Oral Answers to Questions

Baroness Morgan of Cotes Excerpts

Tuesday 11th March 2014 Commons Chamber

[Chris Heaton-Harris (Daventry) (Con)]

4. What fiscal steps he is taking to limit welfare spending.

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

The Government have announced their intention to bring social security spending within firm spending controls through the introduction of a welfare cap. The level of the cap will be announced at Budget 2014. The Government have taken significant action to bring welfare costs under control since 2010. The welfare cap will ensure that welfare spending remains on a sustainable footing and that significant deteriorations in the forecast do not go uncorrected.

[Chris Heaton-Harris]

I welcome that answer. Does my hon. Friend believe that the tough decisions the Government have taken to control public spending on welfare have enabled them to protect public spending on schools and the national health service, and that this policy is a vital part of the Government’s long-term economic plan to reduce the deficit and safeguard the British economy?

[Nicky Morgan]

My hon. Friend is entirely right. The Government have taken difficult decisions to place the public finances on a sustainable footing, while protecting important areas of expenditure such as the NHS. The Government’s long-term economic plan to return the public finances to a sustainable path has restored fiscal credibility. It is notable that the Labour party has no plan, long-term or otherwise, other than to borrow more, spend more and tax more.

[Mr Ian Davidson (Glasgow South West) (Lab/Co-op)]

Does the Minister accept that the cuts to the welfare budget will lead to an increase in poverty, particularly child poverty? Does she believe that that is a price worth paying?

[Nicky Morgan]

The number of children in poverty has fallen and the number of children in workless households has gone down by 100,000.

[Nick de Bois (Enfield North) (Con)]

5. What steps he plans to take to reduce youth unemployment.

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[Stephen Metcalfe (South Basildon and East Thurrock) (Con)]

9. What assessment he has made of the effect of freezing fuel duty on the price of petrol.

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

The autumn statement confirmed that fuel duty would be frozen for the remainder of this Parliament. As a result of this Government’s actions, average pump prices are now 13p a litre lower than they would have been if we had implemented the previous Government’s fuel duty escalator, and they will be 20p a litre lower by the end of this Parliament.

[Stephen Metcalfe]

Does my hon. Friend agree that this Government’s changes to fuel duty and the scrapping of next months’ increase proposed by the previous Government provide more proof that it is this Government who are helping hard-working families to tackle the cost of living and supporting our long-term economic plan?

[Nicky Morgan]

I thank my hon. Friend for that question. He is entirely right. In total, the Government will have eased the burden on motorists by £22.5 billion over this Parliament, to 2015-16. By the end of this Parliament, it will cost the typical motorist £11 less to fill their car.

[Helen Goodman (Bishop Auckland) (Lab)]

Will the Minister explain to my constituents in rural west Durham why, of the 10 areas that the Treasury wants to have a special rural fuel duty discount, eight are in Liberal Democrat constituencies, with two in the constituency of the Chief Secretary?

[Nicky Morgan]

There are strict criteria that towns have to meet in order to be included in the list. If other towns want to be considered, they need to supply the relevant evidence. The criteria include the pump price threshold, the cost of transporting fuel and the population density. If the hon. Lady’s constituents would like to submit evidence to the European Commission, they are welcome to do so.

[Duncan Hames (Chippenham) (LD)]

Motorists in my constituency are relieved to have had fuel duty frozen, but they want the Government to go further. Now that pump prices have fallen from their peak levels, how does what the Government have achieved with fuel duty rates compare with a policy of a fair fuel stabiliser?

[Nicky Morgan]

The point made by the hon. Gentleman, which his constituents will appreciate, is that freezing fuel duty has enabled people to spend more money on themselves and their families in other ways. He needs to understand that fuel duty cuts and freezes since Budget 2011 have had to be fully funded through tax rises or spending cuts elsewhere. Any further action needs to be considered in the context of the wider public finances.

[Sammy Wilson (East Antrim) (DUP)]

Tomorrow, the FairFuelUK campaign will be handing in a petition calling for a reduction in fuel duty. Given that the National Institute of Economic and Social Research has indicated that a 3p reduction would increase jobs by 70,000 and GDP by 0.2%, does the Minister agree that such a measure should be given priority in the forthcoming Budget in order to help the economy on its way and to promote growth?

[Nicky Morgan]

That is a matter for the Chancellor. The hon. Gentleman will appreciate that the Government regularly receive a range of representations on fuel duty. We hear what he and many other campaigners, not only on fuel duty but on many other issues, have been asking for.

[Guy Opperman (Hexham) (Con)]

20. I want to address the point about the rural fuel duty cut. We have been beneficiaries in Northumberland, as one of the two constituencies not necessarily in Scotland. I can state the reason simply: merely look at a map and identify the fact that the least amount of people are there.

[Nicky Morgan]

I thank my hon. Friend for his question. I am delighted that his constituents will benefit from the rural fuel rebate scheme, which means that, as I said, his constituents will have more money to spend on themselves and their families in other ways.

