National Insurance (Contributions) Bill
Brooks Newmark Excerpts(10 years, 5 months ago)
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Mr Gauke
Our motivation—and, I am sure, that of any sensible Government—is to do everything we can to address the issue of youth unemployment. That means trying a number of approaches and adopting a number of policies. It is difficult to quantify the number of jobs that will be created as a consequence of the measure, because many factors will come into play, but we believe that it will be helpful none the less. As I said, the director-general of the CBI also believes that it will make a real difference in tackling the scourge of youth unemployment.
Mr Brooks Newmark (Braintree) (Con)
It is probably worth considering the fact that a lot of businesses, particularly retail businesses, work on very small margins. Does my hon. Friend agree that the extra money that they will receive through not having to pay this jobs tax will probably encourage them to hire a young person rather than someone who is over 21?
Shabana Mahmood
It does not represent a flip-flop, as the hon. Gentleman well knows. It would not be a debate on this issue if he did not make the point that he has made on a number of occasions. I would have felt as though I had missed out on something if he had not made that intervention, so I am grateful to him. He will not be surprised if I repeat my previous answers to him in relation to national insurance. I was very proud to stand for election on the Labour party manifesto at the 2010 general election and proud that the Labour Government had got the recovery under way at the time of that election—a recovery that was choked off by this Government as soon as they came into power. [Interruption.] Government Members might not like to hear it, but I am afraid that that does not stop it being true.
Let me clarify my point about the employment allowance. From the moment it was announced in the Budget, our immediate critique was not that it should not be introduced —we supported its introduction from the beginning—but to say, as we have continued to say, “Bring it in as soon as possible—why wait?” If there were compelling reasons for the wait, it would be understandable, but I am afraid that I find nothing compelling in anything the Minister has ever said about the delay in bringing these proposals forward. All the issues relating to IT and systems and getting software up and running could be sorted out, with a bit of will.
I understand that software developers are still waiting on HMRC to give them the full guidelines on what software they will need to produce to make sure that take-up of the employment allowance goes ahead with relative ease. I hope that the Minister has had sight of the submission by Mr Holloway of the Learn Centre to the National Insurance Contributions Bill Committee, which was submitted after the Committee had disbanded but was still made available to all its members, because it contains concerns about the delay in getting proper clarification and explanation to software developers on what they need to do in relation to the employment allowance. Given that it is December and they have to get ready for the employment allowance to come online in April 2014, they will not have a huge amount of time to get everything in place and ready. If that is the position on the employment allowance, then why not add in the proposal on NICs for under-21s and deal with both issues at the same time?
Given that we are speaking from the Opposition Benches—unfortunately—our amendment does not propose that the measure should be introduced immediately in 2014; otherwise Government Members would no doubt have shouted at us about the cost of doing so and the spending commitment entailed. However, we have asked for a review that would look at the level of youth unemployment now and the impact that introducing the measure in April 2014 would have had on the level of youth unemployment as it stands today. That is because the Government should not escape scrutiny for the impact that this measure may have had compared with what it will have, I hope, when it comes into force in 2015. If it is found that the measure would have had a significant impact, as we believe it would, that is an important bit of information and the Government would be put under pressure to introduce it sooner than they intended.
This Government found money in the autumn statement for the married couples allowance. They have always said that the recognition of marriage in the tax system is symbolic. However, government is about choices and priorities, and if money can be found immediately to do something that is symbolic and sends a message, then surely it should be found for a practical Government measure that helps to prioritise our young people who need jobs today and not on a date far from now. The choices and priorities of this Government are wrong and they should think again. The emergency presented to this country by the current rate of youth unemployment cannot wait to be dealt with on some future date. The Government should reconsider the start date of this proposal. We therefore intend to press our amendment to a vote.
Mr Brooks Newmark (Braintree) (Con)
I am someone who looks at a glass of milk as being half full, not half empty, and I think that the Government have done much to help young people back into work. The hon. Member for Birmingham, Ladywood (Shabana Mahmood) may wish to mock the Youth Contract, but it has encouraged businesses to offer over 21,000 jobs to people at risk of long-term unemployment. Those 21,000 people appreciate the youth contract and want the job that it has enabled them to have.
We have over 1 million young people in apprenticeships, which are also getting young people back on to the jobs ladder. Indeed, the latest Office for National Statistics labour statistics indicate a significant rise—of about 50,000 in the past three months alone—in the number of young people in work. The number of young people seeking jobseeker’s allowance has fallen by 13,000—the 17th consecutive monthly fall. That is good news indeed. Many constituencies, of Members throughout the House, have benefited, as has Braintree, which has seen a fall in long-term unemployment, regular unemployment and youth unemployment.
On top of all that, I was absolutely delighted to hear the Chancellor supporting the Million Jobs campaign manifesto, which, I hasten to add, I helped to draft, by abolishing the jobs tax for under-21s. It is extremely important that if we are cutting taxes we do it to help those in society we really want to help. As a father of five children between the ages of 16 and 25, I am extremely sensitive to that age group. It is important that we get young people into work, and the new Government initiative does just that. It will enable even more young people to get a foothold on the employment ladder by providing a highly attractive incentive for businesses to hire a young person under 21. I thank Lottie Dexter, the director of the Million Jobs campaign, who has worked extremely hard not only in running it but ensuring that the draft manifesto that we put out only six weeks ago caught the Chancellor’s attention so much that he decided to support it in his autumn statement. I am delighted to support the new clause.
Sheila Gilmore
Our debate in Committee on the wider aspects of the Bill made it clear that employers may well use the allowance, which was originally the major part of the Bill, in a number of ways and that job creation would not necessarily be the only result. Some employers, for example, might choose to provide higher wages, while others might choose to provide more training for the upskilling of their work force.
The Minister did not touch on this, but I presume the same might be said for the current proposal, because it is not, as I understand it, tied to taking on a new employee; rather, it relates to anyone who employs a young person, which, obviously, simplifies the issue in many ways. It would be useful to consider and, indeed, encourage not just the take-up of new jobs—although that is very important—but the issue of upskilling.
As Members of all parties have said—Government Members often throw this at us—structural issues relating to youth unemployment have been around for some considerable time. Many things have been written about the causes, including whether there is a problem with a lack of entry-level jobs and whether people are skilled enough.
Mr Newmark
Would the hon. Lady at least like to join me in welcoming the fact that youth unemployment in her constituency over the past year has dropped by 19.8%?
Sheila Gilmore
I believe that relates to the claimant count, which is not always the same as youth unemployment, because some people in the 18-to-25 age group will have run out of contributory benefits and fallen off the claimant count. I still see an issue when I look around me, even in a city that, in comparison with the rest of Scotland, has always done better with regard to employment.
Of course, it is a good thing. [Hon. Members: “Hear, hear!”] No one is going to say that it is a bad thing. That would be ridiculous.
Sheila Gilmore
I have two things to say to that. Is it a good thing that youth unemployment—or the claimant count at least—has fallen in my constituency? Yes, it is. Do I give the Government credit for that? Well, I am not sure whether it is down to the Government or not, so we should put that to one side.
