National Insurance Contributions (Rate Ceilings) Bill

Christopher Pincher Excerpts

Tuesday 15th September 2015 Commons Chamber

[Barbara Keeley]

The hon. Lady confuses our not opposing a pledge that we made first on 25 March—it is our pledge, if you like—with a Bill that I am denouncing as a gimmick. It is not just me who is denouncing it as such; a range of commentators have done so as well.

[Christopher Pincher (Tamworth) (Con)]

Will the hon. Lady give way?

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[Barbara Keeley]

I think that the whole range of the tax regime and national insurance is under discussion today.

Given that we hear no assurances that there will not be further increases to insurance premium tax in this Parliament, I want to make it clear again that we support the principle of not raising taxes for working people. That is why we do not oppose the Bill. As I mentioned earlier, before the election campaign started properly, we pledged not to raise national insurance contributions, so this could rightly be described as our idea.

[Christopher Pincher]

The hon. Lady says that the Opposition will not oppose this welcome measure. Does that mean they will vote for it, or simply abstain?

[Barbara Keeley]

As I understand it, there will not be a vote because it will not be opposed, but I cannot speak for other parties in the House.

The Government’s tax lock, of which the Bill forms a part, is nothing more than a gimmick of epic proportions, as I have outlined and demonstrated with many comments from people outside the House. It speaks volumes about the lack of belief that Conservatives have in their own policy commitments. We vote annually on tax legislation, and the Government regularly introduce Bills on NICs alongside Finance Bills—we have already heard about suggested changes to NICs—and, as such, primary legislation, debate and Division are already required in the House.

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[Kit Malthouse]

The hon. Gentleman will have to ask my right hon. Friend the Chancellor of the Exchequer that question next time he appears. I hope that the hon. Gentleman would support me in urging those on the Treasury Bench generally to provide a level of certainty and in many ways to be slower about their decisions.

[Christopher Pincher]

My hon. Friend is generous in giving way. The question of certainty has been raised and eloquently explained by him. Does he agree that, when Members question certainty, they should ask themselves why they ask for referendums on whether they should be part of the United Kingdom, which surely breeds uncertainty?

[Kit Malthouse]

My hon. Friend has made a strong point. During the debate on the referendum concerning our possible divorce as nations, businesses piped up very loudly about what was likely to be a very uncertain horizon for them on the far side of the debate. The majority opted for the status quo, because a bird in the hand was worth God knows what in the bush.

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[Helen Goodman]

The hon. Gentleman knows the way to my heart; he knows that I am half Danish and that I would much prefer the Danish model to the Mexican model.

Hon. Members have been talking about certainty, but the Bill will provide certainty only for the very well off. The Government are not worried about certainty for people on very low incomes, as we shall see in an hour’s time when we discuss the cuts to tax credits.

[Christopher Pincher]

The hon. Lady is a doughty individualist. I recall her calling me up a few months ago, when she was seeking the chairmanship of the Public Accounts Committee—regrettably, she was unsuccessful in that enterprise—and asking me what the PAC Chair should do. One thing she said was, “We must make Parliament more accountable.” Surely by passing this legislation, which would have to be repealed if the Chancellor wanted to make changes, we are making this House and the Chancellor more accountable.

[Helen Goodman]

That is rather a silly remark. If the Chancellor makes decisions on tax, we can question him about them. This Bill is more a non-decision about a non-tax. It does not do what the hon. Gentleman suggests. Conservative Members have reiterated some of their well-known mantras, but have added nothing of substance to the debate. There is no positive agenda in this Bill addressing the needs of the British economy. It is, I am sorry to say, a gimmick.

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[Christopher Pincher (Tamworth) (Con)]

I should like briefly to add my voice in support of this welcome Bill. Having listened to the hon. Member for Worsley and Eccles South (Barbara Keeley), I am pleased that the Opposition do not propose to oppose the Bill. It appears that she has bravely come to the House to abstain in person.

