Fiscal Responsibility and Fairness

Debate between Danny Alexander and John Bercow

Thursday 19th March 2015 Commons Chamber

[Derek Twigg (Halton) (Lab)]

rose—

[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.]

[Mr Speaker]

Order.

[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.

Oral Answers to Questions

Debate between Danny Alexander and John Bercow

Tuesday 10th March 2015 Commons Chamber

[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.

--- Later in debate ---

[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.

[Mr Speaker]

Last but not least, Sir Oliver Heald.

Oral Answers to Questions

Debate between Danny Alexander and John Bercow

Tuesday 9th December 2014 Commons Chamber

[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?

Oral Answers to Questions

Debate between Danny Alexander and John Bercow

Tuesday 4th November 2014 Commons Chamber

[Crispin Blunt (Reigate) (Con)]

This fiscal consolidation plan will be heavily influenced by the dramatic liberalisation of pensions announced in the Budget, which will be significantly influenced by the success or otherwise of the guidance guarantee that is now being legislated for. Does the Chief Secretary agree with Ros Altmann that the Financial Conduct Authority should ensure that people who do not receive or take the guidance in this new environment are at least asked proper questions about their circumstances, such as about their partner and their health?

[Mr Speaker]

Order. A question can be wide, at a stretch, but it should not also be over-long.

[Danny Alexander]

I agree with my hon. Friend that the pensions reforms are a great liberalisation of the pensions system. We will give people, rightly, the opportunity to make use of the money that they have saved for their retirement as and when they choose. The guidance guarantee is enormously important. We have been working closely with organisations such as Citizens Advice to make sure that people have access to the guidance in the way that my hon. Friend has set out, and we need to deliver on that.

Oral Answers to Questions

Debate between Danny Alexander and John Bercow

Tuesday 11th March 2014 Commons Chamber

[Danny Alexander]

It is striking how little the Scottish National party appears to have learned from what has happened in the eurozone. The truth is that when setting up a new country, the last thing anyone wants to do is to abandon all the levers that control the economy. The first few decades of independence would be a risky, dangerous and uncertain phase, and embarking on it without the ability to control interest rates or an exchange rate that can, for example, adjust to oil price fluctuations, and with your hands bound on tax and spending—one of the lessons of the eurozone crisis—is an utterly ridiculous proposition.

[Mr Speaker]

Question 3, Andrew Selous.

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

Employment in the United Kingdom is increasing—

[Mr Speaker]

Order. I know that the Chief Secretary is an important man with many important matters on his mind, but none is more important than the grouping of questions 3 and 11. Am I right?

[Danny Alexander]

You are right, Mr Speaker, and I beg your pardon.

Oral Answers to Questions

Debate between Danny Alexander and John Bercow

Tuesday 10th December 2013 Commons Chamber

[Danny Alexander]

Insofar as I as I could hear what the hon. Lady was saying—

[Mr Speaker]

Order. Insofar as the Chief Secretary was having trouble hearing what the hon. Lady was saying, it was because of extreme and frankly discourteous noise from his own Benches, a fact of which I know the Government’s deputy Chief Whip will have taken full note.

[Danny Alexander]

Wherever the noise was coming from, I should say that, of course, house building and construction is important in every sector, social and private. That is why, in the autumn statement last week, we announced both the increase in the housing revenue account—something for which my party, the Liberal Democrats, has campaigned for some time—and the extra funding for large sites to unlock another 250,000 new homes in the private sector.

--- Later in debate ---

[Danny Alexander]

Local authorities—[Interruption.]

[Mr Speaker]

Order. I said a moment ago that the hon. Member for Rotherham (Sarah Champion) should be heard. The Chief Secretary similarly must be heard.

[Danny Alexander]

We have made a commitment to one-for-one replacement. Housing starts, under the planning system, cannot be started instantly, which is surely a lesson that the hon. Gentleman should have learned during his many years in this House. The commitment is there and every one of those homes sold will be replaced by a newly built home.

--- Later in debate ---

[Danny Alexander]

First, may I say what a great pleasure it is for those on this side of the House to see the shadow Chancellor in his place, and may I join him in condemning the unattributable briefing against him from the people behind him—something that never happened in his day?

The whole reason millions of Britons—[Interruption.]

[Mr Speaker]

Order. At the moment I cannot hear the Chief Secretary’s reply, but I intend to do so, however long it takes; it is very straightforward.

[Danny Alexander]

I would like you to be able to hear it as well, Mr Speaker.

The whole reason millions of Britons are under financial pressure is that Labour’s economic mess cost every household in this country £3,000. Because our plan is working, we can cut income tax, we can cut fuel duty, we can put the triple-lock on pensions, we can freeze council tax and we can take money off people’s energy bills. The only way to raise people’s living standards in this country is to have a sustainable economic recovery.

National Infrastructure Plan

Debate between Danny Alexander and John Bercow

Wednesday 4th December 2013 Commons Chamber

[Danny Alexander]

It is very rare that I find myself thinking that Labour Members must wish that they had the shadow Chancellor on the Front Bench asking the questions and not the shadow Chief Secretary—the former policy wonk in the shadow Chief Secretary role with no new ideas of his own whatsoever.

The shadow Chief Secretary is quite right to say that this plan is not about new Government money, as I announced £100 billion-worth of new Government policy in June. He is wrong, however, on his comparisons with capital spending. Capital spending is higher in this Parliament as a share of the economy than it was under the previous Government. He is also wrong to criticise our announcements on energy today. The announcements on strike prices have been welcomed by commentators as diverse as Greenpeace, which states that it is right to focus on the costs of offshore wind, and the Renewable Energy Association, which described today’s announcement as a good day for renewable energy and renewable heat. I remind the hon. Gentleman that this Government were the first to put in place a green investment bank, something his party never bothered to do when it was in office.

Hearing the hon. Gentleman talking about infrastructure reminds me that his party cannot even decide what it thinks about the most important infrastructure project in the country, let alone what to do about it. The moment the Labour party comes out with a proper policy on High Speed 2 is, I suspect, a long time away. That is a pretty pathetic failure on Labour’s part to back investment in the north, northern cities and Scotland.

On delivery, let me say this. Onshore and offshore, underground and overground—[Interruption.]—wired and wireless, tarmac and train track, this Government are delivering. [Interruption.]

[Mr Speaker]

Order. There has been far too much noise on both sides of the Chamber. I appeal to Members to hear the Chief Secretary and I will then facilitate questioning for an appropriate period.

[Danny Alexander]

As we show in our national infrastructure plan today, investment in infrastructure in this country was up an average of £41 billion a year in the last Parliament, and £45 billion a year in this Parliament. Frankly, given our record, it is not clear which part of the word “delivery” the hon. Gentleman does not understand. Of the 646 programmes in our infrastructure pipeline, 291 are in construction. Under this Government since 2010: 36 transport schemes, delivered; 353 flood defences, delivered; superfast broadband to 10,000 rural homes every week, delivered—[Interruption.]

[Mr Speaker]

Order. Mr Lucas, your apprenticeship to become a statesman has several years to run at this rate.

[Danny Alexander]

A new prison is being commissioned in north Wales, Mr Speaker, should the hon. Member for Wrexham (Ian Lucas) wish to visit. That will be delivered very soon.

I have already mentioned superfast broadband to 10,000 homes, and 150 railway station upgrades and 80 electricity generation schemes have also been delivered. Making Britain the best country in the world to invest in infrastructure—delivered, and confirmed by a £25 billion commitment today from the insurance sector, which the hon. Member for Nottingham East should have welcomed rather than criticised. We on the Government Benches are building the foundations of Britain’s economic future—the only thing the Opposition built was debt.

--- Later in debate ---

[Danny Alexander]

I am not aware of the specifics of junction 10A on the A14. Clearly, I do not want the town of Kettering to grind to a halt. We want the hon. Gentleman to be able to get here to his place of work as often as possible. It might be appropriate for him to meet a Minister from the Department for Transport to discuss this matter. I will gladly keep up to speed with what happens and hold a meeting if it is absolutely necessary.

