Future Government Spending

Andy Sawford Excerpts

Wednesday 4th March 2015 Commons Chamber

[Andy Sawford (Corby) (Lab/Co-op)]

The difficulty that Government Members have is the question of motive. When people across the country see Sure Start centres, police stations and NHS walk-in centres closing, underinvestment in schools and queues outside our A and Es, they know what a Tory Government have done already, and they know what will happen if we go back to their 1930s plan.

[Chris Leslie]

The whole country will be affected, including Scotland, Wales and Northern Ireland, if the Conservatives are given a further five years for their ideological plan. The plan has not just failed to date; it will continue to fail and will continue to harm those on lower and middle incomes and those who depend on public services. The Conservatives will not set out where their billions of social security cuts will hit, for example, so we have to take past performance as a guide.

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[Andy Sawford (Corby) (Lab/Co-op)]

I would like to say that it is a pleasure to follow the hon. Member for Peterborough (Mr Jackson), but he reminded me of a performance by Sir Ian Bowler at a “Stand up for Labour” event at the Labour club in my constituency, which was a caricature of a particularly unpleasant form of Conservatism in this country. I can see now how Ian Bowler was inspired. The hon. Gentleman used ugly language to portray a gross mischaracterisation of the events of recent years.

The hon. Gentleman called for some humility. He might have acknowledged that when the Government came to office, they promised to balance the books and said that we would all be in it together. They have failed on both counts, and people in his Peterborough constituency know that.

“In five years’ time, we will have balanced the books,”

the Prime Minister told the CBI in October 2010. Let us be absolutely clear: that promise has been broken. They have not balanced the books and the next Labour Government are set to inherit a large deficit as a result. The Office for Budget Responsibility says that borrowing in 2015-16 is set to be £75 billion. The Government will be borrowing over £200 billion more than they planned in 2010. It is because of their failure to deliver on debt and tackle the cost of living crisis that we so desperately need a Labour Government.

Despite Tory claims that our economy is fixed—Conservative Members go around the country and we see pictures of the Chancellor in his hard hat doing a lap of honour while the public look on incredulous—wages have stagnated for many workers. Too many of the jobs that are being created are in low-paid insecure work, rather than high-productivity sectors. I have consistently called for action on zero-hours exploitation, and I introduced a private Member’s Bill on the issue. I am pleased that we have made a tiny bit of progress, and I was proud of the role I played in getting the Office for National Statistics to change the way it records figures so that we now have a more accurate reflection of the situation.

[Mr Jim Cunningham (Coventry South) (Lab)]

The problem of the hon. Member for Peterborough (Mr Jackson) is that a lot of us were in the House when the world economic situation deteriorated. He forgot to tell us that the problems started in America. Conservative Members were in their bunkers at the time and talked about doing something about regulation and so on; they never had a policy. Therefore when they talk about honesty in this debate, they should get up and admit that they suddenly discovered there was a problem after they came to power. What happened? People’s wages have been cut by 7%.

[Andy Sawford]

My hon. Friend is right. Conservative Members were calling for less regulation of banking in this country. Not only did they back Labour’s spending plans right up to the time of the global financial crash, but I remember that in my area they paraded around during the 2005 election calling for more spending and criticising the then Labour Government because we had not built enough hospitals, rebuilt enough schools, created enough Sure Start centres, or put more police on the beat. They had the cheek to call for more public spending in 2005, and now 10 years later they pretend that they were counselling caution at that time when they plainly were not.

The notion that the Labour party—the powerful Labour party that created a global financial crash that hit a Conservative-led Government in Germany and right-wing Governments in France and America—did so because we were investing in schools and hospitals is completely absurd. The public have found the Government out and they will be exposed for it at the election.

[Andrew Gwynne]

Let me take my hon. Friend back to what he said about low pay and its impact on the economy. Low pay is not just a tragedy for our constituents who are forced to accept low wages; it is a disaster for the economy of Britain. We have seen tax receipts drop by £68 billion, and national insurance contributions by £27.3 billion—money that could be invested in public services.

[Andy Sawford]

My hon. Friend is right. The effect of low and stagnant pay means that tax receipts have been much lower than expected. The Government have failed on the deficit and the cost of living crisis. Low pay is combining with higher housing costs and the failure to deliver benefit reform to drive down social security costs, which are rising under this Government. The Tory-led Government are set to spend £25 billion more on social security than they planned in 2010. We need action on the issues that our constituents are facing.

In my area it is not just zero-hours exploitation that causes insecurity, and many people are working through agencies. They come off the books of the jobcentre to work for an agency. That work might last days, weeks, or a few months if they are lucky, and sometimes they get exploited working year in, year out through an agency without holiday pay or proper terms and conditions—desperately insecure employment. Although a few agencies follow the law, when HMRC investigated agencies in my constituency they found more than 70 breaches of the law, and £120,000 owing to local workers in non-payment of the minimum wage. People were being made to pay to get their own pay through payroll companies, or they had to pay illegally for their own protective equipment. That is the real world that many people face in my constituency and across the country.

[Adam Afriyie (Windsor) (Con)]

Will the hon. Gentleman give way?

[Andy Sawford]

I have no more time. The Prime Minister said that he would name and shame those companies. A year ago he made me that promise at the Dispatch Box during Prime Minister’s questions, in front of the whole House and the country. It was on the front page of my local paper, but a year on he still has not named and shamed those local companies. The people in my area do not know which of these agencies is most likely to rip them off.

What about the second part of the Government’s promise: that we are all in this together? They promised us that they would not balance the budget on the back of the poor. They cut the 50p rate to 45p, handing a £3 billion tax cut to the richest 1%. They handed people earning £1 million a tax cut of more than £42,000 a year, while cutting council tax support for war widows and the disabled. They imposed the deeply unfair bedroom tax, which has had the direct result of driving many people into the queues at the food banks in my constituency and across the country. I want to thank Hope church for its brilliant work, which I try to support. The people of Corby have been brilliant. The food bank ran out of stocks recently. We put out an appeal and within 24 hours it was full again. However, people in this country, one of the wealthiest countries in the world, should not have to rely on food banks. That is Tory Britain.

Since 2010, there have been 24 Tory tax rises. Ordinary families are paying £450 a year more in VAT. Figures from the IFS show that households will on average be more than £1,000 a year worse off by the time of the next general election. This is the first Government to lower living standards during their time in office. It gets worse: because of their failure and their dogma—the Tory party tried to stop the NHS being created in the first place—they are now planning to take us back to a time before the NHS existed, to a 1930s level of spending.

At the coming election, there will be a very stark choice. Under Tory plans, the state will shrink from 41% now to 35% by the end of the next Parliament. That is the lowest level since 1939, before the NHS existed and when children left school at the age of 14. That is the equivalent of cutting every penny we spend on schools, half the budget of our NHS, and more than all the Departments’ capital budgets added together, including what we spend on investment in schools, hospitals, roads, railways, housing, science and flood defences.

People in my constituency know that I have been fighting very hard to try to stop cuts to the local fire service and to keep Sure Start centres open. The children’s centre in Raunds has just closed. Our police stations are threatened: the front desk at Oundle has just closed and Corby police station is threatened with closure. We have had cuts to our ambulance services. Last week, the captain of Corby Town football club broke his leg in two places and dislocated his ankle. An ambulance was called at 8.10 pm. It came at 11.10 pm.

That is what has happened in the first five years of a Tory Government. People know what will happen in the next five years of a Tory Government. Our NHS will be completely decimated, as our social care services have been in this Parliament. People in my constituency and across the country cannot afford five more years of this rotten Tory Government.

Childcare Payments Bill

Andy Sawford Excerpts

Monday 17th November 2014 Commons Chamber

[Andy Sawford (Corby) (Lab/Co-op)]

I agree with the case my hon. Friend is making. Does she share my concern about the closure across the country of Sure Start centres, which were a key part of that commitment to supporting children and families, including the Raunds Sure Start centre in my constituency, which the Tory county council is now going to close?

[Catherine McKinnell]

My hon. Friend makes a very valuable point and I was just about to come to that. We are the party of Sure Start and the thousands of Sure Start centres that existed in 2010. It is not specifically relevant to this debate, but we could not allow it to pass without mentioning the very deep concern up and down the country about the future of our Sure Start centres.

There are concerns, which were made abundantly clear by a number of witnesses in Committee last month, that the Bill does not go anywhere near far enough to provide the support that thousands of parents and families desperately need right now. They need that support now, not in 12 months’ time, which is why we tabled new clause 1. Based on the Family and Childcare Trust’s annual survey, we know that child care costs have risen five times faster than wages since 2010, at a time when wages have lagged behind prices, leaving people £1,600 a year worse off on average. This support is even more vital when we see how much parents have lost out as a result of the Government’s choices: the decisions to cut tax credits, child benefit and maternity pay, and to close thousands of Sure Start centres.

As we saw and read in the news yesterday, research from the London School of Economics and the Institute for Social and Economic Research at the university of Essex shows clearly how the burden of austerity under this Government has fallen most heavily on those with lower incomes. The research found that the Government’s tax and benefit changes have seen the poorest lose about 3% of their incomes, while the richest half of the country have actually seen their incomes increase by 1% to 2%. That blows away the Government’s claims from the start that we are somehow all in this together. The research highlighted the fact that families with children have fared worst of all, which confirms our worst fears. Single parent families, in particular, have lost far more through cuts to tax credits and other support than they may have gained through any tax changes, proving that the Government have given with one hand but taken away far more with the other—so much for being the most family-friendly country. Families have lost out on up to £1,500 a year due to changes to tax credits alone. Tax credits are a vital part of income for many working parents, especially those on the most modest incomes.