We would not be debating the proposal, and it would not have been included in the autumn statement, if the Government did not believe that youth unemployment is still an issue and a problem. Many statements are being made about how wonderful it is that youth unemployment is coming down, but the Government clearly believe, like us, that there is still a problem. If there was no problem, I doubt the proposal would have been made.
Although many young people are not necessarily unemployed for long periods, there are groups of young people who find themselves unemployed for a year or even two years, which, as we know, is of huge consequence to people’s future life, health, well-being and income.
Mr Newmark
I am sorry to hear that the hon. Lady’s approach to what the Government are doing is one of, “Bah, humbug!” Given that it is Christmas, will she at least acknowledge, first, that the Government are doing a good job by bringing youth unemployment down in her constituency and throughout the country and, secondly, that this particular initiative of abolishing the jobs tax for under-21s is a good one? It is Christmas.
Sheila Gilmore
It is indeed Christmas and, given that many families up and down this country will be struggling through Christmas, I do not think the Government will receive much thanks. For example, a rising number of people are having to resort to food banks this Christmas and, indeed, throughout the year. We could trade these issues backwards and forwards.
The point I was making was about giving young people who are in employment the opportunity to be trained and to upskill because, while it is very important to get a first job, being able to progress is also extremely important. Will the Minister consider monitoring—in future or even when the proposal is implemented—what happens in practice? Perhaps the Government should tie the proposal to certain beneficial outcomes, such as making the provision available to employers who agree to use it either for the creation of a job or for the upskilling of an existing worker. It would be highly desirable not to encourage practices such as zero-hours contracts, which Members on both sides of the House said were bad when we debated them, so perhaps the allowance should be tied to employers who do not provide young people with zero-hours contracts.
Cost of Living
Brooks Newmark Excerpts(10 years, 6 months ago)
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Chris Leslie
I will give way to Government Members if they can answer this point: what was the Government’s reaction to our call to take action on energy prices? They dithered and argued among themselves, frozen like rabbits in headlights, flailed around and attacked us for daring to stand up to excessive profiteering and then, finally, No. 10 Downing street said, “Wear a jumper.”
Chris Leslie
I will give way to one of the woollier Members on the Government Benches.
Mr Newmark
Fuel prices would be 13p a litre higher if Labour were in power. Consumers have saved £170 on average, which is a saving on the cost of living. That is one area in which the Government have done a lot to help motorists.
Chris Leslie
When the public faced difficulties, the previous Government took action to freeze prices and duty for petrol and diesel. The hon. Gentleman mentions a fictional 13p and seems to think that when people fill up their petrol tanks they say, “Thanks goodness these prices are so low; I must thank the hon. Gentleman.” He is living in cloud cuckoo land. The Government are not just out of touch; they are out of ideas and they are running out of time.
Chris Leslie
The national debt was about £800 million. The national debt—[Hon. Members: “The deficit.”] I know what the hon. Gentleman said. I could hear what he said. I am giving him the figures. The national debt—[Interruption.] It seems that Government Members do not want to talk about the national debt. The national debt was about £800 million. It is now £1.2 trillion. As Brucie might say, “Higher, higher!”
Mr Deputy Speaker
It had better be a point of order, Mr Newmark, if you want to get in early. I do not want to have to put you near the bottom, because I know that this matter is important to you.
Mr Deputy Speaker
Order. I was not taking a point of clarification, but a point of order.
Mr Newmark
It is a point of order, Mr Deputy Speaker. The hon. Member for Nottingham East (Chris Leslie) was asked a question about the deficit. Unfortunately, his answer was about debt. Rather like Rev. Paul Flowers, he does not know basic economics. [Interruption.]
Yvonne Fovargue (Makerfield) (Lab)
No subject impacts more on my constituents than the cost of living. Wages are dropping—in the north-west by 7.8%, a loss in spending power of nearly £1,700 a year—while more people are being given part-time hours or zero-hours contracts. That is not their choice, yet food and fuel prices continue to rise.
People in my Makerfield constituency are “doing the right thing”: they are working or looking for work. For those looking for work, a quick glance at the universal jobmatch site will superficially show that many jobs are available after searching for retail jobs in Wigan. Let us look a bit deeper at these “jobs”, however. In the three pages I checked at random, 67 of the 75 jobs available were for self-employed catalogue distributors—jobs that the site stated it had been assured “may” enable people to earn a wage equivalent to the national minimum wage. Really? How many people have tried these jobs, paid up front for their catalogues—about £150—and found that they consistently earned the national minimum wage after paying all their contributions? It certainly does not include the people who have been to my surgeries after trying these non-jobs and finding that they could make very little—not even enough to heat and eat.
Domestic energy bills have risen by an eye-watering average of 37% over the last three years. In 2012-13, citizens advice bureaux received 92,000 inquiries about fuel debt alone, while Which? estimates that flaws in the market have left consumers paying £3.9 billion over the odds since 2010. We intend to stand up for consumers in this failing market and break the stranglehold of the big six. What have this Government proposed? Nothing. It is no wonder that citizens advice bureaux saw a 78% increase in the number of people having to use food banks last year. Many of those people were in work, yet were unable to pay their bills and could not afford to eat.
Mr Newmark
As the hon. Lady has mentioned jobs, I thought that it would be useful to give her a little information and a few facts. Is she aware that unemployment in her constituency has fallen by 26% in the past year, and that youth unemployment has fallen by 40%?
Yvonne Fovargue
I am grateful to the hon. Gentleman for mentioning the unemployment figures in my constituency. I recently received an e-mail from the Audit Office telling me that the figures were not reliable because the constituency was a pilot area and people were coming off the register.
Admitting that you cannot feed your family is not easy or comfortable. For many people, going to a food bank is a last resort and a source of shame, although it is not their fault but is due to an accumulation of Tory-led policies that are punishing, not rewarding, hard-working people.
I would not be doing justice to my constituency postbag, or to the people who attend my surgeries, if I did not mention the economically unsound bedroom tax. As I have often said before, in Wigan we have a shortage of one and two-bedroom properties and a surplus of three-bedroom properties. People are being forced either to move to the more expensive private rented sector, uprooting their families and incurring further expense, or to pay the difference. Given that 4,200 people in my constituency are affected by reductions in housing benefit ranging from £517 to £1,273, it is no surprise that in October, 2,500 people contacted Wigan and Leigh Housing about rent arrears and debt. That represents an increase of 50% in the last three months.
The bedroom tax means yet another cut in the available income of many of my constituents, forcing them to make stark choices about how they spend their money. Far from being a case of what luxury item they must do without, it is a case of “Can we afford to have the heating on, or should we shiver and buy food—and what about that new pair of school shoes? Heaven forbid that the washing machine or the fridge should break down!” There is certainly no money to save for a rainy day. In fact, many of my constituents are already swamped and drowning in debt.
No wonder the payday lenders, the home credit providers, the log book loan companies and the rest are proliferating. According to a recent report, 48% of people who go to payday lenders are female, and the majority of females have borrowed for everyday necessities. They have borrowed to buy food for the family, or to pay the heating bills. Capping the cost of credit constitutes a welcome recognition that these companies are making profit from despair, but there is much more to be done. The root cause of rising prices and low incomes needs to be addressed if people are to be saved from being dragged into a spiral of debt.