The hon. Lady asked why the Bill is necessary. Were she present, she might like to reflect on this reason: the decision by the new Leader of the Opposition to appoint as his shadow Chancellor the hon. Member for Hayes and Harlington (John McDonnell), a self-confessed Marxist who wants to nationalise the banks, print money and soak almost everybody in the great cause of the proletariat. That sends shivers down the backs of many small and medium-sized enterprises in our country and of international investors. This Bill goes some say to guarding against that uncertainty.

As we have heard, businesses like certainty, even if that certainty generates bad news. It was bad news to hear from the Opposition in the last Parliament that they proposed to freeze energy prices. That increased the cost of capital for investors in our energy infrastructure and made them put off investment decisions.

This Bill, however, is good news. It gives business folk in all our constituencies the certainty that we will not increase taxes. That means that they will make investment decisions and grow their businesses. In my constituency, where unemployment has fallen faster in the past three years than anywhere else in the country, Jaguar Land Rover, BMW, Tamworth Steel Stockholders and Percy Lane Products will create new jobs and more wealth for our country. Business folk in my constituency say that this Bill is a no-brainer, which is one reason why it should commend itself to the Opposition. Let’s do it.

Budget Resolutions and Economic Situation

Christopher Pincher Excerpts

Tuesday 14th July 2015 Commons Chamber

[Paul Scully]

I will come back to the national living wage.

The platitudes on the Ed stone were in stark contrast to the measured policies in the Budget.

Hon. Members can talk about semantics and about whether it is the national minimum wage or the national living wage. What we have seen is a significant—

[Christopher Pincher (Tamworth) (Con)]

Does my hon. Friend agree that the doubling of the workforce at Jaguar Land Rover from 3,000 to 6,000 in three years is not semantics? Those are real jobs for real people—a real opportunity that we are giving those people, which the Opposition never did.

[Paul Scully]

Absolutely. I could not have said it better. The number of jobs that we have created and the amount of wages that we are putting in people’s pockets are real measures. With this increase in the national living wage, the Chancellor has put cash in people’s pockets.

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[Paul Scully]

The combination of measures—paying the lowest paid more and softening the cost to employers with the increase in employment allowance— will help businesses solve that problem themselves.

The Budget is only one part of helping to build growth and productivity. It is the Whitehall part, but we also have the town hall part. We need to look at our changing high streets and at issues such as parking. For example, Ross’s Fruiterers in Worcester Park is a real centre of the community—my hon. Friends the Members for Aldridge-Brownhills (Wendy Morton) and for Braintree (James Cleverly) made similar points—because everybody knows Ross Nelson and uses his business as their local shop. The key issue for him is parking, as it is for hundreds of shops and small businesses in Sutton and Cheam and Worcester Park. He needs stop-and-shop parking so that his delivery vans can come and go. That is a matter not for the Chancellor, but for the local authority and Transport for London, so we need to work in partnership.

The third part of the jigsaw is businesses themselves. As we heard earlier, Governments do not create jobs; businesses do. Having been a businessman for 20 years, I feel that, in becoming a politician, I am a poacher turned gamekeeper. However, I still believe that business people are far better placed than any politician to solve the problems faced by retailers dealing with changing high streets or by small businesses trying to attract more customers and grow. Members will remember Ronald Reagan’s remark that the nine most terrifying words in the English language are, “I’m from the Government and I’m here to help.”

[Christopher Pincher]

I am obliged to my hon. Friend, who is being generous in giving way. Of course, the Labour party was never there to help business when it was in government, because it introduced regulation after regulation. Is not regulation bad for business, and should not the Government—

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[Paul Blomfield]

My hon. Friend is absolutely right, and other colleagues have made that point forcefully in this debate.

