amendment of the law

Andrew George Excerpts

Monday 25th March 2013 Commons Chamber

[Andrew George (St Ives) (LD)]

It is, of course, a pleasure to follow the hon. Member for Bradford West (George Galloway). His speech was an oratorical interlude that demonstrated his perspective on the world and suited his style: blacks, whites and no greys. Although he denies practising yah-boo politics, I am afraid to say that that was pretty much what we heard.

Today, we are concentrating primarily on housing, and I want to make a constructive contribution on the narrow issue of developing the construction industry, trying to kick-start the economy in the process and meeting desperate housing need. I welcome any intervention by the Government, including the Budget announcement on the promotion of home ownership for those seeking, in many cases in desperate circumstances, to get their first toe-hold on the housing ladder. In particular, I want to look at the special circumstances faced by many people living in rural areas.

My own part of the world is, of course, west Cornwall and the Isles of Scilly. Cornwall as a whole has seen the number of houses double in the past 40 years, yet housing problems for local people have become significantly worse. What we have learned in Cornwall applies to many other parts of the country that are attractive to wealthy people—we have many such places in Cornwall—who can afford second homes. On its own, building houses is not the problem. In places that are highly desirable to those with large wallets, something more sophisticated is required than merely heaving in a load more houses and turning the place into a developers’ paradise. There is a big mismatch between earnings levels and house prices in our area.

[Mr Gregory Campbell (East Londonderry) (DUP)]

The hon. Gentleman’s area, like mine, has a number of second homes on coastal development routes. Does he agree that we need the Government to plug this massive loophole, so that people do not take advantage of what appears to be there at the moment and build large buy-to-let properties with a significant subsidy from the public purse?

[Andrew George]

I entirely agree. As the Government introduce their proposals, I hope that they will discount any chance of the loan guarantee being used to support the purchase of second homes, and that it will go only to families that otherwise would not be able to buy a first home of their own. After I was first elected in 1997, I campaigned against the policy that had been introduced by the Conservative Government of providing a 50% council tax discount for second homes. In that case, hundreds of millions of pounds were being used every year to subsidise the wealthy buying second homes, when thousands of local families could not afford their first. This Government are finishing off the job. I persuaded the previous Labour Government to remove as much as they possibly could of the second home council tax discount, and that was the right step forward.

Before I was elected to this House, I worked with housing associations and others to find a way of constructing a new lower rung on the housing ladder through shared equity and shared ownership schemes. The rural exceptions policy allowed exceptions to be made on the edges of villages and towns, where planning permission would not normally be granted, to meet local housing need. It allowed the schemes to go ahead and meant that the development price of land was significantly lower than would have been the case if they had been given unfettered permission to develop the land and build properties at prices that local people could not afford. The exceptions approach and shared ownership were clearly the way forward. The problem was that in rural areas only two lenders, Nationwide and Halifax, were prepared to put money into shared ownership developments.

A lot of lenders question whether they are prepared to put their money in and support local families who are trying to get on to the housing ladder. Such properties do not result in the level of default—the amount is 0.45% in shared ownership as a whole, which is significantly less than that for rural housing stock—that a lot of lenders pretend. If the Government are looking at ways to tighten the definition and develop their loan guarantee scheme so that it will apply to families who desperately need help, I urge them to look at the shared ownership sector. They should find ways to enable the situation to come to life, but not just on the first, initial purchase; they should try to ensure that on the second and subsequent purchase they can facilitate and work with housing associations so that these families can move on. The lack of confidence that this market can have a life of its own is holding it back.

I hope the Government will look at ways of having, in effect, a rural housing investment bank through this measure, and I hope that they will see this as a constructive contribution to the debate.

Tax Fairness

Andrew George Excerpts

Tuesday 12th March 2013 Commons Chamber

[Mr Gauke]

My hon. Friend is absolutely right to raise that point in the context of the changes we have made to our corporate tax system. In 2009 KPMG commissioned a survey of tax professionals, asking them to name the three most competitive countries. The UK was nominated by just 16% of respondents. In 2012 KPMG undertook the same survey and the UK was nominated by 72% of respondents. That is a dramatic change, which we are proud of, and it will help our economy grow. We have also had the courage to reduce the 50p rate, which will help our competitiveness, too.

[Andrew George (St Ives) (LD)]

One thing we do know is that mansions cannot emigrate if the tax rate goes up. Earlier my hon. Friend the Minister said that the problem with the mansion tax is that it becomes a home tax. Does he agree that the council tax is also a home tax, and may I understand from what he has been saying that the Conservatives are coming round to the Liberal Democrat view that we should consider introducing a local income tax as an alternative for financing local authorities?

[Mr Gauke]

No, I think my hon. Friend would be wrong to reach that conclusion from what I have said. There is an interesting debate on the balance between property and income taxes, however, and I note his suggestion in that context.

May I now return to the topic of the 50p rate, as I know the hon. Member for Nottingham East likes to focus on it? The Opposition may think that in this day and age 50p is the least the wealthy should pay in income tax. I want to put to them the question raised earlier by my hon. Friend the Member for West Worcestershire (Harriett Baldwin). In less than four weeks the 50p rate will have gone. The additional rate will be 45p. Will Labour seek to reverse that? I am happy to take an intervention on this point. Will Labour seek to reverse that after the next election?

