Spending Review and Autumn Statement

David Rutley Excerpts

Wednesday 25th November 2015 Commons Chamber

[Mr Osborne]

Yes, absolutely. First, the Transport Department had set aside a number of contingency funds, which we do not have to use. We are also phasing out the resource grant for Transport for London, but Transport for London is getting a big capital settlement, which is a large part of the Transport Department’s resource budget, and that is where some of the savings come from.

[David Rutley (Macclesfield) (Con)]

Protecting the science budget and electrifying the TransPennine line are vital tasks to help rebalance the economy. Will my right hon. Friend remind the House how long it has been since he set out the vision for the northern powerhouse, and what has been achieved since then?

[Mr Osborne]

My hon. Friend and constituency neighbour has been a big champion of investment in the north, not just in his constituency but in the north-west of England. My speech on the northern powerhouse, which I gave to an audience that included Labour metropolitan leaders, was last summer. Since then, working across party divisions, we have had agreement now in Liverpool, Greater Manchester, Sheffield, Tees Valley and in the north-east to have a big devolution of power from Whitehall to those areas and elected mayors. There is a huge commitment of transport capital. We have created Transport for the North, which did not exist a year ago, and funded it, and there is a big commitment to the cultural institutions in the north of England as well, so we are talking about a massive commitment. We have also made a big commitment to science institutions across the north, which is something close to his heart.

The Economy

David Rutley Excerpts

Wednesday 18th November 2015 Commons Chamber

[Mike Wood (Dudley South) (Con)]

As a fan of “Yes, Minister”, I shall start by congratulating the Opposition on their brave decision to choose this subject; given the Labour party’s abysmal record in this area, that is perhaps courage verging on chutzpah.

In May, voters in a majority of constituencies around the country endorsed the difficult decisions taken by the previous coalition Government to get the economy back on track, and placed their faith in the Conservative party to secure the economy and to take the further difficult decisions in a fair way to secure that recovery.

It is disappointing that the Opposition motion omits the real progress that has been made over the past five years in improving people’s opportunities and giving a brighter outlook for working people in Britain. We have 2 million more people now in work; that is many, many more families with the security of a job and a steady income. We have secured 2 million more apprenticeships since 2010, with 3 million planned for this Parliament, meaning that ever more young people will have the skills that they need for future work. The Government are also doubling free childcare to 30 hours a week and introducing the national living wage.

[David Rutley (Macclesfield) (Con)]

Earlier in the debate, the hon. Member for Hayes and Harlington (John McDonnell) was quick to say that the £9 national living wage was inadequate, but did not point out that the Labour manifesto set a target of only £8. Did my hon. Friend find that outrageous?

[Mike Wood]

I certainly did not find it surprising. As we knew at the time of the election, the £8 that the Opposition were proposing was probably lower than the minimum wage was scheduled to be by 2020 anyway, but the additional national living wage will mean a real increase in the incomes of the lowest paid families in Britain.

I am sure many of us remember the times when those on the Opposition Front Bench were making funny hand gestures to indicate that somehow the economy was flatlining. They are not doing that so much any longer, because the only thing that is now flat is inflation. With inflation at close—

Oral Answers to Questions

David Rutley Excerpts

Tuesday 27th October 2015 Commons Chamber

[Greg Hands]

Of course we will publish information, but I remind the hon. Lady that the deal that was signed last Friday commits us to £30 million a year of additional funding. If she does not think that that is a good deal, perhaps she should listen to Simon Henig, the chairman of the new North East combined authority. He is a member of her own party, but it seems that she does not want to listen to what has been said by a member of her own party. He said:

“The agreement being signed today will bring significant economic benefits and opportunities for businesses and residents.”

The hon. Lady should be welcoming that.

[David Rutley (Macclesfield) (Con)]

25 . Last week’s announcement of £130 million for the new “China cluster” at Airport City Manchester, and the announcement of a new flight from Manchester to China, further underpin the northern powerhouse. Is it not clear that, for all the Opposition’s droning on about regional policy over recent decades, it is this Government and this Chancellor who are delivering a clear vision for the north?

[Greg Hands]

Last week’s state visit by the President of China was exceptionally successful, including the Manchester leg of his journey. Various announcements have been made in Manchester concerning the northern powerhouse, but particularly important was the announcement of the first direct flight connecting Manchester and the northern powerhouse region to China. I am sure that that will prove vital to the connectivity of the northern powerhouse, and will ensure that inward investment is brought into the region.

