Small Businesses: Tax Reporting

David Morris Excerpts

Monday 25th January 2016 Westminster Hall

[George Kerevan]

I am happy to reinforce the hon. Gentleman’s point. Indeed, various Treasury papers suggest that the shift towards a paperless tax system will increase receipts by about £600 million. That is not a bad thing, and no one would oppose it if it happened, but the issue is that the Minister and HMRC are rushing to judgment in introducing the proposed system. They think that moves to put it in place will be so advanced by 2020 that they will be able to start instructing small businesses to update quarterly.

Buried in the small print of last November’s Treasury press notice is a suggestion as to one of the advantages that will come from the proposal:

“HMRC expects the number of calls”

to its various call centres

“to reduce from 38 million in 2015-16”

to a mere 15 million by 2020. Magically, as a result of the electronic vision being presented to us, about 23 million phone calls will no longer be made to HMRC. Does anyone here, the Minister included, actually believe those numbers?

In the run-up to introducing a new system, the likelihood is that things will go wrong. If we are lucky, we might make something like the proposed saving in calls 10 years from now, but I doubt that that will happen between now and 2020. I have great respect for the Minister, but I would like to hear him swear on his heart that he actually thinks we will deliver 23 million fewer calls.

[David Morris (Morecambe and Lunesdale) (Con)]

From what I can gather, the whole point of having a trial period from 2018 is to iron out that anomaly in the system. Would the hon. Gentleman not agree that it is welcome that we are using small and medium-sized enterprises and self-employed people as a test bed, rather than putting through some sort of virtual reality programme?

[George Kerevan]

I could not agree more. At the risk of repeating myself, I stress that the Scottish National party—I think this goes for all parties—agrees that this is the road to take and that we need to consult, but there is a question over the speed at which this is being done. I understand why the Treasury and HMRC have to sell things and to make promises about what they can deliver but, as the hon. Member for Hertsmere said, experience proves that the introduction of major IT systems rarely works out, particularly when they are on this scale. We are talking about getting 50 million taxpayers and small businesses on this system between now and 2020, but that will not happen.

The Government need to slow down and consult more. The Minister has to stop putting in place arbitrary timetables for when the consultation will work itself out. In particular, he has to stop telling us that he can implement the system in 2020 and impose quarterly returns, which is the thing that is worrying small businesses. Instead, he should concentrate on bringing the consultation to a point where everyone is on board, and then the system will come into play.

I want to reinforce an important point that other Members have made in interventions: we do not have full digital coverage in this country. When Culture, Media and Sport Ministers get up in the main Chamber and talk about getting to nearly 100% coverage, what is the target date? It is 2020, but that may slip. If the new system needs 100% broadband coverage, it makes much more sense to wait until that coverage is in place before switching over the entire British tax system, including the system on which small businesses depend, to a new one. That is another argument for delaying full implementation until 2025 or 2030.

I worry that there is a hidden agenda. Clearly, the Government are attempting to make cost savings. The very Treasury press statement that introduced the idea of moving quickly to a new electronic tax system by 2020 told us that HMRC seeks to make

“£717 million of sustainable resource savings”

by 2020. The system is being put in place at the same time that HMRC is being expected to make major cuts. Again, that does not all stack up.

My real point to the Minister is that no one opposes the introduction of this system, but clearly there has been a catastrophic failure in how the Government have presented it to small businesses. We hear constantly from Ministers that they are pro-small business, so now is the time for them to honour those words. If they simply consult more, delay the introduction of the new system until they are sure that they have everyone on board and set aside the requirement for quarterly reporting until they are sure that the system is actually working, they will achieve success.

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[David Morris (Morecambe and Lunesdale) (Con)]

May I declare an interest and refer hon. Members to my declaration in the Register of Members’ Financial Interests? I am the Government’s self-employment ambassador and as such it is my task to engage with people in the self-employment sector to find out exactly what concerns them and exactly what they would like from the Government on all matters of self-employment.

I was a small businessman for the better part of 30 years before entering Parliament. I know that I do not look old enough but, believe you me, I spent every year building my business up, just as the hon. Member for Hove (Peter Kyle) outlined. It was a steep learning curve of trepidation and fear most of the time, but when one gets a hand on the roller coaster, one begins to make a success of it.

It has just been made clear that this is not going to be a new form of taxation every quarter, but the self-employed sector is frightened that it could become the new VAT. The sector could be given a bill over a period of, perhaps, 10 years from the date when the new policy comes in and becomes law, and HMRC could mutate that to become a collective every quarter. Rightly, the self-employment sector is very worried that that might happen with this policy. From my research and what I have just been given from the Treasury, I am sure that will not happen, and I am sure the Minister can assure me of that at the end of the debate.

The sector is concerned that the proposal could be a predictor of turnover. As I outlined, when I was self-employed, I worked year on year, until I started to be comfortable. Some years were good and some were extraordinarily bad. As the hon. Member for Hove eloquently said, this is not a matter of one size fits all. Self-employment differs across the sphere. Some business may be seasonal, a classic example being a man who grows Christmas trees. He should have a good December, but during the rest of the year he will have to have other self-employment.

We do not want online registration to become a yardstick with which to beat the self-employed. I know from my experience of being self-employed that turnover can fluctuate. We have just been through a deep depression and we have seen its effects on small businesses as well as large businesses. We do not want HMRC to start saying that business X did better in quarter one four years ago than it is doing now. Self-employment does not work that way. Businesses evolve and sometimes they become smaller and sometimes they enlarge. One size does not fit all.

Not all self-employed people are computer-savvy. Some 20% are not online, especially in rural areas. That may include the farming community and its business models, up to 40% of whom are not computer literate and cannot get their heads around online formulations. The hon. Member for Hove, who spoke eloquently and forcefully, said we do not want it to become more complicated for the self-employed to get in touch with HMRC to sort out their problems.

It is welcome that, to introduce the policy by 2020, a voluntary scheme will be looked at. That would be pivotal in the success of the policy. What should also be looked at is wider consultation across the whole self-employment sector. The Federation of Small Businesses should be consulted at length, as should British Chambers of Commerce, the Association of Independent Professionals and the Self-Employed and a whole host of other self-employment bodies with a firm stakehold in the self-employment sector and society.

Some business anomalies come and go and HMRC should recognise that and help. I referred to the chap who grows Christmas trees once a year. I was in the retail and service industry, which fluctuates between holiday periods and between periods when there is more spending on the high street and recessions. That should not be used as a sort of dashboard for small businesses in particular towns or regions or even across the country because they vary from someone running an IT business on the internet and selling small goods all the way to a big business on the verge of going multinational. Such businesses cannot be predicted.

HMRC has estimated

“that £6.5 billion in tax goes unpaid every year because of mistakes made when filing tax returns.”

We do not want that to become £12 billion, which may be a stretch of the imagination, but when any new system comes in, there are new challenges. We must make sure we get this right from the start. We do not want the self-employment sector to feel that Big Brother is on to them with a turnover predictor that becomes the new form of VAT. I do not think that will happen, but it must be said. Will the policy eventually lead to quarterly payments? From what I have seen from the Treasury, I do not think it will and I am sure the Minister will reassure us on that.

What must also be taken into account is that cash flow can be very unpredictable and many businesses are paid on a 90-day cycle, which is one quarter. That could skew and distort the figure that comes across a business’s dashboard with HMRC if it goes online.

To sum up, I hope this will not become the new VAT. I was a self-employed businessman for the better part of 30 years and I have seen all sorts of changes over that period from successive Governments of all political parties that had an effect on the way my business and others in my area ran. HMRC should set up special classes. The change should not be something that is just learned online. There should be a dedicated centre where self-employed people can be told what to do, so that they are not pressured into becoming semi-accountants, instead of earning money and being an entrepreneur and creative.

One part of the “Making tax digital” myth-buster that concerns me is where it says that people

“who genuinely can’t use digital tools…will be offered alternatives, like nominating someone else to update their information for them, or giving information by phone.”

In plain English, that reads to me like using an accountant. That should be taken into due consideration with these classes to ensure that people do not spend more and more of their time and money on employing more accountants to deal with quarterly returns.

It must also be asked what the penalties are if a quarterly return is not filed on time. Again, that concerns the self-employed sector. Those people want to know what the new system will look like, what it will involve and how, in reality, it will affect their business. We must get this right. We cannot let the estimated £6.5 billion of losses get any larger. It is good that the Government are grasping this nettle. It is a fact, whether we like it or not—everyone in this Chamber knows—that this kind of taxation filing will be done online eventually, because that is the way things are going. It is inevitable; that is the way of life. We all, from whichever side of the political divide, accept that. However, we must ensure that we do not place extra burdens on businesses and that they remain productive and creative, as we have one of the largest sectors for self-employment not in Europe, but in the world.

