Tax Fairness

Anas Sarwar Excerpts

Tuesday 12th March 2013 Commons Chamber

[Mr Gauke]

There are two points. It is correct that the wealthy are often able to move income from one year to another, but the conclusion that HMRC and the Office for Budget Responsibility reached is that even taking into account the forestalling effect, the behavioural consequences of the 50p rate were so significant that it barely raised any revenue. That is the reality. It even takes into account the hon. Gentleman’s point about forestalling. That approach has been confirmed by the OBR. The 50p rate failed.

[Anas Sarwar (Glasgow Central) (Lab)]

The message that the Government have repeated over and over again is that we are all in this together. Take the example of families in my constituency who live just one mile apart. One has been handed a tax cut as a result of the scrapping of the 50p tax rate. One mile in the other direction families will be handed a food parcel. Does the Minister think that is fair?

[Mr Gauke]

Let us look at what was in the last Budget in respect of stamp duty and the cap on reliefs. We could also look at what we have done with regard to capital gains tax. The independent Institute for Fiscal Studies has made it clear that the top 20% are affected most by the fiscal consolidation policies that have been pursued in this Parliament. Those with broadest shoulders are bearing the greatest burden. However, we have an enormous deficit that we have to get down—a deficit that we inherited from the Opposition.

--- Later in debate ---

[Stephen Williams (Bristol West) (LD)]

Thank you, Mr Deputy Speaker—indeed, a man from Swansea.

It is a pleasure to speak in favour of the Government amendment tabled by the Deputy Prime Minister and the Prime Minister, because it reflects the realities of coalition Government. The amendment is completely frank about the fact that there are two parties in coalition and that one of them—my party, the Liberal Democrats—supports a mansion tax while the other, the Conservative party, does not. When we conducted our coalition negotiations back in May 2010, the Liberal Democrats were successful in getting many of our policies into the coalition agreement that is now being implemented by the Government, but the mansion tax was resisted by the Conservative party, and that is why the Chancellor has not, thus far, put it forward in his Budgets. We accept that position. Our amendment reflects the realities of the coalition.

[Anas Sarwar]

Will the hon. Gentleman tell us what part of the Opposition motion he cannot support?

[Stephen Williams]

I will come to that, if the hon. Gentleman is patient.

The key sentences in the Opposition motion and in the coalition Government amendment are those which refer to our support for tax cuts for people on low and middle incomes; we have that in common. However, it rather depends on what one means by that. We know what we mean by it. At the last general election, the Liberal Democrats said that the most effective way to cut taxes for people on low and middle incomes was to raise the income tax threshold to £10,000. That policy was accepted by our coalition partners and it has now been delivered by the coalition Government. I listened carefully to what the Leader of the Opposition said in his speech just a month ago when, lo and behold, Labour was converted to a mansion tax. The purpose of that conversion was specifically to right the wrong that the hon. Member for Nottingham East (Chris Leslie) acknowledged was done in 2007—in other words, to reintroduce the 10p rate. That is what Labour’s policy is. The motion is not entirely clear about that, but we have heard the words of the Leader of the Opposition. We know that, yes, they are now in favour of a mansion tax, but specifically to fund a 10p tax rate, which we think will be completely ineffective.

The Economy

Anas Sarwar Excerpts

Tuesday 11th December 2012 Commons Chamber

[Anas Sarwar (Glasgow Central) (Lab)]

Can the hon. Gentleman confirm whether the capital housing budget has been increased or decreased under the Scottish Government?

[Mr Weir]

The Scottish Government have been putting more and more money into capital investment. [Interruption.] It has not been decreasing. They have been putting money into capital investments that matter, despite the overall budget from Westminster having been cut.

The Scottish Government have been taking the action that the former Chancellor, the right hon. Member for Edinburgh South West (Mr Darling), called for earlier. In June, they announced a £105 million package of investment for so-called shovel-ready projects. Conventional capital investment has been boosted by a £2.5 billion pipeline of infrastructure projects that is being delivered through the non-profit distributing model. The Scottish Government recognised long before the current Chancellor did that the model of private participation in infrastructure was fundamentally flawed, although Labour does not seem to have cottoned on to that yet. A total of £700 million has been switched from the resource to the capital budget to support capital investment. The Scottish Government are supporting a range of innovative finance initiatives such as the National Housing Trust.

