Oral Answers to Questions

Brooks Newmark Excerpts

Monday 23rd June 2014 Commons Chamber

[Mike Penning]

I also said during that Westminster Hall debate that, for nearly three years, new recipients of ILF have been dealt with by local authorities. There have not been any major problems. We are confident that this will roll out correctly and we intend to roll it out as soon as possible.

[Mr Brooks Newmark (Braintree) (Con)]

T7. Unemployment in Braintree between May 2010 and May 2014 has dropped from 3.4% to 2%, and youth unemployment in that same period has dropped from 6.3% to 3.8%. There remains a challenge, however, in that the unemployment rate is not falling as fast for young women as it is for young men. What are the Government’s policies doing to help young women to get back into work?

[Esther McVey]

I am pleased to say that unemployment is falling right across the country and across all age groups. Employment is up as a consequence. We are doing significant things. We now have record numbers of women going into work, and at record rates. Our policies, more than anything, are supporting young girls.

amendment of the law

Brooks Newmark Excerpts

Tuesday 25th March 2014 Commons Chamber

[Margot James (Stourbridge) (Con)]

It is a pleasure to follow the right hon. Member for Edinburgh South West (Mr Darling).

Four years ago, I promised my constituents that if we were elected our first priority would be to repair the public finances. No longer could we go on borrowing £1 for every £4 we spent. Reducing the deficit has involved tough decisions, and I pay tribute to the Chancellor for sticking to the necessary path, which has seen the deficit come down by a third. It is forecast to fall by 50% next year.

Even after all that work, the OBR estimates that we will still be spending more than we earn by £108 billion this year, so the job is not yet done. However, people are at last starting to enjoy the fruits of progress. Earnings are projected to exceed inflation this year, and the increase in employment has been huge. In my constituency, unemployment has fallen by 25% since the election. Contrary to the Labour party’s predictions, the 1.6 million private sector jobs created since 2010 have exceeded the number of jobs lost in the public sector by a factor of three.

There was a time, 18 months ago, when the International Monetary Fund, which was broadly supportive of our policies, looked on nervously as Britain was the one country that was serious about tackling an out-of-control deficit. The proof of the pudding is in the eating, and UK unemployment stands at just over 7% and falling. That is in sharp contrast to the rest of Europe, where unemployment averages 10.9%. Likewise, the OBR has raised its forecast for economic growth from 1.8% to 2.7%, which makes the UK the fastest-growing economy in both the EU and the G7.

[Mr Brooks Newmark (Braintree) (Con)]

It is fascinating that the hon. Member for Leeds West (Rachel Reeves) resorted to quoting the old Etonian George Orwell during her peroration.

It is interesting to note that in today’s Treasury Committee meeting, the economists there predicted that growth would exceed that 2.7% figure, and even the Bank of England’s projection of 3.3%.

[Margot James]

I heartily agree, and I would not be surprised if things got even better than that over the next few years. We have momentum now, as my hon. Friend’s point shows.

Our economic strategy has been about far more than reducing the deficit: how we do that matters. The Chancellor set out a strategy to rebalance the economy, and we wanted to see growth that was more balanced between London and the south-east and the other important regions, between the service sector and the manufacturing sector and between the public and private sector. We also wanted to build an economy made more secure by savings and investment, instead of one built on excessive debt.

This Budget marks another milestone—it capitalises on the hard-won and sustainable economic progress to secure radical reforms that will restore the incentive that has been so recklessly destroyed over recent years. Scottish Widows estimates that fewer than half of us are saving enough for our old age, and that one in five are saving nothing at all. The bold increase in the ISA tax-free limit to £15,000 is welcome. There are more than half a million ISA savers in the west midlands alone. Not all of them will be able to put away the maximum every year, but the fact that they will now have complete freedom to invest cash as well as equities will encourage more saving among people who just want their cash to grow in a tax-free environment.