The people I represent are hard-working people who want the best for their families and who are doing the right thing, but they are being let down by this Tory-led Government in so many ways. Every time they go to the supermarket, every time they receive a fuel bill, and every time they turn on the television or walk down the high street and see more advertisements for payday lenders, they are reminded of the Government’s failure to address the issue that is most important to them: the cost of living.
Mr Brooks Newmark (Braintree) (Con)
It is always a pleasure to speak after the hon. Member for Dundee East (Stewart Hosie), for whom I have great respect. Unfortunately, he can sometimes be a little dour and sees a glass of water as half empty rather than half full. I would rather talk about a glass of water being half full than half empty, so my speech might have a more positive tone than his.
The Government have made huge strides to clean up the economic mess created in 2010. As the Governor of the Bank of England, Mark Carney, said on Wednesday 13 November:
“Inflation is now as low as it has been since 2009. Jobs are being created at a rate of 60,000 per month. The economy is growing at its fastest pace in 6 years. For the first time in a long time you don’t have to be an optimist to see the glass as half full.”
Ian Paisley (North Antrim) (DUP)
Will the hon. Gentleman give way on that point?
Mr Newmark
No.
“The recovery”,
the Governor of the Bank of England says,
“has finally taken hold.”
If I may, I would like to begin by highlighting some of the economic achievements of this Government since 2010. The Government have cut the budget deficit by a third. The Government have helped the private sector create 1.4 million new jobs, offsetting any jobs lost in the public sector by 3:1. The Government have ensured that borrowing costs have fallen to record lows, saving money for taxpayers, businesses and families alike. The Government have helped bring inflation down to 2.2% as of October 2013. That is important because of the damaging effect that rising prices can have on the cost of living. The Government have helped bring back growth to the UK economy, with growth now projected to be 2.9% by year end 2014. The Government have ensured that the UK has more men and more women in work than ever before. The Government have seen the number of people claiming unemployment benefit fall at the fastest rate since 1997. Indeed, in my constituency of Braintree, both unemployment and youth unemployment are down 20% in the past year alone.
David Rutley
My hon. Friend sets out an impressive track record of achievement in the economy. Does he also recognise that our economic growth in the UK is projected to be the fastest in any country in Europe?
Mr Newmark
I thank my hon. Friend for that intervention. I am just getting to that point.
Mr Newmark
Furthermore, British manufacturing recently reported the strongest growth on record, exceeding that in every quarter since 1989, and Reuters recently reported that growth in UK services is the strongest in 16 years. The Government have indeed achieved much to rebalance our economy.
Finally on economic performance, as my hon. Friend the Member for Macclesfield (David Rutley) just mentioned, according to the OECD the UK has the fastest growth in the developed world, beating the US, Germany and Japan. So by almost every benchmark, the UK has made huge strides in turning around the UK economy, and the Chancellor and his team at the Treasury should be congratulated on sticking with plan A and ensuring that the UK is on the path to recovery.
The Government also have much to be proud of on the cost of living. The 2013 Budget raised the personal tax allowance to £10,000 from April 2014. That ensured a tax cut for 25 million people, with individuals paying an average of £705 less in income tax than they did in 2010. Indeed, 2.7 million people have been taken out of tax altogether, thereby reducing the cost of living.
Mr Newmark
The Government have already reduced energy bills by £193 by removing the green levies imposed by the Leader of the Opposition and are ensuring that energy companies offer the lowest tariffs to customers, thereby reducing the cost of living.
The Government have frozen fuel duty for the longest period in more than 20 years, with pump prices 13p per litre lower than when Labour was in power. Indeed, the average motorist will save at least £170, the average van driver will save £340 and the average haulier will save £5,200 each year as a result, thereby reducing the cost of living.
Sheila Gilmore (Edinburgh East) (Lab)
The hon. Gentleman and his party must be greatly relieved to be able to report an increase in GDP, given that in June 2010 the Office for Budget Responsibility was predicting that it would be 2.5%, 2.5% and 2.6% in the three years coming. So it must be a big relief to have at last turned the corner.
Mr Newmark
Yes, it is a big relief, but as anyone in business knows—I had been in business for 20 years before I came to this place—turning around a business, particularly in an economy that was as messed up as that created by the Labour Government, takes a while. Progress is not necessarily linear. What we do have is growth returning. That is recognised by the Governor of the Bank of England, the OECD and the International Monetary Fund.
Mr Newmark
I cannot give way; I have allowed the two interventions I am permitted.
Furthermore, the Government froze council tax in 2013-14 for the third year in a row. The combined effect of the Government’s actions means that council tax bills, which doubled under the previous Government, have fallen by 9.5% since 2010, thereby again reducing the cost of living. The Government have increased child care support for low-income working families on universal credit, thereby reducing the cost of living. In 2011, child tax credit increased by £225—the largest increase ever—and in April this year, it went up by 5.2%, a further increase of £135, thereby reducing the cost of living. The Government introduced the triple lock, which means that pensions increase every year by price inflation, earnings growth or 2.5%, whichever is highest. Over the course of their retirement, the average pensioner will be about £12,000 better off under the triple lock, which helps with the cost of living.
Furthermore, the Government introduced the warm home discount scheme, which gives pensioners a £120 rebate on their electricity bill, thereby reducing the cost of living. The Government have increased cold weather payments permanently from a measly £8.50 under the previous Government to £25, thereby reducing the cost of living.
In conclusion, the Government have much to be proud of. The Chancellor made some difficult decisions in 2010 to ensure that the country could have a long-term sustainable economic recovery. As the Governor of the Bank of England reiterated in the Treasury Committee yesterday, the economic recovery has finally taken hold. We should not jeopardise all this by returning to Labour’s tax and spend policies, which created the financial mess that we have finally begun to clear up. The Government must stick with their long-term economic plan, as that is the only sustainable way to raise living standards. I therefore oppose the motion.
Roberta Blackman-Woods (City of Durham) (Lab)
It is always a pleasure to follow the hon. Member for Braintree (Mr Newmark), but rather than him being positive, I think that he looks at the world through extremely strong rose-tinted spectacles. The Government’s record is failing the country, and nowhere is that failure felt harder than the north-east, which is where my constituency of City of Durham is located.
Last month, the Office for National Statistics confirmed that the north-east had the highest regional unemployment rate in 2013. It said that the unemployment rate in the region was the highest in the UK at 10.3% in the second quarter of 2013, compared with 7.8% for the UK. The employment rate stood at 66.5%, lower than the UK rate of 71.5% for the same period. Almost a fifth of children in the north-east lived in workless households in the second quarter of 2013. At 18.7%, that was the highest proportion in the regions, compared with an average of 13.6% for England.
Mr Newmark
Given that the hon. Lady is discussing employment and unemployment I thought it would be useful to remind her that in the past year alone in her constituency, unemployment has dropped by 26% and youth unemployment has dropped by 29.5%.