It appears from what he said this afternoon that even the former Chancellor has changed his original views and now supports the increase in capital expenditure on infrastructure, although that has not prevented his Labour colleagues in Scotland from continually attacking it; such is the way of politics, I suppose. Indeed, their leader has announced a cuts commission—an initiative whose only backers appear to be their friends in the Better Together campaign, the Conservatives.

[Mr Weir]

My hon. Friend makes a good point. The Conservatives in Scotland have also supported the cuts commission, so it appears that they are all cutters together rather than better together.

The SNP Government in Scotland have been very active in ensuring that we rebalance our economy with investment in new green initiatives. The Government down here often talk about that, but we have seen little evidence of it. Indeed, the proposals in the Energy Bill give cause for concern about the way in which this Government look at green investment and whether there is to be investment in new green energy or whether the Treasury is winning the battle and we are going down a different route.

This is important to Scotland because the renewables industries now support more than 11,000 jobs in Scotland, and that figure is growing. There have been significant investments in green energy. Gamesa chose Leith for its new UK offshore wind manufacturing plant, which will create up to 800 jobs. Burcote Wind has announced plans for a £l billion investment creating up to 600 new jobs. Global Energy Group has announced that Nigg skills academy will deliver training for up to 3,000 people over three years. Scottish Power has announced the creation of 300 skilled jobs as part of a £5 billion investment in Scotland’s grid, and it is also investing £6.5 million in grass-roots skills development.

[Anas Sarwar]

The hon. Gentleman is talking about all this fantastic new investment which is happening in Scotland within the United Kingdom. Would that still be the case if Scotland were an independent country? What would corporation tax be in an independent country—20%, 15%, or the current level?

[Mr Weir]

The hon. Gentleman cannot tell me what corporation tax will be here next year, never mind what it will be in Scotland in a few years’ time. This investment is taking place. He and his party keep saying that the referendum is causing uncertainty, but all this investment is coming in now. People are investing in Scotland despite the scaremongering from the Labour party. I ask him to consider this: the real barrier to investment in the UK is not uncertainty about a referendum in Scotland but uncertainty about the referendum on Europe that Government Members and increasingly people in his party are pushing for.

[Anas Sarwar]

Will the hon. Gentleman give way?

[Mr Weir]

No, I have already given way enough.

There is uncertainty in politics and uncertainty on Europe, but in Scotland we are pressing ahead. Despite all the scaremongering from Better Together, investment is still going on. Most recently, Areva announced a substantial investment in wind. Beyond renewables, Diageo has made significant investments in the whisky industry. A great deal of investment is going on. They are coming to Scotland because it is a good place to do business and because it has a Government who are pushing forward and taking the steps necessary to create an environment to build up an economy that makes sure that there is work, that puts money into local firms and local economies and that puts people back in work. Those are the important things that people care about and that is what the Scottish Government are doing—that is why they are so successful—rather than following the austerity model, which seems to be the only thing that this House can talk about.

That has all been done with the limited powers of devolution and without the key economic levers of power that would allow the Scottish Government to do even more. That will change when Scotland votes for independence in 2014 and we will unlock the real opportunities to build a better Scotland, rather than be locked into the austerity agenda of the UK parties.

Tax Avoidance and Evasion

Anas Sarwar Excerpts

Thursday 13th September 2012 Commons Chamber

[Mr Meacher]

We have our representative on the Front Bench who will speak about that, but I will come to what I think should be done.

The Government have said that they will accept the Aaronson proposals in full—what a surprise! So the Prime Minister’s boast that he was cracking down on aggressive tax avoidance turns out to be nothing more than a paper aeroplane job devised in the certain knowledge that it will never fly.

After this tragic-comic charade, what will Government’s Bill, scheduled for next year, achieve? If it is used at all, other than as a fig leaf to cover the Chancellor’s nakedness on this issue, I think that it will be drawn extremely narrowly to include only the most egregious and extreme cases of tax abuse. It will exclude national insurance and VAT, which are a pretty large part of the tax system, and will not even regard the shifting of income, profit or gain from one tax category to another in order to gain a tax advantage as being within the definition of tax avoidance. I ask you, Mr Deputy Speaker! Indeed, the fact that the Government’s own economic impact assessment for the proposed general anti-abuse rule states that it will have little or no measurable impact makes it absolutely clear that the anti-abuse rule is just a massive white elephant.