Cornwall (Government Funding)

Andrew George Excerpts

Tuesday 18th December 2012 Westminster Hall

[Dan Rogerson]

I am grateful to the Minister for giving way again. He is being extremely generous, as was the Treasury with the project that he describes, although I have to acknowledge that half the costs will be funded locally, through local authorities. That is an excellent example of what he was talking about earlier: £30 million is coming from central Government and £30 million from local government. He also raised the issue of fuel duty. Again, I welcome the Government’s decision on that. I understand that they are also having discussions with the European Union in relation to what it has done for islands, such as the Isles of Scilly in the constituency of my hon. Friend the Member for St Ives (Andrew George), and whether rural parts of mainland Britain could also benefit from a further reduction—

[Andrew George (St Ives) (LD)]

Of 5p.

[Dan Rogerson]

A 5p reduction. That would have a huge impact, particularly on small businesses in my constituency. I urge the Minister to redouble his efforts to secure that.

[Mr Gauke]

My hon. Friend is right to say that we are having further discussions with the European Commission about that. Obviously, we will update the House as soon as we are able to do so. However, I do not want to leave the A30 just yet—not a comment that people often make. The scheme to which I referred, and for which I know my hon. Friend has campaigned long and hard, will relieve congestion and improve journey times. It will also attract business growth and inward investment to Cornwall by improving links to the rest of England. The Government welcome the commitment from Cornwall council, to which my hon. Friend alluded, to deliver and part-fund the scheme on behalf of the Secretary of State. Its drive in taking the scheme forward demonstrates how much of a priority it is to the council and to Cornwall generally. Work on the scheme is set to start in 2014-15, subject to the completion of planning processes and funding agreements, and the road is due to be open to traffic in 2016. I am sure that it will bring real benefits to the area.

My hon. Friend may feel that my contribution took a long time to reach Cornwall, and I am sure that is a feeling that many motorists will at times sympathise with. However, it is important for us to look at the national context of spending and the impacts that decisions made at that level will have in each region. I hope that my comments have been useful in laying out the Government’s position.

[Andrew George]

I know that my hon. Friend the Member for North Cornwall (Dan Rogerson) raised, while I was still in Committee, the issue of health funding and the principle of parity. Cornwall has received more than £200 million less over a six-year period than the Government themselves have said it should receive—than its target funding. I know that the Minister has deferred to each Department when he has answered questions on these issues, but as for his opinion, does he think that such a distance between what is allocated and what the Government say that a local area should get is acceptable?

[Mr Gauke]

Of course, as a Government, we are committed to ensuring that there is a fair funding system. As a constituency MP, representing a Hertfordshire seat, I know that often one can look at particular areas, including health funding, where there are disparities between what one might expect—what one might see as the right amount for one’s area—and the national average, and that can be deeply frustrating for Members for Parliament and for our constituents. My hon. Friend the Member for St Ives (Andrew George) makes the case well for Cornwall. Of course, as a Government, through all Departments, including the Treasury, we will look at what we can do to ensure that we have a funding system that is fair.

I am conscious of the time, so I will conclude. I congratulate my hon. Friend the Member for North Cornwall on securing the debate, on his work in relation to the A30, and on raising the points that he has raised today. Of course, as a Government, we want to ensure that we have a fair funding formula, whether that be for health, education or local government. That is something that we recognise across Government, including in the Treasury. On the specific issue of damping that my hon. Friend raised, I think that more information will be available to him very shortly.

Green Economy

Andrew George Excerpts

Thursday 28th June 2012 Commons Chamber

[Laura Sandys]

Well, by 2020 the subsidy will amount to $660 billion.

[Andrew George (St Ives) (LD)]

My hon. Friend will be aware that the noble Lord Stern, who produced a seminal work just a few years ago warning of the consequences of ignoring the impact of climate change, emphasised the way in which past Governments have given, and the current Government still give, tax breaks and other subsidies and support to the fossil fuel industry—to the disadvantage of renewable energy.

[Laura Sandys]

I thank the hon. Gentleman for his comment. I do not see the issue as a positive for one sector or another, but we must have transparency across all the energy sources that we as a country decide to—let us say—invest in or to support in any way.

--- Later in debate ---

[Mr Lilley]

My hon. Friend is quite right. We could halve our emissions by switching to gas from coal, but that does not please the greens.

[Andrew George]

Will the right hon. Gentleman give way?

[Mr Lilley]

I am sorry, but I have given way a couple of times.

To suggest that we can make ourselves richer by adopting more expensive energy is self-evidently ridiculous. Most of what has been cited as evidence of green growth involves creative accounting on a scale that would make Enron blush. First, there is the suggestion that a green sector has arisen, which allegedly employs 1 million people, produces goods and services worth £120 billion and, as the Deputy Prime Minister said the other day, contributes 8% to our GDP—although the House of Commons Library can find no source for that figure, other than the Deputy Prime Minister.

Those figures aroused my natural scepticism, so I tracked them down and found that they came from a Department for Business, Innovation and Skills report published earlier this year, entitled “Low Carbon Environmental Goods and Services (LCEGS)”. My scepticism was confirmed by the opening words, which explain:

“The definition of the LCEGS sector is the result of five year’s work”.

You bet it was! It carries on:

“The definition is broad”—

I can believe that—

“and includes activities that may appear under the overlapping headings of Enviro, Eco, Renewable, Sustainable, Clean Tech, Low Carbon or No Carbon (and any other we might have missed).”

That is not my comment, but theirs. It goes on:

“In the strictest sense it is not a ‘sector’ but a flexible construct or ‘umbrella’ term for capturing a range of activities spread across many existing sectors”.

What does the sector contain? A quarter of it or more has nothing to do with low-carbon activities at all, but relates to things such as sewage and water treatment, double glazing and controlling noise. Those are all excellent things, but they are not what we are talking about today and nothing to do with the low-carbon economy.

