Financial Transaction Tax and Economic and Monetary Union

Andy Sawford Excerpts

Tuesday 18th June 2013 Commons Chamber

[Greg Clark]

I shall say more about stamp duty shortly, but I am sure the hon. Lady, who I am sure is a student of these matters, will be aware that it was agreed at Pittsburgh in 2009 that the International Monetary Fund should conduct a study to establish whether there was an international basis for proceeding. It conducted that study, and found that there was no such basis.

I hope that, given the international concern about the proposed tax, the House understands that we have no choice but to challenge it. Not only are there numerous problems with the design, but the proposal flagrantly disregards the position of those who choose not to participate.

The hon. Member for Nottingham East pointed out that the Chancellor had said that we had no objection to the principle of a financial transaction tax. Of course that is the case. How could we possibly have an objection to a financial transaction tax, given that we in the United Kingdom have had one since 1694? It is called stamp duty, and it is very different from the proposed design of this tax. It contains, for instance, an exemption for intermediaries to avoid the “cascade effect”, whereby at every stage of a transaction a tax racks up throughout the chain. That has a very negative impact on the costs faced by savers and companies. We have no objection to levelling the playing field with countries, including France, that have recently adopted stamp duty-type taxes of one sort or another, but other countries, particularly the United States, are far from being close to a consensus. If the hon. Gentleman has taken an interest in the matter, he will know that President Obama and his Administration have described this development as very troubling.

Of course Britain will play a leading role in promoting global standards when it comes to taxes, but I think the whole House would acknowledge that, in international negotiations, we should focus on what will give us a realistic chance of making a big difference to people, rather than choose to divert effort and negotiating capital into what, given the views of others, would be simply a gesture.

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

The right hon. Gentleman is a fair-minded Minister when it comes to most matters on which I have dealt with him. I think he is right to say that it would be in the interests of this country to pursue a financial transaction tax—indeed, he has acknowledged that his party views it as such. Can he tell us how many times Ministers from our Government have made representations to the American Government on this matter, given the importance of financial services to both our economies?

[Greg Clark]

I am grateful to the hon. Gentleman for his kind words, but when we have a chance to participate in and lead international gatherings, we must decide where our negotiating capital or authority can best be deployed. The Prime Minister decided, correctly in my view, to pursue tax transparency at international level, through our leadership of the G8 and in other forums. I think that the hon. Gentleman, who is as fair-minded as he considers me to be, would be churlish not to acknowledge the considerable breakthrough achieved by the Prime Minister in recent months, and by the Chancellor before him in Mexico, in respect of tax transparency. I believe that that is an example of the palpable progress that even the Opposition should applaud.

Economic Growth

Andy Sawford Excerpts

Wednesday 15th May 2013 Commons Chamber

[Mr Osborne]

I will give way to whichever Labour MP can answer this question: do the Labour party rule out an in/out referendum on Europe?

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

It is six months to the day since the voters of Corby in east Northamptonshire delivered a damning verdict on the Government. The key issues in that by-election were not the preoccupations of the right wingers in the Chancellor’s Tory party, but jobs and health care in this country. But since the Chancellor is so keen to ask us questions, will he answer the question that the hon. Member for Basildon and Billericay (Mr Baron) answered very clearly, which is: if there were an in/out referendum tomorrow, how would the Chancellor vote?

[Mr Osborne]

The policy is this: change the European Union, seek a new settlement, then put that to the British people in a referendum. This debate has revealed that Labour cannot answer the simple question: does it rule out offering an in/out referendum before the next general election? If it cannot answer that question, it will not be listened to on this subject any more, and people will be very, very clear that the only way to get an in/out referendum on Europe is to have a Conservative Government after the next election, so people should vote Conservative in that election and make sure that they have their say.

--- Later in debate ---

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

I am pleased to have the opportunity to speak in this debate, albeit briefly. It is six months today since I was elected as the Member of Parliament for Corby in east Northamptonshire, which is an incredible honour. Fresh from those doorsteps, I can say that the people in my constituency told me that they wanted action on our economy and action to protect our vital local services. It is to address those areas of policy that they elected me to be their representative, and it is against those priorities that I have considered the Queen’s Speech.

Since the day I was elected six months ago, 324 more people in my constituency have been made unemployed. Sadly, the Chancellor has ignored the message that he was sent by my constituents. He continues to ignore the impact of his policies on my constituents. When this Government took office, 2,009 people were unemployed in my constituency. That was far too many people, but of course we were coming out of a global economic recession. The figure now stands at 2,852. Youth unemployment, which we know rose after the global economic recession—it was far too high and we were doing everything we could to reduce it, with programmes such as the future jobs fund—stood at 590 in my constituency when this Government took office. The figure is now 770. One more person in my constituency has become unemployed each day in the time that this Chancellor and this Prime Minister have been in office.

We have heard what keeps the people at the heart of this Government awake at night: they lie awake worrying about how to pay the school fees. Even if the coalition parties do not care about the tragedy of unemployment for the people who are out of work and their families in my constituency and in other constituencies, perhaps they could be encouraged to see the economic folly of their policies. This Government are spending £21 billion more on keeping people out of work, rather than introducing policies that help people to get back into work. I wish that instead of lying awake at night worrying about the school fees or the latest factions in the Eurosceptic right, they worried about the young unemployed people and the 2,800 people who are out of work and desperately looking for work in my constituency. I wish the Government would stop stigmatising those people and calling them shirkers, when I know how hard each and every one of them I meet and speak to on the doorsteps or in my surgeries is looking for work.

After three years, this Government have no answers. They have nothing to say. I wanted to see a jobs Bill that would put in place a compulsory jobs guarantee, a finance Bill to kick-start our economy and a consumers Bill. I also wanted to see measures to deal with the housing market. In particular, had I had more time today, I would have said more about the real potential of co-operative housing solutions. There are already important co-operative models in the rented sector, but we also need to introduce more intermediate market housing.

Finance (No. 2) Bill

Andy Sawford Excerpts

Wednesday 17th April 2013 Commons Chamber

[Chris Leslie]

My hon. Friend ought to know by now that this particular Treasury does not go in for assessments based on evidence. In fact, we are lucky that there was a fag packet on which the Chancellor could draw up his plan.

My hon. Friend needs to recognise that the Budget was not designed to deal with the needs of the economy, the housing market or the rural communities to which she has referred. It was designed entirely to save the Chancellor’s skin, and to support his ideological approach and the extreme austerity agenda that he has been pursuing. Because he had been failing on the deficit and borrowing, he decided to design a housing market intervention that fell below the line—that added up in terms of national debt, but did not affect his borrowing figures. The convoluted scheme that he created may have a series of perverse consequences, because it was not designed to meet the needs of housing or of the communities that we represent. It was designed merely for the Chancellor’s own convenience, in the light of his disappearing and diminishing personal prospects.

We all know, or at least Labour Members know, that housing is the bedrock of a stable community, strong families and economic progress, and that the adequacy of housing availability is crucial to our economic recovery. There should be a cross-party consensus on the need to help families to get a foot on the housing ladder and helping people to fulfil their aspirations and provide a decent foundation for the future. However, despite the warm words about housing that we have heard for the past three years, the Government’s record is poor, and the housing investment measures in this Budget—like those in previous Budgets—fall well short of what is needed and what Labour Members would advocate. What hope can there be for hard-working families who are struggling to get on to the housing ladder, given the current mismatch between supply and demand? House building has fallen, rents are rising, home ownership is becoming harder rather than easier so that the goal for young families is becoming less and less achievable, and homelessness has risen.

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

I agree with my hon. Friend’s assessment of the likelihood that the Government’s latest measures in the Bill will significantly improve people’s opportunities to buy their own homes or gain access to housing on the rental market. Are we right to take account of the Government’s track record over those three years when making such an assessment, and am I right in thinking that the Government have announced 300 housing measures which have caused the situation to become worse rather than better?

[Chris Leslie]

It could almost be said that there have been more announcements than new homes constructed under the present Administration. Let us consider a few of the schemes that they have announced.

My hon. Friend will recall the new homes bonus, which was part of the Government’s so-called localism agenda, because he and I have spent some time examining that particular set of policy options. The scheme, which the Government announced in 2010, was supposed to unleash growth and build at least 400,000 additional homes, but it has totally failed to deliver. The number of housing starts fell by 11% last year, to below 100,000—less than half the number required to meet housing need.

--- Later in debate ---

[Chris Leslie]

Setting aside the fact that there is probably the lowest number of Conservative MPs here in the Chamber today since 1923, they do not have room to criticise any previous Government on these issues, let alone the last Labour Government. We believe that there is a crying need for housing, which is one of the crucial foundations for future economic prosperity. It is about time Government Members recognised that they have had three years in power, and have their own record to defend. They have to take some responsibility for the decisions they have been supporting.

I do not know whether my hon. Friends recall the infrastructure guarantee scheme, a key feature of the summer before last. It was part of the Government’s emergency legislation, and they rushed it through Parliament. It was supposed to enable guarantees to underpin £40 billion of investment in infrastructure and £10 billion-worth of new homes, including 15,000 new affordable homes. However, so far as I can see—I am sure the Minister will intervene if I am wrong—not a single tangible penny of support from that scheme has been allocated for house building. I am happy to give way to the Minister if he wants to correct me.

[Andy Sawford]

Will my hon. Friend give way?

[Chris Leslie]

I am just waiting to see whether the Minister wants to intervene. [Interruption.] It seems that he does not, so I give way to my hon. Friend.

[Andy Sawford]

My hon. Friend questions the confidence we can have in voting on the measures in the Finance Bill, given the Government’s performance in the last three years, and rightly mentions their infrastructure guarantee scheme. According to my assessment, they have begun 15% of the 576 projects in the national infrastructure plan, so we have no reason to have any confidence in the measures in the Bill.

--- Later in debate ---

[Alison Seabeck]

My hon. Friend is right. I think we have to take the figures offered by the Government with a huge pinch of salt. Although I support any measure, as I am sure he would, to kick-start the housing market and enable young people, such as my daughter, to get on the housing ladder, I, like my Front-Bench colleagues, have serious concerns about the scheme.

[Andy Sawford]

My hon. Friend makes the point that we need to kick-start the housing market, and I think that all Labour Members agree. She talked about the chutzpah of the Government’s first Housing Minister, whom she challenged at the time, when she led for the Opposition. Is there not a contrast between the urgency of the measures that were rushed through Parliament when the coalition Government took office and the delay in the measures that they now say will make some kind of difference, which will take us through to January?

