareham (Mr Hoban) has previously said in the House, all jobseekers claiming benefits have a personal adviser whose role it is to support them back into work. If an adviser identifies that someone does not have the knowledge and skills needed to access online services, they can discuss those needs with the jobseeker and arrange for suitable IT training to be provided. In fact, the Department for Work and Pensions is currently piloting a digital skills assessment tool in four jobcentres in the east of Scotland, which will be used by advisers to assess claimants’ digital ability. I hope that what I have said goes some way in addressing the hon. Lady’s point about jobseekers’ lack of skills in relation to making job applications or accessing benefits online.

The hon. Lady slightly humorously talked about Glasgow being at the top or the bottom of the league table of things that were “not very good”—I think that was her phrase. We should remember, however, that some really positive and encouraging things are happening in the city. I am sure that she and the hon. Member for Glasgow Central (Anas Sarwar) will be only too aware of those initiatives, and will have done their bit to champion and support them in recent months and years.

I would like to take this opportunity to highlight a few of Glasgow’s recent successes. The UK Government are supporting the city of Glasgow to lead the way in using modern technology to support growth and increase sustainability. Glasgow beat off bids from a number of other cities around the UK to be awarded £24 million as the host city for the Technology Strategy Board’s future cities demonstrator project. The university of Strathclyde recently secured funding for two of the UK Government’s catapult centres, looking at offshore renewable energy and high-value manufacturing, which are important sectors for future growth. In 2013, Glasgow overtook Edinburgh in the global financial centres index for the first time, making it the highest-ranking financial centre in the UK behind London, and Glasgow is to host the Commonwealth games next year, which will be a highlight for the whole of our country.

[Anas Sarwar]

I thank the Minister for listing all those fantastic Labour achievements in the city of Glasgow. May I add another? Glasgow city council has made a commitment to there being free universal broadband right across the city by the end of this council term, and to every single Commonwealth games venue having broadband by the time of the games next year.

[Stephen Crabb]

The hon. Gentleman must have had previous sight of my speech, because that is the very next sentence. Glasgow city council is planning for a free open-air wi-fi network to be available in Glasgow city centre in time for the 2014 games, and I think we all recognise that that will mark another major step in Glasgow’s progress towards full digital inclusion.

I point to the fact that the recent spending round announcements include significant extra resources to support infrastructure investment and growth in Scotland. That is good news for Scotland, because an increase in capital spending means better infrastructure, greater competitiveness and more jobs, which clearly shows how Scotland continues to benefit from being part of the United Kingdom.

I conclude by saying that we will make a point not only of ensuring that my colleagues at the Scotland Office see what was discussed this afternoon, but of feeding the comments made and the questions asked through to my noble Friend Lord Freud, the Minister for welfare reform at the Department for Work and Pensions. Some of the issues raised deserve a full response, and we will ensure that the hon. Lady receives that response in due course. I commend the hon. Lady on how she has addressed the issues this afternoon, and the Carnegie UK Trust on its excellent report into digital exclusion in Glasgow, entitled “Across the Divide”.

Recession (Standards of Living)

Anas Sarwar Excerpts

Tuesday 2nd July 2013 Westminster Hall

[Mr Cunningham]

I am outlining the consequences of the reduction to which my hon. Friend refers, and I want to look more closely at some of the rising living costs.

The most basic expenditure to affect living standards is surely food. Despite the growth in the popularity of own-brand food labels and budget supermarkets during the recession, outgoings on food shopping are still rising. Inflation of 3.13% means that a typical family now spends £234 more on annual food bills than they did in November 2011, which puts significantly more pressure on the earnings required to secure an adequate standard of living for the whole family.

An inability to respond to that pressure has left families with an unacceptable standard of living. There is evidence of that across the country, including in my constituency and surrounding areas. Research has shown that about one in five people in the west midlands have to skip meals and go without food to feed their family. Some 70% of families who are suffering from food poverty have to rely on food supplied by schools in the form of free school meals, breakfast clubs and other school clubs. As a result, more than a quarter of families suffering from food poverty are unable to provide all the meals for their children during school holidays. I am sure that we all agree that that situation is unacceptable. If we judge our society on the basis of the situation faced by the worst-off, it is clear that something needs to be done to improve the ability of families to provide meals for their children without having to go without food themselves.