[Mr Speaker]

I would go so far as to say that the continuing presence of the hon. Member for Kettering (Mr Hollobone) in the Chamber on a daily basis is a vital national interest.

[Ian Lucas (Wrexham) (Lab)]

Solar energy provides hundreds of manufacturing jobs in my constituency. The Government have presided over numerous changes to the investment framework for that industry and another change has been announced today. Will the Chief Secretary provide an assurance that there will be no further changes to the investment framework before the next general election?

--- Later in debate ---

[Danny Alexander]

I am grateful to my hon. Friend for welcoming the plan. In June, we set out considerable funding for the Department for Transport to deal with such local pinch points. Local enterprise partnerships have a role in identifying where action is needed. I urge him to engage with his local enterprise partnership, as I am sure he is already doing, because if it identifies such schemes as priorities for the area, they will in turn be made into priorities for Government funding and the problems can be dealt with.

[Mr Speaker]

I had anticipated a point of order, because I had received notice of one, but it appears that it will not be raised at this stage. So be it.

Investing in Britain’s Future

Debate between Danny Alexander and John Bercow

Thursday 27th June 2013 Commons Chamber

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

I am grateful to you, Mr Speaker, for allowing more time than is usual for a statement, given the range of announcements to be made today.

Yesterday, my right hon. Friend the Chancellor set out the difficult decisions that the Government have taken to continue the process of restoring our country’s finances. I pay tribute to his work to see the country through these most difficult of times.

Today, I will set out how the British economy can succeed in the global race by creating balanced growth and delivering lasting prosperity. Most past Governments of every colour have prioritised short-term convenience over the long-term national interest. Today, we change that. We are shifting the Government’s policy horizon to match the modern economy’s horizon, because the coalition Government want to make the right long-term choices for Britain.

I therefore announce the most comprehensive, ambitious and long-lasting capital investment plans this country has ever known. We are putting long-term priorities before short-term political pressures. I tell the House in all candour that these are not easy choices. There is no easy way to create jobs and prosperity. It is a difficult path, but the right one.

Today, it is clear that the British economy is moving from rescue to recovery. We inherited an economy in dire straits. Official statistics published this morning show that the recession in 2009 was even deeper than we first thought. We have made painful choices to get our economy back on the right track. We are making good progress—the deficit is down, jobs are up—but as we move from repair to renewal, we need to invest in the fabric of our nation. I can do that because we have chosen to find savings from day-to-day budgets, allowing us to recycle billions into long-term capital spending. That is not the easy choice, but the right one.

We can guarantee £300 billion of capital spending by the end of the decade. Today, I can set out our plans for more than £100 billion of that for the infrastructure of our country: the biggest public housing programme for more than 20 years, the largest programme of rail investment since Victorian times, the greatest investment in our roads since the 1970s, fast online access for the whole country and the unlocking of massive investments in cleaner energy to power our economy forwards, all at a price that we can afford to pay, without adding a single pound to our borrowing forecasts. Investing in stronger communities, in better infrastructure, in new sources of energy—that is how we will build a stronger economy in a fairer society, enabling everyone to get on in life.

At every stage of the process, we have sought to cut waste and inefficiency first, focusing on the back room, not the front line. We should not pretend that that is painless. Back-office efficiencies mean thousands of job losses. Contract renegotiation means rightly asking more for less from our suppliers. But that is the right way to make savings, while improving the quality of our public services.

Across government, we are using our capital budgets to help our public sector become smaller, more efficient and more effective. In 2015-16, we will invest £25 million in the best digital equipment for our police and £100 million in a new prison in north Wales—a scheme that will eventually save £20 million every year. More than £200 million is being invested over three years to increase the digitisation of Her Majesty’s Revenue and Customs’ customer services, a move that will save more than £50 million every year in administrative costs.

I pay tribute to the Minister for the Cabinet Office and Paymaster General and his team for their expertise and insight in unlocking these savings. I am the first Chief Secretary ever to have had this pool of commercial expertise at my disposal during a spending round. They tell me that we can do more to save money for the taxpayer. So, working closely with the Minister for the Cabinet Office, I will conduct a further rolling efficiency review of all Departments to unlock savings to support our economic priorities. I will strengthen the financial management capability in Government, too. We will take action to sell off £15 billion-worth of public assets by 2020. Some £10 billion of that money will come from corporate and financial assets, such as the student loan book, and the other £5 billion will come from land and property.

The Government are the custodians of taxpayers’ assets. When we no longer need them we should sell them back at a fair price and not act like a compulsive hoarder. Too often, local and national Government sit on an area of land that could be put to good use for the economy, housing or schools. Today, we say this to businesses and communities, “If there are any publicly owned sites out there that you can make economic use of, then tell us.” Unless Ministers can be convinced that the site is needed, we will sell that land at a fair price and we will use the proceeds to pay down our debt and invest in our economy.

Let us not forget that the plans we inherited from the previous Government included significant cuts to capital spending in this Parliament. We have added to those plans year-on-year with more money for investment in this Parliament. Some people say that we are not delivering, but since we came to office more than 30 transport schemes have been completed, 150 railway stations have been upgraded and we have built 84,000 affordable homes. However, we need to work more smartly to improve delivery. No single Government infrastructure project in recent memory has been quite as triumphant as the 2012 Olympic and Paralympic games, so we appointed Lord Deighton, the man who oversaw that success, to improve infrastructure delivery across government. He is working his way through Whitehall Department by Department, helping to develop clear delivery plans. Today, the Government are accepting his central recommendation that we take crucial infrastructure delivery out of the hands of civil servants and into the hands of commercial experts.

Our innovative UK guarantee scheme is enabling privately funded projects to go forward, too. It has already provided certainty to investors in the Drax power station and the Northern line extension. I can announce that UK guarantees will be available for two more years to December 2016. I can announce today that we will offer a guarantee of up to £500 million to support investment in the Mersey Gateway bridge and a multi-million pound guarantee to advance the new nuclear power station at Hinkley point, a guarantee that could provide growth in Liverpool and a guarantee that could provide power to 8% of the UK’s homes. These deals are not yet done, but they are a major step forward for our country’s future.

Let me turn to how we will invest in stronger communities. The Government have made a very strong commitment to education. We have protected the schools budget, including the pupil premium. We know what parents want: a good school nearby in a good state of repair, and this is how we will give it to them. First, some buildings simply are not good enough, so we are rebuilding 261 of the worst schools as part of the Priority School Building programme. With the moneys I have committed today, we will complete this by 2017—two years early. There are many other schools in need of repair and investment. The previous Government stopped even checking just how many schools were in need of repair. We have started again. We will put £10 billion behind this, which will be enough to clear the urgent backlog. We are investing, too, to create 1 million new places in a decade across the country, including in Lancashire, Leeds and London—better buildings and a place for every child are the best investment in our future generation.

We will continue to invest in the health of the nation, too. The health budget will rise in 2015, including on capital. That means we can begin redeveloping the Royal Liverpool hospital next year, and I can also announce a further £150 million for health research infrastructure, including facilities for our world-leading work on dementia.

Our new approach to housing is truly transformative. Our Help to Buy scheme is already getting people on to the ladder. But, put simply, this country does not have enough homes that people can afford. The previous Government allowed the number of affordable homes to fall by a shocking 420,000. A good home should not be a luxury for the few, but an achievable aspiration for the many. We are already ensuring that the affordable housing supply increases every year, not decreases, as it did in every year but one under the previous Government. But our housing associations have told me that they can do more. To do that, they need certainty on rents, alongside public investment. So today I can provide both those things: I can guarantee that social rents will be set at the consumer prices index plus 1% out to 2025—the longest period of certainty ever; and I can provide £3 billion more capital over three years from 2015 to deliver 165,000 new affordable homes. On average, that is more each year than in any of the past 20 years; it is more in three years than the previous Government managed in seven. And we can do all that because our approach gets twice as many houses as they did for every pound we put in, getting more for the taxpayer and more for this country. This spending round also funds over 2,500 more new homes specifically designed for older and disabled people, and £160 million for decent homes, mainly in London. I know that issue is important to many MPs, particularly my right hon. Friend the Member for Bermondsey and Old Southwark (Simon Hughes). This is the most ambitious and significant investment in affordable housing for a generation.