When we look at all the tax and benefit changes since 2010, including the Government’s much-lauded and touted personal allowance increases, we see that families have clearly been hit hardest of all, and that will remain the case right up to the general election. A family with both parents in work will be about £2,073 a year worse off and a family with a single parent in work will be about £1,300 a year worse off. Despite the Conservatives’ claim of creating the most family-friendly country and the Liberal Democrats’ supposed belief that families should get the support they need to thrive, the Government have not been family-friendly and they have not stepped in to provide families with the help they so desperately need to get to grips with the soaring costs of child care. Far from stepping in, they have pulled the rug from under the feet of many families. Any extra help for parents struggling with the cost of child care is clearly to be welcomed. However, not only is the Bill too little too late for hundreds of thousands of families, we are disappointed that the Government have so far refused to consider that additional support could be offered to families right now. That is why we have tabled new clause 1.

Oral Answers to Questions

Andy Sawford Excerpts

Tuesday 11th March 2014 Commons Chamber

[Sajid Javid]

My hon. Friend is absolutely right. We need to stick to our long-term plan to ensure that we have a growing economy that creates jobs and gives people the financial stability that they need, and the biggest risk to that plan would be our adoption of Labour’s policies of more borrowing, more spending and more debt.

[Andy Sawford (Corby) (Lab/Co-op)]

Unemployment among young people in my constituency remains stubbornly high, at just under 500, but under-employment is also a big issue. Many people are in insecure employment, on zero-hours contracts, and barely managing to struggle on the minimum wage. Will the Minister make an assessment of under-employment and develop a strategy to address it?

[Sajid Javid]

Unemployment in the hon. Gentleman’s constituency rose in all categories under the last Government, and youth unemployment has fallen by 33% so far under the present Government. I hope that the hon. Gentleman will join me in welcoming that. He is right to point out that we must do much more to deal with the problem, but I am sure he supports the efforts that the Government have made in regard to apprenticeships. There have been 1.5 million apprenticeship starts over the last four years.

Holiday Pricing

Andy Sawford Excerpts

Monday 24th February 2014 Westminster Hall

[Mr George Mudie (Leeds East) (Lab)]

I congratulate the hon. Member for Birmingham, Yardley (John Hemming) on securing this debate, but I also congratulate my generous hon. Friend the Member for North East Derbyshire (Natascha Engel), because she chairs the Committee that gave him this debate, which is on a serious problem.

I enjoyed the speech from the hon. Member for East Hampshire (Damian Hinds), which was sensible and humorous, as well as logical and grounded, and that is the approach we should take. There is a problem, but two years ago we would not have debated it, because other problems were forcing their way to this place. What on earth has happened? The person in this room who I feel most sorry for is the poor Minister from the Department for Business, Innovation and Skills. It has been seen as a BIS problem, but it is not; we have been forced here by a problem caused by the great Department for Education. If anyone should be explaining why we are going over all these problems, it is a Minister for Education.

I disagree with the hon. Member for Birmingham, Yardley on the Select Committee point. This matter does not need or deserve a Select Committee inquiry. The Secretary of State for Education should just repeal the regulations that he slipped through when nobody was looking. They have genuinely caused so much pain across the country. I can see that some people are unhappy, so I accept the petition, but I do not accept the remedy. I hope the hon. Member for Birmingham, Yardley will forgive me for saying this, but it brings back memories of when Shirley Williams—she is Lady Williams now—was the Secretary of State for Prices and Consumer Protection. Are we actually suggesting that we could have a cap?

The Guardian took a snapshot of the seasonal price differences. This is free advertising for these institutions, but four nights in lodge accommodation at Center Parcs Woburn Forest, Bedfordshire, has a 51% increase between summer term time and the summer holiday. Disneyland Paris has a 7% increase. It is not about foreign flights and foreign people; it is about business and supply and demand. If we try to regulate prices, we will land ourselves in trouble. A King once said, “Bugger Bognor!” I do not know if I will get into trouble for saying that, but if the King can say it, I think I can say it. Four nights at the Butlin’s resort in Bognor Regis have a 99% increase in cost between the week before schools go off and the week after.

[Andy Sawford (Corby) (Lab/Co-op)]

rose—

[Mr Mudie]

I hope my hon. Friend is not going to defend Bognor Regis.

[Andy Sawford]

I agree that the regulations that the Government created to place fines on parents have exacerbated the problem, but does my hon. Friend share my concern that the Government have effectively strengthened the monopoly in the holiday period by making it increasingly difficult for parents to have any kind of flexibility? Often, we are not talking about parents taking their child out of school for two weeks year in, year out, but children missing a couple of days or even an afternoon to get a slightly cheaper flight. That flexibility has been lost.

[Mr Mudie]

My hon. Friend is absolutely right. A tremendous amount is being lost, but it is because of the Department for Education, not BIS.

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[Lorely Burt (Solihull) (LD)]

I thank my constituency next-door neighbour, my hon. Friend the Member for Birmingham, Yardley (John Hemming), and the Chair of the Backbench Business Committee, the hon. Member for North East Derbyshire (Natascha Engel), for today’s debate, which is important for parents throughout the UK.

There is no dispute in any corner of the House about the importance of education. It is a long time since I was at school, but I do not recall my parents ever taking me out of school, and I never took my children out of school. We were fortunate enough to scrape together enough money to take them on holiday. It was generally just for a week, but we had that benefit. Taking children out of school should be avoided, but there are circumstances in which it is warranted, and many hon. Members have mentioned those that might arise.

The sinner—my hon. Friend the Member for East Hampshire (Damian Hinds)—talked about holiday companies’ pricing. Companies set the prices that the market will stand. We may disapprove of their charges, and there are great disparities between the amounts by which companies hike up their prices in school holidays, but we cannot order them to restrict their charges. Those are matters to do with competition rules. However, restricting the number of children who can go on holiday outside normal times leads to a rise in demand in the school holidays, and that is an excuse for companies to hike the prices even further, which is regrettable.

Perhaps my hon. Friend the Minister will clarify something. In September 2013, the ruling was that head teachers could grant leave only in exceptional circumstances. Various hon. Members have spoken about what would constitute exceptional circumstances, and whether the definition has been laid down. Will my hon. Friend explain what is meant by the term? The statutory instrument was based on a review carried out by Mr Charlie Taylor. Will my hon. Friend confirm that parents and businesses were not consulted in advance?

I will not repeat all the instances that have been given of suitable circumstances for holidays during term, but seasonal workers are one relevant group. Not many people must be available for the harvest but nevertheless there are all kinds of seasonal workers in the economy. We heard about the armed forces, children with disabilities, and businesses. That is a matter for the Department for Business, Innovation and Skills, because businesses employ parents. If a business employs many parents, can they all be away on holiday at the same time? That is a problem in my own constituency office.

[Andy Sawford]

The hon. Lady makes an important point about consultation, and I should be interested to hear whether there was any. Can she add to her list the situation in which parents have family overseas? Constituents have explained to me that it is important to see their family who are abroad, and that it is difficult when there is no flexibility about it, particularly when they are on the other side of the world.

[Lorely Burt]

I should be delighted to do that. There is a large element of the Asian diaspora based in my constituency and that of my hon. Friend the Member for Birmingham, Yardley.

Maintained school and academy heads could previously authorise 10 days’ leave, but there is no jurisdiction over the private school sector. Academies normally work for 190 days a year, and private sector schools work, on average, 165 days. There is a measure of irony about that. The children with the wealthiest parents get most choice about when they can go on holiday.

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[Dr Thérèse Coffey (Suffolk Coastal) (Con)]

It is a great pleasure to contribute to this debate. I had not planned to do so at 4.30 pm, but have been motivated by some of the speeches. I congratulate my hon. Friend the Member for Birmingham, Yardley (John Hemming), who was right to take up the debate, which is important, as recognised by so many parents signing the e-petition. It deserves time in Parliament.

With respect to my hon. Friend the Member for Solihull (Lorely Burt), in the closing paragraph of her speech she said that she wanted head teachers to have discretion, but she also wanted guidance from the Department on what constitutes “exceptional”. That is part of the issue, although a little bit of history might explain some of the situation.

The hon. Member for Corby (Andy Sawford) is still in his place, and he might be aware that section 23 of the Anti-social Behaviour Act 2003 introduced the power for education authorities to issue penalty charge notices in cases of unauthorised absence. To avoid confusion, I was mistaken in what I said earlier about 10 days, because the power is automatically triggered when there are 10 sessions—in effect, five days—of unauthorised absence. That is what triggers the penalty charge notice. That was the case before the more recent statutory instrument was introduced last year.

That takes us back to the idea of what is “special” and what is “exceptional”. The 2006 regulations refer to 10 days of leave—up to 10 days—to be granted by the head teachers in their consideration of what constitutes “special circumstances”. The 2013 regulations removed all the references to when people could be away, saying that the head teacher is the person who can grant leave of absence in “exceptional circumstances”. As was pointed out by my hon. Friend the Member for Solihull, the difference between “special” and “exceptional” is largely one of semantics. I am not sure that it is right for the Department for Education to define one word or the other, but as has been said consistently, it is appropriate for the head teacher to define whether people may take their child out of school.

[Andy Sawford]

The hon. Lady makes an important point. Notwithstanding the principle, part of the problem with making the change through a statutory instrument is that there was not the debate that there would have been otherwise—for example, if there was primary legislation with a proper consultation, or even informal debate in the Chamber—on the meaning of the terms. That would have been critical for head teachers and Members in understanding the statutory instrument and its effect.

[Dr Coffey]

I do not profess to be an expert on parliamentary procedure or on why certain bits of legislation are introduced under the negative or the affirmative resolution procedures. That tends to be defined in the original Act—in this case, I do not know who was responsible for the very original Act and whether it was 1944 or 2006. The original Act is when the process for the introduction of future secondary legislation is decided, but the hon. Gentleman is aware, as my hon. Friend the Member for Birmingham, Yardley pointed out, that any Member of the House or of the other place may trigger a stay on any regulation on negative resolution by signing an early-day motion. That is a mechanism available to us all. I recognise that MPs therefore have to be even more on the ball about checking what statutory instruments are up for affirmative or negative resolution. That information, however, is made available to every Member of the House in the vote bundle.