[Anas Sarwar (Glasgow Central) (Lab)]

I congratulate my right hon. Friend on securing this important debate. He is rightly making a powerful case about tax avoidance in the UK, but does he recognise that it is also a global problem? Recent OECD statistics show that the amount of tax avoidance that takes place in developing countries is three times as much as the global aid budget, and the Government’s recent legislation on controlled foreign companies makes it easier for companies to avoid paying tax in developing countries.

[Mr Meacher]

I agree. That is a question to which the Minister should reply. What concerns me is that this Government, out of those in all the western countries, particularly those in the EU and the OECD, have been dragging their feet the most on this issue.

Why are the Government introducing this measure? That can only be a matter of conjecture, but I suspect, as does the Association of Revenue and Customs, which represents senior officials at HMRC, that its real purpose is to stop almost nothing while allowing the vast amount of tax avoidance that it will never address to be deemed ethically and technically acceptable when of course it is nothing of the kind—in other words, to move the goalposts even further towards expanding the boundaries of so-called legitimate tax avoidance. I hope that the Minister will convince me and the House that that is not so, but that is certainly how many people read it.

Turning to the point raised by the hon. Member for Brighton, Pavilion (Caroline Lucas), what should be done in place of this mealy-mouthed Government measure? First and foremost, we need a general anti-tax avoidance principle—GANTIP—enshrined in statute. That would allow HMRC to declare null and void any scheme whose primary purpose was an artificial contrivance to avoid tax rather than to act as a genuine economic transaction. I think that most people in this country would agree that that is an extremely fair and reasonable proposition.

That is exactly what my private Member’s Bill, the General Anti Tax-Avoidance Principle Bill, would do. It is due to receive its Second Reading tomorrow and I expect the Government Whips to give it a fair run. It was prepared and drafted by Richard Murphy, one of the founding members of the Tax Justice Network and, I can say without any exaggeration, one of the country’s leading tax accountants. It would overturn the rule in the so-called Duke of Westminster case in 1936, which has underpinned the tax avoidance activities of the accounting, legal and banking professions ever since for three quarters of a century. In effect, there is an economic test at the core of my Bill that can be applied if, having taken into account all the relevant circumstances relating to the economic substance of a transaction, it appears that tax is not being paid by the right person, in the right amount, in the right place, at the right time, or at all

GANTIP is crucial, but other measures are also needed and I will address them briefly. The Government should seek an international financial standard that requires country-by-country reporting by transnational corporations in order to block the immense loophole of transfer pricing. The European Union savings tax directive, which the UK Government have repeatedly tried to water down, should be strengthened to include offshore trusts, which are a favourite tool of the tax-cheating industry. The non-dom rule was introduced in 1799—it is somewhat anachronistic—and the UK is now the only country in the world, apart from Ireland, I think, that does not tax worldwide earnings. It should be abolished.

A much tougher line should be taken on closing down UK tax havens. The UK Crown dependencies hold some $7 trillion of US bank deposits and probably dodge some £30 billion of tax. The Cayman Islands have just 30,000 inhabitants, but they are home to 457,000 shell companies. We should adopt the rule that unless such territories provide full and automatic information on all such funds that can be taxed, any transactions with such tax havens should be declared illegal.

In conclusion, I do not often agree with the Prime Minister and the Chancellor, but tax avoidance is morally wrong and morally repugnant. It is high time that we had in this country a Government whose actions show that they actually believe and support that.

Oral Answers to Questions

Anas Sarwar Excerpts

Tuesday 11th September 2012 Commons Chamber

[Mr Osborne]

I agreed with my hon. Friend until his last sentence. He is right to say that it is not just the big projects announced from this Dispatch Box that count; the local projects in Peterborough and elsewhere will also unlock jobs, development and investment. Of course, we cannot make all those announcements here in the House of Commons. However, we have provided local authorities with the funds to make those transport changes and improvements. We call it the Growing Places fund, and it is worth about £500 million. In the city deals that we are striking with different cities, we are improving road and rail connections to create jobs and get the private sector growing, which is what we all want to see.

