Charter for Budget Responsibility

Debate between Angus Brendan MacNeil and Danny Alexander

Wednesday 26th March 2014 Commons Chamber

[Mr MacNeil]

Will the right hon. Gentleman give way?

[Danny Alexander]

I will not give way.

When we came into office, only 53.8% of public expenditure was under a direct mechanism of control—departmental expenditure limits. That means that nearly half of public expenditure was simply beyond control—it was so-called annually managed expenditure, which in practice meant annually unmanaged expenditure. Progressively, over the course of this Parliament, we have put in place additional mechanisms to control an ever-rising amount of public expenditure. The pension reforms, which mean that in future the state pension age will be linked to life expectancy, bring greater control over the costs of the basic state pension. The reforms of public service pensions, which include a cap on the costs within public sector pension schemes, bring that source of expenditure, which had ballooned out of control under Labour, much more directly under the control of Government.

In total, when the measures in the welfare cap are included, we will have increased the amount of expenditure under direct control and directly accountable and transparent to this House from around 50% at the start of the Parliament to 77% at the end of it. From the perspective of every Member in the House, that ought to be a welcome change, because it means that this House has more say and more ability to scrutinise and hold accountable the Government for changes in public expenditure that take place on their watch.

A number of hon. Members mentioned unemployment benefits and jobseeker’s allowance. The hon. Member for Paisley and Renfrewshire North (Jim Sheridan) referred to his experience in receipt of unemployment benefits. He is right that most people in that situation are not there through any fault of their own. That is precisely why jobseeker’s allowance is excluded from the scope of the cap. The benefits that are the so-called automatic stabilisers that fluctuate with the state of the economy—jobseeker’s allowance and the benefits that are passported from it and, in due course, those elements of universal credit, too—will not be in the scope of the cap, precisely for the reasons that he described in his speech. That perhaps ought to reassure him and encourage him to vote for the measure.

Fundamentally in the end, I think those people who are speaking against the cap betray their own lack of confidence in their ability, should they wish to, to come to the House transparently and accountably and persuade the House—

[Mr MacNeil]

rose—

[Danny Alexander]

I have one minute left. No, I am not going to take any interventions; I am going to make progress.

Those people who speak against the cap betray an enormous lack of confidence in the ability of those who think that, in response to circumstances, welfare spending should be increased above the cap, to come here and persuade the House that that increase in expenditure would be necessary. The truth, over many years, has been that where there have been changes in forecasts, and where decisions have been made that have led to increased costs, they have been sneaked in through the back door, through the forecast, without any direct accountability to this House.

The people who say that the cap involves expenditure cuts are also wrong. The cap starts at around £120 billion and rises over five years to £127 billion, in line with inflation, so we have set it at a reasonable level. In this House, we should never again go back to the situation we had under the previous Government, where public expenditure was uncontrolled, and where debt and the deficit were allowed to balloon uncontrollably. This is part of clearing up the mess that was made of the public finances, and I commend the motion to the House.

Question put.

The Economy

Debate between Angus Brendan MacNeil and Danny Alexander

Tuesday 11th December 2012 Commons Chamber

[Mr Angus Brendan MacNeil (Na h-Eileanan an Iar) (SNP)]

The right hon. Gentleman will know that the rebate scheme has been a success. When will mainland areas of Scotland be included? There are already such schemes in continental mainland areas, so why is there a delay in its introduction in mainland Scotland? Areas such as Caithness, Sutherland and Argyll need it—and need it quick.

[Danny Alexander]

I am grateful for the hon. Gentleman’s endorsement of the current scheme as a success. I hope he will spread the word to his constituents and ensure that the credit goes to the appropriate place.

To win the argument at European level for an extension of the scheme, we must pass the same test and provide the same evidence to justify including such remote areas. We are working with local authorities in various parts of the country to gather evidence to support our case. As the hon. Gentleman will recall, we must take that evidence to the European Commission. If it approves our proposal, it must in turn be approved by all 27 EU member states. There are a number of hurdles and a significant process to engage in to gather evidence.

[Mr MacNeil]

rose—

[Danny Alexander]

If the hon. Gentleman will forgive me, I will make progress. Many hon. Members wish to speak in the debate.

There has been good engagement between the Treasury and the FairFuelUK campaign, which has pressed its case very strongly. I welcome its engagement.