Before 1997, Britain had one of the best-funded occupational pension systems in the world. That proud state was totally undermined by the last Government’s decision to end dividend tax relief on pensions. Incentives to save were also undermined by the growth of means-testing of the state pension. The welcome pension reforms that the current Government have already introduced were given a further boost last week by the Chancellor’s dramatic announcement that we are no longer to be forced to buy an annuity. That is welcome news for everyone who is saving into a pension scheme, regardless of their age.

Just under 20,000 people in Stourbridge are of pensionable age, and many have been badly hit by the poor annuity rates and exceptionally low interest rates of recent years. I was therefore delighted on their behalf by the new pensioner bond, which from next year will offer a much better return than anything available on the market today. Low-income savers will also benefit from the abolition of the 10p tax rate on savings from income of £5,000 or less.

Food Banks

Brooks Newmark Excerpts

Wednesday 18th December 2013 Commons Chamber

[Alun Cairns]

I absolutely recognise that the tone of this debate is disgraceful, but the issues need to be analysed and addressed in an adult way so we can understand the longer-term issues that have got us to this position. That has not happened since 2010; the issue goes back well beyond that and must be addressed in a proper, adult, consensual way.

[Mr Brooks Newmark (Braintree) (Con)]

Does my hon. Friend support the volunteers, and particularly Church groups in Braintree and throughout the country, who are doing a tremendous job in supporting food banks? On the point he has just made, this is a long-term problem and the inconvenient truth the Opposition will not accept is that there was a tenfold increase in food banks from 2005 to 2010. The problem did not begin in 2010, and we need a long-term solution.

[Alun Cairns]

I am grateful to my hon. Friend for that powerful point, which gives me the opportunity to pay tribute to those who work and organise food banks in the Vale of Glamorgan: Coastlands Family church, Bethesda chapel in Dinas Powys, and Bethel Baptist church in Llantwit Major. For me, food banks play an extremely important role in bringing people back into the state system of support, or pointing them in the direction of the relevant charity that can help and support them to address an underlying long-term issue that has been missed, or the situation in which they find themselves.

We must recognise that food banks and the Trussell Trust, which facilitates those in my constituency that I mentioned, rightly limit the provision they make available. First, people must have a voucher that comes from a recognised body such as the social services, a GP, or a women’s aid or drug support group. People find themselves in terrible situations, often because of the breakdown of the family or changes that they simply have not been able to manage. We need to recognise that the food bank and the Trussell Trust give food provision for three days only. Food banks are not the soup kitchens that the right hon. Member for Manchester, Gorton (Sir Gerald Kaufman) has described. They rightly limit provision because they do not want to create that culture of dependency. They are about bringing those people back into the state support system and the charitable groups that need to address those problems.

Housing Benefit

Brooks Newmark Excerpts

Tuesday 12th November 2013 Commons Chamber

[Mr Brooks Newmark (Braintree) (Con)]

I was not expecting such generosity so early on, Mr Speaker, and I apologise for not being present at the beginning of the debate; unfortunately, I had a ministerial meeting. I have been listening to much of the debate, however, and, notwithstanding some of the emotional hyperbole from Opposition Members, at its core the Opposition motion is in effect saying that the Government spare room subsidy is somehow not fair. Well, what is not fair is that 2 million households are on the social housing waiting list. What is not fair is that 250,000 tenants are living in overcrowded conditions. What is not fair is that every family in this country is somehow paying £900 a year to subsidise the benefits bill of £23 billion. That is what is not fair.

What is fair, however, is that if a taxpayer-subsidised council house has a spare room, the occupier of that house should pay an extra £14 per week or, effectively, the equivalent of three hours’ work. That is not a big ask. That is not beyond the reach of most tenants. What is fair is that we exempt disabled tenants and partners in need of overnight carers. What is fair is that we exempt those in supported “exempt” accommodation. What is fair is that we exempt disabled children who are unable to share a bedroom. What is fair is that we exempt approved foster carers. What is fair is that we exempt armed forces personnel who are living with parents. All this the Government do because that is, indeed, fair.

