Amendment of the Law

Christopher Pincher Excerpts

Thursday 20th March 2014 Commons Chamber

[Ed Balls]

The irony is that back in 2011 the Chancellor was in favour of it, and now he has changed his mind. The OBR, which we supported from the outset in this Parliament, has established a good track record, and we are happy for our manifesto to be audited. What is it about the Conservative Front Benchers that means that they are scared of independent OBR audit of their manifesto? Who knows?

I return to the welfare cap, and I will give a bit more detail for Government Members. We have had a lot of tough and divisive talk from the Chancellor on welfare over the past three years, but it cannot hide the fact that social security is up by £13 billion compared with his plans, particularly because of his failure on housing benefit. We have called for a cap on social security spending, and we will support the welfare cap next Wednesday, but we will make different and fairer choices to keep the social security bill down. We will introduce a compulsory jobs guarantee to get young people back to work. We will scrap the bedroom tax, which is not only unfair but could end up costing more money, not less. We will also scrap the winter fuel allowance for the richest 5% of pensioners, get more houses built and tackle the low wages that have pushed up spending on housing benefit. That is the fair way to ensure we get people back to work and get welfare costs under control.

[Christopher Pincher (Tamworth) (Con)]

What I have heard from the shadow Chancellor reminds me of the words of Errol Flynn, when he said, “I find difficulty in reconciling my gross habits with my net income”. The right hon. Gentleman has just made promises to the tune of £465 million of spending. How is he going to find that money and still not breach his welfare cap?

[Ed Balls]

When the hon. Gentleman referred to my gross assets, was he making a personal point? I am running the marathon in four weeks’ time, and I was rather hoping the Chancellor might join me, but unfortunately his assets do not seem to be up to it.

The hon. Gentleman made an important comment just two months ago, saying to the Tamworth Chronicle:

“There are too many young people without employment and there are too many in longterm unemployment.”

I agree. Why will he not back our bank bonus tax to get young people back to work? That is what he should be doing. The Chancellor has failed on living standards growth and deficit reduction; he has also failed to deliver the balanced recovery that we need.

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[Christopher Pincher (Tamworth) (Con)]

It is a pleasure to follow the hon. Member for Feltham and Heston (Seema Malhotra) because it gives me an opportunity to let her know that in my constituency, youth unemployment has fallen by 40% in the past 12 months. I am also pleased to speak in this Budget debate on business because as we all know—at least, as we should know—it is business, not the Government, that generates wealth. Wealth generates jobs, and jobs lift people out of despondency and dependency.

[Chloe Smith]

Does my hon. Friend agree that it is also possible for Members of the House to work with businesses in their constituency and do something about unemployment? I gave the example of Norwich for Jobs.

[Christopher Pincher]

I agree with my hon. Friend. I hold an annual jobs fair, and last year 300 to 400 jobs were available to the 176 people who came to look for them. There were more jobs available in my constituency than jobseekers at the job fair, which is an indication of how our economy in the midlands, and particularly in Tamworth, is developing.

I agree with the hon. Member for Feltham and Heston about bingo and the change to gross profits tax. That tax was introduced in 2009 and created an anomaly because it meant that that soft gambling industry was taxed at 20%, compared with most of the rest of the industry at 15%. Added to the fact that bingo operators cannot reclaim VAT on their investment or refurbishment costs, it means that many operators have to carry a cumulative and punitive tax, equivalent to VAT of 32%. That was stifling the industry, with one bingo hall per week going to the wall. The Chancellor’s changes will mean more money for stakes, which is good for punters, and more investment in bingo halls and more jobs—a good thing that will also increase tax yield.

I am very pleased to see the changes to air passenger duty and start-up support for new routes. Birmingham airport, my local airport, will benefit from that. It is currently extending its runway so that it will be able to take long-haul flights to and from major markets in China and India. If the Treasury is listening, it can provide further support by adding Birmingham airport to the regional air connectivity fund list.