Tax Credits

David Rutley Excerpts

Tuesday 20th October 2015 Commons Chamber

[Seema Malhotra (Feltham and Heston) (Lab/Co-op)]

I beg to move,

That this House calls on the Government to reverse its decision to cut tax credits, which is due to come into effect in April 2016.

Today’s debate is incredibly important, but it is a shame that we have to hold it at all. It is deeply disappointing for the 3 million families across the UK who are set to lose an average of £1,300 from April that the Government have not taken the opportunity to step back, do the right thing and rethink these unfair proposals. The Conservatives omitted to mention these unfair proposals in their manifesto. Indeed, given another chance today to stop the changes—in the Welfare Reform and Work Public Bill Committee—they chose to vote against doing so.

Last night, we heard the latest arguments in favour of the cuts, which are already backfiring. The Government are seeking to make this a binary choice between cutting the incomes of the working poor and funding nurses, when in fact many of those in receipt of tax credits are our nurses, teaching assistants, care workers, civil servants and so many others who work day and night to keep our public services and our economy moving.

[David Rutley (Macclesfield) (Con)]

The decision to seek to reverse these reforms is an important one, but when was the hon. Lady made aware of it—on the Labour side? [Interruption.]

[Hon. Members]

Just ignore him.

Oral Answers to Questions

David Rutley Excerpts

Tuesday 21st July 2015 Commons Chamber

[Damian Hinds]

I appreciate how important the shale industry is in County Down. Of course we are very disappointed that the Commission made this judgment on part of the shale exemption, having previously found all the exemptions to be legal in 2002. I say to the hon. Lady that if any businesses in her constituency have particular issues to raise, they should talk to HMRC, and it will continue to provide support through the staged payments of other taxes through the time to pay scheme.

[David Rutley (Macclesfield) (Con)]

7. What fiscal steps he is taking to support businesses.

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

In addition to the measures we took in the last Parliament, in the summer Budget we announced that we will: cut the main rate of corporation tax to 19% in 2017 and 18% in 2020; publish a business tax road map by April 2016, giving businesses the certainty they need to plan for long-term investment; support business investment by increasing the annual investment allowance from £25,000 to £200,000—its highest ever permanent level; and increase the employment allowance from £2,000 to £3,000.

[David Rutley]

The announcement that national insurance and corporation tax will both be further lowered will be welcome news for businesses in my constituency and across the country, as we take forward our long-term economic plan. The Labour party went into the election promising to increase tax on businesses. Does my hon. Friend agree that that is the wrong approach and that it is by lowering taxes that we best back businesses to create the jobs needed by our families?

[Mr Gauke]

First, may I express my sympathies to my hon. Friend’s constituents affected by the tragic incident in Bosley on Friday? I know he raised that matter in the House yesterday. I agree with him that if we want to improve investment in the UK, and therefore productivity, we should be looking to cut corporation tax, not raise it. It would have been a big mistake to have reversed the progress we have made.

Budget Resolutions and Economic Situation

David Rutley Excerpts

Tuesday 14th July 2015 Commons Chamber

[Sajid Javid]

My hon. Friend is absolutely right. At the heart of the new national living wage is just what she says—it will mean working people earning even more, and it will go on to boost productivity, too.

Aggressive regressive policies that penalise honest labour have no place in the modern world. That is why we have already cut the main rate of corporation tax to 20%, rewarding productive companies and boosting UK competitiveness. It will now fall further to 19% in 2017 and just 18% in 2020, making it the lowest in the G20. More than a million businesses will see their tax bill fall as a result, allowing them to invest more in their staff and facilities.

That is not all. As corporation tax falls, tax allowances for growing businesses will rise. The annual investment allowance will be set at £200,000—its highest-ever permanent level, while the employment allowance will increase by £1,000 to £3,000, cutting employer national insurance contributions still further. By next year, businesses will be able to employ four people full time on the national living wage and pay no national insurance at all. By April next year, we will publish a business tax road map, setting out our plans for business taxes over this Parliament and giving employers the information they need to plan ahead.

From September 2017, working families with three and four-year-olds will receive 30 hours of free childcare—twice what they currently receive. This will help the parents themselves, but it will also get more skilled employees back in the workforce sooner—a real bonus for British business.