[Alison Seabeck]

My hon. Friend is right. There is a significant gap that will lead to a further trough in house building. It will certainly not lead to the boost that the Government expect as a result of introducing the scheme. Frankly, the scheme looks like another idea drawn up on the back of a cigarette packet, and we have seen too many of those. I think that this one, like others, whether in welfare, education or health, will have a number of unforeseen consequences.

Following the Budget, we now know that the Government’s mortgage scheme will not exclude people buying second homes. Although it might get some movement into the market, it will not solve the underlying problem and could well be abused. In areas such as the south-west, where we have a glut of second homes and where affordable homes are a rarity in some areas, introducing measures that could increase the opportunity for people to purchase second homes, as well as risking pushing up prices, is extremely dangerous. That could create severe price volatility in those areas and lead to the exact opposite of the intended outcome.

In Plymouth and the South Hams, we have the prospect of around 5,000 new homes in Sherford, all close to some of the most beautiful countryside and coast in the country. Many people will want to buy those homes, which opens the door to second home ownership. How many of those purchasers will want to buy to let? The Government say that they do not plan on the scheme being used by people who want to buy to let, but by using subterfuge it will be entirely possible for them to do exactly that. Will the Minister explain exactly what type of bureaucracy will need to be set up fully to ensure that the scheme is not abused by people who want to buy to let?

--- Later in debate ---

[Stephen Williams]

Thank you for calling me, Mr Hoyle. I am being called rather sooner than I imagined; indeed, I did not even necessarily imagine that I would be making a speech in full detail, but making use of my House of Commons Library notes I have hastily prepared something, particularly on new clause 5, which is a welcome innovation in many ways.

[Andy Sawford]

As the hon. Gentleman is not quite prepared to speak at the moment, perhaps I could help to give him some material for his response to the new clauses. Will he enlighten us on whether the Liberal Democrats might take this opportunity to support us in pushing forward a mansion tax, given that they did not do so last time?

[Stephen Williams]

I am happy to enlighten the hon. Gentleman, whose intervention falls into the category of a nice try. I think he is referring to the Opposition motion on this issue that we debated five or so weeks ago. The Government amendment to that motion made it crystal clear that, in the context of the coalition, my Conservative Front-Bench colleagues do not support the introduction of a mansion tax in this Parliament; indeed, it is not in the coalition agreement because we could not agree on it at that point. However, the Liberal Democrat part of the coalition does believe that a mansion tax should be introduced. We are happy to do the workings on it and happy to espouse it at every opportunity. It will be in our manifesto at the next general election, and subject to what happens in that election, when I am sure that negotiations may well take place again, perhaps we will have a different outcome. I welcome the fact that the Labour party, which emphatically rejected the principle of a mansion tax in the negotiations in 2010, now seems to be on the way towards conversion to the long-term Liberal Democrat train of thought on this issue.

I also hope that Conservative coalition colleagues might have a conversion between now and 2015. Some of them—in fact, a lot of them; we talk to each other rather more than we used to—whisper in my ear that they wished the Conservative party that embraced this policy. That applies particularly to Conservative MPs from the north of England—north of the line from the Severn to the Wash. Perhaps there are not very many £2 million properties in those constituencies. Nevertheless, a lot of Conservative MPs from outside the south-east of England have privately said to me that they wish the coalition would adopt this principle.

--- Later in debate ---

[Stephen Williams]

The hon. Gentleman, whom I quite like and respect—a feeling not shared universally among his colleagues—tempts me to comment on what might happen in the 2015 general election, on what discussions might take place in its aftermath and on what we might say during it. In 2015, the Liberal Democrats will say that we favour a mansion tax, with all the details we have already put on the table. I intend to publish a short paper that might help—it might do the Treasury’s job for it, making the new clause unnecessary—and which will flesh out what I am talking about. He said that Labour might benefit from taking more policies from the Liberal Democrats. We are all in politics to see our ideals, principles and policies put into practice, and if Labour wants to adopt more Liberal Democrat positions, instead of always saying we are wrong, the public might welcome that more grown-up attempt at consensus politics.

[Andy Sawford]

I do not understand something about the hon. Gentleman’s remarks. He has justified not voting for his own policy five weeks ago on the basis of an artfully crafted—I think he used those words—Government amendment that allowed the Liberal Democrats to wriggle out of it. But today there is no such amendment. He has challenged, very assertively, the depth of our new clause. If he is so confident in the depth of his own policies, why have the Liberal Democrats not tabled a new clause that he could vote for today?

[Stephen Williams]

I am happy to reveal now that I will not be supporting new clause 5 in the Division Lobby. That should not surprise the hon. Gentleman. I will not be supporting it, because it is not about the principle of introducing a mansion tax. It asks for a study. It asks the Treasury to do some work. These are busy people, with important work to do, and I do not want to waste their time. We do not want them to waste their time finessing badly thought-through Labour party proposals.

Finance (No. 2) Bill

Andy Sawford Excerpts

Monday 15th April 2013 Commons Chamber

[Mr Gauke]

I shall give way to the hon. Member for Corby (Andy Sawford), as I have not given way to him yet.

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

The Minister may be reluctant to offer real transparency on the impact of the Government’s changes because of the findings of the Institute for Fiscal Studies that the average family will be £891 a year worse off as a result of the cumulative effect of the changes under his Budgets over the past three years.

[Mr Gauke]

I do not recognise those numbers. We have taken steps to try to get the country out of a significant fiscal hole. We have taken steps to reduce the amount of tax that millions of households will pay as a consequence of the increase in personal allowance. We have reduced income tax for 25 million people. That is something we are proud of, and something that we did not see when the Opposition were in power.

--- Later in debate ---

[Chris Leslie]

I understand that the hon. Gentleman will be tabling amendments on that issue and look forward to seeing how he will frame them. I know that Ministers are looking forward to seeing those amendments, because they will spark a useful debate within the Government ranks. Personally, I do not think that is the best strategy. I think that it would be better to look at the damage his hon. Friends have been doing to the tax credits system. It is women and families, in particular, who are paying the price for the Chancellor’s economic mistakes. In fact, the Government have cut support for parents by reducing statutory maternity and paternity pay so that by 2015 it will be worth £180 less than it would have been had it been uprated in line with inflation. I think that the hon. Gentleman needs to look at that point. The Prime Minister once promised—I know that this is something the hon. Gentleman feels keenly—that he would lead the most family-friendly Government ever, but it is ordinary families across the country who are paying the price for the Government’s failed economic strategy.

The Finance Bill will make Britain less fair. We are definitely not all in this together. For example, let us look at the Government’s “shares for rights” scheme, set out in clause 54, which I know we will be considering again in the Chamber. The Government’s view of a fairer society is one in which businesses are allowed to force new employees to give up their rights at work, including the right not to be sacked unfairly and the right to redundancy pay, something so unpopular that even former Conservative Ministers voted against it in the House of Lords. It is not even as if the business community is asking for that power. Of the 184 businesses that responded to the official consultation, only three said that they wanted to use the scheme. Ministers are totally out of touch with employees and employers on that issue.

Whatever rosy picture the Minister tries to paint, the public can tell that living standards are falling, not rising. The Government just do not seem to understand how extreme austerity has hit consumer confidence, how it is sapping business confidence and how precipitous cuts and tax rises have had the opposite of their intended effect. Let us take the study published only last week by the Financial Times showing that they are harming the prospects of recovery for some of our most fragile local economies, especially in poorer areas of the country, by removing £19 billion of spending power from their residents. It is the regions of the UK most in need of regeneration and private sector investment that are feeling the heaviest impact.

[Andy Sawford]

My hon. Friend is making an incredibly important point about the uneven effects of the Government’s policies. In some parts of the country people have been able to return to work, according to the much-vaunted statistics on unemployment in recent months, but across East Northamptonshire 126 more people this year are on employment and support allowance because of the Government’s failure to get our economy growing overall and their particular failure to help those communities that have suffered most in recent years.

[Chris Leslie]

Where is the regional economic strategy from the Government? Where is their attempt to revitalise those parts of the country that have suffered most of all? I am sorry if I sound a little like Eeyore to Government Members, but somebody has to say, as my hon. Friends have been saying, that Government policies are just going to harm those parts of the country that are in desperate need of regeneration and will make the situation worse for them. My hon. Friend makes that point well.

--- Later in debate ---

[Chris Leslie]

Looking at the situation in the round, that is exactly the sort of welfare reform that we need. If we are going to get to the root of these problems, we must have serious reforms to our welfare system, and we need a Government who are serious about delivering them.

The Chancellor and his Ministers are not serious about solving these issues; all they want to do is to stoke up fear and prejudice, blame the unemployed and the welfare system, and deflect attention from their own woeful failures to repair public finances. Serious welfare reform has to be a continuous process to fit the modern circumstances of society. Reform is never just a “job done”, nor should it aim only at being headline-grabbing. We should crack down harder on fraud but also on tax evasion, we should better reflect the contributory principle, and above all, we should focus relentlessly on getting people back into work so that they are making a productive contribution while also paying taxes again to bring in those much needed revenues.

A Work programme where only 2% of participants find themselves in sustained employment is a humiliation for these Ministers. They should never have scrapped the new deal, and if they were genuine reformers they would immediately set out a compulsory jobs guarantee, using the repeat of the banker bonus tax to fund a minimum-wage job placement for all young people unemployed for a year, and using the money saved from reducing the pension tax relief for the richest 1% to fund a job for all adults who are long-term unemployed for two years or more. No excuses: if they turn down those decent and properly paid job opportunities, they should forfeit unemployment benefits. Languishing on the dole for the long term must end, but we need to treat those looking for work with respect and give them a decent and real job opportunity, not cast them aside.

[Andy Sawford]

My hon. Friend rightly highlights the importance of helping the long-term unemployed back to work and the new deal’s success relative to the Government’s Work programme, which is a contradiction in terms. Does he recognise that in my constituency, which, according to independent surveys, is the most difficult place in the country for young people to find work, we need approaches such as the future jobs fund, which the Government scrapped as one of their first acts of vandalism on coming into office? We need those programmes, which we have proposed.