Another significant section of expenditure is on travel. Average rail fares increased by 5.9% in January 2013, combined with inflation of 4.96%. Expenditure on everyday travel has grown more than any other costs since November 2011. The typical UK traveller spends £341 more every year, and the fact that there was a further average price rise in January 2013 means that such rises are likely to continue.

I have raised my objections to high-speed rail elsewhere, so I will not get into that today. After a previous Secretary of State for Transport, the right hon. Member for Runnymede and Weybridge (Mr Hammond), described high-speed rail as “a rich man’s toy”, I have not been assured that we will not see transport costs rise even further to pay for high-speed rail. Travel costs do not appear to be a real concern for the Government.

The increasing prices applied by utility providers are putting significant pressure on households. The resulting energy bills have drained an extra £221 from their budgets every year since this Government came to power. Such increases have caused the cost of living crisis that afflicts millions of families across this country, reducing their ability to secure an adequate standard of living. Those issues are compounded by the fact that, according to a study by the Institute for Public Policy Research, 5 million homes are overcharged by energy suppliers. Yet the Government have backed “business as usual” in the energy market, with energy companies having paid out £7 billion to shareholders, which is a clear refusal to challenge the practices, pricing and structures in the energy market that are causing such difficulties for families and individuals alike.

I believe that it is our responsibility to ensure that energy bills are kept at a manageable level for families. When Labour left office, there were 1.75 million fewer households living in fuel poverty, including 500,000 fewer vulnerable households, because our policies—such as winter fuel allowances, cold weather payments and improvements in energy efficiency through the Warm Front scheme and tough requirements on energy companies —ensured that they could spend the amounts of money required to secure an adequate standard of living, rather than having to overspend on energy bills.

Housing expenditure, and specifically rent, makes up a considerable portion of families’ overall expenditure. As a result, the cost of rent can have a huge impact on a family’s standard of living. The greater the proportion of total expenditure taken by rent, the less the family’s ability to spend in areas that would secure it an adequate standard of living.

[Anas Sarwar (Glasgow Central) (Lab)]

I congratulate my hon. Friend on securing this massively important debate. May I point him to a comment made by Donald Hirsch, the author of the recent Joseph Rowntree Foundation report on living standards, who stated that

“the next election is likely to be the first since 1931 when living standards are lower than at the last one”?

Does that not represent a failure of the current UK Government?

[Mr Cunningham]

I agree with my hon. Friend, and I have just outlined the consequences of that.

If the issue about rent is taken as a reflection of the overall situation across society, there is serious cause for concern. On top of that, the Prime Minister promised 100,000 new homes under the NewBuy scheme, but there were just 2,000 by May 2013. Indeed, home ownership has fallen from 64% in November 2011 to 59% in January 2013, which is the result of families increasingly shifting to rented properties. The increasing trend towards renting means that 25% of UK families are now in rented accommodation, which is a significant rise from 19% in November 2011. Meanwhile, rent in the social housing sector has gone up by 26%, and the number of families using social housing, including council housing, has increased from 11% to 15% in January 2013.

According to the debt charity StepChange, the combination of those factors has caused the proportion of its clients with rent arrears to increase significantly— from 5.6% in 2010 to 8.6% by the end of 2012. I would describe rent prices as one of the most pressing problems affecting living standards today, and I believe that it needs to be urgently addressed.

StepChange’s findings about rent arrears bring me to another key element of expenditure that is rising—debt. Between November 2011 and January 2013, average debt repayments increased by almost £20 a month or £240 a year. That is accompanied by a dramatic rise in the number of families seeking help for utility bills and with council tax and rent arrears.

Although overall debt levels have decreased, households are now struggling with priority debts that many were previously able to meet. More than a third of those seeking help from StepChange are in arrears on at least one household bill. I find it particularly striking that clients over 60 have the highest overall levels of arrears and single parents have the highest levels of rent, council tax and water arrears. The sad result is that 78% of StepChange’s clients felt that debt problems had undermined their self-confidence and their ability to support both themselves and their family.

There are plenty of other examples. According to research by Consumer Focus, the number of households in debt to their electricity supplier has increased by more than 25% to 850,000, and the number in debt to their gas supplier has risen by 20% to more than 700,000. We all know how debt can be extremely destructive: being in debt can affect someone’s quality of life and financial stability. That matter requires urgent Government attention.