The biggest sector within the low-carbon sector looks promising: it is called “Alternative Fuel Vehicle” and employs 105,000 people, making it the biggest employment area in the low-carbon sector. I thought, “Terrific, we are employing 105,000 people making electric cars.” Sadly, however, we are not. I know one of the producers of electric vehicles and, alas, it is no longer producing them. It turns out that the name relates to mainstream and other vehicle fuels. We are not starting off some great manufacturing revolution through all this subsidy at all.

--- Later in debate ---

[Andrew George]

Will the right hon. Gentleman give way?

[Mr Lilley]

No, I have given way lots of times, including when it has reduced my own time.

Let us give up on the belief that we will create a new industry. All we are doing is subsidising jobs in other countries, whose manufactured goods we import. It is quite clear from a look at the detailed figures in this bogus sector that we are not creating an infant industry.

I will now give way to the hon. Member for St Ives (Andrew George), who wished to intervene, because I have a couple of minutes to go.

[Andrew George]

I thank the right hon. Gentleman for giving way. He must address the fact that the low-carbon goods and services market, including the renewables sector that he is talking about, is worth £3.2 trillion a year, employs 28 million people and is growing at a rate of 4%. Either we turn our back on that as a market for the UK or we engage with it, in which case we have to have production capital here.

[Mr Lilley]

Exactly, but who is we? If we is the Government, the hon. Gentleman is proposing that the Government subsidise industries to go for that £3.2 trillion world industry. In fact, that is a bit of an exaggeration, but let us suppose that the figure is correct. The Government are not allowed to do what he wants because of European Union rules, which he supports. We cannot offer infant industries subsidies in this country, or indeed anywhere else in the European Union, although some of our partners may do so in concealed forms. We do not and cannot, so let us not pretend that we are doing so.

The subsidies that we deploy in this country go largely towards generating electricity by more expensive means than is necessary, which increases the cost base of our industry and makes it less competitive across the board. I hope that companies in this country will set up businesses in this sector, as in any other sector, to win exports across the world, but the Government are not allowed to support those companies, and let us not pretend that they are doing so when, in fact, they are subsidising imports.

--- Later in debate ---

[Gordon Henderson]

I can confirm that none of those organisations can offer such a subsidy, but that is not to say that we cannot do something to attract an alternative.

[Andrew George]

The hon. Gentleman will surely acknowledge that one thing that the sector, particularly the production sector, wants more than anything else is the underbelly of a functioning sector—one where there is a market, even if only initially in the UK, and certainty. That is one thing that the Government can and need to provide.

[Gordon Henderson]

I agree, and I shall come to that in a moment. Vestas has not given any reason for its decision, so we can only speculate on why it decided to pull out of Sheerness. A few months ago, it announced that it was slowing down development of the V164 to take account of the current economic conditions and the needs of their potential customers, which is what the hon. Gentleman touches upon. As I said, though, I will return to that point later.

That slow-down has resulted in the slipping of the date for erecting the prototype VI64 from the end of 2012 to 2014. I can only assume that Vestas took the decision—quite sensibly from a commercial perspective—that it did not want to lay out more money in an option on land for which it had no need for the foreseeable future. What will happen in 2014 is anybody’s guess, and that is a big worry both for my constituents and those of my hon. Friend the Member for Isle of Wight (Mr Turner). It is still conceivable, I suppose, that Vestas will come to Sheerness in 2014, but it will only proceed with its project if it can obtain firm orders for the VI64, and no potential customers will commit to those orders until they are clear about the Government’s commitment to offshore wind energy. Currently, however, the Government’s position is not clear, so I would like it to be made clear.

That brings me to the issue of subsidies, which has been raised already. As a Conservative, I am not naturally in favour of taxpayers’ money being used to help any business. If a product is good enough, it should be able to stand on its own two feet. I accept, however, that strategically Governments often use taxpayers’ money to invest in research and development in some industries, particularly where such developments are in the national interest—the defence industry is a case in point, of course. I believe passionately that securing energy supplies into the next century is in our national interest and that it will benefit Britain if taxpayers’ money is used to encourage the development of alternative sources of energy, whether nuclear power, shale gas or offshore wind. For that reason, I will gladly support the motion.

--- Later in debate ---

[Andrew George (St Ives) (LD)]

I am pleased to have an opportunity to speak in this important debate. I warmly congratulate the hon. Member for South Thanet (Laura Sandys) on driving the initiative for the debate and on making a telling and significant opening speech in which she set it on the right course.

So far, speakers have not much reflected on why it is necessary for us to pursue a low-carbon future—apart, that is, from the right hon. Member for Hitchin and Harpenden (Mr Lilley), who is no longer in his place—and have accepted that policy as a given. As a responsible and significant country that wishes to lead the way internationally—for example, at the recent Rio+20 summit —we should be setting the standards in responding to the challenges facing the globe. The recent Stern report set out the significant impact that rapid climate change will have on people and their lifestyles around the globe, and on the world’s economy, including this country’s economy, if we fail properly to get on top of the problem.

I am glad that that is now seen as the relatively unarguable fact of the matter. Although there are some who advance the case—I will not say that it is a respectable case, but I respect the fact that they argue it—of the climate change deniers, who are the modern equivalent of the flat earth society, on a relatively un-peer reviewed and un-scientific basis, it is good that this Government, the previous Government and Members of this House generally take a reasonable approach to the challenges that we face.