[Chris Leslie]

This is the answer to Ministers who were saying earlier from a sedentary position, “Where are your policies?” The difference between the parties is that they do not understand that jobs, at the heart of welfare reform, are the way to get revenues flowing into the economy. If they neglect economic growth and do not recognise that growth has an effect on the wider prosperity of society as well as on public finances, they will never repair the deficit as they claimed they would, and they will never have the fairer society that the Minister had the cheek to mention when concluding his speech. Ministers talk about fairness: tell that to the families who are losing £891 this year—households who are in work—when at the same time they see these Ministers giving away £145 million in the Budget to hedge fund managers by abolishing stamp duty reserve tax on some unit trust investments; tell that to those who are forking out 20% VAT and losing hundreds of pounds through higher taxes while the banks are let off the hook; and tell that to our constituents who we see, all too frequently, left with only £60 per week to live on while Ministers lavish on millionaires an average £100,000 tax cut in this financial year by scrapping the 50p top rate.

The Chancellor either does not understand fairness or does not care that he is creating unfairness. The Finance Bill will make the rich richer but do nothing to help the vast majority to secure a better standard of living. Worse still, the Bill will harm the prospects for our economy this year. Just at the moment we need measures to stimulate growth, the Government have produced this misguided Bill. They give a little away with one hand but take away so much more with the other. Their tax rises and cuts more than offset what they have promised in several years’ time on child care or changes to the personal allowance. Taking a penny off a pint of beer does not go very far when they have added 5p a pint through higher VAT.

Why is this such an inappropriate Bill? It is because the Chancellor does not prioritise the British economy or the prosperity of the British people. His No. 1 priority is himself: his own political reputation. It is all about reviving his own fortunes and trying to shore up his ideological credentials. This Budget and this Finance Bill were not about anyone else’s job but the Chancellor’s. That explains the fudging of the public accounts to make it look as though the deficit was falling when it is plainly as high as the year before. It explains the Chancellor’s refusal to budge from a failing strategy in case he had to admit his mistakes and swallow his pride, it explains the ever-widening net of blame for why things have fallen so off course, and it explains why the country’s fortunes have been downgraded while he carries on regardless. It is time that the Chancellor’s reputation was not the be-all and end-all of Treasury policy. It is time that we put the boost that our economy needs at the heart of everything we do. This Bill is bereft of the bold steps we need to kick-start Britain’s economy. I urge my hon. Friends to oppose it because Britain deserves better.

--- Later in debate ---

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

If there was one test that the Government put in place from the day that they got into power, it was reducing the deficit. Three years on, what do we see? Borrowing is increasing by £245 billion and there is no chance of the deficit being paid off by 2015. By 2016-17, debt as a ratio of GDP will be 85.4%. Those are damning figures.

On 23 April 2012, the Prime Minister said:

“We’re involved in an economic rescue mission, but we’re not just a bunch of accountants dealing with a deficit, there’s also a driving passion and vision to change this country and make it much more on the side of hard-working people who do the right thing.”

Unfortunately, those who work hard and play by the rules have seen the top earners in society get a tax cut of 5p. I will not denigrate success: there is nothing wrong with people striving to work hard and enjoy the fruits of their labour; aspiration is what the party I represent is about and it is something that we should believe in. However, if the Government could find a tax cut of 5p for the highest earners, why could they not do it for the middle-income earners, for the families who are worried about their jobs and for the people sitting around their kitchen tables today who see the price of their groceries going up all the time, inflation going up and real wages dropping by 2.4%? Who is standing up for them? Nobody.

We hear wonderful words and statistics from Government Members, but the simple fact is this: we are still stuck in the grip of an economic theory that failed. We were told that tax cuts for the very rich would trickle down through society. We were told that the highest earners would somehow create jobs. What did we see by the end of the ’80s? We saw a record recession in 1990, with more houses repossessed and more businesses going bust than ever before, all because of the belief that we should be on the side of those who ride in limousines, rather than those who go to work every day in their vans.

I believe in one thing. It may be old-fashioned, but I believe that work is the only way out of poverty and the only way to reduce the ills of this country. Having people in work and paying their taxes is the only way to reduce not only the deficit, but the national debt. It is up to this Government and to any Government, whether they be red, blue, yellow or whatever blue and yellow are when they come together, to create jobs and to reduce all the barriers to people getting into work.

What does the Bill do? We have heard Government Members lauding the right to buy scheme. We have heard them talk about getting more people on the property ladder, even though rents are through the roof and it is hard to get a deposit. The average age of a person buying their first house is now 37. At that age, my mother and father had already had two children and got divorced—they had already lived their life. Now, people of that age are still struggling to get on the ladder.

What is the problem? It is not home ownership or high rents, but the lack of housing in this country. Instead of following the pledge of the Labour party to build 100,000 new houses using the sell-off of the 4G spectrum, the Government have ignored the problem completely. How many people will take advantage of the right to buy scheme? Will it go on failing like it is? Only 1,500 people took advantage of it last year. That is not a scheme that will create a nation of home owners; all it does is provide warm words. Whether we are on the right or the left, we have to get to a point in this country where the best ideas are used. Surely, the best idea is to use the money from the 4G spectrum to invest in homes and thereby create jobs.

The next matter that I want to talk about is barriers to work. We can quote statistics all we want, but the simple fact, as Harold Wilson said, is that it does not matter what the employment rate is in the country; for an unemployed person, the unemployment rate is 100%. Most of the people with children whom I talk to in my surgery and around my constituency say that the biggest barrier to getting back to work is child care issues. That is the elephant in the room. We can talk about job creation schemes all we want, but if people have child care issues, their priority is to look after their child.

On 19 March, a Treasury press release lauded the

“New scheme to bring tax-free childcare for 2.5 million working families”.

When I saw that, I applauded it and thought that it was the way forward. However, I then found out that the scheme will not come in until 2015. That means that people who have child care issues now face cuts to their child tax credit. A family with two children have already seen a cut of £1,500 a year in their child care funding. There is not only a cut in child care funding; since 2010, there are 400 fewer Sure Start centres and early years budgets have been slashed. That affects the economy, because if parents cannot go back to work, whether they are mums or dads, it adds to the welfare bill. I genuinely believe that it is economic madness to cut jobs or not allow people to go back into work if it creates a welfare bill that adds more and more to the deficit.

I will move on to another barrier to work. Like many hon. Members, I am bombarded by e-mails and letters from the FairFuelUK campaign. That must be the campaign from which I have received the most e-mails, letters and communications. However, those communications are coming not from a national campaign, but from the ordinary motorist in work. He is struggling to get to work. Again, the Government laud their freezing of petrol duty in September and say that they are on the side of hard-working families and people who need their car for work.

[Andy Sawford]

Does my hon. Friend agree that if the Government had taken the sensible advice of shadow Treasury Ministers to cut VAT, that would have provided much more significant help with the price of fuel than their small offering?

[Chris Evans]

I thank my hon. Friend, because I was building up to that point.

The Conservatives like to tell people that they are the party of low taxation. They might have cut income tax in the ’80s, and cut it now from 50p to 45p, but the one thing they have used over and over again is value added tax. Under the Conservatives, VAT has risen from 15% to 17.5% to 20% as it is now. That is the tool they have always used. It is all very well someone being taxed on what they spend or buy, but everybody has to pay VAT, whether they are a struggling pensioner, a student who needs clothes or equipment for university, or a single parent. Everybody has to pay VAT, whether they are a duke or on the bins.

When VAT is put on petrol, it is instantly put up by 3p. The Government’s proposal means absolutely nothing. This Government could show some bravery and leadership by reducing VAT. I know they will say that once VAT has been put on some goods it has to stay, but that does not mean it has to stay at 20%. When the Labour party was in power in 1997, we reduced VAT on fuel bills to 5%. It has been done before; a precedent has been set and it can be done again.

When I look around my constituency I see so many hard-working people who are being squeezed. The most heinous thing, which I hear all the time, is people being demonised because they claim benefits, even though six out of 10 people who claim benefits are in work. That says one thing: work is not paying. What do the Government do? They make a tiny increase this week to the minimum wage. For me, the minimum wage is the cornerstone of welfare reform—a decent living wage. I am sick to death and tired of hearing my constituents be demonised and criminalised because they find themselves unemployed. They are all pushed together in sweeping statements; they are called scroungers, and being from the valleys that hurts me, because I know how proud is the tradition of working. That is the most heinous thing.

One thing the Government could do to prove that we are—to use a phrase that has not been heard for the past two years—“all in this together” is repeal the bedroom tax. That is close to my heart, because the average person in Islwyn will pay an extra £91 for having an extra bedroom. There will be pensioners who have lived in the same council house all their lives, brought up a family and made a home, but who are being kicked out because they have a three-bedroom house. What are they to do—bring in a lodger or someone they do not know? No. In my constituency of Islwyn in Caerphilly county borough, 80% of my constituents who are renting will be affected for the simple reason that in 1945 the Labour Government did not build council houses just to house people: we built family homes. We built two and three-bedroom houses in which families could grow and thrive in a safe environment. That was a cornerstone of Aneurin Bevan’s vision as Housing Minister—a contribution that people often forget.

I am concerned that ordinary people are getting squeezed all the time. The Finance Bill represents an opportunity for the Government to show that they can be caring and compassionate, but this opportunity has been wasted. It was not a steady-as-you-go, as-you-were Budget, and the figures bear out the situation. Growth in this country is anaemic; it is flatlining and needs investment. The Prime Minister’s mantra at Prime Minister’s questions every week is the same: “All Labour wants to do is borrow more money; it wants to go the same way as Greece and spend it all.” To me, however, it is an absolute no-brainer. We are already borrowing £245 billion, so what is wrong with trying to invest that in creating jobs and building new houses?

I oppose the Second Reading of this Bill because it does nothing for the people we seek to represent. This is not about steady-as-you-go; the Government have failed in their primary aim of reducing the deficit, and therefore the Bill does not deserve a Second Reading.

--- Later in debate ---

[David Rutley]

The debate is about sustainable economic growth, and if we look at the record of the 13 years of the previous Labour Government and their promise of no return to boom and bust, the facts speak for themselves.

[Andy Sawford]

What is it about 63 consecutive quarters of economic growth that the hon. Gentleman does not recognise as a period of prosperity in this country?

[David Rutley]

As a member of the Treasury Select Committee, I have had the privilege of interviewing and putting to the test various former permanent secretaries. Lord Turnbull springs to mind. He worked in the Treasury under the Labour Government and supported Labour Ministers, and he is on record as saying that after those 63 successive quarters, what he called wishful thinking crept in—

--- Later in debate ---

[Andy Sawford]

You can’t even get to two quarters of growth—

[Mr Deputy Speaker (Mr Lindsay Hoyle)]

Order.

--- Later in debate ---

[David Rutley]

If the hon. Lady had listened, she would know that I did not say that. The phrase about wishful thinking came from Lord Turnbull—one of Labour’s permanent secretaries, speaking for himself. The groupthink that pervaded the Treasury at the time led to the tragic results that we are having to clear up, and the Bill is taking steps to do that.