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

I commend all the speeches that we have heard so far, from across the party political divide, but particularly that from my hon. Friend the Member for Hove (Peter Kyle), who touched on the spirit of entrepreneurialism that many hon. Members speaking in the debate care about and has motivated them to take part. I think that it was the hon. Member for East Lothian (George Kerevan) who correctly said or implied that no one should turn their face against employing new technology to simplify or streamline what might otherwise be bureaucratic, wasteful paper-based systems. I do not think that that is really at the heart of the debate. I am less concerned about the shift from paper to digital than I am about the potentially even more seismic change from annual to quarterly reporting, updates, summaries, returns—call them what you will, there is definitely something that a small business will have to produce. In fact, I was wondering what the difference is between a return, a summary and an update. Perhaps the Minister was updated at the last general election rather than returned. I do not know, but it is on that specific point that we will want some answers.

My apologies, by the way, Mr Davies, if I am not able to remain in the Chamber until the end of the debate. I should also say that possibly we should all declare an interest—I point to my entry in the Register of Members’ Financial Interests—as individuals, because this proposal will not just affect businesses. In the Treasury’s update in the autumn statement and spending review, it was clear that the proposal will take in very many businesses and self-employed people, down to levels well below the VAT thresholds and others. I do not think, even though there are 110,000 signatures on this e-petition, that most people have quite realised the ramifications that the proposal could have for them as individuals submitting an individual tax return, as well as for those businesses that are affected.

This is not just about the move to doing things online; it is very much about the process of lodging the tax return or even update, because that is the thing that many people find particularly laborious. This is not about how things are written down; the issue is the process that takes up so much time and soaks up so much effort when a company is taking stock of the income that has been generated gross, of the expenditure that has gone out and of any gains or losses that have been incurred. When the Government say that in four years’ time there will be “at least quarterly” requirements to file “summaries” with HMRC, the Minister should not be too surprised if people hear that and feel that there will be at least a quadrupling of the administrative effort and exertions and the sweat and tears that sometimes go into that process.

My hon. Friend the Member for Hove has articulated sufficiently the broad points about why we should support SMEs; I have just a few specific questions about the Government’s proposals so far. Will the option of an annual tax return be abolished? Will companies still be able to make the return annually? Will this quarterly—or perhaps more frequently—arrangement be supplementing that? What exactly is proposed? The Minister says “at least quarterly”. Will he elaborate on how often he means by that?

Many small businesses and individuals will liaise with their accountants annually. They will collect together all the receipts or invoices and hand them over en bloc to their accountant, who will of course help with the recording of income, business expenses and so on. The accountant will examine those, perhaps audit them and agree a verified and checked final figure; and that is the point at which information is dispatched to HMRC. I want to drill down into whether the Minister is now saying that businesses and individuals will in effect be asked to submit raw, unaudited, almost “real-time” income and expenditure data directly to HMRC—disintermediated, if I can use that term, by taking the accountant out of the picture?

Will the Minister say a little more about where the accountancy and audit stage will fit into this process? That is a crucial thing for many businesses. They want to ensure that they are submitting information about their business activities in full, so that it is accurate. They will be anxious about what will happen if they make mistakes in those data, because they are going in on a real-time or near-real-time basis. They will be anxious about how that could ever be disentangled should administrative mistakes be made. Will not businesses now feel that they ought to incur even more accountancy costs, perhaps four times a year instead of annually, just to be on the safe side? The Minister can say, “There’s no need to do this. Just let us have access to your books and we’ll press send on Sage,” or whatever software the Minister envisages. However, I think that many businesses will want to take a precautionary approach. I can understand why they would do that, so will the Minister elaborate on that point?

What happens to the actual payment of tax owed? When will that be forthcoming? I think that the hon. Member for South Ribble (Seema Kennedy) touched on this point. Will an annual sum still be required, or are we in effect moving to some sort of pay-as-you-earn for small businesses? I have often found it a bit of an anomaly that many people who are employed have the tax deducted—dripping out as monthly payments—at source, but others have the option of making their tax payment sometimes 18 months further down the line. There is no particular incentive in that respect. There was, when interest rates were higher, the opportunity for people to forestall the payment of their tax and perhaps gain the benefit of holding on to that cash before parting with it and giving it to the Treasury. In this case, if we are moving to a sort of PAYE for small firms, it would be better if the Minister was honest and straightforward about it, because that would be a big change in the way business accounting works.

The hon. Member for Morecambe and Lunesdale (David Morris) made the point about seasonal businesses. He mentioned Christmas tree growers. There are many seasonal companies, which will do well in the summer months and perhaps less well in the winter or vice versa. Examples include window cleaners, sports coaches and people involved in holiday lettings. Of course, quarterly reporting arrangements will therefore be quite volatile over an annual period. Taking snapshots at a particular point in time will not necessarily give the final, smoothed, annual, true report of what the business may or may not owe in tax terms. There is a real question about peaks and troughs across the year and how that can be taken into account in a quarterly reporting arrangement.

[David Morris]

One thing that concerns me from what the hon. Gentleman is saying is that, if quarters are compared to relative years and HMRC thinks that something is amiss, it could enforce an investigation. Would the powers of investigation for HMRC be doubled overnight because it would have more of a dashboard—for want of a better word—on the computer to look between years and sectors and also types of businesses?

[Chris Leslie]

Many hon. Members will have filled in all sorts of electronic forms when purchasing goods and services. I can envisage an HMRC drop-down menu saying, “Pick the type of business that you are.” My concern is that not all businesses fit neatly into the categorisations provided by the computer. Whether the computer says yes or the computer says no, that does not always tally with the realities of those businesses’ needs. There is some virtue in the annual tax return arrangement, because it provides a smoother, more strategic overview of the tax liabilities of a business that is complex, even if it is small or micro.

There are bigger concerns about the design of the Minister’s proposal. For me, it is a bit of a distraction to get bogged down in the question of online versus paper. The core question is what is involved in moving to the quarterly summary and update arrangement. There are administrative issues, too, which people will worry about. HMRC has not exactly covered itself in glory in recent years in terms of customer responsiveness. I think 18 million phone calls went unanswered last year, and only 50% were picked up in the first half of 2015. Given that track record, I do not think the Minister should be surprised if people are a little bit wary about another big transformation coming, when they may want some help and support.

The Public Accounts Committee looked into HMRC customer responsiveness, and it was not exactly satisfied with some of the answers that it got. We need full assurance about HMRC’s competence on that matter. Principally, we need assurance about whether the Government are carefully thinking through this significant change, which could affect not only businesses and the self-employed, but many other individuals—perhaps tens of millions. The debate has been a worthwhile opportunity to pause and urge the Minister to think more carefully about the proposal.

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[Sammy Wilson]

That is exactly the kind of question that any reasonable business would want answered when deciding whether the change is good or bad. It is easy to hide everything behind a term such as “quarterly, digitally-gathered business records” but the detail, as the hon. Lady says, is significant for businesses.

If the information is to be looked at in detail, that will affect how businesses go about collecting and verifying it. Most businesses do not want to make mistakes. They are not all treated—unfortunately, Minister—like the Googles of this world. Many businesses fear HMRC—they fear the taxman. They are afraid of making a mistake and of that being interpreted as them somehow trying to pull the wool over people’s eyes. Inevitably, instead of one visit to the accountant or auditor, there will be three or four visits. I do not think that this is just speculation, because one only has to look at what happened when VAT filing started. That was sold on the same kind of basis, because we were told, “You just fill in all the stuff,” but that was not what happened. People started going to accountants to get them to verify that they were sending in the proper information.

Will more queries be raised with businesses and will more time be tied up dealing with those queries? As businesses see the quarterly returns as something of great significance that have an impact on the tax they pay and how that might be scrutinised, will they face more compliance costs due to their asking professionals to do their returns? Alternatively, as some Members have described it, is it simply that they will have all the information on one spreadsheet, and that they can click a button to send it to HMRC, with that being the end of it? I doubt very much that that is how businesses will regard this, and HMRC has already accepted that there will be set-up and hardware costs.

[David Morris]

Does the hon. Gentleman agree that the best way to sort out such hardware and software costs will probably be to look at examples elsewhere? The Estonian Government, for instance, do not use paper at all; everything is done online. We have imported the car tax system from Estonia, and perhaps it would be good to look at how other countries manage similar taxation programmes.