[Anas Sarwar (Glasgow Central) (Lab)]

The huge contraction in our construction sector is one of the reasons we are in a double-dip recession. We have seen two reshuffles—one in the UK Government and one in the Scottish Government. In Scotland, the new Cabinet Secretary for Infrastructure, Investment and Cities will be building not the case for schools, hospitals and railways but the case for independence, and we have a UK Chancellor who thinks that a credible economic policy is just about rolling up his sleeves. When we will see a change in direction from this Government to make sure that we are creating investment and jobs right across the UK?

[Mr Osborne]

In this case, I agreed with the first half of the question. I do not think that the Scottish Government are focused on the priorities of the Scottish people, and I made that case when I spoke to CBI Scotland in Glasgow last week. However, I disagree with his attempt to compare the record of the Labour Government with that of this coalition Government. We are spending more on capital investment than the previous Labour Government planned to spend in this period, as they set out just before the general election. We are spending more on capital investment in the essential infrastructure of this country than they did. We are also taking tough decisions on welfare and the like in order to get the deficit down and get money spent where it can create jobs.

Banking Reform

Anas Sarwar Excerpts

Thursday 14th June 2012 Commons Chamber

[Mr Hoban]

A number of countries have argued for the freedom to go further and impose higher capital surcharges—Switzerland is one and Sweden, which has introduced higher capital surcharges, is another. It is our responsibility to ensure that we protect the stability of the UK economy and the interests of the taxpayer, and respond to the structure of the banking system in the UK. Bank balance sheets in the UK are many times larger than our economy. We are much more exposed to risk. It is therefore right that we should take actions in the UK that help to protect the economy and the taxpayer, which is why we are introducing these proposals today.

[Anas Sarwar (Glasgow Central) (Lab)]

The Scottish Finance Secretary and the Scottish First Minister have said that if Scotland were to become a separate country, the Bank of England would remain the lender of last resort, while UK regulatory authorities would still oversee Scottish institutions. Can the Minister tell us what representations the Government have received from the Scottish Government and whether he is aware of any other EU country that does not have its own central bank or regulatory regime?

[Mr Hoban]

The hon. Gentleman raises an interesting question. There are some important questions to be answered about how the banks would be regulated if Scotland were to become independent. As I made clear in my response to the shadow Chancellor, a fiscal union needs its own system of banking supervision and its own resolution arrangements, and it is hard to see quite how things would work for an independent Scotland.

Jobs and Growth

Anas Sarwar Excerpts

Thursday 17th May 2012 Commons Chamber

[Anas Sarwar (Glasgow Central) (Lab)]

Like thousands of my constituents, I am deeply disappointed that after taking us back into recession this Government have failed to come forward with a substantive plan in the Queen’s Speech to get the economy back on track. In the fourth quarter of 2011, growth dropped to minus 0.3%, and to minus 0.2% in the first quarter of this year. Long-term youth unemployment has risen by a shocking 264% in the last year alone. What might be described as an embarrassment by the Chancellor is a tragedy for families up and down the country. Nothing announced by the Government in the Chancellor’s Budget and certainly nothing in the Queen’s Speech will address the problems that hard-working families face across the country.

We all know that business lending is a vital part of any healthy economy. That is why the Opposition wanted the Government to tackle what the Business Secretary himself described as a “yawning mismatch” between the demands of small business for finance and the banks’ reluctance to lend. Instead, we got a small sticking plaster to cover a massive business funding gap that is estimated to reach £150 billion by 2016.

We have a coalition Government who have completely the wrong priorities. They are more interested in papering over coalition cracks than getting Britain back into work. Instead of helping hard-pressed families and small business owners, the Government decided in the Budget to give a tax cut to those earning more than five times the average salary.

I was disappointed not to see any mention in the Budget or the Queen’s Speech of families struggling with the rising cost of child care, which is higher in Scotland than anywhere else in the UK. It is no surprise that 10% more women are in employment in countries such as Norway and Denmark, where parents have access to affordable child care, than in the UK.