The global market in low-carbon goods and services is currently worth £3.2 trillion and may be worth as much as £4 trillion by 2015. It employs 28 million people worldwide and, unlike many sectors, is growing at a rate of 4%, which is faster than the world’s GDP. The nub of the debate is that we can either ignore that growing global market in low-carbon goods and services and say that Britain wants no part of it, or say that we want not only to be part of it, but to be at the cutting edge. Britain should provide the necessary economic certainty for the players in that market to develop low-carbon technology in this country. We must give the right signals and encouragement to those industries. The underbelly of such certainty in Britain can provide the basis on which companies can test and develop those industries, and then become world leaders and develop an export market for the UK.

Fundamentally, that is what I believe lies behind what the Government are doing, and theirs is the right approach. They are putting the investment in and trying to read the messages in the market itself. I know that the Government have had some difficulty with solar photovoltaics, but the fact is that the cost of solar PV reduced by more than 50% in one year. It is difficult for any Government to have a system that can respond effectively to that and not create distortions in the market. We need to have the right incentives to encourage these industries, but the incentives must work in a manner that creates certainty for the long term. Despite the difficulty that was experienced last year, I am pleased that there is now a great deal more certainty and a formula in the feed-in tariffs system that will take the solar PV industry forward to a point where ultimately, in only a few years time, it will not need any fiscal stimulus to continue succeeding and to be one of the most significant players in our economy.

[Mr Robin Walker]

Worcester Bosch, a manufacturer of solar thermal energy, is based in my constituency. One of its concerns is that the enormous subsidies for solar PV under the unreformed feed-in tariffs system discouraged people from investing in solar thermal. Does my hon. Friend agree that having a more sensible and sustainable system will encourage the development of all technologies?

[Andrew George]

My hon. Friend makes the point very well. We must get the balance of the fiscal incentives right. The hon. Member for Southampton, Test (Dr Whitehead) made the point to the right hon. Member for Hitchin and Harpenden that the European rules do not rule out establishing incentives to develop and then roll out new technologies to promote the low-carbon economy.

West Cornwall and the Isles of Scilly in my constituency have for many years been at the cutting edge of many renewable technologies. We had the first wind farms at Delabole and Cold Northcott in the late ’80s. The geothermal project at Rosemanowes, near Penryn, has spawned a number of developments involving ground source heat pumps and deep geothermal, which I believe will be a significant driver of low-carbon technologies into the future. I am also pleased that the Government are investing in geothermal energy. More of Cornwall’s landscape is taken over with large solar PV than other parts of the country—Cornwall is famed for its sun, and it rarely rains. We want to harness that technology.

The first place in the UK to roll out commercial-scale wave technology is also in my area. That required significant Government investment—from the previous Government and the current one. We are at the critical point of ensuring that we plug companies into the system and that it works.

With all those sectors, Cornwall wishes to be seen as the green peninsula—the cutting edge or blueprint from which others can learn. The Eden project is an exemplar of rolling out such projects. It is not just the technologies that hope for opportunities, but companies. For example, Fugro Seacore, an offshore drilling company—I must declare an interest: my son works there—is helping to put in the footings for offshore wind. Such companies hope to have improved opportunities as a result of the fiscal measures that the Government are putting in place to promote low-carbon technology. I hope all hon. Members support this important motion.

Oral Answers to Questions

Andrew George Excerpts

Tuesday 26th June 2012 Commons Chamber

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

The hon. Lady refers to just one of a number of shambolic statements made by the Scottish National party since it launched its campaign for independence a few weeks ago, and not just on the Bank of England, but on financial services regulation. She makes the point very powerfully indeed that Scotland is “better together” as part of the United Kingdom. We have greater strength together as part of a more credible economic unit and part of the shared monetary policy of the Bank of England. All that would be jeopardised if Scotland were ever to become independent.

[Andrew George (St Ives) (LD)]

T7. The Chief Secretary has rightly committed the Government to clamping down on tax avoidance. Given recent high- profile cases of tax avoidance, and notwithstanding the earlier question from the hon. Member for Bolsover (Mr Skinner), will my right hon. Friend update the House on the progress being made and perhaps give a projection for the progress he expects over the rest of this Parliament?

[Danny Alexander]

I am grateful to my hon. Friend for his question. As the Chancellor said, the Government have done more on this issue in two years than the previous Government managed in 13 years. In particular, at the time of the spending review I announced that we would invest an extra £900 million in Her Majesty’s Revenue and Customs so that it could employ a large number of additional experts to deal with tax avoidance. That programme is projected to lead to an additional £7 billion a year in tax revenue by the end of this Parliament, and we are well on track to meet that objective.

Hot Takeaway Food (VAT)

Andrew George Excerpts

Wednesday 23rd May 2012 Westminster Hall

[Stephen Gilbert (St Austell and Newquay) (LD)]

It is a pleasure to serve under your chairmanship again, Mr Scott, and to welcome so many hon. Members. I place on the record my personal thanks to Mr Speaker for allowing the debate, which was originally slated for the day of Prorogation and so fell from the order of business. I am grateful to Mr Speaker for allowing it to take place today instead.

There is much to welcome in the Budget announced by my right hon. Friend the Chancellor, particularly the lifting of more than 2 million of the lowest paid out of paying income tax and the additional tax burden placed on those fortunate enough to be among the wealthiest in our society. However, I would not be doing my job as a Member of Parliament if I welcomed only the good news from the coalition Government and turned a blind eye to Government proposals that had a significant negative impact on my constituents and the country. The proposals for the extension of VAT to hot food, and in particular how they relate to baked goods, fall into that category.

I am, however, grateful to the Minister and to other colleagues in Government for the constructive way in which they have handled this issue and the concerns raised by me, my hon. Friends and the industry. I found them willing to listen and receptive to alternative solutions. It is surely in the best tradition of Government to recognise that none of us has a monopoly on wisdom. Their constructive engagement with me and others has been welcome.

