Off-payroll Engagements (UK Export Finance)
Danny Alexander Excerpts(9 years, 8 months ago)
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The Chief Secretary to the Treasury (Danny Alexander)
On 5 March 2015, I published the conclusions of HM Treasury’s second evaluation of Departments’ compliance with the rules governing off-payroll appointments in central Government.
The evaluation raised a number of concerns regarding implementation of the guidance at UK Export Finance. I stated that I had asked the Permanent Secretary to the Treasury to commission the Government Internal Audit Agency to carry out an independent audit of the implementation of the off-payroll guidance at UK Export Finance, following which further consideration would be given to the need for any sanction.
The independent audit is now complete and has identified that the off-payroll guidance was not properly implemented at UK Export Finance. As a result I shall be issuing a fine against UK Export Finance of £500,000 for breaches of the guidance which involve the failure to seek proper assurance regarding the tax arrangements of a number of individuals.
While the vast majority of off-payroll contracts are in place for legitimate reasons, I am committed to ensuring that the public sector demonstrates the highest standards of integrity in this area and that public sector employers meet all their tax obligations. The Treasury will continue to monitor compliance to ensure this is the case.
[HCWS485]
Fiscal Responsibility and Fairness
Danny Alexander Excerpts(9 years, 9 months ago)
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The Chief Secretary to the Treasury (Danny Alexander)
Yesterday my right hon. Friend the Chancellor of the Exchequer set out the final coalition Budget of this Parliament. The policy measures contained in the Budget document were all agreed between us. I secured key Liberal Democrat commitments, including the significant increase in the income tax personal allowance, support for mental health, and tax measures to support motorists, Scotch whisky and the oil and gas sector, because together they make our society fairer and our economy stronger.
However, I know that millions of people who watched yesterday’s exchanges between the Chancellor and the Leader of the Opposition were left wondering, “Isn’t there another way to do this?” Of course people want a stronger economy based on a credible plan, but they also want a fairer society based on modern public services. Therefore, to all those left cold by yesterday’s exchanges, to all those asking themselves whether there is another way, today I say, “Yes, there is a better way.”
Today I set out a better economic plan for Britain, a plan that is based on values of fairness as well as strength, a plan that delivers on our commitment to balance the books in a fair way, a plan that borrows less than Labour, cuts less than the Conservatives and enables our country to see light at the end of the tunnel. It is not a rollercoaster ride, but a steady path back to prosperity. It sticks to the path we have chosen in this Government, rather than lurching away from it by cutting too much or borrowing too much.
The fiscal forecast published by the Chancellor yesterday would, according to the Office for Budget Responsibility, return Government consumption—the effective spending power of the state—back to levels last seen in 1964. But the era of “Cathy Come Home” is not my vision for the future of Britain. [Interruption.] Although, I can see why 1964 might appeal to some on the Government side of the House—after all, that was before Nigel Farage was born.
The economic plan that I am publishing today has been produced by the Treasury, based on assumptions I provided, using data from the Office for Budget Responsibility—[Interruption.]
Mr Speaker
Order. I will not take points of order in the middle of a statement.
Danny Alexander
Finishing the job we started in 2010 will require roughly £30 billion of fiscal consolidation by 2017-18. All parties in this House signed up to that in January, although the shadow Chancellor has been trying to wriggle out of that commitment ever since.
Our first priority must be to ensure that those with the broadest shoulders bear the largest share, so the fiscal plans I am setting out today are based on a further £6 billion from tax dodgers—an additional £6 billion of tax rises. We should expect those in high-value properties, the banking sector and others to pay more, rather than asking those working on low incomes to accept less. That would leave around £12 billion of departmental expenditure savings and the remaining £3.5 billion from welfare savings. Those measures would allow the structural current deficit to be eliminated in 2017-18. In fact, the coalition’s fiscal mandate is met with headroom of £7.7 billion.
Once that task is complete, we need to continue to cut the debt as a share of the economy, and we will not flinch from that task, because to do so would be to leave an intolerable burden to future generations. Provided that we can meet that target, borrowing for productive investment in infrastructure—in roads, railways, broadband and housing—can and should be part of our plan. We will therefore grow public expenditure as the economy grows after 2017-18. Ten years on from the financial crisis is the right time for the public finances to turn the corner. To continue the pain beyond that date is unnecessary and simply making cuts for cuts’ sake. To go too slowly, as the Opposition recommend, would drag out the pain for too long.
The national debt as a share of the economy would fall in every year of this plan, from 78.2% in 2017-18 to 76.1% and then 73.9%. The implied spending envelope for Departments would be £314.3 billion in 2017-18, rising to £324 billion and then £348.1 billion in the last year. That is £25 billion, £36 billion and then £40 billion more available for public services and infrastructure investment than in the plans presented yesterday. Just think what could be achieved with that. [Interruption.] They might not like to hear it on the Opposition Benches, but that money could be used—[Interruption.]
Danny Alexander
That money could be used to ensure that the NHS has the £8 billion it needs to secure its future, or to ensure that the education budget can be protected in real terms from cradle to college and not allowed to wither, or to support growth-enhancing spending of the sort delivered so effectively by my right hon. Friend the Secretary of State for Business, Innovation and Skills—[Interruption.]
Mr Speaker
Order. The hon. Member for Denton and Reddish (Andrew Gwynne) must resume his seat.
Mr Speaker
Order. Sir Bob, I do not think I require a lecture from you upon the matter of good order. Calm yourself, man; it will be better for your health.
Danny Alexander
Labour Members may not like it, Mr Speaker, but I am setting out the numbers in the Treasury document published today, which is an entirely legitimate thing to do.
This will also allow us to reward the hard-working public servants whose pay restraint has helped so much to balance the books. Public servants have made big sacrifices, and we need to repay that.
No Chief Secretary has ever had to control public spending in the way that I have, and no Chief Secretary should ever have to do so again. But this scenario proves that there is no need to shrink the state in the way that some in this House propose. The recovery secured, the fiscal mandate met, national debt down, public finances that have turned the corner, a stronger economy and a fairer society, and a better future for the United Kingdom: that is what these plans deliver.
However, fairness is not simply embodied by the numbers on a spreadsheet; it is also about the actions that we take. Nothing makes people more angry than the sight of some refusing to pay the tax that they owe. Last month I committed to ensuring that any individual or company that facilitates tax evasion would face stronger criminal penalties and financial sanctions. Today we deliver on that commitment by publishing a substantial package of next steps in the clampdown on these immoral and illegal practices. We inherited—[Interruption.] If the hon. Member for Denton and Reddish (Andrew Gwynne) would simply listen to what is being said instead of ranting like a lunatic, he would hear the measures that the Government are taking to clamp down on tax evasion.
We inherited from the previous Government a tax system that had more holes than a Swiss cheese and was more complex than a Rubik’s cube. The opportunities for those who wish to get away without paying were many and varied.
Andrew Gwynne (Denton and Reddish) (Lab)
Which page of the Budget is this on?
Mr Speaker
Order. The hon. Gentleman should not keep shrieking from a sedentary position, “Which page?” If the Chief Secretary wishes to go through page numbers, that is his prerogative, but if he does not, excessive gesticulation is rather unseemly. I have high aspirations for the hon. Gentleman’s future as a statesman, but I am not sure he is aiding his objective of becoming a statesman by this rather shrill shrieking, which in any case, as I am sure Mrs Gwynne will confirm, will be injurious to his health.
Danny Alexander
We would not wish to injure the hon. Gentleman’s health, Mr Speaker, nor to allow him not to hear the changes that we are making to deal with tax evasion.
For too long, our tax system struggled with the fact that a small minority felt it perfectly okay to indulge in tax avoidance and commit the crime of tax evasion. The public will not tolerate being stolen from any more. When this coalition Government came into office, we made it clear that we would eradicate loopholes that the previous Administration had left wide open. We said, “If you have not been compliant, we will give you the chance to put your affairs in order, but then we will come after you.” Since 2010, in every year of this Parliament we have put in place measure after measure to tackle the abuse of the tax system. Her Majesty’s Revenue and Customs will have secured £100 billion in additional revenue over the course of this Parliament. That includes more than £31 billion from big businesses and an extra £1.2 billion from the UK’s 6,000 richest people.
Yesterday’s Budget announced further measures targeting those who persistently enter into or market tax avoidance schemes that HMRC defeats. The Budget also announced game-changing information exchange agreements with over 90 tax authorities worldwide. Today I can announce the next steps—a tough, comprehensive new evasion-deterring package. First, for offshore evaders, following consultation we will introduce a new strict liability criminal offence so that people can no longer simply plead ignorance in an attempt to avoid criminal prosecution. Strict liability will bring an end to the defence of, “I knew nothing—it was my accountant, m’lud.”
Secondly, the Government will introduce a new offence of corporate failure to prevent tax evasion or the facilitation of tax evasion. No longer should any organisation be able to get away with facilitating or abetting others to evade tax. If people help a burglar, they are accomplices and criminals too. Now it will be the same for companies that fail to prevent their employees from helping tax evaders; they will be treated as accomplices too.
Thirdly, we will increase financial penalties for offshore evaders, including, for the first time, linking the penalty to underlying assets. A billionaire evading £5 million of tax will not just be liable for that £5 million. Fourthly, we will introduce new civil penalties so that those who help evaders will have to pay fines that match the size of the tax dodge they facilitate. If someone helps someone else evade £1 million of tax, they risk a penalty of £1 million, or even more, themselves. Fifthly, we will extend the scope for Her Majesty’s Revenue and Customs to name and shame both evaders and those who enable evasion.
Our message is simple: “Come forward and settle your affairs, or be caught and face the consequences.” These measures are helping to put in place a far more effective tax system in the UK. Once again it combines fiscal responsibility with fairness.
I would like to mention one last measure. Mr Speaker, you and the right hon. Member for Salford and Eccles (Hazel Blears) have pioneered measures to open up politics and Parliament to people from a more diverse range of backgrounds. Following extensive discussions, I am delighted to confirm that the Treasury has agreed to provide reserve funding of £200,000 a year for the Speaker’s parliamentary placement scheme in both 2015-16 and 2016-17, to ensure that its excellent work can continue beyond this year. I pay tribute to the work done by you, Mr Speaker, and the right hon. Lady as the driving forces behind the programme.
Combining fiscal responsibility with fairness—that is the approach that we as Liberal Democrats have brought to the coalition Government. We will finish the job of dealing with the deficit, and do so fairly. We will get the national debt down, we will secure the economic recovery and we will have no tolerance of people who evade tax or those who help them. That is the approach that will deliver a stronger economy and a fairer society. I commend this statement to the House.
Chris Leslie (Nottingham East) (Lab/Co-op)
What a farce! Why has the right hon. Member for Inverness, Nairn, Badenoch and Strathspey (Danny Alexander) been allowed to use the Government Dispatch Box for his party political pleading this morning? Is this a statement of the Treasury’s policy or not? He said he was publishing fiscal plans today—where is that document? I thought that statements in the House of Commons were supposed to be from Ministers speaking collectively on behalf of the Government, but the right hon. Gentleman has totally abused that privilege, assembling MPs this morning on a false pretence.
I know it is usual to have several days of Budget debates in the Commons, but not several Budgets. On a procedural point, I have to ask you, Mr Speaker: what recourse do we have, as the official Opposition, when statements are made that are not Government policy? [Interruption.] I do not know where the Deputy Prime Minister is going. I think that was his valedictory appearance in the House of Commons.
Can we all have a turn at giving statements and using civil service resources in this way? Will we get to vote on both Budget statements or just one of them? The Government refused to let the Office for Budget Responsibility cost all the manifesto policies of the main parties, but then they waste Treasury time and money specifically funding a Lib Dem policy document. Will the Chief Secretary at least tell the House how much this morning’s phoney exercise cost the taxpayer? What better illustration can there be of the shambolic downfall of this miserable Government when we cannot even tell whether a Minister is speaking in an official capacity? This is an alliance driven totally by party political interests, rather than Britain’s best interests.
The right hon. Gentleman spoke about measures supposedly to tackle tax evasion and tax abuses. Are they actual Government policy or are they things that he would quite like to do but that other Ministers are squabbling about? Are they genuinely new powers to tackle tax evasion or just a series of press releases to give the impression of activity?
The OBR has expressed doubt about the right hon. Gentleman’s approach to common reporting standards and says that these plans have “very high” levels of uncertainty. Can he clear that up? The OBR also says on page 209 of its report that today’s announcement relies
“on extra HMRC operational capacity in order to be implemented as intended.”
How much additional HMRC resource will be committed to the measures? When will it be committed and with what guarantee?
With the tax gap widening a further £1 billion, to £34 billion, why should we believe that these steps will be any different from the Government’s failed deal on tax disclosure with Switzerland, which has raised less than a third of the promised £3 billion and involved agreeing to turn a blind eye to abuses in the future? Would the new powers to tackle offshore tax abuses prevent what looks to have happened at HSBC? The ex-chairman of HSBC’s Swiss bank, Lord Green, apparently admitted last night to feeling “dismay and deep regret”, adding with enormous understatement that
“the real world of the markets is shot through with imperfections”.
You san say that again! Will the Chief Secretary at least now admit that it was an error that Lord Green was appointed as one of his ministerial colleagues in the face of all the evidence, or did he sign up to that as well?
The Chief Secretary came to the Dispatch Box to set out an alternative Lib Dem Budget, desperately trying at the eleventh hour to distance himself from the extreme and hazardous fate that awaits our public services—our police, our defence, our social services and the NHS—if his boss is re-elected. Let us just get this straight: is he now saying he cannot sign up to the Chancellor’s Budget, as in the Red Book, this time around? We know, or at least I thought we knew, that the quad, of which he is a member, had signed off the Budget and autumn statement figures. Is he now saying that next week he will not be voting for what is in the Red Book?
Are the Liberal Democrats ruling out a coalition with the Conservatives after the election? If they cannot even sign up to the Chancellor’s Budget when they are part of the Government, how on earth could they sign up for another five years? Does the Chief Secretary not realise how two-faced he looks? They want to have their cake and eat it—to be in government, but not in government. I can almost hear his constituents saying, “It’s too late, Danny. You’ve been propping up the Tories for five years—taking the NHS backwards, imposing the bedroom tax and trebling tuition fees, while slashing taxes for millionaires—so don’t come along now with your alternative plans and expect anybody to believe you.” It is too late for this: the Liberal Democrats have backed the Tories all the way—working families have paid the price—and now it is time for him to pay the ultimate price for his behaviour.
Danny Alexander
Frankly, the hon. Gentleman should know about farce—he has presided over the farce that is his own economic policy for the past five years.
The hon. Gentleman referred to collective agreement. I can confirm that the publication of “An alternative fiscal path beyond 2016-17” has been collectively agreed by the Government as an alternative fiscal scenario. He may not like this constitutional innovation, but he should get used to having coalition Governments in the future. The fact that he does not like constitutional innovation is perhaps why he and his colleagues blocked House of Lords reform earlier in this Parliament.