The Government are on the road to cutting the deficit we inherited, but we are also building a fairer society. The distributional analysis that we publish shows that that continues to be the case, despite the tough choices we have made. It is worth pointing out that, under the previous Government, the Treasury never published detailed distributional analyses of its decisions, but under this Government the Treasury publishes them at every fiscal event. The analyses show that the top 20% of households continue to make the greatest contribution. In fact, the cumulative impact since the June 2010 Budget of tax, tax credit and benefit reforms shows that households in the top 10% see the greatest reduction in their income, both in cash terms and as a percentage of net income or expenditure.

--- Later in debate ---

[Danny Alexander]

I am grateful for the hon. Lady’s support—I take support from wherever it comes these days.

The Government have taken sensible further steps to restrict pensions tax relief. The decisions the Government are taking are not easy, but as a country we must live within our means. The scale of the problems this country faces means that the period of fiscal restraint must continue for longer. That is why the Government will shortly set out spending plans for the financial year 2015-16. I will carry out a spending round in the first six months of next year to set those budgets and ensure that we continue to build a sensible long-term plan for the country’s finances. We will need to find an extra £10 billion of savings from Departments in the spending round. That will mean more difficult choices, but they are also responsible choices as the coalition continues to work to restore stability to the UK economy.

We have heard this afternoon and in Question Time that some criticise the autumn statement. The division in British politics is very clear. Government Members live in the real world. We understand that times are tough and that there is no endless supply of money, and recognise that the right and responsible action is to take the difficult decisions to ensure we can live within our means. Labour Members appear to live in a fantasy world. They still believe that they ended boom and bust, despite the events of the past five years. They still refuse to apologise for the mess they created and fail to be honest with the British people about the tough decisions that any party in government would have to take.

It will come as no surprise to hon. Members that I will not take advice from the Labour party, which wrecked our economy because it allowed the country to become too dependent on revenues from the City of London and paid too little attention to the rest of the country. Labour insulted pensioners up and down the country by increasing the basic state pension by 75p, and insulted 5 million of the lowest-paid workers by increasing their income tax bill with the abolition of the 10p rate.

[Mr MacNeil]

rose—

[Danny Alexander]

I will not give way—I will finish my speech shortly.

The Labour party thought it was right that private equity managers should pay a lower rate of tax on their earnings than the person who cleaned their office, and insulted hard-working people and businesses up and down the country by failing to crack down on tax avoidance and evasion in 13 years in office.

This Government face some of the most serious decisions we have had to make in our recent history. We are recovering from a decade of debt, we inherited the largest deficit since the second world war, and we have had to face a multitude of problems abroad. However, we continue to take simple, sensible steps towards recovery. We continue to build a strong, sustainable economy and to build a fair society. I commend the autumn statement to the House.

Amendment of the Law

Debate between Angus Brendan MacNeil and Danny Alexander

Tuesday 29th March 2011 Commons Chamber

[Danny Alexander]

I am sorry, but I must press on and make some progress.

As well as a competitive tax system, we need a fair one, as the hon. Member for Central Devon (Mel Stride) observed in his speech, which is why we have responded to the concerns of hard-pressed motorists by cancelling Labour’s fuel duty escalator for the remainder of this Parliament.

That is on top of announcing a fuel duty rebate for the most remote parts of the UK; it is on top of introducing a fair fuel stabiliser to share the burden of high international oil prices; it is on top of cutting fuel duty by 1p per litre, which is already feeding through to the prices at the pump; and it is on top of reversing Labour’s planned 5p a litre in April. So, fuel will be 6p a litre cheaper than it would have been under the previous Government.

[Mr Angus Brendan MacNeil (Na h-Eileanan an Iar) (SNP)]

When might the European Commission give the green light to the rural fuel derogation for the islands of Scotland, particularly as today in Benbecula diesel is £1.52 a litre?

[Danny Alexander]

The hon. Gentleman and I agree about the importance of that point. We have submitted the formal application to the European Commission, and I hope that, European processes willing—as he knows, they are not always entirely predictable—we will have that permission over the next few months.

The help that we are providing to motorists has to be paid for, and it is right that we ask the oil companies to pay a greater share of the extra profits that they are making from the high international oil price. Even with those changes, the profits on a barrel of oil are forecast, as I said, to be higher over the next five years than they were over the past five, so I say to the oil companies, “We do understand your concerns, and there is plenty for us to discuss with you, especially to support”—

Oral Answers to Questions

Debate between Angus Brendan MacNeil and Danny Alexander

Tuesday 13th July 2010 Commons Chamber

[Danny Alexander]

The measures in the Budget are set out precisely to ensure a sustainable recovery through a number of measures, particularly in the tax sphere and, following the earlier questions on regional growth, to stimulate business. Of course, it is now for the independent Office for Budget Responsibility to produce independent forecasts of growth, and it will do so at the time of future fiscal events.