Too many Members of this House, on both sides, have in recent years seen the devastation that flooding can cause in their constituencies. We need to work with the private sector to protect families from the threat of flooding, so we will provide £370 million in 2015 and increase that in real terms every year to 2020. More than 400,000 households will be protected over this decade. Insurance also has a vital role to play in helping households deal with the consequences when flooding does occur. I am pleased to tell the House that we have now reached an initial agreement with the Association of British Insurers on the future of flood insurance. The industry wants to do the right thing and so do we. We have always said that we wanted to find a solution that works for households at risk of flooding, wider bill payers and the taxpayer. The industry’s proposed scheme, known as Flood Re, promises to do that by effectively limiting insurance prices for high-risk households. Up to 500,000 households would be helped, with support targeted towards those on lower incomes. Support would be funded by a levy on insurers, something the ABI has promised us will not increase customer bills in general. Importantly, there will be no cost to taxpayers.

There remain many details to work through, so we propose also to take powers to allow us to regulate for affordable flood insurance should that prove necessary. We are seeking these powers in the Water Bill, which we are today introducing to Parliament. The Secretary of State for Environment, Food and Rural Affairs is today launching a public consultation on our proposed approach, and we welcome views on it. He will introduce our final proposals to Parliament as a Government amendment in the autumn.

Local businesses, local communities and local authorities know best how to make the decisions to support growth in their area. For decades we have not given them enough chance to do so, but now we are. Yesterday, the Chancellor confirmed that we are establishing a single local growth fund to transfer funding streams to local enterprise partnerships, as recommended by Lord Heseltine, with £2 billion in 2015 and at least that in every year for the rest of the decade. In total, at least £20 billion will be under the control of LEPs to 2020. The details of how that will work are set out in the document published today.

We have also reached agreement with Greater Manchester on its innovative “earn back” scheme, which will allow it to invest in its priorities, such as the Trafford Metrolink and the A6 to Manchester airport relief road. I know that many hon. Members, including my hon. Friend the Member for Cheadle (Mark Hunter), have been campaigning on that for many years—as indeed has the Chancellor, for that matter.

The regional growth fund has also been a fantastic success, thanks to the drive of people up and down the country, led by my right hon. Friend the Deputy Prime Minister. The £2.4 billion in this Parliament is safeguarding half a million jobs, spread across every English region. Furthermore, we are today investing an extra £600 million so that we can do even more to strengthen our communities.

For our economy to grow, however, we need those communities to be better connected. In the last two decades, rail passenger numbers have doubled, and that figure is set to rise by nearly 15% over the next five years. More people are using our railways than at any time since 1927, so we have set out a clear, long-term plan to cope with that demand. Last year, we announced that Network Rail had been funded to deliver the largest programme of rail investment since the Victorian era, and today I reaffirm that commitment. This investment will bring new life to our rail networks, upgrading stations such as King’s Cross, Manchester Piccadilly and Birmingham New Street, improving links from Liverpool to Newcastle through the northern hub and opening up a new line from Bedford to Oxford. We are also electrifying 850 miles of railway. By comparison, the previous Government managed nine miles in 13 years.

My hon. Friend the Member for Westmorland and Lonsdale (Tim Farron) will be pleased to hear that Network Rail is conducting a feasibility study into electrifying the Lakes line between Oxenholme and Windermere. We are going one better in London, and from 2015, we will fund Network Rail to begin work on electrifying the line connecting Gospel Oak and Barking. Nowhere is fast commuter transport more important for our economy than in London, and our investment in Crossrail will support more than 120,000 additional peak-time commuters every day. The Government are committing £2 million to support a funding and financing study into Crossrail 2. The challenge for the Mayor of London now is to determine how at least half of the cost of the scheme can be met through private sources, ensuring that it will be affordable to the UK taxpayer.

Keeping London connected is crucial, but it must not be done at the expense of our other great cities. It is not good enough that the UK has just 68 miles of high-speed rail, compared with 1,000 in Germany and more than 2,000 in France. We want a high-speed line that connects eight of the UK’s 10-biggest cities, making daily commuting between them possible for the first time. Today, therefore, we provide long-term financial certainty for High Speed 2, setting a funding envelope of £42.6 billion for construction costs and £7.5 billion for rolling stock, and we are setting a clear budget for the scheme of £16 billion for the next Parliament.

Yes, that is a higher overall budget than previously put forward. We are learning from our Olympic experience and setting a long-term, realistic financial plan with the right contingencies. This is the longest and largest transport budget the Treasury has ever set aside, and the people running the project will have to deliver within it.This project will change the economic geography of our country, and I urge hon. Members to support it. It is not being built at the expense of a single other rail project. Taken together, we are supporting more than £30 billion of investment in rail, making this coalition the most pro-rail Government in history.

We also need to think of the remote parts of the UK that HS2 will not reach. Air connections are crucial to those regional economies, so to help maintain those connections, I can announce today that we will provide £10 million a year for a new regional air connectivity fund. I look forward to Howard Davies’s report into that and other aviation issues.

Millions of people rely on our road network. We have worked hard over the past three years to protect road users, cancelling fuel duty increases and saving 13p on a litre of petrol, but our road system has been decaying for decades, and without further significant investment now, by 2040, nearly a quarter of motorists’ travel time could be spent stuck in traffic. I can therefore announce today the biggest programme of investment in our roads in 40 years. The Government will invest more than £28 billion over the six years from 2014 in the enhancement and maintenance of national and local schemes. First, we will take action to fix the backlog of maintenance that has left road surfaces crumbling in communities up and down the country. We are committing £10 billion of investment in road repairs between 2015-16 and 2020-21. More than £4 billion of that money will be spent on national road maintenance—enough to resurface more than 21,000 miles of road, which is the equivalent of London to Beijing and back—while the other £6 billion will be spent locally, allowing local authorities to fill the equivalent of 19 million potholes a year.

Secondly, we will deliver all the major projects in the Highways Agency’s pipeline. We will add two lanes to the busiest motorways, bringing another 221 lane miles to our road network, and we will tackle some of the most congested parts of our network, through projects such as the £1.5 billion A14 scheme between Huntingdon and Cambridge. This scheme is of strategic national importance and will unlock jobs, housing and growth in the region, as well as providing key relief for a major freight route. I am delighted to announce that we will be bringing forward the start of construction by almost two years, to 2016.

I can confirm today that there is more: the A19 between Newcastle and South Shields, the A63 in Hull, the M6 junctions between Birmingham and Manchester, the M5 junctions from Bromsgrove to Worcester, the A38 Derby junctions, the M1 junction near Long Eaton and south of Rugby, the A21 between Tonbridge and Pembury, junctions on the M4, the M23 Gatwick junctions and the A27 Chichester bypass.

This money will pay for us to identify and deliver solutions for the most notorious problem spots across the country. Any hon. Member from the Prime Minister down who lives in Cornwall or who has driven there for their holidays will want to see a better A303. Any hon. Member planning a trip to Scotland—Scotland as part of a strong United Kingdom—will want to see a better A1 north of Newcastle. We will also look at the A27 corridor, the trans-Pennine route and connectivity to Leeds airport.

We will ensure that these investments are delivered, because I can also announce that we are transforming the Highways Agency into a publicly owned corporation, an organisation that will have the long-term funding certainty and flexibility to deliver the best possible road network for the UK’s motorists. We are legislating to ensure that these reforms and this investment are guaranteed.

Where our predecessors left the road network on the hard shoulder, we are bringing it into the fast lane. We are not only building the roads of the future but developing the cars of the future. This Government remain committed—[Interruption.]

[Mr Speaker]

Order. There is a very disorderly atmosphere in the House. Mr Docherty, you are in a very jolly frame of mind, but it would be greatly to your benefit and that of the House if your jollification could be a tad more restrained.

[Danny Alexander]

Thank you, Mr Speaker.