[David Rutley (Macclesfield) (Con)]

I welcome my right hon. Friend’s announcements. In tandem with the enterprise Bill and plans to review self-employment, does he agree that they will help boost the enterprise culture that we Government Members believe is vital to further the interests of our national economy?

[Sajid Javid]

I agree absolutely with my hon. Friend. Conservative Members have always understood the power and importance of enterprise, while Labour Members have never understood just how important it is to boosting our productivity and making sure that our economy keeps growing and creating jobs at a record rate.

--- Later in debate ---

[Mr Umunna]

First, undoubtedly we should have better regulated the banks during our time in office, but it is worth Conservative Members remembering that the Financial Services and Markets Act 2000 that put in place a tripartite system for banking regulation was not opposed by them at the time—[Interruption.] No, it was not; I have read the Hansard myself. It is also worth noting that, to the extent that we were criticised by Conservative Members, they were saying we were regulating the banking sector too much.

Secondly, I will happily acknowledge that after 15 years of economic expansion we should not have been running a deficit—albeit an historically small and unremarkable one—going into the crash, but again I remind Conservative Members that the average deficit during our time in office before the crash hit was 1.3% of GDP, whereas in the 18 previous years it was 3.2%. It was not that small deficit that caused the increase in the wake of the crash; it was the fall in tax receipts precipitated by the recession.

[David Rutley]

By anybody’s measure there was a record structural deficit before the crash. That was on the Labour Government’s watch. Will the hon. Gentleman now join others in his party who have had the guts to apologise for creating that huge structural deficit?

[Mr Umunna]

That is simply not true—and if it were true, why did the hon. Gentleman’s party sign up to our spending plans in 2007?

--- Later in debate ---

[Helen Whately]

rose—

[David Rutley]

rose—

[Mr Umunna]

I will give way to the hon. Lady.

Budget Resolutions and Economic Situation

David Rutley Excerpts

Monday 13th July 2015 Commons Chamber

[Alison Thewliss (Glasgow Central) (SNP)]

It is a dubious honour to be called to speak in this Budget debate—not because I am not keen to speak on behalf of my party and my constituents, but because so many things about it still upset me deeply. I raised the issue last week, but I have yet to receive an answer on the provision set out at the top of page 88 of the Red Book. Specifically, what kind of system will the Department for Work and Pensions and Her Majesty’s Revenue and Customs introduce to ask women who have been raped to prove it in order to qualify for child tax credits? I still seek clarification on that appalling clause, and I hope that the Secretary of State will eventually be able to give it. I know how hard my constituents and people across these islands will be hit by the Budget. I stand here on behalf of my party to do my best to represent them and fight their corner today. I will speak first about the impact on communities, and then I will discuss investment and city deals.

The Secretary of State for Work and Pensions once claimed he could live on £53 a week. I am not clear whether he tried, but I know that more than 480,000 people signed a petition asking him to do so. As Members of this House, we are comfortably off. Even if we were suddenly to lose our jobs, as so many hon. Members’ colleagues in Scotland did in May, I suspect that none of us would starve. That is not the daily reality of life for many people across the United Kingdom today. Even when people are in employment, they do not earn enough to live more than hand to mouth. We in this House do not have the right to pull up the ladder and leave them behind. Let us be in no doubt—this is not because our lowest-paid do not work hard enough. Many work extraordinarily hard for long hours doing difficult, dirty and dangerous work. They need our support and they need our respect. Most of all, they need fair pay— a real living wage, not some hastily badged imitation—and access to Government support mechanisms such as tax credits to help them live with dignity. This Government should apologise to the Living Wage Foundation for stealing the campaign it has worked so hard to build.

I was glad to hear of the shadow Secretary of State’s conversion, because an Opposition who oppose opposing are no good at all. I urge all Labour Members to remember the toil of many people in our country struggling to make ends meet when they consider backing the Tories’ Budget. Those people elected Labour Members to stand up for them, not for the Secretary of State.

This Tory Budget has been assessed by groups such as the Fawcett Society as being disproportionately hard on women. The Fawcett Society considers that this Budget gives with one hand and takes away with two, stating:

“Women are going to be pushed further into a poverty trap following a Budget that offers little to help them increase their income…We fear that many more will find themselves in a low benefit, low wage situation that is increasingly difficult to escape.”