That leads me to the related issue of payday loans, which, thankfully, has been debated a good deal recently, so I will speak only briefly on it. Last year, there was a staggering rise in the number of people seeking help with payday loans. More than twice as many people—360,413—contacted StepChange for help with payday loan problems in 2012 than during the previous year. The data show that, on average, a client’s payday loan debt is up more than £400 on last year, and now exceeds their monthly income.

Oral Answers to Questions

Anas Sarwar Excerpts

Tuesday 25th June 2013 Commons Chamber

[Mr Osborne]

Small business rate relief has helped many small firms to cope with the cost of rates, and we have been able to extend it year after year. We will have to make a decision later in this Parliament about a further extension, but there is clear evidence that the current extension is doing a great deal of good.

[Anas Sarwar (Glasgow Central) (Lab)]

The main complaint from businesses throughout the country, both small and large, is that they do not feel they are receiving the support that they need from the banking sector. Given that state-owned banks are among the poorest in terms of lending, what is Jeffrey—sorry, the Chancellor of the Exchequer—doing about it?

[Mr Osborne]

As I said earlier, the Royal Bank of Scotland is the largest lender to small businesses in our country. That is why it is such an important support for the economy. We are taking a serious look at how we can enable it to move on from all the bad loans—all the bad bets that it laid—during the middle years of the last decade, when, by the way, the shadow Chancellor, who is still muttering from a sedentary position, was City Minister.

Surely it is in all our interests to try to sort out the banking problem, but I have no idea whether Labour Members support our proposal on the Royal Bank of Scotland. We have heard absolutely nothing from them. However, what we are doing shows that we are actually confronting the problems that we inherited.

Economic Growth

Anas Sarwar Excerpts

Wednesday 15th May 2013 Commons Chamber

[Mr Osborne]

In every single year under this Government the rich will pay more in tax than in any single year of the Labour Government that the hon. Gentleman consistently supported, and the top rate of tax will be higher than in any single year of the Labour Government he supported. We put up capital gains tax so we avoided the scandal that they presided over—indeed, that the shadow Chancellor presided over—of cleaners paying higher rates of tax than the hedge fund managers they work for. That is what we have done to ensure fairness in our tax system, and that is what we are going to continue to do.

[Anas Sarwar (Glasgow Central) (Lab)]

The Chancellor said those who work hard will be rewarded. Can he explain why wages are falling, household budgets are falling and the cost of living is going up? How is that fair?

[Mr Osborne]

Let us look at what the Governor of the Bank of England said in his press conference this morning:

“there is a welcome change in the economic outlook…But this is no time to be complacent—we must press on to ensure a recovery”.

Yes, there was also the disappointing news that unemployment had gone up, but we also saw that the claimant count and youth unemployment had come down, and the monthly unemployment data were a lot more encouraging than the three-month survey. That is the reality of the current data.

amendment of the law

Anas Sarwar Excerpts

Monday 25th March 2013 Commons Chamber

[Anas Sarwar (Glasgow Central) (Lab)]

The Budget the Chancellor delivered was not the Budget that my constituents or the city of Glasgow needed. The Budget Glasgow needs is one that gets the economy moving, helps people back into work and looks after the most vulnerable in our society. Instead, the Government are willing to give millionaires a £40,000 tax cut at the same time as 17,000 Glaswegians will have to cope with the impact of the bedroom tax. Thousands more will have to mitigate the damage to their family budget of the cuts to child tax credits, cuts to working tax credits and drastic cuts to the local services that many people rely upon. Wages are falling, jobs are being lost, household budgets are being squeezed and there is still no sign of a rethink. Just when will the Chancellor wake up and smell the Starbucks coffee?

[Mr MacNeil]

rose—

[Anas Sarwar]

I will give way to the hon. Gentleman. He has made many interventions, so let us hope that this one is sensible.

[Mr MacNeil]

Is the hon. Gentleman not disappointed, and should he not be ashamed, that he supports a Westminster Government over independence, so we have the bedroom tax imposed on Scotland? If he supported independence, we would not have the bedroom tax in Scotland at the moment.

[Anas Sarwar]

That shows us the myth of the Scottish National party. The hon. Gentleman says that the only way to stop the bedroom tax is independence; the bedroom tax will be introduced on 1 April 2013, but according to the SNP timetable, independence day will be 31 March 2016. Members can work it out for themselves.