As we have been reminded today, Labour’s introduction of the national minimum wage was opposed by the Conservatives. I am delighted that they now apparently embrace it. It ended the scandal of poverty pay, providing a safety net below which wages should not fall. But for too many people, the national minimum wage has become the norm, not a safety net, as have zero-hours contracts and part-time hours for those who want full-time work. Alongside those setting up real businesses, there has been a growth in bogus self-employment, particularly in sectors such as construction. Uncertainty has replaced job security, and it has all been aimed at reducing labour costs.

[Christopher Pincher]

The hon. Gentleman mentions zero-hours contracts. Would he care to tell the House the percentage of the workforce who are employed on zero-hours contracts?

[Paul Blomfield]

I will tell the hon. Gentleman that too many people are employed on zero-hours contracts, and I could cite countless examples of people in my constituency whose lives have been destroyed by them and who have raised the issue with me.

It was interesting last week to hear Ministers, almost in the same breath, expressing their concern about low pay and then condemning tube staff for their industrial action.

Greece

Christopher Pincher Excerpts

Monday 6th July 2015 Commons Chamber

[Mr Osborne]

The right hon. Gentleman is right to draw our attention to the serious migrant issues in Greece. I think we all remember seeing the television images a few weeks ago of the boat crashing into the rocks off the beaches in Greece. I know that the Home Secretary and other European Interior Ministers have spoken to the Greek Government about the direct assistance we can provide to help them police their borders and deal with what is, of course, a common challenge.

[Christopher Pincher (Tamworth) (Con)]

I am grateful for the steps the Chancellor is taking to help British businesses and to advise holidaymakers, but he will know that many more British holidaymakers will shortly be making the journey to Greece. Has he any indication of any tour operator that is unduly exposed to the Greek market and therefore at heightened risk of failure? Will he, along with his colleagues on the Front Bench, continue to monitor the situation?

[Mr Osborne]

We keep in touch with all the tour operators. Most of them have very big operations in Greece, but they are satisfied with the arrangements and the support we are providing. As I say, these holidays are going ahead. People are not seeing any great disruption and are making a contribution to the Greek economy. We want to continue to provide good travel advice. We will change the travel advice if we feel we need to, but the travel advice at the moment is not, “Do not travel to Greece”; it is just, “Make sure you are prepared.”

The Economy

Christopher Pincher Excerpts

Thursday 4th June 2015 Commons Chamber

[Chris Leslie]

This is at the heart of the Chancellor’s policy choices. Is he looking not just at how much but how spending is taking place? He can choose to ensure that where spending has to be prioritised decisions lean towards supporting growth and productivity and the skills that will in turn get us into that more virtuous cycle.

[Christopher Pincher (Tamworth) (Con)]

Will the hon. Gentleman give way?

[Chris Leslie]

I will give way in a moment. Not to take a reasonable and measured approach, when the Chancellor clearly has scope to do so, would suggest that he is influenced much more by Conservative ideology than by economic judgment. That is what it always comes down to with this Chancellor. Is he focusing on securing the long-term needs of the economy or on securing his own long-term future; is he focusing on the country or on his Back Benchers; is he focusing on his current job or on a future one?

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[Chris Leslie]

I do not know whether the hon. Gentleman has seen the ONS report published yesterday, but it shows that we are losing high-skilled employment in this country and that gradually it is being replaced with low-skilled employment, which is a real worry. We need to ensure that we compete in the world on the basis of a high-skilled, virtuous cycle. I think that he would be complacent if he ignored what is happening in our economy.

[Christopher Pincher]

rose—

[Chris Leslie]

I cannot remember whether I have given way to the hon. Gentleman already but, given that he is being so polite and persistent, I will give way one last time to him.

[Christopher Pincher]

I am obliged to the hon. Gentleman. He likes to give the impression that sweetness and light always surround him, but he might like to look behind him occasionally. He must recognise that no one will take his talk about deficit reduction seriously when sitting behind him is his former leader, who less than a month ago said that the previous Labour Government did not spend too much.