[Mr Angus Brendan MacNeil (Na h-Eileanan an Iar) (SNP)]

The Budget VAT rise in January will affect economic growth on the islands of Scotland. Surely we need a rural fuel derogation in place before the rise. After all, the rural fuel derogation was in the coalition document, but the VAT rise was not.

[Danny Alexander]

The hon. Gentleman is right, of course, that the rural fuel derogation is in the coalition agreement. The Chancellor restated our commitment to investigating the matter in the Budget statement, and I can assure the hon. Gentleman that we will be coming forward with an announcement in due course.

Finance Bill

Debate between Angus Brendan MacNeil and Danny Alexander

Tuesday 6th July 2010 Commons Chamber

[Danny Alexander]

I will make some progress and give way to the hon. Gentleman later.

The Bill shows how the Government will carry out Britain’s unavoidable deficit reduction plan in a way that strengthens and unites the country. The Budget and the Bill stand for three things. The first is responsibility—taking action to eliminate the structural deficit. The second is freedom—helping the businesses on which we all rely to rebuild our broken economy. The third is fairness—protecting the most vulnerable, while ensuring the contribution of all. Those principles are at the centre of the Bill before the House today and I shall address each in some detail shortly.

[Mr Angus Brendan MacNeil (Na h-Eileanan an Iar) (SNP)]

The right hon. Gentleman mentioned fairness and businesses, and I would like to draw his attention to rural areas. He will understand that the increase in VAT will affect fuel prices in rural areas. Would it not be right to have a rural fuel derogation pilot in place before the VAT increase takes effect?

[Danny Alexander]

I am very grateful for that intervention. The hon. Gentleman knows that we are investigating a rural fuel derogation of some sort—that was repeated in the Budget statement. Although I cannot make a commitment on timing, as he knows, I am personally very enthusiastic about such a measure and I will continue to work with my colleagues on it.

--- Later in debate ---

[Danny Alexander]

The hon. Lady says she was sympathetic—I attended a meeting where she expressed that sympathy—but no action by the previous Government resulted, despite the matter being pressed for a number of years. I am sure that my hon. Friend the Exchequer Secretary will look at all the issues as the question is investigated.

[Mr MacNeil]

rose—

[Danny Alexander]

I hesitate to take further interventions, as we are somewhat outwith the scope of the Bill, but I will give way once more to the hon. Gentleman.

[Mr MacNeil]

I ask the Chief Secretary to consider this question. With rural fuel priced between £1.30 and £1.35 a litre, were a rural fuel derogation to apply in Na h-Eileanan an Iar, to where might we smuggle fuel? I would struggle to find anywhere where fuel is more expensive. That smuggling would be a problem is a ridiculous proposition. We had 13 years of nothing but sympathy from the last Government, with absolutely no action. I hope that this Chief Secretary does not make the same mistake.

[Danny Alexander]

I am grateful for the intervention, in both senses.

Returning to the Bill, I should say that our plan stands first and foremost for responsibility, because a failure to deal with the deficit is the greatest threat to our economy and to the well-being of our nation. A failure to act now would mean higher interest rates hitting businesses, hitting families and hitting the cost of repaying the Government’s debt. That would mean more business failures and sharper rises in unemployment, and it would risk a catastrophic loss of confidence in the economy. The Budget’s forward-looking fiscal mandate will eliminate the deficit in five years and put us on track to have the debt falling by 2015.

The Office for Budget Responsibility forecasts that the measures in our Budget will lead us to meet that challenge one year early and the bulk of the reduction will come from lower spending, rather than from higher taxes. My right hon. Friend the Chancellor announced that the spending review will conclude with an announcement on 20 October and address precisely how we will bring down spending.

Oral Answers to Questions

Debate between Angus Brendan MacNeil and Danny Alexander

Tuesday 8th June 2010 Commons Chamber

[Mr Angus Brendan MacNeil (Na h-Eileanan an Iar) (SNP)]

Growth throughout the UK economy has often been geographically uneven. Has the Chancellor considered what help a rural fuel derogation might bring to the highlands and, in particular, the islands of Scotland; and can I volunteer my own constituency, Na h-Eileanan an Iar, for any pilot project?

[Danny Alexander]

The Government are well aware of the benefits that a rural fuel derogation might bring to remote parts of the economy. We are examining that issue, which is contained in the coalition agreement, and we note the hon. Gentleman’s interests from his own constituency.