Roberta Blackman-Woods
I do not know where the hon. Gentleman got his figures, because I looked at the drop in unemployment and the numbers for youth unemployment in Durham showed a reduction of 19 in the last quarter. Although we welcome any increase in employment, he must pay attention to the quality of jobs that have been created. In Durham, a lot of people have lost good, stable, well-paid jobs in the public sector, and have taken insecure, low-paid, zero-hours-contract jobs in the private sector, if any employment at all.
As I was saying, the Government’s failure on living standards is impacting on people in the north-east. I shall go briefly through some of the issues that we are facing. With the current cost of living crisis, people are working longer hours for lower incomes, and despite being in work, many people find themselves in poverty. Government Members seem unable to grasp that.
Lyn Brown
I will not give way. Two hon. Members still want to speak, and I promised that I would not give way.
I recently surveyed my constituents—[Interruption.] Government Members may want to chunter, but I would like them to listen, because it is about time that they educated themselves on how difficult this is for real people. I asked my constituents how they are managing their energy costs, which we know have risen by almost £300, thanks to the inactivity of this Government. I was absolutely appalled to discover that 41% of respondents are spending more than 10% of their household income on heating their homes. That is fuel poverty.
The Prime Minister and his colleagues tell us that the answer is to switch suppliers. Well, 34% of my respondents told me that they had switched, but then found themselves paying more for their heating than they were saving. Most of the 66% who had not switched suppliers told me that that was not because they were happy with their current supplier, but because, “They’re all the same. I would end up paying more.” As for the Prime Minister’s advice on whether to wear a jumper, the response of 97% of my constituents was, “Wow, patronising or what?” I agree with them. His remarks encapsulate just how out of touch he is with the everyday lives of ordinary people in this country.
Many people told me how the rising cost of living is having a detrimental impact on their lives and those of their children. I was told, “In my household, we have to choose a room to heat and we all spend our time in that room.” How on earth do we expect young people to thrive academically in that environment, or even simply get the space to do their homework? I was told, “I don’t have the heating on as long as I’d like to, to save money”, and “We don’t heat our home until it’s nearly freezing inside.” Premature winter deaths soar in cold weather when people are not able to heat their homes. The most recent statistics show that Newham is ninth out of the 32 London boroughs for the number of excess winter deaths, despite it having the youngest population in the UK.
Paying the heating bills is only one part of the cost of living crisis. In the year to March 2013, rents increased by 2.7% on average across the country. In Newham, rents increased by 15% in the same period. That is an average of £135 more per month. Let us also put into the mix the lack of affordable child care, the difficulty in finding and holding on to employment, and the impact of zero-hours contracts on people’s ability to pay the rent. All those issues have become weekly or even daily concerns for people who live in Newham.
Under this Government, the cost of nursery places has risen by 30%—five times faster than pay. How do the Government think hard-working people in my constituency and in the other constituencies we have heard about, who are often on the minimum wage and are living in expensive private sector accommodation, can afford that hike? What advice would they offer my constituents who are working long hours just to make ends meet and who are worried about decent, affordable child care for their families? How would they advise people in my constituency who are struggling to pay exorbitant rents, but are living in overcrowded and often substandard private sector housing? What would they tell the young person who is struggling to find a decent, full-time job? I will tell you, Mr Speaker.
This Government offer empty platitudes. They are out of touch and have no clue what life is like for ordinary working families. They have allowed prices to rise faster than wages in 39 out of 40 months. And when was that halcyon month when wages rose more than prices? It was the month in which the bankers received their bonuses. Does that not tell us all we need to know about the Government? This Government put the wishes of the privileged before the needs of working people. Trust me, Mr Speaker, I could go on and on talking about the abhorrent impact that the cost of living crisis is having in my constituency. The only people who seem to be completely oblivious are the Members on the Government Benches. They care not about the consequences of their cavalier ignorance on the lives of ordinary people. Britain deserves better.
Sheila Gilmore (Edinburgh East) (Lab)
I am not at all surprised that the Government Members who have spoken in this debate on the cost of living—all of whom, interestingly, are men, with the exception of the Minister who will respond—seem so delighted and thrilled that they can come here and talk about a recovery, because something very strange has happened over the past three and a half years.
In June 2010, the Office for Budget Responsibility made its first pre-Budget forecast before the emergency Budget that we were rushed into because we had to do something about the economy. It predicted that GDP growth would be 2.1% in 2010-11, 2.6% in 2011-12, 2.9% in 2012-13 and 2.7% in 2013-14. It was assumed that inflation would be at its highest at 4.1%. I seem to remember that it hit 5.2% or thereabouts. Of course, the higher-than-predicted inflation was the only reason why the Government were able to boast about record increases in pensions.
Something happened between June 2010 and now. The thing that happened was the Government’s economic policy. Instead of improving the economy over the past two and a half years—
Sheila Gilmore
Time is very limited, so I will not take any interventions. During that period, economic growth has gone backwards and we have found ourselves in a position of stagnation—[Interruption.]
Catherine McKinnell
It is time for Government Members to take responsibility for the economy: three wasted years, lost opportunities and the loss of jobs and growth as a result of this Government’s failing economic policies.
Mr Newmark
It is an inconvenient truth for the hon. Lady that in the previous Parliament unemployment in her constituency went up by a whopping 88%. Under this Government, it has gone down 12%.
Catherine McKinnell
There are some inconvenient truths for Government Members. Personal debt has increased on their watch by 33% in my constituency and by a significant number in the hon. Gentleman’s constituency.
Hon. Members are keen to refer to the previous Government’s borrowing figures. As of last week, the coalition Government have borrowed more in three years than the Labour Government did in 13 years of government—that is the reality. On every economic test, and on the test the Prime Minister and the Chancellor set for themselves, they have failed palpably. It is clear from the many contributions to the debate that the recovery, which appears to be taking place, has yet to touch the lives of millions of people, contrary to the impression given by Government Members. My concern is that things will get a whole lot worse before people see any signs of them getting better.
Any economic recovery needs to deliver rising standards for all, not just for the Prime Minister, the Chancellor and their friends at the top. We need a recovery that is balanced and built to last. Critically, it needs to benefit every corner and community in the country. Instead, the Government, and the Government Members who support them, continue to bury their heads in the sand. They remain oblivious to the living crisis experienced by millions of families, or, worse, they deny what they hear and see with their own eyes. It is the same old Tory party, aided and abetted by the Liberal Democrats. They are totally out of touch with the reality of life for so many in Britain today who find themselves increasingly out of pocket and increasingly in debt.
Nicky Morgan
My hon. Friend is indeed right. I wanted to come to his speech, because he started by talking rightly about fuel duty and the wonderful campaign he has launched to ensure that households are not spending as much as planned under the last Labour Government. I heard his plea for a further cut. I take note, but I make no promises.
We then heard from my hon. Friend the Member for Braintree (Mr Newmark), who gave a characteristically positive speech. I note that unemployment in his constituency, including youth unemployment, is down by 20%, which is definitely something to be recognised. My hon. Friend the Member for Spelthorne (Kwasi Kwarteng) rightly talked about the recovering economy and about how debt had become endemic under the last Government. He is, of course, absolutely right.