I hope the Treasury will work closely with the Department for Transport to consider the Whitacre link, a railway line axed by Dr Beeching. The line runs through Tamworth to Birmingham airport, and new track would reduce travel time from Tamworth to Birmingham airport from 40 minutes to just 18 minutes. That is the sort of local, sensible infrastructure development that business people in my constituency want to see. My hon. Friend the Minister knows my views on HS2. If it goes ahead, it will not be enough for it just to link our major cities. We need to improve the infrastructure around those major cities to realise the potential benefits of HS2. Building the Whitacre link would be one way of doing that.

I welcome the continued drive down of corporation tax. That will help to expand businesses and create jobs. I hope the Chancellor will not see the 20p rate as an end in itself, but as a means to an end: matching the Irish 12.5% rate of corporation tax. If we can get down to such a level, we will attract businesses to Britain that currently go to Ireland, and build a better and stronger economy. That is what business folk in my constituency would like to see.

Despite the rather gloomy concerns of the hon. Member for Rutherglen and Hamilton West (Tom Greatrex), I support and approve of the Government’s determination to drive down the cost of energy on businesses. The carbon price support rate, at £18 per tonne of carbon, is a good move. I think the Liberal Democrats would prefer to see about £30 per tonne by 2020, but capping it at £18 will reduce about £50,000 of cost for small and medium-sized businesses in my constituency.

There is, however, an energy elephant in the room: the huge amount of infrastructure spend we need to undertake in the next 10 years to keep our lights switched on, our water warm and the wheels of industry turning. The big six, which are already highly leveraged, can probably add no more than £70 billion to the £110 billion cost. If we are to get the £40 billion we need from independent players, and not rely on the taxpayer or the consumer to foot the bill, we need to ensure that electricity market reform and the signals to investors are right, otherwise there will be a cash crunch.

In general terms, the Budget was good. It was a Budget for business. In my constituency, businesses are upbeat and they say that they expect to grow. BMW is coming to Tamworth this year with 100 new jobs. Let us have more of the same: let us have more Budgets for business.

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[Mr Robin Walker (Worcester) (Con)]

The hon. Member for Plymouth, Moor View (Alison Seabeck) has just mentioned her father’s election address, and I am reminded of my father’s election addresses about how Conservatives had to clear up the mess that Labour left behind.

Like many Members across the House, I am passionately focused on employment. We needed the Budget to encourage business investment and help the recovery, which is gaining pace, to deliver more and higher-quality jobs. The hon. Member for Coventry North West (Mr Robinson) made an interesting point about ensuring that those jobs deliver greater productive capacity, and I agree with him that we need to do that.

The claimant count in my constituency of Worcester is down from 2,545 immediately before the election—and from a peak of 2,700 under Labour—to around 1,900 now. Youth unemployment peaked at 800 under Labour and is now below 500. That is much better, but there is no room for complacency. In fact, we have seen some small rises in unemployment in recent months, which I abhor. I have said that we need this Budget to deliver investment in jobs.

When I talk to local businesses, especially manufacturers, about what they need if they are to invest in jobs, they tell me that they need support to invest in plant and machinery, which can raise the productive output of each job. We have seen that support in this Budget. They also want support for research and development that will anchor manufacturing jobs in this country, including the jobs at Yamazaki Mazak, which has its European research headquarters in Worcester. They need help with the cost of employment, and this Budget has introduced the implementation of the employment allowance, which will provide a huge boost to businesses large and small in regard to the number of people they can employ.

It is interesting that, at the start of this Government, we got rid of Labour’s jobs tax—an increase in the cost of national insurance for every business and employer—and that, as we come towards the end of this Government, we are taking a further step forward in the form of the employment allowance. It will provide a real incentive to take young people on, and taking people under 21 out of national insurance will help more young people to get into the businesses of the future.

