Oral Answers to Questions

David Gauke Excerpts

Tuesday 25th June 2013 Commons Chamber

[John Howell (Henley) (Con)]

4. What assessment he has made of the effect on living costs of changes to the personal allowance.

[The Exchequer Secretary to the Treasury (Mr David Gauke)]

It was announced in Budget 2013 that the Government would increase the annual personal allowance by a further £560 to £10,000 in April 2014, thus meeting a key coalition commitment a year ahead of schedule. By that date, as a result of the combined effects of all personal allowance increases under this Government, a typical basic-rate taxpayer will have gained by more than £700 a year in cash terms.

[John Howell]

Does my hon. Friend agree that the best way of tackling this issue is to put cash into people’s pockets, and that taking 2.7 million people out of tax altogether is an excellent way in which to proceed?

[Mr Gauke]

I do agree. What we have done is quite a contrast with what was done by the last Government, who increased the amount of income tax that some low earners would have to pay by £232. Now the equivalents of those people have been taken out of income tax altogether.

[Kevin Brennan (Cardiff West) (Lab)]

If everything is better for the average family, why did the Institute for Fiscal Studies say that the average family was £891 worse off? Was the IFS wrong?

[Mr Gauke]

We do not accept those figures. What I will say is that we have been prepared to tackle the biggest deficit in our peacetime history. We have taken measures to put the public finances back on a sustainable footing, with no help from the Labour party, which has opposed every measure that we have taken to do that.

[Robert Halfon (Harlow) (Con)]

Is my hon. Friend aware that the Government have taken 3,000 low-income people out of tax altogether in my constituency, and have cut taxes for 40,000 low-income residents? Is this not a Government who are on the side of the poor?

[Mr Gauke]

My hon. Friend is absolutely right. He could have added—and I am surprised that he did not do so—that we have taken action on fuel duty as well.

[Alison McGovern (Wirral South) (Lab)]

Money in people’s pockets is one thing, but since the financial crash, food prices have increased by 18% compared with inflation of 13%. It is not just a question of the money in people’s pockets; it is also a question of what they have to pay when they go to the shops. Does the Minister really believe that families in my constituency feel that they are better off?

[Mr Gauke]

It is because of the need to deal with the cost of living that we have taken measures such as controlling increases in council tax. That is why fuel duty is lower than it was in the plans that we inherited, and why we have taken the measures that we have taken in regard to the personal allowance. [Interruption.] The shadow Chancellor is muttering about VAT. Let us be clear about this. Labour Members did not vote against VAT; then they said they were against VAT. Last week they said that they would not change VAT; now the shadow Chancellor is complaining about VAT. It is just chaos and confusion from the Labour party.

[Mark Menzies (Fylde) (Con)]

5. What recent steps he has taken to increase the level of infrastructure investment.

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[Simon Wright (Norwich South) (LD)]

14. How many jobs have been created in the private sector since 2010.

[The Exchequer Secretary to the Treasury (Mr David Gauke)]

Private sector employment has been growing robustly, with 1.3 million jobs created in the sector since the start of 2010. At Budget 2013, we announced the £2,000 employment allowance, which will support businesses aspiring to grow by hiring their first employee or expanding their work force. Businesses will be able to employ four adults or 10 18 to 20-year-olds full time on the national minimum wage without paying any employer national insurance contributions at all.

[Laura Sandys]

Does my hon. Friend agree that the combination of an enterprise zone and a regional growth fund that has been supporting jobs in my area following the Pfizer closure, and which the Chancellor very kindly opened, has delivered 750 new jobs in one year? We hope to be announcing a further 200 jobs in the next couple of weeks. Does that sound like a private sector success?

[Mr Gauke]

It certainly does, and I pay tribute to my hon. Friend for the work that she has done for her constituency. Discovery Park is proving to be a success, with help from the regional growth fund and as an enterprise zone—and long may that success continue.

[Simon Wright]

The 2010 autumn statement confirmed the dualling of the A11, raising investor confidence in Norwich as a destination for growth. May I urge Treasury Ministers to be similarly bold in their spending review in relation to the A47, where investment has the potential to create up to 10,000 more jobs for the region?

[Mr Gauke]

I am grateful for that question, and I am sure that my hon. Friend will be listening attentively to any announcements made later on in the week. His constituency is another example of where private sector growth has been very strong, reflecting the national pattern.

[Mr Jim Cunningham (Coventry South) (Lab)]

How many jobs will high-speed rail create?

[Mr Gauke]

Over time, tens of thousands.

[Mr Gregory Campbell (East Londonderry) (DUP)]

Following the success of last week’s G8 summit, Northern Ireland is now looking forward to the international investment conference in October. Will the Treasury work closely with the Prime Minister and the Northern Ireland Executive to ensure that we maximise private sector investment in Northern Ireland, both in 2013 and 2014?

[Mr Gauke]

Yes, absolutely. There needs to be a much stronger private sector in Northern Ireland, as has been accepted by this Government and by all the parties in Northern Ireland.

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

9. What his Department’s estimate is of the likely level of public sector net debt as a share of GDP in 2015-16.

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[The Exchequer Secretary to the Treasury (Mr David Gauke)]

In January 2013 a new income tax charge was introduced to reduce or remove the financial benefit of receiving child benefit for those on high incomes. For taxpayers with incomes between £50,000 and £60,000, the amount of the charge is a proportion of the child benefit received. For taxpayers with income above £60,000, the amount of the charge is equal to the amount of child benefit received. Eighty-five per cent. of families with children continue to benefit in full from child benefit. Entitlement to child benefit payments remains universal and will continue to be paid to all those who claim it.

[Richard Graham]

I am delighted to hear about the savings that will be achieved, especially given that those of us who supported them were told by the Labour party that they would destroy the universal principle, and that they were complicated, unfair and unworkable. It now appears that they are workable, and the Opposition have accepted that they will not change the policy. Will my hon. Friend share with us what vital provision of services those savings can achieve, and will he also consider means-testing the winter fuel allowance?

[Mr Gauke]

There is a substantial saving to the Exchequer through child benefit. It was not that long ago when the Leader of the Opposition said that millionaires should receive child benefit because

“it’s a cornerstone of our system to have universal benefits”.

It appears that that is no longer the case, although all we have is briefing. On winter fuel payments, the Prime Minister made it clear that they would continue in the course of this Parliament and we will fulfil that commitment.

[Simon Danczuk (Rochdale) (Lab)]

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

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[The Exchequer Secretary to the Treasury (Mr David Gauke)]

We remain committed to introducing video games tax relief as soon as possible and we are working with the industry to provide the Commission with the evidence that it needs to conclude its investigation quickly. These things can take a little time, but we have a history of succeeding in implementing new and innovative forms of state aid.

[Mr Iain McKenzie (Inverclyde) (Lab)]

T3. Since the Chancellor’s last spending review the US economy has grown four times faster than the UK’s. Is this not further evidence of the Chancellor’s failed policies?