[Mr David Hanson in the Chair]

[Sammy Wilson]

If we have long enough consultation and lead-in periods, there will be opportunities to find out where similar changes have been made and what lessons can be learned from them. I hope that that elementary step is taken so that we iron out some of those things. If the software is free, it does not mean that there will be no disruption to businesses because they will have to adapt to a universal form of data collection, which might be different from what they use at present. Of course, that requires training and changes to how things are done.

Many people in my constituency who have set up small businesses or become self-employed did so because they are good plumbers, carpenters, builders, mechanics or whatever, but they are not into the administrative stuff. Even if there is help and this standard software is provided free of charge, they will pay somebody to carry out the process, and if they have to pay that person four times a year, it will add to their costs.

As several hon. Members have said, while we talk about all this information being supplied online, that is not an option for many businesses throughout the United Kingdom. A report that was published on Friday by a group of hon. Members stated that it was accepted that the internet programme has not been rolled out as well as the Government had hoped. The report made substantial recommendations and asked whether we could implement them without breaking up BT’s monopoly.

One thing we know is that HMRC has accepted that 19% of businesses have no digital contact, and that 42% need assistance, so a substantial number of businesses will not find the transition easy. Connections in this part of the United Kingdom are much better than those in Scotland, Northern Ireland or other areas of England and Wales where the population is perhaps more dispersed, so the burden of not being able to comply with digital returns will be felt much more heavily in some constituencies than others, and that needs to be taken into consideration. I do not want to make a point that others have made, but if the system needs to involve other ways for people to contact HMRC, we already know that there will be difficulties. I do not want to go through all the statistics about phone calls not being answered—

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[Sammy Wilson]

I have three points to make in conclusion. First, although more than 100,000 people have signed the petition, I believe, despite what the Government have said, that that is probably an indication that many businesses are not even aware of the changes. If the policy announcement has not percolated down to those who will be affected, how can we be sure that they will be fully aware of the substantive changes to come until they are hit by them? There is a lesson to be learned about just how effective the announcement and the consultation have been. Secondly, although the Government argue that they want to reduce the regulatory burden on businesses, I cannot for the life of me, for the reasons I have given, understand how the approach will reduce that regulatory burden.

My third point is about political perception, but it is important, and I would have thought that the Minister’s party would have been particularly concerned about this. There is increasing cynicism that somehow big business gets away with things that small business does not. The measure will apply to small businesses but not to large ones, yet all the time the headline news is about how the latter—whether it is the Googles or the Starbucks —seem to walk away from their tax responsibilities. People will find it difficult to understand why there should be a greater onus on small businesses to declare their earnings and business details when some of the larger ones can get away without paying tax for 10 years and then get a slap on the wrist. As we discussed earlier in the main Chamber, they seem to get away with paying very little.

[David Morris]

I would like the hon. Gentleman to try to look at the matter this way: self-employment is the largest growing sector in the country, and that has to be taken into account when considering how taxation should be simplified. As my hon. Friend the Member for High Peak (Andrew Bingham) said, the sector is the powerhouse—the engine room—of our economy. I hope that the hon. Gentleman agrees that two different styles and sorts of businesses are being discussed in parallel. Our earlier proceedings in the Chamber were about the Googles of this world, and this debate is about the self-employed and small and up-to-medium-sized enterprises.

Tax Credits

David Morris Excerpts

Thursday 29th October 2015 Commons Chamber

[Frank Field]

I could not agree more, in that we have not had a Chancellor who has decided that it is misplaced for taxpayers to play the role in the welfare system that wages should play in our economy. That leads welfare reform into new areas about how to raise productivity, particularly among those who are lowest paid. We should not simply accept and welcome the Chancellor’s proposals for a national living wage but think about how we take it on from there. My hon. Friend is absolutely right.

My first suggestion to those on the Treasury Bench stems from the fact of the Government’s introducing a national living wage. When the people who designed tax credits got to work, nobody thought that any Government would bring forward that proposal. They therefore incorporated two aspects into the tax credits system. The first was about how to subsidise, and make up to a more decent level, poverty wages. The second was that given the life cycle and where life’s journey takes us, there are periods when people have children and their budget is stretched, and the tax credits system should play a role in that. I ask those on the Treasury Bench, when they are thinking about what they do in only a few weeks’ time in the autumn statement, to consider whether we should now grow up and accept that we are going to have a national living wage, and that the tax credits system should not only subsidise low wages but take some of the responsibility for the costs of children. I think there would be a great deal more support in the country if tax credits were about supporting children rather than the need to subsidise poverty wages.

[David Morris (Morecambe and Lunesdale) (Con)]

Will my right hon. Friend, as I would call him outside this Chamber, make it clear that this is about tax credits and not child tax credits, as they are two different benefits?

[Frank Field]

There are two benefits—child tax credit and child benefit. The Prime Minister seems to misunderstand the difference between the two, because he said during the election that child tax credits would not be touched, but given that under this formula we are changing the clawback—or, as my hon. Friend the Member for Nottingham North (Mr Allen) would say, the amount of money people lose—by changing the threshold at which people begin to take back tax credits, and the rate at which tax credit income changes, we are affecting the value of child tax credit. There are questions about the sense of having two benefits serving the same purpose.

My second proposal is one that I guess many Tory MPs have made privately to the Government. I cannot imagine that Government Whips are different from Opposition Whips. If we had been in government making this proposal, our Whips would have been very busy last weekend phoning hon. Members to ask what they would tolerate as a minimum for reform. I would have thought that one very clear message coming back would be that bringing in these reforms next April is not acceptable

The third and more radical proposal, which again unites Back Benchers on both sides of the House, is that the changes to tax credits should apply only to new claimants. One of the problems of our popularity in shovelling around taxpayers’ money without realising that the music might stop some day and people might think the bill was not actually affordable is that in the meantime our constituents have responded to the very clear messages—in the form of incentives in the tax credits system—about what we wish them to do. In talking both publicly and privately with Conservative Members and certainly with Labour Members, I have noticed a sense that it is one thing to say there is a new contract for people who are not claiming tax credits now, but it is a totally different ball game to say to the others, “You’ve responded and you’ve done all we expected you to do, but, by Jove, we are going to clobber you now for doing so.”

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[Stephen McPartland]

I completely agree with the hon. Lady. I mention teaching assistants because I think they are a classic example of people who are constricted in the hours they are able to work. They can work only so many hours a week and so many days a year.

The existing mitigation includes free childcare for three and four-year-olds, but if people do not have a three or four-year-old that is pointless and no help whatsoever. There has been talk about the personal income tax allowance increasing from £11,000 to £12,500. I would like to see it go up to £15,000 by the end of the Parliament, but if people do not earn more than £11,000, it is of no use to them. People on £11,000 will still be hit by the £1,200 or £1,400 cut. That punishes people who are going out to work and doing the right thing. That does not sit right with me and I cannot support it.

[David Morris]

Does my hon. Friend think that a tapering system would be better suited to this policy?

[Stephen McPartland]

That is a possible solution and I am sure that the Treasury is looking into it. I would like to work with the Treasury on how the mitigation could work, and I hope that it will listen.

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[David Morris (Morecambe and Lunesdale) (Con)]

I very rarely stand up in the House of Commons and congratulate an Opposition Member on initiating a debate of such magnitude, but I thank my friend the right hon. Member for Birkenhead (Frank Field). Many in this Chamber see him as a leading light on the welfare of the people of this country. I remember very plainly from before I was in politics the right hon. Gentleman being sacked for thinking the unthinkable, and here we are debating tax credits.

The tone of the debate is very measured. We are hearing balanced views from all sides. Tax credits were brought in for the right reasons, but they spiralled out of control. When nine out of 10 people can claim a tax credit, we have to ask ourselves whether it is a sweetener for working or a benefit, as it was originally set up to be.

[Mark Durkan (Foyle) (SDLP)]

rose—

[David Morris]

I give way to the hon. Gentleman, who is another hon. Friend.

[Mark Durkan]

I thank the hon. Gentleman for giving way. In acknowledging the contribution of the right hon. Member for Birkenhead (Frank Field) in securing this debate, will he also acknowledge the role of the other place in creating an entirely different context for this debate, because we would not have been hearing the tone he has remarked upon had it not been for Monday night and the position forced on the Chancellor?

[David Morris]

I disagree with my hon. Friend on the debate in the other place, because I think it was unprecedented that that motion was passed. However, I have my own words to say about that in another context, which he will probably read about over the weekend.

We were in a position where almost everyone was on a tax credit. They were a stepping-stone to gainful employment. The right hon. Member for Don Valley (Caroline Flint) said it right: employers do not know if their employees are on tax credits. I know that; I employed over 100 people and some were claiming tax credits, but I found that out only down the line in certain circumstances. So it is mainly a hidden benefit.