I was even more disappointed to see nothing in the Budget about supporting disabled people into work, following the Government’s shocking decision to close the majority of Remploy factories. According to the Government’s own figures, about 500,000 disabled people will lose their benefit entitlement when the disability living allowance is replaced by the new personal independence payment. Case studies conducted under the Government’s consultation on the PIP suggest that blind and visually impaired people who are judged to have adapted to their disability will not qualify for the higher rate. That ignores the reality that the difficulties, the barriers and, most importantly, the costs continue regardless of the length of time a person has lived with sight loss.

I urge the Prime Minister to look for inspiration to my home city of Glasgow, where the Labour council that was re-elected last week with a commanding majority —a feat that is almost impossible under a proportional representation voting system—has managed to lower unemployment in the past year in the face of this Government’s economic failures and the Scottish Government’s swingeing cuts. In Glasgow, people voted for a manifesto that put investment in jobs, growth and education first. They voted for the £25 million investment in the Glasgow guarantee, a programme that will use the Commonwealth jobs fund, the Commonwealth apprenticeship scheme and the Commonwealth graduate fund to create a lasting legacy of employment from Glasgow’s proud hosting of the Commonwealth games in 2014.

The people of Glasgow rejected the scorched earth policy of mass austerity and the imagined magic wand of separation in favour of investment to create jobs—investment such as that proposed by my right hon. Friend the shadow Chancellor in our five-point plan. We want to see the establishment of a state-owned British investment bank, similar to the bank for small and medium-sized enterprises that John Longworth, the director general of the British Chambers of Commerce, has been calling for, to help businesses to create the jobs that our country needs. We also want to see a jobs Bill that would ensure that money raised from a tax on bank bonuses was used to provide real jobs, with real wages and responsibilities, for more than 100,000 young people aged 18 to 24.

We have an out-of-touch Government at Westminster who are repeating the mistakes of the 1980s and a distracted Government at Holyrood who are concerned more about a separation referendum than about the real issues affecting the lives of ordinary Scots, and people up and down the country can see right through them. That is why we saw the elections results that we did last week.

Oral Answers to Questions

Anas Sarwar Excerpts

Tuesday 6th March 2012 Commons Chamber

[Mr Gauke]

There are times when taxpayers engage in aggressive avoidance and we put a stop to it, as we did last week. However, the offsetting of losses is not novel—it is a long-standing element of the tax system—and, although of course we keep all such matters under review, the legitimate use of losses does not necessarily count as aggressive avoidance.

[Anas Sarwar (Glasgow Central) (Lab)]

Given the Government’s attempts to cut the deficit, it would make sense to clamp down on tax evasion, so why are they cutting 10,000 staff at HMRC?

[Mr Gauke]

We are cutting down on tax evasion. Whereas under the previous Government tax evasion coverage was reduced—the number of staff dealing with tax evasion was reduced—it can be seen that the number of people working on tax evasion in HMRC is now increasing.

Living Standards

Anas Sarwar Excerpts

Monday 5th March 2012 Commons Chamber

[Mr Gauke]

I am going to make a little progress.

We know, given the constraints that we face in the public finances, alongside high commodity prices and international uncertainty, that these are tough times for many families. That is why we have taken substantial steps to protect living standards, and to ensure that we support our poorest and most vulnerable families. Even as we cut the deficit, fairness has been at the very core of our spending plans. We will not let our poorest and most vulnerable families bear the consequences of the previous Government’s failures. That is why we have secured the largest ever cash rise in the basic state pension, and why we have uprated working-age benefits by 5.2% to protect the real incomes of the poorest.

[Anas Sarwar (Glasgow Central) (Lab)]

rose—

[Glenda Jackson (Hampstead and Kilburn) (Lab)]

rose—

--- Later in debate ---

[Mr Gauke]

We believe there are a lot of votes in the hon. Lady’s constituency.

I was going through the things we have done to help the poor, but let me continue. What we have done with the personal allowance is a big step—helping working people, ensuring that work pays and lifting living standards for those on low incomes. That is why this Government have made increasing the personal allowance one of our key priorities in supporting low and middle-income families across the UK. In April 2012, we will make a £630 increase in the personal allowance, taking it £8,105, which, taken with the £1,000 increase in April 2011, will benefit 25 million taxpayers, taking 1.1 million low-income individuals out of income tax altogether. We note that the shadow Chief Secretary to the Treasury expressed her opposition to that policy just a few minutes ago.