My hon. Friend the Member for Tamworth (Christopher Pincher) coined a new phrase that I hope will spread across the Twittersphere and beyond about geeks bearing gifts. I wonder whether he would agree with Charles Clarke, the former Home Secretary, who said of Labour’s energy policy: “My criticism of that particular proposal is I think it is a one-off effort that does not deal with the overall comprehensive issue we have to address. I think there is even a case that some of the recent price rises we have seen might have been a response to the suggestion of a freeze”. That is absolutely correct.
We heard a wonderful speech from my hon. Friend the Member for Hexham (Guy Opperman), who talked about apprenticeships, noting the move from 430 to 690 apprentices in his constituency over the last year. He is absolutely right that for 13 years the last Labour Government failed to tackle the lack of skills necessary for our economy.
Mr Newmark
Is the Minister aware that every single Labour Government have left power with more people unemployed than when they arrived in power, while this Government are bringing unemployment down?
Nicky Morgan
My hon. Friend is absolutely right. Unsurprisingly, we did not hear that from Labour Members.
We heard an excellent speech, too, from the hon. Member for Redcar (Ian Swales), and I would like to thank him for his remarks, particularly his comments about energy investment and support for manufacturing.
Women and the Cost of Living
Brooks Newmark Excerpts(10 years, 6 months ago)
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Nicky Morgan
I am always happy to receive submissions on this issue from Members from across the House. We have already committed an extra £200 million for people on universal credit so that coverage of their care costs will go up from 70% to 85%.
Let me remind the House that we are increasing free early education places for three and four-year-olds to 15 hours a week. We are enabling low-income families to recover their child care costs and providing all families with support for 20% of their child care costs from autumn 2015.
Mr Brooks Newmark (Braintree) (Con)
It is also worth noting that it is this Government who have taken 2.5 million people out of tax entirely, including many women.
Nicky Morgan
My hon. Friend is absolutely right. The increase in the personal tax threshold meant that 57% of those who benefited and who were taken out of tax were women. That is 145,000 women who are no longer paying income tax. That money is staying in their households and they are able to spend it on themselves and their families, which should be welcomed.
Alison McGovern
I would have listened hard to what that lady had to say and would have asked her some more questions about her circumstances—[Interruption.] The hon. Gentleman says that that was under my Government, but I would point to the success of the previous Labour Government on women’s employment. I remember only too well my mum’s experience of being a childminder and setting up a pre-school in Wirral, in my constituency. I remember the absence of support under the previous Tory Government. I will take no lessons whatsoever from what the hon. Gentleman says from a sedentary position.
Mr Newmark
I know that the hon. Lady does not like to hear facts, but the fact is that today this Government have delivered more jobs for women than ever before in history and certainly more than under 13 years of Labour. More women are in work today than ever before.
Alison McGovern
I am glad that the hon. Gentleman intervened to patronise me and say that I do not like to hear facts—[Interruption.] I am glad that he intervened to patronise me in that way, because—[Interruption.]
Lilian Greenwood
I am not going to take any lectures from Government Members who have doubled the amount of debt in this country.
Of the £14 billion the Government are taking from people’s pockets to pay down the deficit through changes in tax, benefits, pay and pensions since the general election, £11 billion is from women, even though they still earn less and own less than men. More than 40 years after Labour’s Equal Pay Act 1970 outlawed paying women less than men for the same work, women still face a lifetime of earning less. For every £1 a man takes home, a women takes home just 85p.
Under this Government, the situation is likely to get worse. The cuts mean that women are losing employment in the public sector, but they are not getting comparable jobs in the private sector. The Women’s Budget Group analysis shows the following: although unemployment across the whole UK has fallen by 0.6% for men, it has increased by 0.8% for women; the number of women who are unemployed has increased by nearly 15% to over 1 million, the highest level for a generation; and long-term unemployment has increased eight times faster for women than for men. For older women aged over 50, the situation is even worse: unemployment is up by 42,000—more than a third—since the general election, while for older men it has fallen. As my hon. Friend the Member for Ashfield (Gloria De Piero) said, unemployment rates are particularly high among black and ethnic minority women.
Some jobs have been created in the private sector, but overall 63% of them went to men and only 37% to women. For women who are still working in the public sector, while wages have been frozen, at least progress was being made year on year to close the gender pay gap, with the difference between the hourly pay rates for men and women narrowing from 18.2% to 14.2% in recent years. There has been no comparable reduction in the private sector, where women earn, on average, 25.1% less per hour than men. As the Fawcett Society warns:
“Unless the government takes urgent action, women will lose their precarious footing in the workforce. We face a labour market characterised by persistent and rising levels of women’s unemployment, shrinking pay levels for women and a widening of the gender pay gap.”
Even the recent return to growth will not necessarily help if the Government do not act. Professor Diane Elson of the Women’s Budget Group says:
“Our big concern is that…women are going to be so far behind they will not be able to catch up.”
Is there any reason to hope the Government are listening and will act? Not if recent announcements are anything to go by. The Tories’ Free Enterprise Group wants to extend VAT—a deeply regressive tax that hits the poorest hardest—to essentials such as food, children’s clothes and bus fares. The Lib Dems tell us that the answer is to increase the income tax threshold. The Deputy Prime Minister claims that that will help those on low incomes, but any gain will be far outweighed by the Government’s tax rises and unfair changes to tax credits—and of course the very poorest will not benefit at all.
Mr Newmark
As a member of the Free Enterprise Group, I want to put it on record that I oppose the suggestion that was made by one individual in that group. We should not impose VAT on children’s clothing and food, in particular, as that would be regressive and punitive. It was not said by the Free Enterprise Group but by one individual in that group, and I certainly oppose it.
Lilian Greenwood
I am sure we have all read about the proposed changes and know who to believe.
The Government’s own impact assessment on the tax threshold rise to £10,000 shows that 57% of those gaining from the measure are men and only 43% are women. The Women’s Budget Group notes that three quarters of the gain will go to the better-off half of all households. On average, households in the poorest 10% of the distribution gain just £6 per year; in contrast, the richest 10% of households gain an average of £87 per year. What has the Government’s priority been? It has been a tax cut for those earning over £150,000 a year and a massive giveaway to millionaires, while child benefit—a lifeline for many mums—has been frozen not once but for three years in a row. Tax credits and other benefits that many low-paid women rely on will rise by just 1%, condemning families to falling living standards and increasing the pressure on women, who are most often responsible for making ends meet. It is not a record to be proud of.
These changes threaten women’s economic autonomy. Women who live on their own lose most from the combined impact of changes to taxes and cuts to benefits and services.
National Insurance Contributions Bill
Brooks Newmark Excerpts(10 years, 7 months ago)
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Mr Gauke
No, not at all. There is a whole host of measures, including the regional growth fund, and there is some really good news; exports are up significantly in the west midlands and the north-east in particular. We are taking steps to strengthen industries up and down the country. The hon. Gentleman touches on the regional employers’ NICs holiday; let me turn to that, because I suspect that the policy will feature heavily in the arguments that we hear from Opposition Front Benchers.
