Business of the House

Daniel Zeichner Excerpts

Thursday 11th January 2018 Commons Chamber

[Paul Maynard]

As I said earlier, the hon. Gentleman will not be surprised to know that, as someone from Cheshire, I understand the importance of Vauxhall Motors to the Ellesmere Port community. I was as disappointed as I am sure he was to hear about the further job losses. The rapid response service of Jobcentre Plus has already been put into action, and the Government are trying to engage with Vauxhall further throughout the process to do all we can both to protect UK jobs and to help those who are affected. There will be much more help available to those who are affected, but I recognise his concerns and will make sure that the Leader of the House passes them on to the Department for Business, Energy and Industrial Strategy.

[Daniel Zeichner (Cambridge) (Lab)]

You may be aware, Mr Speaker, of the concern that many parents have about skin gambling and loot boxes and worries in the video gaming sector about unauthorised third party website selling those items from those loot boxes, thus potentially turning young people into gamblers. There have been reports of young people losing a great deal of money very quickly. May we have a debate in Government time on how best to protect our young people and also safeguard our very successful and vibrant video game industry?

[Paul Maynard]

The hon. Gentleman has raised an important example of how internet development and technologies can change rapidly and create new threats and dangers for which we need to ensure that we are fully prepared. He raises an important point. It sounds like a perfect vehicle for an Adjournment debate or a Westminster Hall debate, which will then make sure that the Minister’s attention is drawn to the matter more fully.

Exiting the EU: Costs

Daniel Zeichner Excerpts

Wednesday 29th November 2017 Commons Chamber

[Elizabeth Truss]

I assure my hon. Friend that that consideration is part of our discussions.

[Daniel Zeichner (Cambridge) (Lab)]

Before making a big decision, it is generally sensible to inquire about the price. Most people will be staggered to learn that the average household in this country will be asked to stump up between £2,000 and £3,000 to pay for this. What plans do the Government have to tell people about the bill they are facing and to ask them whether they think it is a good use of their money?

[Elizabeth Truss]

The hon. Gentleman needs to look at both sides of the account, because we will not be paying ongoing vast sums into the EU as we are at the moment. He needs to look at the big picture.

Outsourcing and Tax Credits

Daniel Zeichner Excerpts

Friday 4th November 2016 Commons Chamber

[Mr Deputy Speaker (Mr Lindsay Hoyle)]

Last but certainly not least, Daniel Zeichner.

[Daniel Zeichner (Cambridge) (Lab)]

I think we have got the message that the Minister wants lessons to be learned. Will he assure us that all that the minutes, recordings and transcripts relating to the process that led up to the tendering of the contract will be published?

[Simon Kirby]

I understand that the independent National Audit Office will be looking at all those and will report in due course—let us hope that it does so sooner rather than later—and we will learn lessons from that independent report.

The Economy and Work

Daniel Zeichner Excerpts

Thursday 26th May 2016 Commons Chamber

[Daniel Zeichner (Cambridge) (Lab)]

My part of the country is an area that is rightly perceived to be successful. Cambridge is, in many ways, a model for the future of Britain, with many innovative, high-tech, high-skill jobs linked to world-class research embedded in excellent local institutions. Public and private are mutually interdependent, and not seen as being at odds.

Last year, as part of the city deal process, the local business-led organisation Cambridge Ahead worked with all the local partners, at the Government’s request, and developed “The Case for Cambridge”, which was a powerful, evidence-based argument for what was needed to maintain that success. We should be implementing that case but, instead, we have lost almost a year on an extraordinary and bungled attempt to shoehorn three counties together into a devolution deal with an elected mayor. A few weeks ago, following an over-subscribed Westminster Hall debate on the East Anglia devolution deal, I suggested that the House have a more substantial discussion not only on the East Anglia deal but on the wider issues, because what is happening across England—this bungled mix of devolution and local government reorganisation, or lack of it—has profound consequences.