[Chris Leslie]

When it comes to deficit reduction, let us never forget that the Chancellor of the Exchequer promised to eradicate the deficit by the end of the previous Parliament. We have passed that deadline, so he has broken that promise. He should put his hands up and admit that, when it came to his promise on the deficit, he failed.

We now need focus to address our economic challenges, not a Chancellor distracted by his own political ambition. We need a concerted drive to boost productivity; a balanced recovery reaching all corners of the country, with no sector left behind; a meaningful effort to tackle the root causes of higher welfare costs, low pay and insecure working conditions; a guarantee that any scope for tax cuts should be focused entirely on middle and lower earners; and a commitment to reject an ideological drive to shrink public investment. That is the approach Britain needs. That would be a genuinely one-nation approach.

Instead, we had a Queen’s Speech that focused on short-term political headlines, rather than long-term economic gain. It was designed to lay political traps for the Chancellor’s opponents as part of a grand political chess game, rather than to focus on productivity and balanced growth. This obsession with short-term, narrow political gain is the Chancellor’s curse. He is the Chancellor for whom productivity means kicking the Home Secretary off her Cabinet Committees. He is the Chancellor for whom a long-term plan means a move next door. He is sticking with the family business and measuring up the wallpaper for No. 10 already. That is his real agenda. Cold and calculating, he is the iceberg Chancellor, with hidden dangers beneath the surface. He is putting productivity and public services are risk, prioritising the very richest above those on middle and lower incomes, pitting one nation against another. Britain did not vote for a hidden agenda. I urge the Chancellor to put the ambitions of Britain above his own.

Financial Conduct Authority Redress Scheme

Christopher Pincher Excerpts

Thursday 4th December 2014 Commons Chamber

[Guto Bebb]

I accept that point, but I stress that if an independent reviewer of another bank has been approved by the FCA—the scheme is a voluntary, not a judicial one—I seriously do not think that going down such an avenue would create cost. The FCA’s current view is that if a client is not happy with a decision made by a bank and its independent reviewer, then it can resort to law, but the whole reason for establishing the redress scheme was to save small businesses that cannot afford to go to law.

I want to talk in detail about consequential losses. When the redress scheme was announced back in 2013, it was made very clear that the scheme was for consequential losses and interest payable. The Financial Services Authority, as the FCA then was, highlighted that consequential losses would be determined by reference to the general legal principles relevant to claims in tort or for breach of statutory duties.

I have already given the figures. It is more than acceptable and very welcome that £305 million has been paid out in relation to interest at 8%, but only £5 million has been paid out in consequential loss claims. Part of the redress scheme has therefore completely fallen down. I have seen case after case of well-argued and reasonable claims for consequential losses from businesses acknowledged to have been mis-sold and as a result to have lost millions of pounds in turnover, but when a detailed claim that will have cost a significant amount is made the response from the banks is a simple no.

[Christopher Pincher (Tamworth) (Con)]

I congratulate my hon. Friend on securing this debate. Does he not agree that the loss to companies is much larger than simple consequential losses? We are talking about small firms, with just a few employees, who are grappling with the banks and the redress system. In my constituency, a three-man outfit has been grappling with Lloyds for nearly two years. Whenever they correspond with Lloyds it takes perhaps half a month to get through all the paperwork, which has a real impact on their ability to develop and build their business.

[Guto Bebb]

I agree. The scheme was described as one in which businesses would not need professional advice. Yet when a consequential loss claim is made, either by a business or by a business with the support of legal or professional advisers, banks time and again respond with the support of legal and accountancy firms. The process for consequential losses is therefore very unequal.

Oral Answers to Questions

Christopher Pincher Excerpts

Tuesday 2nd September 2014 Commons Chamber

[Mr Gauke]

The hon. Gentleman is right to raise the fact that there are external pressures here, but there are steps that the Government can take, and, as he touches upon, we have taken a number of measures to help with exports. Whether that is support for UK Trade & Investment or new financing facilities, the Government are determined to do everything to help those businesses to export to overseas markets.