Mr Brooks Newmark (Braintree) (Con)
The hon. Member for Carmarthen East and Dinefwr (Jonathan Edwards) made a good point about rebalancing the country’s economy. Is my hon. Friend the Minister aware that we have had the biggest growth in construction in six years? The Chancellor and the Treasury should be congratulated on ensuring that the Government are rebalancing financial services and manufacturing in the economy.
Mr Gauke
The striking point about the most recent growth numbers is that they demonstrate growth in every sector, and that is very encouraging. I began by saying that the economy in the mid-2000s, say, was very dependent on financial services and on London and the south-east. Of course we want a successful financial services sector and we want London and the south-east to do well, but it is also important that growth is better balanced throughout the United Kingdom, and the Government continue that commitment.
Oral Answers to Questions
Brooks Newmark Excerpts(10 years, 8 months ago)
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Mr Osborne
Gross lending is up under the funding for lending scheme, which we operate jointly with the Bank of England. We are aware of the specific challenge of small business finance, which is why, just before the summer, with the previous Governor, we launched a focus of the scheme on small business funding.
The hon. Gentleman says investment is failing under this Government. He is an MP from the midlands. Given his personal history, I would have thought he would welcome the announcement by Jaguar Land Rover of the 1,700 jobs being created in Solihull. As he well knows, four years ago there was a choice of closing either Castle Bromwich or Solihull. Not only are both open, but a huge investment in the new technology of ultra-light cars is coming along with 1,700 new jobs. The hon. Gentleman is a midlands MP and used to work for the company, so I would have thought he would welcome that.
Mr Brooks Newmark (Braintree) (Con)
19. I met the Braintree district business forum last week. The feedback was very positive—the economy is turning around and demand for business is growing—but, as businesses grow, they face a working capital squeeze. What are the Government doing to enable businesses to access working capital more easily?
Mr Osborne
The business bank is up and running, and £300 million is in the market to help support small business lending. My hon. Friend has gone around the country promoting some of the investment tax breaks we have provided, such as the seed investment tax break, which provides that crucial, early-stage capital so that the many businesses now being created have the money to grow.
Finance Bill
Brooks Newmark Excerpts(10 years, 11 months ago)
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Debbie Abrahams
It is always a pleasure to follow my hon. Friend the Member for Scunthorpe (Nic Dakin). I agree with him totally and will speak in support of new clause 10.
The points made by the Institute for Fiscal Studies last week when the comprehensive spending review was published support what we are trying to do with the new clause:
“The documentation and explanation accompanying yesterday’s spending review announcements was woeful”.
It went on to say:
“Publishing such a small amount of information with little explanation is not an exercise in open government.”
That warning says it all. It reflects the Government’s total incompetence on the economy.
Last week’s spending review was further evidence that the Government’s economic policies are failing. They were warned by my right hon. Friend the Member for Morley and Outwood (Ed Balls) that cutting too far and too fast would smother growth, and that is just what has happened. The Chancellor promised that he would deal with the deficit by 2015. That will not happen. He promised that his emergency Budget and his first comprehensive spending review in 2010 would deal with the nation’s finances and put the country on the road to recovery. Again, that has not happened.
Mr Brooks Newmark (Braintree) (Con)
It is interesting to hear the hon. Lady refer to the right hon. Member for Morley and Outwood (Ed Balls). She is critical of our Government’s policy, but does she support increasing the debt? She criticises not bringing down the deficit faster, but if she followed her right hon. Friend’s policy, I am afraid the deficit would be going up, as would the debt.
Debbie Abrahams
I am afraid I totally disagree with the hon. Gentleman, but I thank him for his intervention. Perhaps I could mention that his right hon. Friend the Chancellor said:
“We have already asked the British people for what’s needed.”
He promised that he would not come back asking for more, yet last week we were here again. I hate to draw parallels with Oliver Twist, but it is a little like him coming back for more. In three years, the Chancellor has managed to hollow out the economy. He has not sorted out the City, and he is passing it off as everybody else’s fault, rather than his own.
Mr Newmark
There is a thing called “chutzpah”. Is the hon. Lady saying that her party bears no responsibility whatsoever for the enormous debt legacy and deficit the country was left with? The Government are making progress. More men and women are in work than ever before and the deficit is down by a third. Yes, the debt is not going down as fast as possible—
Madam Deputy Speaker (Dawn Primarolo)
Order. Mr Newmark, this is not an opportunity for you to make a speech; it was an intervention on new clause 10, and we would like it to be relevant.
Cathy Jamieson
Thank you for that guidance, Mr Deputy Speaker. I had feared that the Exchequer Secretary would jump up and ask a supplementary question about the Opposition’s position on cutting VAT.
Cathy Jamieson
I suspect that the hon. Gentleman wants to stray into the territory where Mr Deputy Speaker has suggested we do not go. Suffice it to say that my hon. Friend the Member for Hyndburn (Graham Jones) makes yet another suggestion that the Minister would do well to consider as part of the wider review. I look forward to hearing his response.
Jack Dromey
You are right, of course, Mr Deputy Speaker.
We are here to stand up for the people we represent, and we all see the impact of the housing crisis in our constituencies. I see the impact in the shortage of homes being built in Erdington—56 certified by the National House-Building Council in 2012—and the building worker, one of 79,000, who lost his job, a big man who burst into tears on his front doorstep in Marsh lane and said, “I’ve lost my job three times; I am desperate to provide for my family. I simply can’t cope any longer.” I also see the impact on the homeless families who come to my surgery—on one occasion, they had just been evicted—desperate for a decent home, and the young people in the Orchard project run by the YMCA in my constituency, where numbers of young homeless people double every year.
Mr Newmark
Is the hon. Gentleman aware that homelessness today is at its lowest for the past 30 years? It has been lower in only three of the past 27 years. It has been bad, but homelessness today is the lowest it has been for 27 out of 30 years.
Jack Dromey
I prefer to rely on statistics from the hon. Gentleman’s Government: homelessness has risen by 30% since the general election.
A teacher and a firefighter in their 20s came up to me on Erdington high street and poured their hearts out about how they are desperate to buy their own home but simply cannot get a mortgage. Evidence from Shelter has shown that typically, couples in their 20s will have to save for 11, 12, 13 or 15 years to afford a deposit. Extraordinary statistics show that the number of people between 25 and 34 who own their own home has fallen from 2 million to 1.3 million, and census figures showed that for the first time since the 1950s home ownership has fallen in our country.
I have seen the problems in the private rented sector in my constituency, such as the lady in Streetly road who had to be rescued by the council’s private tenancy team from a premises for which she was being charged a fortune in rent, but which was deeply dangerous because of faulty electrical wiring.
Jack Dromey
My hon. Friend is right. We call it protection for good tenants and landlords alike; the Government call it red tape and have rejected every move since 2010 to regulate the private rented sector more effectively. No Government have done enough in our lifetime, but my hon. Friend the Member for Kilmarnock and Loudoun was right: I will compare favourably anytime the record of our Government to the current Government.
Mr Newmark
I hate to throw facts at the hon. Gentleman, but 421,000 social homes were lost under the previous Labour Government. This Government are building 170,000 homes by 2015. This Government’s record is far better than that of the past 13 years under the previous Government.