Further, the Government are doing all they can to address a number of the issues raised by Opposition Members, including providing discretionary housing payment to give a safety net to help to support vulnerable residents, as well as making the welfare reform changes that have been introduced. In particular, in the 2013 Budget the Government announced that £35 million extra a year would be allocated to help councils provide support for vulnerable tenants, especially those living in isolated rural areas.

The Government have a responsibility to deliver both fairness and value for money for taxpayers. The spare room subsidy does just that by addressing the mismatch between overcrowded housing and those living in houses with empty bedrooms, subject to the exemptions I outlined. Therefore, I support the Government’s amendment.

Budget Resolutions and Economic Situation

Brooks Newmark Excerpts

Friday 22nd March 2013 Commons Chamber

[Mr Duncan Smith]

I am going to make some progress. The right hon. Gentleman will have plenty of time to contribute and I want to finish responding to the intervention from the hon. Member for North Durham (Mr Jones). Capital spending was set to fall. The plan that Labour left was to lower capital spending and there is no way around that. He cannot talk about capital spending rising because it was set to fall. We are bringing borrowing down. Labour has no plans at all for that and would raise borrowing.

[Mr Brooks Newmark (Braintree) (Con)]

Does my right hon. Friend agree that the bottom line is that today more men are in work than ever before, and more women are in work than ever before? That is the most important thing for our constituents.

[Mr Duncan Smith]

I was going to come on to that. I agree with my hon. Friend, and our employment levels put us in a better position than almost everybody else in Europe. We have more people in work and lower levels of unemployment. To be honest, people in Spain or France would give their eye teeth for the figures that we have today. Labour would push the cost of borrowing higher and higher, the deficit would spiral and the world community would not lend to us except at the highest rates possible. We would be rather like Spain or, in some senses, Italy.

--- Later in debate ---

[Mr Brooks Newmark (Braintree) (Con)]

I almost choked on my cornflakes this morning when reading Jonathan Portes’s blog. We have to remember that Mr Portes, like Mr Blanchflower, is an arch-Keynsian and proponent of plan B—borrowing more money in a debt crisis. Referring to Robert Chote and the Office for Budget Responsibility, he observed that the OBR has shown

“that, as a percentage of GDP, the deficit has indeed fallen by a third. The Chancellor is correct.”

He went on to say:

“The UK’s underlying economic strengths remain, as the current health of the labour market illustrates.”

The Budget and, indeed, the performance of the Chancellor and his team at the Treasury have much to commend them. If we remember, three years ago, UK plc was on the verge of economic collapse. We were living far beyond our means, and the Chancellor’s emergency Budget in 2010 sought to address that problem. Two and a half years later, where are we and what progress has been made? First, the deficit is indeed down by a third. Annual borrowing has come down from £159 billion and is almost under £120 billion. We have more men in work than ever before, and we have more women in work than ever before. Indeed, the amount claimed in jobseeker’s allowance in Braintree, my constituency, has dropped by 11%. We have created more than 1.25 million jobs in the private sector. We have created 250,000 new businesses, so the Chancellor, the Treasury and the Government have much of which to be proud.

It is true, however, that growth has not been as robust as we would like, and neither has the pace of Government debt reduction been as fast as we would like. The reason is a combination of the crisis in the eurozone, which has become worse since the emergency Budget, and the inflationary impact of energy costs—a fact acknowledged by Mr Chote and the OBR. The bottom line for many of our constituents is a record level of employment. In other words, more people are in work than ever before. We have record low interest rates, which means that more homeowners have low mortgages and businesses have low interest payments.

This week’s Budget seeks to build on the strong foundation established by the original emergency Budget, addressing the need to help those who aspire to work hard, as the Chancellor said. It is a Budget to help families. Indeed, as we have heard, the personal allowance, which has been raised to £10,000, will help, as there will be a tax cut for more than 24 million families—or, in my constituency, 38,391 families. Families, in fact, will pay roughly £700 less than they did in 2010—2.7 million families will be taken out of tax altogether, or, in my constituency, 3,905 families. Fuel duty will be frozen, saving people, particularly in rural areas in my constituency, £7 every time they fill up the tank, compared with what would have been under Labour.