I applaud what the Chancellor is trying to do. I do not think this idea of a £1,300 average loss to 3 million households stacks up, because it is based on estimates. We do not know what is going to be in the spending review. However, we do know what has already happened by raising the personal tax allowance to £11,000 in April, with the aspiration for it to be £12,500 in 2020. That will help out and create a tax break worth about £1,000 to people all across the country. We are also offering 30 hours of free childcare, which amounts to £5,000. Fuel duty has been frozen, too, and the economy is on the up.

[Caroline Flint]

I hear what the hon. Gentleman says about 30 hours of free childcare, but I think most people listening in the Gallery or outside will think that is for all children in any form of childcare. We need to have an honest debate. That is 30 hours of free childcare only for those three and four-year-olds in nursery education. That does not begin to help those families that have different-age children, and the cuts to working tax credits fundamentally affect families who get access to support with their other childcare costs to enable them to take up a job and stay in work.

[David Morris]

I thank the right hon. Lady for her eloquent intervention. She demonstrates that there is confusion in the whole sphere of tax credits and child tax credits. When tax credits were brought in, they helped families who were struggling in a time of great austerity. It has to be acknowledged that we are still in a time of great austerity, but the economy is now on the up and we are seeing projections that we are starting to come out of recession mode and that we will move into a lack of deficit within the next five to 10 years.

What do all these figures mean? Put simply, they mean that we have to balance the books and we have to look at every possible way of doing so. We have to think the unthinkable, as my right hon. Friend the Member for Birkenhead—I keep calling him my “Friend”—did all those years ago. I do actually have faith in the Chancellor. I know him personally, and he is a good, decent, caring man, despite what we read in the newspapers and despite what is said about him. I know that he will be watching this debate and hearing what we are saying. He will be thinking about this. Yes, nine out of 10 people were claiming tax credits. My right hon. Friend the Member for Birkenhead said that these measures could benefit eight out of 10 people, but we must care for the other two people in every 10 and ensure that we get the right deal for them.

--- Later in debate ---

[Dr Huq]

I think that we have a similar number—6,500 families—in Ealing Central and Acton. It is the children whom we should be thinking about. They are not just columns on a spreadsheet, but real people.

There was great drama at PMQs yesterday. The leader of the Labour party asked the Prime Minister six times about these plans and whether working people would be worse off next year, and six times, the Prime Minister refused to answer. Even The Sun—not the most Labour friendly paper—referred to that exchange. As my hon. Friend the Member for Islington North (Jeremy Corbyn) said:

“This is not a constitutional crisis; it is a crisis for 3 million families”.—[Official Report, 28 October 2015; Vol. 601, c. 339.]

We could go further, even further than this motion. The Chancellor could still perform a full U-turn, which I would welcome, as I did the rapid conversion to feminism in this place yesterday. As my hon. Friend the Member for Hayes and Harlington (John McDonnell) said, if the Chancellor were to make a U-turn, we would welcome it on the Labour Benches. We would not taunt the Government if they were to do that. There is still time.

The Chancellor has a choice before him. He can continue hell-bent on his tax giveaways to big corporations and to the wealthiest in our country, or he could reverse those tax breaks to the few and go for a lower surplus target in 2019-20 while still sticking to his self-imposed charter. He would still be in a position not to hit those 3 million working families with these tax credit cuts. After all, this is a Government who claim to be on the side of working people. The ball is now firmly in the court of the Treasury Ministers.

My hon. Friend the Member for Birmingham, Selly Oak (Steve McCabe) said that, often, the lifting of people out of taxation is used to justify these measures, but such a move is not as progressive as it initially appears to be. It helps dual earner households the most, but only those who earn enough. It makes no difference if the Government start taxing at £6,000 or £11,000, because there is little help for those on £5,000—the lowest paid on the distributional curve.

Studies have shown that the national living wage, which is not an actual living wage, will only affect a small minority of people and it will never help those under the age of 26. My right hon. Friend the Member for Don Valley (Caroline Flint) also pointed out that the childcare element is quite limited. In my own constituency, parents would be hard-pressed to find a nursery that could offer a place, because there is not the commensurate resource to match the policy.

People have been wondering, even before the mess of this week, how they can trust a Prime Minister who blatantly said one thing on TV as recently as 30 April and then quite a different thing just a couple of months later in July. He made a promise of no cuts to a voter on a phone-in programme. That was then followed up by David Dimbleby to check that what he said was clear. By July, that promise had gone. That must be the fastest U-turn in history. In PMQs yesterday, we heard some MPs say that they had claimed tax credits. I do not know whether that is true. Perhaps we can put that down to the theatre of PMQs.

[David Morris]

rose—

[Dr Huq]

I have already given way once, so I will not do so again. Reduced tax credits are being introduced alongside a gamut of other welfare changes, the cumulative effect of which is an assault on the lowest paid in our country.

Oral Answers to Questions

David Morris Excerpts

Tuesday 27th October 2015 Commons Chamber

[Mr Osborne]

The measures to save welfare—as I say, we will help with the transition—come alongside the increase in the national living wage, the increase in the personal allowance and the action we have taken to cut social rents. They are all part of a package that is delivering economic security to the people in Northern Ireland and across the United Kingdom. The hon. Gentleman remembers what the situation was like five or six years ago in Northern Ireland: high unemployment, a lack of business investment and people looking for work. Now we are in a situation where jobs are being created and people are finding work. Do I say that everything has been done that needs to be done? Absolutely not. We have more to do to bring jobs and investment to Northern Ireland. Let us work together to make that happen.

[David Morris (Morecambe and Lunesdale) (Con)]

My local council keeps bleating on about cuts, saying how they are going to affect everybody living there. But, on the front page of a newspaper, a management consultancy company that the council brought in said that in my constituency and the region, 10,000 jobs are going to be created over the next five years. [Interruption.] Yes, very lucky. Does the Chancellor agree that his economic policies have put that on track and that my area of the world is going forward, making it better for the people who live there?

[Mr Osborne]

My hon. Friend is absolutely right. As a result of the combination of him being a very effective local MP and the fact that we have a Conservative Prime Minister and a Conservative Government, we are delivering more jobs into my hon. Friend’s part of Lancashire. Indeed, I remember on visits with him seeing the work being done on the link road to the port, which for decades—including when there were Labour MPs representing the constituency—was campaigned for, but never delivered. Now it is actually being built and delivered as a result of my hon. Friend’s local efforts.

Budget Resolutions and Economic Situation

David Morris Excerpts

Monday 13th July 2015 Commons Chamber

[Greg Clark]

The hon. Lady, who is a Greater Manchester Member of Parliament, should talk to her leaders in Greater Manchester who put the proposal to the Government. The proposal was not invented in Whitehall and visited upon Greater Manchester. The leaders of Greater Manchester made the very good point that when there is a strong connection between the needs of the national health service and the social care of residents across Greater Manchester, it makes complete sense for them to be managed together. That was their proposal and, in line with what my hon. Friend the Member for North Wiltshire (Mr Gray) said, we were very pleased to endorse it.

As I said, this is just the start. We want to build on the ingenuity and experience of local councils and civic and business leaders in an area to attract private investment to match the public investment. The city and local growth deals that we implemented in the last Parliament have transformed £7 billion of funds from central Government Departments into £21 billion of local investment. This Budget represents a golden opportunity for local leaders to repeat that success on a grander scale. Furthermore, with measures such as the creation of new enterprise zones, for which an invitation has gone out to places across the country, and the extension of the coastal communities fund, we are determined that this invitation should be extended to all parts of the country.

[David Morris (Morecambe and Lunesdale) (Con)]

Would my right hon. Friend look favourably on an enterprise zone application for Morecambe White Lund and on a coastal communities investment, because Morecambe needs more money on top of the £1 billion that was delivered by the previous Government? I am sure that, with the Secretary of State’s help, we can do better.

[Greg Clark]

I know from the last Parliament what a fighter my hon. Friend is for his area. I would welcome an application for Morecambe not just for an enterprise zone, but for the coastal communities fund—announcements were made on those two important policies in the Budget. I say to Members from all parts of the House that this is a big opportunity for them to work with the council and business leaders in their area to put forward a compelling bid for funds and, indeed, the devolution arrangements.

Greece

David Morris Excerpts

Monday 29th June 2015 Commons Chamber

[Mr Osborne]

As I said earlier, I do not think that anyone has been particularly enamoured with Syriza’s foreign policy, but what has been clear over the past few weeks is that it really needs to resolve the issue it faces with the eurozone.