On “exceptional” or “special”, I do not have children, so I do not pretend that I have to face the issue. I have, however, had six parents contacting me, four of whom cited cost. In one of those situations, incidentally, teachers had given activities for the children to do while away from school. Another case involved getting time for the children with the other parent. The sixth person who contacted me did so about parental choice: it is for parents to decide when their children go on holidays, not schools, because teachers could make up the time, with the children given special projects. I am not sure that that is necessarily acceptable behaviour. I fully understand the issue about cost, but I have no idea why “special” versus “exceptional” makes a difference for the head teacher in assessing such a decision.

In my time, I have been involved in children’s education as a school governor in two different schools. I will not say which school, because it would be unfair on the head teacher, but in one we discussed the issue in lengthy detail. Parents had almost come to see it as a right to request the time off, and the head teacher would be given a hard time by the parents unless up to 10 days of leave were given. We felt that that was wrong, because it put pressure on the head teacher, as well as on the classroom teacher, who had to cope with the child missing 10 days of schooling.

There is no doubt of the strong link between a school’s attendance records and attainment at the school. That cannot, of course, be proved for every single child, but it is fair to say that, in the schools in my constituency where attendance rates are significantly below the average, I see a significant difference in the attainment of the children. We need to stand up for that consistently: it is not necessarily simply about the individual child—although that child’s education is important—but about all the children in the classes. We need to remember that.

I had not planned to speak and I do not wish to extend the debate unduly, but the regulations introduced last year still leave the head teacher with appropriate discretion. In cases of children with military parents, or those whose parents wish them to attend a funeral, the situation remains the same. There is no automatic right for parents to remove a child in such a case, unless they wish to go down the unauthorised absence route, but by changing the focus and putting in regulation that circumstances must be exceptional, the right expectations are set for parents. It is not therefore a right to take a child out of school for up to 10 days of holiday, as referred to in regulation. What is allowed is exactly what is said: if there is no other opportunity for a particular situation to happen, head teachers may use their discretion. Frankly, if MPs hear of cases in which that is not being applied, we should take them up on behalf of the parent.

Oral Answers to Questions

Andy Sawford Excerpts

Tuesday 28th January 2014 Commons Chamber

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

Yes, I can confirm that. A state aid investigation has been opened, so we are compelled under European law to suspend the exemption, but, working with the industry, we have provided a very robust response to the Commission outlining why the exemption is justified. We remain confident that the Commission will find that the exemption does not amount to state aid.

[Andy Sawford (Corby) (Lab/Co-op)]

T8. Her Majesty’s Revenue and Customs is investigating 12 employment agencies in my constituency for underpayment of the minimum wage. Two investigations have been concluded, penalties imposed and money repaid to local workers, but local people simply do not understand why the Government will not name and shame those two agencies. I think the Government are wrong. Will they reconsider?

[The Economic Secretary to the Treasury (Nicky Morgan)]

I think the hon. Gentleman raised this topic in the debate on the national minimum wage. I am very happy to take this away and to have a conversation once I have had a chat with Treasury officials.

National Minimum Wage

Andy Sawford Excerpts

Wednesday 15th January 2014 Commons Chamber

[Rachel Reeves]

I could not agree more with my hon. Friend. If more people were paid a living wage, if the minimum wage were enforced and if more people who want to work full time were doing so rather than working part time, all those things would help bring down the rising costs of social security.

A Britain where people who are putting in the effort and the hours still cannot make ends meet cannot be right and it is not fair. A Britain where parents who want to spend more time with their family and children but can hardly see them because they have to take on a second job is not right and it is not fair. A Britain where a young worker who wants to go to evening classes to improve their prospects but cannot because they have to take on an extra shift in the evening just to make ends meet is not right and it is not fair. A Britain where a woman cleaning the offices of well-paid executives before they arrive in the morning and who is still at work in the evening serving on the supermarket tills is not right and it is not fair.

This is not just an injustice to those families. It is, as my hon. Friend has said, imposing cost on the rest of us as well, because lower pay means more money spent on tax credits and housing benefit. The bills of in-work poverty are rising faster than this Government can cut people’s entitlements. It also means less tax and national insurance going into the Government’s coffers. If we want to get the costs of social security under control and if we want to put our public finances on a sustainable footing, we need to get our economy working for working people, so that we can all earn our way out of the cost of living crisis that this Government have created.

What solutions do Government Members have to offer? As my hon. Friend the Member for Feltham and Heston (Seema Malhotra) has indicated, the hon. Members for Christchurch (Mr Chope), for Wellingborough (Mr Bone), for Cities of London and Westminster (Mark Field), for Windsor (Adam Afriyie), for Clacton (Mr Carswell) and for Bury North (Mr Nuttall) sponsored a Bill that would have enabled employees to agree with their employers that they should not be paid the minimum wage. The hon. Member for South Northamptonshire (Andrea Leadsom) has said that people working for businesses with three employees or fewer should not have to be paid the minimum wage. The hon. Member for Esher and Walton (Mr Raab) has said that 16 to 21-year-olds should not have to be paid a minimum wage. The hon. Member for Shipley (Philip Davies) has said that disabled workers should not have to be paid the minimum wage. Shame on them and shame on the Conservative party. It is the same old story from the same old nasty Tories. Their only answer to our economic problems is to cut taxes for the richest and cut pay for the poorest.

[Andy Sawford (Corby) (Lab/Co-op)]

The push to stop a minimum wage for 16 to 21-year-olds is appalling at a time when the Government have made life so difficult for that group of people in our society through their changes to the education maintenance allowance and the increase in tuition fees, which the Liberal Democrats, of course, promised would not happen. It is absolutely wrong and we must fight it.

[Rachel Reeves]

I could not agree more with my hon. Friend. With almost 1 million young people out of work—250,000 of them for more than a year—hitting them further by saying that they should not be entitled to a minimum wage is doubly unfair, cruel and callous.

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[Andy Sawford (Corby) (Lab/Co-op)]

It is a pleasure to speak in an incredibly important debate that has huge implications for people in my constituency. In 1905, boot and shoe workers from the second-largest town in my area, Raunds, marched near Parliament to demand fair pay from the War Office, and they won their campaign. There is a long tradition in my constituency of fighting for a living wage, and we all owe a debt of thanks to those hon. Members who passed the minimum wage in 1997. It was, indeed, a great achievement for the Labour party—not just that Labour Government, but the Labour movement—in more than a century of fighting for a better standard of living for working people in this country.

Today, though, my constituency is plagued by problems, particularly in connection with employment agencies that treat many workers unfairly and make unfair deductions from pay—for example, transport costs, unlawfully charging for personal protective equipment and making workers pay a payroll company just to get their own very low pay—and those deductions take people below the minimum wage. The latest scandal involves local agencies charging workers £2.50 a week for personal accident insurance, which they buy for pennies and then sell on at a profit to the worker, when of course the worker is already protected by the employer’s liability insurance. It is another way of bringing down the employer’s premium and scamming the workers.

I am grateful to the hon. Member for East Dunbartonshire (Jo Swinson), who I wish well—she recently gave birth to a son—for supporting me in getting Her Majesty’s Revenue and Customs and the Employment Agencies Standards Inspectorate to come to Corby to investigate the 32 agencies operating in my area. They found that 12 agencies were breaching the minimum wage law and that £120,000 was payable to more than 3,000 local workers. Two of the investigations have been completed, and penalty charges totalling £1,532 and wages totalling £3,154 have been paid back to workers, but that is just the tip of the iceberg. These are very small figures. The remaining 10 agencies have an average of £12,000 to pay back to local workers, but for some of the largest agencies—they are also national agencies—operating in my area that figure will be up to £40,000 or £50,000.

On the two agencies that have had to pay penalty charges, I must say to the Government that it really is not much money. Having to pay back £1,532, having scammed local workers out of £3,154, is hardly a deterrent to them and other local employers. I appreciate the support from the Government so far, but will the Minister consider whether, in those cases, fines should have been imposed? We know that they have breached the law. If in the other 10 cases we find even more substantial breaches, as we surely will given the figures HMRC is looking at, I hope we will impose fines. I welcome the move to increase the fines announced today. I would like it to go further, but let us acknowledge that the Government are moving in the right direction. Enforcement is critical, however. The increase in the fines is meaningless unless we take enforcement action to deter people from breaching the law. It is a huge rip-off.

We have taken other initiatives. I am delighted that Channel 4’s “Dispatches” worked with me to investigate the issues in my constituency and did some undercover reporting that was shown on Channel 4. A director of Staffline, one of the biggest agencies in my area with known issues of exploiting workers, was filmed saying that he could ensure, through a legal loophole, that Corby workers would be paid less than workers for a particular company on another site in this country. That is absolutely wrong. These agencies find ways to exploit workers and help companies to do it.

The companies are responsible for their own actions. I say to them all that they should sign up to the employment agency charter that we have launched in Corby. Some of the best agencies have worked with us because they are proud of their practice. There is a role for temporary employment and there can be a role for agencies in certain circumstances. Some of our local employers have signed up, too, but I want them all to sign up. I want them to know that if they do not, we will be on their backs; and that if they break minimum wage law, the Government will fine and fine them properly so that they do not do it again.

I had hoped to cover other issues on the living wage and, in particular, on zero-hours contracts. I hope all hon. Members will support my private Member’s Bill on zero-hours contracts, which I shall introduce next Friday.

Oral Answers to Questions

Andy Sawford Excerpts

Tuesday 10th September 2013 Commons Chamber

[Greg Clark]

My hon. Friend is absolutely right. I pay tribute to him for doing his bit in an important cluster of manufacturing businesses in Stroud. He has invented and promoted the festival of manufacturing and engineering in Stroud, which will take place between 11 and 15 November, helping to give a further boost to the already successful companies in Gloucestershire.