We will help a typical family with two children under 12 with child tax credit to the tune of £2,400— 2.5 million families will benefit from that. There is help, too, to enable people to get on the housing ladder, with the shared equity scheme that the Government have proposed, as well as the mortgage guarantee scheme. It is a Budget to help businesses. The new £2,000 employment allowance will help the average business to hire an extra person for £22,400 or, hopefully, four young people on the minimum wage. I pay tribute to Lottie Dexter and the Million Jobs campaign, which tries to help young people to get back into work.

Some 450,000 small businesses and a third of employees will pay no jobs tax at all. Corporation tax will be driven down from 28% to 20% by 2015, which will make it the lowest such tax in any G20 country. Help to Buy will help the building industry which, we all know, has been struggling. In my constituency—the constituency of white van man and Essex man—I have many entrepreneurs such as electricians and plumbers, and the scheme will help them to secure much-needed work. There is help, too, for angel investors and entrepreneurs. I have been plugging the seed enterprise investment scheme, and on capital gains tax for reinvestment in qualifying schemes there will be another holiday for another year. I commend that measure.

[James Duddridge]

I recall that in the Budget, the Chancellor praised my hon. Friend in relation to that work. What advice can he give me and other hon. Members on how best to promote those schemes in our constituencies, as that seems to be a really good way to drive growth?

[Mr Newmark]

This is an important scheme, because it will help angel investors and people starting businesses. There is a gap in the market, and funding has been lacking. The tax scheme is highly attractive, and offers 50% off income tax. For example, for a £10,000 investment, people will get £5,000. If they hold the investment for three years, it is capital gains tax-free, so it is highly attractive.

Labour got us into this mess. Having listened to the responses from the Leader of the Opposition and the shadow Chancellor, I do not think they have a solution to the country’s problems other than plan B, to borrow more. That would cost up to £200 billion more, according to the Institute for Fiscal Studies. We have already had a debt crisis. Labour’s plan would cost an average family £2,000 more.

The Chancellor has set out a Budget for those who work hard and want to get on. This Budget backs families; this Budget backs jobseekers; this Budget backs drivers; this Budget backs home buyers; and this Budget backs businesses. The Government are clearing up Labour’s mess, they are backing those who want to work hard and want to get on, and they are moving Britain forward. I commend the Budget to the House.

--- Later in debate ---

[Mr Newmark]

I might be able to help my hon. Friend and the hon. Member for Glasgow North East (Mr Bain). The IFS says that the Labour pathway would cost the country another £200 billion in debt.

[Mr Gauke]

My hon. Friend is absolutely right to point that out. That would be the consequence of pursuing the policies advocated by Labour. That does not take into account the concerns about what going down that route would do for international confidence and the price we pay for our borrowing—interest rates. Such borrowing would jeopardise the economy.

We have made progress on, for example, unemployment. Since the first quarter of 2010, the private sector has increased by 1.25 million jobs and total employment is up by 890,000 in the period. A number of hon. Members, including the hon. Member for Houghton and Sunderland South (Bridget Phillipson), described the conditions in their constituencies. It is worth pointing out that, in the north-east of England, employment has risen by 1.4% and unemployment has fallen by 1.5% in the past year.

We are therefore making progress, but I will not deny that we, like most major economies in western Europe, do not have the level of growth we would like. Two big challenges face all of us. First, how do we get growth when there is no money left, and secondly, how do we live within our means—what do we do to get the deficit down? To deal with that question, we must first acknowledge that the problem essentially is that spending is too high, and not that taxes are too low.

We must take steps to address that, which means taking difficult decisions, as the Government have done, on departmental spending. Our decisions have, by and large, been opposed by Labour. We have had support on one element of departmental spending—the public sector pay freeze. We have announced that we have had to extend that for a further year into 2015-16, but I am not sure whether Labour supports that policy. I believe that freeze is essential if we are to meet our targets.

