Tax Credits

Debate between Damian Hinds and Chris Leslie

Tuesday 15th September 2015 Commons Chamber

[Damian Hinds]

I am afraid that high marginal deduction rates have long been a feature of the social security and welfare system. As many Opposition Members know, universal credit will change that by making a substantive change in the withdrawal rates.

[Chris Leslie (Nottingham East) (Lab/Co-op)]

The Minister knows that this is a serious matter, and Members on both sides are concerned about the work incentives and making sure we do not unfairly penalise people who want to get back into work. My hon. Friend the Member for Bishop Auckland (Helen Goodman) was right about the rapid increase in the marginal deduction rate to 93% from next April. He needs to address that specific point. How is it not a penalty to work?

[Damian Hinds]

For people in receipt of housing benefit, the change in the marginal withdrawal rate will be 2p in the pound. The changes do not reduce the incentive to work, and, as the hon. Gentleman knows, equally important are the incentive, ability and support to work more hours once in work and the fact that there are now more jobs offering more hours. Our reforms to childcare are another key part of our support for people who want to increase their hours.

The context to these changes is that, despite making great progress towards balancing the budget, we still ran a deficit of 4.9% last year and are expected to have the second-highest deficit in the G7 in 2015. We need to eliminate the deficit and start cutting the national debt in order to build up our resilience to global economic shocks.

Youth Unemployment

Debate between Damian Hinds and Chris Leslie

Wednesday 16th February 2011 Commons Chamber

[Chris Leslie]

In the city of Nottingham at this time last year, youth unemployment fell for five months continuously, but this year it has been rising. The hon. Gentleman talks about growth and how central it is, but does not he have some doubts that his Government are not doing quite enough on the growth strategy? Could he elaborate on that?

[Damian Hinds]

I do not have such doubts. I cannot comment in detail on Nottingham’s figures over the past few years, but as we have been examining in this debate, the problem of youth unemployment has not started in the past few months: it has been with us for a long time and we have a structural issue.

I was talking about the buoyancy that is needed in the private sector. That starts with investment because when there is investment, businesses grow and take on workers, including young workers. To encourage investment, we need to keep interest rates low. To keep interest rates low, we need a Government who take the nation’s finances seriously. We also need to ensure that lending is happening, and I am pleased that the Government are taking a very robust approach with the banks on that. Something that we need to work on more, but which will take some time, is ensuring that British firms are not bogged down in regulation, dead-weight administration and an enormously complicated tax system.

As well as a buoyant private sector, we need to make sure that we have the right skills to take advantage of the opportunities in the market, both generally and targeted at specific sectors. When we talk about productivity, we tend to focus on manufacturing, but the service sector now accounts for two thirds of the private sector and for much of the productivity gap that we have in relation to other leading nations. Services will continue to be important in future and we need to build up the skills base of our young people—not just their craft skills but their interpersonal and communication skills.

It is also right to have a targeted approach—a strategy for Great Britain plc. Our record on picking winners is not unblemished, but we do need a strategy. We will never again make T-shirts cheaper than China, but there are sectors in which we can excel. The trick is to find sectors in which there is the coincidence of a high-value, attractive growth market and something that Britain is uniquely well-placed to take advantage of, such as advanced manufacturing, pharmaceuticals, the creative industries, financial services, higher education and tourism.

Let me say a word on tourism, because my background is in the hospitality, leisure and tourism sector. [Hon. Members: “Ah!”] I do not know why people are saying “Ah.” That market is in long-term growth and remains a great export opportunity for this country. We are well-placed to take advantage of that market because of our great heritage, our vibrant cities and our beautiful countryside. In that regard, I must say, on a local level, that I am delighted that the South Downs national park will be opening its doors in a few weeks’ time.

When it comes to tourism at Great Britain plc, the marketing department is very good but I am afraid that the human resources department still needs some work.