[Anas Sarwar]

Will the Minister explain how living standards are increasing for families in Glasgow when 2,000 couples and 4,000 children will lose up to £4,000 in working tax credits at the same time as VAT is going up, inflation is high and the cost of living is going up? How is that improving living standards for poor families in Glasgow?

[Mr Gauke]

I come back to the initial point: we face a huge deficit. People recognise we have to reduce it, but at the same time we are trying to do everything we can to protect the poorest. That is why we are running through the issues here.

Banking (Responsibility and Reform)

Anas Sarwar Excerpts

Tuesday 7th February 2012 Commons Chamber

[Mr Hoban]

The hon. Gentleman needs to reflect on what is happening in banking. I think his hon. Friend the hon. Member for Edinburgh East (Sheila Gilmore) even got as far, in last night’s debate on the Financial Services Bill, as suggesting that people should not use online banking so as to keep bank branches open. People are changing the way that they access banking and are thinking about whether they need to go into bank branches. We need to ensure that branches are there to meet needs where that is commercially viable, but there is no free lunch here. If the cost of maintaining branch networks continues to rise and insufficient numbers of people use them, the cost will be passed on to the customers who use the branches. The hon. Gentleman needs to think quite carefully about how many additional costs he wants to impose on bank customers in order to keep branch networks viable in that way.

[Anas Sarwar (Glasgow Central) (Lab)]

Is the Minister aware of today’s announcement by the Clydesdale bank about its restructuring programme, which it says is taking place as a result of the UK Government’s austerity Budget, which is causing difficulties for the bank and a difficult economic climate? It employs 2,000 people in my constituency. There are real concerns about job losses in Glasgow and about the closure of branches of that bank, which was going about its business in a meaningful way.

[Mr Hoban]

If the hon. Gentleman had been here a little earlier, he would have heard my reply to his hon. Friend the hon. Member for Edinburgh East, who asked about exactly the same problem. The reality is that there are issues facing banks in the UK, and Clydesdale needs to reflect that. The hon. Member for Edinburgh East also raised the issue of the austerity programme, but that is in place to tackle the problems the Labour Government left behind.

On corporate governance, the previous Government failed to tackle the bonus culture and failed fundamentally to reform corporate governance. The Business Secretary has announced a package of measures to tackle the disconnect between top pay and company performance. Shareholders need the information and powers to hold boards to account on pay. We will give them that and we expect them to use those powers. The Institute of Directors, the National Association of Pension Funds, the CBI and the Association of British Insurers all support the Government’s ambitions. As Otto Thoresen, the director general of the ABI, said when he wrote to bank chairmen last December,

“it can no longer be business as usual for this remuneration round”.

Across the board there is consensus that we need to tackle excessive pay and this Government are answering that, but it is not an easy task. Across the economy, and especially in the banking sector, the previous Government allowed an unjustifiable sense of bonus entitlement to grow, whether in the public or private sector. Under them, a bonus became a right, not a reward, and simply par for the course. After 13 years of Labour Government, we now have a substantial challenge ahead—dismantling the culture of excessive pay in the banking sector. We have already gone some way towards dismantling that culture, but we still have a long way to go.

Road Fuel Duties

Anas Sarwar Excerpts

Tuesday 13th September 2011 Westminster Hall

[Mr Cunningham]

I welcome the hon. Gentleman’s response because he is only apologising for the Government of whom he is part. When he was in opposition, he said the opposite; but never mind, we shall carry on.

Although we cannot broaden the debate, I would like to mention that one of the major implications of the fuel price increase is its impact on the wider economy. We could talk about pensioners who are on fixed incomes, one-parent families or people who rely on transport—whether it is the motor car or the bus. I need to check this out, but I think that, a couple of weeks ago, National Express announced that it may have to reconsider off-peak fares for pensioners because of the subsidy situation. That is something that the Minister may want to investigate.

[Anas Sarwar (Glasgow Central) (Lab)]

I join my hon. Friend in congratulating our hon. Friend the Member for Central Ayrshire (Mr Donohoe) on securing the debate. My hon. Friend the Member for Coventry South (Mr Cunningham) mentioned the impact on pensioners. In the city of Glasgow, 100,000 pensioners face cuts to their winter fuel allowance this year as well as increases in the cost of fuel and of living. Sadly, too many pensioners right across the country will have to choose between putting food on the table, heating their homes and getting out and about around the country. Would he like there to be some real Government action to support pensioners?