I support the overall aims of the Government. It is right to seek to simplify the application of VAT rules on hot food, to close anomalies that have been exploited by supermarkets and others and raise revenue from those flouting the rules, to help tackle the national deficit and create a level playing field as between bakeries and other sellers of hot food, such as fish and chips. However, we have to do so in a way that actually creates simplicity, is enforceable by Her Majesty’s Revenue and Customs, is deliverable by businesses across the country, and, crucially, is understandable for consumers. The effect of the Government’s current proposals on the baking industry fall short in all four of those tests.

I would like to set out the practical problems and concerns with the Government’s proposals, and the likely economic impact on the baking sector if the proposals are not altered, and then present an alternative way forward that I hope will achieve the Government’s aims without any negative impact. I am not proposing, however tempting it is, to stand here and argue for an exemption for the Cornish pasty or the baking industry. I want to set out a framework that delivers the Government’s intention of consistency and simplicity.

I am delighted to have the support of my hon. Friends the Members for St Ives (Andrew George), for North Cornwall (Dan Rogerson), for Truro and Falmouth (Sarah Newton), for South East Cornwall (Sheryll Murray), and for Camborne and Redruth (George Eustice), and that of many other hon. Members from across the House and the country, including an alliance, however unlikely, with Devon.

It is understandable that the Government should seek to move away from the current situation in respect of VAT on hot food, where the basis of the test rests on the intention of the supplier. That is subjective, and has led to considerable inconsistency of application. In recent years, a plethora of case law tribunals have established significant anomalies—for example, two hours for zero-rated food, a position exploited by supermarkets in particular.

In place of that subjective and contestable test of intention, the Government’s proposals attempt to move towards a more precise test that centres on ambient air temperature, but that simply replaces one set of anomalies with another when it comes to baked products—pasties, sausage rolls, meat and potato pies and all the other savoury staples in our high street. There is little doubt that the ambient air temperature test will become the subject of significant dispute between bakeries and HMRC, with the potential for litigation. Why is that? The ambient air temperature is constantly changing. As the temperature of a naturally cooling baked product is also constantly changing, it raises the possibility of a pasty or pie at the same temperature being subject to different VAT rules in different parts of the country at the same moment. That is clearly a nonsensical position that will cause considerable difficulties in establishing a consistent ambient air temperature for every bakery in the country, a duty unlikely to be welcomed by HMRC. It will place an additional difficulty for the businesses concerned in deciding when to charge the customer VAT.

The proposed changes would be open to challenge in terms of legal certainty, and could tie up the industry and the Government in the courts for some time. The changes are contrary to the stated intention of the consultation—to simplify current rules and reduce uncertainty and costs for both businesses and HMRC. The ambient air temperature has already been found wanting by the courts. In the Court of Appeal, during the Pimblett case in 1988, Lord Justice Parker said:

“The test is a precise one. It involves a remarkable result that frozen food would be regarded as hot if the ambient temperature was one degree lower than freezing. A praiseworthy attempt to produce precision does not, in this instance, appear to me to have advanced clarity one whit”.

To an extent, that view seems to be shared by colleagues in the Treasury. In my discussions with them, it seems that the Government’s intention is not even to enforce the letter of the proposed rules, but to make a number of assumptions based on the quantity of each bakery’s products that should be standard-rated. That is untenable.

Any apportionment scheme cannot override the basic rules on supply, consideration and liability. That is even recognised in HMRC’s guidance. Any agreement based on the temperature of cooling products will be impossible, given the size and variation in bakeries and the fact that a reference point for ambient air temperature cannot be established.

There are a number of other practical difficulties for businesses. When do they issue a VAT receipt if requested to do so by customers? They will have to re-write till software systems and determine the price on which VAT would be charged, all set against the unworkable backdrop of legislation that will be prone to confusion and challenge.

Another issue relates to products sold on a seasonal basis—perhaps we can add mince pies to the list. At what point would HMRC agree with bakeries on the apportionment scheme for seasonal products such as mince pies? I doubt whether that would be able to be done in a timely way, and it shows that the Government’s tests are unworkable. If agreement on an apportionment scheme cannot be reached, the industry will have to fall back on legislation, which would be problematic at the very least.

The Government’s current proposals are unenforceable by HMRC and undeliverable by the industry. They will be confusing to customers and open to challenge in the courts.

[Andrew George (St Ives) (LD)]

My hon. Friend has ably demolished the Government’s primary claim that the measure is a means by which they can resolve an anomaly. The Treasury knows that wherever a line is drawn, even a new line, a new anomaly is created. Does my hon. Friend agree that under all Governments the Treasury tends to use sophistry when arguing that it is resolving an anomaly and that that is simply a way of increasing tax income?

[Stephen Gilbert]

My hon. Friend puts his finger on the Treasury’s intention, but I will demonstrate that the negative effects of the measure make it unlikely that any net additional revenue would be raised, when the damage to jobs, business rates and so on is taken on board. He is right to say that the Government expect to raise money from this measure—their impact assessment suggested that £50 million would be raised in the first year, rising to £120 million annually in subsequent years—but at what cost would that be to the baking industry in particular? I am afraid that it will cost jobs and investment in an industry that we want to see more of, not less, on our high streets.

Business and the Economy

Andrew George Excerpts

Monday 14th May 2012 Commons Chamber

[Vince Cable]

Bringing the two organisations together will in itself produce some efficiencies, but I cannot assure the hon. Gentleman that they will be protected from the efficiency savings that the rest of the public sector is having to undergo. We are confident, however, that with the reforms that we are undertaking, competition procedures will be faster, not slower.

