Oral Answers to Questions

Danny Alexander Excerpts

Tuesday 28th January 2014 Commons Chamber

[Chris Heaton-Harris (Daventry) (Con)]

5. What recent steps he has taken to reduce income tax.

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

Since 2010, the Government have increased the income tax personal allowance by more than 50% and it will reach £10,000 this April. That will cut the income tax bills of more than 25 million working people by £700 a year. We can afford to do that because we have stuck to a credible economic plan that is creating jobs and supporting growth, as is shown by today’s excellent figures.

[Chris Heaton-Harris]

That means that 2.4 million people have been lifted out of paying tax altogether. In my constituency, thousands of people are no longer paying tax and are in profitable work. My constituency has a 1.9% unemployment rate and thousands of jobs are coming to Daventry. Does that not show that for my constituents, the Government’s long-term economic plan is working?

[Danny Alexander]

I agree wholeheartedly with my hon. Friend. I can update him on one point of fact. By April this year, we will have taken not 2.4 million low earners out of tax, but 2.7 million low earners.

[Steve McCabe (Birmingham, Selly Oak) (Lab)]

Given that the married couples tax break helps just one sixth of families with children and one third of married couples, is it an example of the Government’s well-targeted support?

[Danny Alexander]

I would prefer it if those resources were used to fund further increases in the personal allowance. However, the hon. Gentleman should welcome the fact that the Government are saving thousands of people in his constituency £700 a year in income tax that they would be paying if his party had stayed in office.

[Ian Swales (Redcar) (LD)]

Raising the income tax threshold to £10,000 is putting more money into the pockets of the low-paid, and their spending is helping to drive the recovery. Will the Chief Secretary consider increasing the threshold to £10,500 in the forthcoming Budget?

[Danny Alexander]

My hon. Friend is right to say that this policy is helping people on low incomes, as well as working people up and down the country, many of whom have household budgets that are under pressure. I would like the income tax personal allowance to be higher. As a party, we have set the goal of a £12,500 personal allowance in the next Parliament. In the same way, the £10,000 goal for this Parliament was set by the Liberal Democrats.

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

I note that, despite a number of opportunities, the Chancellor did not mention the cut to the 50p rate of tax. I wonder whether the Chief Secretary to the Treasury will refer to it in answering a simple question. Will he confirm that people who are earning more than £1 million have received an average income tax cut of more than £100,000 this year—yes or no?

[Danny Alexander]

The figures from HMRC show that the cost of reducing the 50p rate to 45p was about £100 million. It is precisely because the tax was not raising any money that I was willing to support the decision to reduce it, on the basis that we would raise much more money from the same people in different ways. The House might like to be updated on one of those measures. The annual tax on enveloped dwellings—the mansion tax for tax dodgers—is raising five times as much as we thought it would.

[Keith Vaz (Leicester East) (Lab)]

6. What discussions he has had with the Secretary of State for Health on introducing an additional tax on drinks with a high sugar content.

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[Greg Mulholland (Leeds North West) (LD)]

8. What steps he has taken to reduce the cost of living for those on low incomes.

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

In addition to lifting the income tax personal allowance, which I mentioned earlier, the Government are supporting working households’ income through other measures such as freezing fuel duty, supporting a council tax freeze and, most importantly, sticking to an economic plan that is getting hundreds of thousands more of our fellow citizens back into work.

[Greg Mulholland]

I thank my right hon. Friend for that answer. The best way to help people and families on lower incomes is to take them out of tax. What is the effect of the increase in the tax threshold compared with the last Government’s disgraceful decision to abolish the 10p tax rate?

[Danny Alexander]

That is a very good question. The tax threshold increases that we have presided over will have taken 2.7 million people out of tax. The personal allowance is a zero rate, whereas a 10p rate would halve the rate of income tax, so raising the personal allowance is literally twice as good.

[Nia Griffith (Llanelli) (Lab)]

I would like to draw the Chief Secretary’s attention to people who earn less than £10,000 a year and cannot afford to run a car. With the incredible squeeze on tax credits through low inflation rises and the taper being made even steeper, families in that situation, who are the working poor, are being hit the hardest. What will he do for those people on tax credits?

[Danny Alexander]

The hon. Lady is right, of course, that the financial crisis that took place when her party was in office cast a long shadow over the personal finances of millions of people in this country. However, she omits to mention that many of the people she refers to were paying income tax under the previous Government, and it is thanks to this Government’s policies that they are no longer doing so.

[Heather Wheeler (South Derbyshire) (Con)]

19. I want to extend the previous question to the difficulties of pensioners who are stuck on low-performing annuities. How will the Government open up the market and improve annuities for the future?

[Danny Alexander]

We have already taken steps to ensure that the annuities market works better. We are examining it further to ensure that people who have saved for a pension can get a proper deal in retirement.