At this time of all times, with the parallel debate on the relationship between Westminster and Brussels, what an opportunity this was to have had a proper consideration of how each level of government could work with another, based on mutual respect. Instead, we have had a debate on Europe that has been intellectually largely bankrupt and a devolution process that in the east was reduced to, “You’ve got three weeks to make up your mind”, and “Oh, you’ve got to have an elected mayor or two”.

What is really needed and what the business community in particular is crying out for is the imagination, the freedom and the flexibility to unlock the massive potential that exists in and around Cambridge. Unfortunately, our strengths are also our weaknesses, and we struggle on housing and transport. There are so many possibilities, including the proposals put forward by the London-Stansted-Cambridge Consortium, which would unlock growth between Cambridge and London if only we could take advantage of such opportunities.

There are other threats to Cambridge’s knowledge economy. Having already trebled tuition fees for university students and scrapped maintenance grants, the Government now want fees to rise again. Few students will welcome paying more when so many feel that their contribution is already too high. When they make comparisons with other countries, they are right to feel aggrieved. We are all pleased that the Government have promised to protect the dual funding system of research, but there are real risks that such separation will be eroded over time.

Let me conclude by making the wider point that whatever the strength of a research-based, high-tech economy, we still need to make sure that the benefits are shared fairly. When I look at the rising number of people turning to the Cambridge food bank, see more and more people on short-term and zero-hours contracts and see the visible evidence of more and more rough sleepers on the streets of Cambridge, it is clear the economy is working for some but by no means all. One looks in vain for measures that will address that very real unfairness, while the measures on housing and benefit changes passed in the last Session will make the situation in my city worse, not better. Those are all reasons why I will oppose the Government tonight.

Budget Resolutions and Economic Situation

Daniel Zeichner Excerpts

Tuesday 22nd March 2016 Commons Chamber

[Daniel Zeichner (Cambridge) (Lab)]

It was striking how little the Chancellor had to say about science and innovation in the Budget. Nearly 60,000 people are employed in the Cambridge cluster, and Cambridge is home to over 1,500 tech companies with a combined annual revenue of about £13 billion. This Government’s record on science is erratic. Investment in research and development is only at 0.49% of GDP—below the OECD average of 0.67% and well below the EU target of 3%. That means that the UK comes last in the EU 27 and eighth in the G8 in terms of R and D spending as a proportion of GDP. The annual funding shortfalls resulting from the 2010 flat-cash settlement for the resource science budget meant a £1 billion loss to the UK research base over the lifetime of the previous Parliament.

There was some relief when the Government committed to protecting the science resource budget in real terms over the course of this Parliament, but £1.5 billion of this funding has been reserved for a new global challenges fund—a new funding commitment tucked within existing science resource funding. I would welcome clarification of how this will impact on current scientific research. It should be noted that funding for innovation and wider research sits outside the ring-fenced science budget. This funding supports companies, especially small and medium-sized enterprises, in translating their research into products.

Like many others, I was very disappointed by the Government’s decision to bin research grants for companies and replace them with loans. This will have a significant impact on key early-stage enterprises, which have explained that they will struggle to secure investment if they have a hefty loan on the books. Sadly, the Government did not listen. They should, because, as I have said on previous occasions, Cambridge’s future success is not assured. Last week, new data from the Office for National Statistics showed that house prices in Cambridge have risen faster since 2010 than anywhere else in the country. If people cannot live in the city, they are then forced to live outside, and that is why local transport matters so much.