The same concerns about competition underpin our decision to bring forward a separate Bill, establishing an independent groceries code adjudicator, which will protect suppliers—small firms and farmers—from unfair treatment. In doing so, we will support investment and innovation in the groceries supply chain, and support British food manufacturing and British farming. The measure has been welcomed by the Food and Drink Federation, the National Farmers Union and the Association of Convenience Stores.

The case of a highly concentrated industry buying from and selling to large numbers of suppliers and customers is a classic, economic textbook case in which intervention is needed to prevent monopoly profits. Retailers should not of course be prevented from securing the best deals and passing on the benefits to consumers, but equally retailers should be required to treat their suppliers fairly and lawfully. An independent adjudicator will ensure that the market is working in the best long-term interest of consumers. It will have the powers to intervene proactively and to name and shame offenders. In such a competitive market we consider that those powers will be an effective tool, but if it appears that they are not adequate, I, as Secretary of State, will be able to grant the adjudicator the power to impose financial penalties.

[Andrew George (St Ives) (LD)]

I must congratulate my right hon. Friend and the Government on bringing forward this important measure, which has all-party support. If supermarkets have nothing to hide, they have nothing to fear from the introduction of the adjudicator. Given that the OFT and the Competition Commission are due to merge, however, may I urge him to introduce the measure as quickly as possible so that the merger does not distract from the important job of getting on with the adjudication that is clearly necessary in the sector?

[Vince Cable]

May I first congratulate my hon. Friend, who I think was one of the prime movers behind the legislation and was very persistent in demanding it? Of course, I have no control over the parliamentary timetable, but given that the Bill is small and there is a consensus, it should go through very quickly.

--- Later in debate ---

[Mr Bailey]

The figures my hon. Friend quotes are quite self-evidently a demonstration of the Government’s ridiculous priorities.

Let me turn to the green investment bank, which was Labour’s idea. It has been talked about for a very long time by this Government and now, two years later, we actually have it. However, it is inadequate, and unfortunately the Government have already introduced a series of policies on feed-in tariffs that will decimate many of the companies that would potentially have benefited from the green investment bank. Again, it is difficult to see how we will lift ourselves out of recession on the back of that.

There are certain measures that are welcome, such as the Groceries Code Adjudicator Bill. However, earlier I spoke about the slowness of implementation. Both the Select Committee on Environment, Food and Rural Affairs and the Select Committee on Business, Innovation and Skills, which I chair, examined the issue before the last summer recess, and we did so quickly at the request of the Government. The Bill could have been implemented last autumn or at the beginning of this year. Indeed, the parliamentary business over the last three months was hardly so crowded that such a quick and simple Bill that had received so much pre-legislative scrutiny could not have been introduced. Why is it being introduced only now?

[Andrew George]

Given that the hon. Gentleman is the Chair of a Select Committee and will want to be seen to be even-handed in this matter, does he agree that it was a great disappointment that the previous Government failed to act on the recommendations of the Competition Commission, which reported on 30 April 2008, and did not implement the measure during their time of office?

[Mr Bailey]

May I compliment the hon. Gentleman, who I know has been an ardent campaigner on this issue for many years? All credit to him for that. The measure was in the Labour party manifesto for implementation, and I am sure that it would have been implemented far more quickly, and perhaps more profoundly, than what is currently proposed.

I want to raise two issues about the measure, the first of which is fines. I welcome the Secretary of State’s comments about that, because our Committee recommended that there should be fines, not just a name-and-shame process. It would appear that he may be moving in that direction, although we will question him more closely on it. However, something that he did not mention was the ability of third parties such as trade associations to submit complaints. If individual companies or farmers have to make a complaint, they might fear discrimination. No doubt we shall tease out these issues during the Bill’s passage through Parliament.

I am most concerned about the missing elements from the Queen’s Speech. As a Labour and Co-operative party Member of Parliament, I am particularly concerned that, despite the Prime Minister’s trumpeting of his commitment to a co-operatives Bill, such a Bill is mysteriously missing. There is a degree of cynicism in the co-operative movement over the Government’s motives. They are keen to trumpet their commitment to co-operation when it is politically expedient to do so, but the absence of the Bill that the Prime Minister promised us during this parliamentary Session is bound to create a suspicion about their true commitment and motives in this regard.

The most astonishing omission of all from the Queen’s Speech was a Bill on higher education. My Committee carried out a long inquiry into this matter, and offered a raft of recommendations to the Government last November. To date, the Committee has not even had a reply to its recommendations. On two occasions, excuses have been given. The consultation on the White Paper ended in January, and we were told that further consultation was needed. We were also told that the matter would best be dealt with as part of an announcement of the Government’s policies in the Queen’s Speech in the new Session, yet the Queen’s Speech contained absolutely nothing about it. The inevitable suspicion is that there is such profound disagreement between the coalition partners on this subject that we shall have a White Paper and a consultation but no Bill on an issue of profound importance to hundreds of thousands, if not millions, of students in this country. This is also a serious matter in that higher education is one of the biggest export earners for this country. The omission of a Bill demonstrates a complete lack of consistency and commitment to it.

--- Later in debate ---

[Andrew George (St Ives) (LD)]

It is a pleasure to follow the hon. Member for Llanelli (Nia Griffith). She highlighted the importance of the Groceries Code Adjudicator Bill in the Queen’s Speech, a measure for which I have campaigned for more than a decade, so its introduction is not before time.