The House of Commons Library says that, since 2010, 85% of the £26 billion-worth of cuts made to benefits, tax credits, pay and pensions has been taken from women’s incomes. That is unacceptable. I ask all feminists in this House to consider it very carefully.

The communities I know best are resilient. They look out for one another and make sure their neighbours are okay. They collect for food banks. They donate what little they have to ensure that their vulnerable neighbours are looked after. The sharp increase in food banks in this country is a stark example of a community response to crisis. Visits to food banks increased from 25,899 in 2008-09 to 1,084,604 in 2014-15, according to the Trussell Trust’s figures. This speaks to a crisis in our policies in this nation and a very human response by ordinary people to that crisis. We should not have a requirement for food banks in a wealthy nation such as ours. Being ahead in our GDP and our status is not important when people are starving.

What shocks me most is the role of our social security system in forcing people to use food banks. The Trussell Trust’s figures show that just shy of 30% of people are using food banks because of benefit delays: families cannot feed themselves because of an administrative problem. That is absolutely unacceptable and shameful. Twenty-two per cent. of people use food banks due to low income. These people have jobs, but because of their pay and the uncertainty around zero-hours contracts they do not earn enough to eat. This is not right. We must act and not accept the Tory narrative, shake our heads, and throw up our hands.

The benefits statistics from advice agencies such as the citizens advice bureaux show further evidence of an unfair system that exacerbates the poverty in our communities. In the category of benefits, tax credits and national insurance advice, one single citizens advice bureau in the Bridgeton area of my constituency saw an increase in its caseload from 4,092 in 2011-12 to 7,266 in 2014-15. Its evidence shows that delays are built into the social security system at every stage, through application, mandatory reconsideration, and appeals. When people are supported by agencies such as the CAB, they are far more likely to be successful in those appeals. That clearly speaks to a system that is off-putting and difficult to navigate; it is not people-friendly. On Friday I learned of a person who waited over a year for his personal independence payment case to be processed—a whole year, for someone who needed support more than most. Who picks up the pieces? Neighbours, friends, churches, and community organisations filled the gaps when this Government forced citizens to the brink. The Government’s Budget undermines people’s sense of community and puts unsustainable strain on the vital services so many rely on.

I have seen the impact of cuts to local government over the past few years. During that time, the Scottish Government have done their utmost to protect local government from the worst of the cuts it has faced, but decisions have already resulted in significant detriment to services. Cuts were made to the flesh, with efficiency savings, reductions in office costs, and the need to work smarter. Cuts were then made to the muscle—to the staff—

[David Rutley (Macclesfield) (Con)]

I am listening to the hon. Lady with interest. Does she believe that there is any room at all for reform of the benefits system or the welfare approach to encourage more people to get into work, or support them into work, or is everything perfect in Scotland?

Greece

David Rutley Excerpts

Monday 6th July 2015 Commons Chamber

[Mr Osborne]

As I say, it is not for us to dictate to the Greek people or to the eurozone whether Greece should leave. I repeat: the elected Government of Greece say that they want to remain in the eurozone, so we should at least respect that intention, and we will see whether they can work with their partners to deliver it.

[David Rutley (Macclesfield) (Con)]

I welcome the steps that my right hon. Friend is taking to secure UK economic interests in the current difficult circumstances. Given that one of the challenges of the situation is the lack of a clear and orderly exit mechanism from the eurozone, are there any plans within the eurozone to address this issue after the short-term challenges facing Greece have been solved?

[Mr Osborne]

My hon. Friend makes a good observation. There is no straightforward mechanism for a country to exit the eurozone; it is not provided for in the treaties. Of course, if the eurozone wanted to propose a change to the treaties, then we would be very willing to sit down and discuss it.

Royal Bank of Scotland

David Rutley Excerpts

Thursday 11th June 2015 Commons Chamber

[David Rutley (Macclesfield) (Con)]

I welcome today’s statement and the steps being taken to return RBS to private ownership. Will my hon. Friend confirm that the steps set out in the markets review will help to tackle what the Governor of the Bank of England has called a “culture of impunity”, which has been too prevalent in investment banking?

[Harriett Baldwin]

My hon. Friend is absolutely right to highlight a very important part of the Governor of the Bank of England’s announcement last night—the “Fair and Effective Markets Review”; bringing a range of fixed income, currency and commodity markets within the regulatory perimeter; and aspiring to be not only the most competitive country in the world in which to locate a financial services business, but the one with the best, cleanest and most competitive regulatory system.