I turn to the devolution deal—so-called. Let us be clear: Cambridge and the area around us need the freedoms to make the investments needed to tackle the housing and transport challenges we face. That was why Cambridgeshire councils, business and universities came together to create the Case for Cambridge—a thoughtful and sensible set of proposals put to Government last year. However, instead of responding positively to that locally agreed and developed proposal, the Government came back very late in the day with a completely different solution, and basically said, “You’ve got three weeks to take it or leave it.” Unsurprisingly, the reaction has been furious. The local enterprise partnership has rejected it, individual business leaders have rejected it, the city council has rejected it, and today Cambridgeshire County Council rejected it. This is no way to deal with the huge and urgent challenge that faces one of the most successful parts of the country: it puts that very success at risk. I hope that those involved in this process—ultimately it is Treasury-led—will reflect on what has happened and reopen discussions in good faith with Cambridgeshire. Cambridgeshire needs a deal, but it needs a deal for Cambridgeshire, not for the Treasury.

Oral Answers to Questions

Daniel Zeichner Excerpts

Wednesday 9th December 2015 Commons Chamber

[Mr Osborne]

First, everyone here would pay tribute to the people of Carlisle, the extraordinary resilience they have shown and the acts of friendship that neighbours have shown to those affected by the terrible floods. Before the Prime Minister left for central Europe this morning, he asked me to make sure we would be able to help on the specific point my hon. Friend raises, and did raise with the Prime Minister, and I can say that we will support the work the Cumbria Community Foundation does and we will match, by up to £1 million, the money it is raising for its local flood appeal.

[Daniel Zeichner (Cambridge) (Lab)]

Q9. When the Chancellor tripled student tuition fees, he set the repayment threshold at £21,000. He has now frozen the threshold, and the Institute for Fiscal Studies tells us that many students will bear many extra thousands of pounds in repayments. Given that he has broken his promise, will he send students an apology or just the bill?

[Mr Osborne]

There seems to be collective amnesia among Labour Members: they introduced tuition fees and the payment threshold was £15,000. We have increased it to £21,000, which enables us to fund the lifting of the cap and more people who are qualified to go to university. I would have thought, and I would have hoped, that on this day the hon. Gentleman welcomed the big investment we are making in Cambridge, not least with the renovation of the famous Cavendish laboratory.

Finance Bill (First sitting)

Daniel Zeichner Excerpts

Thursday 17th September 2015 Public Bill Committees

[Barbara Keeley]

Indeed. I think one of my hon. Friends wanted to intervene.

[Daniel Zeichner (Cambridge) (Lab)]

It is a pleasure to serve under your chairmanship, Sir Roger. I quite take the point you just made, but does my hon. Friend agree that it is slightly rich for Government Members to talk about the past when they were elected last time on a pledge to reduce the deficit by half by the end of the Parliament, which they have completely failed to achieve? Setting tax rates in stone will only further perpetuate their past failure.

[Barbara Keeley]

Absolutely. In talking more broadly, I have been trying to paint a picture of the impact of the set of policies in the Budget, not all of which are in the Bill.

We feel that the tax lock is a short-term measure. As I said earlier, we need to think about long-term reform to ensure an equitable and efficient tax system that provides good value for the taxpayer. There is also a need for long-term tax system planning. We welcome the consultations announced by the Government, but action is also needed on, for example, the alignment of national insurance contributions and income tax. That has been discussed many times, over and over again, but never acted upon, and I will be talking about that later in the debate.

Finance Bill (Second sitting)

Daniel Zeichner Excerpts

Thursday 17th September 2015 Public Bill Committees

[Mr Gauke]

I am grateful to my hon. Friend for her contribution. She makes a very good point.

The hon. Member for Worsley and Eccles South asked what would happen if inflation is higher than the increase in the national minimum wage. The Government’s aim is to have a national minimum wage that helps as many low-paid workers as possible without damaging their employment prospects. We welcome the fact that the Low Pay Commission shares our aim of seeing progressive real increases in the national minimum wage. It is because we have a strong economy and high levels of employment that we are seeing increases in the national minimum wage and that we now have the flexibility to introduce a national living wage.

On those who do not benefit from the increase in the personal allowance, we believe that in our income tax system someone working 30 hours a week on the national minimum wage should not pay income tax. These changes will ensure that those individuals will be taken out of income tax. We want to create incentives to encourage those who, for example, wish to increase their hours if their circumstances permit them to do so. They should be able to do that without finding themselves paying income tax.