[David Morris (Morecambe and Lunesdale) (Con)]

As the Government’s self-employment ambassador, I have had texts from a lot of people during this statement. They are worried about late payments by businesses in Greece and, more to the point, draconian steps that may be taken by Her Majesty’s Revenue and Customs. Will the Chancellor reiterate the steps that could help such small enterprises to flourish by being paid more quickly?

[Mr Osborne]

I very much commend my hon. Friend for the work he does. Let me reiterate that HMRC is ready to operate the time to pay scheme to help both the self-employed and small businesses—and, indeed, larger firms—who have problems because there have some kind of financial transaction with a Greek company and have been caught up in the Greek Government’s capital controls. There is advice on the Department for Business, Innovation and Skills website, and they can get bespoke advice by phoning the helpline.

House of Lords Reform

David Morris Excerpts

Tuesday 23rd June 2015 Westminster Hall

[David Morris (Morecambe and Lunesdale) (Con)]

I beg to move,

That this House has considered reforming the House of Lords and the number of peers.

Thank you for chairing this debate, Mr Hollobone. It is an honour to serve under your chairmanship.

This debate is not designed to diminish the Lords’ responsibility, status or powers. I am trying to find a way forward that will allow us to retain the Lords’ expertise and keep them there for life, as was originally envisioned when they were appointed. It must not be seen as ageist or in any way derogatory to what goes on in the other place. I value the Lords; the Lords are valued. Their expertise is second to none, irrespective of their type, and their constitutional role should not be underestimated.

There are currently 786 peers, with 40 peers on leave of absence or otherwise disqualified from sitting. The Conservative party has 228 peers; the Labour party has 212; there are 178 Cross Benchers; the Liberal Democrats have 102; the Democratic Unionist party has four; the UK Independence party has three; Plaid Cymru has two; the Ulster Unionist party has two; the Green party has one; there are 28 non-affiliated peers; and there are 26 Lords Spiritual. It is a bit long-winded to state how many Lords there are, but it is important that I do so because our upper Chamber is one of the most highly-subscribed democratic institutions in the developed world.

The numbers in attendance by age were supplied to me by the House of Commons Library. The analysis reveals that the mean age is currently 70.4 years—in effect, 70 years. The median is roughly the same, implying a symmetrical distribution, with roughly as many peers above that age as under it. The oldest party is the UK Independence party, at a mean age of 76.3 years, although there are only three of them. The mean age of the Cross-Bench peers is 76.2 years; for the Labour party it is 71.3; for the Conservatives it is 70, and for the Liberal Democrats it is 70.3.

It is difficult to analyse peers’ activity, yet a brief analysis using Hansard data reveals that the mean age of the 20 most active Members of the House of Commons, excluding Mr Speaker, is 64.9, which is more than five years younger than the average of the House of Lords. That may suggest that younger Members are more active, although I would be cautious about drawing that conclusion, given that it is based on only a partial analysis of the data.

In the previous Parliament, the right hon. Member for Sheffield, Hallam (Mr Clegg) wanted to have a partly elected upper Chamber. He proposed that the upper Chamber continue to be known as the House of Lords for legislative purposes; that the reformed House of Lords should have 300 Members, of which 240 are elected Members and 60 are appointed independent Members; and that up to 12 Church of England bishops may sit in the house as ex-officio Lords Spiritual. His proposal would have halved the number of Lords and created a semi-elected second Chamber, which would have huge ramifications for our unwritten constitution and our intellectual talent. I believe that that would be the wrong way forward, and would cause a drought of our intellectual talent in the other place.

Dan Byles, the former Member for North Warwickshire introduced a private Member’s Bill for the retirement of Lords. Some peers have utilised that provision. I contacted Dan, and he disclosed that the retirement age was always aimed at 75, although that was never mentioned.

My proposal is to reduce the numbers in the House of Lords. It could be seen as radical, although I hope it is not. I want it to be seen as a constructive way forward. I believe that there is a better way to slim down the Lords by 250 Members, so it becomes more proportionate to the Commons over a 20-year period. I propose that the Lords eventually settles at 450 to 500 peers, who should remain in the House of Lords as life peers, but retire from the Lords as we know it at the age of 75. They may wish to retire from the Lords under Dan Byles’s law, but that would be up to them.

I propose that Lords over 75 become the Lords council. They would still be able to attend functions and use the facilities of the House of Lords. In fact, they would be able to go about their daily business as they do now. They would still be remunerated, and it would cost no more than it does now. The problem is not the number of Lords, but the number we appoint, so we have to find a way forward that enables us to value our existing Lords and appoint new ones in a manner that reflects where we want the House of Lords to be in 20 years’ time.

Members of the new Lords council would be able to sit on Committees, based on their expertise and choice. They would be able to influence their colleagues and the Government as before. However, they would not be able to attend the Chamber and vote. That would have a significant effect on getting down the numbers, improving the working environment and creating a Chamber atmosphere similar to the Commons.

The benefits of my proposal are that it would enable us to value our peers without losing them as we reduce their number over two decades. It would allow a tapered reduction to take place in a sensible and measured manner. It would allow the more active peers to debate and work on a regime suited to their stamina. Therefore, the Lords who, to put it bluntly, are getting older and cannot attend the Chamber regularly will have options. They would not be able to go into the Chamber in the first place, although they would be able to advise. It would create a career path from the Commons into the Lords, and make both Chambers more efficient. The new appointees would be strictly limited and appointed in the same way as before. However, there would be constraints that I will not mention in this debate that will have to be looked at to ensure we have the correct political system at work. We must prevent the perception that the Lords is being stacked by political means. The main benefit would be that we retain the expertise of all ages and reduce the numbers sensibly.

As the median age is currently 70—there are as many under that age as over it—the maths naturally state that if the proposal were to become law, roughly a third of peers would go into the new Lords council in the first five to 10 years. The restriction of the numbers of new appointees would ultimately reconfigure the look of the new Lords structure. I firmly believe that my proposal is a viable and credible means of reducing the number of Lords and, more importantly, preventing the loss of our valued intellectual talent that an elected second Chamber would cause. It is very simple and straightforward.

[Mr Andrew Turner (Isle of Wight) (Con)]

I am happy with most of what my hon. Friend said, but I am concerned about the age being fixed. Some peers are very effective beyond the age of 75. I suggest a slightly different arrangement, whereby a percentage—I will not say what that is at the moment—retires or is requested to retire, and people compete for the remaining places. How about that?

[David Morris]

That is a valid and constructive way forward, as an annexe to what I am trying to do. I would like hon. Members reading this debate in the future to understand that this is a simplified view of what could happen. Further debates would have to take place, and legislation would have to be enacted to make it actually work. However, what my hon. Friend has just articulated very well is that we could have a percentage of Lords who assist a transition, and so still retain the intellectual expertise in the other place—that is the whole ethos behind this debate.

I have nothing more to add, but this is an important subject. For literally decades we have been trying to sort out the problem of the number of Members of the House of Lords. Although I voted for the proposals of the right hon. Member for Sheffield, Hallam in their initial stages, I did not like them. We should look into the issue in a more measured and stately way—one that suits the House of Lords as it currently stands.

[Kirsty Blackman (Aberdeen North) (SNP)]

I must apologise, Mr Hollobone—I have not spoken in a Westminster Hall debate before and so am not quite sure what I am doing.

I am the SNP spokesperson on the House of Lords. Our policy is no longer to have a second Chamber, but I understand that this debate is about finding a way forward by reforming the House of Lords rather than getting rid of it. The way forward that has been suggested is really interesting and would reduce the number of Lords. The hon. Member for Isle of Wight (Mr Turner) mentioned that some Lords are active and effective over the age of 75; that was an interesting point and should be taken into account.

One concern I have with the proposal of the hon. Member for Morecambe and Lunesdale (David Morris) is that in the interim period of 20 years he suggested there is a risk that the House of Lords as a whole will continue to get older. If we are aiming to reduce the number of Lords, presumably we will not be appointing many more in that interim period, which will push the average age up, even with a cut-off point of 75.

[David Morris]

I agree with the hon. Lady. I have looked into this, and if we do the maths, as I said earlier, the average age in the Lords is around 70, and the average active Lord is 65 years of age. She is correct that there is a mathematical schism, in that not appointing new Lords would push up the average age. However, over a period of 20 years it would come down to how many Lords were appointed in the initial stages. We could have a calculated assessment that kept in mind the ages of the Lords and how many might be around in 20 years, which would allow us to work out a taper.

[Kirsty Blackman]

Absolutely. If the youngest Lords at the moment are in their 30s and we do not appoint any more, in 20 years the youngest will be in their 50s, which is a concern.