This Government remain committed to ensuring that the UK remains at the forefront of decarbonising road transport and investing in electric vehicles. In the 21st century, good communications are not just about faster roads and high-speed railways, however; they are also about high-speed internet access. The Government have already committed £1.2 billion of public investment to fixed superfast broadband. I saw at first hand the impact that that investment is having on smaller communities when I visited Rothbury in Northumberland. It is crucial, if we want to rebalance our economy, that it is not just the biggest cities that have access to the fastest broadband.

The UK already has better broadband coverage, usage and choice than Germany, Italy, France and Spain, but we want to go further. I can announce today that we are providing a further £250 million to ensure that fixed superfast broadband reaches 95% of the population by 2017. We will work closely with industry to ensure that at least 99% of the UK population have access to superfast broadband—whether fixed, wireless or 4G— by 2018.

Let me now turn to how we support the private sector to deliver our energy needs. Some Members will know that I was privileged to spend my early years on the Hebridean island of Colonsay. Then, the island had no mains electricity. Unreliable diesel generators powered the island, and regularly broke down. Until mains electricity arrived, we never quite knew when the lights would go out. We do not want any community in our country to face that problem in the future. Our existing power stations are closing, as they are too old or too dirty to continue. They must be replaced and added to as our need for electricity grows. Thanks to the hard work of the Secretary of State for Energy and Climate Change—

[Danny Alexander]

He is the best ever.

Thanks to my right hon. Friend’s hard work, we are ready to unleash the energy revolution that our country needs. Today’s news from the British Geological Survey of 1,300 trillion cubic feet of shale gas—double the previous estimate—confirms its huge potential for the UK. That is almost as much hot air as the shadow Chancellor produces in a year—[Interruption.] And if they would stop fracking around on the Opposition Front Bench, they might learn something. The plans that we are setting out today provide the framework to kick-start this industry in a way that protects the environment and supports local communities.

As well as revolutionising the way in which we get our energy, we are transforming how we generate and supply it. As we face the challenge of climate change, we need to bring forward investment in low-carbon technologies. This country has massive potential in wind, wave and tidal. We need to harness it. We are putting in place a comprehensive energy policy through the Energy Bill that is in front of this House. This is an approach that we know will work for consumers and investors alike. Last year we made the unprecedented decision to set out funding plans for low-carbon generation all the way to 2020, providing up to £7.6 billion in real terms.

Now we can set out what this means for investors. We do this through setting strike prices. If future prices are below this level, we will guarantee a price to the generator, giving them the confidence to invest now. But if they rise above it, we will claw back money for consumers. We were planning to set strike prices next month, but we have been able to make faster progress so, today, I can announce that we are publishing the prices for renewable generation ahead of schedule. Prices have been set for key renewable technologies, including onshore and offshore wind, tidal, wave biomass and solar. The prices are broadly similar to those we would have to pay under the renewables obligation. We will set the price at the level we need to bring forward sufficient investment, but not a penny higher. As these technologies develop, costs will fall, so we will reduce the price too. For instance, next year we will guarantee generators £155 per megawatt hour of offshore wind. By 2018 this will fall to £135. We expect our reforms to bring forward 8GW to 16 GW of offshore wind capacity. Industry asked for certainty; we have given it. Now industry needs to get on with it.

Yes, this approach has costs now but, in the long term for consumers, they will be more stable than they would otherwise have been. In fact, when this investment goes alongside our plans for energy efficiency, overall our policies could save an average of £166 per household by 2020. We are taking the right decisions now for the good of our country.

In addition, we need to guarantee that capacity will be available at short notice to meet spikes in demand, for instance through gas-fired stations. Today we can provide details on a new regime that will achieve this. The first auction for this new capacity market will run next year to provide certainty for the winter of 2018. But there is financial risk for construction, too. That is why we have set up a Green Investment Bank to back green energy projects. It has committed over £600 million already; for instance, it has invested in the Walney wind farms off the north-west coast of England, which are expected to provide energy to the equivalent to 300,000 households. We have already pledged to provide £3 billion for the bank and, today, I can announce that we will provide an additional £800 million so that it can expand further. Crucially this will include, for the first time, the power to borrow half a billion pounds in 2015-16 from Government. This is a real milestone in green investment, delivering a key promise we made in our election manifesto, unlocking over £100 billion of private investment into our energy networks, and supporting jobs, growth and prosperity for years to come. Our energy policy is a win for consumers, a win for investment and jobs and a win for our climate; the greenest Government ever.

In the last three years we have re-secured for this country a very precious commodity: credibility. No one doubts that the coalition is serious about sorting out the economic mess that we have inherited. People have the right to know that we will continue to work hard to repair the economy, that interest rates will stay low and that we will get our country back on an even keel. But repair is not all we do, because people also have the right to expect that Britain stays one step ahead in the world, that we ease congestion on our roads and deliver faster broadband to make sure businesses in every corner of this country can serve their customers—[Interruption.]

[Mr Speaker]

Order. There is a lot of noise in the Chamber. I think that the Chief Secretary is nearing his end.

[Danny Alexander]

I am certainly nearing the end of this statement.

People expect us to ease congestion on our roads and deliver faster broadband to ensure that businesses in every corner of this country can serve their customers, and that we make sure all parts of Britain keep going. They expect that we will invest in a modern railway so that commuters get to work on time and home in the evening to see their kids. People have the right to expect that we keep spending serious money on the schools and hospitals on which all families rely, and that we make sure that the lights stay on in our homes, even when the demand on energy is surging.

The plans I have set out today deliver all that and more. This is an ambitious plan to build an infrastructure of which Britain can be proud and, in doing so, to help build a stronger economy in a fairer society where everyone can get on in life.

I commend this statement to the House.

--- Later in debate ---

[Mr Speaker]

The length of the Chief Secretary’s answer is improper, regardless of its content. The way in which a Minister replies to questioning is a matter for him, and he is at liberty to refer to material, but he must not dilate in his answer. If it were to become effectively a second statement, he might have some difficulty retaining the attention of the House.

[Danny Alexander]

Thank you for that advice, Mr. Speaker. I was merely attempting to respond to the inaccurate account of our investment given by the hon. Member for Nottingham East (Chris Leslie). In fact, investment as a share of GDP will be higher during the current decade than it was during the 13 years for which Labour was in office. We are spending more and underspending less than Labour did. Ours is a record of delivery and a record of action, and today I have given the House our promise of more.

The hon. Gentleman asked about the private sector. We have been listening to the private sector, which is why we are setting out the long-term plans that it wants. He asked about the planning system. We have reformed the planning system, and he voted against that reform. He also asked about flooding. As I said in my statement, my right hon. Friend the Secretary of State for Environment, Food and Rural Affairs will be announcing amendments to the Water Bill. The hon. Gentleman will know from the spending round document which was published yesterday that the forecast for local government self-financed expenditure is up, not down. I am sorry to hear that he opposes investment in shale gas. His Building Schools for the Future programme was expensive and inefficient, which is why we have introduced the Priority School Building programme.

I should very much have liked to hear from the hon. Gentleman that he supported our detailed and ambitious plans, and so would the country. I am sorry that we did not hear that from him, and I hope that he will reflect on it in the days to come.

--- Later in debate ---

[Danny Alexander]

I am sorry to hear such a curmudgeonly response to what I thought was a very positive announcement. [Interruption.] The point that I was making in my statement was that there are a number of long-standing issues on our highways network that have never been addressed. We have set aside the funding and will bring forward the plans to ensure that the improvements to that route take place between now and 2020.

[Mr Speaker]

My sense is that there is nothing unparliamentary about the use of the word “curmudgeon”. It is very much a matter of taste.

[Paul Burstow (Sutton and Cheam) (LD)]

I congratulate the Government on the announcements about social care spending and the health service. I draw my right hon. Friend’s attention to a capital project that will serve my constituency: the commitment to an investment of £219 million in St Helier hospital. However, that project has been stuck in the mud for the past three years because local NHS managers have been blocking its progress. Will he intervene with Ministers at the Department of Health to unblock that project and provide the much-needed investment?