[Andy Sawford (Corby) (Lab/Co-op)]

According to the Office for National Statistics, Corby is the manufacturing capital of the UK, but over the past three years our businesses have survived despite this Government’s policies not because of them. Will the Minister look again at the decision to pick winners in the boat-building industry and not to award money from the regional growth fund to my local firm, Fairline Boats?

[Greg Clark]

The hon. Gentleman is wrong in his assessment. He failed to say that the 13% collapse in manufacturing happened during the last three years of the previous Government. In the first three years of this Government, it has recovered. He mentioned the regional growth fund—paying tribute, I assume, to another successful intervention, which has helped firms such as JLR and will help others, including in the east midlands.

Living Standards

Andy Sawford Excerpts

Wednesday 4th September 2013 Commons Chamber

[Andy Sawford (Corby) (Lab/Co-op)]

Any increase in employment is to be welcomed, but the real story of the labour market is a living standards crisis, with falling real wages and millions working harder for less. I know that from the experiences in my constituency. We have heard complacency from the Government today. They say that they have fixed the economy, but for ordinary families we know that things are getting harder, not easier. Ministers just sound out of touch when they ignore the fact that the number of people who are working part time because they cannot find a full-time job is at record level.

Real wages are falling: wages increased by 0.6% on the year to June, while the retail prices index increased by 3.3%, over five times the pace of wage growth. OBR forecasts show that, after inflation, wages are set to be £1,520 lower in 2015 than they were in 2010. That means that, as my hon. Friend the Member for Cardiff South and Penarth (Stephen Doughty) told the Prime Minister today, ordinary working people will have lost, on average, £6,660 on this Government’s watch. That is a shameful record.

Underemployment is a massive and growing problem for millions of families already feeling the pinch from rising prices and falling wages. More than one in 10 people are now unable to work the hours they would like because this Government strangled the recovery for three years. Today we have heard complacent, boastful comments from the Government, delighted that there is, at last, a slight upturn in the economy. Let us not forget, though, that for three years, having inherited a growing economy, they flattened that growth and people across this country suffered for three years.

The Government and the Prime Minister are out of touch in not understanding that very many people not only work part time but often work on zero-hours contracts. They find themselves working through agencies and are often exploited. People in my constituency have told me about their experience of these zero-hours contracts—of turning up for work only to be told that there is no work that day, yet they might have arranged child care or had to pay considerable transport costs to get to work, or working for half a shift and then being told that they are no longer needed that day. That is no way for businesses to treat their employees, but it is also no way for a Government to behave when they turn a blind eye to the growth of that practice in our economy.

People have told me about not being able to get a mortgage, car finance or a bank overdraft, or even a rental agreement, because they cannot clearly demonstrate that they will have money coming in over the weeks and months ahead.

[Charlie Elphicke]

Will the hon. Gentleman give way?

[Andy Sawford]

No. I know that two of my colleagues want to speak, so I am going to push on.

Seventy per cent. of zero-hours contracts are for permanent jobs. How can it be right that someone in a permanent job is not given a permanent and proper contract of employment? More than 80% of people on zero-hours contracts are not looking for another job. They want to remain in employment, but they want it to be fair and secure. Resolution Foundation research shows that those employed on zero-hours contracts receive lower gross weekly pay and that workplaces utilising zero-hours contracts have a higher proportion of staff on low pay. In my constituency zero-hours contracts, combined with the very high number of people working through agencies, have created a two-tier work force, with permanent employees often being paid better and having security of employment while many other workers are being paid very low wages and exploited from week to week.

There is an argument that zero-hours contracts offer flexibility. Of course, casual employment has always been part of the labour market, including casual employment where there are no guaranteed hours. I have worked under those conditions and other people do so too. For example, Corby borough council employs lifeguards at the local swimming pool on such casual contracts; of course, it is seasonal work and there are changes in demand over the course of the year. When I talk about zero-hours exploitation, I do not mean all casual employment in the economy. The local Tories in Corby have got themselves into an extraordinary position, saying that my local council should end all casual employment. That is completely bizarre. It has been suggested that it is hypocritical of me, as a Co-op Member, to highlight this issue and campaign against zero-hours exploitation because across the country the 2% of workers the Co-op employs in its funeral business are mainly retained firefighters or semi-retired people. It is a ridiculous suggestion.

Most people understand that some casual employment works for some people, but the key is that it should be reciprocal and fair. That is why I have introduced a Bill that aims to tackle zero-hours exploitation. I want to see what legal changes we can make to help people, particularly by ending things such as exclusivity clauses in zero-hours contracts.

I am delighted that the shadow Business Secretary, my hon. Friend the Member for Streatham (Mr Umunna), has really taken a lead on this issue. Just a few weeks ago, he held a summit bringing together employers and people who are concerned about it. I welcome the support of many organisations in civil society—trade unions and organisations such as Citizens Advice—in trying to tackle it. However, it is not achieved only through legislation; this Government should act, and the Business Secretary’s review should have more resources put behind it. We should try, through public procurement, to encourage Government and local government to stop using zero-hours contracts as far as possible.

Co-operatives

Andy Sawford Excerpts

Wednesday 3rd July 2013 Westminster Hall

[Chris Evans (Islwyn) (Lab/Co-op)]

Thank you, Mr Hollobone; you are too kind. It is a pleasure to serve under your chairmanship once again.

It gives me great pleasure to have secured the debate right in the middle of co-operatives fortnight. I am a proud member of the Co-operative party and take great pride in sitting as a Co-operative Member of Parliament. The Westminster group of Co-operative MPs is the largest that it has been for 95 years. I am pleased to work alongside colleagues in the Scottish Parliament and the National Assembly for Wales, together with thousands of councillors around the country.

The purpose of this year’s co-operatives fortnight campaign is to focus on helping people to find co-operatives they love, whether they are providing sparkling wines or energy, and whether they are online or in-store. The campaign also gives Members from all parties in the House an opportunity to learn more about what is happening co-operatively in their constituencies.

Co-operation runs through the fabric of the south Wales valleys, where I was born and brought up, and which I am proud to call home. Indeed, family legend states that the last words of my great-grandmother, before she passed away at the age of 104, were, “It’s okay; I’m with the Co-op.” From Tower colliery in Cynon Valley to local corner shops, co-operatives permeate every strand of our society.

The debate affords me the opportunity to speak about the Islwyn community credit union, which offers saving accounts and small loans to members who, after a few months, become eligible for a loan at low interest rates. The great thing about the credit union is that its methods are working. In the past few days, the coalition has announced its intention to crack down on payday lenders. I am pleased that it is credit unions such as the Islwyn community credit union that have been at the forefront of the fight to turn households away from doorstep lenders and payday loan companies, which for too long have had a stranglehold on the type of valley community that I represent.

I feel extremely privileged to have been able to share a number of milestones with the Islwyn community credit union, most notably when it celebrated lending £1 million to families across my constituency of Islwyn. The credit union is an example of the impact that co-operative organisations can have on a local economy, which is why I am pleased that the co-operative sector has outperformed the rest of the UK economy since the financial crisis began.

With every pound spent in a co-operative generating an additional 40p for the local economy, the success of co-operatives can only be a good thing for the communities that we represent. Co-operatives are popping up all over the country, even in areas that do not have the history of co-operatives enjoyed by areas such as mine in the south Wales valleys. Since 2008, the UK co-operative sector has grown by more than 20%, and co-operative businesses in the UK now have a turnover of more than £36 billion a year.

As other industries and sectors feel the impact of the recession and the economic crisis, the number of co-operatives has increased in each of the past five years. There are now 6,169 co-operatives nationwide, 446 of which are based in Wales. Last year alone, the number of co-operatives throughout the country increased by 236, which was a rise of 4%. Membership of co-operatives is also growing month by month and now stands at more than 15 million, which is a 36% increase in membership since 2008.

The co-operative sector has also diversified over the past five years. More and more people understand that co-operatives are not just supermarkets or—as my great-grandmother understood—providers of funeral services. They also operate in other parts of the economy, from health care to housing, from farms to football clubs, and from credit unions to community-owned shops.

While preparing for the debate, I read about the increase in community-run shops. With more and more commercial shops struggling in the recession, communities are coming together to preserve stores that offer valuable services to a town or village, such as a local bakery. Food stores that can no longer cope with high rents or costs and therefore have to leave the local high street are being replaced not by new commercial businesses buying vacant units on the high street, but by local people who know at first hand how valuable local stores are to the communities in which they live. Some 6% of commercial village shops are being taken on by groups of residents who are determined to ensure that shop closures do not leave a gap in their community. These stores are not only having an effect on local life, but making a significant contribution to the UK economy.

The Co-operative Group has a work force of almost 100,000 people, which makes it one of the largest private employers in the UK. In 2012, community shops had a combined turnover of £49 million and more than 50,000 people were involved in some way in a community-run enterprise. The Plunkett Foundation reports that there are more volunteers working across co-operative community shops in the UK than there are helping national charities. Such co-ops are having a long-term impact on the economy; they are not a short-term fix to keep a store open temporarily before a commercial company can come in and take it over. Research by the Co-operative Group indicates that while only 65% of conventional businesses survive for their first three years, more than 90% of co-ops are still in business after their first three years. Those co-ops are local enterprises that create jobs and employ people on local high streets. In turn, those people are walking up the same high street and spending their wages in local shops. Co-ops and their staff are putting money straight back into the economy and the small businesses that make up our communities.

I was especially interested to read the results of a recent YouGov poll that asked people for their thoughts on co-operative businesses. Some 52% of respondents described co-operative organisations as “trusted”, compared with a figure of just 7% for plcs. We see that though the work done by societies all around the country. The top three words that came to people’s minds when they were asked their views on co-operatives were “fair”, “democratic” and “trusted”. That tells me that, unlike almost every other profession and institution in the UK, co-operatives still have one thing that the rest do not seem to have: that simple word “trust”.