[Mr Cunningham]

The previous Government certainly went a long way to try to address some of those problems. Some Labour Members did not necessarily think that they went far enough, but that is another argument. We now have the present Government. If they want to talk about the big society, they must get a grip of the issue and try to do something more positive. It is no good relying on a pilot scheme somewhere and a double-tier price index for fuel. We must tackle the problem in a proper way. Someone mentioned the European scheme, which may well be something that the Government can consider.

I return to the issues that affect the economy. Haulage prices must be affecting businesses, particularly small businesses—for example, in relation to builders. We rely on builders to generate much of the economy. There are one or two examples of that. In addition, small businesses cannot always get credit and have cash-flow problems, which impacts on small and other businesses and therefore on the economy.

It is also worth noting that this Government, like the previous Conservative Government, changed the retail prices index; we now have a new invention called the consumer prices index. Such an approach shows that the Government are concealing the real impact of their policies, particularly in relation to inflation. I hope that the Minister will address that because the retail prices index is a way in which the public can get a good measure of what is happening in the economy in respect of inflation. If we consider current inflation levels, the public are not sure whether they are getting a true measure. The household budget is mucked around with, to use an expression, but the real cost cannot be measured. I hope the Government will look at that.

In relation to the islands, I know a lot more about Cornwall. Some years ago, I sat on the Trade and Industry Committee. We discovered to our surprise that one of the poorest areas in the country was Cornwall. Like the highlands and islands, Cornwall relies on the tourist trade, as everybody knows; a lot of its jobs depend on the tourist trade and a lot of them depend on public transport. That has an impact on public transport and bus fares. That is bound to affect the poorest areas in Britain, whether we are talking about the islands, the south or the south-west.

I remember one scheme where the post office used postal vans as a method of public transport in order to pick people up. There have been cuts in public transport in the south-west; the frequency of buses, that public mode of travel, has been reduced drastically. I wonder what has happened to what we used to call the transport subsidy.

I have covered some of the main points that I thought needed emphasis. My hon. Friend the Member for Central Ayrshire has covered the major areas, so it was worth pointing one or two other things out. The seriousness of the situation has now developed, whether we talk about inflation measurements or the impact on ordinary people who have been encouraged to take part in what is called the big society.

--- Later in debate ---

[Justine Greening]

There are many people with schools in their constituencies—I can certainly think of one in mine—that saw none of that investment. Frankly, it is easy to spend, spend, spend. That is the Labour party’s legacy to Britain—a debt that is so high that it is costing taxpayers £120 million of interest every day. It is always the same. Let us not forget that the other legacy was unemployment that was 400,000 higher.

[Anas Sarwar]

rose—

[Kerry McCarthy]

rose—

[Justine Greening]

I will give way to the hon. Gentleman, but then I would like to make some progress and talk about fuel, because that is clearly the point of the debate. However, I am happy to have a debate on the economy, because many people in Britain recognise exactly whose fault it is that the economy is in the state that it is in today—it is the fault of the Labour party.

[Anas Sarwar]

I give the Minister some credit for being able to rewrite history in the way that she has. Can she tell me why the Conservative party supported Labour’s spending plans before the financial crisis?

[Justine Greening]

You always know that you are making progress in an argument, Mr Dobbin, when people have to turn back to things that happened decades—[Interruption.] Opposition Members can make this into a political issue. I would like to make it into an issue that involves people outside this place. Frankly, if those in the Labour party had spent less time arguing among themselves, as we now know they were doing, and a little more time moving away from political stunts to manage the economy responsibly, perhaps the public finances in this country would not have been in the mess that they were in when they were handed over to us at the last election. [Interruption.] An Opposition Member says, “You are in government.” Yes, there’s a good reason for that—because the British people had just about had enough of the Labour party being in control of the purse strings. I think we all hope that it will be an awfully long time before it is given control of the purse strings again. [Interruption.] I now want to make some progress on fuel duty and I particularly want to —[Interruption.]