Oral Answers to Questions

Debate between Danny Alexander and John Bercow

Tuesday 25th June 2013 Commons Chamber

[Danny Alexander]

Yes, it certainly should, and I urge my hon. Friend to listen carefully to the Chancellor’s statement tomorrow.

[Mr Speaker]

I call Pamela Nash. Not here.

Oral Answers to Questions

Debate between Danny Alexander and John Bercow

Tuesday 12th March 2013 Commons Chamber

[Danny Alexander]

The hon. Gentleman will know that in the 2010 spending review and the 2011 and 2012 autumn statements, we increased spending on infrastructure compared with the plans for capital spending that we inherited from the previous Government. Consequently, investment in infrastructure in this country is higher as a share of GDP over this Parliament than it was on average during the previous Government’s time in office.

[Mr Speaker]

I call George Freeman.

Oral Answers to Questions

Debate between Danny Alexander and John Bercow

Tuesday 6th November 2012 Commons Chamber

[Danny Alexander]

My hon. Friend is right to highlight the importance of releasing public sector land for development for housing, including affordable housing. The Homes and Communities Agency is well ahead of its targets for releasing such land and for schools—

[Mr Speaker]

Order. Are we referring to the proceeds of the auction?

[Danny Alexander]

I am answering the question, which relates to the proceeds of the auction. We are using other policies, rather than the proceeds of the auction, to support this objective.

--- Later in debate ---

[Mr Speaker]

Order. That is the term of—[Interruption.] Order. No assistance is required from the hon. Gentleman. He will accept my ruling and he can like it or lump it.

[Danny Alexander]

Rather than the proposal to use revenues from the auction, there are other policies that we can use to support the objective highlighted in the question, including those highlighted by the hon. Member for South West Devon (Mr Streeter)—planning reform, releasing public sector land and other fiscal steps that the Government can take which do not involve committing to this policy now.

Oral Answers to Questions

Debate between Danny Alexander and John Bercow

Tuesday 11th September 2012 Commons Chamber

[Danny Alexander]

The hon. Gentleman raises an important point, and I sympathise greatly with families up and down the country who face the problem that he describes. That is why we have made decisions on fuel duty that mean that the price of petrol is roughly 10p a litre less than it would have been had we followed through the Labour party’s plans. The Office of Fair Trading has recently announced a call for information on the problem, and I urge him and Members in all parts of the House to pass on any information that they have. Having spoken to Clive Maxwell of the OFT, I know that it is committed to ensuring—

[Mr Speaker]

Order. I am greatly obliged to the Chief Secretary, but from now on we need rather shorter exchanges if I am to maximise the number of Back-Bench contributors.

[Kerry McCarthy (Bristol East) (Lab)]

The Chief Secretary will know that one thing that is really hitting people at the moment is the rising cost of food. A huge number of people, even those in work, are having to resort to going to food banks. What action are the Government taking to address that situation?

Amendment of the Law

Debate between Danny Alexander and John Bercow

Monday 26th March 2012 Commons Chamber

[Danny Alexander]

I am going to make some progress—[Interruption.]

[Mr Speaker]

Order. The House needs to calm down a bit. I was listening intently, because I wanted to hear the Chief Secretary’s answer, and I was struggling somewhat to do so. I want to hear what he has to say.

[Danny Alexander]

It is no surprise that Labour Members want to drown out any reference to their record in government.

I think I know why the record increase in the income tax personal allowance has not been welcomed by Labour Members today and was hardly mentioned by the two Opposition Front-Bench speakers, despite the fact that Labour used to call itself the party of working people. This debate has also revealed something of lasting significance about the Labour party—

--- Later in debate ---

[Danny Alexander]

The Budget is fair. It raises additional taxes from the wealthiest and asks the wealthiest in this country to pay more. That is why, for example, we are capping—[Interruption.]

[Mr Speaker]

Order. There is so much noise that I am not sure the Chief Secretary can even hear that his right hon. Friend the Member for Haltemprice and Howden (Mr Davis) is seeking to intervene. Perhaps he can hear and does not want to give way, but if he cannot hear, he is not able to give way.

Tax Avoidance (Public Servants)

Debate between Danny Alexander and John Bercow

Thursday 2nd February 2012 Commons Chamber

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

I am very grateful to the right hon. Gentleman for giving me the opportunity to set out the answer to this question. As hon. Members might be aware, departmental public spending encompassing the appointment of senior civil servants is audited against the Treasury’s “Managing Public Money” guidance. That document makes it clear that

“public sector organisations should avoid using tax advisers or tax avoidance schemes as any apparent savings can only be made at the expense of other taxpayers or other parts of the public sector.”

There is no place for tax avoidance in Government.

A recent case has highlighted those issues, and although I cannot comment on the specifics of an individual’s tax affairs, for reasons of which the right hon. Gentleman will be fully aware, I want to take the opportunity to explain the action that I have taken.

As hon. Members are already aware, for senior civil service appointments whose salary exceeds £142,500, terms and conditions are negotiated by the appointing Department and are presented to me for approval of the salary. Those arrangements are in place to control excessive pay.

In the light of that recent case, I have asked the Treasury urgently to review the appropriateness of allowing public sector appointees to be paid through that mechanism—[Interruption.] I have also asked the Treasury Officer of Accounts—[Interruption.]

[Mr Speaker]

Order. I granted this urgent question because I thought it warranted ministerial comment and scrutiny by the House. The House can rely upon me to ensure that there is plenty of time for Back Benchers, but as a matter of procedure, propriety and courtesy, we must hear what the Chief Secretary has to say, preferably without constant interruption and heckling.

[Danny Alexander]

I am grateful, Mr Speaker.

As I was saying, I have also asked the Treasury Officer of Accounts to write to all accounting officers across Whitehall to remind them that all appointments should, in line with existing guidance, consider the wider cost of lost revenue to the Exchequer when considering value for money.

Furthermore, I have requested that all Departments carry out an internal audit by the end of March. As my right hon. Friend the Minister for Universities and Science has said, the Student Loans Company will for the remainder of the contract in question change the arrangements and deduct tax and national insurance at source. Across Government, if any appointments that do not provide value for money are found, whether agreed by this Government or the previous one, I have urged Departments to seek to unwind them as quickly as possible and as quickly as is compatible with securing good value for public money.

At a time when we all have to pull in the same direction to tackle the country’s financial problems, it is essential we all pay our full and fair share. That is why I have taken this action to ensure that Government Departments do not support tax avoidance schemes.

--- Later in debate ---

[Danny Alexander]

rose—

[Mr Speaker]

Order. I should just emphasise that the right hon. Gentleman will want to focus specifically on the terms of the urgent question, and I know that that is what he will do.

[Danny Alexander]

The question is a broad one about tax avoidance in Government. There are Government employees in other jurisdictions, and I am sure that the measures we have taken—for example, in relation to Switzerland and Lichtenstein, the non-dom levy that we have put in place, and so on—will ensure that any practices that might have been in place in the past no longer occur.

--- Later in debate ---

[Danny Alexander]

I can tell the hon. Gentleman what I have said already. I signed off the salary level in this case. The terms and conditions of the appointment were put forward by the Student Loans Company in the Department for Business, and came to me for approval in the usual way, given the salary level that was being proposed.

[Mr Speaker]

Order. I am grateful to the Chief Secretary to the Treasury, the Opposition Front-Bench team and the 34 right hon. and hon. Members who were able to question the Chief Secretary. [Interruption.] The hon. Member for St Helens North (Mr Watts) is thirsting to raise a point of order, but I am afraid he will have to wait until after business questions.

Oral Answers to Questions

Debate between Danny Alexander and John Bercow

Tuesday 24th January 2012 Commons Chamber

[Danny Alexander]

I am sorry if agreeing with a Government Minister makes the hon. Gentleman uncomfortable, but he is of course right that work is the best route out of poverty. That is the driving force behind our welfare reforms, the Work programme, which is the most extensive initiative ever undertaken to help people off benefits and into work, and our youth contract. Of course the country is in very difficult economic circumstances, but the Government are doing everything we can to support people off benefits and into work for precisely the reason he gives.