Crucially, we need to drive forward the skills agenda. Many of the engineering businesses in my constituency—including Yamazaki Mazak and Worcester Bosch—are great supporters of apprenticeships. Many small and medium-sized enterprises are also beginning to take on apprentices. I am glad to see in the Budget the £85 million extension of support for SMEs to take on apprentices, and to see the £20 million increased funding for degree level apprenticeships. The Business, Innovation and Skills Committee, on which I am proud to serve, has challenged the Government to deliver on both quality and quantity for apprenticeships, and so far they have an excellent record on both.

I must mention some of the spending measures in the Budget that could directly benefit Worcester. The £20 million cathedral fund will be very welcome in many of our county towns, and the horse race betting levy extension will support Worcester race course. The cathedral and the race course are two vital landmarks in the city, and I am delighted that both could benefit from the Budget. The extra £140 million of flood funding is also extremely welcome for reasons that will be all too obvious to anyone who has watched television in recent months. It is also great news that we have seen progress on the question of VAT for air ambulances. That is a huge achievement following campaigning by many Members. I would now like to see progress on the question of VAT for hospices.

The Budget did not mention delivering fairer funding for schools, although the Chancellor did mention it in his autumn statement. We also had a statement on it last week, and a huge step forward has been taken on that issue for the first time in decades. This is a cross-party campaign in which many hon. Friends and hon. Members from across the House have taken part.

[Christopher Pincher]

My hon. Friend is right to say that the Campaign for Fairer Funding for Education is a great cause, and I congratulate him on championing it. Does he agree, however, that in so far as the fairer funding has been spread around the country, it seems to have overlooked Staffordshire?

[Mr Walker]

I do agree with my hon. Friend, whose intervention has given me the extra time I need to make the point that, for many years, that campaign was led by the former Member for Stafford, David Kidney, who spoke passionately about the issue. I have said to the Education Secretary and others that it would be unfortunate if Staffordshire were passed over in this regard, but £350 million represents a big step forward for the lowest-funded authorities and, by my calculations and those of f40—the Campaign for Fairer Funding in Education—Staffordshire is among those lowest-funded authorities and deserves help.

The Financial Secretary to the Treasury, my hon. Friend the Member for Bromsgrove (Sajid Javid) is on the Front Bench today, and he is a Worcestershire colleague. I am delighted that Worcestershire will be receiving £5 million to help schools that have been underfunded for a long time. The long-term economic plan to take our country forward must focus on skills and on preparing young people for the future. Fair funding for education is a vital part of that, and I am grateful for the enormous support that colleagues have given me during this campaign. Indeed, most of my colleagues sitting on these Benches at the moment have supported the campaign and spoken passionately about it. I am grateful that it is a cross-party campaign, and one that we have been able to take forward significantly this year, and in this Budget. This is a Budget for jobs and for the future, and it allows us to take a significant step forward in achieving fairness for our country.

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[Mr Ellwood]

Absolutely. I concur with my hon. Friend, and that is one reason why more money has gone into apprenticeships as well.

My second point concerns GDP growth. A year ago, the OBR predicted growth for 2013 at just 0.6%. In fact, it came in at three times that level, and the forecast for next year has changed from 1.8% to 2.4%.

Thirdly, inflation now sits at 1.9%, well within the range set by the Bank of England. Fourthly, thanks to our low interest rates, the cost of borrowing by individuals, banks and the Government is low. But, of course, low interest rates are not so welcome to savers, hence this important announcement to end compulsory annuities, making it cheaper and simpler for pensioners to draw down their savings.

[Christopher Pincher]

My hon. Friend mentions that inflation is low. Is it not the case that wage inflation this year is likely to be higher than inflation, which means that finally we will see an end to the wages crunch?

[Mr Ellwood]

Again, my hon. Friend makes a valid point.