There could be a degree of election for the pool of life peers, as well as for the hereditary peers. The SNP policy is to abolish the House of Lords entirely, but if that is not going to happen, we want something that is closer to representative democracy. That would mean some form of election, and a House that represented the breadth of the population. A mean age of 70 is nowhere near doing that—I am not in any way being ageist, but simply suggesting that there is a lack of representativeness. If there were a system whereby a group of the current life peers was chosen democratically to continue in the House, we would be more likely to have a swathe of peers who were more representative of the population.

[David Morris]

I understand where the hon. Lady is coming from and share some of her sentiments. However, we looked at that in the previous Parliament and could not get the proposals through the House. I think the House of Lords should be kept as it is now; the issue is how we get the numbers down. I do not have a panacea and am hoping that this debate will be the start of a process. I share her sentiments, which could be looked at in future.

[Kirsty Blackman]

Absolutely.

I do not have much more to say. I appreciate the chance to contribute to the debate and hope that we can find a constructive way forward that includes reform of the House of Lords and, in particular, reduces the number of its Members.

--- Later in debate ---

[John Penrose]

My hon. Friend makes my point for me, which is that I do not think that my hon. Friend the Member for Morecambe and Lunesdale is pretending that his proposal is a complete answer. I think that he is putting it forward as an interesting and thought-provoking contribution to a broader debate, and my hon. Friend the Member for Isle of Wight is quite right to point out that this question about how we reduce the size of the House of Lords will depend not only on people leaving, standing down, retiring or—as this proposal suggests—entering as councillors, but on the number of people coming in and at what age they come in. This proposal does not necessarily address that issue directly—I think my hon. Friend the Member for Morecambe and Lunesdale was quite straightforward about that—and that is why I suggest that we ought to have other people contributing to this debate, because it will require other proposals for us to come up with a full suite of potential answers.

[David Morris]

I know that the Minister may not be able to answer this question, but could he possibly point me in the right direction in the House of Lords to like-minded Lords who would like to take this matter further? I know that previously Dan Byles worked closely and respectfully with the Lords.

[John Penrose]

I am sure that the Whips in the Lords and the Leader of the Lords will be happy to point my hon. Friend at particular people who might be interested, and I also suggest to him that he might want to talk to some of the Lords who sponsored the two successful private Members’ Bills that have gone through recently. They might be interested themselves, or they might know other colleagues who would be interested in picking this matter up. That would be my starting point.

I hope that other people outside Westminster Hall have listened to this debate, that their interest is piqued and that they will start to consider this important and—as I have said—currently unexpectedly neglected area of constitutional reform, because we have only just started to focus on it. Therefore, this debate is an incredibly valuable starter for 10—a way of beginning a wider debate and kicking things off—but we need to be clear that it is a starting point and not the final answer. To be fair to my hon. Friend, I do not think that he is positioning it as anything else but that.

With any luck, those outside this place will listen to what we have said today and start work. If they start work and then have weighty thoughts on a variety of approaches to pursuing this important area of constitutional reform, I will be delighted to hear what they have to say.

Question put and agreed to.

Oral Answers to Questions

David Morris Excerpts

Tuesday 16th June 2015 Commons Chamber

[Oliver Colvile (Plymouth, Sutton and Devonport) (Con)]

3. What recent steps he has taken to rebalance the economy and create a northern powerhouse.

[David Morris (Morecambe and Lunesdale) (Con)]

4. What recent steps he has taken to rebalance the economy and create a northern powerhouse.

[The First Secretary of State and Chancellor of the Exchequer (Mr George Osborne)]

We have a comprehensive plan to rebalance the economy and create a northern powerhouse by bringing together the great cities and counties of the north of England, alongside plans to support other vital economies in our country, such as the south-west. Those plans involve major investment in transport infrastructure, backing science and skills, and supporting local businesses. The centrepiece of the northern powerhouse is the commitment to a major transfer of power to our great cities and counties so that local people can take more control of the decisions that affect them.

--- Later in debate ---

[Mr Speaker]

Order. The question is about the northern powerhouse and must be confined to the northern powerhouse. We are immensely grateful.

[David Morris]

In my constituency, a link road was 60 years overdue. The Prime Minister and the Chancellor came, and the Prime Minister put a series of bolts into the bridge there. Does my right hon. Friend the Chancellor agree that the road is vital to the improvement of my constituency, and that such projects should be rolled out across the area to ensure more vitality in the northern powerhouse?

[Mr Osborne]

My hon. Friend the Member for Plymouth, Sutton and Devonport (Oliver Colvile) is a huge champion of Plymouth and the south-west. We will have time to address the south-west in questions.

The Heysham link road is a major achievement for my hon. Friend the Member for Morecambe and Lunesdale (David Morris). People have campaigned for it for 70 years. I happened to visit about a week before the general election with the Prime Minister. Because of my hon. Friend’s fight for infrastructure and jobs in his seat, he is back in the House doing his job.

Future Government Spending

David Morris Excerpts

Wednesday 4th March 2015 Commons Chamber

[David Morris (Morecambe and Lunesdale) (Con)]

It has been a pleasure to speak twice this week under your guidance, Mr Deputy Speaker. If this is to be my last speech in this Parliament with you in the Chair, may I say that I have had an absolutely great time under your guidance as Deputy Speaker? However, I do hope to come back, and to see you there again and we could have another life of five years together.

Today’s issue is a serious one, but I would like this speech to be in the right vein; it should deal with what this means to those watching our debate today. We are bandying figures about all over the place, but what do they actually mean to people? I can talk only about my experiences over the past five years. I was a newly elected MP and we were going through the Lobby making decisions that we knew were going to affect people’s lives. But we had to take these decisions to get the country on the right track. Over my five years as a first-term MP—after the election I hope to be in a second term, but I do not count my chickens—I have wanted to see what has happened in my community. The first thing I remember talking about was a road in my community. I am glad to say that that road, which took 70 years to build, came to fruition with my guidance and under the coalition Government. Costing £123 million, the road will join up the M6 with the port at Heysham and will increase the prosperity in the area tenfold. For every £1 spent on the road, £10 will be put back into the local economy.

We are considering building a new power station. My constituency already has two nuclear power stations, which account for 2,000 jobs in the area. Thankfully, again under this coalition Government, we have a footprint for a third nuclear power station, which will be completed in the next five to 10 years, creating a further 2,000 new jobs.

Let me turn now to schools. Without wanting to be overtly political, schools that were closed down under the previous Government have reopened under the coalition. In my constituency, a school was closed down and has now reopened. Sadly, another school, Skerton, has closed, but I am fighting to get it reopened as a free school. We can find the money to carry out all this work at a time when austerity is at its worst.

Sea wall defences have been built in my constituency, at a cost of more than £10 million. A mandate went out just before the last general election in which five out of the 10 categories of coastal protection were wiped away. Thankfully, we have put two of them back, and we have saved an area off Sunderland Point.

[Mark Garnier]

My hon. Friend has talked a great deal about how much money the Government have put into his area. Does he also not recognise that private sector investment, such as the £140 million of private sector investment that will be put into the Wyre Forest in the future—

--- Later in debate ---

[Mr Deputy Speaker (Mr Lindsay Hoyle)]

Order. I have to intervene. I have allowed some leeway here, but I will not let this debate be turned into an election broadcast for all Members who wish to speak. This is about future Government spending. Obviously, the hon. Gentleman has set out a bit of a programme, but we are in danger of going around every constituency and hearing what the measures will be. That is not what today is about.

[David Morris]

I respectfully understand that, but I do agree with my hon. Friend on that particular point.

Under the coalition, we have had to make some very distasteful decisions, but in my area, health is on the up. We had problems in my local hospital which were put to bed yesterday in the Kirkup inquiry. Since 2010, we have had four new hospital wards at the Royal Lancaster infirmary. [Interruption.] Yes, we have had a new health centre costing £25 million in Heysham—

[Mr Deputy Speaker]

Order. I am trying to be helpful. This debate is about future Government spending. We cannot talk about what has been spent. I have allowed some leeway in that regard. I understand that a general election is coming, but we cannot be so blatant about it. This is about future Government spending. I am sure that the Government want Members to recognise their vision for the future, and that the Opposition want to challenge the Government. I know that that is what everybody wants. If we can stick around that, I will be very grateful.

[David Morris]

Thank you, Mr Deputy Speaker, for indulging me. I got a bit carried away with the good news in my constituency. So, yes, where are we going in the future? The deficit has been halved. As the self-employment ambassador to the Government, I can say that one of the largest sectors in our economy is self-employment. I am sad to see that the Opposition have not recognised the importance of that sector.

