Oral Answers to Questions

Debate between Bill Esterson and Chloe Smith

Monday 13th December 2021 Commons Chamber

[Chloe Smith]

I am happy to meet the hon. Lady, who, as a relatively new member of the House, I can see is getting stuck into casework. I welcome her hard work in doing so. The design of universal credit has concentrated support on the most severely disabled. That can be taken in alignment with other points that I have made, including on the support available through the national disability strategy and the ideas put forward in our health and disability Green Paper, as well as the many other things that the Department is doing. I hope that they may be of some support and help to her constituent.

[Bill Esterson (Sefton Central) (Lab)]

20. What assessment she has made of the potential effect of her Department’s employment schemes on labour market shortages.

Oral Answers to Questions

Debate between Bill Esterson and Chloe Smith

Thursday 27th February 2020 Commons Chamber

[Chloe Smith]

My hon. Friend has clearly already got himself into the detail of the Department in the most admirable way, which is what we would expect from the new Chair of the Public Administration and Constitutional Affairs Committee. He is right that this legislation is pressing and that behind it sits a very large programme being delivered by the UK Statistics Authority, with which I work closely. We will bring forward the order shortly to Parliament, and I look forward to its scrutiny in this place so that we can have a successful census in 2021.

[Bill Esterson (Sefton Central) (Lab)]

T5. Was Andrew Sabisky recruited to work on the defence and security review that the Prime Minister announced yesterday?

Oral Answers to Questions

Debate between Bill Esterson and Chloe Smith

Wednesday 10th January 2018 Commons Chamber

[Chloe Smith]

I agree with my hon. Friend and I am glad he has raised those points. My predecessor in this role, my hon. Friend the Member for Kingswood (Chris Skidmore), did excellent work in the Every Voice Matters project where he focused on this as a matter of social justice. Of course, the citizen—any citizen—should be at the heart of voting and able cast their vote as a matter of public service.

[Bill Esterson (Sefton Central) (Lab)]

6. What recent assessment he has made of the level of Government procurement from small businesses.

Oral Answers to Questions

Debate between Bill Esterson and Chloe Smith

Wednesday 19th December 2012 Commons Chamber

[Miss Smith]

My hon. Friend is absolutely right to point to the need for organisations to make complaints about poor procurement practice. That is why we have provided a right to challenge such practice through the mystery shopper service and I confirm that today we are publishing the next batch of its results, which I think my hon. Friend will find very interesting indeed, and we shall continue doing so.

[Bill Esterson (Sefton Central) (Lab)]

The Federation of Small Businesses told me yesterday that most of its members had given up trying to do business with Departments. According to the Government’s figures, public sector procurement from small businesses has fallen in most Departments since the election. Why has that happened?

[Miss Smith]

I am afraid the hon. Gentleman is rather mixed up. As I mentioned in my answer, spend with SMEs is rising and we are on track for that 25% target. I am also conscious that the chairman of the FSB said this year that

“central government has raised its game…But more must be done”.

The question is: why did the previous Government do so little?

Regional Pay

Debate between Bill Esterson and Chloe Smith

Wednesday 20th June 2012 Commons Chamber

[Miss Smith]

If I tried to answer that question, I suspect that I would soon end up outside the scope of the debate. It is particularly important to note that we need to consider the evidence, which the Chancellor has asked for by asking the pay review bodies to consider the question. That evidence would come into the answer to the hon. Gentleman’s question.

[Bill Esterson]

rose—

[Miss Smith]

I will not give way. The hon. Gentleman should rest his foot, as I had to myself several months ago. I wish him well and a speedy recovery.

It is somewhat troubling that shadow Ministers have not been able to explain whether they think it is good for small businesses in their constituency that the public sector pays 7.5% more overall than the private sector. They have not been able to explain, as I have mentioned, why they favour regionalising benefits and not pay. Perhaps they will surprise us all and stand firm against attempts to appease the unions, wait for the pay review bodies’ reports and take a mature decision based on the evidence available. That is what this Government will do. We do not seek to cave in to those who have given around £15 million to the Labour party in recent times.