No Treasury resources were expended apart from in the work of the civil servants who calculated the numbers. It is entirely appropriate for civil servants to carry out work on a scenario on behalf of the Chief Secretary. In relation to the hon. Gentleman’s questions on tax evasion and avoidance, the new powers introduced by this Government are set out in a report today. I am sorry to hear that he opposes the common reporting standard. I would have thought that he welcomed the fact that there is UK leadership on ensuring that there are international agreements to open up offshore bank accounts to scrutiny by tax authorities from around the world. The new offences and penalties will of course hit any organisation, whether a bank or an accountancy firm, that facilitates others to engage in tax evasion.
On the hon. Gentleman’s last question, he knows very well that, as the OBR says in its own document, its forecast is constructed on the basis of a neutral fiscal assumption that is presented for the rest of the Parliament. That conceals a range of differences between the parties in the coalition. It is entirely proper for me to set out today what I think we are undertaking, exactly as the Chancellor did in his speech yesterday. Instead of this pathetic display, the Labour party should get on with apologising for the economic mess it created, and it should congratulate the Liberal Democrats and the coalition Government on clearing up its mess.
Adam Afriyie (Windsor) (Con)
I have to say that I am stunned by this statement. The fact that not a single Conservative is on the Front Bench says an awful lot. This is the Westminster bubble at its absolute worst, and it represents everything that is wrong with politics today. The Liberal Democrats have betrayed their voters, and their voters know it; their own candidates are now pretending to be independents; and today’s display is an absolute betrayal of the role they have played in government. I have no question, Mr Speaker. I think the voters will make up their own minds.
Danny Alexander
Given that we have secured a substantial fall in the deficit, the strongest economic growth in Europe and the creation of jobs in numbers that are not being seen in the rest of the European Union, the hon. Gentleman ought to be congratulating me and my hon. Friends on our role in this Government, not criticising us.
Chris Bryant (Rhondda) (Lab)
A fanfare went up around the country when, in the autumn statement, the Government announced that there was going to be a tax relief for orchestras. Now we learn that the Government’s definition of an orchestra says that an orchestra can get tax relief only if it has woodwind, strings, percussion and brass—all four. That means that no string orchestra is included, the London Sinfonia is not included, the Orchestra of the Age of Enlightenment is not included and nor, for that matter, is a single brass band in the land. If the Chief Secretary wants somebody to trumpet his orchestra tax relief, will he not have to change the rules?
Danny Alexander
I think that the hon. Gentleman is trying to make a serious point. Officials in HMRC have worked very carefully on writing a definition that is appropriate. I will certainly take his points back to HMRC and see whether they can be taken on board.
Ian Swales (Redcar) (LD)
I welcome the Chief Secretary’s statements on tax evasion and avoidance. Does he agree that it should no longer be a respectable occupation to advise those who want to avoid paying their share towards our schools, hospitals, our armed forces, pensions and all the other things on which our country relies, and enable them to do so?
Danny Alexander
I wholeheartedly agree with my hon. Friend. I have championed action on that matter in the Treasury over the past five years, and today’s Government announcements show the next stage of that. As he says, this country does not and should not tolerate the abuse of the tax system that has gone on in the past.
Stewart Hosie (Dundee East) (SNP)
I have never seen a statement, other than a Budget statement, that is so heavily redacted. It is almost as if the Chief Secretary is trying to pretend that he is important. He sat there yesterday and grinned as the Chancellor announced £30 billion of cuts. He voted for £30 billion of cuts in January and he has boasted about it today. He has not laid out a plan that combines fiscal responsibility and fairness. The plan is in the Red Book. It is not responsible and it is not fair; it is just another five years of austerity and cuts, and he knows it.
Danny Alexander
Given that the hon. Gentleman speaks on behalf of a party that wants to break up and bankrupt the United Kingdom and that has set out plans to have the national debt higher at the end of the next Parliament than at the beginning, he has a cheek. The Scottish National party’s plans would do nothing to sort out this country’s economy. They would damage the recovery and cause jobs to be lost in Scotland. I think that the people of Scotland can make up their own minds about that.
Sir Malcolm Bruce (Gordon) (LD)
I congratulate my right hon. Friend on the work that he has done to ensure that the wealthiest pay a much higher contribution in taxes than they did under the last Government, who created more loopholes for the rich to avoid taxes than there are holes in a sieve. Surely it is perfectly legitimate for a coalition that has secured recovery and growth for five years to set out how that can be taken forward in the next five years. May I suggest that if coalitions are to become the norm, we need to find better ways of handling them, so that the two coalition parties can present their cases to the House? This statement is a perfectly reasonable way of doing that.
Danny Alexander
I am very grateful to my right hon. Friend. I thank him for his support on the measures to support tax avoidance and evasion and on the package of measures that we announced yesterday to support the oil and gas industry, which has been widely welcomed in his constituency and elsewhere. He is absolutely right that although the Labour party might not like the fact that we have a coalition Government, it needs to get used to the idea that that may well be the norm for many years to come. Innovation will be needed in parliamentary procedures and other things to accommodate that.
Yvonne Fovargue (Makerfield) (Lab)
At the beginning of his statement, the Chief Secretary seemed to express concern over the direction of the coalition Budget and some of its measures. Will he confirm that the Liberal Democrats will go through the Lobbies with their coalition partners?
Danny Alexander
As I said in my statement, all policy measures in the Budget have been agreed across the coalition. What is being set out is an alternative fiscal scenario for meeting the path of deficit reduction to 2017-18, which is an entirely legitimate thing to do. Labour Members may not like the fact that they crashed the economy, made a mess of the nation’s finances, and have no plan of their own to sort it out, but they should welcome the fact that an alternative plan has been set out today.
Duncan Hames (Chippenham) (LD)
I commend my right hon. Friend for the action he is taking in government to prevent tax dodging—not long ago it was relatively easy to take advice on that simply by watching the “Daily Politics”. Will he say how much extra revenue Her Majesty’s Revenue and Customs has been able to collect as a result of action he has already taken to prevent tax dodging?
Danny Alexander
I am grateful to my hon. Friend for his question, which gives me the opportunity to pay tribute to the excellent people who work for HMRC. They work hard, day in, day out, on behalf of us all, to ensure that we bring in the revenue that is required, and that compliance procedures are in place to ensure that people cannot get away with dodging tax. As a result of the actions we have taken, more than £100 billion of revenue is being collected by the Exchequer that would not otherwise have been collected.
Tom Blenkinsop (Middlesbrough South and East Cleveland) (Lab)
A Budget, in other terms, is an estimate. Will the Chief Secretary to the Treasury please tell us about estimates that the Lib Dems will have more or fewer MPs after the general election than the 16 who are currently in the Chamber?
Danny Alexander
I am not sure that is a matter for the House; it is a matter for the British people in the coming election, and I confidently expect that the Liberal Democrats will do far better than any of the pundits predict.
John Thurso (Caithness, Sutherland and Easter Ross) (LD)
I commend my right hon. Friend for setting out a fair path to a stronger economy. Will he join me in congratulating Wick tax office, which has done such a sterling job on cracking down on avoidance through film partnerships, and which is still open despite many Treasury attempts to close it? As the economy grows, will he pay real attention to investing in infrastructure and education so that we can maintain a sustainable recovery and invest in our future?
Danny Alexander
I pay tribute to my right hon. Friend and his work on the Treasury Committee, and to staff at Wick tax office for their work to ensure compliance in our tax system. They have brought in many millions of pounds of revenue that would not otherwise have been collected. He is right to stress the importance of investment in infrastructure. Under this Government, we have the largest programme of investment in our railways since Victorian times, and in our road network since the 1970s. The plans I am setting out today would allow and enable borrowing for productive capital investment after the books are balanced, which will allow us to do more of that still. That is the right, fair plan for this country.
Susan Elan Jones (Clwyd South) (Lab)
The Chief Secretary to the Treasury may be aware of a popular television programme in this country called “Pointless”—it would be unkind of me to use the same description about him, so I will not. Can he say in one short sentence what exactly was the point of what he has said today, apart from pacifying some of his colleagues?
Danny Alexander
The hon. Lady is a member of a party whose last Chief Secretary left a note boasting that there was no money left—I think “Cashless” might best describe the Labour party. The point of my statement is exactly what I set out. I do not intend to repeat the entire statement in response to the hon. Lady’s question, but it is clear that behind the neutral fiscal assumption on which the OBR constructs its forecast, many different paths are open to this country. The alternative scenario published by the Treasury today illustrates one such path, which I would endorse.
Miss Anne McIntosh (Thirsk and Malton) (Con)
I commend the Budget and congratulate the Government on focusing on reducing national debt, which seems to have taken the wind out of Opposition sails. I thank the Chief Secretary for agreeing to a rural fuel duty discount for Hawes. Regrettably that is not in Thirsk, Malton and Filey, but I am sure my right hon. Friend the Member for Richmond (Yorks) (Mr Hague) will be very pleased. Will the Chief Secretary take heart that the £10 less duty paid on tanking up a car will bring great comfort to families in north Yorkshire?
Danny Alexander
I thank my hon. Friend for her consistent support for the rural fuel discount scheme. She was one of the Conservative Members who spoke up for this in the last Parliament, as well as in this one, and she makes the right argument. I am delighted that we are the first country in the EU to put in place a rural fuel discount scheme for remote mainland communities, and I hope in due course it will be possible to extend it—so I do not wish her constituents to think that the hope of its being extended to them is extinguished.
Alex Cunningham (Stockton North) (Lab)
The right hon. Gentleman has tried to give a very different impression today, but if he is still “all in it together” with the Chancellor, will he do what his boss has refused to do and tell us where the £12 billion of cuts to the welfare budget will fall?
Danny Alexander
It might have escaped the hon. Gentleman’s knowledge, but his Front-Bench team signed up to the revised charter for fiscal responsibility, which requires £30 billion of further deficit reduction. I can reassure him that I do not support the Conservative policy of £12 billion of welfare cuts in the next Parliament, but no doubt that matter will be debated in the election campaign. I believe Labour claims it has some plans for reducing welfare expenditure, though, as on everything else, it has not set out any detail.
Sir Alan Beith (Berwick-upon-Tweed) (LD)
I commend my right hon. Friend for his determination in staying a course that avoids the excessive borrowing advocated by Labour and the ideologically based welfare cuts of the kind just mentioned. Without such a course, it will not be possible to deliver what he has given a personal commitment to—dualling the A1 and repairing the road into Rothbury taken away by a landslide. These and other measures have been based on the success of Liberal Democrat participation in the coalition.
Danny Alexander
I agree with my right hon. Friend. The plan I have set out today ensures that we would borrow less than Labour and cut less than the Conservatives, ensuring a fair path for the public finances, which is necessary to deliver in full on our plans to dual the A1—plans that he has championed relentlessly during his time in the House. I am pleased it has been a Liberal Democrat Chief Secretary who has enabled that scheme to be funded.
Debbie Abrahams (Oldham East and Saddleworth) (Lab)
This is clearly the Chief Secretary to the Treasury presenting an alternative Liberal Democrat Budget. He obviously did not hear your statement at the beginning, Mr Speaker. To press him on the point my hon. Friend the Member for Nottingham East (Chris Leslie) raised, how will he be voting on Monday, and if he is going to vote for his own alternative Budget, will he be resigning as Chief Secretary to the Treasury?
Danny Alexander
With the greatest respect, I think it was the hon. Lady who was not listening. I made it clear that the policy measures in the Budget were ones that I helped put together, on an equal basis with the Chancellor, and I will be voting in favour of all the Budget resolutions, as I think Labour should. If it wants to oppose income tax cuts for working people and measures to support first-time buyers and savers and motorists, it should tell the British electorate.
Dr Matthew Offord (Hendon) (Con)
I am grateful to the Liberal Democrats for coming to the House and announcing their policies, because it will allow me to campaign in the election for the Conservative party manifesto and put clear blue water between our two parties. However, I have to congratulate the right hon. Gentleman on his stance today. I think he has pulled off the neat trick of not only being a member of the Government but showing himself able to be part of the opposition—something that Her Majesty’s loyal Opposition have not been able to do in the last five years.
Danny Alexander
I think I will take that as a compliment, although I do not know if it was meant as such. The hon. Gentleman makes a perfectly reasonable point. He and I are members of different political parties and have different visions of the future, but we have worked together in this coalition Government very effectively to clear up the mess left by Labour and get our country back on the right track. Of that, both coalition parties ought to be proud.
Mrs Mary Glindon (North Tyneside) (Lab)
How does the Chief Secretary expect to tackle tax evasion and avoidance if the Government go ahead with reducing the number of HMRC staff—the staff he was just praising—from 50,000 to 40,000 by next year?
Danny Alexander
As I explained in my statement, we have set out a range of measures in this Parliament to improve compliance activity, including by investing an extra £1 billion in precisely the areas of HMRC that focus on this, so there are more specialist tax inspectors, accountants, lawyers and so on focusing on this area. Yesterday, we announced the ending of the tax return and the move to a digital system for tax reporting, which will save money for both taxpayers and HMRC and allow even more resource to be focused on tackling avoidance and evasion.
Annette Brooke (Mid Dorset and North Poole) (LD)
I thank my right hon. Friend for his statement. Will he comment briefly on its implications for the future funding of our nurseries, our schools and our colleges—something very important to us on the Liberal Democrat side?
Danny Alexander
My right hon. Friend makes an important point. I believe that in the next Parliament, we should protect the budgets in real terms not just of schools, but of early-years education and 16-to-19 education as well. Saying simply that cash per pupil should be provided on a frozen basis across the Parliament amounts to real-terms cuts for education. That is what people will get from one party of this coalition, but from our part of it people will get real-terms growth and expenditure in all parts of the education system. I think that is vital, given the role of those institutions in fostering opportunity for all in our society.
Mr Jim Cunningham (Coventry South) (Lab)
The Chief Secretary has just talked about education. If he is really concerned about the education of 16 to 24-year-olds, why is he cutting the further education budget in Coventry by 24%? He should look further at the validity of the claim that the Government are going to create more apprenticeships. That rings hollow, certainly in my ears, so will the Chief Secretary please clarify the answer he just gave to the hon. Member for Hendon (Dr Offord)?
Danny Alexander
It is a matter of record that 2.1 million apprenticeships have been created under this Government. That was the result of substantial investment by my right hon. Friend the Secretary of State for Business, Innovation and Skills. I would have thought that apprenticeships, and their growth, would be welcomed on all sides, because it is an important way for people to gain skills, not least within this House. I very much hope that, on reflection, the hon. Gentleman will welcome that substantial investment.