[Sheila Gilmore (Edinburgh East) (Lab)]

rose—

[David Morris]

If the hon. Lady will let me finish, I will gladly give way. Labour’s manifesto, which we have seen on the internet, does not recognise the self-employment sector, as it sees it as a failure in the labour market, which is quite wrong. I say that respectfully to the Opposition. I was self-employed for 30 years, so I know what it is like to survive.

[Jake Berry (Rossendale and Darwen) (Con)]

My hon. Friend has set out very eloquently the investment that we have seen in Lancashire in transport and infrastructure, including the £15 million invested in the rail link between Darwen and Manchester—

[Mr Deputy Speaker]

Order. Absolutely not. The hon. Gentleman should know better than to tempt fate, as the fate will not be good for either of us. This is about future Government spending. We do not need pats on the back over spending that has already been invested.

[David Morris]

Once again, thank you for your indulgence, Mr Deputy Speaker.

The self-employment sector in this country accounts for 760,000 new businesses created since 2010, which shows that the country has an entrepreneurial spirit, with huge advantages for taxation. I hold out an olive branch to the Opposition and ask them to embrace it, purely and simply because it is better for us all, irrespective of political party. I believe that the country is going in the right direction—[Hon. Members: “Hear, hear.”] Thank you, I really do. Unemployment is moving towards historic low levels and the future is bright. I would like to think that the future is blue, but the electorate will have their say in about eight weeks’ time. I thank the House for the five years for which I have been a Member of Parliament, the Opposition as well as my colleagues, and I thank you, too, Mr Deputy Speaker. I hope that I shall be returned to carry on the good work for Morecambe and Lunesdale’s constituents.

Carnforth Station

David Morris Excerpts

Thursday 18th December 2014 Westminster Hall

[David Morris (Morecambe and Lunesdale) (Con)]

It is an absolute pleasure to serve under your chairmanship, Mr Davies. I am grateful for this debate on the future of Carnforth station, a subject close to many of my constituents’ hearts, as well as to my own.

In order to discuss the future of Carnforth station, I need to start by discussing the past and how the station has served the community. In the 1940s, it was a bustling junction station that connected the north, south, east and west of the country. Its strategic position created jobs and prosperity from the railway, but the demise of the steam trains in the 1960s sadly led to its demise. The main line platforms were closed down and physically removed in 1970, prior to the electrification of the west coast main line. Carnforth was reduced to a branch station, and its buildings gradually fell into disrepair.

The station has a rich history: most people will recognise it as the setting of David Lean’s classic 1945 film “Brief Encounter”, which was filmed at the station. The station clock is an iconic part of that film—I am sure that many Members are familiar with the romantic scenes that occurred in front of it. There is no truth to the rumour that some of my constituents have said I am the Trevor Howard of the modern era—as much as I would love that—but I hope that this will be not a brief encounter but a railway rendezvous with a destination that will mean only Carnforth reincarnation.

In 1996, members of the community, led by Peter Yates MBE—who is present in the public gallery—joined together to form a trust to restore the station from a shell. Peter’s vision was to see it restored to its rightful place as a transport hub for commuters, tourism and heritage. The trust received £1.5 million pounds of funding, in co-operation with Railtrack. Peter Yates even sourced the original clock and ensured that it was re-installed at the station, where it belongs and still is today. The station’s café and museum are immensely successful and attract tourists from miles around—in fact, from all over the world. Carnforth also features four country walks, and the station café serves the best food of any train station I have ever had the pleasure of stopping at. Couples from all over the world come to the station to propose under the clock, as well as to absorb the ambience of Carnforth’s iconic setting and the surrounding countryside.

Carnforth station is not just a museum or tourist attraction; it should be the natural strategic station to link Barrow, Leeds, Kendal and Windermere. Carnforth has always been referred to as the gateway to the Lakes, and the rail service should reflect that. The station is connected to the M6 motorway by the A601M, and it also has close links to the Lancaster canal. Because of the transport links that the station boasts, it is perfectly placed to displace Lake District traffic and encourage people on to the railway, which will protect our national park for generations to come and cut down on pollution. This year, Carnforth station has seen an increase of 29,672 passengers since 2009, which shows that the train station is becoming more and more popular, not least because of the ease of accessing it. The nearest main train station is Lancaster, which is not easy to get to. In fact, it was recently announced that Lancaster is the second worst area in the country for slow traffic, beaten only by Westminster in central London.

Not only have the figures for station usage risen; the support for the station that I feel as the local Member of Parliament is extraordinary. The people in Carnforth, and the many visitors that it attracts, are supportive of the station, and they contact me every time they feel that there might be a threat to services. Currently, one of the main concerns is the new franchise for the Barrow to Manchester airport line. The Department for Transport has announced that the line between Manchester airport and Preston will be electrified, and my constituents are concerned that that will affect the frequency of trains from Barrow to Preston and on to Manchester airport. I have raised the matter with Ministers, and the DFT’s response was that the winning bidder would be expected to deliver an improved quality of service to customers.

Nevertheless, my constituents remain concerned about the frequency of trains under the new franchise. The main issue that they would like to be addressed is the reinstatement of the platforms on the main line at Carnforth station. On 21 July, I presented to the House a petition of more than 5,000 signatures of people who support reinstating the platforms. For context, the electoral ward of Carnforth has approximately 2,000 homes. That shows how wide ranging is the support for the station in my constituency.

Historically, there were main line platforms at Carnforth station, but they were closed off in the 1970s. My constituent, Robert Swain, has found that the platforms were taken away illegally and never formally closed. Even if that is the case, Network Rail has informed me that in order for the platforms to be brought back into use, a business case must be put forward to show that services would use the reinstated platforms. I have a letter that I received from Chris Gibb when he was at Virgin, which states that although Virgin itself would not seek to stop trains at Carnforth, it has no objection to the main line platform being used by other operators on the line. First TransPennine Express has stated that if the platforms were suitable to accept passengers, it would look into the possibility of stopping further services at Carnforth.

Carnforth station is the centre of the railway universe. It hosts connections to the north, south, east and west, and my constituents would like to see it as the train hub it once was, rather than the mere feeder service for local stations that it currently is. To paraphrase a famous former constituent, Mr Eric Morecambe, is seems that we have all the necessary information we need to restore the platforms at Carnforth station, but not necessarily in the right order.

Let me be clear: my constituents are not asking for the Virgin west coast main line train to stop at Carnforth. That idea has been tried and tested in this House; despite agreements, it has not yet transpired. We are well aware that if Virgin trains did stop at Carnforth, another station would lose its service, and that is not what my constituents want. They would like to see the platform restored so that the Preston to Windermere train, run by First TransPennine Express, can stop in Carnforth. The preliminary maths have already been looked into by the Department for Transport, and a stop at Carnforth on that service would see journey times increased by only a couple of minutes. My constituents, Peter Yates MBE and Robert Swain, conducted a survey of all the trains that passed through Carnforth station in a 10-hour period during the day, and concluded that an extra stop at Carnforth on the main line First TransPennine Express service would not cause any delay to the Virgin trains that pass through the station.

The big problem is trains going north. Geographically, the next town north of Carnforth is Kendal, but to get to Kendal on the train people have to take a train south to Lancaster and then a train north to Kendal, passing through Carnforth on the way back up. That is a huge waste of time and encourages people to use their cars instead of the railway. The other major pull in the area is Windermere. To get to Windermere from Carnforth, people also have to go south in order to go north. If the train from Windermere to Preston could stop at Carnforth, we could welcome more visitors to the “Brief Encounter” café, help tourism in Carnforth, allow commuters to access towns to the north, rather than just to the south, and enable more business to be conducted.

The Lake District hub at the moment is Oxenholme, an extremely small station that is not large enough to keep cars away from other areas of the Lake District. If Carnforth could be the hub, its connections are such that fewer cars would be needed in the countryside. The case for the restoration of the main line platform is only strengthened by HS2 going through the area. When HS2 is built, it will not reach Carnforth, but it will free up a considerable amount of capacity on the main line. Although I understand that no decisions on that will be made until HS2 is near completion, it presents an opportunity for Carnforth station to have even more services stopping at the station.

The people of Carnforth and the wider community would like the platform to be reinstated so that the mainline TransPennine Express train could stop there. How do we go about that? The Department for Transport has told me this is a local decision and it is for Lancashire county council to determine whether such a scheme is a local priority. At the moment, it has not placed it on its priority list. When the Conservative councillor, Tim Ashton, was the portfolio holder for transport at Lancashire county council, he was fully supportive of the reinstatement of the platform. He told the then Secretary of State for Transport of this proposal. However, Tim Ashton is no longer the portfolio holder at the county council and it is now led by the Labour party.