Every Member will have felt the distrust that the public have developed for politicians, but we all know that it does not stop there. The police, journalists and bank managers—all good professions—have been damaged in the past decade, and the trust that people once had in them has all but gone. When I hear about community-run co-operatives, it says to me that they can fill the gap. Quite simply, people have to trust something, and if they do not trust businesses, banks or whatever, they can trust local co-operative organisations. In society, even outside co-operatives, it is important that people have trust, because without trust, people cannot believe in anything, and that brings about anarchy. However, if trust is still there for co-ops, it shows that they can fill the void so, quite simply, we have an opportunity.

I am saddened that the opportunity to promote co-operatives and mutuals as an alternative is not being exploited by the Government. I have spoken about the impact of co-operatives on the economy, but I am worried about how seriously the Government are taking them. We have a heard in the past few weeks from Government Members about the place of the Co-operative party in Westminster, but I know that a Conservative co-operative movement was recently established, and its members will appreciate some of the points that I am about to make.

Let us take the example of the Energy Bill. When the Secretary of State for Energy and Climate Change was appointed, we were promised a “community energy revolution”. My Labour and Co-operative colleagues on Labour’s shadow Energy and Climate Change team worked hard to make sure that he stuck to that commitment. Co-operative energy companies, such as the one created by the Midcounties co-operative, have an important role to play in the energy market. We all want to see large community projects such as the Westmill wind farm co-operative in Oxfordshire, but there will be less and less chance of such projects popping up across the country if the Government do not give co-operatives proper support.

I do not have to tell you, Mr Hollobone, that the energy industry faces a lot of challenges. There is widespread opposition to projects such as wind farms, which will become more and more of a reality in the coming years whether we like it or not. What frustrates me is that a lot of that opposition is completely unnecessary; it could be avoided if the Government further supported co-operatives and did not overlook them ahead of scrutiny in this place.

Research commissioned by the Co-operative party has shown that two thirds of people who would oppose wind turbines near their home would change their mind if the turbines belonged to the community. When people were surveyed on their perception of energy companies, the results showed that the public were 4.5 times more likely to “completely trust” a co-operative energy supplier than another energy supplier. This was what I was getting at when I spoke about trust: people instinctively trust co-operative projects. However, more has to be done if we want co-operatives to continue to stimulate the economy in sectors such as energy.

I have spoken numerous times in the House about housing, because we are facing a genuine housing crisis. There can be little doubt that investing in infrastructure is the way to stimulate and grow the economy, and the prime way of doing that is house building. If the Government are building new homes, it means that people are in work and that building firms can bid for contracts, and it also helps to bridge the gap that is starting to develop between supply and demand. I see that in my constituency surgery each week. When people affected by the bedroom tax ask me, “Where am I going to live? The council do not have any homes and I cannot stay where I am,” I am sorry to say that I do not have an answer for them.

The majority of social tenants in Caerphilly county borough council are in two or three-bedroom homes, and there are no one or two-bedroom homes for them to move into. In parts of my constituency such as Crumlin, 70% of tenants are thought to be in under-occupation. In Newbridge, the figure is 60%. Everyone in the borough knows that there are no homes to move into, but what choice does the council have but to implement the policy? These families are victims of legislation—that is why they are suffering—yet the Government still do not build homes. That frustrates me, because the Government could look to co-operative housing to fill the gap.

Throughout Europe, 10% of people are in housing co-operatives, but the figure for the UK is only 0.6%. In Sweden, co-operative housing tenure has existed since 1920 and nearly one fifth of all housing is provided in this way. In Poland, 3.5 million homes, which account for almost 30% of the total housing stock, are managed by a housing co-operative.

Co-op housing works in different ways in different countries, but the basic principle is no different from that of credit unions or community-owned shops. Such housing providers are jointly owned and democratically controlled by their members. Community co-operatives have rescued pubs and shops in the UK, but we do not seem to think of the impact that they could have on the housing market and, subsequently, our economy, so an opportunity is being missed. David Rodgers, the current president of the International Co-operative Alliance, said:

“Britain has stood still for two and a half years and has failed to recognise the contribution co-operative housing can make”.

Such opportunities are not receiving the support that they should get.

My hon. Friend the Member for Stalybridge and Hyde (Jonathan Reynolds) introduced the Co-operative Housing Tenure Bill last year, which would have had a real impact and improved the legislative framework for co-operative tenure. The Bill would have given people an alternative to owning and renting, but the Government did not support it. They like to talk about house building as a way of driving economic growth, and they went as far as explicitly saying in the coalition agreement:

“We will promote shared ownership schemes and help social tenants and others to own or part-own their home”.

However, it seems that co-operative housing is another area in which the Government talk a good game but fail to deliver.

In respect of financial mutuals, the Government could look at co-operative examples to help to stimulate the economy. After three years in this House, talking about the economy month after month, I have discovered a few things. First, it is fashionable to blame the bankers for everything. I admit that when I first came to the House, I was guilty of doing the same thing, like everybody else, even though I used to be one. Secondly, nobody seems to be coming up with any real alternatives to our financial system to avoid scandals such as Lehman Brothers in 2008 and more recently involving LIBOR.

It seems a while since the Prime Minister and Deputy Prime Minister stood together in the rose garden of No. 10, but it was only three years ago. Once again, the coalition offered high hopes to reform our banking sector, pledging to

“bring forward detailed proposals to foster diversity in financial services, promote mutuals and create a more competitive banking industry.”

Yet when the Government had an opportunity to put these words into action, what did we see? Absolutely nothing. If the coalition had been serious about promoting mutuals in our financial sector, they could have re-mutualised Northern Rock. Instead, the Treasury sold the bank to Virgin in a deal that the National Audit Office has subsequently suggested did not give the taxpayer good value for money. Co-operative colleagues tabled a raft of amendments to the Financial Services Bill earlier this year that would have forced the Government to make good on their pledge by introducing financial inclusion, education and transparency, but once again the amendments were chucked out and the Government ploughed on with the same old approach.

Last year, I tabled a private Member’s Bill, the Banking (Disclosure, Responsibility and Education) Bill. It is based on the Dodd-Frank Act in America, which enables every bank transaction to be monitored. My Bill would require banks to produce a report specifying who they are lending to, to find out about those excluded from financial products from mainstream banks.

When we talk about people excluded from financial products, we are not just talking about those without complex bank accounts. We are talking about the 9 million people without access to any credit whatsoever from banks. These households have serious difficulty getting access to essential services such as energy, water, land lines and the internet. A situation like that creates a breeding ground for loan sharks and high-interest lenders.

Where I grew up in the south Wales valleys, we lived on an L-shaped street. On Monday nights we would see a white car come over the top—an XR3i, for hon. Members who remember those souped-up cars. I can remember a woman getting out of the car, and all the doors were slammed shut. All the kids were pulled in from the street. It was the woman from the Provident. My mother claimed that she smelled of cheap Estée Lauder perfume. I do not know what Estée Lauder smells like, but my mother said it was cheap. That woman would knock on someone’s door and shout, “You owe me £400”. That was wrong, but everybody in our street thought that person owed £400. “I’ll get you next week, love”, she used to say.

I remember my mother panicking about whether we had enough money for the Provident. We would get our hands down behind the settees, looking for spare change to get it together to pay the woman, because we did not want her shouting down at us. We felt that climate of fear at 6pm every week, on a Monday. The saddest thing is that I know that is still going on, not just in communities like mine, but in communities throughout the country.

[Andy Sawford (Corby) (Lab/Co-op)]

My hon. Friend rightly hits on one key benefit of co-operatives, which is their values. He also reminds me of my own childhood. I remember that Sid, who ran the Co-op at the bottom of the road, ran a book based on trust. Every so often, my dad would settle up. Occasionally, we hid in the kitchen from Tommy the milkman, because mum had not got enough money to pay him that week. In the end the accounts were settled, because the Co-op was part of our community and there was a relationship of trust between us. That is one of the key benefits of co-ops.

[Chris Evans]

That sums up the benefits of co-ops for so many communities, including mine, and those in my hon. Friend’s constituency. When we grew up in those communities, there was a level of trust. We trusted one another. We knew one another and we grew up in communities where we knew everybody. It sounds romantic to say it now, but we did know our next-door neighbour. I knew everybody in the street that I grew up in. I do not think that I do now. That is the saddest thing.

The important thing is that the co-operatives brought about trust and a sense of values and ethics, which we do not see in society very often. That is why it is important for people to support their local co-operative, such as the one run by Sid at the end of the street, who had a savings club for Christmas. My hon. Friend says that his family used to hide from Tommy the milkman behind the settee. I wonder whether his family still speak to him.

--- Later in debate ---

[Chris Evans]

Not being a member of the management team myself or privy to decisions in the Co-operative bank, the best people to answer that are on the board of that bank. The Britannia takeover was particularly difficult for the Co-operative bank and has had a major effect.

We talk about IT projects, and we have seen such things happen in government as well. My predecessor in Islwyn served on the Public Accounts Committee, and when I worked for him I saw that a lot of problems reported by the National Audit Office were often to do with IT programmes. The lesson to be learned for the Co-operative bank, as with others, is that when investing in IT, if it goes wrong it really does go wrong.

[Andy Sawford]

I sense that my hon. Friend has many other important issues to address, but does he agree that it is important that we use the right language to describe what has happened at the Co-operative bank in recent months? Terms such as “collapse” are not helpful in assuring savers of the bank’s future. We ought to recognise that, unlike other banks and financial institutions, the Co-operative bank has not sought a bail-out from the Government but has righted itself, and we all should support it in what I hope is a sustainable future.

[Chris Evans]

My hon. Friend is absolutely right. The Co-operative bank—along with other mutuals—is the only bank that did not take a bail-out from the Government. If we have learned anything from the financial crash of 2008, it is that the language we use can have a serious effect on consumer confidence. I do not think any of us will forget the queues outside Northern Rock on that Saturday, which all came from a few misjudged words. The Co-operative bank is still on the high street, is still flourishing and has righted itself. We all have to be careful in the language we use. As the hon. Member for Warrington South (David Mowat) said, there are lessons to be learned, and I am sure they will be learned in the next couple of years.