Finally, I come to the deficit, and how much the Government must borrow to balance the books. The OBR predicts that the deficit will continue to fall. We should remind the Opposition that when they took office in 1997, they inherited a sound economy. Up to 2002, the Labour Government made a surplus. Then the wheels came off, one by one. By 2004, the deficit was up to £33 billion, by 2008-09, it had increased to £69 billion, and in their final year of office, they had to borrow £156 billion to balance the books. Thankfully, a change in Government brought in a new economic strategy and our deficit has reduced to £108 billion this year, which will drop to £95 billion next year. If we stick to this economic plan, we will balance the books by 2018.

Of course, productivity, exports and savings figures are not what they should be, and the Budget addresses that. Time is limited and I cannot go into the details, but I welcome greater incentives.

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[Shabana Mahmood (Birmingham, Ladywood) (Lab)]

What is clear from the debate we have had today and the Budget statement we heard yesterday is that this Government are hopelessly out of touch. There was no mention from Government Members, either yesterday or today, of the central fact that after four years of this Government ordinary working people are £1,600 a year worse off.

The Chancellor said yesterday that his Budget was for doers, makers and savers. Well, it might help some doers, some makers and some savers, but one would not want to bet the house on it. That is because of the Government’s record. In 2010 he said that he would eliminate the deficit by 2015, but we now know that he does not plan to do that until 2018. The Government have borrowed £190 billion more than they originally planned to. Indeed, they borrowed more in three years than the previous Labour Government borrowed in 13 years.

In 2011 the Chancellor announced his Budget for growth, but we saw his growth forecasts revised down. In 2012 he said that he would tackle tax avoidance to raise billions of pounds, but the UK-Swiss tax deal raised only a fraction of the money the Government promised. The truth is that he is way out on his own forecasts of where he said we would be when he came to power. He has failed on the terms he set for himself, and ordinary people are paying the price.

The Chancellor would have us believe that his Budget will improve the lives of ordinary working people at some point in the not-too-distant future, but I am afraid that it is a future that is just out of reach—it is not now. There is nothing in the Budget that will help the ordinary person in the ordinary family in the here and now. In the here and now, wages are down for the ordinary working person, bills are up and the economy will not return to pre-crisis levels until 2017.

Sure, for a doer earning £150,000 or more, or a banker taking a big bonus, this is a Budget and this is a Government for them. The Chancellor has already given a huge tax cut to people earning over £150,000, and bankers’ bonuses are rising. People earning over £1 million have received a tax cut worth, on average, £100,000. But what about the rest of the doers? The average wage in this country is £26,500. There are no meaningful measures in the Budget to help them. What is gained by the increase in the personal allowance has already been more than wiped out by the cost of living crisis affecting millions of people across our country. The truth is that this Chancellor has given with one hand but taken away far more with the other. There is nothing in the Budget for the millions of hard-working doers up and down our country.

As for the makers, there was some welcome news in the Budget, but I am afraid that it is a case of far too little, far too late. On both energy and business investment, the Chancellor was simply putting right the mistakes that he made in his 2010 Budget, especially the cut in capital allowances, a fact that he conveniently forgot to mention yesterday. In 2010 he hit businesses that wanted to invest. It is good that he is starting to put that right, but it is very late in the day and a lot of damage has already been done to the economy.

On exports, again there were some welcome steps, but revised export forecasts show that the Chancellor is set to miss his 2020 target. In fact, the Budget suggests that he will not even get halfway. Again, his own record does not give us a great deal of hope. The Government’s export enterprise finance guarantee scheme helped just five firms before it folded, and the export refinancing facility was still not operational over a year after it was first announced. That is not a record to be proud of.

On science and research—this relates to the discoverers and inventors that the makers of this country rely on—once again we saw the Government’s characteristic approach: a little bit here and a little bit there, but nothing in the co-ordinated and planned way that this country’s science community is crying out for. There is no long-term science framework, as was delivered by the previous Labour Government, and as will be delivered again by the next Labour Government in 2015. Everybody knows that this country’s science, research and innovation base, which punches well above its weight on the global scale, needs a long-term plan for certainty and to build the critical mass from which great innovation occurs, but this Government have once again failed to deliver it.