Plan A clearly is not working. For some time, the Opposition have been calling for additional infrastructure investment to boost the construction sector and we have been urging the Government to act. The Chancellor could have used the funds from the 4G auction to build 100,000 affordable homes, stimulate the economy and help tackle the housing crisis, but instead he decided that public services and public sector workers should bear the burden. Not content with imposing a 1% pay freeze until 2015, he has extended it to 2016. Given the rate of inflation, that is an effective pay cut for hundreds of thousands of people across the country.

With 80,000 construction workers out of work, construction output has fallen by 8.2%. The Government announced an extra £225 million for affordable housing, but only £125 million of that will be spent before 2015 according to the OBR, and it is dwarfed by the £4 billion cut in funding for affordable housing that the Chancellor made in his first Budget. Even after that investment the coalition Government’s record will still be a cut of around £10 billion in infrastructure projects.

It says everything about the Government’s attitude that they cut real-terms pay for millions of public sector workers, while giving the green light to slash corporation tax for big business. Research by the House of Commons Library, published today, confirms that the reductions in corporation tax will cost £29 billion in total, £10 billion over the life of the current Parliament alone. That policy enjoys the full support of the Scottish nationalists, who want to see a future independent Scotland at the front of a race to the bottom, a low tax country with an economy like Iceland—or perhaps like Ireland. I have not seen the latest Scottish Government press release, so I do not know which country they are modelling their assessment on this week.

[Kwasi Kwarteng (Spelthorne) (Con)]

Am I right in assuming that the hon. Gentleman favours a high-tax economy for Britain?

[Anas Sarwar]

No, I am suggesting that while people across the country—especially the most vulnerable—see their household income slashed and the poorest people are having to live in more difficult circumstances, the Government see their priority as giving millionaires a tax cut and cutting taxes for the biggest businesses in the country. I know whose side I am on. I am sad to say that I know whose side the hon. Gentleman is on, and I am sure people will punish him appropriately come the next general election.

[Mr MacNeil]

Will the hon. Gentleman give way?

[Anas Sarwar]

I have given way twice already, but if I have any spare time at the end of my speech I might let the hon. Gentleman entertain the House.

The Chancellor claimed the Budget showed he was on the side of people who want to get on; instead it has shown just how out of touch this Government really are. The low-paid workers the Government say will pay less income tax will still be worse off at the end of the month, when that saving is clawed back many times over—clawed back through VAT, clawed back through cuts to tax credits and clawed back from thousands of my constituents through the scandalous bedroom tax.

Yes, the Liberal Democrats can celebrate lifting the threshold to £10,000, but household income for many families in that bracket will fall as a result of the Government’s measures. At the same time, the value of an average worker’s pay has fallen by more than £1,000 and persistently high inflation continues.

In these difficult economic times, the Chancellor should certainly accept our proposals for the funding for lending scheme to be enhanced to target small and medium-sized enterprises better by rewarding banks that expand SME lending regardless of their mortgage book. Now is the time when our banks should be supporting SMEs, not hitting them harder. Throughout my constituency, whether I am speaking to small or large businesses, they all make the same complaint: the banking sector is holding back investment in this country, not promoting it. If we can get our banks lending again and get people investing, we will get more people back to work and see growth and regeneration in some of the hardest-hit communities.

The Chancellor should seriously explore our proposals for new regional banks that are committed to their regions and in touch with local business, making it easier for firms to secure the capital investment they require to create the growth and jobs Britain needs. Sadly, my constituents continue to suffer, trapped between this coalition Government, who continue to look out for the wrong people, and a Holyrood Government, who are distracted by their referendum obsession and happy to double Tory cuts and pass them on to local government, washing their hands of all responsibility and removing £250 million from Glasgow’s economy. We heard earlier from one of the SNP Members that we should recognise that the fall in unemployment was thanks to action taken by the Scottish Government. It is amazing that when unemployment goes up, it is all Westminster’s fault but when it goes down it is all thanks to the Scottish Government. It cannot be both.

The reason why I and countless others in the House went into politics was to help build stronger communities, not to use the poorest and most vulnerable people as electoral or political dividing lines, writing off millions of people as a drain on the economy for electoral advantage. We want to help to create a sustainable economy to fund world-class public services, ensure that society’s resources are distributed equitably and protect the most vulnerable people in our communities.

Last Wednesday I sat and listened to the Chancellor lay out his vision for the coming years. It is a vision that I and, I am confident, the majority of people in Britain reject.