[Christopher Pincher (Tamworth) (Con)]

21. Does my hon. Friend agree that the extension of the runway at Birmingham airport, allowing long-haul flights now to fly direct to China, is another example of how the Government’s long-term economic plan to build a stronger and healthier economy in the west midlands will allow business men to travel there and do better business with China?

[Mr Gauke]

My hon. Friend makes an excellent point and that is one important example of the 2,000 infrastructure projects delivered by the Government.

Finance Bill

Christopher Pincher Excerpts

Wednesday 2nd July 2014 Commons Chamber

[Catherine McKinnell]

We would always hope that the Government would behave rationally in respect of these matters. I am pleased that the hon. Gentleman has absolute confidence in that, but I would be grateful if the Minister could provide some reassurance because the Government’s record on these issues has not always been entirely rational and I do not share the confidence of the hon. Member for Warrington South (David Mowat) in this regard.

On follower notices and accelerated payments, amendment 2 inserts subsection (8A), which provides that if a tribunal finds that a penalty should not have been charged because it was reasonable for the taxpayer to continue his dispute, the follower notice on which it was based remains valid, as does any accelerated payment notice or partner payment notice related to it. Concerns have been raised that if a penalty is cancelled on the grounds specified in clause 207, the validity of the follower notice—or related accelerated payment notice or partner payment notice—is not affected by the cancellation of the penalty. HMRC has confirmed that the intention is that if the penalty is cancelled on other grounds specified in subsection (2A), the follower notice, and any related accelerated payment notice or partner payment notice, would be cancelled. That is clearly the logical result of a successful appeal against the penalty. However, a few questions have been raised about this, so will the Minister say in what circumstances the grounds of appeal in clause 207(2A)(d) might be used, and why if successful, the FN and related APN or PPN would not be cancelled? When will guidance be published on this and the rest of the legislation on FNs and APNs, bearing in mind how important the guidance will be in helping taxpayers and their advisers to understand how this legislation is intended to operate? When will HMRC be publishing a list of the disclosure of tax avoidance schemes that will be issued with an APN, as we know that there is a lot of concern about the implementation of some of the Government’s proposed changes? On that very technical note, I conclude my queries to the Minister and I look forward to receiving reassurances from him in his response.

[Christopher Pincher (Tamworth) (Con)]

I welcome the chance to make a brief contribution to the debate on this group of amendments. It was a pleasure to serve on the Public Bill Committee with the Exchequer Secretary; it was certainly an educational experience for me. It was also a pleasure to serve with the hon. Member for Newcastle upon Tyne North (Catherine McKinnell), although her professed determination to scrutinise the legislation line by line did at times make it feel as though she was scrutinising it word by word.

I should like to speak briefly to Government amendments 1 and 2, which affect clause 207, encompassing clauses 192 to 212. As the Minister and the shadow Minister have said, those provisions deal with follower notices and the accelerated payments regime. I was heartened to hear that the Minister is spelling out the ground rules for appeal in respect of follower notices, but he will know that there remains some residual concern, to say the least, about the retrospective nature of accelerated payment notices.

A number of people and their advisers have made what they believe to be a proper disclosure, particularly after the increase in the fine for non-disclosure from £5,000 to £1 million, erring on the side of caution and over-disclosing. They are concerned that they will now be caught up by that disclosure and will find themselves with retrospective tax liabilities, perhaps dating back to 2004. The Minister was good in Committee in making it clear that he would continue to consult the industry and taxpayers, because the original consultation was brief. I hope that he will do that, and will continue the dialogue with the industry and with taxpayers to ensure that nobody is caught up unfairly, having tried to do the right thing, by these proposals. I look forward to hearing him make the position clear in his remarks .

[Stewart Hosie]

I rise to speak against new clause 1 and the introduction of the bareboat chartering regime. I heard the Minister’s comment that this is about trying to get a fair tax return from this small but important sector. It tells us that at the moment it is paying about £200 million a year in tax and national insurance. At a yield of about £100 million, the tax return from this small sector will be increased by about 50%—that seems a substantial increase in a short period.