The introduction of local and market-facing pay could help poorer regions, which I know Members on both sides of the House would welcome. It could do that by providing more public sector jobs for the same level of investment and by helping the local private sector to become more competitive and to expand. Tonight’s debate should not be about regional pay, about ending national pay bargaining or about cutting anybody’s pay. The Government recognise that public sector pay is a complex issue that varies significantly between public sector work forces.

Working Tax Credits

Debate between Bill Esterson and Chloe Smith

Wednesday 30th November 2011 Westminster Hall

[The Economic Secretary to the Treasury (Miss Chloe Smith)]

First, may I congratulate the hon. Member for Stalybridge and Hyde (Jonathan Reynolds) on securing this debate, and thank him for his kind words about my role at the beginning of his comments? He has asked me a number of specific questions, which I shall be happy to address. In addition, I would like briefly to set out the various reforms to tax credits. I will talk a little about child poverty and, of course, about work incentives, before addressing fully his main point about the 16 to 24 hours change.

[Bill Esterson]

In her reply, will the Minister deal with the central issue of fairness? Does she think that targeting the poorest families by cutting tax credits is a fair approach as a deficit reduction measure, or does she think that this is wrong, and that the Government should target the bankers?

[Miss Smith]

I will happily tackle that. In fact, the hon. Gentleman brings me straight to the main point with which I must preface my comments, which is that we are in a very difficult position, economically speaking. That cannot have escaped the attention of anybody sitting here, least of all the right hon. Member for East Ham (Stephen Timms), who I know is very alive to all such matters. However, the fact is that when faced with a very difficult economic situation, we have to make very difficult choices. We must be mindful of the fact that to leave the country struggling under an enormous debt burden does not help anybody; normal working households would not thank us for failing to deal with that situation. So that is one view of fairness to which I shall return throughout my speech.

Renovation of Empty Property (VAT)

Debate between Bill Esterson and Chloe Smith

Tuesday 18th October 2011 Westminster Hall

[The Economic Secretary to the Treasury (Miss Chloe Smith)]

Thank you, Mr Chope. I am grateful for your warm welcome. I thank the hon. Member for Sefton Central (Bill Esterson) for securing this debate. I acknowledge some of the good arguments that he made, but I believe that his proposal is not the right tool for achieving economic growth. I shall deal with some of his specific points, including a note on apprenticeships, a little on energy supply and some remarks on green opportunities for householders.

The hon. Gentleman made some sensible arguments regarding the reuse of empty properties. Of course, we would all like existing housing stock to be put to good use; I know that from my constituency, as I am confident he does from his. He also made good points about the need in the current economic situation to support small businesses as best we can, and about evasion. I shall come to those points, but I will begin with a few words about the Government’s policy on empty property in the round before discussing the specifics of how VAT applies to empty property. I reassure you, Mr Chope, before I veer anywhere near being off-subject, that tackling the country’s 700,000 empty homes is a priority for my right hon. Friend the Secretary of State for Communities and Local Government, as promoting growth and apprenticeships are for all my other colleagues.

The hon. Gentleman will know that in this year’s Budget, the Government announced £180 million for up to 50,000 additional apprenticeship places over the next four years. That is real action, and I am sure that hon. Members agree that it will meet some of the concerns raised in this debate.

On 20 September this year, the Department for Communities and Local Government announced more powers for community groups to bring empty homes back into use. Community and voluntary organisations will be able to bid for a share of £100 million in Government funding to pioneer housing schemes to help ensure that empty properties are lived in again. That will also help to provide more affordable housing, which I am sure the hon. Gentleman welcomes.

[Bill Esterson]

I welcome the Minister to her role. I do not know whether this is the first debate that she has responded to, but I congratulate her on her appointment. She mentioned the £100 million available to community groups. How many homes are expected to be brought back into use as a result?