We do not want to create a breeding ground for loan sharks and high street lenders. Sadly, Provident, Wonga, Cash Converters and Shopacheck are now household names. When people have nowhere else to turn, and when there is no food in the fridge or money left in the electric, where are they going to go? I spoke earlier about Islwyn community credit union, and I am pleased that in Wales everyone has access to a credit union. I have spoken previously about expanding the role of credit unions, which do not have to lend solely to individuals; they can lend to businesses, too, whether they are micro-businesses or small businesses that cannot get money elsewhere. We need to see more from the Government to promote co-operative finance and mutuals so that they live up to the promises they made when they came into office.

It is worth remembering that conventional banks used £60 billion when they were bailed out, but the mutual sector did not use any money at all. Bradford & Bingley operated as a building society for 150 years, yet it lasted only 10 years as a bank. I hope that the Minister will explain exactly what the Government are doing to encourage mutuality in the banking sector. I also hope he will address the potential for co-operatives in the energy and housing sectors, because I believe they could form the basis for real and lasting economic growth.

I will end by citing a statistic that demonstrates the potential of a co-operative economy. The UK is ranked 15th in global GDP, but the UK co-operative economy is the eighth largest globally. We are clearly doing something right, but with more than 1 million co-operatives in the world serving 1 billion members, we have the potential to do a lot more. There is growing consensus on the factors that serve business excellence—a clear mission, better customer service and, above all, fairness and transparency. At the heart of the success of the co-operative movement are the fundamental values of equality, democracy and participation, and therefore co-operatives should be encouraged and adopted.

--- Later in debate ---

[Andy Sawford (Corby) (Lab/Co-op)]

It is a pleasure to serve under your chairmanship, Mr Hollobone, as you are my near neighbour. I congratulate my hon. Friend the Member for Islwyn (Chris Evans) on securing this important debate and on opening it in such great style. He covered a broad range of issues relating to how the co-operative movement benefits our economy.

Hon. Members have made many claims regarding the strong co-operative traditions of their constituencies, and I do not dispute the fact that Rochdale is the home of the co-operative movement. I can say, however, that my constituency, with its previous boundaries—you, Mr Hollobone, will understand this, because the Kettering and Corby constituencies were combined at that time—elected the first ever Co-operative MP. Alf Waterson was elected in 1918. Samuel Perry, the father of the tennis legend Fred Perry, was subsequently elected to be the Co-operative MP several times. Samuel Perry was a key mover in joining the forces of the Labour and co-operative movements around the UK.

The driving forces behind the radicalism of people in my constituency, in electing the first Co-operative MP, were the chapels, the boot and shoe workers and, in particular, the blast furnace men’s union at Corby, which adopted Alf Waterson as its candidate. The political movement was connected to an economic movement at the time, as ordinary working people in Northamptonshire came together through co-operatives to try to make a better life for themselves. Their values still hold true today in the co-operative movement—values of self-help, self-responsibility, democracy, equality, equity and solidarity.

In the tradition of the founders of the co-operative movement, co-operative members today—and I am one, and should declare an interest on that account, and as a Labour and Co-operative MP—believe in the ethical values of honesty, openness, social responsibility and caring for others. The co-operative principles are guidelines by which all co-operatives today put their values into practice. Those seven principles are voluntary and open membership; democratic member control; member economic participation, empowering those members; autonomy and independence; education, training and information; co-operation between co-operatives; and concern for community.

There are many benefits to the way in which co-operatives put their values into practice today, in addition to what we might see as core economic benefits. There are thousands of community initiatives around the country, including some in my area. The co-operative movement in the UK has been a leading force for sustainability. There is a significant focus in the Co-operative retail group at the moment on reducing waste. The movement has been a leading force in promoting fair trade in Britain, and I am pleased to say that fair trade sales in co-operatives are rising year on year. Indeed, the Co-operative helps us to celebrate Fairtrade fortnight across the UK.

The co-operative movement has championed staff volunteering. Co-operatives UK, which is one part of the movement in the UK, estimates that the staff time it donates each year is worth about £1.7 million. There are programmes such as the Skills4Schools campaign, which helps to promote numeracy in primary schools and financial literacy in secondary schools. The initiative Farm to Work has led to thousands of primary schoolchildren visiting co-operatives at working farms. There are many ways in which the values of education, training and information are still at the heart of the co-operative movement. Co-operatives are engaged in the education system not only through Skills4Schools but in many other ways. I am pleased with the increase in the number of schools opting to become co-operative trust schools and co-operative academies.

Today’s focus is, rightly, as we seek to get the economy growing again, on the economic benefits of co-operatives. The number of entrepreneurs, employers and communities in the UK that own and control their businesses through co-operative enterprise has reached an all-time high, with a record 15.4 million membership of co-operatives. That is an increase of 36% since 2008 and 13.6% in the past year. The number of co-operative businesses in the UK has also risen by 28% since 2008 or the onset of the recession. The recent report published by Co-operatives UK, entitled “Homegrown: The Co-operative Economy 2013”, shows that co-operatives have a £37 billion turnover in the UK economy.

We might wonder why co-operatives have grown, at a time when little seems to be growing in this country. I think that it is because of the tough economic trading conditions, which have encouraged more and more Britons to turn to co-operatives to take greater control of their destinies and grow their own way out of recession. The Co-operatives UK report highlights the fact that co-operative shops had a combined turnover of £50 million in 2012, with more than 50,000 members. Those who have chosen the co-operative option, who are growing their own co-operative enterprises, include entrepreneurs, employers who share ownership of their firms, communities, customers and even sports fans, as my hon. Friend the Member for Rutherglen and Hamilton West (Tom Greatrex) highlighted, who want to own and run their clubs. The growing appeal of sharing ownership, profits and control in line with the traditional values—democratic member control, voluntary and open membership, and autonomy and independence—has, in a diverse co-operative economy, brought about community pubs, foster care and child care providers, and multi-million pound co-operatives such as Co-operative Energy. In the energy setting, in addition to Co-operative Energy, we want many more mutual, local community co-operatives. That is why I support the strong points that my hon. Friends have made about amendments to the Energy Bill. I hope that the Government will now see sense on that matter, as I understand amendments have been made in the Lords.

People are taking action to form co-operatives because they want a say in what matters to them. In a time of limited economic growth and social challenges, people’s appetite is to seek independent control, to run a fair organisation that benefits all, and to put increasing importance on planning for the long term.

The recent study of the effect of co-operatives on local economies carried out by the independent economic analyst K2A showed that money spent by customers increases in value as it goes to local suppliers, to customers as a dividend, and to employees in wages; they in turn spend a proportion of their money locally. The estimates, using the benchmarks that are accepted around the world for examining the value of business in local economies, are that co-operatives generate an additional £40 for the local economy for every £100 spent by a customer. Overall, that means that co-operatives, rather than generating profits for outside investors or national or even global suppliers, generate £100 million for local economies.

[Gavin Shuker (Luton South) (Lab/Co-op)]

Does my hon. Friend agree that the impact of co-operatives in the economy is felt not only locally but in tax revenues to the Exchequer, which pay for public services? To cite a simple example, there has been concern about the levels of tax paid by some water companies. In comparison, Welsh Water is a co-operative that does extremely well on that front and on environmental sustainability.

[Andy Sawford]

My hon. Friend is right to highlight the importance of Exchequer receipts from co-operatives, not only through business rates and other forms of taxation paid by those businesses, but also because co-operatives in the UK employ so many people who are economically active and who contribute to tax returns. That is one of the benefits of co-operatives, and I am pleased that my hon. Friend brought it up.

As for local co-operatives, the secretary-general of Co-operatives UK describes the effect of keeping so much money in the local economy, and generating additional value there, with the term “sticky money”. Co-operative money is sticky money: I think it is a good term. He says:

“It stays local, because co-operatives employ local people, are owned by local people and try to source from local firms that do the same. Every pound spent in a co-operative shop is a real boost to the local economy.”

Co-operatives are known as trusted local businesses. Indeed, my hon. Friend the Member for Islwyn has told the Chamber about his experience of that. I share that experience of growing up, and the values that can be seen in co-operatives. Today, the value that they offer to communities is incredibly important.

In my community, the main co-operative is the Midlands Co-operative. It is one of the largest independent retail co-operative societies in the UK. It employs 7,000 staff, is member-owned and has a board of directors, one of whom—I should declare an interest—is my father. It had gross sales of £670 million and a profit of £24.3 million in 2012-13. It operates across a wide range of sectors—food, funeral services, crematoriums, transport—and has more than 300 trading outlets in 12 counties. I want to highlight its achievements.

The Midlands Co-operative Society was recognised as co-operative of the year, which I am sure you welcome, Mr Hollobone, as you must shop, as I do, in a Midlands Co-op in your constituency. It has the highest trading profit of all independent co-operatives, and it rewarded its members with a £4.3 million payout; it created 300 additional jobs in its trading area; it invested more than £0.5 million to help its employees develop their skills; it funded local community projects to the tune of £1.5 million; and it has refurbished many of its outlets to make them energy-efficient, reducing energy consumption.

All the Midlands Co-op stores have a locally sourced range—I have already referred to the initiative to take primary school children to the co-operative’s working farms—and the supply chain benefit of sourcing locally from firms that are less than 50 miles away is incredibly important. In my area, and yours, Mr Hollobone, the supply chain benefit is known as a “Taste of Northamptonshire”. The Midlands Co-op helps vital community initiatives, so I was pleased to support the Corby women’s choir recently at a great local event, and I welcome the news that the co-operative is backing grass-roots football in Thrapston in east Northamptonshire. The benefits are enormous.