Oral Answers to Questions
Danny Alexander Excerpts(9 years, 9 months ago)
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Jack Lopresti (Filton and Bradley Stoke) (Con)
3. What steps he is taking to invest in infrastructure.
The Chief Secretary to the Treasury (Danny Alexander)
This Government have revolutionised the approach to infrastructure through long-term planning via the national infrastructure plan, which we conceived and published, that sets out an infrastructure pipeline worth more than £460 billion of public and private investment. In the 2013 spending round, I committed over £100 billion to support infrastructure investment across the United Kingdom.
Jack Lopresti
I am delighted that the Government have made significant commitments to the south-west region, such as the fantastic £50 million-worth of investment for a new junction on the M49 in my constituency. Will the Minister confirm what further investments he is making for improvements to transport across the south-west region as a whole?
Danny Alexander
Investment in the transport infrastructure of the south-west has been a much higher priority for this Government than, I think, for any previous Government. We have committed £7.2 billion-worth of investment in the transport infrastructure of the south-west, including £2 billion in roads—for example, dualling the A303 and the new tunnel at Stonehenge, sorting out the A30 all the way to Camborne and the electrification of the Great Western main line with new inter-city express trains. I have recently asked the south-west peninsula rail task force to bring forward more proposals for investment in strategic rail schemes for the region.
John Healey (Wentworth and Dearne) (Lab)
Last month, a couple of hundred senior business figures gave a very warm welcome to the second stage of the review that Sir John Armitt has done on infrastructure for the Labour party, including plans for a new independent national infrastructure commission to identify the country’s long-term needs and monitor Governments’ plans to meet them. Business backs Labour plans; business organisations back Labour’s plans; will the right hon. Gentleman back them?
Danny Alexander
Of course, the Labour party’s belated conversion to long-term planning for infrastructure is welcome, although it was not the practice during its 13 years in office. I think that the national infrastructure plan and the architecture around it provides the right framework for delivering that long-term planning. I am not convinced that a new quango is the best way to solve the problem.
Mrs Caroline Spelman (Meriden) (Con)
Last week, the HS2 Select Committee wrote to the Treasury asking for more flexibility on big infrastructure projects where farmers have difficulty finding suitable replacement land within the statutory time limits for capital gains tax relief, leaving the businesses not knowing whether or not a discretionary power could be granted. Can the Chief Secretary give some comfort to my constituents who are affected by this?
Danny Alexander
I do take seriously my right hon. Friend’s point. The Department for Transport is working on the plans to flesh out how these things will work in respect of HS2. I would add that HMRC can provide extra flexibility where there are particular impacts on particular farmers or other businesses. I would certainly want to maintain an open mind on the points that my right hon. Friend is raising.
Mr Dennis Skinner (Bolsover) (Lab)
I could not help but notice that when my hon. Friend the Member for Birmingham, Ladywood (Shabana Mahmood) was asking the Chief Secretary’s sidekick to answer a question about Lord Green, the Chief Secretary was constantly having a laugh at his expense. I am going to give him a chance: will he now answer the question about meeting Lord Green. Now is the opportunity to make a name for himself. Come on.
Mr Speaker
I am trying to use such powers of anticipation as I have, but let us hear the Chief Secretary respond.
Danny Alexander
I do not recall ever having had any conversations about investment in infrastructure with Lord Green. Matters relating to ministerial appointments are, of course, a matter for the Prime Minister. What matters is making sure that in this country we have a zero-tolerance approach to tax evasion and tax avoidance, and that where organisations are facilitating or encouraging tax evasion, we put in place the proper penalties.
Dr Julian Lewis (New Forest East) (Con)
Does the Chief Secretary agree that no British Government should fail to invest in the infrastructure, the personnel and the equipment of the armed forces at a rate less than the NATO-recommended minimum? Will he have a word with his leader and with mine to make sure that the necessary commitment is given before the general election?
Danny Alexander
We have met that commitment in the present Parliament, and we will do so in 2015-16 as well. Spending on defence will, of course. be a matter for the next spending round. However, I suggest that the hon. Gentleman should have regard not just to the total amount spent, but to the efficiency of the expenditure. We have made great progress during this Parliament in securing better value, in terms of defence equipment and output, for the limited money that we have to spend as a country.
Ms Margaret Ritchie (South Down) (SDLP)
The Treasury has had meetings with the European Commission to discuss the reinstatement of the aggregate credit levy scheme for Northern Ireland, which could serve as a further tool of investment in infrastructure. What further discussions have taken place?
Danny Alexander
I know that discussions have been ongoing, and that the issue has been the subject of a protracted dispute. I have no further updates, but I will ensure that my ministerial colleague who is responsible for the scheme writes to the hon. Lady.
Andrew Gwynne (Denton and Reddish) (Lab)
5. What recent representations he has received on fiscal steps to address funding pressures in the NHS.
Danny Alexander
The Government have protected the health budget in real terms throughout the current Parliament. Of course a strong national health service needs a strong economy, and the Government plan to deliver that strong economy, along with a fairer society. The NHS budget has already increased by £12.7 billion during this Parliament, and in the autumn statement we announced an additional £2 billion for front-line NHS services. That money is intended to meet demand pressures in the next financial year, and also to help to start the process of transformation that was outlined in the “Five Year Forward View”, which is probably the most important representation that I have received on NHS funding in the last year or so.
Andrew Gwynne
Hospitals have struggled to cope with the pressures during the winter. Labour has made a fully funded commitment to provide the extra doctors, nurses, home care workers and midwives who are needed through a “time to care” fund. Analysis of Conservative party spending plans shows that more than 260,000 elderly people risk losing their social care packages during the next Parliament. Is it not time for the Government to commit themselves to taxing hedge funds and tobacco companies in order to raise the extra resources that our NHS so desperately needs?
Danny Alexander
Let me gently say to the hon. Gentleman that he ought to be a wee bit cautious about believing too many of his Front Benchers’ spending plans. They say that they want to deal with the deficit but have set out no plans to do so, and they have made multiple spending commitments without any sense of how those commitments will accord with their fiscal strategy.
The hon. Gentleman is, of course, right to suggest that going too far and reducing the deficit reduction by more than is necessary in the next Parliament would have a damaging effect on public services. I would say that his party has got it wrong and the Conservative party has got it wrong, but the Liberal Democrats have got it right.
David T. C. Davies (Monmouth) (Con)
23. Despite the economic chaos that was inherited by the coalition Government, spending on the NHS in England has been protected and increased. Does that not compare very favourably with the position in Wales, where a Labour Government have slashed NHS spending by 8%? Should we not judge these people by their deeds rather than their words?
Danny Alexander
My hon. Friend has made a very fair point. Comparing the NHS performance of different Administrations is an important activity, in which I am sure he will engage very fruitfully over the next few weeks. Let me add that if we are to judge a Labour Government by their actions, we should look at the mess that the Labour party made of the economy when it was last in power. If we found ourselves with problems of that kind again, money for our NHS would be one of the resources that would suffer.
Chris Leslie (Nottingham East) (Lab/Co-op)
As we heard from my hon. Friend the Member for Denton and Reddish (Andrew Gwynne), the pressures on the NHS are already putting care services in crisis. Why has the Chief Secretary colluded in Tory plans to shrink public investment and take an additional £70 billion from public services in the next Parliament, thus posing an even bigger risk to health and social care? He has dodged the question in the past; will he give us a straight answer now? Why did he sign off those Tory plans in the autumn statement?
Danny Alexander
The hon. Gentleman would do better to begin any question about the NHS with an acknowledgement of his own party’s failures I have made it clear that the figures published by the Office for Budget Responsibility represent a neutral assumption. I think the hon. Gentleman’s party would borrow too much and the Conservatives would cut too much, and that what we need is a balanced approach in the middle.
Chris Leslie
I do not know whether the Chief Secretary knows what he is doing. The letter from the OBR’s Robert Chote explicitly says—I have it in front of me—that the forecast for that £23 billion of surplus in 2019-20 was
“signed off by the ‘quad’”,
of which I think the Chief Secretary is a member. Is Robert Chote wrong, or did the Chief Secretary not realise what he was signing up to? Will he at least assure us that, if that was a mistake or he did not spot it in the past, he will be opposing a repeat of those Tory plans in next week’s Budget Red Book?
Danny Alexander
Matters relating to the Budget will be revealed by the Chancellor in his Budget statement next Wednesday and not before, as I am sure you would expect, Mr Speaker. I have listened to the hon. Gentleman today, as I listened to him on the “Today” programme yesterday, and there was not a single answer about how Labour would balance the books, and not a single answer about how Labour would invest in public services. I heard yesterday about Labour’s zero-based review, which seems to mean zero savings, zero ideas, zero economic credibility.
Stephen Mosley (City of Chester) (Con)
Health services in Chester and west Cheshire are facing increased pressures because of thousands of people fleeing from the Welsh NHS and seeking treatment in England. Will my right hon. Friend guarantee to provide more money for hospitals on the English side of the border, to protect them from the failure of the Labour party in Wales?
Danny Alexander
Clearly, there are issues in the NHS in Wales, but I would caution my hon. Friend about the tone of his question, because health workers in England and in Wales are working as hard as they can to provide the best treatment they can for people on either side of the border. Of course there are failures in terms of funding in Wales and issues that need to be dealt with, but everyone on this side of the House should unite in respect and admiration for our nurses and doctors and the work they do to keep us healthy in this country.
Tim Loughton (East Worthing and Shoreham) (Con)
6. If he will make a comparative assessment of the level of duty on wine paid in the UK and in other EU member states.
Charlie Elphicke (Dover) (Con)
8. What plans he has to introduce penalties for financial advisers who promote aggressive tax avoidance and tax evasion schemes.
The Chief Secretary to the Treasury (Danny Alexander)
This Government have been relentless in cracking down on tax avoidance and evasion. We have introduced a tougher monitoring regime and penalties for high-risk promoters of tax avoidance schemes, and the unprecedented common reporting standard will mean that by 2018 more than 90 countries will be exchanging information on offshore accounts automatically, helping Her Majesty’s Revenue and Customs to find and pursue offshore evaders successfully.
Charlie Elphicke
I thank the Chief Secretary for that answer. Does he agree that more has been done on tax avoidance in the past five years than was done in the previous 13, so craven were the previous Government before big business and big tax avoidance? Will he welcome the Financial Secretary’s announcement yesterday of further action on tax avoidance-promoting schemes?
Danny Alexander
The hon. Gentleman is absolutely right in both things that he says. The Financial Secretary’s announcement represented very important further progress, but if we look back over the past five years, we see that the relentlessness of our pursuit of measures to crack down on avoidance, be it the general anti-abuse rule in the tax system, the disclosure of tax avoidance schemes regime, the monitoring regime that we are putting in place or the measures to increase prosecutions for tax evasion, has made it clear that there is absolutely no tolerance for aggressive tax avoidance and tax evasion in this country.
Geraint Davies (Swansea West) (Lab/Co-op)
The Chief Secretary will know that 10% of UK wealth is held in offshore bank accounts, which is a much higher proportion than in the United States, so why is he not focusing on that tax avoidance and evasion, at a time when 65% of people on jobseeker’s allowance in Swansea have been sanctioned and are living on a pittance? It is a disgrace.
Danny Alexander
The hon. Gentleman clearly was not listening to my first answer, because we have put in place something unprecedented: working with our colleagues in other countries, the common reporting standard will mean that more than 90 countries will be automatically exchanging information on offshore accounts, so that HMRC has the information it needs to find and pursue offshore tax evaders successfully. We need to make further progress on how we deal with organisations that encourage, promote or facilitate tax evasion. I have said I want to see further work done on that, and I am sure we will be hearing more about it soon.
Ian Swales (Redcar) (LD)
In 2006-07, a hedge fund manager avoided millions in tax through a film scheme later judged unlawful. HSBC received £438,000 for acting as an intermediary, so does the Chief Secretary agree that there should have been a penalty on HSBC for its role in this scam?
Danny Alexander
I do not know the details of the specific instance to which my hon. Friend refers, but I do think that in cases where an organisation is facilitating or promoting tax evasion and a penalty is then paid and tax is paid, as it should have been in the first place, the organisation facilitating the tax evasion should be liable for exactly the same amount of money, to be paid to the Exchequer. In that way, there would be a strong financial as well as legal incentive for people not to get involved in this practice in the first place.
Sarah Newton (Truro and Falmouth) (Con)
9. What recent representations he has received on caps on local authority borrowing for building homes.
The Chief Secretary to the Treasury (Danny Alexander)
I have received many representations on local authority borrowing caps, but I would refer the House to the recent excellent review of the local authority role in housing supply carried out by Natalie Elphicke and Councillor Keith House. They made many suggestions as to how the local authority role in house building could be improved, but one of their conclusions was that the problem was not a lack of money but the way in which resources are deployed and organised in the local government sector.
Sarah Newton
I very much welcome the answer to my question and the other comprehensive measures the Government have taken to enable people to buy their own homes, such as First Buy. Will the Chief Secretary explain a little more about some of those findings and what more we can do to ensure that hard-working people who need social housing can get it?
Danny Alexander
The hon. Lady raises an important question. In this Parliament we are building more affordable homes than has been the case at any point in the past 20 years, and in the next Parliament we will be building even more. However, I do not think any of us should be complacent; we need to raise substantially the level of house building in this country. That is why I welcome the recommendation of Keith House and Natalie Elphicke on a housing finance institute. It is also why I set out around the autumn statement last year moves towards Government taking a direct commissioning role to ensure that we meet a 300,000 homes a year target. That will be piloted at the Northstowe development, which I encourage the hon. Lady to find out more about.
Alison Seabeck (Plymouth, Moor View) (Lab)
I declare an indirect interest, which is on record. Local authorities are at the sharp end of this Government’s failure to deliver the housing that the country needs, particularly affordable rented housing. Labour Plymouth is proactively doing what the Minister has just said—bringing forward land and building 1,000 homes. It has a view on the cap and about meeting the need. Greater concerns, however, surround the announcement of the starter home scheme, which will lead to a massive loss of affordable home building— developers get out of any requirement to do it and the local authority has no say. Can the Chief Secretary please tell the House what the impact assessment of that policy was and the impact on affordable rented homes?
Danny Alexander
The idea behind the starter homes scheme is precisely to offer homes at a discount to young people who want to get on the housing ladder. I would have thought that was an objective that everyone in the House would welcome. If the hon. Lady wants to look at social rented housing, in this Parliament—and continuing in the next Parliament—we have the highest annual rate of social house building than under the previous Government or for the past 20 years. During Labour’s 13 years in office, the number of social homes fell by 421,000; we have increased it by over 300,000.
Michael Connarty (Linlithgow and East Falkirk) (Lab)
10. What recent discussions he has had with the Finance Secretary of the Scottish Government on devolution of taxes.
The Chief Secretary to the Treasury (Danny Alexander)
I have had frequent and largely constructive discussions with the Scottish Cabinet Secretary for Finance, Employment and Sustainable Growth, including on the matter of devolution of taxes, as have my ministerial colleagues. The Scottish Minister recently met the Chancellor of the Exchequer. We have made huge progress in the area of tax devolution.