I would like to say that this bareboat chartering regime was a one-off stand-alone bad measure, but it does not stand in isolation. It is part of a pattern of ill-judged, disjointed and sclerotic decisions that this Government have taken, and it typifies their attitude to the North sea. Some years ago, we had the massive hike in North sea corporation tax supplementary charge, which absolutely stifled investment and brought it to a grinding halt. That led the Government, in panic, to make some kind of correction through the introduction of a large series of complicated new and enhanced field allowances.

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[Mr Gauke]

The point is that the relief is designed to support the range of theatre productions across the UK, in both the subsidised and commercial sectors. We worked closely with the subsidised sector when developing the policy, and we are confident that it will benefit from the relief.

Let me turn to the points made about measures to deal with tax avoidance schemes, including the accelerated payments regime and follower notices. My hon. Friend the Member for Tamworth (Christopher Pincher) asked whether taxpayers who have not used a true tax avoidance scheme will be caught, perhaps with a precautionary notification having been made under the DOTAS regime. Any unintended consequences for compliant taxpayers will be minimal. Where the taxpayer has used a relief correctly, but a DOTAS disclosure has been triggered, there would not normally be any tax in dispute, and there will therefore be no accelerated payment. If a taxpayer has used a relief largely as intended, but some elements are disputed, then an accelerated payment—if one is required—would be confined to the disputed elements. Let me be clear that the accelerated payment is the amount of tax that the taxpayer can expect to pay if their avoidance fails, taking account of their overall tax position. It is not some arbitrary amount, as has been alleged by those who have tried to discredit the measure.

My hon. Friend asked whether the measure will be retrospective in effect, as did my hon. Friend the Member for Cannock Chase (Mr Burley). We had an extensive debate on that point in Committee, and the Committee reached a sensible conclusion, but let me set out the issue again. The measure is not retrospective. The rules about whether the taxpayer’s scheme does or does not work and about the amount of any tax liability will not be changed. The taxpayer would have already paid the money had they not entered an avoidance scheme. The taxpayer can continue to dispute the case, and will be paid back with interest should they win. We are not restricting people’s rights. Prudent taxpayers should recognise that tax avoidance carries a significant risk of not working and that the tax might become payable, so they should make plans for such an outcome.

[Christopher Pincher]

My hon. Friend is being very generous with his time. I am pleased that he has made the position clear. Will he also make it clear that he will continue the dialogue with the tax advice industry and with taxpayers who are concerned about the issue? The Treasury Committee has described the measure as a retrospective piece of legislation. I know that he has received representations from the noble Lord Flight, and I trust that he will also take those on board.

[Mr Gauke]

I have received a number of representations on the matter, but I have been clear as to why the Government do not consider the measure to be retrospective. It is right that in these circumstances the disputed tax should be held by the Revenue.

The hon. Member for Newcastle upon Tyne North asked about the grounds for a penalty appeal. We have introduced amendments to provide extra clarity on that. They separate cases in which the penalty is cancelled because the notice should not have been issued from those cases in which the notice was appropriate but the taxpayer has reasonable grounds to continue the dispute—for example, because they could reasonably argue that different grounds are relevant. Then it will be for the tribunal to decide. HMRC is on course to publish the guidance and the DOTAS list in time for Royal Assent.

To answer the question from my hon. Friend the Member for Cannock Chase about the follower notices, there is no appeal against the requirement to pay the accelerated payment. That would simply substitute one dispute over the substance of the scheme for another. HMRC is not making a decision about whether the avoidance scheme works, which would have full rights of appeal, and the rules do not change that situation; rather, the requirement imposed on the taxpayer relates solely to the timing of the payment. If payment of the tax is a problem because the taxpayer cannot afford the full amount immediately, HMRC will use its normal approaches, including appropriate payment arrangements.