I want to say a few words in support of the comments made by my hon. Friends about co-operative housing. I was pleased to hear David Rodgers mentioned in his role in the International Co-operative Alliance, but I have known him for some years as the former chief executive of the Co-operative Development Society, which I think would lay claim to being the largest co-operative housing organisation in Britain—we can have that debate with my hon. Friend the Member for Rochdale (Simon Danczuk) another time—not only for owning many thousands of units of housing directly, but for supporting co-operative housing organisations throughout the UK. The CDS has been a pioneer in introducing new models of intermediate market housing—desperately needed in this country—by looking at examples in north America, especially Vermont, where co-operative housing makes a huge contribution to the housing supply and in particular to intermediate market housing, but also in northern Europe. In cities such as Oslo in Norway, more than half the housing in the city is co-operative housing.

We need to look at the real potential offered by co-operative housing models in this country. In particular, we could link co-operative and mutual models with community land trusts—for rural as well as urban areas—to engage communities in bringing forward significant new developments. Community land trusts offer real potential to capture land values—for example, exception sites can be made community land trusts—and that is something we ought to look at. Using the mutual models, benefits such as corporate mortgages and so on can reduce the cost to people of purchasing their own home. In particular, under flexible models of share ownership, people can buy equity shares in the overall housing trust, which they take on with an element of housing equity growth, if that happens over the time that they are in the housing. That is much better and more flexible for people than traditional ways of getting a foot on the housing ladder or a stake in the housing market.

The community mutual model, as developed in particular by organisations such as Mutuo, has been taken up in Wales. There are community mutuals in Rhondda, in Torfaen and elsewhere in Wales, but I want to see more in England. I also want to see more community gateway models in England, such as those developed by the Confederation of Co-operative Housing; community gateway housing mutuals exist in Preston, Watford, Lewisham and Braintree. On hybrid mutual schemes, Rochdale Boroughwide Housing, which has 14,000 units—I understand why my hon. Friend the Member for Rochdale says that it is an incredibly large and important co-operative—is using an innovative new membership-based model of housing provision.

Those are real opportunities, but I hope that the Government will look at some of the legislative opportunities that might be available in the next few years, including the important Bill to support co-operative housing introduced by my hon. Friend the Member for Stalybridge and Hyde (Jonathan Reynolds), to better support the development of co-operative models in the UK economy. Co-operatives can provide enormous benefit and could prove to be as strong in this century as they were in the last.

[Stella Creasy]

rose—

Finance Bill

Andy Sawford Excerpts

Tuesday 2nd July 2013 Commons Chamber

[Catherine McKinnell]

I am pleased to hear the hon. Gentleman suggesting that those on the Government Benches are considering supporting our proposal. I wonder whether he has realised that his Government are borrowing £245 billion more than they planned, because they have failed. Their economic plan has failed—it has failed on living standards, on growth and on getting the deficit down. The Chancellor promised in 2010 that by 2015 he would have balanced the books, yet he is borrowing £245 billion more than he planned—and those books will not get balanced in the time frame that he promised.

[Andy Sawford (Corby) (Lab/Co-op)]

I support new clause 10 because it is really important to see whether the measures in the spending review will increase tax receipts. My hon. Friend is highlighting the failure over the last three years to get the economy growing and the impact of that on tax receipts. That explains the reality of the further and deeper cuts that the Chancellor promised us we would not have to face.

[Catherine McKinnell]

I thank my hon. Friend for that interjection, which gets to the crux of the matter. The Chancellor had to come here last week to announce further spending cuts in 2015-16, planning for future failure, because he is failing to deal with the economic reality that we face today. Ultimately, we are tabling this new clause because we hope that the Government will take stock of the situation in which they are leaving households up and down this country. The price of the failure of the Chancellor’s economic plan is not being paid by those at the top. We debated at great length yesterday the fact that the top-earning taxpayers are getting a tax cut from this Government, while it is ordinary families that rely on public services that are paying the price for this economic failure throughout the country.

Despite the pain being meted out to those who are least able to bear it, the coalition’s self-defeating economic policies have resulted in the Government failing their own economic tests. They are borrowing more than they planned and they are not going to balance the books by 2015. Rather than spending his time planning how to boost jobs and growth now, the Chancellor is planning for failure in 2015. He should be laser-focused on injecting a stimulus into the economy to secure jobs and growth now, so that we no longer need to plan for failure and for further cuts in 2015. It is common sense.

[Andy Sawford]

My reading of the new clause is that the review would have to be placed in the House of Commons Library within six months. Is it my hon. Friend’s intention to urge the Government to look at infrastructure spending in the review and, specifically, to include the figures on the impact of cutting capital investment again, year on year, in the spending review and what that does for our economy?

[Catherine McKinnell]

Indeed, it is very much the hope that the Government will shine this laser focus on measures to boost spending and boost jobs and growth now in order to stimulate the economy, get people into work and get the welfare bill down. We know that that bill is rising as a result of the failure of the Government’s economic plan. They should focus on infrastructure spending, which is not just what we say, but what the IMF says, too.

--- Later in debate ---

[Catherine McKinnell]

I am pleased that we have the hon. Gentleman’s support in principle for the fact that the Government need to take stock of the impact of these spending decisions and his acknowledgement of the devastating impact of the cuts to local authority projects, which we have rehearsed many times here, particularly in areas such as the one I represent. We will not see the impact straight away; we will see it in six months, 12 months, 18 months or two years’ time. The Government have imposed cuts without allowing the economy time to grow, create jobs and consolidate the debt in a responsible way, so we will face the consequences of this economic approach for many years to come. I am pleased, as I say, that the hon. Member for Southport (John Pugh) recognises that.

[Andy Sawford]

My hon. Friend has mentioned local government cuts. According to my reading of the spending review, capital spending in the budget of the Department for Communities and Local Government is to be cut by 35.6%. Could the review take account of that, although it will be some time before we are aware of its full impact on the economy?

[Catherine McKinnell]

The purpose of the proposed review is to encourage the Government to become laser-focused on the impact of their spending review. My hon. Friend is certainly laser-focused—not just on the impact of the cuts on local authority budgets, but on their impact on jobs and economic growth up and down the country.

Common sense tells us—well, it tells everyone but the Government, it would appear—that boosting growth and living standards this year and next would bring in tax revenues and reduce the scale of the cuts that will be needed in 2015, but nothing in the spending review will boost the economy over the next two years. It seems incredibly complacent and counter-intuitive to come to the House and simply plan for the consequences of economic failure in 2015. We believe that the Chancellor should have used his spending review to concede that he has got it wrong and has failed to secure growth. He should be proposing genuine investment in infrastructure this year.

--- Later in debate ---

[Andy Sawford]

I came in to support my hon. Friend in pushing for new clause 10, which focuses on the impact of the spending review on the economy and, in particular, on tax revenue, so I am a little surprised at the nature of the debate. However, would she envisage the review examining the implications of the tax cut for millionaires on the economy over the past few years? Would it examine the impact of giving the richest people in our country a tax cut, as that is an actual policy?

[Catherine McKinnell]

To be fair, and to stay laser-focused on the new clause, I should say that we hope and envisage that the Government’s review would look at the impact of the spending review they announced last week. We heard more promises of action from the Government last week, but we did not hear about action that will take place next week, next month or even next year. We heard the Government pledging action on infrastructure investment in two years’ time.

That would be bad enough even if the Government had a proud record, or indeed any record at all, on delivering on the infrastructure projects they announced three years ago. As we have heard a few times—it bears repeating because the figures are so shocking—just seven out of 571 so-called “priority” projects identified by the Government in 2011 in their national infrastructure plan have actually been completed; 80% of the projects announced have not even got off the ground. Despite all the hype, if we delve into the figures, we find that the Government are cutting investment in infrastructure in real terms by 1.7% by 2015. Instead of an urgent boost to jobs and growth, which this country is crying out for, by bringing forward long-term investment in infrastructure, as advocated not only by us but by the International Monetary Fund, all we got was a series of empty promises for two years’ time—and some for beyond that—from a Government who lack all credibility on this issue.

[Andy Sawford]

My hon. Friend rightly talks about how few of the Government’s priority infrastructure projects have begun. Does she hope the review would also examine progress on the Government’s priority school building programme? I understand that there are 261 projects, and I wonder whether she has had time to consider how much progress has been made on them.

[Catherine McKinnell]

That is another absolute failure in terms of the promises made by this Government that are simply not delivered. I hope that the Government will agree to undertake the review we are calling for today and that the House will, by voting with us, acknowledge that the economic plan the Government have so far pursued is failing and that they need to examine what last week’s spending review will deliver. I hope that there will be a recognition that they promised to rebuild, again as part of a “priority” programme, 261 schools and only one project has begun. It is devastating, not just for the children who need those new schools, but for the communities that need those jobs and the small businesses that need to supply the construction industry, which, as we know, has been brought to its knees by this Government’s failure to invest in infrastructure. Instead of investing in affordable homes, improving transport links and repairing Britain’s broken roads, which would give the country the short, medium and long-term returns that we are looking for, the Government are cutting capital spending in 2015. Announcing infrastructure projects for two years’ time will not create a single job today.

[Catherine McKinnell]

My hon. Friend makes his point very powerfully. It is a fact that a number of jobs have been lost in the construction industry that should have been created if the Government were taking not just our advice but that of the IMF and investing in infrastructure projects now. If they did so, tax receipts would improve this year and next year and we would not have to plan for failure in 2015, which is what the Chancellor came here to do last week.

[Andy Sawford]

My hon. Friend is right when she talks about the implications of the Government’s failure to invest in house building and construction in this country on the revenue from rates. Does she think that the review placed in the Library ought to consider the implications of the lack of receipts from house building in the Government’s vaunted programmes, such as the community infrastructure levy and so on, as well as of the business rates raised from firms in the construction industry? Is scepticism not one reason behind this request for a review? Four major housing announcements have been made in the past three years, and there have been 300 announcements, four launches and no action, and the lowest house building in 2012 for 70 years, so is there not some scepticism behind it?