Corporation Tax (Northern Ireland) Bill

David Rutley Excerpts

Wednesday 4th March 2015 Commons Chamber

[Mr Gauke]

I beg to move, That the Bill be now read the Third time.

I would like to start by noting the immense amount of hard work done by my right hon. Friend the Secretary of State for Northern Ireland and, before her, my right hon. Friend the Member for North Shropshire (Mr Paterson) in getting this policy to where it is today. The parties of Northern Ireland are united in calling for this measure, saying that

“Securing the power to lower corporation tax is a key priority for the Executive to promote the growth of the local community.”

I welcome the ongoing co-operation of colleagues in the Northern Ireland Executive. I thank all hon. Members who have contributed constructively and positively to the scrutiny of the Bill, even if we have not managed to reach complete agreement this afternoon. We have now reached the final stage of this House’s consideration of the Corporation Tax (Northern Ireland) Bill. I have been pleased by the wide-ranging and informed debate we have had.

This measure will allow the Northern Ireland Executive and the Northern Ireland Assembly to set a different rate of corporation tax from the rest of the UK for most types of trading profits arising in Northern Ireland. The tax base, including reliefs and exemptions, will remain under the control of the UK Government. The earliest financial year for which Northern Ireland could have its own rate is 2017. This allows time for businesses and agents to become familiar with the new rules. The power will enable the Executive to encourage genuine investment that will create jobs and growth, meeting the shared goal of the UK Government and the Executive of rebalancing the Northern Ireland economy away from our dependence on the public sector.

I would like briefly to remind hon. Members of the aim of this policy and the key measures within the Bill. As my right hon. Friend the Chancellor said in the autumn statement:

“we recognise the strongly held arguments for devolving corporation tax-setting powers to Northern Ireland.”—[Official Report, 3 December 2014; Vol. 589, c. 314.]

These include: its land border with the very low corporation tax environment in the Republic of Ireland; the fact that Northern Ireland is more dependent on the public sector than most other parts of the UK—estimates of the extent of this dependence vary, but it is generally accepted that about 30% work in the public sector, compared with about 20% in the rest of the UK; the claimant count in Northern Ireland in October 2014 was 5.9% compared to 2.8% in the UK as a whole, and the unemployment rates are reducing more slowly than the rest of the UK; and economic prosperity—GVA per capita—is persistently some 20% below the UK average and has been for a number of decades. To a large degree, many of these issues are the legacy of the troubles.

Devolving corporation tax recognises these unique challenges. The Northern Ireland regime has been carefully designed to enable the Executive to encourage genuine investment that will create jobs and growth, while minimising opportunities for avoidance and profit shifting. It balances this with the need to keep the costs of a reduced rate proportionate, both for the Executive and in relation to any additional administrative burdens for businesses. The design of the regime builds on the principles agreed in 2012 by the joint ministerial working group, which included Ministers from the Treasury, the Northern Ireland Office and the Northern Ireland Executive. In essence, companies trading in Northern Ireland will attract a Northern Ireland rate on their qualifying trading profits but continue to pay the UK rate on profits from non-trading activities, which do not generate jobs or economic growth in the same way.

Similarly, the regime does not extend to financial trades such as lending, leasing and reinsurance, as they offer significant scope for profit shifting without the benefits of substantial new jobs. The regime does not provide opportunities for brass plating, but the policy recognises the genuine growth and employment potential for Northern Ireland offered by back-office operations. Companies with financial trades not covered by the Northern Ireland regime may make a one-off election in respect of profits, determined by mark-up, on the back-office functions of those trades to qualify for the Northern Ireland regime.

[David Rutley (Macclesfield) (Con)]

I thank my hon. Friend for his hard work in taking the Bill through the House. It is important for Northern Ireland and its unique circumstances, but does he agree that there will probably be lessons for the rest of the UK to learn from Northern Ireland about further reducing corporation tax to make our country even more competitive?

[Mr Gauke]

My hon. Friend raises an important point. We are in an era when countries are generally reducing corporation tax rates. In this Parliament, we have reduced our rate from 28% to 21% and are about to reduce it further to 20%, although some advocate that we reverse some of that progress. I also note that the Indian Government set out a plan at the weekend to reduce their corporation tax rates. Certainly, I think that the whole UK will be watching the experience in Northern Ireland very closely to see what economic benefits arise as a consequence of a reduced rate.