The source for the HMRC success rate of 80% is the list of tribunal and court decisions. Those decisions are all published and people can read for themselves HMRC’s continued success in these cases.

The hon. Member for Newcastle upon Tyne North asked whether we are withdrawing support for investment in renewables. The change we are making is not an attack on renewables. It will simply end double subsidy of companies that are at lower risk because they will benefit from Department of Energy and Climate Change support, and will ensure that the venture capital schemes remain well targeted and operate in a fair and sustainable way. The Government continue to support the renewables sector more generally and have set out the amount of support we will allocate to low-carbon generation up to 2020-21, when it will reach £7.6 billion. The Government continue to offer generous incentives to the sector.

The hon. Lady asked whether funds already invested in renewable energy schemes will have to be returned to investors. I can reassure her that new clause 6 will have effect only for shares issued by companies on or after Royal Assent to the Bill. Existing schemes and investors will not be affected by the changes.

With those points of clarification, I hope the House will support the proposals.

Question put, That the clause be read a Second time.

The Economy and Living Standards

Christopher Pincher Excerpts

Thursday 12th June 2014 Commons Chamber

[Mr Osborne]

I do not have the number the hon. Gentleman asks for here, but there were zero-hours contracts under the previous Labour Government and there are Labour councils that use zero-hours contracts. As those on the Labour Front Bench have pointed out, not all zero-hours contracts are bad. One measure in the Queen’s Speech that was not mentioned by the shadow Chancellor—indeed, he did not actually address the speech in his remarks—will ban exclusivity with zero-hours contracts. Labour had 13 years; the shadow Chancellor was in charge of economic policy for 13 years and could have taken such a step, but he did not. I suggest that Labour Members hold their tongues and come with the Government through the Division Lobbies as we do something about an abuse that they did absolutely nothing to crack down on.

[Christopher Pincher (Tamworth) (Con)]

On the topic of pearls of wisdom from the shadow Chancellor, does my right hon. Friend agree that his rather careful formulation that a jobs tax is not his argument was rather too clever by half? We did not hear from the shadow Chancellor a clear commitment that a jobs tax is not Labour’s policy now or at the general election.

[Mr Osborne]

My hon. Friend is right. We listened carefully, but like the Leader of the Opposition the shadow Chancellor did not rule out a jobs tax. Why? Because it is Labour’s tax of choice. That is what they did in government when they increased national insurance, and what they proposed at the general election. A couple of years ago the shadow Chancellor admitted that he would be minded to do that as a means of bringing order to the public finances—his weapon of choice is a jobs tax. That is Labour’s answer to jobs: tax them, destroy them, make people unemployed. That is why every Labour Government in history have left unemployment higher than when they entered office.

Oral Answers to Questions

Christopher Pincher Excerpts

Tuesday 29th April 2014 Commons Chamber

[Mr Osborne]

Of course families are feeling the impact of the great recession over which the last Government presided, but the hon. Gentleman talks about who has felt the benefit of growth. What about the people in his constituency who have got a job, where unemployment has fallen by 17% and youth unemployment is down 18%? What about the 1.5 million people who have got jobs as a result of this Government working through their long-term economic plan?

[Christopher Pincher (Tamworth) (Con)]

20. I welcome today’s excellent news. With the deficit down, growth up and more people than ever in work, the Government’s long-term economic plan is clearly delivering for my constituents. However, there is always more to do, so will my right hon. Friend tell me what further steps he can take to encourage growth in workplace apprenticeships? In Tamworth, they have grown by more than a third.

[Mr Osborne]

We have provided more than 1 million apprenticeships, and in the most recent Budget we provided more support for apprentices by extending grants to small and medium-sized companies to help them take on apprentices. We also introduced and expanded degree-level and post-degree-level apprenticeships. Apprenticeship schemes are one of this Government’s great successes, and we are going to build on it.

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.