In these debates, it is quite difficult to dig below the surface of party political point-scoring and mutual blame for the situation that the country finds itself in, but if we do, we find potential for a great deal more cross-party consensus of the sort that there has been on grocery market management—or, to put it better, fair dealing in the grocery supply chain. This is a Queen’s Speech for jobs and growth, but we cannot, simply by passing a law, decree that there shall be jobs, just as one cannot decree that the sun will shine. We need to create the conditions in which a free market is regulated appropriately—hopefully as lightly as possible—to enable that process to happen.

Regarding the groceries code adjudicator, let me set out why our current situation arose and why we need regulation. It is great that there are successful companies in this country, supermarkets foremost among them, but those who have followed what has gone on in that trade have found that, when it comes to the treatment of suppliers in the grocery supply chain, some supermarkets have moved from successfully using their market muscle to abusing it.

There were welcome reforms to the common agricultural policy in 2003, when the Labour Government helped to decouple support from production and moved to other forms of support. That meant that the agricultural industry had to be much more market- facing, but when it looked to the market, it found the supermarkets there, beating suppliers up all the time and retrospectively changing the conditions of supply after they had been agreed. In any case, on many occasions, the contract was verbal. There were problems to do with the introduction of promotional campaigns, which suppliers found themselves paying for; there was the issue of paying for shelf space; and there was late payment of bills, as well as many other overriders in supermarkets’ treatment of their suppliers. In my view, many of those problems persist.

In 1998—the debate goes back that far—my colleague, Colin Breed, then Member of Parliament for South East Cornwall, produced a report, “Checking out the Supermarkets: Competition in Retailing”. That resulted in the Competition Commission undertaking a report in 2000 that led to the first voluntary code of practice, but that code was pretty ineffective; suppliers never used it because of the climate of fear. The most recent Competition Commission report in 2008 resulted in the commission introducing, in 2010, the groceries supply code of practice—I have to correct the hon. Member for Llanelli; it was not the previous Government but the Competition Commission that did that. We want to make sure that contracts, and the relationship between producers and supermarkets, can succeed.

I chair the Grocery Market Action Group, which has members from the National Farmers Union, NFU Scotland, ActionAid, Friends of the Earth, and many other bodies such as the British Independent Fruit Growers Association, so I should declare an interest, though it is not a pecuniary one. It is simply part of my campaigning role to achieve the outcomes that we all want—the Bill has cross-party support.

The GSCOP is all very well, but it is like having the rules of rugby and no referee. That is why the adjudicator is required. The message I want to get across to the supermarkets is that if they have nothing to hide, they have nothing to fear from the proposed measure, and I urge them to embrace it. In fact, they could use it as a marketing tool that enables them to reassure their customers, who benefit from a good, healthy relationship between suppliers and retailers, that they engage in ethical, fair trading with all their suppliers.

One of the great benefits of the grocery code adjudicator proposed by the Government is that it will help customers. The proposal to allow third-party complaints is right and the reserve powers on fining are appropriate. I urge the Government to bring in the measure as quickly as possible.

Oral Answers to Questions

Andrew George Excerpts

Tuesday 24th April 2012 Commons Chamber

[Miss Smith]

The Treasury supports electricity market reform, as I think the hon. Gentleman knows. He will also know that we have also laid out our support for energy-intensive industries. I have no doubt that he will be able to direct questions about programming to the Leader of the House.

[Andrew George (St Ives) (LD)]

10. What steps he plans to take to ensure taxes owed are duly collected.

[The Financial Secretary to the Treasury (Mr Mark Hoban)]

HMRC has managed both to reduce debt levels and to help businesses through difficult economic times. It offers help to businesses that are in genuine difficulty, including through time-to-pay arrangements. Where appropriate, it is taking faster and firmer action against those who fail to engage with it. The amount of customer debt owed to the Exchequer decreased by about £2.4 billion between February 2011 and February 2012.

[Andrew George]

I am grateful to the Minister for that answer and I must congratulate the Government on their plans to close loopholes, particularly for the super-rich, including through the gift aid system. Will he ensure that the Government do not weaken their resolve in that regard, and ensure that gift aid genuinely goes to support charitable activities?

[Mr Hoban]

I am grateful to my hon. Friend for that support. He is absolutely right. I think that it is unfair that reliefs can be used without limit to reduce tax liabilities so that some taxpayers with very high incomes have very low tax rates, even below the basic rate.

Finance (No. 4) Bill

Andrew George Excerpts

Wednesday 18th April 2012 Commons Chamber

[Mr Stuart]

I am grateful to my hon. Friend.

[Andrew George (St Ives) (LD)]

I, too, have put my name to the new clause. Is the hon. Gentleman aware of the anomaly in areas such as mine where there is a planning restriction on occupancy where static caravans exist, making them ideal for people who want to use them for holiday homes? Under the measure, static bricks-and-mortar constructions will not be subject to the same level of taxation, so the measure will benefit those who can afford to have a second home and will therefore have an impact on the availability of housing for local people, whereas the presence of static caravans does not impact on the local community in the same way.

[Mr Stuart]

My hon. Friend is quite right. That is why the hon. Member for Ynys Môn (Albert Owen) has a fair point. Some people will be able to afford permanent housing, thereby further pressurising the housing market in areas where such housing is limited. Static caravan parks have been a perfect arrangement, because they allow both the local community and people from outside to benefit. They have meant that the local worker who is looking for a house—often someone who works at a caravan park—has been better able to find a house.

--- Later in debate ---

[Gordon Henderson]

I can only agree with that:

I accept that there is an argument for trying to address the current situation whereby some shops sell hot pies without charging VAT but others, such as my local chippy, have to charge VAT on the hot pies that they sell. However, the Government’s proposal is not an answer. Nor, sadly, is the Opposition’s new clause 1, which is why I cannot support it. I very much hope that the hon. Member for Pontypridd (Owen Smith) will withdraw it, and that he and his colleagues will support new clause 5, which I believe would achieve the Government’s objectives while protecting businesses such as that run by my friend.