[Mr Speaker]

Order. I am sorry to disappoint colleagues, but questions to the Treasury team, rather analogous to questions to the Foreign Secretary and his colleagues, tend to beat the box office records. We must now move on.

Public Service Pensions

Debate between Danny Alexander and John Bercow

Tuesday 20th December 2011 Commons Chamber

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

With permission, Mr Speaker, I would like to make a statement on the reform of public service pensions.

Seven weeks ago I reported to the House that in an effort to secure agreement, the Government were making a new offer to public service workers. Despite some unnecessary interruptions, scheme negotiators have been working hard to reach detailed heads of agreement by the end of the year deadline that we set. It has not been an easy task, but the Government have demonstrated that they will not shy away from taking difficult long-term decisions in the nation’s long-term interest.

We wish to see pensions for public service workers that are fair and sustainable, that provide dignity in retirement, and that are affordable for the workers and for taxpayers. That is why we committed in the coalition agreement to establish an independent commission to bring forward proposals for reform. Lord Hutton’s magisterial report did just that. We have stuck closely to the recommendations of the former Labour Secretary of State for Work and Pensions.

The case for reform is self-evident. The average 60-year-old lives longer now than in the 1970s. That means that people are living in retirement for longer. The life expectancy of a 60-year-old was 18 years in the 1970s; that has risen to 28 years today. As a result, the cost of public service pensions has risen to £32 billion a year—an increase of one third over the last 10 years.

We have already made some changes that deal with short-term pressures, including changing the basis of pension uprating to the consumer prices index and increasing member contributions by 3.2 percentage points, phased over three years. Those proposals are unchanged. Next year’s contributions increase is almost identical to that planned by the previous Government. The precise details of next year’s increase have been set out by Departments. All increases are tiered by income to protect the lower-paid. The Government will review the impact of next year’s increases, including on opt-outs and equality, before taking final decisions on how future increases will be delivered. Interested parties will have the opportunity to provide evidence and views to the Government.

I know that many Members of the House will be concerned about the pay and conditions of our armed forces. Let me be clear that members of the armed forces will continue to make no contributions towards their pensions and will be exempt from the increases announced at the spending review.

From the beginning of this process, we have committed to ensuring that public service pension schemes continue to offer a defined benefit pension that is based on the size of the worker’s salary and is not dependent on the market performance of a fund. That is not available to most people in the private sector. From the beginning, we have been clear that all accrued rights will be protected in full, and that the taxpayer needs to be properly protected from the risks associated with further increases in life expectancy by linking the scheme normal pension age to the state pension age. In November, we improved the offer to a 1/60th accrual rate, which is an increase of 8%. That is available only in the event of agreement being reached. We also agreed to protection for those who are 10 years from retirement.

I would like to pay tribute to the Minister for the Cabinet Office, the TUC and the scheme negotiators on both sides for their efforts to reach agreement. I am pleased to report that heads of agreement have now been established with most unions in the local government, health, civil service and teachers’ schemes. It will of course now be for union executives and memberships to decide their response.

The heads of agreement deliver the Government’s key objectives in full, and do so with no new money since our November offer. In future, scheme pension ages will match the state pension age and schemes will be on a career average basis; all the agreements are within the cost ceiling that I set in November, and will save the taxpayer tens of billions of pounds over the decades to come.

Because heads of agreement have been reached, the better offer that I made in November has been secured by trade unions for their members, including the “no change” guarantee for workers 10 years from retirement. The heads of agreement also deliver a number of the key objectives set out by the trade unions during the talks. Negotiations on them are now concluded, and we and the unions agree that this is the best outcome that can be achieved by negotiation. It is the Government’s final position, and we will bring forward legislation to the House in due course.

The full details of the heads of agreement in each scheme are today being set out in written statements by each Department. The key changes made are as follows. In the civil service, we have agreed to revalue each year’s contributions by the consumer prices index rather than earnings, allowing an accrual rate of 1/44th to be offered. That will cost the same as our original offer, but with a configuration preferred by the trade unions. As a consequence, the new scheme will be very similar to the Nuvos scheme that is already available in the civil service, except that in future the normal pension age will be linked to the state pension age as it rises. It is therefore deeply disappointing that the Public and Commercial Services Union has rejected the heads of agreement and walked away from the talks.

I have previously made the point that the local government scheme must be treated differently because it is a funded scheme. The Local Government Association and the trade unions have agreed that the pension age in the new scheme will be linked to the state pension age, and their preference is to deliver a career average scheme. Further discussions will take place over the next three months to agree the details.

In the health scheme, we have agreed to a revised revaluation factor of CPI plus 1.5%, which will allow the accrual rate to be improved to 1/54th. In education, we have agreed to a revised revaluation factor of CPI plus 1.6%, allowing for the accrual rate to be improved to 1/57th, along with modest improvements to early retirement factors. All those heads of agreement are within the cost ceiling that I set out in November, but in a configuration preferred by the unions.

Discussions on police, armed forces, judiciary and fire service schemes have been a separate process from the start, and proposals will be brought forward in due course.

Let me turn to some other aspects of the deals. All the agreements include a cap on taxpayer costs at two percentage points above or below the scheme valuation. That cap is symmetrical, so employees will benefit if costs fall. As Lord Hutton made clear, with the other aspects of reform now agreed there is no reason to believe that, under normal circumstances, that cap will need to be used. It is there as protection for taxpayers and for workers if extraordinary unpredictable events occur.

In the course of the talks, unions have stressed the importance of ensuring that their members will continue to be able to receive the benefits of their scheme if it is outsourced. That is the purpose of the fair deal policy, the future of which we have been consulting on. Because we have agreed to establish new schemes on a career average basis, I can tell the House that we have agreed to retain the fair deal provision and extend access for transferring staff. The new pensions will be substantially more affordable to alternative providers, and it is right that we offer workers continued access to them.

In addition, the Government will consider what practical options might be available to reform the terms of access to the NHS pension scheme, in particular for NHS staff who move to a non-NHS “any qualified provider” delivering NHS services. [Interruption.] That is something that the trade unions have suggested, so hon. Members should keep quiet and listen. [Interruption.]

[Mr Speaker]

Order. The statement must be heard, and with courtesy.

[Danny Alexander]

Opposition Members never have any answers, so they chunter from the sidelines instead.

At the same time, by offering transferred staff the right to remain members of the public service scheme, we are no longer requiring private, voluntary and social enterprise providers to take on the risks of defined benefit that deter many from bidding for contracts in the first place. Replacing so-called bulk transfers of pensions with continued access to public sector schemes means that we continue to protect public service workers’ pensions, manage the risk to the taxpayer and forge ahead with our ambitious plans for public service reform.

I have made the commitment that these reforms will be sustained for at least 25 years. The Government intend to include provisions on the face of the forthcoming public service pensions Bill to ensure that a high bar is set for future Governments to change the design of the schemes.

What does this deal really mean? For our work force, it means that they will continue to receive the best-quality pensions available in this country—and rightly so. In the private sector, these pensions could be bought only at a cost of one third of salary. This is a proper reward for a lifetime’s commitment to serving the public. The new scheme is fairer to women too. By moving to career average, we will give a better pension in future to those, mainly women, who have low or steady salaries throughout their careers.

The Government have been clear that because we are living longer, public service workers must work a bit longer and pay a little more for their pensions. But in return we have also made an important commitment—that at retirement, those on low and middle incomes will get at least as good a pension as they do now. I can confirm today that we have met that commitment. For people who depend on our public services, it means that most unions will be asking their executives to lift the threat of further strike action while work is done to conclude the final agreement, and I hope that the remaining unions will do the same. For the taxpayer, it means that tens of billions of pounds extra that would have been spent on unreformed pensions over the next 30 years is now available for other pressing demands. These are reforms that significantly improve the long-term fiscal sustainability of this country, and reinforce the credibility of our fiscal stance.