[Daniel Zeichner (Cambridge) (Lab)]

It is a pleasure to serve under your chairmanship, Mr Howarth. Will the Minister tell me how much a part-time worker earning, say, £8,000 will benefit from the changes?

[Mr Gauke]

The point I am making is that as we increase the personal allowance, people who earn under that amount do not pay income tax. If we still had a personal allowance of £6,475, such a person would clearly be paying income tax. If the hon. Gentleman is saying that we have already made an awful lot of progress, I would entirely agree with him. That does not mean that we should stop.

The hon. Member for Worsley and Eccles South raised the issue of the national living wage, which we will introduce. It is based on the national minimum wage, which we believe should continue in its current form, applying recommendations from the Low Pay Commission to the Government. That has an important role to play.

The Government want to protect younger workers’ employment prospects as well as see as many people as possible benefiting from a higher wage. Given that younger workers tend to have less experience in the labour market than older workers, there is a risk that too high a wage rate might make them relatively less attractive to employers. That is why we will have both the national living wage and the national minimum wage.

--- Later in debate ---

[Mr Gauke]

There is a question of cost. It is necessary to evaluate where the impact would lie and the benefit of going above £200,000. Yes, the allowance was once at a very high level, but that was because of particular temporary circumstances, given the uncertainty that existed towards the end of the previous Parliament.

Let us not forget that 99% of companies will receive 100% relief on their investment with an annual investment allowance of £200,000. It is a question of balancing the benefit to investment with the cost in tax that we will forgo if we go above £200,000. The judgment that we made was that, given that 99% of companies will get 100% relief, a level of £200,000 was a reasonable approach to take in the context of a set of policies that are undoubtedly pro-business and designed to attract investment in the UK.

[Daniel Zeichner]

rose—

[Roger Mullin (Kirkcaldy and Cowdenbeath) (SNP)]

rose—

[Mr Gauke]

I was about to conclude, but I will quickly take the two inventions.

[Daniel Zeichner]

On a point of clarity, given that we are discussing permanence, I think I heard the Minister say that this would be the level for the remainder of the Parliament. Is that what he is saying?

[Mr Gauke]

That is our intention, yes; £200,000 will be the level for this Parliament.

--- Later in debate ---

[Barbara Keeley]

I will come on to a very good reason why. I will answer the hon. Gentleman’s points. I ask the Minister why—I hope he does not lose this question—given the average house price outside London, the Chancellor has decided to introduce this additional band. There are wider questions, which I said I would come to, about the scope of who will benefit from the nil rate band.

The new tax exemption applies to lineal descendants. We welcome the clarification of who will benefit outlined in the Government amendment, and the apparent extension of the nil rate band to a lineal descendant’s spouse or civil partner in the event of the lineal descendant’s death. However, the Institute of Chartered Accountants has pointed out that it could be seen as discriminatory to allow the relief only to lineal descendants; many godparents, aunts and uncles are as close to, and their lives are as intertwined with those of, godchildren, nieces and nephews as are those children’s parents. That is the kind of family structure that we have these days.

[Daniel Zeichner]

I agree with my hon. Friend. I have had representations from constituents who feel that the lineal descendancy clause is absolutely discriminatory, particularly against childless couples. There seems to be no logic to it, and I would welcome hearing the Minister’s case for it.

[Barbara Keeley]

My hon. Friend puts that in an excellent way. Will the Minister clarify the Government’s position on why the policy will apply only to lineal descendants? It has the potential to raise house prices by making property an even more attractive investment for the wealthiest, which would make it even more difficult for ordinary working people to get on to the property ladder.

Paul Johnson, the director of the IFS, has said that it is

“rather odd to give this special treatment to housing given that owner-occupied housing is already extremely tax privileged”.

He said:

“This will only increase the bias we have towards putting your money in a house, to inflating potentially the value of housing, without dealing with the lack of housing, which is driving up the value of private residences.”