The Bill is a fitting tribute. It will promote competition and reduce barriers to entry for the ambitious and aspirational people of this country, who simply want the chance to work hard, compete and get on. The Chancellor’s Budget speech made it clear that the Bill will be followed by future measures that continue these efforts to free enterprise and remove the roadblocks to economic growth. That is a clear commitment from the Government.

It is worth reflecting on what enterprise actually means. It does not mean that people are on their own as some critics allege. As John Donne wrote:

“No man is an island, entire of itself.”

He could have written the same thing about enterprise, because free-market economics is not an atomistic pursuit, but recognition that we all advance by pooling our comparative advantages in a common free economy. We should remind ourselves of the common value and purpose of enterprise as we lay the foundations for future growth. It is not about state intervention, as Opposition Members suggest.

Business transactions must involve at least two parties—the supplier and the consumer—and the very word “enterprise” is derived from joint undertakings: enter from the French “entre”, meaning “between”, and “prise” from “prendre,” to take. It is suggested, perhaps rather dubiously, that President George Bush once said, “The problem with the French is that they have no word for entrepreneur.” Forgive my French, Mr Deputy Speaker, but although we do not have a word for entrepreneur, we on the Government Benches understand the meaning of enterprise, which is literally the joint seizure of opportunity for mutual advantage. The Bill sets out how the Government will encourage it.

Enterprise is voluntary, and therefore it carries for suppliers involved in business the element, and excitement, of risk that consumers for the service or product may not be found. Suppliers need to be flexible to survive and thrive in competitive markets where consumers, even usually loyal ones, are free at any time to say no. That is why the Government need to ensure that there is the freedom to be flexible and the confidence to be bold for enterprise to thrive and succeed.

[Andy Sawford]

What specific measures in the Budget will give enterprise in my constituency the confidence to be bold?

[David Rutley]

The enterprise allowance, for example, enables—

--- Later in debate ---

[David Rutley]

It is sad to see such gloomy faces on the Opposition side of the Chamber. I accused the shadow Minister of being a bit Eeyore-like and I think it is catching on the Opposition Benches. Labour Members should cheer up a little and look at the reaction to the Budget. The Federation of Small Businesses says that it

“asked for a budget for small businesses and this is what has been delivered. This Budget opens the door for small firms to grow and create jobs.”

[Andy Sawford]

Would the hon. Gentleman write me a letter, which I could circulate among the young people in my constituency who are desperately trying to find work and the people hit by the bedroom tax who face poverty and homelessness, advising them to “cheer up a little”? Would he write to me in those terms? I would gladly circulate it and we could see what my constituents think.

[David Rutley]

In a spirit of co-operation I suggest that for a change the hon. Gentleman leaves Croydon—[Hon. Members: “ It is Corby.”] Wherever it may be —beginning with a C. The hon. Gentleman should come up to Macclesfield and see what we are doing with apprenticeships and our local college to encourage young people to get into work. It is about human endeavour and getting on with the job, not moaning and groaning as the Opposition are doing.

The Forum of Private Business speak of the Chancellor being “spot-on” with his “basic common sense” decision to freeze fuel duty. I hope Opposition Members at least welcome that. The Association of Convenience Stores welcomes measures that

“will benefit consumers and reduce some of the pressure on local shops.”

--- Later in debate ---

[David Rutley]

No, I have given way enough. We have all enjoyed the debate, but I shall now finish my speech.

In Macclesfield, we have one of the highest rates of self-employment in the UK, and among women Macclesfield has the highest rate of self-employment in the north-west. This year, the Budget was above all for small businesses and entrepreneurs like them. The Bill is the first step to realising the series of measures that will be delivered by the Government, such as the widely welcomed—at least on the Government Benches—employment allowance.

Not just small businesses welcome the return to a solidly pro-enterprise, pro-competition, lower tax environment. The Institute of Directors and the CBI both welcomed the clear progress in the Chancellor’s continual, and continuing, efforts to lower corporation tax. Clause 4 of the Bill provides for a corporation tax rate of 21% in financial year 2014, which is the lowest in the G7. Perhaps it is part of Lady Thatcher’s legacy that these days clause 4 is something to be celebrated as useful to the economy and progressive for growth.

The Chancellor has gone one better. Under clause 6, we will see Britain’s main rate of corporation tax reduced to just 20% in financial year 2015, the lowest in the G20. This is a clear, determined agenda to incentivise business activity for jobs and growth. It is precisely that clarity and determination that gives businesses certainty and confidence that enterprise is worth conducting in the UK, and that, as the Chancellor said, Britain is once again open for business.

It is a mark of how vastly over-complicated our tax system has been allowed to become that there are far too many opportunities to avoid and even evade taxation, and that very complexity has made a general anti-abuse rule inevitable. Of course, the Government are well aware that they must take great care that such a rule does not undermine the certainty and confidence in the tax system that we need. It would be sad if the GAAR became an excuse for HMRC to become sloppy when drawing up future tax rules in the knowledge that, if it did not get the desired results, it could always apply the rule. I am sure that the Treasury is determined to avoid such a situation.

I am pleased by the Government’s commitment to simplifying the tax system at the same time that the anti-abuse rule is being planned. Fighting complexity with complexity is not a long-term solution, so I look forward to progress on simplification. It is encouraging, and to the Chancellor’s credit, that in just three years the Government have taken the UK from near the bottom of the KPMG league table of competitive tax regimes to the top. That is progress, and I applaud it. Ministers should also be praised for not only explicitly recognising that there is yet more to be done, but setting a path for getting that done, not least by increasing the personal allowance to £9,440 this tax year, with the clear target of hitting £10,000 next year.

The Bill includes a significant commitment under schedule 14 to research and development credits, even for those companies with no corporation tax liability. The Chancellor’s decision to increase to 10% the rate of credit for above-the-line R and D, as well as the new £700 million annual patent box, will help to tackle under-investment in knowledge-based industries. That is important for the life sciences sector, which is critical to Macclesfield’s local economy and vital for our national competitiveness. Those measures are in addition to the tenfold two-year increase in the annual investment allowance for qualifying investments in plant and machinery from £25,000 to £250,000, which will boost much needed business capital investment.

The global race is not a sprint, but a marathon, and the Government are wise to recognise that it will be easier for businesses to run without hurdles and barriers in their way. To be blunt, if we want businesses to thrive, we need to tax them less and minimise the bureaucratic burden. The result of that approach is real sustainable growth and new employment opportunities. This is not about Thatcherite dogma; it is actually happening and it is delivering positive results, such as by enabling private sector employment growth of more than 1 million jobs since 2010. That is a great achievement for the Government—

[Andy Sawford]

Part-time jobs.

[David Rutley]

They are real jobs—not public sector jobs funded by taxpayers’ money, but ongoing and sustainable private sector jobs.

--- Later in debate ---

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

Members have been addressing two questions in this debate: first, where we find ourselves and why; and, secondly, what we should do about it. In 2008, 63 consecutive quarters of economic growth in this country came to an end with the onset of a global recession that started in America and spread quickly across the world. The Conservatives and their supporters at the Daily Mail like to blame the previous Labour Government for the global crash. Was it Labour that was selling the sub-prime mortgages in America? Of course not.

The response to that unprecedented crisis was to take very significant action, first to arrest it and then to bring some relative stability. Crucially, the previous Government chose to invest in our economy to keep businesses growing and to keep people in work.

[Jonathan Edwards]

Does the hon. Gentleman acknowledge that economic performance prior to the crash was based on unsustainable personal debt bubbles and asset price bubbles, with personal debt in the UK equivalent to 100% of gross value added—far higher than in any other modern democracy?

--- Later in debate ---

[Andy Sawford]

The previous Labour Government’s record of 63 consecutive quarters of growth is absolutely unarguable. Of course, lessons must be learned by Members in all parts of the House, including those in my own party, about the economy at the time, and I will go on to say a little more about that.

The alternative to investing in our economy to keep businesses going and to keep people in work was to go back to the experiences of the recessions in the early 1980s and early 1990s. Twice, 3 million people were unemployed, with the country being told that unemployment was a price worth paying. My own family know that it was not. They were impacted when the steelworks at Corby closed in 1980 and 10,000 people were put on the dole. People from communities such as mine, where the films “Brassed Off” and “Billy Elliot” seem more like documentaries, know the effects of unemployment and know that it is a personal tragedy for families and communities and is never a price worth paying. This year alone, 126 more people in my constituency are claiming employment and support allowance.

Let us not forget that the Tories supported the measures that we took in the recession—the same Tories who had warned against more regulation of the banks. Now they want to rewrite history. They are convincing people that our investment and the borrowing that underpinned it was more like a credit card debt than a mortgage. One of those is short term, bad debt and irresponsible; the other is about investing in our future. It is about the decisions that responsible businesses make to borrow to invest—the decisions that responsible Governments all around the world, and the UK Government, made in the depths of that last recession.

To win an election, the Prime Minister claimed that he would “balance the books” by 2015. In 2010 he told the CBI that his Government had a plan that would secure the credit rating. So what has happened— what did they do? They cancelled the future jobs fund, which was really helping to get people back to work in my constituency. I know that was happening in Northamptonshire because I was close to that work. They stopped the Building Schools for the Future project, scrapping plans for 715 schools to have improvements, including Lodge Park in my own constituency. That affected not only the students and their parents and families, and future opportunities to develop skills in the town, but the people who were going to build the new unit at the school. The children are now in mobile classrooms, which I am ashamed to see in one of the wealthiest countries in the world.

This Government took all the life and confidence out of an economy that was growing when they inherited it from the previous Labour Government. They stopped housing developments such as Priors Hall in my constituency, on which a lot of our economic future rested. Tata Steel laid off people in my constituency in 2011, and when I asked why I was told not only that it was about operating in a challenging global environment and about energy prices, but that all of the tubes from Corby went into infrastructure projects around the country which had been hugely affected by the stopping of road-building programmes and Building Schools for the Future.

[Pamela Nash]

My hon. Friend may know that we had a similar problem in my area, north Lanarkshire, with our Tata Steel site and public sector projects, so the steel was bought from abroad.