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

When it comes to the cost of living, does the Chief Secretary now agree that it was a big mistake for the Chancellor to issue such dodgy statistics last week, desperately pretending that the public have never had it so good? The Government’s first statistical dodge was adding in only tax changes that they like and ignoring tax rises and cuts to tax credits, which, by the way, disproportionately hit women. Their other dodge was trying to prove that the rich were really doing very well by leaving out that thing that they do not like talking about today—the millionaires’ tax cut. They were such blatantly skewed figures—is the Chief Secretary not just a little bit embarrassed about such statistical trickery?

[Danny Alexander]

A vast amount of words, but not one of them welcoming the most important set of statistics today—the growth figures that have been published this morning. The year 2013 was the first calendar year since 2007 with economic growth in all four quarters, and I wish the hon. Gentleman had welcomed that.

[Chris Leslie]

Week after week, month after month, we come to the Dispatch Box and beg the Government to do something about the cost of living crisis, but all we hear from the two Government parties is, “Crisis? What crisis?” How out of touch can they possibly be? I want to ask the Chief Secretary a simple question. Does he really, genuinely think that the British public are better off today than when he came to office?

[Danny Alexander]

I know for a fact that the British public are better off than they would be if the hon. Gentleman’s party had stayed in office. He’s got a cheek, he really has.

Again, no welcome for the growth figures or the fact that, last week, we saw the largest quarterly rise in employment in our country’s history. No welcome for the big tax cuts for working people in this country or the range of measures that we have taken to ask the wealthiest to pay more. Those are the things that are getting this country back in the right direction, something that the hon. Gentleman’s party would fail to do.

[Andrew Griffiths (Burton) (Con)]

9. What assessment has he made of the effect on the brewing industry of the reduction in beer duty announced in the 2013 Budget.

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[Roberta Blackman-Woods (City of Durham) (Lab)]

15. What recent progress his Department has made on implementing the national infrastructure plan.

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

I published the updated national infrastructure plan on 4 December 2013. It includes an update on the Government’s top 40 priority investment projects, including a pipeline of £375 billion-worth of planned investment, of which the Government have contributed £100 billion in capital over the long term.

[Roberta Blackman-Woods]

Last month, after detailed analysis, the Financial Times reported that it found progress in infrastructure schemes to be slow, if not minimal, including on many of the 40 priority projects launched to great fanfare by the Government. What will the Minister do to rectify the situation and get infrastructure projects delivered?

[Danny Alexander]

I do not think that that analysis is correct. Thirty-six transport projects worth more than £1.7 billion have been delivered, upgrades to more than 150 railway stations and 350 flood and coastal erosion schemes have been completed, superfast broadband last year passed an extra 200,000 premises and electricity generation schemes are being completed across the country. Just last week we completed, several months ahead of schedule, the M4 and M5 managed motorway projects near Bristol—another example of infrastructure being delivered by this Government.

[Stella Creasy (Walthamstow) (Lab/Co-op)]

T1. If he will make a statement on his departmental responsibilities.

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

Yes, I can confirm that. A state aid investigation has been opened, so we are compelled under European law to suspend the exemption, but, working with the industry, we have provided a very robust response to the Commission outlining why the exemption is justified. We remain confident that the Commission will find that the exemption does not amount to state aid.

[Andy Sawford (Corby) (Lab/Co-op)]

T8. Her Majesty’s Revenue and Customs is investigating 12 employment agencies in my constituency for underpayment of the minimum wage. Two investigations have been concluded, penalties imposed and money repaid to local workers, but local people simply do not understand why the Government will not name and shame those two agencies. I think the Government are wrong. Will they reconsider?

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[John Cryer]

The Liberal Minister used to be a loyal servant of Britain in Europe. Does he still agree with its founding principles?

[Danny Alexander]

I still very much take the view that Britain is better and stronger as a full member of the European Union and that membership of the European Union is vital for our trade and for 3.5 million jobs in this country, which is why I will resist any attempts to take Britain out of the European Union.

[Jason McCartney (Colne Valley) (Con)]

T5. I do not know whether the shadow Chancellor has been to Yorkshire recently, but if he does come up north, he will see that, in Colne valley and Huddersfield, manufacturing is surging, whether it is Magic Rock brewery exporting to Australia, Camira fabrics selling its textiles to the Los Angeles transit system or even Newsholme foods selling black puddings to Spain. Will the Chancellor please continue to reject the doom-mongering, mithering and class warfare from the Labour party and continue with his long-term economic plan?

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[Duncan Hames (Chippenham) (LD)]

We know that the Chancellor is keen to cut high marginal rates of tax. Does he appreciate that an advantage of the further increase in the personal allowance for which the Liberal Democrats are calling is that it would almost entirely scrap the effective 30% marginal tax rate faced by those who are aged over 65 and whose incomes amount to no more than the national average?

[Danny Alexander]

May I first take this opportunity to congratulate my hon. Friend, and my hon. Friend the Member for East Dunbartonshire (Jo Swinson), on recently becoming parents? He is quite right to suggest that further increases in the personal allowance would benefit all parts of the population. The Chancellor will make announcements in the Budget in March and, as a party, we will be campaigning for further increases in the personal allowance, precisely to ensure that the benefits are spread as widely as possible.