Many of the policy’s features are similar to those analysed in a Treasury document that was leaked to, and published by, The Guardian. According to the estimates in the document, based on Budget 2014 forecasts, the policy would reduce the proportion of estates liable for inheritance tax from 8% in 2015-16 to just over 6% by the end of the Parliament, rather than increasing it to slightly more than 10%, as the current policy would have done. The document contains the argument that

“there are not strong economic arguments for introducing an inheritance tax exemption specifically related to main residences”.

A number of problems with the policy are set out in the document, such as the fact that it would encourage investment in owner-occupied housing rather than other more productive investments and that it would discourage downsizing late in life when that might otherwise be appropriate. Although the Government have made some provisions to prevent the downsizing problem, industry experts have said that the changes could lead to more people choosing to upsize later in life, which would have consequences for the availability of housing stock for other buyers.

I want to talk about the balance of the Government’s tax cuts, including changes to inheritance tax. Those changes will cost £24.6 billion over the Parliament, and they will be financed by five main sources, according to the Office for Budget Responsibility. Tax increases will raise £47.2 billion over the Parliament; we have talked about things such as insurance premium tax. Welfare cuts, including cuts to tax credit and many freezes, will raise nearly £35 billion. Other spending decisions will cut £8.1 billion. Cuts to departmental spending and to the BBC have been proposed. Various tax and spending decisions have indirect effects that will raise a further £14.2 billion.

The Budget decisions, interestingly, imply £3.5 billion of extra borrowing over the Parliament, on top of the £14.6 billion increase indicated by the OBR pre-measures forecast. Inheritance tax raised an estimated £3.8 billion in 2014-15, but house price inflation had been expected to drive the tax take up to £6.4 billion by 2019-20. Instead of the Exchequer receiving more revenue from inheritance tax, however, the policy is expected to cost it £940 million a year by 2020-21, when the additional family home allowance—like the existing allowance, it will be transferable between spouses—reaches £175,000 per person.

When they talk about borrowing, Conservative Members should bear in mind that if the Government had kept the existing allowance, they would have more than halved expected additional borrowing over the lifetime of the Parliament. In contrast, their position appears to mean more borrowing, when one of the Government’s specified aims is to do the opposite. It seems strange that in the debates we have had so far the Conservative party seems to be convinced that it is okay to increase taxes such as insurance premium tax and to make increases that hit very large numbers of people the main way to raise finances, while implementing changes to inheritance tax that will cost the Exchequer considerable sums of money.

Surely, keeping inheritance tax as it was would be better than increasing the insurance premium tax and making hefty welfare cuts. Those are the decisions that are weighed against each other. The Government are cutting a tax for the wealthier families in the country, while cutting tax credits for millions of those who are in need. That is what we are going to see over the coming years. We could say that this is a rather warped interpretation of Robin Hood: taking money from the poorest to pay for a tax cut for the richest.

To answer the point made by the hon. Member for North Dorset, this tax cut comes at the same time as the Government have decided to abandon a manifesto pledge to implement a £72,000 cap on care costs. In a written statement to the House of Lords on 25 July 2015, the cap on costs was described as an expensive new commitment. The cap—a pledge made by the Conservative party—was designed to prevent older people and younger people with disabilities from having to sell their homes when they went into care.

Here is the answer for the hon. Gentleman: why is it okay for people with care needs to have to sell their homes and have nothing to pass on, while the very wealthiest—the top 10%—are allowed to keep house values of £1 million? The Government have decided to abandon a cap, for which they had made legislation, on the grounds that it is too expensive, while they are opting to go with the introduction of the nil rate band for inheritance tax on properties, which will cost £1 billion by 2020. That £1 billion a year could have been an incredible investment in social care; instead, we are going the opposite way. We are talking about hundreds of thousands of pounds, if not millions. People who have to pay their own care costs will be under a huge burden and will have to give up their homes.