Michael Connarty
From reading the text of the Smith agreement, it seems to me that we have handed over income tax in particular to the Scottish Government, whereby allowances and bands can be varied. In fact, we have created the possibility of an independent tax system, apart from hanging on to the 20p tax as a kind of fulcrum around which it must work. Has the Treasury looked at the impact on the UK if there were an entirely independent tax system in the north of the United Kingdom?
Danny Alexander
Yes, we have. The hon. Gentleman is right. The Smith commission—rightly, I believe—devolves power over rates and bands in the income tax system. It does not devolve control of the tax base or the personal allowance. One of the bits of work that remains to be done is to ensure that we have a fiscal framework in place around that which means that the fact of devolution does not offer a financial advantage in and of itself either to Scotland or to the rest of the United Kingdom. I have had constructive discussions with John Swinney on that point and on many others. It is, of course, a matter for the Scottish Government to make sure that they have competent administrative machinery in place, which they will need next month when the process of the first wave of income tax devolution starts.
Mike Crockart (Edinburgh West) (LD)
Is my right hon. Friend, like me, waiting with bated breath for the latest Government Expenditure and Revenue Scotland figures to be published? Does he expect that they will bolster or demolish the Scottish National party’s case for full fiscal autonomy?
Danny Alexander
Bated breath might be overstating it, but I expect the new GERS figures very soon. In recent days we have seen evidence of the damage that the Scottish National party’s ideas would do to the UK economy—higher debt for the whole of the UK at the end of this Parliament than at the beginning of it, and an extra £5 billion a year being spent on interest payments. Having been defeated on its proposals for independence, which would have undermined and damaged the Scottish economy, the SNP seems inclined to offer the same damage to the UK economy as a whole.
Cathy Jamieson (Kilmarnock and Loudoun) (Lab/Co-op)
Under the Scotland Act 2012, from April 2016 Scotland will indeed have significant new tax-raising powers. HMRC’s own risk register shows that the risk that Scottish taxpayers will not be identified by April 2016 has risen from amber to red, so can the Chief Secretary tell the House why, despite these being the biggest changes to Scottish tax ever, only 11 full-time equivalent HMRC staff are working on them and, according to Audit Scotland, they rely on a single official in the Scottish Government?
Danny Alexander
I am confident that the resource being applied at the HMRC end of the spectrum is sufficient to ensure that we can deliver the devolution that is planned. That process is going on at present. Stamp duty devolution starts in April this year and income tax devolution the following April. Whether or not the Scottish Government are applying sufficient resource, effort or people to make sure that the tax system will be competently administered is a question for them to answer. I recently signed off the orders to devolve stamp duty, and they will now need to make sure that that is done properly.
Cathy Jamieson
I thank the Chief Secretary for that response, although it does not entirely fill me with reassurance. Is it not the case that this whole process risks descending into absolute chaos, and is it not time that both the UK and the Scottish Governments got a grip? How many HMRC and Treasury officials have been seconded to the Scottish Government to help clear up the mess? If people have not been seconded, will he now have urgent discussions to see whether that would help?
Danny Alexander
I am afraid that it is a feature of devolution, which the hon. Lady and I both support, that devolved Administrations have to take responsibility for matters that are in their purview. Frankly speaking, it is not for the Treasury to send officials to bail out Revenue Scotland. If it approaches us and says that it does not have enough people, it cannot do it and it is not ready, that is fine. But having discussed the matter with John Swinney and received assurances that he believes that it is in a good position to carry on taking on those functions and to do so properly, that is sufficient for me to sign the orders to hand over the powers.
Mary Macleod (Brentford and Isleworth) (Con)
11. What fiscal steps he has taken to support businesses.
Sir Robert Smith (West Aberdeenshire and Kincardine) (LD)
14. What steps he is taking to support jobs in the north-east of Scotland by maximising the economic recovery of North sea oil and gas. [R]
The Chief Secretary to the Treasury (Danny Alexander)
The Government have made significant progress on supporting the North sea oil and gas sector, including the announcements I made in December about an investment allowance and other changes, although I recognise that there are very serious ongoing problems at the moment.
Sir Robert Smith
I thank the Chief Secretary to the Treasury for recognising the problems in the North sea. Does he also recognise that the job losses that have been announced predate the fall in the oil price, and that it is crucial that in the Budget we see long-term structural change for the maturity of the province?
Danny Alexander
I wholeheartedly agree with my hon. Friend. I have had a number of meetings with Oil & Gas UK and representatives of the oil industry. Having set out in December the fact that the tax regime for the North sea is going to be on a declining path, recognising precisely the issues that he mentions, we have set a clear direction of travel, and the Chancellor will set out our decisions in the Budget next Wednesday. Let me reassure my hon. Friend that this Government take incredibly seriously the need to make sure that we have a fiscal regime that supports maximum economic recovery of the resources of North sea oil and gas.
Stewart Hosie (Dundee East) (SNP)
The Chief Secretary knows that the fundamental issue is the cost of doing business in the North sea basin. The up to 81% marginal tax rate on production is something that the Government could do something about. Given that this Chief Secretary boasted that putting up the supplementary charge was his decision, will he now apologise for that and make sure that the charge begins to be reduced in the Budget next week?
Danny Alexander
In fact, we made sure that the supplementary charge began to be reduced in the autumn statement in December, so the hon. Gentleman should catch up on his facts. The fact remains that the measures we are taking to support the industry—through the Wood review, the establishment of the Oil and Gas Authority, and decommissioning deeds and field allowances —have already created an environment that has seen very substantial investment in the North sea in the past few years. The point that my hon. Friend the Member for West Aberdeenshire and Kincardine (Sir Robert Smith) made is right. Making sure that we have a climate for long-term investment is precisely what we are trying to do, and the hon. Gentleman will have to wait for the Budget for our decisions.
Dame Anne Begg (Aberdeen South) (Lab)
What are the Government doing to encourage the offshore sector to co-operate and to have common standards as a better way of reducing costs in the supply chain than laying off the very people we will need when, I hope, things in the North sea begin to pick up again?
Danny Alexander
The hon. Lady makes an important point about co-operation in the industry. It is precisely such co-operation that has led the Wood review to recommend and the Government to create the Oil and Gas Authority. We find that particularly in respect of the sensible and low-cost use of infrastructure in the North sea, where greater co-operation between fields and so on will help to reduce costs. That is one of the early challenges that Andy Samuel is getting to grips with at the Oil and Gas Authority, and I think he has the support of the whole House in doing so.
Ian Lavery (Wansbeck) (Lab)
T1. If he will make a statement on his departmental responsibilities.
The Chief Secretary to the Treasury (Danny Alexander)
Mr Speaker, I should say that the Chancellor of the Exchequer is at ECOFIN, making sure that Britain’s voice is heard in the European Union, and the Exchequer Secretary is unwell. I am sure that the whole House wishes her a speedy recovery.
The core purpose of the Treasury is to ensure the stability and prosperity of the economy.
Ian Lavery
Will the Chief Secretary confirm that the Treasury has had discussions with the Department for Business, Innovation and Skills and the Department of Energy and Climate Change with regard to UK Coal’s application for state aid for the British coal industry? What stage are the discussions actually at?
Danny Alexander
It would be wrong for me to go into the ongoing discussions between BIS and other Departments and the industry. However, I can certainly say that I am aware of the issues that the industry is experiencing, and a discussion on that subject is going on with the Government.
Andrew Griffiths (Burton) (Con)
T2. Under the previous Labour Government, thousands of pubs closed and the brewing industry was taxed to the point of extinction. The Campaign for Real Ale now says that the Chancellor has saved 1,050 pubs, sold 75 million extra pints and has been the saviour of Britain’s brewing industry. Does the Chief Secretary agree that this Government have been positive for beer and pubs, and will he urge the Chancellor to keep on supporting our breweries?
Danny Alexander
This Government have undoubtedly been positive for beer and pubs. Many hon. Members, including my hon. Friend the Member for Leeds North West (Greg Mulholland), have campaigned on this issue. It is of course for the Chancellor to announce the Government’s decisions in this respect—I am sure that he has not pulled all those pints himself—but it is certainly the case that the beer and pub industry is stronger in this country, as part of a stronger economy, because of the decisions that this coalition Government have so far made.
Mrs Mary Glindon (North Tyneside) (Lab)
T3. Do the Government expect operating oil companies in receipt of tax concessions to develop contract strategies to enable UK fabricating yards to participate in large contracts with the potential to support thousands of jobs across the whole country?
Danny Alexander
If the hon. Lady has specific issues in mind, I would gladly engage in further discussion with her, but the steps this Government have taken—including the establishment of enterprise zones in many areas where there are fabrication yards, and measures such as electricity market reform to get offshore wind and other such production going in the UK—all support the objective that she describes and which I share. If she has further ideas on how we can pursue that, I would gladly hear them.
Martin Vickers (Cleethorpes) (Con)
T4. The Chancellor recently highlighted the major part that my Cleethorpes constituency and the Humber estuary will play in the growing northern economy. However, much depends on continued investment in transport infrastructure. Will the Minister assure me and my constituents that that will continue as a high priority?
Danny Alexander
I certainly can. In the final Treasury questions of this Parliament it is worth reflecting on the fact that, despite the tough economic decisions we have had to make, this country is making the largest investment in our rail network since Victorian times and the largest investment in our road network since the 1970s, and we have a programme to roll out superfast broadband across the entire country. Those things will leave our economy with a stronger long-term growth potential, as well as having given us the best growth rates in the European Union at the moment.
Andy McDonald (Middlesbrough) (Lab)
T5. Is it not the case that those earning more than £1 million a year have benefited from an average tax cut of up to £100,000 a year in this Parliament? Does that not illustrate that, as ever under the Tories, the mega-rich get richer and the poor get poorer—and that this time they have been aided and abetted by the Liberal Democrats?
Mr William Bain (Glasgow North East) (Lab)
For hard-pressed taxpayers, the real test of whether the Government are committed to cracking down on tax evasion and avoidance will be whether this month’s Finance Bill contains legal penalties for breach of the general anti-abuse rule. Will the Financial Secretary tell us whether those will feature in the Finance Bill—yes or no?
Danny Alexander
The hon. Gentleman will have to wait for the Finance Bill to be published and to hear the Budget statement next week. He should reflect on his party’s record in office on these matters. Frankly, when the coalition Government came to office, we inherited a tax system like a Swiss cheese: it was so full of holes that tax was leaking all over the place. We have plugged a lot of those holes and there is more work to be done, but I do not think that he should give us any lectures.
Greg Mulholland (Leeds North West) (LD)
I am sure my right hon. Friend will welcome the report by the Electrification Task Force, which is chaired by the hon. Member for Harrogate and Knaresborough (Andrew Jones), and praise its work. The report said that in tier 1 the Harrogate-Leeds-York line should be prioritised, but does the Minister agree that we must also put in the 1.1 mile of track to connect Yorkshire’s Leeds Bradford airport?
Danny Alexander
I congratulate the hon. Member for Harrogate and Knaresborough (Andrew Jones) and my hon. Friend on the their work, and I met them recently to discuss it. There is a strong case for investment in the Harrogate-Leeds-York line and in the rail link to the airport that my hon. Friend describes. Ensuring that degree of connectivity for one of the fastest growing airports in the country, which has huge potential for growth, could also take off the roads the traffic caused by people travelling to other airports in the country. We shall be considering the matter carefully.
Kelvin Hopkins (Luton North) (Lab)
The Minister will have noticed the substantial depreciation of the euro in recent times, which is bound to cause damage to the British economy. When will the Government take the exchange rate seriously and seek to secure an appropriate exchange rate for sterling?
Danny Alexander
We take seriously the need for this country to have a set of policies that ensure the long-term health and growth of the UK economy, and the appropriate mix of fiscal policy, monetary policy and long-term investment. That is why we have the fastest growth in the United Kingdom of any advanced economy, and why there are now more than 2 million more people in work in the private sector than there were in 2010. That is a record I am proud of, and the hon. Gentleman should congratulate the Government on it.
John Glen (Salisbury) (Con)
When considering the allocation of LIBOR fines, will Treasury Ministers consider carefully the submission of Alabaré Christian Care in my constituency? It is seeking to construct a new veterans village in Wilton that will be transformational for veterans across Wiltshire.
John Cryer (Leyton and Wanstead) (Lab)
Further to Question 8, what measures is the Chief Secretary taking to tackle the activities of payroll and umbrella companies that promote bogus self-employment which in turn fuels widespread tax evasion?
Danny Alexander
We have already announced measures to deal with intermediaries, both offshore and onshore. As the hon. Gentleman will know, a consultation on the issue is taking place at the moment, and it is important to ensure that companies cannot put in place artificial arrangements that are designed to reduce their tax bill and often have the consequence of removing important employment rights from workers. We continue to take that matter incredibly seriously.
Neil Carmichael (Stroud) (Con)
Does the Chief Secretary agree that one key aspect of the long-term economic plan is investment in skills, and will he reassure the House that the Government will carry on doing that?
Danny Alexander
Yes I can. As this is national apprenticeship week it is worth reflecting on the fact that in this Parliament we have created more than 2 million more apprenticeships. That is a great achievement of this Government and has helped to ensure that young people have the skills they need to succeed in today’s economy. From my perspective that will continue to be a priority in the next Parliament.
Mrs Emma Lewell-Buck (South Shields) (Lab)
To follow up the question from my hon. Friend the Member for Leyton and Wanstead (John Cryer), it appeared from recent written answers that the Government are leaving open loopholes that see workers lose hundreds of pounds a month from rip-off umbrella companies. Why is that?
Danny Alexander
As I said, we are consulting on that matter and have already taken considerable action to deal with intermediaries. I am sure that more will be said about the issue in due course.
Duncan Hames (Chippenham) (LD)
Youth unemployment in my constituency has halved under this Government, and the Chief Secretary met some of the young people in new jobs at Anthony Best Dynamics in Bradford on Avon last year. Will he or the Chancellor accept an invitation to accompany me to one of the advanced manufacturing businesses in Chippenham which, with the support of the relevant Government programmes, can extend many more opportunities by creating jobs in 21st-century products in Chippenham?
Danny Alexander
I gladly accept the invitation, although time is limited. As my hon. Friend said, through visiting Anthony Best Dynamics I have seen precisely the benefits that apprenticeships can provide for young people wanting to get highly skilled jobs in the technology companies that are creating very high value added for the UK economy. The work that he has done in his constituency to promote businesses taking on apprentices is an example to the entire House.
Mr Dennis Skinner (Bolsover) (Lab)
Why was the Chief Secretary to the Treasury so discreet about the application for state aid for the three remaining deep mine pits in Britain? Is he aware that in February 2014 the Government took £700 million out of the mineworkers’ pension fund for themselves? That kind of money in state aid could save those three pits so that they could exhaust their reserves. Now come on—tell us what’s happening!