[Andy Sawford]

My hon. Friend is absolutely right. The story of the decision to close the steelworks in Corby in 1980 has now come full circle and been shown to be short-sighted, given that the steel is now coming from Port Talbot. Some of Tata’s steel is now coming from abroad, because it is so difficult for it to compete in this country. I called for measures in the Budget—I spoke about this in a recent Adjournment debate—to support the steel industry in the UK in order to mitigate the impact of high energy prices around the world. The contrast between this country and others is stark and instructive of this Government’s approach. Germany, where the economy is growing—it now has more than 3% growth—has a £5 billion mitigation package for energy intensive companies, while this country has a £250 million mitigation package and we are not even clear about its details.

[Stephen Doughty (Cardiff South and Penarth) (Lab/Co-op)]

My hon. Friend led a strong Adjournment debate recently and I was proud to join him in it. Does he not find it extraordinary that the Business Secretary admitted in the New Statesman in March that

“the fiscal consolidation achieved through reduced capital spending has had economic consequences”?

The Government’s lack of coherence is extraordinary: one side is arguing, like us, for increased infrastructure spending, while the others are doing little about it.

[Andy Sawford]

My hon. Friend is absolutely right and I will say more later about capital spending in this country.

It was not just Tata Steel that shed jobs in my constituency; Argos also did so and Aquascutum closed. Those companies were affected because nobody had any confidence and nobody was spending. That happened because the Government chose—they made a deliberate political choice—to talk our economy down. It was a political strategy without any real regard for the damaging effects it would have on our economy. When they got hold of the levers of power, they revealed their real purpose: an ideological attack on the state and on the poorest in our society.

The accumulative impact of the Government’s Budgets, including this one, will have an effect on individuals. The Institute for Fiscal Studies tells us that the average family will be £891 a year worse off, but that figure tells only part of the story. The other part is how the cuts to services will impact on all residents, particularly those who most rely on public services. Buses have been cut in my constituency, the ambulance station in Corby is due to close and children’s services, particularly for those with special educational needs and their families, have been decimated. Respite care has been lost and there are fewer police and police community support officers than when this Government came to office, and there is a real threat of cuts to my local hospital. The huge impact of those cuts to services on families means that they are worse off.

The Government’s policies have impacted on those who most needed their help—the children plunged into poverty and the disabled people hit by the bedroom tax and the pernicious Atos reviews that this Government have failed to intervene in and stop. Those out of work and unemployed in my constituency have been stigmatised by this Government and left desperately chasing the few vacancies that exist.

The Government say that there are more people in work, but that is not true in my constituency. Moreover, what sorts of jobs are being created? They are part-time, low-paid jobs for underemployed people in my constituency —fragile employment for people working through agencies on zero-hour contracts and on the margins of the labour market, there to be exploited. And the Government say that that is okay.

[Mr Russell Brown (Dumfries and Galloway) (Lab)]

In the last couple of weeks, I received an answer from the Cabinet Office on the private sector jobs that have been created. The Government now talk about 1.25 million private sector jobs and for a long time spoke about 1 million. Is my hon. Friend surprised to learn that, in fact, between June 2010 and September 2012, the figure is only 750,000?

[Andy Sawford]

I thank my hon. Friend for bringing the real figures to the House. He is right that the Government are grossly exaggerating the total number of private sector jobs that have been created and, crucially, the nature of those jobs.

[Mel Stride (Central Devon) (Con)]

The hon. Gentleman is right to raise the huge problem of unemployment under all Governments. Is he aware that in his constituency, between 2005 and 2010—that is, under the last Government —the number of jobseeker’s allowance claimants rose by 103%, whereas the number has risen by just 8% for the duration of this Government?

[Andy Sawford]

If the hon. Gentleman is being honest, he knows that the figures that he is quoting reflect the impact of a huge global economic crash in 2008, which had a big impact on my constituency, not least because it is a manufacturing constituency. [Interruption.] The Economic Secretary is suggesting that because the figures go from 2005 to 2010, they reflect the Government’s record across the whole period. Government Members fail to say that the economy was growing for much of that time. We all acknowledge that a global crash happened in 2008 and that that caused unemployment. The critical thing is what we do about it.

[Pamela Nash]

Is the key point not that unemployment in this country is now higher than when the Government took office?

[Andy Sawford]

My hon. Friend is right. Of course, unemployment is also higher in Corby. My constituents will think that Government Members have a cheek to raise those figures in the way they have today.

My constituents will be appalled by the comments of the hon. Member for Macclesfield (David Rutley) and others, who have told them to stop whingeing and moaning. They are talking about people who are trying desperately to find work and whose situation has been made worse, not better, by this Government. The Tories do not understand the lives of those people. They do not understand the margins of the labour market or the margins that many of the poorest in our society live on. They understand the marginal impact of their millionaires’ tax cut, which is about £100,000—after all, many of them will get it—but they do not understand the marginal impact of their policies on people who have very little to live on. Fourteen pounds may be half a bottle of claret to the Chancellor, but for people in my constituency, it means choices about food, heating, fuel and new shoes for the kids.

The Government’s Budget was a chance to get back on track after three wasted years in which the UK went back into recession and lost its credit rating. The best that the Chancellor could do was to say that he hoped that we would not have another quarter of negative growth. He has his fingers crossed that he does not become the triple-dip Chancellor. Borrowing is going up not just this year, but next year and the year after. We are now told that there will be deeper cuts to services and the living standards of people in this country. While George and his friends get a tax cut, my constituents are told that things will get worse. Since the Chancellor’s spending review in 2010, the UK has been 18th out of the G20 countries in terms of growth. It is worse than the USA, Germany, France and Turkey, but the Government refuse to change course and recognise that we will get on track only if we get our economy growing.

I was incredibly disappointed that in the Finance Bill the Government rejected our proposals to use the 4G receipts to fund house building, for a proper tax on bankers’ bonuses to fund a jobs guarantee for young people and to bring forward infrastructure investment. Only 14% of the 576 projects in the Government’s national infrastructure plan have started.

In their first three years, the Government spent £12.8 billion less on infrastructure than the previous Government had planned to spend. The Chancellor has been told by the International Monetary Fund, the CBI, Sir John Armitt, some of his Back Benchers and Lord Heseltine that the Government should boost the economy with greater infrastructure spending. They make announcements such as that about the A14—part of which runs through my constituency—which is now not set to start until 2018. The electrification of east midlands trains to Corby was announced with great fanfare. What will fund it? It is the same amount of money in the next Parliament that the Government cut from what we would have spent on infrastructure in this Parliament to upgrade our railways.

In the previous Government’s plan for 2012-13, we were due to spend £48.4 billion this year on infrastructure. This Government say they will spend £41.7 billion on infrastructure. We were planning to halve the deficit during this Parliament, but this Government said that they wanted to go further and eliminate the structural deficit. What is the effect of that? They are spending £13 billion less on infrastructure—precisely what we need to get our economy growing—and £13 billion more on social security. It all sounds familiar to people in my constituency who remember that when Margaret Thatcher, the architect of this kind of trickle-down Reaganomics, came to office, 2 million people were on out-of-work benefits. When she left office, 6 million people were on out-of-work benefits and we see it all again. The rich are getting richer, the poor poorer, and many are paying the price of economic and social failure. Meanwhile, in countries such as America, which should be instructive to the Government if only they would raise their sights, the stimulus has been maintained and there has been growth of more than 4%.

What do I want now? If the Government will not listen to my hon. Friends as they present the way forward for our economy nationally, I want action locally. The south east midlands local enterprise partnership bid in my constituency is focused on housing, and at last money from the Government’s Get Britain Building fund has gone to meet some of the infrastructure gap, particularly as the council and others have had to renegotiate section 106 agreements, which became too expensive for developers to move forward. After three years, some of that money has just begun to trickle to my constituency. If the Government support the SEMLEP bid, there is a real opportunity to substantially reduce the gap in budgets for infrastructure, which we need now that we are renegotiating the section 106 agreements. We are not asking for additional money; we are asking for flexibility such as an increase in the borrowing cap.

I want help for local firms—I mentioned Tata Steel and I have invited the Minister to come and help—and I want targeted help for young unemployed people in my constituency. The City Minister, the right hon. Member for Tunbridge Wells (Greg Clark), for whom I have a great deal of time, has shown that, relative to his colleagues across Government, he is willing to take action and listen to local areas. He has taken action in cities around the UK to help fund social innovation. I would like the Government to talk to people in Corby about how we can help young people in the most difficult place in the country in which to get back to work.

I hope that the Government will listen and stop telling my constituents to stop whingeing. They must stop stigmatising those most affected by their wasted three years, and stop trying to divide people at a time when we need the country to come together with a Government who are backing our workers and businesses to get Britain growing again.

Economic Policy

Andy Sawford Excerpts

Monday 25th February 2013 Commons Chamber

[Mr Osborne]

That is a call for yet more borrowing. At least the hon. Gentleman is happy to advocate that in the House of Commons, whereas the shadow Chancellor dare not talk about his economic policy.

The capital spending in the plans that we inherited from the last Labour Cabinet—which, presumably, were agreed to by all members of that Cabinet—was lower than the capital spending in the plans that we have now. Why? Because we have made difficult decisions on welfare bills and other areas of resource spending in order to invest in capital. As for housing, with schemes such as Firstbuy and NewBuy and the new housing guarantees, we are getting behind the housing industry. [Interruption.] The hon. Gentleman says “Going down”, but the rate of housing starts under the last Labour Government was the lowest since the 1920s. That is the situation with which they left us.

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

Only a few months ago, people in my constituency gave a verdict on who they thought was responsible for the state of our economy. The number of jobseeker’s allowance claimants in my constituency has risen by 127 in the last two months. It is the toughest place in the country for young people to find work. Does the Chancellor realise just how out of touch he will sound to all those people who desperately want a Government who are on their side? How can he look foreign investors in the face and tell them to invest in my constituency and others, given that he has now failed the test that he set himself?

[Mr Osborne]

Foreign investors are investing in Britain, and the hon. Gentleman should welcome that. We are also investing in the east midlands—

[Andy Sawford]

Not in my constituency.

[Mr Osborne]

The hon. Gentleman says not in his constituency. He is the MP for Corby, and for 13 years people wanted the Corby link road, which is being constructed—

[Andy Sawford]

Where is it?

[Mr Osborne]

He asks where it is; it is being built at the moment. For 13 years people wanted that road and it was not produced, but it is now being produced under this Government.

Infrastructure

Andy Sawford Excerpts

Tuesday 12th February 2013 Commons Chamber

[Greg Clark]

The hon. Gentleman is a fair man. He will know that the plans to electrify the Great Western railway and the railways in the valleys represent an important investment—I am sure he would acknowledge that—and a big contribution to the economic revival of Wales. It is very important that they should do that.