[Catherine McKinnell]

My hon. Friend tempts me to suggest a less than honourable motive for our tabling the new clause. I appreciate that there may be some scepticism about the Government’s commitment to investing in infrastructure and growth and that last week’s announcement was simply about planning for more cuts to public services rather than a genuine attempt to try to look for opportunities for growth. It must be said, however, that the spending review, which plans more cuts in 2015 and was accompanied by an infrastructure announcement on Thursday that was mostly reheated—I think my hon. Friend the Member for Nottingham East (Chris Leslie) described it as a “microwave statement” as its announcements had been reheated so many times—failed to impress anybody.

Liberal Democrat Members in particular should be concerned by statements from the Deputy Prime Minister. He has commented that

“the gap between intention, announcement and delivery is quite significant”.

He puts that rather mildly, and I would hope that by supporting our new clause the Government could take stock of the impact mot just of the 2013 spending round they announced last week but of the delay in delivering any of the projects that have already been announced, as well as the delay pursuant to the announcements that have been made for 2015. This is an important opportunity for the Government to take stock and consider why their economic plan has so catastrophically failed. That would mean that rather than planning for failure in 2015, they could take the steps necessary now to bring forward infrastructure investment and put into play the infrastructure investment that has already been announced so that we can start to create jobs and opportunities for communities up and down the country that are suffering from stagnation in the economy.

[Catherine McKinnell]

I would welcome any signs of positivity in economic growth from any sector of our economy, especially the construction industry, which has suffered catastrophically from the cuts and stagnation in the economy over the past three years. I would indeed welcome that small piece of good news. It is a step in the right direction, but our amendment calls on the Government to take stock and do more.

[Andy Sawford]

I think construction is an incredibly important part of the economy, so I think it is right that the hon. Member for Central Devon (Mel Stride) suggests that the review six months after the spending review would look at construction. I hope it would explore the figures that I have seen, suggesting that the volume of new construction orders fell by 10% between quarter 4 of 2012 and quarter 1 of 2013. Construction is going in the wrong direction at the moment, and we need to know from the review whether the measures in the spending review will actually make that worse.

[Catherine McKinnell]

My hon. Friend makes an important point. Ultimately, it is about what we hear in our communities when talking to businesses about confidence—the confidence to invest, the confidence to take seriously the Government’s commitment to investing in infrastructure and growth. The reality on the ground is deeply worrying. Members of the public will be concerned about the complacent tone that the Government adopt towards the economic situation. The Government are apparently ignoring the fact that they promised 6% growth and delivered only 1%, that they promised 576 infrastructure projects and have delivered only seven, that they promised 261 rebuilt schools and have only put spades in the ground in one. Members of the public will be worried to hear how complacent this Government seem to be. That is why we tabled the new clause—to give the Government the opportunity not just to make the announcement and walk away, hoping that nobody will notice that they are doing nothing about economic stagnation, but to spend some time reflecting on what these announcements will mean in real terms in respect of expected tax receipts.

There is one key Government Department that is capable of increasing tax receipts to the Exchequer, and that is Her Majesty’s Revenue and Customs. Indeed, without the receipts that HMRC collects, there would be no funding to invest in public services. HMRC’s capacity and resources are therefore absolutely critical, and it is widely accepted that it can make a pretty impressive return on investment. Last year, senior HMRC officials brought in £16.7 billion over and above what was returned voluntarily by businesses and individuals.

[Andy Sawford]

I am very pleased to hear my hon. Friend highlight the important role that HMRC plays in our economy. Whatever the review shows about the implications of the spending review, one of the key aspects is HMRC’s effectiveness in bringing in tax revenue. Will my hon. Friend therefore urge the Government, in this review, which I hope they will support, to look at the implications of underpayment of wages to people, particularly minimum wage avoidance issues? HMRC recently sent a team to my constituency, and found that £100,000 was owing to local workers. There are huge implications for receipts at HMRC.

[Catherine McKinnell]

My hon. Friend raises a very important point. I have tabled several parliamentary questions to the Minister on that subject, and I look forward to his response outlining what action the Government are taking, alongside HMRC, to ensure that it not only collects tax throughout the country but ensures that employers abide by the national minimum wage legislation to ensure that employees do not fall short despite the fact that they are working. It is imperative that HMRC has the Government’s support and also has the correct resources to ensure that workers are not exploited in the way that my hon. Friend suggests is prevalent in his part of the country and which I have no doubt is a phenomenon that impacts on hard-working people countrywide.

Despite the headlines suggesting that everybody is avoiding tax, we are generally a tax-compliant nation—I believe the current figure is approximately 93%. Of course, it is the 7% for which HMRC needs extra support and resources to get the returns. The Association of Revenue and Customs estimates that a senior tax official earning £50,000 a year can expect to generate additional yield of at least £1.5 million a year—a return 30 times greater than the cost of their salary. That is a good investment, I think most would agree.

--- Later in debate ---

However, under the funding settlement announced by the Chancellor last week, at the same time as it is required to bring in those additional revenues, HMRC must cut its costs by a further 5% in 2015-16, on top of the significant efficiency savings and cuts it has already been expected to make. Can the Minister confirm, for the benefit of the House and as part of the review for which we are calling, precisely how much funding will have been cut from HMRC between the coalition coming to power in 2010 and the end of financial year 2015-16? A clear picture of the figures would be useful. Also, will he confirm the total number of HMRC posts that are expected to have been lost during that period?

[Andy Sawford]

My hon. Friend’s question to the Government is incredibly important and I hope we hear an answer. Does she share my concern that some of the measures in the spending review will have serious implications for tax collection unless HMRC has sufficient resources? For example, the director of the Institute for Fiscal Studies said of the shares for rights policy that it has “all the hallmarks” of another tax-avoidance opportunity, and Lord Forsyth, the former Conservative Employment Minister, said it

“has all the trappings of something that was thought up by someone in the bath”.—[Official Report, House of Lords, 20 March 2013; Vol. 744, c. 614.]

HMRC will have to be very alive to these issues of tax avoidance.

[Catherine McKinnell]

My hon. Friend makes an important point. The Bill Committee debated at some length the fact that the Government like to talk the talk on tax avoidance, but have created another tax-avoidance opportunity in the hare-brained shares for rights scheme. I think we all agree with Lord Forsyth.

--- Later in debate ---

[Mr Gauke]

New clause 10 asks for a review of the impact on tax revenues of the measures set out in the 2013 spending review. I note that the Labour party again seems to be interested in discussing matters that are not in the Bill as such. Rather than discussing the Bill, Labour Members want to discuss the spending review—although given how the spending review went for the Opposition, they might have done better to spend last week debating the Finance Bill.

Let me explain briefly why new clause 10 is unnecessary. The House will be aware that in 2010 this Government created the Office for Budget Responsibility in order to ensure that the impact of Government policies is independently scrutinised. The OBR routinely publishes economic and fiscal outlooks, which provide a transparent and independent assessment of the impact of Government policy on the public finances, including receipts, and the economy. The impact of the policies announced in the 2013 spending round will be reflected in the OBR’s autumn forecast, which will be published alongside the autumn statement, so there is no need for a parallel review, which is what new clause 10 would involve.

We have had an interesting debate about the measures in the spending review. At times I have been somewhat confused about the Opposition’s position. I had understood that they accepted the spending review envelope, although it certainly did not sound like it from what the hon. Member for Newcastle upon Tyne North (Catherine McKinnell) said. She described local government spending cuts as “devastating”, so we assume that she opposes that measure. She was not quite clear about where further cuts would be made to compensate for that, but no doubt she will enlighten us in future.

We also heard the Opposition make the argument that we should take steps to boost growth now, rather than focusing on 2015-16. That was not an endorsement of changes such as planning deregulation, which can help growth, or a more competitive tax system. Indeed, we have tried to work out exactly what Labour believes in this area, but it was not clear. We have consistently heard about a five-point plan from the Opposition, including a cut in VAT, which was the flagship of that plan. On three occasions the hon. Lady was asked whether Labour still favoured a temporary cut in VAT under the current circumstances; on three occasions that question was evaded. I will happily give her the opportunity to intervene now if she wants to provide an answer. Do the Opposition believe in cutting VAT now? [Interruption.] She is not going to answer that question. I think we have seen the abandonment of the five-point plan—

[Andy Sawford]

rose—

[Mr Gauke]

Unless the hon. Gentleman is going to bring it back.

[Andy Sawford]

One of the frustrations for my constituents is hearing the Government give highly political answers when they are being held to account. New clause 10 is important because it seeks to look at the impact of the measures in this spending round. The Minister says it is unnecessary, but if he looks at the contrast between the OBR forecast at the time of the 2010 spending review and real growth in the economy, he will see that it was wide of the mark and that our economy has been flatlining for the last three years. That is why we need to know the real implications.

[Mr Gauke]

If the hon. Gentleman accepts the OBR numbers, he really ought to accept the OBR analysis of why what he describes has not happened.

However, let me not go into that. Rather, let me turn to what appears to be the panacea coming from the Opposition, which is to say that we should borrow more in order to invest in capital infrastructure. It ignores the fact that the Darling plan—Labour’s plan to address the deficit partially—involved substantial cuts in capital spending. It also ignores the comments made by the right hon. Member for Edinburgh South West (Mr Darling) about some of the challenges of using infrastructure for pump-priming purposes. The argument also ignores the fact that we will be spending more on capital infrastructure as a proportion of GDP in this decade, a period of austerity, than in the previous decade, when the Government were throwing money around. It also ignores the measures that we have set out for delivering the biggest programme of road investment since the 1970s, for updating our rail networks, for securing our energy infrastructure, for investing more in science and innovation, for building new homes and schools, for establishing the single local growth fund, for expanding digital coverage and for investing in our flood defences.