Danny Alexander
I am not going to change the answer I gave to the earlier question. I appreciate the sensitivity of these matters, and I would say that this Government have taken steps, wherever we can, to support that particular industry. I am not sure that it would be appropriate for me to comment further.
Off-payroll Engagements
Danny Alexander Excerpts(9 years, 9 months ago)
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The Chief Secretary to the Treasury (Danny Alexander)
Today, I am announcing the conclusions of HM Treasury’s second evaluation of Departments’ compliance with the rules governing off-payroll appointments in central Government.
New, tighter, rules were established in May 2012 when I published the review of the tax arrangements of public sector appointees. This review covers off-payroll appointments from the 2013-14 financial year.
Off-payroll workers play an important role in helping Departments meet short-term needs for specialist advice and interim service. The majority of these arrangements will have been in place for legitimate commercial reasons. However, it is essential that Government Departments are able to assure themselves that their off-payroll workers are meeting their tax obligations.
The recommendations of the May 2012 review mean that the Departments’ most senior staff must now be on payroll, and Departments have stronger powers to seek assurance in relation to the tax arrangements of their long-term, high-paid contractors.
I asked the Treasury to evaluate compliance with these rules on an annual basis. The results of this second evaluation are summarised below.
Below board-level off-payroll engagements
The rules for new off-payroll engagements apply where the engagement is for more than six months with a daily rate above £220. All new engagements from 23 August 2012 meeting these criteria must include contractual provisions that allow the Department to seek assurance that the worker is paying the right amount of tax and national insurance contributions and to terminate the contract if assurance is not provided. For any individuals where their engagement has either been terminated; ended as a result of the assurance process; or ended after assurance was sought but before it was received, Departments have been asked to provide personal details of the worker to HMRC for further investigation of tax avoidance.
In accordance with the guidance, Departments adopted a risk-based approach in deciding which contractors to seek formal assurance from. In 2013-14, Departments sought assurance on the tax affairs of 2,505 of their contractors and received satisfactory assurances from 2,248 of these engagements. In 257 cases contracts were terminated or came to an end before assurance was received. Further details can be found in the table annexed. This does not include the Department for Education which did not publish its annual report and accounts until 20 January 2015. The Treasury is examining the Department’s compliance with the guidance and results will be issued in due course.
A small number of Departments have made errors in how they have reported the information or implemented the policy. These include:
the Ministry of Defence which due to administrative error failed to seek assurance from a number of workers in 2012-13. I will be imposing a sanction of £1 million on the Ministry of Defence.
the Department for Work and Pensions (DWP) which made errors in the reporting of the policy and has issued a correction to its accounts for 2013-14. After further investigation I am content that DWP has complied with the guidance.
UK Export Finance where this review has raised a number of concerns regarding implementation of the guidance. I have asked the Permanent Secretary to the Treasury to commission the Government Internal Audit Agency to carry out an independent audit of the implementation of the off-payroll guidance at UK Export Finance, following which further consideration will be given to the need for any sanction.
Notwithstanding these issues, the results of this review suggest that the large majority of central Government Departments are operating the rules effectively. This has resulted in a number of engagements, where adequate assurance was not provided, being brought to an end and individuals’ details being passed onto HMRC for further investigation. Referrals to HMRC occurred in all relevant cases across Government, apart from 27 cases at NHS England, where the information necessary for referral was not retained by the organisation. This has now been addressed by NHS England to enable HMRC to undertake future investigations of individuals where required.
Board-level and senior appointments
The guidelines set out in May 2012 also specified that, regardless of their tax arrangements, board-level officials and those with significant financial responsibility should be on the payroll of the Department or other employing body. This is unless there are exceptional circumstances, and such exceptions should not exist for longer than six months.
As a result of the recent review, I can announce that HM Treasury has determined two cases which have breached these rules, both appointments at an arm’s length body of the Department of Health. As a result, I will be imposing a sanction on the resource budget of the Department of Health of £470,740.
The sanction will be imposed for two breaches at NHS England, which relate to the regional director of finance and the director of finance for Central Southern CSU being engaged off-payroll for a year or more. In both cases the individuals provided the necessary assurance to NHS England regarding their tax arrangements.
This review has encountered instances where an off-payroll worker at board level or with significant financial responsibility has been seconded to the Department from another organisation. Where the full value of payments from the Department to the individual are put through the payroll of the seconding organisation this has not been treated as a breach of the Treasury guidance. In addition, where this review has encountered below board-level appointments with significant financial responsibility that are in place to maintain the delivery of critical and time-limited projects, they have not been required to be on the payroll. This is subject to the strict requirement that all such engagements should be subjected to the assurance process to determine that they are paying the right amount of tax.
The public sector needs to demonstrate the highest standards of integrity and it is essential that Government employers are able to assure themselves that their senior and highly paid staff are meeting their tax obligations. Each Department is responsible for seeking assurance as to the tax arrangements of the off-payroll appointees in the Department and its arm’s length bodies, and judging whether the evidence presented demonstrates satisfactorily that the appointee is meeting their tax obligations.
The fines imposed as a result of this review reflect the failure of Departments or their arm’s length bodies to follow the processes set out in the guidance. However, I do not believe that less funding should be available to the users of the health service or our armed forces as a result of these breaches, and so I can today announce that the Government will be giving money levied from these fines to support armed forces veterans and health charities.
The Treasury will continue to monitor compliance with the HMT guidelines and will conduct a similar review for the 2014-15 financial year.
Annex 1: New off-payroll engagements between 1 April 2013 and 31 March 2014, for more than £220 per day and for more than six months.
Number of new engagements for whom assurance was sought (as of 31 March 2014) | Number for whom assurance was requested and received | Number for whom assurance was requested and not received | The number whose contracts came to an end before assurance was received | The number terminated as a result of non-assurance | |
|---|---|---|---|---|---|
BIS | 21 | 21 | 0 | 0 | 0 |
BIS ALBs | 197 | 196 | 1 | 1 | 0 |
CO | 11 | 11 | 0 | 0 | 0 |
DCLG | 17 | 17 | 0 | 0 | 0 |
DCLG ALBs | 2 | 2 | 0 | 0 | 0 |
DCMS | 30 | 28 | 2 | 2 | 0 |
DCMS ALBs | 59 | 58 | 1 | 0 | 1 |
DECC | 13 | 12 | 1 | 1 | 0 |
DECC ALBs | 24 | 24 | 0 | 0 | 0 |
DEFRA | 44 | 37 | 7 | 0 | 7 |
DEFRA ALBs | 26 | 21 | 5 | 0 | 5 |
DFID | 2 | 2 | 0 | 0 | 0 |
DFT | 68 | 62 | 6 | 6 | 0 |
DFT ALBs | 130 | 113 | 17 | 17 | 0 |
DH | 23 | 23 | 0 | 0 | 0 |
DH ALBs | 858 | 779 | 79 | 0 | 79 |
DWP | 78 | 51 | 27 | 27 | 0 |
DWP ALBs | 5 | 5 | 0 | 0 | 0 |
FCO | 12 | 12 | 0 | 0 | 0 |
FCO services | 80 | 80 | 0 | 0 | 0 |
HMRC | 15 | 15 | 0 | 0 | 0 |
HMRC ALBs | 6 | 1 | 5 | 5 | 0 |
HMT | 18 | 18 | 0 | 0 | 0 |
HMT ALBs | 7 | 7 | 0 | 0 | 0 |
HO | 110 | 110 | 0 | 0 | 0 |
HO ALBs | 30 | 30 | 0 | 0 | 0 |
MOD | 263 | 160 | 103 | 103 | 0 |
MOJ | 140 | 140 | 0 | 0 | 0 |
MOJ ALBs | 108 | 108 | 0 | 0 | 0 |
NS&I | 9 | 9 | 0 | 0 | 0 |
OFGEM | 0 | 0 | 0 | 0 | 0 |
OFQUAL | 8 | 8 | 0 | 0 | 0 |
OFSTED | 0 | 0 | 0 | 0 | 0 |
OFT | 6 | 5 | 1 | 1 | 0 |
OFWAT | 11 | 11 | 0 | 0 | 0 |
ORR | 0 | 0 | 0 | 0 | 0 |
TSOL | 0 | 0 | 0 | 0 | 0 |
UKEF | 0 | 0 | 0 | 0 | 0 |
UKSA (ONS) | 74 | 72 | 2 | 0 | 2 |
Total | 2,505 | 2,248 | 257 | 163 | 94 |
In 12 additional instances assurance was not requested but was received. These instances are: DFT 4, DFT ALBs 7, BIS ALBs 1. This table has been compiled using Departments’ 2013-14 annual reports and accounts, and additional up-to-date information provided by Departments to the Treasury during the review. For 2013-14 there were 2,828 contracts in scope. Departments took a risk-based approach in seeking assurance on these. |
[HCWS347]
Infrastructure (Sale of Eurostar)
Danny Alexander Excerpts(9 years, 9 months ago)
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The Chief Secretary to the Treasury (Danny Alexander)
I am pleased to inform the House that the Government have agreed the sale of their entire interest in Eurostar International Ltd (“Eurostar”) for £757.1 million.
The autumn statement 2013 and “National Infrastructure Plan 2013” set out the Government’s ambition to achieve £20 billion from corporate and financial asset sales by 2020. Eurostar was identified as a possible candidate for sale and following a competitive auction process which started in October 2014, the Government have now reached final agreements.
A consortium comprising Caisse de dépôt et placement du Québec (CDPQ) and Hermes Infrastructure has agreed to acquire Government’s 40% stake in Eurostar for £585.1 million. In addition, Eurostar has, on closing of the sale of the Government stake, agreed to redeem HMG’s preference share, providing a further £172 million for the Exchequer.
Eurostar is the high-speed train service linking London, Ebbsfleet and Ashford with Paris, Brussels, Lille and other French destinations. Established in 1994 as a partnership between three railway companies: SNCF, SNCB and British Rail—subsequently London and Continental Railways (LCR)—Eurostar became a single, unified corporate entity owned by three shareholders: SNCF, SNCB and LCR in September 2010. In June 2014 the ownership of the UK holding transferred from LCR, a Department for Transport owned company, to HM Treasury.
The sale receipts will be paid on completion of the contract, which is expected to happen in the second quarter of 2015. SNCF and SNCB—the other shareholders in Eurostar—have the option (the “Pre-emption Right”) to acquire HMG’s 40% stake for a 15% premium to the agreed price of £585.1 million. Closing of the sale to the CDPQ and Hermes Infrastructure consortium is conditional on SNCF and SNCB not exercising the Pre-emption Right. The transaction is also conditional on certain regulatory approvals including EU merger clearance.
[HCWS340]
Public Service Pensions Uprating
Danny Alexander Excerpts(9 years, 10 months ago)
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The Chief Secretary to the Treasury (Danny Alexander)
Legislation governing public service pensions requires them to be increased annually by the same percentage as additional pensions—state earnings-related pension and state second pension. Public service pensions will therefore be increased from 6 April 2015 by 1.2%, in line with the annual increase in the consumer prices index up to September 2014, except for those public service pensions which have been in payment for less than a year, which will receive a pro-rata increase.
[HCWS271]
Oral Answers to Questions
Danny Alexander Excerpts(9 years, 10 months ago)
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Mark Hunter (Cheadle) (LD)
9. What assessment he has made of the implications for his policies of recent trends in unemployment figures.
The Chief Secretary to the Treasury (Danny Alexander)
Since the Government came to power, employment has increased by 1.75 million and now stands at its highest level ever; unemployment has come down by almost 600,000; and the number of jobseeker’s allowance claimants has fallen by more than 40%. That is one of the many ways in which the stronger economy that we are building is leading to a fairer society in this country.
Mark Hunter
Does my right hon. Friend know that unemployment in my constituency is down to 1.3%, which is precisely half what it was at the last general election and one of the lowest figures in the north-west of England? Does he agree that without the Liberal Democrats and the coalition Government, we would not have had the political stability that was essential for the recovery to take hold?
Danny Alexander
I wholeheartedly agree with my hon. Friend. Not only has unemployment halved in his constituency, but employment has risen by 1,300 since 2010. That is testimony to the work of Liberal Democrats and the Government in creating stability and to his role of supporting and championing local businesses in the north-west of England.
Stephen Timms (East Ham) (Lab)
A striking feature of the recent trends in unemployment is the increase in youth unemployment, which has risen for three months in a row. In the figures that were published last week, it rose by 30,000, which is the biggest jump for almost two years. Why is it that while overall unemployment is coming down, youth unemployment is going up? Why are young people losing out?
Danny Alexander
I am sorry to have to correct the right hon. Gentleman, but youth unemployment has come down by 171,000 over the past year and is 175,000 lower than when the Government came to power. In his constituency, it is down 53% since 2010—a fact that I am sure he will join me in welcoming. I would agree with him that we need to continue for a number of years with the successful policies that are reducing unemployment in this country, to ensure that every young person has the opportunity to make the best of their life.
Richard Drax (South Dorset) (Con)
May I congratulate the Front-Bench team on their economic policy and their long-term economic plan? Unemployment in South Dorset has halved over the past five years. Does the Chief Secretary agree that to hand the country back to the Opposition in a few months’ time would be an absolute disaster for the economic future of this country?
Danny Alexander
I agree that the right course for the country is to continue with the balanced, sustainable, fair action that we have taken to deal in a common-sense way with the country’s financial problems. Lurches away from that path are offered by the Labour party and, I am afraid to say, the hon. Gentleman’s party. That is why it is necessary to have the Liberal Democrats to keep the country on the straight and narrow.
Sammy Wilson (East Antrim) (DUP)
Although unemployment in Northern Ireland is lower than would be expected at this point in the economic cycle, growth has not reached out to many of the regions of the United Kingdom, including Northern Ireland. What steps are the Government taking to address the concentration of growth in the south-east of England and the fact that it does not extend to the regions?
Danny Alexander
I do not accept the hon. Gentleman’s characterisation, because we see strong economic growth in London and the south-east and in Scotland, and the economy of the north-west of England has been growing well, particularly in employment. We are seeing a more balanced pattern of growth and job creation than in previous economic recoveries.
None the less, the hon. Gentleman is right to say that there are significant problems of unemployment in Northern Ireland. That is why we have put in place a range of policies to help support the Northern Ireland economy, some of which we will be debating this afternoon.
Daniel Kawczynski (Shrewsbury and Atcham) (Con)
11. What progress he has made on his fiscal consolidation plans.
Helen Goodman (Bishop Auckland) (Lab)
14. What recent estimate he has made of the effect on household budgets of tax and benefit decisions taken in the present Parliament.
The Chief Secretary to the Treasury (Danny Alexander)
Since 2010, I have published regular distributional analysis of the impact on households of our reforms to tax, welfare and public spending. It is the most comprehensive analysis available. The most recent analysis we published, alongside the autumn statement last month, shows that the wealthiest continue to make the biggest contribution towards reducing the deficit. By 2015-16, the net contribution of the richest 20% will be larger than the remaining 80% put together.