The divergence between London and the south-east, and the rest of the country is not a record of which to be proud. In the most difficult of circumstances, this Government are having to find the money to build the infrastructure that should already have been put in place during these years of plenty, speeding Britain to recovery. By failing to control current spending in the good times, the legacy of the previous Labour Government was not just a record deficit, but an infrastructure backlog and reduced capital budgets to pay for it. We need to invest more in infrastructure. Nick Pearce, of Labour’s favourite think-tank, the Institute for Public Policy Research, has said that the

“cut…was a decision of the last Labour government which the Coalition inherited”.

We need to remember that successful infrastructure investment does not begin with the allocation of budgets, but with clear-sighted, strategic decision making.

Let me give just two examples of the way in which Labour, over 13 years, failed to address the strategic need for leadership on infrastructure, the first of which relates to roads. When Labour was first elected, John Prescott was appointed as Secretary of State and soon took charge of transport. One of his first actions was to cancel almost all approved road schemes, all across the country, including the dualling of the A21 in my constituency. The reason was not that the Government did not have the cash. I am pleased to say that my right hon. and learned Friend the Member for Rushcliffe (Mr Clarke) had left the economy in rude health and so they were in a good position. These road schemes were cancelled, along with many others, because John Prescott had fallen under the spell of a doctrine that said, “If you build more roads, they will only attract more traffic, so you should not build them in the first place.”

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

As I have told the Minister before, Corby, in east Northamptonshire, is the most difficult place in the country for a young person to find work. The level of youth unemployment in my constituency has rocketed. Does he recognise how completely out of touch he looks to those young people when he talks about policy 15 years ago, whatever its rights and wrongs, rather than addressing the here and now? He talks about having the political will to take forward infrastructure projects. Was John Longworth wrong—I think he was right—when he said recently, speaking for the CBI, that this Government lack the political will to drive through infrastructure projects?

[Greg Clark]

The hon. Gentleman will know that infrastructure is particularly important to Corby, and the link road that is to be built there is very important to that. He will also know that the increase in youth unemployment of 17% that happened under the Government he supported has contributed to the situation he describes.

Let me address the point of strategic leadership. How can we have long-term leadership and long-term vision for the future of our country, when important economic contributions to success, such as road schemes, are cancelled? That lunacy persisted for years, as our roads became more congested, to the detriment of the environment as well as the economy. It was not until years had passed that that nonsense was recanted by Lord Prescott, the then Deputy Prime Minister, and we decided that, after all, more traffic required more and better roads.

--- Later in debate ---

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

Thank you, Mr Deputy Speaker, for the opportunity to speak in this important debate. I congratulate my hon. Friend the Member for Leeds West (Rachel Reeves) on bringing forward this debate on what the Opposition know to be an incredibly important and urgent issue.

I disagree fundamentally with the hon. Member for St Albans (Mrs Main) when she says that we need to go slowly in bringing forward infrastructure in this country. Given the desperate state of our economy and the number of people who are desperately looking for work, we need a great deal of urgency from the Government, particularly given their appalling record over the past two and a half years.

It was interesting that the Financial Secretary chose to speak mainly about policies from the past. Most of his speech was actually about the last century. Some of the people who are now suffering, such as those who want school places in my constituency while the Government are failing to bring forward infrastructure investment, were not even born at the time of the decisions that he talked about.

The Financial Secretary took on the former Deputy Prime Minister, John Prescott, in particular. I was at the opening of the new St Pancras station when John Prescott was praised by Lord Heseltine for his fantastic contribution to ensuring that the channel tunnel rail link went ahead and that that fantastic building was saved for the nation. The many people who arrived at that station ahead of the Olympics saw what we can do in this country when we commit ourselves to major infrastructure projects. I agree with the CBI and the many other people, including some of the economists who previously endorsed this Government’s plans, who say that this Government lack the political will to take forward major infrastructure projects.

When people get on the train at St Pancras, which John Prescott and the last Labour Government did so much to make possible, they can now come to Corby and see the new railway station that has been built there. If the Minister tells any one of the commuters or the people who use that line for leisure day in and day out that the last Labour Government did not do enough to improve rail services in my constituency, they will laugh him out of town on the next train.

We want to do more and to go further. We want to have northbound routes on that railway line. The other week, the Government made an announcement that was typical of their infrastructure announcements. They said that they were going to electrify the midland main line with £1 billion of expenditure. However, the figure was exactly the same as the amount of money they disastrously took out of the plans for infrastructure spending to which the previous Government had committed in this Parliament. They give us jam tomorrow.

Earlier, the Economic Secretary whispered to the Financial Secretary about the improvement to the A43 in my constituency. Ministers talk about that proudly, but nobody was fooled when that announcement was made—it was just weeks before a by-election. I was surprised there was no announcement today of an Eastleigh bypass or orbital route, a south coast Hampshire link road or some other such potential bribe. Perhaps the coalition parties cannot agree on what appropriate bribe to give.

Labour can give hope to the people of Eastleigh because we have a plan—a five-point plan for jobs and growth. We have talked—[Interruption.] You can laugh.

[Mr Deputy Speaker (Mr Nigel Evans)]

Order. I think the hon. Gentleman meant to say, “The Financial Secretary can laugh.”

[Andy Sawford]

Some young people from my constituency were here yesterday to learn about parliamentary etiquette —I should have taken more tips, Mr Deputy Speaker. If the Financial Secretary had laughed in front of those young people when I talked about the desperate need to invest in jobs and growth in this country, they would have given him very little credit indeed.

There is a fanciful picture of how the Labour Government did not invest in infrastructure, but hon. Members should come to Corby and east Northamptonshire and drive past the schools that were built there, such as the brand-new Kingswood school, which is a fantastic facility. My nieces get a fantastic education at the Corby business academy—[Interruption.] The Economic Secretary says that we will pay for those projects, but a combination of funding from the public and private sector—[Interruption.] He should listen to bodies such as the Monetary Policy Committee, which says that we need to find ways of investing in infrastructure in this country.

[Gordon Birtwistle]

rose—

[Gordon Birtwistle]

No, I am not going to mention Eastleigh at all. Hon. Members are interested in the hon. Gentleman’s point on PFI—[Interruption.] No, he was talking about new colleges. Will he tell us when those massive infrastructure deals will be paid for? Will my grandchildren be paying for them?

[Andy Sawford]

The overwhelming majority of the investment in new children’s centres, schools and health improvement projects in my constituency was publicly funded. Government Members should remember that PFI was dreamt up by a previous Conservative Government, and that they did not oppose a single new school, children’s centre or hospital built by the Labour Government. If they were honest, they would have objected to them being built in the first place—or say they would close them down now. Let us have honesty on that.

[Bill Esterson]

My hon. Friend is right about the benefits of the new schools and children’s centres. A group of sixth-formers from Deyes high school were at an education event in the Palace earlier today. Their school building was due to be replaced under Building Schools for the Future, but they will not see it, and neither—more importantly—will their brothers and sisters. However, it would have been replaced under a Labour Government. I am sure that my hon. Friend agrees that that is the disgrace in what the current Government have done. They have cancelled the future in schools for many of our young people.

[Andy Sawford]

I absolutely agree. The planned rebuilding of Lodge Park school in my constituency under Building Schools for the Future was cancelled—one of the Government’s first acts. The Secretary of State for Education later apologised for his bungling and mishandling of that, but his apology means nothing to the young people whose education is suffering, or to the construction workers who otherwise would have had employment in my town. It is all part of the story of the past two years. This Government’s policies took Britain back into recession—one of only two G20 countries to go back into recession. The very people who counselled that Britain needed a plan to reduce its deficit over time—the previous Government set out a reasonable, sensible plan—are now telling the Government that they got it wrong and reduced the deficit too quickly, and that the plan has been hugely damaging to our economy. The Government’s economic arguments present a false divide between the public and private sectors. The public sector and the private sector are intimately interconnected in my constituency, as in any other. The Government create a false divide between the role of Government and Government spending and prospects for growth.

Corby and east Northamptonshire has a new railway station and new schools, and the new Tresham college building is a fantastic facility for young people. That investment helps companies such as AGI Amaray, which makes all the DVD boxes we have in our homes. It helps companies such as Tata Steel to recruit people with the skills they need. It helps innovative new start-ups such as KwikScreen—some people from that company were in Parliament yesterday and I visited them a few weeks ago—which is now selling all over the world. It helps them because we are investing in the young people they need to compete in the world. The Corby east midlands international swimming pool is an incredible investment of which the whole country can proud. The Leader of the Opposition went there with me to meet visiting international swimmers and to wonder at the facility. It is impressive to people looking to invest in the town and provides a wide range of facilities for local people, including ways of keeping them healthy, and we need a healthy population for the work force of the future.

All the good that Labour did for Corby contrasts with what is happening now. It is reasonable to contrast Government records, and important to do so when looking ahead. The slow-down in the market has had huge consequences for my community. We have one of the fastest growing populations in the country—it is set to double in the next 20 years. Little Stanion is a new development that, because the bottom dropped out of the housing market and the construction sector, has not yet reached the trigger point for the infrastructure it needs. I have talked to local people. They do not have the parks, play areas, public transport provision or the investment in schools and other facilities that they need. We need to get the economy growing. That is why, in my by-election, many people came out to vote for me on a cold, dark November evening. They voted because I made a pledge to support a jobs guarantee for young people, funded by a one-year national insurance tax break for small firms—I do not why the Government will not listen to that idea.

My hon. Friend the Member for Leeds West is absolutely right to press the Government for action to get young people back to work. There are specific projects in east Northamptonshire and Corby, such as the Chowns Mill roundabout, investment in the A45, the Rockingham northern orbital route, getting the Geddington road reopened again and broadband. The previous Government promised 2 megabit broadband for every household in my constituency by 2012, but those plans were cancelled. We are now hoping that that might happen by 2015, but it is all part of a picture for my constituents of jam tomorrow—the investment was removed just when it was most needed. The Government really should listen.

--- Later in debate ---

[Catherine McKinnell (Newcastle upon Tyne North) (Lab)]

This has been a good and thoughtful debate with Members on both sides of the House illustrating how important infrastructure projects are to their constituencies, to the wider region and to UK plc as a whole.

I want to highlight some of the more memorable moments in the debate. My hon. Friend the Member for Swansea West (Geraint Davies) summed up the Minister’s opening speech as a dismal display of dither and delay; I hope that I have paraphrased him correctly. The hon. Member for St Albans (Mrs Main) gave the Government’s position away by speaking up for dither and delay and cautioning against a mad dash for growth. One could not accuse the Government of that—it is more like a mad dash for the dip.