[Miss Smith]

I will ensure that the hon. Gentleman receives a specific figure, as I do not have it with me. However, as I will discuss—this goes straight to the heart of the issue—incentives also exist for councils to bring empty homes back into use by including them in the new homes bonus, which he will know about. I think this figure will reassure him: after just one year of the new homes bonus, 16,000 previously empty properties have been brought back into use.

The Department for Communities and Local Government will also consult in due course on plans to allow local councils further discretion to introduce a council tax premium on homes in their area that have been empty for more than two years. That will provide a stronger incentive to get those homes back into productive use—an aim I am sure the hon. Gentleman and I share, as do other colleagues—and remove that blight on local neighbourhoods.

It might be helpful to the hon. Gentleman if I explain how VAT applies to empty property. He might be unaware of some reliefs that go a significant way towards meeting the demands of the “Cut the VAT” campaign. The VAT system already provides for numerous reliefs from the standard rate of VAT, as he will know, but some reliefs particularly encourage new housing supply and the bringing of empty properties back into use as homes. The first sale of a new domestic property is zero-rated for VAT, as are most supplies of goods and services used in the construction of a new build, as he acknowledged. However, he might not be aware that the renovation or alteration of residential premises that have not been lived in for two years benefits from a 5% reduction in the rate of VAT. He mentioned European constraints. The 5% reduced rate of VAT exists, and is the minimum available, under long-standing EU VAT legislation. The reduced rate also applies when properties are converted from non-residential to residential, and when the occupancy of existing residential property is increased.

Wide relief already exists for the renovation and conversion of empty properties. I am sure the hon. Gentleman will agree that that goes some way towards meeting the valid concerns that he raised about the homes in which his constituents might live. He might not be aware that the “Cut the VAT” campaign’s report makes it clear as early as page 5 that

“the many and varied exceptions that exist within the housing RM&I VAT regime…can easily lead to confusion as to what attracts VAT at the standard rate and what attracts a reduced rate.”

The report goes on to provide a helpful table summarising the available reduced rates, including for

“Renovation or alteration of empty residential premises”.

I know that the hon. Gentleman is a keen supporter of the campaign, as are those on the Opposition Front Bench. For the most part, the VAT reduction for which he asks specifically for the renovation and refurbishment of empty homes is already available.

[Bill Esterson]

I am aware of those points. I have a copy of the campaign document, as does the Minister. Is she also aware of the Prime Minister’s commitment to the Federation of Master Builders? He agreed to write to Treasury Ministers to consider the case for cutting VAT on home repair and improvement work. Does she know whether he has done so, whether he has received the response and what it might be?

[Miss Smith]

The hon. Gentleman will appreciate that I have just spent my first two days at No. 1 Horse Guards. I shall of course ascertain the location of that letter. However, I will suggest a few things that I have absolutely no doubt the Prime Minister will bear in mind as he considers the issue.

Wider VAT reduction risks a serious impact on public finances. I know the hon. Gentleman will be aware of that, despite some of the comments that he made this morning to the Formby Times. For example, if the rate of VAT on residential property renovation and refurbishment were reduced to 5%, it would cost £2.2 billion in the first year alone. If the rate were reduced for five years, it would cost £2.4 billion each year. If it continued for a decade, the cost to the Exchequer—to his constituents and mine—would rise to £2.9 billion for every year of that period. To put those figures in context, that would cost more annually than the entire budget for the Department for Environment, Food and Rural Affairs, and double the budget for the Department for Culture, Media and Sport

I therefore do not accept the claim that cutting the VAT rate for the home improvement sector would lead to a net increase in jobs across the economy as a whole or pay for itself over several years. Although the impact could be positive, we know the real likely impact. If we made such a cut, the revenue shortfall would have to be met from additional taxation elsewhere, which would lead to job losses that would offset any job gains in the building sector. Alternatively, we would need to meet the cost through additional borrowing, which would risk increasing interest rates. As the hon. Gentleman will know, higher interest rates would have an adverse impact on families and small businesses, including businesses in the building sector. I am afraid that there is no such thing as a free pass without effects elsewhere in the economy.