Helen Goodman
Today, the second independent report in as many weeks shows that proportionately the Government have hit the poorest and those with small children the hardest. Today, half a million more children are living in absolute poverty than when the right hon. Gentleman walked into the Treasury. Will he tell us why, instead of tackling that, he supported tax cuts for millionaires?
Danny Alexander
Those analyses ignore some of the most important and most progressive policies put in place by the Government. They ignore the pupil premium, which is investing money in the life chances of young people. They ignore the extra early years education provided to three and four-year-olds, and to the most disadvantaged two-year-olds. They are not included in those analyses, but they are helping to ensure that young people have better life chances under this Government.
Charlie Elphicke (Dover) (Con)
Does the Minister not agree that it is important to note that real wages are rising, real disposable income is rising, child poverty is down and inequality is down under this Government?
Danny Alexander
It is very important to note all three of those facts, but it is also important not to be complacent. There is a lot more to do to ensure that we continue to deliver the successful growing economy that is creating jobs, because ultimately getting into work is the best route out of poverty for families.
Shabana Mahmood (Birmingham, Ladywood) (Lab)
I am not surprised that the Chief Secretary to the Treasury does not want to acknowledge the full truth unveiled last week by the Institute for Fiscal Studies’ figures. Its report shows clearly that tax and benefit changes under this Government have left households £1,127 a year worse off on average, and that families with children have been hardest hit of all. Does that not make a complete mockery of the Government’s claims that they would be the most family-friendly Government ever?
Danny Alexander
As I said, the published analysis is incomplete because it ignores public expenditure. Public expenditure is a very important part of fiscal consolidation, but it is the shift in public expenditure, towards such things as early years education, the pupil premium and supporting disadvantaged young people through the education system, that is a vital part of improving life chances. I hope the hon. Lady will want to recognise that the measures the Government have taken have been aimed at improving the life chances of people. That is why we are making so much progress on attainment in schools, reducing child poverty and so on.
Nadhim Zahawi (Stratford-on-Avon) (Con)
T1. If he will make a statement on his departmental responsibilities.
Greg Mulholland (Leeds North West) (LD)
This Treasury team abolished Labour’s unjustifiable and unfair beer duty escalator and delivered two historic successive cuts in beer duty. We still pay more tax on our beer, however, so our British brewers are not getting a fair deal in comparison with their European counterparts. Will the Treasury make it a hat trick?
The Chief Secretary to the Treasury (Danny Alexander)
During his time in Parliament, my hon. Friend has been a champion of the beer industry, small pubs and small brewers across the country—and a very effective champion he has been, too. Of course I cannot make any commitments about the Budget at this stage, but I welcome his recognition of the progress made on this subject during the course of this Parliament, and I will certainly take his recommendations for the Budget very seriously.
Kelvin Hopkins (Luton North) (Lab)
Britain has an enormous and persistent trade deficit with the European Union—clear evidence of a misaligned exchange rate. The significant weakening of the euro in recent days will make the position even worse and cause damage to British industry. When are the Government and the Bank of England going to take seriously the need to achieve and sustain an appropriate sterling-euro exchange rate?
Charter for Budget Responsibility
Danny Alexander Excerpts(9 years, 11 months ago)
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The Chief Secretary to the Treasury (Danny Alexander)
This has been a very good debate. I am sorry that neither the Chancellor nor the shadow Chancellor were present to hear the remarks of the hon. Member for Warrington South (David Mowat), the last Back-Bench contribution. He made an excellent speech, proposing a grand coalition between their two parties as a consequence of this debate. They can both reflect on that helpful suggestion.
After the defence of the realm, a Government have no greater responsibility than creating the conditions for a strong economy. To do that, we have to be responsible with the people’s money. The Charter for Budget Responsibility is a major stepping stone in embedding the fiscal discipline that we have shown in this Parliament at the heart of our politics for the next Parliament. It highlights the very real and pressing need to finish the job we started in 2010 to get rid of the structural deficit, get our national debt under control and create a fairer and stronger society. Our plan has made sure that in this Parliament the deficit is falling by half, and the measures we have taken to do that have been fair and balanced. Looking around Europe, we have seen what happens when Governments lose control of the public finances: the economy starts to fail, and people suffer, and the least well-off in society suffer most.
I am proud of the progress we have made in this Parliament and welcome the widespread support this Charter for Budget Responsibility has received across the House, but it is important to be clear what this charter does and does not do. It sets out that the Government of the day must have a plan to eliminate the structural deficit within three years and get our national debt falling as a percentage of GDP by 2016-17. Of course it does not prescribe what specific steps various parties would actually take to meet the commitments that the charter imposes. I note the contributions of Opposition Members, and I suppose in one way we have to welcome their Johnny-come-lately admission that the deficit needs to be tackled, albeit with fingers firmly crossed behind their backs.
The shadow Chancellor’s speech was extraordinary, based, as it was, on an assumption that neither he nor anyone else can count to three. It illustrates why the Labour party always runs out of other people’s money. It is a good job he was not there at the start of creation. It would be, “On the third day the lord lost count and forgot to create the land and the vegetation.” It would be a wasteland, which I suppose is what Labour tried to leave at the end of the last Parliament.
Danny Alexander
I am going to make some progress. The shadow Chancellor should be aware, because this is a very serious business, that if his party has a majority his first Budget will be judged by the OBR against achieving this goal in the financial year 2017-18. So unless he is telling us now that it is his deliberate intention to fail this test, he will have to set out between now and the election how he will find some £30 billion of deficit reduction. This is immensely serious and every Opposition Member should weigh that up before deciding which Lobby to vote in.
Jonathan Edwards
Following today’s vote these targets will be set in stone for the next Parliament, so does the Chief Secretary think that if they are missed in the next Parliament there should be ministerial resignations?
Danny Alexander
Each Government have to account for their own economic policy in their own way. I am proud that we have put in place a plan that has got the deficit down by half and, more importantly, got us the best economic growth in the European Union and the strongest record of job creation—Opposition parties are notoriously silent about that.
Let us put this matter into some sort of context. While we have been busy cutting the deficit, the shadow Chancellor and the Leader of the Opposition have spent their time marching their troops up and down the hill of deficit denial. If their votes today are to have any credibility, they will have to march them down that hill again. We have still not heard one word of acknowledgement for their role in the crash of 2008, let alone a word of apology.
By the end of this Parliament the Government will have halved the deficit as a percentage of GDP. That has meant facing up to reality and taking difficult decisions. This has been a process during which Labour voted against every measure that we have had to introduce to rescue the economy. There have been scores of votes on deficit reduction and, you guessed it, the Opposition voted against every one. So I say this to Labour: “Supporting this motion does not restore your credibility on the deficit. You have said your aim is to push out the time scale as far as possible. You are perfectly happy to borrow tens of billions of pounds more. That will mean more debt, more interest payments and the pain of rebalancing the books dragging on for years to come.”
Numerous contributions have been made to this debate, and I thank those who have spoken from the Conservative and Liberal Democrat Benches. We heard a wise contribution from the right hon. and learned Member for Rushcliffe (Mr Clarke), and excellent contributions from my hon. Friend the Member for Redcar (Ian Swales) and from the hon. Members for Hexham (Guy Opperman) and for Ipswich (Ben Gummer), in particular.
However, some Conservative Members have criticised me in this debate for the views I have taken on Conservative plans beyond 2017-18—the shadow Chief Secretary asked me about this, too. Let me send a note of warning to some of my Conservative colleagues. We formed the coalition to tackle the deficit in a timely manner. That is why we agree that the structural deficit must be eliminated by the end of 2017-18 and debt must fall as a share of GDP. Hitting that 2017-18 target will require further consolidation to the tune of some £30 billion, and to say that we can reach that figure by spending reductions alone, with some £12 billion coming from cuts to welfare, would be grossly unfair. It would hurt millions of families who are trying hard to make a success of their lives. Tax on the wealthy should and must play a significant part in how we finish the job in the next Parliament. But our real concern, and where we differ, is on what happens after that mandate is met. As a country we should not be wedded to austerity for austerity’s sake. People in this country supported our coalition approach because it has been necessary and successful in turning the economy around, but they will not support an ideological drive for an ever smaller state.
Chris Leslie
I will. Why then did Robert Chote say that these assumptions were
“signed off by the ‘quad’”?
Did the Chief Secretary sign them off? Was it a mistake or is he now trying to “reverse ferret” out of it? Which is it?
Danny Alexander
It is a neutral assumption about the public finances that does not reflect the policies of the Liberal Democrats. I was just in the middle of describing those things, because people want to see some light at the end of the tunnel. They do not want a Dickensian world of decimated public services. I do not see any need for tens of billions of pounds of further cuts beyond 2017-18. If it happens, the reality for many people would be grim. Going too far or too slowly will not offer that light at the end of the tunnel.
Danny Alexander
No, I will make some progress because there are only a couple of minutes left of the debate. For our part, we Liberal Democrats are very proud to support this charter. Indeed, this is Liberal Democrat fiscal policy being voted on in Parliament. As my hon. Friend the Member for Redcar said, we will eliminate the structural deficit by 2017-18, but do so fairly, so we will ask those with the broadest financial shoulders to bear the heaviest burden by paying a little more in tax. When we have the national debt falling as a share of our national output and have eliminated the deficit, we will then balance the books, allowing borrowing only for productive capital investment or for financial stability. That means that we will finish the job and then be able to invest in our public services so that the people of the country can enjoy the world-class public services that they expect. That is the common-sense approach to keeping our national finances under control and to ensuring that our stronger economy also delivers a fairer society.
We should not delay the time by which we seek to finish the job, as the Opposition wish. Putting our nation’s finances back in order is the responsible thing to do, and that is what this charter does. It sets out two clear, simple, coherent targets for the public finances in the next Parliament. The first is to balance the structural deficit by the third year of a rolling five-year forecast, which, to correct the Labour Front-Bench team, does mean meeting that target by the financial year 2017-18. Should Labour win a majority at the election, it will be judged on that three-year target, so it should be straight with its own Back Benchers about what it is asking them to vote for. The second target is to be judged on those goals twice a year by the independent OBR, and also to be judged by the British people as they scrutinise the plans that each party puts forward at the general election against what we are voting for today.
This vote is deeply serious. These rules are a wise, sensible and balanced framework for the public finances in the next Parliament. The British people will expect us to stick to it, so I commend this charter to the House.
Question put.
Oral Answers to Questions
Danny Alexander Excerpts(10 years ago)
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Mr Mark Spencer (Sherwood) (Con)
12. What fiscal steps he is taking to encourage investment in infrastructure.
The Chief Secretary to the Treasury (Danny Alexander)
Mr Speaker, the Chancellor of the Exchequer is at an ECOFIN council meeting today.
The Government have made huge progress in delivering the infrastructure that the UK needs, establishing the first ever national infrastructure plan, which now shows that more than 2,500 projects have been completed since 2010. West Yorkshire continues to benefit as part of this plan, which includes the M62 smart motorway westward extension—the first new trans-Pennine road capacity since 1971. As part of the city deal, a combined west Yorkshire authority is taking forward a package of investments in transport worth up to £1.6 billion over 15 years.
Jason McCartney
I very much look forward to the northern powerhouse coming over the Pennines to west Yorkshire. Will my right hon. Friend confirm that the new bidders for the Northern Rail and TransPennine Express rail franchises will commit themselves to getting rid of the antiquated Pacer trains that plague commuters in my constituency on their daily commute?
Danny Alexander
My hon. Friend is right to raise this issue, which is raised by Members of Parliament and constituents from across the Northern Rail and TransPennine Express franchise areas. I can confirm that in the autumn statement we set out some changes that we would make to those two franchises. The packages for the new franchises will include a substantial package of upgrades, including new services and modern trains in order to phase out the outdated Pacer trains, which have also been raised with us under the Deputy Prime Minister’s Northern Futures programme.
Mr Spencer
If north Nottinghamshire’s coalfields are to feel the success of HS2, connectivity will be key. Will the Chief Secretary assure the House that once we have pulled together a bid for the Robin Hood extension to the villages of Ollerton and Edwinstowe, capital will be made available?
Danny Alexander
I am well aware of the importance of this connection to my hon. Friend and to other Members of Parliament in the area. As he will be aware, the east midlands has already benefited from investment of approximately £70 million to improve line speeds on the midland main line up to 125 miles per hour. Further electrification is due to be extended to Nottingham by 2019. A decision on the Robin Hood line is a matter for the local authority, but we would certainly look on the idea favourably.
Sheila Gilmore (Edinburgh East) (Lab)
The importance of infrastructure is surely a sign of the importance of Government investment as a way of growing our economy. Does the Chief Secretary therefore agree that one further way that we could move forward on this is to build at least 200,000 new houses a year to help to build our economy?
Danny Alexander
I totally agree with the hon. Lady. It is incredibly important to improve the rate of house building. I would set the figure at closer to 300,000 houses a year across the UK, rather than the 200,000 that she mentioned. She will know that in the autumn statement we extended the affordable house building programme for a further two years in order to build 275,000 affordable homes in the next Parliament. We are taking forward the idea of Government commissioning of housing, which would be a radical departure for this country, at Northstowe, and looking at it as a solution for the whole country.
Greg Mulholland (Leeds North West) (LD)
I warmly welcome the infrastructure announcement, but does my right hon. Friend agree that we also need further devolution to allow the much-needed rail link to Leeds Bradford airport and the electrification of the Leeds-Harrogate-York line? Will he meet me and other interested colleagues who represent the area to discuss how we can take this forward?
Danny Alexander
My hon. Friend is absolutely right to say that devolution, city deals and the growth plans we have put in place for every local enterprise partnership area are an incredibly important part of delivering infrastructure. He refers to two projects that are very important in the city he represents and I would, of course, be delighted to meet him and any other interested colleagues to discuss them.
Mr Andrew Love (Edmonton) (Lab/Co-op)
One hears the pious words of the Chief Secretary regarding house building, but has he not presided over the lowest level of house building since the 1920s?
Danny Alexander
In case the hon. Gentleman does not remember, he was present in the last Parliament when his party was in government and caused the most severe economic crash that this country had experienced for very many decades. The housing market, of course, gets affected by the economic cycle, which is precisely why this Government have presided over the highest level of affordable house building in this country for 20 years. Under the hon. Gentleman’s party, the number of affordable houses in this country fell by 421,000; under this Government, it has risen by hundreds of thousands.
Andrew Percy (Brigg and Goole) (Con)
2. What steps the Government are taking to support economic growth in the Humber.
The Chief Secretary to the Treasury (Danny Alexander)
The Government have taken many steps to rebalance the economy and strengthen every part of the United Kingdom. In the case of the Humber, the growth deal was announced in July, building on the success of the city deal, which was announced in 2013. We have also just announced £80 million for flood defences for the Humber estuary. I am pleased to see that our investment in that part of the country is working. Employment in Yorkshire and the Humber is now at the highest level on record at 2.51 million.