[Sheila Gilmore (Edinburgh East) (Lab)]

10. What steps he plans to take to assist people who earn below the income tax threshold.

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[Jessica Morden (Newport East) (Lab)]

13. What discussions he has had with energy-intensive industries on measures to be included in the 2014 Budget.

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

I meet a range of companies and industry bodies to discuss energy issues and their impact on business. The Government take the competitiveness of energy-intensive industries very seriously. We have made a package of £400 million available until 2015-16, and we continue to explore ways to ensure that our energy-intensive industries remain competitive.

[Jessica Morden]

Last week, job losses were announced at Orb steelworks—a subsidiary of Tata—in my constituency. The combination of high energy prices, the carbon floor price and the renewables obligation has hit the UK steel industry much harder than its competitors. Will the Minister acknowledge that there needs to be a package of measures in the forthcoming Budget, because unfortunately what the Government have done so far has just not been enough?

[Nicky Morgan]

First, may I express my sympathy for anybody whose job has been either lost or put at risk? I know that Wales Office Ministers have been in close contact with energy-intensive industries in Wales and have had discussions with both the Department for Business, Innovation and Skills and me about these issues. The Government recognise that the rise in energy costs is a key issue for many businesses, especially given the lower than expected European carbon price, and we will of course listen to all concerns expressed in relation to these issues.

[Andrew Griffiths (Burton) (Con)]

14. How much beer duty was paid by people in each income quintile in each year from 2008 to 2013.

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

Budget 2013 ended the beer duty escalator and reduced the tax on beer by 1p a pint to help support pubs. The Office for National Statistics publication “The effects of taxes and benefits on household income” provides estimates of the amount of beer and cider duties paid by households in each quintile, and in 2011-12 households in the bottom quintile paid £87 while households in the top income quintile paid £208.

[Andrew Griffiths]

Given that we have seen revenue to the Treasury increase, £400 million-worth of investment by the industry in jobs and growth, and brewers and businesses benefiting from the cut in beer duty, does the Minister agree that the Chancellor was right to scrap Labour’s hated beer duty escalator? Given that a trip to the pub is one of our few pleasures in life, does she accept that it would be folly to increase beer duty in the Budget?

[Nicky Morgan]

Of course I agree with the actions that my right hon. Friend the Chancellor of the Exchequer took at the last Budget, and I congratulate my hon. Friend on the campaign he ran on behalf of pubs, both in his constituency and across the country. I have seen the confidence that the reduction in beer duty has given to Britain’s pubs. The public finances already assume that beer duty will rise by less than other alcohol duties this year, after we ended that beer duty escalator. As my hon. Friend will know, we keep all taxes and duties under review.

[Kevin Brennan (Cardiff West) (Lab)]

In the interests of balance, will the Minister acknowledge that although a penny off a pint through beer duty is welcome, the Chancellor’s VAT changes added 5p to the price of a pint? Will she simply acknowledge that fact, as VAT does not get mentioned by Ministers at all?

[Nicky Morgan]

I understand the point the hon. Gentleman is making, but the fact is that, given the changes introduced in last year’s Budget, the cost of a typical pint has come down. We should all be very grateful for that.

[Greg Mulholland (Leeds North West) (LD)]

I warmly welcome the Treasury decision to scrap the beer duty escalator, give a cut in beer duty and support a freeze this year, but although that has been hugely helpful to brewing, it has not helped many pubco pubs, which face a pubco price escalator. The price of an 11 gallon keg of Fosters for a pubco pub has gone up four and a half times more than it has for a free-of-tie pub, with the same inflation and the same duty. Will the Government stop this scandal with a fair deal for our local?

[Nicky Morgan]

The hon. Gentleman knows well that the Department for Business, Innovation and Skills has been reviewing that whole matter. It has had many thousands of responses to its consultation, and we await the response, which will be published in due course.

[John Howell (Henley) (Con)]

15. What recent steps he has taken to reform the banking sector.

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[Penny Mordaunt (Portsmouth North) (Con)]

T8. The maritime taskforce will report shortly, setting out the opportunities and actions to make Portsmouth and the Solent area the heart of the maritime industry in the UK. Will the Economic Secretary work with me to ensure that we can capitalise on the report’s findings to make that vision a reality?

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

I know that my hon. Friend has worked extremely hard on this. I congratulate her and Admiral Stephens on the excellent work that the taskforce has been doing. It is producing more than a vision for Portsmouth; it is producing a set of clear actions that will enable the Solent area to achieve its ambitions in maritime, marine and manufacturing. Considerable sums will be invested in those sectors. Portsmouth has a Minister and a cross-Government team to help it to secure what it needs, and the Treasury will do all it can to enable the taskforce’s remit to be realised.

[Bill Esterson (Sefton Central) (Lab)]

The Government’s own figures show that net lending to small and medium-sized enterprises has fallen since the funding for lending scheme was introduced, as confirmed by businesses in my constituency. Does the Minister accept that the scheme has totally failed Britain’s small businesses?