My hon. Friend the Member for Corby (Andy Sawford) spoke my mind when he expressed deep concern about the Government’s very backward-looking approach on this issue. He also made a passionate plea for more infrastructure investment in his area. My right hon. Friend the Member for Greenwich and Woolwich (Mr Raynsford) spoke passionately about High Speed 1—a major achievement by Labour in government—and set out his concerns about the lack of housing investment by this Government.

The hon. Member for Rochester and Strood (Mark Reckless) limited his comments to rail infrastructure. He claimed that that was because the Government’s infrastructure activities are too broad and varied, but I would argue that it is the only area they are taking any action on at all.

My hon. Friend the Member for Croydon North (Steve Reed) raised the crucial issue of youth unemployment, which the Government, with their complacent approach, seem to overlook too often. My hon. Friend the Member for Sefton Central (Bill Esterson) recalled the cancellation of Building Schools for the Future—the decision made so rashly by the Government on taking office that has impacted not only on children but, as we now know, on economic growth.

My hon. Friend the Member for Bishop Auckland (Helen Goodman) talked about the lack of investment in the north-east region, with 0.05% of Government investment being the north-east’s share to date and the Government’s decisions being driven by a political rather than an economic rationale. My right hon. Friend the Member for Tottenham (Mr Lammy) set out the desperate need for investment in London. He was seconded by my hon. Friend the Member for Edinburgh East (Sheila Gilmore), who cited the Mayor of London’s having called for much the same thing.

The majority of Members on whom I have commented are Labour Members. That is because we called this debate to raise the fundamental role that infrastructure projects could and should be playing in getting our country and our economy on the road to recovery and growth. This is an economy that has been flatlining as a result of the Government’s failing plan, that did not grow at all in the whole of 2012 and that has now shrunk in four of the past five quarters.

[Andy Sawford]

This country’s growth rate since the 2010 comprehensive spending review is 0.4%. On infrastructure, does my hon. Friend agree that the huge contrast between us and America, Germany and other countries that are maintaining their stimulus is highlighted by the fact that they are now above their pre-crisis peak? They are now growing by 3% or 4%, compared with the abysmal record of this Government.

[Catherine McKinnell]

Indeed. My hon. Friend makes that point very well. Infrastructure investment fell off the cliff when this Government came to power and we are seeing the economic consequences of that today. Many Members have referred to the Chancellor’s 2010 spending review. It took place in the fourth quarter of 2010 and the UK’s economy has grown by just 0.4% since then. During that time, the USA economy has grown by 4.2%, Germany’s by 3.6% and France’s by 1.5%. Our economy, however, has been stagnating for the past two years, and borrowing is now rising, not falling, as a result.

Oral Answers to Questions

Andy Sawford Excerpts

Tuesday 29th January 2013 Commons Chamber

[Greg Clark]

I was in Wolverhampton recently, meeting business and civic leaders from the black country. The proposals to increase skills to help the advanced manufacturing sector in the area to expand are well under way, and I look forward to responding to the bid very soon.

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

In opposition, the Chancellor was fond of quoting the Institute for Fiscal Studies in support of his policies. Does he accept the finding by the IFS that because of all the changes that he has made following his autumn statement, the average one-earner family with children will be £534 worse off by 2015?

[Mr Osborne]

I am fond of quoting the IFS in government as well, and it says that Labour’s plans would add £200 billion to borrowing.

Oral Answers to Questions

Andy Sawford Excerpts

Tuesday 11th December 2012 Commons Chamber

[Greg Clark]

My hon. Friend is absolutely right. That is why it is important for us to maintain the course, pay down the deficit and build confidence in the labour market. We know what happened under the previous Government: in their last two years, long-term youth unemployment doubled.

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

Is the Minister aware that recent independent surveys show that Corby and east Northamptonshire is one of the most difficult places in the country for a young unemployed person trying to find work? I can tell him that I meet young people, day in, day out, who are desperately trying to find work, so will he look at the unique case for having an enterprise zone for Corby and east Northamptonshire, extending by one the number of enterprise zones that the Government have created?

[Greg Clark]

I welcome the hon. Gentleman to the Chamber. When he organised a day think tank, he and I had some very productive exchanges. I should be happy to meet him to discuss the situation in Corby, which is an enterprising town with the potential to create many jobs. As he will know, under the “city deals” system I am responsible for devolving powers to places throughout the country, and I am keen to receive more applications.

Autumn Statement

Andy Sawford Excerpts

Wednesday 5th December 2012 Commons Chamber

[Mr Osborne]

I suspect Benjamin Disraeli was considerably better at the Dispatch Box than the shadow Chancellor, too. My hon. Friend is absolutely right to say that we have taken decisions to help the working poor, through taking them out of income tax and through the personal allowance increase for 24 million people. Whether Conservative or Liberal Democrat in this Government, we can be absolutely proud of the decision we have taken on the personal allowance in these very difficult times.

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

Did the Chancellor hear the very loud message coming from the people of Corby and east Northamptonshire that they believe his economic policies are failing? Does he recognise that they will have heard his statement today and believed it to be complacent and wrong? Can he specifically confirm for the people of Corby and east Northamptonshire the real picture on borrowing? If we take out the £3.5 billion that is counted in for the 4G auction, borrowing will actually be higher this year than last. Will he give us the real cash figures?

[Mr Osborne]

First, may I congratulate the hon. Gentleman on his election in Corby? We were talking earlier about construction projects that had not been started. I saw for myself on an enjoyable visit to Corby, which was ultimately unsuccessful in terms of the by-election, the Corby link road which is being built—I hope he would welcome it. As I say, we have set out the public finance numbers, and we have taken the decision to use the spectrum money to help with further education and to fund the annual investment allowance, which starts in January next year—in this financial year.

Public Service Pensions Bill

Andy Sawford Excerpts

Tuesday 4th December 2012 Commons Chamber

[Mr Gibb]

I rise to speak briefly to Opposition new clause 3, which is on fair deal arrangements. Hon. Members will be aware that fair deal arrangements were originally addressed by Lord Hutton in his interim report in October 2010. Hutton was concerned that the arrangements at that time created barriers to the plurality of public service provision. He said:

“At present, when employees are transferred to non-public service bodies, the organisation they move to is required to ensure that there is ‘broadly comparable’ pension provision for future service, through the Fair Deal provisions…This arrangement has maintained the level of pension provision for those compulsorily transferred out of the public sector. However…this can make it harder for private sector and third sector organisations to provide public services because providing a ‘broadly comparable’ defined benefit pension scheme can be significantly more expensive and risky for private sector organisations than for public sector employers.”

That was the starting point of the debate. In box 1.A—a shaded box, the hon. Member for Nottingham East (Chris Leslie) will be intrigued to know—Lord Hutton concluded:

“Ultimately, it is for the Government to consider carefully the best way of moving forward with Fair Deal in a way that delivers its wider objective of encouraging a broader range of public service providers while remaining consistent with good employment practices.”

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

My principal concern, fresh from the doorsteps of Corby, is for the many individual members of the pension scheme. In his extensive piece of work, Lord Hutton considered the future of public service reform and the relationships between the public and private sectors. What I am most concerned about in the debate today and in supporting the amendment tabled by my hon. Friend the Member for Nottingham East (Chris Leslie) on the fair deal, is giving an assurance to those individuals in Corby and East Northamptonshire—cleaners and nurses and so on—that the goalposts will not be constantly shifted away from what they expect from their pension. From the 3p in the pound change to the RPI to CPI change, they feel buffeted by huge changes that are really affecting them at the moment. That is why we need the assurance in the Bill.

[Mr Gibb]

I congratulate the hon. Member for Corby (Andy Sawford) on his election to the House. His intervention indicates the seriousness with which he takes his new role. I am grateful for that and I take his point. All of us on the Government Benches want to ensure that we have sustainable, good-quality defined benefit pensions in the public sector, but to achieve that there has to be major reform to public service pensions for a raft of reasons to do with longevity, cost, poor performance of the stock market in the past 12 years and tax changes that occurred in 1997. For all those reasons, if we are to have good-quality, defined benefit pensions for public service employees, there have to be major reforms.

The Government have been clear, open and transparent in the negotiating process, and an ample number of documents are circulating that set out precisely the conclusion to the negotiations, not least the proposed final agreements. The idea that without changing primary legislation the Government can somehow slip through major changes to the quality of benefits to the employees, which the hon. Gentleman is talking about, is just not in the real world. All Governments have to behave reasonably, and this Government are no different from any other. Not only have they behaved reasonably in these negotiations, but, I believe, they have given rise to high-quality public service pension arrangements that offer benefits way beyond the arrangements in the private sector. That is a sign that the Government recognise the important contribution that public sector employees make to our society.

I point the hon. Gentleman to the consultation on the new deal that took place between March and June 2011. That was a broad consultation, to which there were more than 100 responses. In July this year, in a written ministerial statement, the Chief Secretary to the Treasury stated:

“the Government have reviewed the fair deal policy and agreed to maintain the overall approach, but deliver this by offering access to public service pension schemes for transferring staff…this means that all staff whose employment is compulsorily transferred from the public service under TUPE…to independent providers of public services will retain membership of their current employer’s pension arrangements.”—[Official Report, 4 July 2012; Vol. 547, c. 54WS.]

That is on the record and should provide the hon. Gentleman and the rest of the House with the assurance they need.

--- Later in debate ---

[John McDonnell]

I rise to speak to the amendments in my name: amendments 4, 7 and 8.

Throughout the progress of the Bill, I have tabled a series of amendments with a central thrust—the same one raised by my hon. Friend the Member for Nottingham East (Chris Leslie)—which is about trust. The amendments would ensure that at each stage and for each grouping, there would be full consultation with and the full involvement of representatives of employees and scheme members. I apologise: I should have declared an interest as a member of the local government pension scheme. Nevertheless, each amendment would address the issue of confidence and secure a recognition, as promised by the Government, that employees will be fully consulted and represented and kept fully informed of changes to their pension schemes, which has not been the case up to now.

It is worth remembering that the pension deal was not a deal for a large number of unions; for more than 1 million workers, it was imposed. The Northern Ireland Public Service Alliance, the National Union of Teachers, the Public and Commercial Services Union, the Prison Officers Association, the University and College Union and Unite did not agree to the deal or the heads of agreement; instead, the deal was imposed upon them. There is deep scepticism amongst workers, and if Government Members do not recognise that, they are not living in the real world, or encountering the same constituents I am, or receiving the letters I get from police officers, teachers and local government workers across the piece.