The Office for Budget Responsibility will provide a forecast of the savings in its next fiscal sustainability report. For industrial relations, I believe this shows that it is possible to reach agreement through negotiation in good faith, based on clear objectives. That is the right way to approach relations between government and the trade unions. Sometimes the talks have been difficult, but it has been right to stay at the table. In these difficult times, it is important to show that people can come together to achieve genuine reform, preserving the best of the past, but recognising the realities of the future. This is a fair deal for public service workers, an affordable deal for the taxpayer, and a good deal for the country. I commend this statement to the House.

Public Service Pensions

Debate between Danny Alexander and John Bercow

Wednesday 2nd November 2011 Commons Chamber

[Danny Alexander]

I am grateful to the hon. Lady for her response, although she left a few questions unanswered herself, which I shall come to.

On proper discussions, I reject what she said about the Government’s stance. Talks have been going on constructively for the last eight months. The Minister for the Cabinet Office and I have spent many, many hours in those discussions, and if the hon. Lady talked to the trade unions, she would discover that they, too, see them as constructive. She also referred to the previous Government’s cap and share arrangement. Let me tell her what Lord Hutton said about it in his report:

“Cap and share cannot take account of the increases in cost of pensions over recent decades because people have been living longer. Also, untested, complex cap and share arrangements cannot of themselves, address the underlying issue of structural reforms, nor significantly reduce current costs to taxpayers.”

In other words, the previous Government’s arrangements were simply not good enough at controlling the costs in the way we need to.

The hon. Lady asked me several questions; let me address them directly. As I said in my statement, transitional protections and tapering are outside the cost ceiling, so they will not be met at the expense of other arrangements, which may be negotiated on a scheme-by-scheme basis. On contributions, there was an assumption, audited by the Office for Budget Responsibility, about the impact that 1% of pay bill would have on opt-out rates, which I accept. We are engaged in a separate track of negotiations with the local government pension scheme—which the hon. Lady also mentioned—precisely in recognition of the fact that it is a funded scheme and that therefore different considerations apply.

On affordability—the first of the hon. Lady’s three tests—let me tell her that, yes, the changes are affordable. Her test is met. This test ensures—[Interruption.] Opposition Front Benchers are saying, “Part-time workers?” The contributions increase has been set out. We have ensured, on a scheme-by-scheme basis, that the contributions will be tiered according to income. Those earning less than £15,000 a year on a full-time equivalent basis will have zero—[Interruption.] The right hon. Member for Morley and Outwood (Ed Balls) likes to hector from a sedentary position. Instead of being the shadow chunterer, perhaps he will sit there and listen. We have made it clear that those earning up to £21,000 on a full-time equivalent basis will have a reduction. The full-time equivalent basis for pension reform is the basis—[Interruption.]

[Mr Speaker]

Order. There was quite a lot of chuntering earlier when the shadow Chief Secretary was speaking, and that should not happen. Those on the Opposition Front Bench have had their go, and I am afraid that they cannot pursue the debate again from a sedentary position. Let us hear the Chief Secretary. The House knows that I will allow plenty of time for questions, so we need not get aerated about it.

[Danny Alexander]

The full-time equivalent basis for pension reform is being approached in exactly the same way that the previous Government treated it. The hon. Lady’s tests for affordability, fairness and a workable settlement are all met. She did not say, in the end, whether she supported the deal on the table to date. It is incumbent on the Opposition to understand the deal and support it. It is also incumbent on them to make clear their position on strike action. I hope that she agrees with me that, in light of the new offer and the constructive approach taken to the negotiations, she should not support trade unions going ahead with strike action later this month.

--- Later in debate ---

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

Does the Minister agree that the statement consisted of sacrificing long-term pension rights to pay for a short-term failure to stimulate economic growth? What we are seeing, after 13 years of industrial peace, is the return of mass strike action due to Tory economic failure and a threatening, macho approach to negotiation. [Interruption.]

[Mr Speaker]

Order. It would be more seemly if the hon. Gentleman were not standing with his hand in his pocket, but I must say to the Education Secretary that he really should not keep on expostulating noisily from a sedentary position. If he were to do that in one of the nation’s classrooms, he would be in detention by now.

[Danny Alexander]

The Education Secretary’s noisy expostulations have been thoroughly in support of what the Government are doing; as such, I welcome them. I think that the tone struck by the hon. Member for Swansea West (Geraint Davies) is entirely out of keeping with the tone of the debate so far. For all the reasons I have given, reform of public sector pensions is necessary. It is important that we get it right and that we do so by agreement if we can. That is this Government’s objective.

--- Later in debate ---

[George Freeman (Mid Norfolk) (Con)]

I welcome the statement and congratulate the Front-Bench team on the work they have done to go as far as they can to help the low-paid. Is it not the truth that we are facing a crisis of spiralling costs from an irresponsible boom in the public sector under the last Government—with unfunded pension liabilities, bankrupt public finances and debt interest set to rise to £76 billion? Is it not the truth that it is always the poorest that pick up the bills for Labour and that a responsible—

[Mr Speaker]

Order. The trouble with Members crafting their questions word for word is that they tend to be rather long.

[Danny Alexander]

The hon. Gentleman is right that the poorest in society end up paying the price for the loss of financial control that we saw in this country under the previous Government. He referred to the liabilities in public service pensions. Those liabilities are, on the latest figures, more than £1.1 trillion. That is the entire education budget for more than 20 years.

--- Later in debate ---

[Danny Alexander]

I am grateful for the hon. Gentleman’s comments, and I hope that Mrs Bone shares his views. He is right to say that nobody who is within 10 years of retirement on 1 April next year will see any change either to their retirement age or to the benefits that they receive.

[Mr Speaker]

That answer will doubtless wing its way to Mrs Bone in a matter of minutes.

[Stephen Mosley (City of Chester) (Con)]

I congratulate the Chief Secretary on his statement. May I also ask him to continue to negotiate and engage positively with the trade unions in the weeks and months ahead?

--- Later in debate ---

[Danny Alexander]

The hon. Gentleman is right about that, and he makes an important point. Part of the reason for setting out some of the information about pension pots today is precisely to widen public understanding of the comparison. That is not to do down public sector workers—in fact, what we are setting out today is a properly positive and generous offer to them—but we are making it clear that there is a wide gulf and we need to raise standards in the private sector too.

[Mr Speaker]

I thank the Chief Secretary and colleagues, whose succinctness enabled 47 Back-Bench Members to question the Chief Secretary in 41 minutes of exclusively Back-Bench time. It shows what can be done when we try.

Oral Answers to Questions

Debate between Danny Alexander and John Bercow

Tuesday 1st November 2011 Commons Chamber

[Danny Alexander]

The hon. Gentleman is absolutely right about the enormous potential of this sector, and I congratulate him on his work and the close interest he has taken in this subject. The Exchequer Secretary to the Treasury would be very happy to meet both him and representatives of the Social Finance investment bank.

[Mr Speaker]

I call Kelvin Hopkins.

Amendment of the Law

Debate between Danny Alexander and John Bercow

Tuesday 29th March 2011 Commons Chamber

[Mr Tom Clarke]

On a point of order, Mr Speaker. You will have heard the Minister refer me to page 44 of the Red Book, which I have now read. Is it in order for the Minister to refuse to allow me to respond?

[Mr Speaker]

It is.

[Danny Alexander]

The right hon. Gentleman misheard me; I referred to page 55.

It is the right decision—

--- Later in debate ---

[Hon. Members]

Give way!

[Mr Speaker]

Order. The right hon. Member for Coatbridge, Chryston and Bellshill (Mr Clarke) is well able to look after himself, but it is for the Chief Secretary to decide whether or not to give way. He is not giving way at the moment.

[Danny Alexander]

Our second ambition is for Britain to become the best place in Europe to start, finance and grow a business, and in that area there is pressing need for reform. A number of hon. Members referred to enterprise zones, including the hon. Members for Newcastle upon Tyne North (Catherine McKinnell), for Stockton North (Alex Cunningham) and for Witham (Priti Patel). I say to them that we have learned from the experience of previous enterprise zones, where of course there was some success and some concerns. By working with all the local authorities in the local enterprise partnership areas, we hope to ensure that we learn some of the lessons to which those hon. Members referred.