We have also had to take steps to reform welfare. I congratulate my right hon. Friend the Secretary of State for Work and Pensions on the leadership he has shown and on his bold vision for reforming welfare. We must address welfare. In the decade before the financial crisis, and despite a growing economy, welfare spending increased by 40% and has continued to rise—it went from 11% of GDP in 2008 to 13% of GDP in 2012. Put simply, welfare spending still costs the UK taxpayer more than £200 billion a year, which is almost £1 in every £3 raised in taxes, and more than the budgets for health, education and defence combined. We need to find savings across the government. Inevitably, savings on welfare need to be part of that. If we are to spend more money on other services, we need to tackle our growing welfare budgets.

As my right hon. Friend the Chancellor explained on Wednesday, the previous public spending framework divided Government spending into two halves: fixed department budgets and annually managed expenditure. We decided in the Budget to introduce a new limit on a significant proportion of the latter. That will be set in a way that allows the automatic stabilisers to operate, but brings control to areas of public spending that have been beyond our control. My right hon. Friend the Chief Secretary to the Treasury will provide an update on that at the spending round.

We must recognise that we are in a global race. There will be economies that succeed and those that fail. We must ensure that we are competitive. That is why we have cut the corporation tax rate again to 20%—the lowest rate in the G20. It is striking how the UK is now recognised as having a very competitive tax system. That is also why we are making it easier for start-ups. I have touched on the seed enterprise investment schemes and the measures on stamp duty on AIM shares.

From April 2014, every business and charity in the UK will be entitled to a £2,000 employment allowance each year to reduce their employer’s national insurance contributions. I can tell the House that we have set up a website to help businesses understand how that will work, with an online calculator to illustrate the effect of the allowance on the employer’s national insurance bill in 2014-15. It can be found at www.employmentallowance.com. The employment allowance will benefit up to 1.25 million employers, with 98% of the benefit going to small and medium-sized businesses with fewer than 250 employees.

The hon. Member for Kilmarnock and Loudoun (Cathy Jamieson) said that the Labour party has proposals in this area, but the employment allowance is much simpler and is permanent, not temporary. It applies to all businesses and charities, not just the smallest, so there will not be a cliff-edge problem whereby people face disincentives in taking on a 10th employee. It will benefit all businesses and charities, not just those that are taking on new staff. It will be very simple to operate through the real-time information system. It could not be simpler. It is also worth pointing out that the Labour party fought the last election with the intention of increasing employer’s NICs. They wanted to put the jobs tax up, not cut it.

The previous Government’s plan for reducing the deficit was inadequate and had no credibility. The Labour Opposition have not stood by any element of that plan. They wanted to raise employer’s NICs; now they want to cut them. They proposed huge cuts in capital spending, which we have partially reversed. They now complain to us that capital spending should be higher. They put in place a fuel duty escalator, but have subsequently called for it to be scrapped. This Government have managed to freeze fuel duty and it is falling in real terms. The previous Government put in place a beer escalator. I think that the Opposition are supporting us in cancelling that as well.

The Labour party has one solution to our economic problems: borrowing and spending more. It spent and borrowed too much during the boom and it never accepted that there was a structural deficit before the crash. It has resisted all our attempts to control public spending and is not willing to accept that there is a need to constrain public spending in the years ahead. The truth is that the Labour party always wants to spend and borrow more. To be fair, when it is in government, it does spend and borrow more. However, the country cannot afford it.

We need to prepare ourselves for growth. We need to put in place incentives for companies to invest and expand. In government, the Labour party failed to do that and failed to control spending. That is why it cannot be taken seriously. That is why it is not the Labour party, but this Government who can achieve for the United Kingdom.

Ordered, That the debate be now adjourned.—(Joseph Johnson.)

Debate to be resumed on Monday 25 March.