Even organisations that signed up to the heads of the deal are now expressing concerns. The British Medical Association, whose briefing Members will have received, thought it had signed up to an assurance from the Government, which I remember being made, that there would be a 25-year guarantee of no change around a number of protected issues. The Government said:

“This means that no changes to scheme design, benefits or contribution rates should be necessary for 25 years outside of the processes agreed for the cost cap. To give substance to this, the Government intends to include provisions on the face of the forthcoming Public Service Pensions Bill to ensure a high bar is set for future Governments to change the design of the schemes. The Chief Secretary to the Treasury will also give a commitment to Parliament of no more reform for 25 years.”

Yet clause 3, described in briefings by the Royal College of Nursing, the BMA and others as a Henry VIII clause, gives extraordinary powers to the Secretary of State to return to these issues, introduce further reforms and make fairly significant changes through statutory instruments, not primary legislation to be debated in the House. Consequently, there is a lack of confidence in the words of Ministers, particularly given that, as my hon. Friend the Member for Nottingham East said, those words are contradictory, not just across Government, but within the same Department. It is extraordinary.

Others also signed the deal. The RCN wrote to us explaining its concerns:

“Clause 3(3) is a Henry VIII clause which enables the Government to amend the Act at a later date through the use of secondary legislation. The RCN is concerned that, as a result, the Bill gives powers to the UK Government to amend and make retrospective provisions to any other related legislation without sufficient member consultation or scrutiny by Parliament.”

I also received a letter from Mary Bousted of the Association of Teachers and Lecturers, which also signed up to the deal. She wrote:

“As you may know, the ATL accepted the Government’s proposed final agreement on changes to the teachers pension scheme as the best that could be achieved through negotiations. We now find the Bill contains additional elements that go beyond what was agreed in March 2012 and believe that the proposed changes could adversely and unfairly affect the quality of education that the nation’s children receive in our schools.”

[Andy Sawford]

Is my hon. Friend aware of the concern among police officers, highlighted last week in an excellent Westminster Hall debate led by our right hon. Friend the Member for Leicester East (Keith Vaz)? Many police officers feel that the arrangements they have made for their later life and approach to retirement—for doing things such as helping their children to get into housing or paying their university fees—have been completely undermined by changes that have pulled the rug from under them right at the end of their working life, after they have made an incredible contribution to keeping our communities safe. It is those kinds of people we must think about today as we make these changes. As my hon. Friend says, we must give them much greater confidence and assurance.

[John McDonnell]

I fully concur with my hon. Friend. I received—perhaps he did too—an e-mail from Inspector Nick Smart, who wrote:

“I am a serving police inspector in West Yorkshire of 17 years. I am about to see my life plans thrown into chaos with the proposed pension changes, with my retirement age extended by at least two years plus a 20% cut in my lump sum—about £40,000—and a significantly worse annual pension.”

It is no wonder that people are demoralised and do not trust the Government. They thought there was at least a 25-year guarantee, but we now know that that is not the case, because the Government are giving themselves the power to change schemes at will in the future.

--- Later in debate ---

[Andy Sawford]

I should have declared my interest as a member of the local government pension scheme when I first intervened. Does the hon. Gentleman acknowledge that one of the technical issues, as those on our Front Bench have pointed out, is that the language we use should allude to the amendment of the schemes rather than to their closure? If the local government pension schemes that are currently in deficit were to be closed, the employers involved would immediately become liable to pay those deficits. That could have a hugely disruptive effect not only on the people receiving pensions now and in the future but on the local authorities themselves and the public services that they provide.

[Robert Neill]

I congratulate the hon. Gentleman on his arrival in the House. I have been dealing with him in the local government world for many years. I did my best to prevent him from coming here, but it clearly was not quite enough! He anticipates one of the technical issues that I was going to mention, and it is perhaps the most substantial one. Chronologically, it is not the first in relation to the Bill, but I might as well deal with it now for the sake of completeness.

I read with care the assurance that my hon. Friend the Minister gave in Committee. I entirely accept that it is not the Government’s intention to create crystallisation. However, I note that the finer details of the proposals are being considered, and we should look carefully at that. The Minister said that there was no requirement for the funds to be wound up, and I accept that, but I hope that he will consider the issues that have been raised by the Local Government Association about legal ambiguity.

I do not doubt that the Minister has no intention of creating a closure that would crystallise the debts of a scheme. That was always the basis on which I approached such negotiations when I was a Minister, and I am certain that nothing has changed in that regard. However, this was one area in which some of the nuttiest legal advice needed to be obtained—[Interruption.] I should have said “knottiest”. There is sometimes a risk of legal ambiguity, and that must be avoided at all costs. I would therefore urge my hon. Friend and his advisers at the Treasury to take on board the work that has been done in the DCLG and other Departments to find a means of resolving this issue. We all know where we want to end up, and I am sure that there is a means of achieving that. I know that the Minister’s skills and abilities will get us there. It is right to point out that some issues still need to be addressed, but they are not insurmountable in the context of where the Government want to get to. It is an important area to clarify to the maximum extent.

The other issue I want to touch on is governance. I hope that the Minister will consider the concerns raised by the Local Government Association and the unions about the lack of segregation between the scheme manager and the scheme board. Again, I do not think there is any dispute between us about where we want to end up, but it is a fact that the local government schemes have a good record in their management and a good record on transparency. When experienced representatives of local government employers raise concerns that the two functions of the scheme manager and the scheme board are difficult to reconcile within the same body, those concerns should not, in my judgment, be lightly dismissed. I note that the Minister sensibly and properly took on board the fact that there are still developments going on here and that proposals are still being developed. I hope that that will continue to be the case, and when he responds to the debate, he may be able to update us and reassure us that continuing discussions will take place with the experts in the local government sector to make sure that we get the best possible design for those matters.

Finally and more generally, I ask the Minister not to be deterred by undue reference to Henry VIII clauses. When I was taking the Localism Bill and the Local Government Finance Bill through the House, if I had £5 for every time I was criticised about Henry VIII clauses, I would have retired to some tax haven as a very rich man. [Interruption.] I probably would not have not done that actually as I enjoy being here so much. However, it is part of the knockabout banter we get here that Oppositions always say that there are excessive Henry VIII clauses, but when one looks back, one finds that when the Opposition move into government, they construct Bills with exactly the same sort of clauses. That is why I urge the Minister not to be put off by that; it is necessary to build in the flexibility that such clauses provide in any piece of legislation of this kind. What are important are the statements of intent about the manner in which those clauses should be used. I am sure that the Minister will be able to reassure us on that.

--- Later in debate ---

I think that Lord Hutton’s proposal for a national board for the local government pension scheme is consistent with the bid for better standards and for better information and better understanding among scheme members. The employers’ side, the Local Government Association, the union side, and members of unions such as the GMB all agree that Lord Hutton was right to make that recommendation, but we are still waiting to see it enshrined in the Bill. I hope that the provision for better standards and information for scheme members that we hope the Government will introduce will include provision for a national board.

[Andy Sawford]

One of my worries about the pension scheme changes relates to the different impacts that they will have on different communities. Sadly, as my right hon. Friend may know, Corby has one of the 10 lowest life expectancy rates in the country. As we review the schemes, and, in particular, as we seek to give people information about the future benefits that they may expect, we should recognise that there are huge regional variations in life expectancy, and that it is important for people and their families to be able to plan for their future.

[John Healey]

My hon. Friend’s constituency is in Northamptonshire and mine is in south Yorkshire, but we share an industrial heritage and a strong tradition of steel-making, and I entirely understand the point that he has made. It is as relevant to Corby and to east Northamptonshire as it is to Wentworth and Dearne and parts of Rotherham and Barnsley.

New clause 3 is simply intended to ensure that the undertaking given to the House by the Chief Secretary to the Treasury, and given to the unions that have been negotiating about pension schemes changes on behalf of their members, is guaranteed, and that Ministers will not be able to change their minds and change the schemes in the future. This must be legislation for a 25-year deal, which is what the Government originally promised us.

The question of access to public service pension schemes for public service workers who may face compulsory transfer to non-public service employers and organisations is critical. As has already been pointed out, the Government’s commitment to an extension was a deal-maker for many unions and for many of their members, particularly on the local government side. It would have been a deal-breaker for those unions and members if the guarantee had not been in place, or if what the Economic Secretary said in Committee—which I have quoted—had been on the table instead. We had a clear and principled commitment. That commitment ought to be included in the Bill, and then, as is appropriate in the case of enabling legislation of this sort, the details of the mechanism for how it is to be implemented can be provided in further regulation or scheme rules.

I must say to the Economic Secretary—as some of my hon. Friends have already said—that trust is a problem for the Government in the public services, particularly when it comes to public service pensions. That should come as no surprise to them. After all, they commissioned Hutton to produce the report, and before the publication of the final version, they hit public service workers with a 3% tax surcharge on their pension payments, and with not just a temporary but a permanent switching of the link with pensions from the retail to the consumer prices index. A commitment in the Bill will serve as a confirmation and a reassurance for public service workers that the Government do indeed mean what they say in this regard.

Let me say something about amendments 19 and 20, and about the Bill’s use of the concept of “closure”. During this debate and in Committee, the terms “closure” and “winding up” have been used almost synonymously, but they are not, of course, synonymous. The winding-up provisions in the Pensions Act 1995 apply principally to occupational pension schemes. Those schemes are different from local government pension schemes, which are funded and have the quasi-constitutional backing of local government.

As my hon. Friend the Member for Nottingham East pointed out, the Economic Secretary has said that that it is not the intention to close local government pension schemes. If, as the Government seem to be arguing, closure does not mean closure and there is no intention to legislate for closure of any of the funds, this change should be straightforward. It is evidently needed, especially given that the concern of employers, scheme members, trustees, and unions representing many of the members has been consistent and clear. Why risk uncertainty, why risk a legal challenge, why risk financial jeopardy for some funds, by allowing debts to be triggered in the particular circumstances of a funded scheme for local government?

It may not be the Government’s intention at present to reduce people’s benefits that they have already accrued. It may not be their intention to end any flexibility in the link between the normal pension age and the state pension age. It may not be their intention to make further and sweeping radical changes or cuts in people’s pension provision. As it stands, however, the Bill allows all those things to happen. That is why the new clauses and amendments are so important. They will reassure pension scheme members, now and in the future, that this is a settlement for the long term, that the Government mean what they say, and that the Government can, in the longer run, be trusted with public service pensions. Scheme members have seen little evidence since 2010 that that is really the case.