In conclusion, I believe that my constituents in Carnforth have made a strong case for the mail line platforms to be reinstated. I would urge the Minister to ensure that Lancashire county council is made aware of this positive case and is encouraged to conduct a feasibility study, so that the platforms can be restored and Carnforth can once again be a prosperous station which would serve the public as a station should. Mr Davies, thank you so much for letting me address the House.

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[Dr Coffey]

I thank the hon. Lady for that intervention. I am not in a position to give her an answer today, but I am sure that if there are questions that I do not manage to cover in my response, my hon. Friend the Under-Secretary of State will write to her.

In June, we launched the competitions for the next TransPennine Express and Northern franchises—they are due to start in February 2016—with a consultation document. We have ambitious plans for rail in the north of England to support the growth of the economy in the north, and those franchises will be key to transforming the way in which rail contributes to communities and businesses across the region—including Carnforth—building on our investment. I am very pleased that we are taking the franchises forward in partnership with the Rail North association of local transport authorities from across the north of England, including Lancashire and Cumbria county councils. Our developing partnership with Rail North is bringing a much stronger local focus to the franchises.

The consultation on the franchises posed important questions relating to the future operation of the Furness line, including the possibility of transferring the Furness line stations and services from TransPennine Express to Northern, and sought views on the appropriate number of through services and shuttle services to Lancaster and which destinations should be served by the through services. We received more than 20,000 responses to the consultation. Those included representations from the Carnforth railway action group, authored, I believe, by Peter Yates, to whom I pay tribute.

I welcome the fact that the response to the consultation has been so strong. It is important for us to hear the views of the public and stakeholders, so that we can take those into account in developing the specifications for the two franchises. I can assure my hon. Friend the Member for Morecambe and Lunesdale that before reaching final decisions, we will give very careful consideration to the views expressed. I hope that he will understand that I cannot go further at this stage. The invitations to tender for the franchises are due to be issued early next year.

Work is already under way, led by Network Rail, to consider the strategic priorities for further investment in our railways in the next control period from 2019. Network Rail is undertaking a long-term planning process in consultation with industry partners and other stakeholders, including local enterprise partnerships, to develop the industry’s priorities and inform the Government’s next rail investment strategy. Key future stages relevant to the services at Carnforth are a refresh of the industry’s electrification strategy, which is due for publication for consultation in spring next year, and the northern route study, on which work is due to commence in early 2016.

I recognise that there is strong local interest in the potential for the electrification of the Furness line. My hon. Friend may be aware that to inform decisions on the next generation of electrification projects in the north of England, the Secretary of State announced in December last year the creation of a taskforce consisting of three MPs from the north of England, Network Rail and two council leaders nominated by Rail North to advise him on the priorities.

The taskforce is chaired by my hon. Friend the Member for Harrogate and Knaresborough (Andrew Jones). I assure my hon. Friend the Member for Morecambe and Lunesdale that it is carefully considering all remaining non-electrified rail lines in the north of England, including both the lines that serve Carnforth. The taskforce expects to submit its interim report in early 2015, to enable its recommendations to be considered alongside Network Rail’s draft electrification strategy. Through a supporting stakeholder working group, which includes local authorities, the taskforce is drawing on a wide range of relevant information including local enterprise partnerships’ strategic economic plans.

Looking further ahead, to provide the capacity and connectivity the country needs in the longer term, the Government continue to progress High Speed 2. I welcome my hon. Friend’s support, and the support of the hon. Member for Nottingham South, for that vital infrastructure project. As has been noted, HS2 offers the prospect of faster connections from Carnforth and the Furness line to London and the midlands. We are considering the impact of HS2 on other routes, and Network Rail is closely involved in the discussions. The Government are fully behind HS2, and the Bill is being considered in Select Committee.

I have heard my hon. Friend’s strong representations in favour of the reinstatement of the mainline platforms at Carnforth station. Government policy makes it clear that it is for local bodies to decide whether that would be the best way to meet local transport needs. Local bodies would have to prioritise that solution to receive funding from the resources that the Government make available to local bodies through the local growth fund, and they have not chosen to do so to date. The Department would, of course, be happy to provide advice and guidance should those local bodies change their minds.

[David Morris]

My understanding is that reinstating the platforms is within the remit of the county council, in any case. Will my hon. Friend join me in some kind of communication with the county council to ask it to push forward a feasibility study for these platforms to be reinstated?

[Dr Coffey]

My hon. Friend has taken the words right out of my mouth. I urge the council to give every support to the project that he is backing so strongly; it would be of great merit for the residents of Carnforth. Although not everyone might agree with my hon. Friend that Carnforth station is the centre of the rail universe, it is an important connection for many people and businesses in that community.

My hon. Friend alluded to the process followed to close the platforms in the 1970s. I assure him that the Government are of the opinion that the mainline platforms were correctly closed. There was no statutory requirement at the time for any form of consent to be sought for the partial closure of a station. I understand that the Department wrote to his constituent in detail on the matter on 8 December this year.

I hope that my hon. Friend can persuade the council to look in more depth at the possibility of reopening the platforms. It may be helpful, however, to remind hon. Members of some of the operational and commercial challenges that would need to be addressed in developing any viable proposal. A key issue is whether a proposal to stop mainline services at reinstated platforms at Carnforth would work operationally and commercially. As was indicated in the last debate on the subject in July 2011, line capacity would be reduced.

The west coast main line is heavily used, with up to three long-distance services per hour between London, Birmingham and Manchester, and Glasgow and Edinburgh, plus regular freight services. Those trains are already popular and well loaded, and further growth is expected. Network Rail’s 2011 route utilisation strategy for the west coast main line corroborates the heavy usage of the line and the resulting capacity problems.

The journey time of a service that called at reinstated platforms at Carnforth would be increased. Further examination, with Network Rail and the relevant train operator, would be required to determine the potential commercial impact of that, and to determine the impact of such a stop on other services that used the line. The modernisation of the west coast main line and the introduction of the December 2008 timetable delivered some significant journey time reductions and more frequent services, which have delivered significant revenue growth since December 2008 and increased rail’s share of the total travel market on the routes served by the west coast main line. Rail serves those markets well, and there are strong calls for further journey time reductions.

My hon. Friend referred to the potential impact of HS2. I caution that released capacity is likely to be on sections of the west coast main line further to the south that are bypassed by the new high-speed line. Nevertheless, the advent of HS2 services will provide a further useful stimulus to rail demand in the area. All those issues, and others, mean that stopping any service at Carnforth could involve a number of trade-offs, now and in the future, which are less straightforward than they might first seem.

It is already possible to travel directly between Carnforth and stations to the south, including Preston and Manchester. As my hon. Friend has noted, that means that the main benefits of stopping Windermere services at reinstated mainline platforms at Carnforth would be to create better journey opportunities between Carnforth and stations to the north, including Oxenholme, Penrith, and Carlisle, and to provide better connections to the north from other stations on the Furness and Skipton lines.

I certainly do not want to rule out the possibility of developing a viable proposition at some point, but local authorities and local enterprise partnerships must want it to progress, and they must back it financially. They did not identify such a proposition as a priority in their response to the franchise consultation. The position of the current holder of the TransPennine Express franchise is encouraging, but that franchise is coming to an end and my hon. Friend will need to encourage the local authority to engage with the shortlisted bidders for the new franchise as they develop their bids next year.

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[David Morris]

I am grateful to you, Mr Davies, for the opportunity to thank Members for their cross-party, collegiate support for reinstating the platforms at Carnforth station. I thank my hon. Friend the Member for Suffolk Coastal (Dr Coffey), and I congratulate her on her sterling work at the Dispatch Box. I also thank her for helping me with this subject on every possible occasion.

Question put and agreed to.

Autumn Statement

David Morris Excerpts

Wednesday 3rd December 2014 Commons Chamber

[David Morris (Morecambe and Lunesdale) (Con)]

In the past four-and-a-half years, my constituency has benefited from the Chancellor’s policies. Some £700 million has been invested in my constituency, and I thank him for that. The greatest gift of all is the Government’s absorption of VAT on hospices. Does he agree that that will help St John’s hospice, and that the policy is long overdue? I thank him for listening.

[Mr Osborne]

My hon. Friend is a great champion of his constituency in Lancashire. He has raised with me and the rest of the Government the great work that St John’s hospice does and the unfair treatment, in comparison with the NHS, that it and other hospices have endured because of VAT. We have listened to him and to other hon. Members and have taken this step forward. We wish the staff at St John’s well with all the great work they do.