As for savers, we will have to look at the detailed proposals, but the Budget itself shows that the forecast savings ratio has been revised down for every year from 2013 to 2018. So much for a Budget to encourage saving! This afternoon, the Institute for Fiscal Studies has told us that the changes are based on “highly uncertain assumptions” and could create people who lose out. What of the millions of people in this country, in the here and now, who cannot save because of the cost of living crisis? Saving will be a luxury for the hundreds of thousands of people relying on food banks to survive and the tens of thousands of people who are being pushed into debt by the bedroom tax.

In this debate we have heard many examples of the effects of the Government’s failure in powerful contributions from my right hon. Friend the Member for East Ham (Stephen Timms) and my hon. Friends the Members for Westminster North (Ms Buck), for Coventry North West (Mr Robinson), for Middlesbrough South and East Cleveland (Tom Blenkinsop), for West Bromwich West (Mr Bailey), for Rutherglen and Hamilton West (Tom Greatrex), for Luton South (Gavin Shuker), for Feltham and Heston (Seema Malhotra), for Makerfield (Yvonne Fovargue), for Plymouth, Moor View (Alison Seabeck), for Stockton North (Alex Cunningham), and for Croydon North (Mr Reed). Every single Labour Member spoke of what the Government should have addressed in their Budget yesterday. This Budget is yet another missed opportunity to deal with the cost of living crisis.

[Christopher Pincher]

If the hon. Lady is concerned about the cost of living crisis, as we all should be, why did her party support an amendment to the Energy Bill in the other place that would have added £150 to energy bills? How would that help with the cost of living crisis?

[Shabana Mahmood]

The truth is that we have called for a freeze on energy bills, which are going up under this Government. Perhaps the Government might understand the cost of living crisis better if they had more women on their Front Bench. I notice that once again this afternoon there is not a single female Member on the Government Front Bench.

The cost of living crisis has meant that child care costs have spiralled by 30% since 2010. Energy bills are up by almost £300 since the election, with consumers having no way of knowing whether the bills are fair, owing to weak competition and poor regulation. Rent is using up more and more of people’s incomes, with rent arrears becoming the fastest growing debt, and food prices have risen by over 4% year on year, putting a huge squeeze on family finances. The Government know that this is not about choosing between bringing the deficit down and dealing with the very serious cost of living crisis. That is simply a false choice that they choose to hide behind, because this Budget could have addressed these things.

Labour Members have put forward a number of fully costed proposals that would deal with the cost of living crisis and get help to families here and now. On child care, we would use a levy on banks to provide 25 hours of free child care a week, worth £1,500, for working parents with three and four-year-olds. The Government’s proposals, which will not even kick in until after the election, will give most benefit to the highest earners, who tend to have the highest child care costs. On housing, we have committed to getting 200,000 homes a year built by 2020, whereas this Government have refused to take the action that is needed and are presiding over the lowest levels of house building in peacetime since the 1920s.

On energy, as I said to the hon. Member for Tamworth (Christopher Pincher), we would freeze energy bills until 2017, and, importantly, reform the energy market to stop consumers being ripped off. We would cut taxes for 24 million working people on middle and low incomes with a lower, 10p starting rate of income tax. We would put young people back to work with a job for the long-term young unemployed that they had to take, paid for by a tax on bankers bonuses. We would balance the books in a fairer way by reversing the £3 billion tax cut for people earning £150,000 a year, which this Government sought to prioritise ahead of any action to help hard-working families in our country.

Yesterday the Chancellor had an opportunity to help people who are struggling in the here and now, and he refused to take it. This Government’s so-called long-term economic plan has failed on its own terms, and people on middle and lower incomes are paying the price. People know that this is not about how the pound looks but how many they have in their pockets. Today they have fewer than they did in 2010, and in 2015 they will have fewer than they had in 2010. It is the same old story—you are worse off under the Tories.