The Economy and Work

Callum McCaig Excerpts

Thursday 26th May 2016 Commons Chamber

[Mr Osborne]

I personally looked closely at this proposal, and it would cost more than £3 billion a year. It is a very expensive tax reduction, only a small proportion of which would go to the steel industry and none of which would go to the steel industry in Wales, where rates are devolved to the Welsh Government. That is why we have not taken that step. We have done other things to reduce business rates for small businesses and changed the uprating of business rates for all firms, including large industrial firms, to the consumer prices index, which will bring a massive saving over many years, but I judged that the hon. Lady’s proposal to help the steel industry was a sledgehammer and that only a small amount would get to the steel industry. It is better to use other forms of direct support for the industry. That is why we took the decision we did in the Budget. We thought there were better ways of helping.

The economic reforms in the Queen’s Speech continue what we are trying to do to improve the productivity growth of the British economy so that Britain, unlike many other advanced western economies, sees its living standards not stall but continue to rise. That is why we have increased expenditure on transport infrastructure, even in straitened times, and many projects, such as Crossrail, are now close to completion. That is why we introduced the apprenticeship levy—to drive up skills—accepting that low skills had been an endemic problem in the British economy for many decades; and that is why, in part, we introduced a national living wage—not just as a measure of social justice but to tackle low pay and drive up productivity in the workforce.

We will not rest there. The Queen’s Speech sets out a raft of other things. Measures in the Finance Bill will continue to make work pay by raising tax thresholds, helping 20 million people with an income tax cut and taking 4 million of the lowest-paid out of tax altogether. We are also making big changes in corporate taxation by closing loopholes, restricting interest relief and preventing the diverting of profits, while reducing rates of business tax to ensure that we remain the most competitive place in the world to do business.

The digital economy Bill will ensure that Britain remains at the forefront of the information revolution and provide the broadband network that is the equivalent of the canals, railways and motorways of the past that previous generations built for us. That is why, as mentioned in the Queen’s Speech, we are introducing the legal right for anyone to request a 10 megabit connection and encouraging more private investment into this vital artery of the modern economy; and why we are making sure that Britain is at the forefront in the revolution in driverless cars.

We are boosting competition with the better markets Bill and putting our new National Infrastructure Commission on a permanent statutory footing, for which people in both political parties have been calling for decades. It will now be one of the permanent fixtures of our country and has already made recommendations, under the excellent leadership of Lord Adonis, to improve transport connections in London, with Crossrail 2; to improve connections in the northern powerhouse and across the Pennines; and to plan for the future of our energy supplies by being able to store energy. All those recommendations, accepted by the Government, are now in the Queen’s Speech. I am also delighted that we have reached an agreement with Sadiq Khan, the Mayor of London, that Andrew Adonis will help develop the Crossrail 2 proposal, which is vital for our capital.

[Callum McCaig (Aberdeen South) (SNP)]

The Chancellor mentioned energy. Despite the Government’s welcome move on the headline rate of tax, a further 475 jobs, predominantly in Aberdeen, have been lost at Shell. Despite their welcome announcement, it is clear that more needs to be done. Will he engage with us and the industry, through the Finance Bill, to focus particularly on exploration so that we can find and get at the 20 billion barrels of oil that remain in the North sea?

[Mr Osborne]

I saw the unwelcome news about the Shell job losses. Working with the Scottish Government, we will do everything we can to help the people who have lost their jobs and make sure that this industry, vital to our country, is protected at a time of low global oil prices. That is why we have worked with Aberdeen on the new city deal and to improve the harbour; and that is why, in the Budget, we chose, as the big tax measures in this area, the abolition of petroleum revenue taxation and a halving of the supplementary charge. We are ready and stand willing to help this industry at this difficult time, because it is world class and we want to make sure we get as much oil out of the North sea basin as we can.

We are also addressing, in the Queen’s Speech, other challenges in the British economy, such as the low savings rate, which we have had for many decades. We have reformed pensions and given pensioners access to their pension pots—250,000 pensioners have already made use of that innovation. I can also tell the House that today at our request—we asked it to impose a charge cap on exiting those pensions—the Financial Conduct Authority has announced that there will be just a 1% cap, which is lower than the range it was consulting on.

The Queen’s Speech also contains a proposal for the lifetime ISA that I announced in the Budget, so that young people no longer have to choose between saving for their home and saving for their retirement. In the words of Martin Lewis, the personal finance guru, it is the biggest change in personal savings this country has ever seen.