Oral Answers to Questions

Danny Alexander Excerpts

Tuesday 29th January 2013 Commons Chamber

[Mr Marcus Jones (Nuneaton) (Con)]

5. What steps he is taking to help people with the cost of living.

[The Chief Secretary to the Treasury (Danny Alexander)]

The Government continue to take steps to support households. The personal allowance will be increased to £9,440 in April 2013 to support hard-working individuals. The cash increase in that year is the largest ever. The 3p fuel duty increase planned for January 2013 has been cancelled, as a result of which fuel duty will have been frozen for two and a half years.

[Henry Smith]

I thank my right hon. Friend for that answer and warmly welcome the fact that more than 1,700 people in my constituency have been taken out of paying income tax altogether by the raising of the threshold, and that more than 42,000 people in my constituency have had their income tax reduced as a result. May I urge him to be bold and go further?

[Danny Alexander]

I am grateful to my hon. Friend for those comments. We are increasing the tax allowance towards the bold and ambitious goal of £10,000, which Conservatives and Liberal Democrats have joined together in coalition to deliver. We will certainly be bold and ambitious, and I will take his comments as a Budget submission.

[Mr Marcus Jones]

For the third year running, the Government have provided additional funds to councils to allow them to freeze council tax, which doubled under the Labour Government. I am aware that Warwickshire county council intends to freeze council tax, but will my right hon. Friend join me in urging Nuneaton and Bedworth borough council and North Warwickshire borough council, which are Labour controlled, to get on board, freeze council tax and give the hard-working people in my constituency a break?

[Danny Alexander]

My hon. Friend makes an important point. We have provided funding to local authorities to enable the council tax freeze to be delivered. Of course, councillors in those areas will be answerable to their constituents if they fail to deliver the substantial financial benefit that that offers. He is right to say that council tax doubled during the Labour party’s time in office.

[Geraint Davies (Swansea West) (Lab/Co-op)]

Does the right hon. Gentleman accept that the cost of living increases have hit the poorest hardest, including the man I mentioned last week in Prime Minister’s questions? Should we not therefore follow the US in taxing the top 2% more, having net investment and generating an extra 1% growth, rather than hitting the poor hardest?

[Danny Alexander]

In that case, I am sure that the hon. Gentleman will welcome the fact that the wealthiest in society are paying more in every year of this Government’s time in office than they ever did under the Labour party.

[Cathy Jamieson (Kilmarnock and Loudoun) (Lab/Co-op)]

Analysis by Citizens Advice shows that the Chancellor’s cuts to tax credits and benefits will

“swamp any gains from the change in personal tax allowances for almost all low income households…and many middle income families”.

How can that hit on working families be justified on the same day as millionaires are getting a tax cut?

[Danny Alexander]

The hon. Lady will know that working people in this country are net beneficiaries of the measures announced in the autumn statement. I would have thought that she would welcome the fact that 2.2 million Scots will gain from the increase in the personal allowance. It is a massive policy to ensure that the working people of this country have more of their own money back in their pockets to use for themselves.

[Jeremy Lefroy (Stafford) (Con)]

7. What progress HM Revenue and Customs has made in closing loopholes in the tax system.

--- Later in debate ---

[Dr Julian Huppert (Cambridge) (LD)]

10. How much VAT was paid by (a) sixth-form colleges and (b) further education colleges in 2012.

[The Chief Secretary to the Treasury (Danny Alexander)]

Her Majesty’s Revenue and Customs does not collect data on the VAT paid on individual goods or services at a sufficient level of detail to indentify the amount paid by sixth-form colleges and further education colleges. VAT costs, like all other costs, are taken into account as part of the up-front funding allocation.

[Dr Huppert]

Sixth forms and further education colleges such as Hills Road and Long Road sixth-form colleges and Cambridge Regional college do excellent work. However, they face a large VAT burden—some £300,000 for sixth-form colleges and well over £1 million for Cambridge Regional college—that schools do not face, as well as receiving less funding than the school sector. Will my right hon. Friend agree to investigate whether that anomaly can be corrected, so that sixth-form colleges and FE colleges can have a level playing field?

[Danny Alexander]

As my hon. Friend will know, when we took office we found a situation in which sixth-form colleges were considerably less well funded for that group of pupils than schools. We are taking steps, year by year, to equalise the funding arrangements, and we will look again at that in the spending round in the first half of this year.

[Kelvin Hopkins (Luton North) (Lab)]

As a governor of Luton sixth-form college for 20 years and a former teacher of A-levels, I am convinced that sixth-form colleges are the most successful institutions in our education system. Is it not time for the Government to stop punishing them for their success?

[Danny Alexander]

I dare say that the hon. Gentleman’s comments on sixth-form colleges will be echoed by many Members of the House. That is why, as I said in answer to the earlier question, the Government are taking steps year by year to equalise the funding arrangements. I am sure he will welcome that.

[Valerie Vaz (Walsall South) (Lab)]

11. What recent assessment he has made of the extent of underemployment in the work force.

--- Later in debate ---

[The Chief Secretary to the Treasury (Danny Alexander)]

If the hon. Lady were concerned about child care, I would have thought she would welcome the fact that under this Government the free offer for three and four-year-olds has been increased from 12.5 hours to 15 hours and that this Government have put in place a new offer for the 40% most disadvantaged two-year-olds for 15 hours’ free nursery education at that age. We will bring forward the proposals to which she refers very shortly, and I hope that when she sees them, she will welcome them.

[Jane Ellison (Battersea) (Con)]

T8. Will the Chancellor update the House on a subject on which all Members receive a great deal of correspondence—funding for small businesses? Will he in particular update us on the funding for lending scheme and other similar initiatives?

[Pamela Nash (Airdrie and Shotts) (Lab)]

T6. Families living with a disabled member are going to be hardest hit by tax credits and benefit cuts. That is not according to a third-party briefing, but according to the Government’s own assessments. What do this Government have against disabled people in this country?

[Danny Alexander]

I think that is a very poor way to phrase the question, especially when the hon. Lady will know that disability living allowance payments, for example, are continuing to be uprated in line with inflation, even as we have to take more difficult decisions on other parts of the economy.

[Jeremy Lefroy (Stafford) (Con)]

T9. A recent article in MoneyWeek suggested that raising the minimum wage would cut the cost of tax credits and benefits and increase employment. What work has the Treasury done on the interrelationship between the level of the minimum wage, the cost of benefits, tax revenues and employment levels?