Jack Dromey
Let me spell out the facts: 2 million new homes; 1 million more mortgage holders; half a million more affordable homes; and 1.6 million social homes brought up to a decent homes standard after our Government inherited a £19 billion backlog in housing repairs. In the 1980s, the hon. Gentleman’s Government stood back and allowed a tidal wave of mortgage repossessions. In 2008, we took action to keep people in their homes and, through the kick-start programme, sustained the building industry against collapse and got Britain building again. I will compare that record favourably anytime to the miserable track record of failure of the hon. Gentleman’s Government.
Finance Bill
Brooks Newmark Excerpts(10 years, 11 months ago)
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Mr Gauke
My hon. Friend brings me to the point that I wanted to move on to: the report that the Chancellor of the Exchequer commissioned in Budget 2011 to evaluate the Exchequer impact of the additional rate of income tax. The report was published alongside Budget 2012. It concluded that the underlying yield from the increase from 40% to 50% was much lower than originally forecast, owing to large behavioural effects—it was possibly only £1 billion and could in fact be negative. The 50% rate also risked damaging growth and the UK economy if it had remained permanent.
Mr Brooks Newmark (Braintree) (Con)
The hon. Member for Islwyn (Chris Evans) focused on our policies. The inconvenient truth for the Labour party is that it had the opportunity for 13 years to test the 50p rate to destruction, but we quickly saw the evidence of the Laffer curve, which shows that, as we lower tax rates, we can collect more revenue. The Government should be congratulated on finding alternative ways of trying to get the rich to pay their just deserts, if the Labour party wants them to do that. In fact the Government have collected more money from the rich by lowering the rate from 50p to 45p and by looking at other ways to collect that money.
Mr Gauke
My hon. Friend is absolutely right. The point is not whether we should seek to get a significant contribution from the wealthiest; it is how we go about doing it. There is a real problem with a very high rate of income tax directed at the most mobile people, who have many more options in how they respond. Not surprisingly, the evidence that the HMRC evaluation discovered is that there is a significant behavioural response.
The hon. Member for Kilmarnock and Loudoun (Cathy Jamieson) said, “This is all tax avoidance and one should crack down on tax avoidance.” I agree: one does need to address tax avoidance, and we have more ambitious targets for HMRC than it has ever had before. We have made a number of changes to the law to address avoidance. I could go on at some length about the steps that we have taken, but the behavioural effect is not only about tax avoidance, it is also about behaviour that is entirely consistent with Parliament’s intentions. One might find people making bigger pension contributions, for which the House has determined tax relief should be available. One might find people retiring earlier or locating in other jurisdictions. All those things have an impact.
Therefore, there is a significant behavioural effect in this area, which brings me to the point that my hon. Friend the Member for Braintree (Mr Newmark) made: the 50p rate is not an effective way of raising revenue, which is why, in my opinion, the Labour party will not give a commitment to bringing the 50p rate back. It knows it is bad economics and does not raise revenue. It knows it sends a bad message about the UK as a location in which to do business. That is why Labour had a 40p rate for 4,722 of the 4,758 days that it was in office. There was a 50p top rate for just 36 days at the very fag end of the last Government, when they knew with a fair degree of confidence that they were going to lose office.
Mr Newmark
I sympathise somewhat with the point of the hon. Member for Islwyn (Chris Evans) about his and his party’s desire to target bankers, but if we want to create an entrepreneurial society, we must realise that not all the big wealth creators are bankers; they are also people in manufacturing, hi-tech industry and so forth. If we want them to settle in the UK, we must make our tax environment attractive and competitive internationally.
Chris Leslie
My hon. Friend has touched on the other argument in favour of the proposal. This is not just a matter of fairness; there is also an economic imperative involved.
I apologise for boring the House about the need for growth and jobs in our economy. That seems to be anathema to some Members on the Government Benches. Many lower and middle income families have suffered increased taxes and cuts to their tax credits, and that is the price that they are paying for the failure of the Government’s economic ideology. The Government promised that all this pain would be worth while. The Chancellor promised that he had done all he needed to do, and that he would not need to come back and ask for more, but what did we see last week? He came back for yet more. That is the price to be paid for the Government’s failed economic plan. The economy is flatlining, and the Government have delivered barely 1% of economic growth since the fabled 2010 spending review in which they promised 6% by now. And let us not forget the rising deficit in the last financial year, up from £118.5 billion in 2011-12 to £118.7 billion in 2012-13. That is a rise in the deficit—
Chris Leslie
And the hon. Gentleman is rising as well. Perhaps he would like to confirm those figures.
Mr Newmark
Following on from what my right hon. Friend the Member for Wokingham (Mr Redwood) said, I would like to ask the hon. Gentleman whether he shares my concern that many elderly people are asset rich but cash poor. How would his proposal deal with that particular challenge?
Chris Leslie
That is why we must ensure that we move the issue forward and get some proper workings from the Treasury—[Interruption.] The hon. Member for Enfield, Southgate seems to think that he has all the answers, so why do the Government not publish them? What is going on with Government Members? They should share these things in the public domain. Do we really have to make a freedom of information request to Ministers in order to get those data?
Chris Leslie
I will give way to the hon. Gentleman in a moment. The Liberal Democrat 2010 manifesto—I know that he has his own signed copy—said that they would introduce a mansion tax at the rate of 1% on properties worth more than £2 million, paid on the value of property above that level. We looked closely at the workings they did on the issue. They suggested that £2 billion of revenue could be raised. If that was extrapolated through to the 10p band, the band would be roughly £1,000, but it might not be. We should look at the details.
Mr Newmark
I know that maths is not the hon. Gentleman’s strongest suit, because in Committee we heard that he could raise £2 billion from £1.85 billion in bonus taxes. The Minister has been very clear that £2 billion divided by 55,000 is £36,000 on average. Does the hon. Gentleman at least accept the principle that this is going to cost taxpayers £36,000 per household on average, not in relation to bands?
Chris Leslie
The Government have apparently undertaken their own valuation exercise, perhaps stealthily, so they could publish the information on the numbers of properties across the country. Perhaps the Deputy Prime Minister, with his 16 special advisers, fanned out across the country to look at the issue. I do not know how they found out the 55,000 figure. If the hon. Gentleman has that information and publishes it, I will be interested to see it, but I am afraid I cannot be certain that it is the correct figure. Labour Members have to be very careful and cautious in taxation matters. We want to make sure that all the figures are very clear and well worked through instead of taking the Exchequer Secretary’s back-of-a-fag-packet approach. I take it as a commitment from him that all this information will be published in the public domain, and then perhaps we can work on devising this measure in a less partisan way.
Mr Gauke
That is not quite what I said. I said that it would not be sensible for the UK to take unilateral action to change the tax law that applies internationally and that the best approach to dealing with international tax issues is to work multilaterally with other economies to update the tax system. I shall turn to some of the specific elements of new clause 12 in a moment, but I am setting out the framework. It is sensible for us to work with other countries to ensure that the international tax system does what it needs to, rather than going off on our own and making changes that could damage the UK’s competitiveness. I am sure that no one in this House would want us to do that.