On the long road to sustainable growth, we cannot ignore the problems that businesses are facing when it comes to accessing finance. Small businesses, in particular, have been the innocent victims—

[Mr Tom Clarke]

On a point of order, Mr Speaker. It is patently obvious that the right hon. Gentleman is having trouble finishing his speech. Would he allow me to answer the point that he asked me to—

[Mr Speaker]

Order. I am grateful to the right hon. Gentleman, but he has been in this House long enough to know that that is not a point of order. I think that it is a point of frustration.

[Danny Alexander]

rose—

--- Later in debate ---

[Mr Speaker]

That is a matter of debate, and it is for Ministers to decide whether and when to explain their position and in what way.

[Danny Alexander]

I have already explained this point in answers to interventions.

It is a measure of the Opposition’s denial about the problems that they created in the British economy that they do not want to talk about the mess they made of it. They think that the responsibility for fuelling the biggest peacetime deficit in our history is a badge of achievement. They think an apology means saying that it is everyone else’s fault. Labour Members had ample opportunity in this debate to show the British public that they had woken up to reality, but they failed on every count.

This Government are clearing up the mess that the last one left behind and putting Britain back on a path to sustainable, balanced growth. It is a hard road but it is the only one available. We will make Britain Europe’s leading destination for enterprise with the most competitive tax system in the G20, the most flexible work force and an economy that is able to compete on the world stage. The Budget will create a more balanced economy. It gives support to hard-pressed families and hope to those looking for work, and it will create jobs across Britain. It is a Budget that stands firm on our plan for the recovery. It is good for business and good for growth. I commend this Budget to the House.

Question put.

Oral Answers to Questions

Debate between Danny Alexander and John Bercow

Tuesday 22nd March 2011 Commons Chamber

[Danny Alexander]

I have seen that letter and, as a fellow highland MP, I am fully aware of the impact that high fuel prices have on families and individuals. We have already taken steps to deliver a 5p duty discount to island communities, and I hope that we will be able to do what we can tomorrow, but that will be a matter for the Chancellor to announce in the Budget statement.

[Mr Speaker]

Eric Joyce is not here. I call Andrew Stephenson.

Oral Answers to Questions

Debate between Danny Alexander and John Bercow

Tuesday 8th February 2011 Commons Chamber

[Danny Alexander]

I am grateful for the question, and I certainly support the work that the MOD is doing. We are actively encouraging Departments and local authorities to scrutinise their PFI contracts for savings. As my hon. Friend knows, the Treasury has published draft guidance to help contract managers identify PFI savings, and a pilot will test the savings measures in the contracts, which will help to scope out possible savings and ensure that other Departments can make the same progress as the MOD.

[Mr Speaker]

Order. I would be grateful if the Chief Secretary could look at the House as he addresses us.

[Mr Andrew Love (Edmonton) (Lab/Co-op)]

What will the right hon. Gentleman do about the scandal of bunching private finance initiative contracts together and selling them on in the private sector, with no benefit to the public sector? Is he going to take action, and if so, when?

Oral Answers to Questions

Debate between Danny Alexander and John Bercow

Tuesday 21st December 2010 Commons Chamber

[Mr Speaker]

Order. I assume that the hon. Gentleman is requesting a visit in which the Minister will talk about the policies of the Government.

[Danny Alexander]

I am certainly not going to let the hon. Gentleman know of my intentions in advance, but it is characteristic of the attitude on his side of the House that Opposition Members do not have a single question to ask that offers a proposal for dealing with the economic problems that they caused. It is economic common sense on the Government side of the House; just nonsense on the Opposition side.

Oral Answers to Questions

Debate between Danny Alexander and John Bercow

Tuesday 12th October 2010 Commons Chamber

[Danny Alexander]

The answer is yes. Departments will be carrying out these assessments on their spending decisions, and I myself held a round-table meeting in the Treasury with a number of different organisations involved in the equalities area to ensure that we were considering all the relevant issues in the run-up to publishing the spending review.

[Mr Speaker]

Order. There is quite a lot of chuntering from sedentary positions, but I want to hear both the questions and the answers.

Oral Answers to Questions

Debate between Danny Alexander and John Bercow

Tuesday 13th July 2010 Commons Chamber

[Ms Angela Eagle (Wallasey) (Lab)]

Is the Chief Secretary aware that, as part of the growth drive, the Treasury has set up a spending challenge website asking for ideas and assistance for the future, and that it is currently featuring issues such as sterilising the poor; reopening the workhouses; asking single parents who cannot finance their children to terminate the pregnancy; benefit claimants to work in sweatshops; and immigrants to be moved out of cities? Is he happy that such racist and offensive drivel is being hosted by one of his websites, and will he give the House an undertaking that the site will be moderated and that this stuff will be removed immediately?

[Mr Speaker]

Order. I know that the right hon. Gentleman, in answering the question, will focus his remarks on the June 2010 Budget.

[Danny Alexander]

I am grateful for that, Mr Speaker.

Of course, I would not wish to promote such ideas, but I am surprised that the hon. Lady pours scorn on the consultation process we are undertaking. She will know that we have also set up such a process for public sector workers. We have had more than 66,000 ideas from people who work in the public sector and who are suggesting savings that they believe can be made in their own services. That is a valuable part of the spending review process. However, we have not had a single idea from the Labour party on how we can make the savings, let alone the apology warranted for the terrible mess it left the economy in.

--- Later in debate ---

[Mr Speaker]

Order. I must limit the hon. Gentleman to two questions—one answer will suffice.

[Danny Alexander]

The Office for Budget Responsibility is wholly independent. Decisions of the sort that the hon. Gentleman has described are a matter for the OBR to take on its own initiative—that is what having an independent body means.

--- Later in debate ---

[Danny Alexander]

It is striking that the one party that had a plan to increase VAT before the election—to 18% or even 19%, according to the account in one book serialised today—did not say so at the election. I am not sure that it would be appropriate for us to publish documents that were worked up for the previous Chancellor—I am not sure that that would be in line with the conventions—but the hon. Gentleman has made his point very effectively.

[Mr Speaker]

Last but never least, I call Mr Dennis Skinner.

[Mr Dennis Skinner (Bolsover) (Lab)]

Has the Treasury done a calculation of the number of construction jobs that will be lost as a result of not building 700 schools? Does that not prove that public sector cuts equal private sector misery? Get that into your head.

Capital Gains Tax (Rates)

Debate between Danny Alexander and John Bercow

Monday 28th June 2010 Commons Chamber

[Danny Alexander]

I will not; I must press on.

The previous Government abolished the 10p rate of income tax. [Interruption.]

[Mr Speaker]

It is for the Chief Secretary to decide. He is not giving way at the moment.

[Danny Alexander]

That is not fairness. We have taken nearly 1 million people out of income tax altogether. That is fairness. The previous Government left an open door for the highest earners to exploit the gap between the rate of capital gains tax and the top rates of income tax, costing the taxpayer £1 billion a year. That is not fairness either. We have raised capital gains tax for higher rate taxpayers, and only higher rate taxpayers, by 10%. That is fairness.

Oral Answers to Questions

Debate between Danny Alexander and John Bercow

Tuesday 8th June 2010 Commons Chamber

[Danny Alexander]

My hon. Friend is right about waste and inefficiency, and consultancy is not the only example. I can give him two or three more. The Department for Business, Innovation and Skills spent £12,000 on branded golf balls over three years. The Ministry of Defence spent £232,000 on eight paintings in a single year. The Department for Communities and Local Government has spent £6,000 on deluxe espresso coffee machines for nine new, but empty, regional fire control rooms. He can rest assured that the actions that we take will ensure that that kind of waste and inefficiency will never happen again.

[Mr Speaker]

Order. I know that the Chief Secretary will want to stick to the narrow subject of external consultants.

[Mr Tom Watson (West Bromwich East) (Lab)]

Is Andy Coulson a consultant? How much are you paying him?