The Government want to provide support across the entire economy for businesses and households.

[Bill Esterson]

I had anticipated the Minister’s comments, because this morning I received a written answer from her colleague, the Exchequer Secretary. I understand the Treasury analysis, but the answer mentions

“in the absence of behavioural change”.

Such behavioural change would include the impact on cowboy builders and the economic benefits of people spending money in the sector and being able to afford home improvements, so there is a balance. I also mentioned earlier the £1.4 billion impact on the economy that Experian anticipated under the old VAT regime. Will the Minister comment, either today or in due course, on the assessment of the impact of behavioural change, and not just of the figures that she has quoted in isolation?

[Miss Smith]

Let me first deal with behavioural change in relation to rogue trading, because it is important to put this on the record. I do not accept that a reduced rate of VAT would suddenly cause the illegitimate trade to become honest. I do not believe that behaviour changes in that sense—5% can be as attractive, in many ways, as 20% to a crook. There are many other factors—this is key—beside cost that cause a customer to use the informal economy, and a trader to operate in it. It is unlikely that a reduction in the rate of VAT, which is only one factor, would have an impact on rogue trading and purchasing.

On the wider point of evasion, the hon. Gentleman may be interested to know that Her Majesty’s Revenue and Customs is investing £900 million to tackle avoidance and evasion and attacks by organised criminals, and that relates to the construction industry. A reduction of the VAT rate alone would not create a level playing field between legitimate businesses and those operating in the informal economy. I fear that his concerns about behavioural change, in that sense, do not go to the heart of the matter.

I will be happy to come back to the hon. Gentleman on the specifics of the Experian report. I am afraid I do not have the figures to hand, so I cannot respond on the spot.

To return to the points that we need to take into account in the wider economy, we need to be aware that households face difficult times. That is exactly why, only yesterday, the Prime Minister and the Secretary of State for Energy and Climate Change met energy suppliers to discuss how to bring down customers’ energy bills. It is also why this Government have increased the personal allowance, cut fuel duty and will reduce corporation tax year on year, which will assist businesses, including those that have signed up to the “Cut the VAT” campaign.

It is important that the Government continue to explore their options for credit easing, with which the hon. Gentleman will no doubt be familiar. We should try to inject money directly into parts of the economy that need it, especially small businesses, which are the driving force for economic growth.

Doing those things will not only boost demand in the short term and, indeed, change behaviour, but help to tackle long-standing UK problems associated with the supply of credit to small and medium-sized businesses. That is vital. The Chancellor will announce further details on 29 November.

To finish on the broader point, Labour, I am afraid to say, may have been content to spend beyond its means, but such costs are unsupportable in the current economic climate and simply cannot be reasonably entertained. We need sound public finances to make sustainable growth possible. Over the past decade there has been an increasing reliance on an imbalanced economy, which drove ever greater problems throughout. That model has proved unsustainable and what we have needed in the meantime, as set out in the Budget 2010, the spending review and other work, is a credible plan to tackle the unprecedented deficit that the Government inherited—and that the hon. Gentleman, no doubt, is about to jump to his feet to defend.

[Bill Esterson]

Until 2008 and the financial crisis, the Conservative party in opposition supported the spending levels of the then Government. It was the financial crisis and the bail-out of the banks that caused the deficit to grow to the level it reached. On the balance between quantitative easing and proposals such as the “Cut the VAT” campaign, which has the support of 49 business organisations, many prominent and highly regarded economists think the latter a far more direct way to get money into the economy to stimulate growth and demand, which I know the Government are in favour of. If we disagree on the means, we certainly agree on the need to do it, whether that be via quantitative easing or cuts to VAT on home improvements. We need to take either one action or the other. I hope the Minister will acknowledge that economists have strong views that such VAT cuts are another way of addressing the issue.