[Andrew George]

I am pleased that the hon. Gentleman will be supporting new clause 5. As he knows, no one eats fish and chips cold, but a lot of people eat a good pasty cold. In fact, they are delicious cold. A lot of people go to the many pasty bakers in my constituency, buy pasties hot, take them home, put them in the freezer and use them later. The Government’s proposal clearly does not address that type of consumption.

[Gordon Henderson]

I am pleased that the hon. Gentleman agrees with me that the proposal is nonsense, but I want to move on to caravans, which are important to my constituency.

The Government’s proposal is allegedly to iron out an anomaly by ensuring that the sales of holiday and leisure caravans are taxed consistently at the standard rate, but once again, it simply creates another anomaly, which I will describe in a moment.

The proposal must be one of the most ill-conceived and badly thought out of all the proposals in this year’s Budget. We have been told consistently that the Government want to help coastal communities, which have become increasingly deprived over the past couple of decades, and which often have a higher level of unemployment than other areas. The Isle of Sheppey in my constituency is one such coastal community. As I have mentioned in the House on a number of occasions, unemployment on the Isle of Sheppey is among the highest in the south-east of England. The island took another knock earlier this year when Thamesteel went into administration. To give them their due, both the Department for Business, Innovation and Skills and the Department for Communities and Local Government have been working hard with my local authorities to find ways of mitigating the closure of Thamesteel by encouraging the growth of other industries, but one of those industries is the tourism and holiday industry, which has declined over the past 40 years, since its ’60s heyday.

In recent months, we have seen the green shoots of recovery in our local tourism scene, boosted in part by the decision of Swale borough council to allow many caravan parks to extend their operating periods from eight to 10 months of the year. That decision gave caravan park owners a real incentive to invest in and upgrade their parks, but success in the caravan holiday business is reliant on a good mix of park-owned caravans for hire and pitches for owner-occupiers. The sale of holiday caravans will be very badly hit if they incur VAT at 20%, and, in turn, the park-owned business will be hit because operators will have to increase their hire charges to balance their books, driving away even more much-needed visitors.

Let us not forget that those visitors are not wealthy people; in the main, they are working class people who strive for a better life by having their own holiday home here in Britain. In my view, the policy has been dreamt up by somebody who has never holidayed in a caravan park, has no idea of how the holiday park business operates and has no conception of the disastrous effect the policy will have on many coastal and rural communities.

It is deeply ironic that the Government are striving to give coastal communities help up the ladder of prosperity while using their feet to kick away the very same ladder with this ill-thought-out proposal. I urge hon. Members to support new clause 6.

Amendment of the Law

Andrew George Excerpts

Thursday 22nd March 2012 Commons Chamber

[Andrew Miller (Ellesmere Port and Neston) (Lab)]

It is a great pity that the Chancellor is not here; I would love to look him in the eye and ask whether we are genuinely all in it together. He and I represent Cheshire constituencies, but I do not think that his position is quite the same as that of the good folk living in the Westminster ward—one of the country’s most disadvantaged—in my constituency. I would really like him to say to those people that he was in the same boat as them. That is manifestly not the case. The media have picked up on that and realised that the story that we were told yesterday is full of half-truths that present the facts differently from what is really happening on the ground.

In these tough times, what the Tory-led Government are doing tells us everything that we need to know about them. It proves that the Chancellor and Prime Minister are totally out of touch with what life is like for people in this country. At a time when bills are going up for families on middle and low incomes, the Chancellor has added to them all. Fuel duty is going up, even though petrol prices are at a record high.

I am glad that some Liberal Democrats are in the Chamber. In the west country, there is already a blog about the new pasty tax. The Lib Dems should watch out; that is not the only thing that they are under attack for. They will be the real losers on the issue of regional pay, raised by my hon. Friend the Member for Dumfries and Galloway (Mr Brown) and the hon. Member for Foyle (Mark Durkan). Areas where Liberal Democrats have traditionally been strong would duck out compared with places such as my county of Cheshire, which is also the Chancellor’s, or Oxfordshire, which is where the Prime Minister is. The Liberal Democrats have a real problem when they start looking at regional pay.

[Andrew George (St Ives) (LD)]

There is a debate to be had on regional pay, and my position is well known. On the sublimely fundamental and seriously important issue of pasty taxes in Cornwall, let me reassure the hon. Gentleman that we will be fighting them on the beaches.

[Andrew Miller]

So when I go to Ann’s pasty shop, I’ll be all right, will I?

The Lib Dems are supposed to be strong on matters related to solar power. This morning, the chief executive of the Solar Trade Association said:

“We cannot understand why solar has been singled out for rough treatment on Capital Allowances when it is a popular technology which will soon reach grid parity and provide businesses with a real alternative to dependence on fossil fuels.”

Again, the Liberals have bought into something that is totally contrary to their own policy position. At the same time, the Budget gave a tax cut to the very richest people in our country, with just 14,000 people earning £1 million or more getting a Budget boost of over £40,000 each year. No wonder the Centre for Policy Studies, which is advised by the Minister for Universities and Science, among others, says that the Budget amounted to small-scale tinkering, regional handouts, and a rearranging of the deckchairs. To be fair to the Minister, there is a lot that I do not agree with in the CPS’s press release. Nevertheless, the Government have chosen to cut taxes for 300,000 people earning over £150,000—the richest 1%. How can that be the priority now?

The Chancellor looked quite smug when he sat down yesterday, but I bet he did not feel so smug when he read today’s papers.