Andrew Percy
Key to economic development in east Yorkshire and north Lincolnshire are, of course, our tidal flood defences, which are so important. Last week the Government announced that the Environment Agency would undertake a review of the package proposed by myself, other local MPs and local authorities. Will the Chief Secretary ensure that Treasury and, if possible, Cabinet officials will also be involved in that process? It needs to be Treasury-led, rather than EA-led, to give us the result we require.
Danny Alexander
My hon. Friend makes a good point. The proposal by the local enterprise partnership is incredibly important and it needs to be assessed in detail by experts at the EA. The National Audit Office recently commended the EA on the way in which it carries out such appraisals. None the less, given the significance of the issue and the fact that it was announced as part of the national infrastructure plan, I shall make sure that Treasury officials are also involved in the process.
Martin Vickers (Cleethorpes) (Con)
23. Although I welcome the announcements in the autumn statement and the northern powerhouse initiative, too often in northern Lincolnshire in the Humber region we feel somewhat remote from the northern powerhouse. Will my right hon. Friend assure me that further initiatives will link the north-western part of the northern powerhouse to the Yorkshire and the Humber region?
Danny Alexander
Under this Government, there have been a number of initiatives in the Humber area that have helped to grow the economy, not the least of which is the enormous effort that Ministers in several Departments made in attracting the Siemens investment to Hull, which is an incredibly important part both of creating jobs in that area and of delivering our ambitions for renewable energy.
Mr Iain McKenzie (Inverclyde) (Lab)
3. What recent estimate he has made of how much the reduction in the additional rate of income tax to 45% is worth for a person earning £1 million a year.
Jackie Doyle-Price (Thurrock) (Con)
7. What recent estimate he has made of the level of employment.
The Chief Secretary to the Treasury (Danny Alexander)
I am pleased to tell the House that employment is at its highest-ever level in this country with 30.8 million people in work. Since the coalition came to power, employment has increased by more than 1.7 million, meaning that on average an extra person has become employed every 80 seconds since the Government were formed in 2010. Last week the Office for Budget Responsibility published its latest forecast, estimating that an extra million people will be in work by 2019.
Jackie Doyle-Price
The Government can be proud of creating on average 1,000 jobs a day. That is not just a number; it is more people with the security of a job and a regular pay packet. Will my right hon. Friend reassure my constituents in Thurrock that we will stick to the policies that are creating record numbers of people in work?
Danny Alexander
My hon. Friend is right. It is incredibly important that we create jobs in this country as that is providing opportunities and incomes for people who did not have one previously. The Government should be proud of that. Today the 2 millionth apprentice has been recruited under this Government, and the young lady, Paige McConville of Oxford, will meet the Business Secretary to highlight that achievement.
Meg Hillier (Hackney South and Shoreditch) (Lab/Co-op)
Many people in my constituency who are in work are trapped in low-paid minimum wage jobs. Often they are not able to add to the hours that they work in order to earn more, and they rely on the state for prop-ups with housing benefit and tax credits. When will the Chief Secretary to the Treasury understand the cost of living crisis in the country, and what will the Government do about it?
Danny Alexander
I recognise that some people find themselves in the situation the hon. Lady describes, and that is precisely why we need a growing economy that creates more jobs, as it does in her constituency. The economy is creating more employment opportunities and allowing people to progress in work. The most recent figures showed that people who have been in full-time work for more than a year—85% of the jobs created in the past year are full time—have seen their wages increase by 4%.
Chloe Smith (Norwich North) (Con)
The UK has seen more net employment growth in the past four years than the rest of the EU put together. Has the Chief Secretary also noted that, according to the same figures, more of our young people are in work than in Germany, Ireland and France, and the position is far better than in Greece, where only one in four young people are in work? Does that not show that we need to stay the course and help more of our young people into work?
Danny Alexander
My hon. Friend is right. It is a fact that the United Kingdom has created more jobs than all the other countries in the European Union put together. That shows the success we have had in delivering economic growth by working through the balanced careful plan that we put in place at the start of this Parliament. She could also have mentioned the fact that female employment, at 73%, is at its highest-ever level.
Geraint Davies (Swansea West) (Lab/Co-op)
A couple with two children who are both working—the woman in part-time work on £10,000 and the man on £25,000—will have lost £9,417 in withdrawn tax credits in the autumn statement. The Chief Secretary talks about putting up the threshold, but he gets much more back from the poorest. When will he pursue a progressive policy that makes work pay for the poorest?
Danny Alexander
I beg to differ with the hon. Gentleman. The policy of increasing the income tax threshold to £10,600, which was put on the table by my party the Liberal Democrats back in 2010, is putting £825 back into the pockets of 26 million working people on low and middle incomes. Improving work incentives and earnings for people in work is something he should celebrate and everyone in the House should welcome.
Guy Opperman (Hexham) (Con)
Is the Chief Secretary aware that in the north-east of England we have the fastest rate of growth in private sector businesses in the autumn quarter and the most tech start-ups outside of London? Does that not show that the long-term economic plan is beginning to work?
Danny Alexander
Actually, I was not aware of either of those facts, but they do not surprise me because of the entrepreneurial spirit and the brilliant businesses we have in the north-east of England. I believe it is the only region of this country that is a net exporter to the rest of the world. Through the measures we are putting in place, including the investment in infrastructure, we need to continue to support that part of the country.
Rushanara Ali (Bethnal Green and Bow) (Lab)
Does the Chief Secretary agree that we need to redouble our efforts to reduce the unemployment level for young people from 730,000, and that some 1 million young people are still not in training or education? Does he think that his Government could do much more to get them back to work?
Danny Alexander
I agree with the hon. Lady that we need to do more to reduce the level of unemployment among our young people, but I point out to her, and it would have been fair for her to point it out, that we have seen a very sharp fall in the level of youth unemployment and a very sharp increase in the level of employment of young people in the past 12 months. That suggests to me that the policy mix the coalition has put in place is precisely the right one to achieve those objectives.
Mr Henry Bellingham (North West Norfolk) (Con)
8. When he next plans to meet representatives of high street retailers to discuss levels of tax; and if he will make a statement.
The Chief Secretary to the Treasury (Danny Alexander)
I met small business representatives in Inverness on Saturday as part of small business Saturday. In response to concerns expressed by small businesses, the Government have taken decisive action that has reduced employment and property taxes paid by high street retailers. As of April this year, businesses can claim a deduction of up to £2,000 in their national insurance contributions, and next year 300,000 shops, pubs and cafes will receive a business rates discount of up to £1,500.
Mr Bellingham
The Minister is probably not aware—there is no reason why he should be—that I have recently been visiting shops in the high streets of both King’s Lynn and Hunstanton. Is he aware that they are delighted—absolutely thrilled—with the business rate discount that is now being raised to £1,500? Can he give me an estimate of how many shops in my constituency will benefit from that?
Danny Alexander
I was not aware of my hon. Friend’s shopping habits, but I am very glad to hear that he has been spending time with small businesses in his constituency.I can tell him that in the King’s Lynn and west Norfolk area there are 1,280 small businesses that will benefit from the £1,500 discount. That is something worth celebrating in his constituency, as it is across the country.
Ian Lucas (Wrexham) (Lab)
Does the Chief Secretary agree that a further rise in VAT would be a hammer blow to small businesses in Wrexham and across the country? Does he also know that a Labour Government have never increased VAT?
Danny Alexander
I am not sure that last fact is absolutely correct. The level of VAT we have at the moment I think is the right one for the country and I certainly would not advocate any further increases. The right measures for small businesses are the reductions in business rates that we have put in place, which I would hope the hon. Gentleman would welcome. The fundamental review of business rates that we are now undertaking is an opportunity for every Member of this House, and small business across the country, to make the argument on how they want this outdated and outmoded system to be reformed.
Stephen McPartland (Stevenage) (Con)
9. What recent steps he has taken to reduce tax avoidance.
Fiona O'Donnell (East Lothian) (Lab)
T1. If he will make a statement on his departmental responsibilities.
The Chief Secretary to the Treasury (Danny Alexander)
The core purpose of the Treasury is to ensure economic stability, promote growth and employment, reform the banking system and restore sanity to the public finances.
Fiona O'Donnell
On Wednesday I asked the Chancellor about public registers of beneficial ownership in the Crown dependencies and overseas territories. He replied that
“they are all consulting, right now, on the creation of these registries.”—[Official Report, 3 December 2014; Vol. 589, c. 328.]
The fact is that two are not consulting and the others have all finished their consultations, although none has published its submissions or its policies. Will the Chief Secretary now set the record straight?
Danny Alexander
I will set the record straight. The record shows that under the previous Labour Government the Crown dependencies and these bodies did not make any progress on registers of beneficial ownership. Progress is being substantially made now because of the lead this Government showed at the G8. By the way, these same places have also now agreed to the automatic exchange of tax information, to make sure that for the first time—this is something the Government of the hon. Lady’s party never did—we can get tax from people who are trying to hide it in these jurisdictions.
Mr Stewart Jackson (Peterborough) (Con)
T2. My constituents in Peterborough who work at Thomas Cook and many families with young children will have been delighted by the announcement on children’s air passenger duty in last week’s autumn statement. Will the Exchequer Secretary give an undertaking that she will continue to monitor the impact of air passenger duty on tourism and the family budget and not rule out further cuts in the near future?
Chris Leslie (Nottingham East) (Lab/Co-op)
Will the Chief Secretary confirm that table 2.3 on page 67 of the autumn statement shows that total managed expenditure will fall to 35% of GDP by 2020? According to the Office for Budget Responsibility, that is a level not seen since the late 1930s. Does he stand by the autumn statement or not?
Danny Alexander
The way in which the autumn statement is constructed is that the OBR is given an assumption about the path of the public finances over the course of the whole of the next Parliament. As I explained yesterday to readers of The Daily Telegraph—perhaps the hon. Gentleman does not count himself as one of them—a neutral assumption is built into the public finances post 2017-18 which assumes that spending will stay flat in real terms. That enables the OBR to construct its forecast. In my view, when we have finished dealing with the structural deficit post 2017-18, public expenditure will be able to grow faster than that.
Chris Leslie
It does not sound as though the right hon. Gentleman stands by the autumn statement much, Mr Speaker. On Wednesday, the chairman of the Office for Budget Responsibility wrote to the Business Secretary confirming that the autumn statement and all the policy assumptions leading to this figure of 35% were
“signed off by the ‘quad’”.
Is the Chief Secretary still a member of the “quad”, and is that actually true? Why is he now pretending to distance himself from his consistent record of Tory collaboration when he has been as thick as thieves with them in vote after vote, year after year, time and time again?
Danny Alexander
I guess it is a tough job being shadow Chief Secretary: he has to deal with the shadow Chancellor. I saw a quote from the previous Chancellor just this weekend, in Alan Cochrane’s diaries. It said, “I don’t think Miliband gets much of a look-in on the economy now. He’s a difficult man, is Balls.” I guess that is what they mean by a zero-zero economy: one Ed has zero influence; the other has zero credibility. Let me say this to the Labour party and to the Conservative party: both of them, in different ways, are advocating relentless austerity for the whole of the next Parliament, and it is only the Liberal Democrats turning around the public finances after 2017-18 who offer any hope of a change in the future.
John Glen (Salisbury) (Con)
T3. Public Health England at Porton Down in my constituency is at the centre of the global life sciences industry and works with 250 partnerships across the globe. The outline business case is currently before a number of Government Departments. Will the Minister assure me that the fullest range of options will be considered, including a proposal to set up a UK centre for a global response to infectious diseases, which I believe would reduce the call on the British taxpayer?
Danny Alexander
I can assure the hon. Gentleman that this is an important and, I understand, sensitive decision, which Public Health England is considering in all its aspects. The outline business case is currently with Treasury officials for scrutiny. I know that this work is incredibly important, not least given the recent Ebola outbreak in west Africa, but it would be inappropriate for me to give any further details on the business case until the review has been completed.
Jim McGovern (Dundee West) (Lab)
T4. I am sure that those on the Government Front Bench will be aware of just how important the video games industry is to Dundee and to my constituency. The Chancellor said last week that he would support exports. Businesses in the video games industry are often started by university graduates with little or no financial support, yet they end up employing people. What will the autumn statement mean for the video games businesses in Dundee?
Danny Alexander
I absolutely recognise the importance of the video games industry to Dundee and other parts of the country, and indeed to many hon. Members. I do not know whether Candy Crush was developed in the hon. Gentleman’s constituency, but it is clearly very popular in the House. The package of measures in the autumn statement to support exporters will benefit the video games industry, as will the improvements to tax relief for research and development, which will particularly benefit small and medium-sized enterprises. If he has further ideas for measures that might benefit that industry in his area, I would be glad to hear them.
Mr Speaker
I know that the Chief Secretary to the Treasury will not want to talk out opportunities for his own hon. and right hon. Friends. I call Mr Roger Williams.
Roger Williams (Brecon and Radnorshire) (LD)
T6. On small business Saturday I visited retail businesses in Brecon, Llanwrtydwells and Talgarth. They told me how pleased they were with the employment allowance, which gave them a reduction of up to £2,000 in their employer national insurance contributions. More than 1,000 businesses benefit from that in my constituency, but up to 500 that are eligible have not applied. What can we do to encourage them to take up this important measure?
Danny Alexander
I am grateful to my hon. Friend for giving me the opportunity to highlight the importance of these changes. As a local Member of Parliament, he has a particularly important role to play in promoting them, as he has done for the businesses already taking them up. I encourage him to continue to do that and to talk to the Department for Business, Innovation and Skills about whether there is more we can do to get that message across.
Chi Onwurah (Newcastle upon Tyne Central) (Lab)
T5. Last week, the Chancellor said: “What I reject is the totally hyperbolic BBC coverage on spending cuts. I had all that…four years ago and has the world fallen in? No”.At my surgeries, I meet mothers dependent on food banks to feed their families, fathers desperate at lost Sure Start services, and disabled pensioners choosing between heating and eating. They tell me that their world has fallen in. Does the Chief Secretary agree with the Chancellor that they are being “hyperbolic”?
Danny Alexander
I am sure the hon. Lady explained to those constituents that the severe economic problems this country is experiencing and recovering from were caused on her party’s watch when it was in office. Although I share the view that these are difficult issues, I hope she would also highlight the fact that her constituency has seen 5,200 jobs created in the past 12 months.
Maria Miller (Basingstoke) (Con)
The confidence to create a new business is a true barometer of the progress this Government are making on the long-term economic plan. Will the Chief Secretary join me in welcoming the 1,000 new businesses that have been created in my constituency in the past 12 months? What is he doing to encourage more people to find their entrepreneurial spirit?