Mr Newmark
I congratulate the Government on their work, particularly in the G8 meeting, in trying to co-ordinate efforts to prevent abuse by multinational companies. Such companies are extremely portable and, does he not agree that the big problem is that if we do not act on a multi-jurisdictional basis, they can move anywhere? If we take unilateral action and they move, that risks jobs in this country—that is why we must never act unilaterally in dealing with such situations.
Mr Gauke
My hon. Friend makes a very important point. Elements of a business are highly portable. In 2007-08, for example, the UK’s position on headquartered companies was very uncompetitive because of our controlled foreign companies regime and a number of businesses moved their headquarters out of the UK and went elsewhere, which had an impact not just through lost corporation tax revenue but more widely, as it meant that individuals paying income tax and decision making were moved out of the UK. That was not in the UK’s long-term interest, so we reversed the situation. Now we have a much more competitive position, which means that companies are moving back to the UK and that new businesses are moving here, too.
My hon. Friend the Member for Braintree (Mr Newmark) is absolutely right that elements of a multinationals’ business are very mobile and that we need a tax system that reflects that. An important part of making our tax system fit for purpose is that it should reflect that, which is why we should work multilaterally.
Mr Newmark
Not that I like to pick on individual countries, but does my hon. Friend agree that the evidence from France, with a relatively newly elected left-wing Government, suggests that businesses and wealthy individuals are moving across the channel in their droves to set up business in the UK?
Mr Gauke
I would say—I think that this is the most tactful way of putting it—that the Government are determined to send the signal that the UK is open for business. That is how we can win the global race. Other Governments might wish to take other approaches, and that is for them to decide. For the UK, we believe in open markets and a competitive tax system—but a tax system, none the less, in which businesses pay the tax they should and in which economic activity is properly taxed.
We have made a commitment to act and have backed that up with extra resources for the OECD. The UK has been actively participating in the development of the OECD’s comprehensive action plan for tackling such issues, which will be presented to the G20 later this month. It might interest hon. Members to know that at the recent Lough Erne summit the G8 called on the OECD to draw up a common template for multinationals to report to tax authorities where they make their profits and pay taxes around the world. That will give tax authorities a new tool against tax avoidance to help them efficiently identify and assess risks, but requiring publication of that information would put the UK at a competitive disadvantage to other countries that did not require publication. It would also impose costly administrative burdens on business and Government.
The new clause proposed by the Opposition would require all multinational companies to report all their UK corporation tax payments—not just tax related to the GAAR, but the whole of their UK corporation tax. That goes way beyond the clear policy that we have set for the GAAR and would risk giving an impression that the GAAR has an impact on all corporation receipts, creating the sense of uncertainty about the impact of the GAAR that we have gone to some lengths to avoid.
John Mann
Somebody is making money, because my own football club would appear to have been part-based in the Cayman Islands, in a structure that then took it into the British Virgin Islands and into Monaco and who knows where else. There are intricate webs criss-crossing these so-called “tax-efficient countries”—these tax havens for tax dodgers, corporate and individual. This Bill follows the biggest financial crisis since the 1930s, with working people losing real income year by year, unemployment rising, a worldwide recession, and people less well-off than they were five years ago. The Bill, however, contains no constructive, detailed, productive proposals on how we are going to deal with these territories. We spend taxpayers’ money providing the armed services to guarantee them and then we turn around and claim that we are the world leaders. I say poppycock to us being the world leaders. This is an excuse of a policy. This is an excuse of an attempt in a Finance Bill. This is an embarrassment to the coalition partners, who would love, if they could come up with some ideas, a robustness to put behind it.
The big dividing point in British politics at the moment is this unwillingness to deal with the tax dodgers. These little clauses—new clause 4 and new clause 12—in their own small way encompass the problem in front of us and in front of the British people.
Mr Newmark
I felt that the hon. Gentleman might need to refuel a little, as he was running out of breath. I am curious—given that many of the unions and pension funds invest in funds that invest in offshore places such as the Cayman Islands, making a lot of money for ex-union members and pensioners, will he suggest that the Labour party recommends that those unions and pension funds no longer use fund managers who invest in those offshore entities?
Spending Review
Brooks Newmark Excerpts(10 years, 11 months ago)
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Mr Brooks Newmark (Braintree) (Con)
Most of my constituents care about two things: whether they have a job, and what level of interest they pay on the mortgage or their business. More than 1.3 million new jobs have been created in the private sector, over a quarter of a million new businesses have been created and we have record low interest on mortgages and on businesses. Does my right hon. Friend feel, like me, that that would be jeopardised if we followed the shadow Chancellor’s borrowing plans?
Mr Osborne
I fear that it would be jeopardised and this country would be back in intensive care. It is remarkable that the shadow Chancellor did not have the courage at that Dispatch Box to say that Labour would borrow more. Labour did say that for three years and now it has completely gone silent.
Oral Answers to Questions
Brooks Newmark Excerpts(10 years, 11 months ago)
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Mr Brooks Newmark (Braintree) (Con)
Does my right hon. Friend share my concern that, notwithstanding the Alice in Wonderland economic world of the shadow Chancellor, a plan to borrow more will not actually bring borrowing down?
Mr Osborne
I completely agree that Labour’s plan to borrow more to borrow less is completely nonsensical. It really is extraordinary that a day after the Labour leader said that Labour had ruled out borrowing more, the shadow Chancellor committed the party to doing just that. It is a catastrophic position for his party to hold. Frankly, I do not think that the country will ever adopt it.
Oral Answers to Questions
Brooks Newmark Excerpts(11 years ago)
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Danny Alexander
I agree, as do the entire Government, that an EU-US free trade area would be of substantial benefit to the United Kingdom and to the whole of the EU. I welcome the fact that the Prime Minister is in Washington this week precisely to advance that agenda.
Mr Brooks Newmark (Braintree) (Con)
The Government is to be congratulated on creating over 1.25 million private sector jobs, but youth unemployment is, as we have heard, still a sticky problem. Will the Minister join me in encouraging businesses to take advantage of the £2,000 tax break provided by the national insurance contributions Bill to try to hire one, two, three or even four young people?
Danny Alexander
First, I congratulate my hon. Friend on the work he is doing on the million jobs campaign to support young people in getting back to work. I echo his words on the employment allowance, which ensures that one person on an average wage and three on the minimum wage can be employed national insurance-free. That should be a substantial incentive, especially for small businesses, to take on more staff.
Mr Gauke
The hon. Lady is right to raise this issue, which we touched on earlier. One of our priorities for the G8 presidency is to bring forward measures on tax evasion and tax avoidance. It is worth pointing out what the Prime Minister said in an article in The Wall Street Journal yesterday; he wants to encourage
“better global reporting to tax authorities in both the developed and developing world”.
That could make a big difference.
Mr Brooks Newmark (Braintree) (Con)
Will the Minister join me in supporting Lord Young’s report on growing micro-businesses, which was released yesterday? It suggests a new package of support for starting and growing small businesses.
Danny Alexander
I strongly welcome that report. The Government have already introduced a package of measures, including start-up loans to support new small businesses. Lord Young has presented his findings to the Government and we will respond in due course.