Danny Alexander
The right hon. Lady is right about that, and I join her in congratulating all 1,000 of those businesses in her constituency and millions more nationwide. We are talking about people who have set up their own businesses and are working hard to create wealth, jobs and growth for this country. That is why a range of the tax and regulatory changes we have put in place have been designed precisely to make the UK the best place in the world to start and grow a business.
Mr Jim Cunningham (Coventry South) (Lab)
T7. A few weeks ago, the Chancellor rushed off to Europe to try to get the cap on bankers’ pay lifted. Will he do the same for public sector workers, and, in particular, nurses?
Danny Alexander
I am not sure that that is a matter for discussion at a European Union level.
Gordon Birtwistle (Burnley) (LD)
Rebalancing the economy has been crucial in delivering the coalition Government’s economic plan. Delivering skills for the future is vital. Does my right hon. Friend agree that the funding of professional careers advice must be part of the plan, to ensure that the growth in manufacturing is secured for the future?
Danny Alexander
I wholeheartedly agree with my hon. Friend on that. He has done more than most Members of this House to promote apprenticeships, the creation of skills and the manufacturing industry, and I pay tribute to him for his work. I ask him to look at what we have said about this in the autumn statement, which contains particular measures to promote the provision of better careers advice in schools.
Kelvin Hopkins (Luton North) (Lab)
T8. This week, growth forecasts for the eurozone economies have again been downgraded, but the European Central Bank is refusing to adopt counteracting measures of quantitative easing. What plans do the Government have for protecting Britain’s economy in the event of a full-blown euro crisis?
Danny Alexander
The best protection for the UK is to stick to the economic plan that is creating jobs and growth up and down this country. That is what the coalition has done and will continue to do. The OBR’s forecast, published last week, showed that it expects the UK, despite the difficulties to which the hon. Gentleman refers, to continue to have economic momentum over the next few years.
Miss Anne McIntosh (Thirsk and Malton) (Con)
Rural communities are clearly not part of the city regions and possibly will not form part of the northern powerhouse. What assurances can the Chief Secretary give us that rural communities will benefit from the increased prosperity from the long-term economic plan?
Danny Alexander
My hon. Friend makes an important point, although I would say to her that rural communities are part of local enterprise partnership areas that benefit from the growth deals announced last year. The city deals and the devolution process we are engaged in benefit all parts of the UK. I highlight to her the investment this Government are making in transport and in broadband as particularly important in driving growth in rural communities.
Yvonne Fovargue (Makerfield) (Lab)
T9. The Office for Budget Responsibility has forecast that individual unsecured debt will rise over the next five years by a staggering £360 billion, which is a record 55% of total household income. More people will be thrust into poverty and forced to go to food banks, and that will not be because more of them know about them or that poor people cannot cook. Does the Chief Secretary agree with the Chancellor that the best way to reduce his borrowing is to increase everyone else’s debts?
Danny Alexander
That same economic forecast suggests that an extra 1 million people will be in work from the record levels that we have at the moment; that there will be a consistent rise in real incomes over the next five years; and that the United Kingdom has the strongest economic growth of any developed country in the world and the strongest job creation. Those are the facts about the United Kingdom and the hon. Lady should welcome them.
Mark Menzies (Fylde) (Con)
May I put it on the record that I support the Government’s drive to create a northern powerhouse? What assurances can the Chief Secretary give me that constituencies such as my own in Fylde will benefit from such a move?
Danny Alexander
I can honestly say to my hon. Friend that his constituency will benefit. It has already benefited from the growth deals, and it is benefiting from investment in energy infrastructure, which is a particular interest there. It is also benefiting from the transport investment, and as we take forward this agenda to improve the economy in the north of England, we will ensure that every part of the north of England, including his constituency, benefits from that process.
Ian Paisley (North Antrim) (DUP)
Was the Chief Secretary as alarmed as I was by this morning’s comments by the Northern Ireland Attorney-General that the Royal Bank of Scotland has been involved in “criminal fraud” with regard to its banking treatment of those who fell behind in their mortgages? If that is the case, will he make a statement to the House, telling us how he intends to deal with the matter so that we can bring back certainty to customers?
Jenny Willott (Cardiff Central) (LD)
Thank you, Mr Speaker, and my apologies. I wanted to ask about tax avoidance. At a time of falling incomes when many people are finding it difficult to make ends meet, does the Minister agree that those on high incomes should avoid using expensive lawyers—if they can afford to use them—to assist with tax avoidance? Does he share my hope that tax avoidance, like drink-driving, will become a moral taboo?
Danny Alexander
I agree with my hon. Friend. This Government have taken consistent action to tackle tax avoidance and to reduce tax evasion, raising billions of pounds to help avoid some of the pressures to which she refers. Dodging taxes is as morally reprehensible as claiming the wrong benefits or doing what she described. Those are all things that we, as a society, want to see stopped, and the Government are taking action to see that they are.
Huw Irranca-Davies (Ogmore) (Lab)
On infrastructure spending, the Government’s claims earlier this year that flood defence spending had increased were rubbished not by insignificant people but by Sir Andrew Dilnot, chair of the UK Statistics Authority, the Channel 4 “FactCheck” programme and many others. On that basis, what confidence can we have that spending on flood defence will increase, when it went down £200 million in the first four years of this Government?
Danny Alexander
This Government’s investment in flood-risk management has increased in real terms by 5% compared with spending in the previous five years. We will be spending more than £5.2 billion over the course of this Parliament on flood and erosion risk management compared with £2.7 billion in the previous five years. That is a record of which I am proud.
Stuart Andrew (Pudsey) (Con)
As my right hon. Friend heard earlier, there is currently a connectivity study on Leeds Bradford International airport. As someone who has been campaigning for that rail link, because the road network is always so congested, may I urge him to look at that study in great detail, as it will help us to contribute to that great economic powerhouse in the north?
Danny Alexander
The hon. Gentleman is right to highlight the importance of the study. We noted it in the national infrastructure plan as something that has produced some new arguments about that link. Clearly, the case must be developed locally, given the more devolved framework in which we are now operating. If he wants to join my hon. Friend the Member for Leeds North West (Greg Mulholland) in the meeting that my hon. Friend suggested, I would be delighted to talk to him about how we can take this important project forward.
National Infrastructure Plan
Danny Alexander Excerpts(10 years ago)
Written StatementsRead Full debate Read Hansard Text Read Debate Ministerial Extracts
The Chief Secretary to the Treasury (Danny Alexander)
The Government’s commitment to infrastructure is a crucial part of our long-term economic plan. High quality infrastructure boosts productivity and competitiveness, and can unlock economic potential across the UK.
The national infrastructure plan 2014 sets out an ambitious infrastructure vision for the next Parliament and beyond, reinforcing the Government’s commitment to investing in infrastructure and improving its quality and performance. It also summarises the substantial progress that has been made during this Parliament, including the completion of over 2500 different infrastructure projects or schemes.
The national infrastructure plan is underpinned by the infrastructure pipeline, which is a forward-looking, bottom-up assessment of planned public and private infrastructure investment in the UK. The refreshed infrastructure pipeline sets out over £460 billion of planned public and private investment to the end of the decade and beyond across the key infrastructure sectors.
The new announcements contained in the national infrastructure plan are as follows:
Flood defences
The Government have published their six-year programme of investment in flood defences, allocating the £2.3 billion capital funding provided at the 2013 spending round.
Interconnectors
The Government will ensure that interconnectors can participate in the 2015 capacity auction, estimating the eligible capacity of each interconnector on a case-by-case basis.
Swansea tidal lagoon
The Government will start closer discussions with Tidal Lagoon (Swansea Bay) plc to establish whether a tidal lagoon at Swansea Bay is affordable and value for money for consumers.
UK Guarantee scheme: Moorside
HM Treasury have reached a co-operation agreement with Toshiba, GDF Suez and NuGen with the aim of issuing a statement of intent to provide a guarantee to assist the financing of a new nuclear power plant at Moorside, subject to due diligence and ministerial approval.
Broadband connection vouchers
Connection vouchers—the Government will provide up to £40 million to extend the SME connection voucher scheme to March 2016 and to more cities. Vouchers will be available on a first come, first served basis.
700MHz spectrum change of use
Further details of the clearance process for high-value spectrum will be set out in 2015 ahead of a further auction of mobile broadband spectrum, subject to the development of delivery options by DCMS and Ofcom.
Northstowe
The Government will take forward development at Northstowe, to support accelerated delivery of up to 10,000 homes, and evaluate the feasibility and economic impact of using this model at a wider scale to support and accelerate housing supply.
Barking Riverside
The Government will agree a principal heads of terms agreement for a loan of £55 million to support the extension of the Gospel Oak to Barking line to Barking Riverside, to unlock the delivery of up to 11,000 new homes.
Brent Cross
The Government support the London borough of Barnet and GLA plans for the regeneration of Brent Cross which could deliver 7,500 homes, subject to a full business case.
Ebbsfleet
The Government are making the first £100 million available to fund infrastructure and land remediation at Ebbsfleet, taking forward their commitment to build the first new garden city for almost 100 years, which will deliver up to 15,000 new homes. Improvements to the A2 Bean and Ebbsfleet junctions will be delivered as part of the Highways Agency programme. The Government will also undertake a review of transport provision for the Ebbsfleet area, including Crossrail, High Speed 1, Southern and Southeastern rail services.
Queen Elizabeth Olympic Park redevelopment (Olympicopolis)
The Government will invest £141 million to support the London legacy development corporation and Mayor of London’s plans to build a new higher education and cultural quarter at the Queen Elizabeth Olympic Park.
Roads investment strategy
The Government are committing £15 billion between 2015-16 and 2020-21 to continue the transformation of the strategic road network, including major projects for the A303, A1, A47 and A27.
Crossrail 2
The Government will provide £2 million between 2014-15 and 2015-16 to support the development of a comprehensive business case produced jointly by the Department for Transport and Transport for London, to complete ahead of the next spending review. This will be combined with a full options appraisal of all potential major transport projects in London, including an extension of the Bakerloo line to improve connectivity in south-east London, and the devolution of South Eastern rail services to London.
Ultra-low emission vehicle research and development
The Government are announcing up to £50 million between 2017-18 and 2019- 20, to support innovation in manufacturing of ultra-low emission vehicles in the UK, based on a Government contribution of £25 million for which they will seek match-funding from industry.
Support for ultra-low emission vehicles
The roads investment strategy sets aside £15 million between 2015-16 and 2020-21 for a national network of chargepoints for ultra-low emission vehicles on the strategic road network. The Government are also announcing further detail of three funds totalling £85 million to support ultra-low emission taxis, buses and cities.
The Government will provide an additional £10 million between 2017-18 and 2019-20 to increase ultra-low emission vehicles in London, in support of the ambition to introduce an ultra-low emission zone by 2025.
Local highways maintenance grant
The Government have already announced that local highways maintenance funding will be increased, totalling £5.8 billion over the next six years, and can now announce how the formula grant will be broken down by region.
Clean vehicle technology fund
The Government will provide up to £4 million to extend the clean vehicle technology fund in 2014-15 which funds road vehicle modification by local authorities in order to reduce air pollution.
Chesterton rail station
As announced by the Prime Minister and Deputy Prime Minister the Government will provide £44 million between 2014-15 and 2016-17 to build a new rail station at Chesterton, linked to Cambridge science park.
Cycle city ambition grants
As announced by the Deputy Prime Minister on 27 November, the Government will provide £114 million between 2015-16 and 2017-18 to enable the continuation of the cycle city ambition scheme in the eight cities it already covers. This will provide capital funding for better cycle infrastructure such as segregated lanes and improved junctions.
Access for all
The Government will increase the funding for the access for all scheme by £60 million between 2015-16 and 2018-19, improving platform access at around 20 stations.
Norwich in ninety.
The Government support the key recommendations of the Great Eastern main line taskforce, including upgraded infrastructure and the latest rolling stock. Bidders for the next Anglia franchise, which will start in Oct 2016, will be incentivised to submit plans for achieving these recommendations for services to Norwich in 90 minutes and associated benefits along the Great Eastern main line.
East West Rail
The Government will consider the outputs of the Network Rail study into the East West Rail central section—Bedford to Cambridge—as part of the planning for control period 6 (2019-24).
Dawlish rail services
The Government will support Network Rail in its work to improve the resilience of the railway at Dawlish. Additionally, it will ask Network Rail to examine wider issues surrounding connectivity to and within the south-west peninsula. Specifically, Network Rail will consider alternatives to the current mainline route to the south-west via Dawlish, including an alternative route via the north side of Dartmoor through Okehampton. This work will feed into Network Rail’s initial industry plan for control period 6 (2019-24).
Bath city centre congestion relief
The Government welcome the strategy put forward by Bath and North East Somerset council and the West of England LEP to improve transport capacity east of Bath and reduce city centre congestion. The Government will consider a business case, which will be developed by Bath and North East Somerset council that assesses the viability of proposals including a park and ride, as well as a park and rail service, located to the east of Bath.
National transport policy
The Government plan to lay the national networks national policy statement before Parliament this month for consideration and a formal vote
Planning
The Government will publish proposals for compulsory purchase reforms for consultation at Budget 2015 to make processes clearer, faster and fairer, with the aim of bringing forward more brownfield land for development.
The Government will take forward measures to ensure that the principle of development need only be established once.
The Government will take steps to speed up section 106 negotiations, to reduce delays to the planning process.
The Government will keep speed of major decisions under review, with minimum performance thresholds increasing to 50% of major decisions made on time as performance improves.
The Government are also announcing today a number of additional housing and planning measures:
Bicester
The Government will support a new garden town at Bicester to provide up to 13,000 new homes subject to value for money.
Public sector land: housing delivery
The Government will set ambitious targets for the release of public sector land between 2015 and 2020. Government are committed to releasing land with capacity for up to 150,000 homes.
Affordable housing
The Government will extend affordable housing capital investment to 2018-19 and 2019-20, to ensure that 275,000 new affordable homes can be delivered over the next Parliament.
Shared ownership
The Government will work with housing associations, lenders and the regulator to identify and lift barriers to extending shared ownership, including a consultation on options for streamlining the process for selling on shared ownership properties.
Housing associations
The Government will consult on ways to increase the borrowing capacity of housing associations in relation to the valuation of properties transferred from local authorities.
Estates regeneration
Budget 14 announced a £150 million fund to kick start the regeneration of social housing estates through repayable loans. Following a bidding round, Grahame Park, Blackwall Reach, Aylesbury Estate and New Union Wharf regeneration projects have all now been approved for funding, subject to due diligence and contract negotiations.
Planning: small applications
The Government will publish new data on local authorities’ performance in meeting their statutory duty to process smaller planning applications within eight weeks.
Planning: small sites
The Government will work with industry and local authorities to test whether more can be done to support the approval of small sites in the planning system.
Copies of the national infrastructure plan 2014 will be available on the gov.uk website and have been deposited in the Libraries of both Houses.