Amendment of the Law

Derek Twigg Excerpts

Wednesday 21st March 2012 Commons Chamber

[Mr Tyrie]

We were a bit concerned about that. The Chancellor announced in either his first or second Budget that he would not alter the framework for the North sea tax regime, and then in his following Budget announced significant changes. That does not do wonders for tax certainty, of course. We need to keep an eye on exactly that sort of thing. We need to move steadily and remorselessly towards a simpler, fairer, clearer, more certain and more reliable tax system. That is what will unlock the huge potential for investment in the private sector; medium-sized and large firms are often sitting on cash piles and have very strong balance sheets.

I am sorry—I have lost my way.

[Derek Twigg (Halton) (Lab)]

You’re not the only one.

[Mr Tyrie]

I will do my best to assist the hon. Gentleman and get back into the groove.

The tax changes that have been announced today should play a crucial role in encouraging economic activity. However, that is only part of what is required to transform the growth potential of the economy. We also need a much wider supply side agenda to be implemented. We need labour market reform. The Chancellor has announced his intentions on planning, and we need simpler regulation. He combined the planning and the regulation points in his speech today.

The decision to tell taxpayers in each statement that they receive how their money is spent and how much tax they pay as individuals is a huge step forward. My hon. Friend the Member for Ipswich (Ben Gummer), who is no longer in his place, has been pressing for that for a few years. I argued for it 25 years ago when I was at the Treasury.

Britain is in the early stages of recovery from the biggest boom and bust cycle since the war. The UK has had to absorb the biggest bank failure—RBS—that, as far as I know, the world has ever seen. We are now having to absorb a crisis among our closest trading partners, generated by fundamental flaws in the design of the eurozone. The times are uncertain and confidence is at a premium. Whatever one’s view of the overall Budget judgment, most people agree that confidence is bolstered when Governments do what they say they will do. In the Budget, the Chancellor has done just that.

--- Later in debate ---

[Derek Twigg (Halton) (Lab)]

I am grateful for the opportunity to speak in this debate. As always for the first speakers, the devil will be in the detail—as we pore over the Budget booklets to see what the Chancellor actually said and what it means to ordinary people. It is certainly clear, however, that it is not a Budget for fairness or growth. As the Leader of the Opposition made clear, the cut in the 50p tax rate is a cut for millionaires—not least, of course, for rich bankers.

[Several hon. Members]

rose—

[Derek Twigg]

I have just started. Can hon. Members hang on a second? I am sorry to excite them so much. I am happy to give way to one of them in a minute.

As we heard today, it is also a cut for many in the Cabinet. It is a £40,000-plus tax cut for millionaires—an amazing amount.

[Charlie Elphicke]

The hon. Gentleman said that this is a tax cut for millionaires. If Labour feels so strongly about this, why has the shadow Chief Secretary just been on the television refusing to commit to scrapping it? Does he regret that and think that she should rethink that position?

[Derek Twigg]

We are here to discuss the Chancellor’s Budget. He is suggesting that it is a fair Budget that helps particularly low-paid people, but, as we have seen, it helps the richest, not least some on his own Benches. Let us be clear about that.

Again, on personal allowances, we need to look at the detail. Let us consider the cuts to working family tax credits and the loss of child benefit. On the latter, by the way, the Chancellor used the phrase “cliff edge”, but we are still on the cliff edge—it is just a bit more complicated to get to it. That is the big change. Then there is the cost of living—energy prices, food prices and, interestingly, petrol prices. The Chancellor used to attack Labour over petrol prices when we were in government. I remember the fuel tax demonstrations. We have not seen many of them recently but the Chancellor has done nothing to ease the burden. We know what he did for VAT. That is what added to the cost of petrol and fuel for the people of this country. But the Chancellor did nothing. Many of my constituents have written to me asking that the Chancellor do something about it, so they will be bitterly disappointed today.

[Brandon Lewis (Great Yarmouth) (Con)]

Does the hon. Gentleman not agree that the Chancellor has done something about fuel duty by cutting the increases proposed by the previous Government?

[Derek Twigg]

We can go back to the fuel escalator and see who introduced that in the first place. The fact is that the Chancellor put VAT up, and that has been a major problem for people having to pay the extra, but of course the Chancellor has ignored that and done nothing.

The Budget does nothing for growth. We need growth in the economy to provide jobs and investment in businesses around the country. Someone said that all politics is local, and I will return in a minute to the specific issue and how it affects my constituency. Borrowing is £158 billion more than planned, and today we see that the February borrowing figures are much higher than expected, despite some of the spin beforehand.

Let me turn to unemployment, which is a crucial issue for my constituents. Unemployment has increased in my constituency, with a significant increase in the latest figures, not least in youth unemployment. Many hundreds of young people are not being given the chance for employment in my constituency, because the Government have no growth policy. Their policies are not having an impact in my constituency in terms of providing the additional jobs and growth that are needed. I have had more and more people come to me personally to ask specifically what the Government are doing—and what I am doing, as well—to help young people who are unemployed. I had a mother come to my surgery a couple of months ago who has two young sons who are unemployed and who are desperately trying to get jobs. It is all very well for the Chancellor and the Prime Minister to talk about how we should clamp down on the benefits system to encourage work, but people cannot find work in many instances. That is an important point that we should bear in mind.

Small businesses have been mentioned already. I have raised this issue on a number of occasions with the Chancellor; indeed, he was even gracious enough to say that he had listened to some of the points that I had made in announcing today’s initiative to help bank lending to small businesses. However, let me give hon. Members two examples of problems in my constituency. One company was unfortunately left with a large debt after the larger contractor it was working for went out of business. The company still had a full order book, but the bank refused to lend it money—a scandalous situation. Another example, which is just as scandalous, is that of a business person in my constituency who needed an overdraft for one day because of a short-term problem. However, the banks refused to grant it.

We shall see whether the Chancellor’s initiative will work in getting banks to give more help to small businesses, but my worry is that although those businesses that are able, much more established and probably in a stronger position may be able to get the money quite easily, the businesses that are struggling—the ones that are riskier to lend to—are the ones that we should be helping in particular. We will wait and see whether the Chancellor’s initiatives today will help those businesses. With the right help, a lot of those businesses can survive and maintain or increase employment. The message that I have been receiving from small businesses in my area is that they have not been getting help from the banks. I hope that the Chancellor’s initiative today will make a positive impact. However, I remain sceptical because of his previous announcements on trying to address the problem. When I mentioned it to the Business Secretary even last week, he said, “Yes, it is a problem.” That was his answer. We need real energy from the Government on helping small businesses. I therefore look forward to seeing whether this initiative works in the way the Chancellor has outlined today, although I remain sceptical.

We heard nothing about local government in the Budget. We have talked about fairness, so let me give some examples of unfairness in the way local government is funded—a crucial area that impacts on jobs, investment, planning and other issues. In Halton, for instance, we will be losing £44 a head in the next financial year because of the cuts. That compares with £28 a head for the much more prosperous Cheshire West and the city of Chester, and a loss of £19.32 for Cheshire East. Guess who is one of the MPs in Cheshire East? Surprise, surprise: the Chancellor. The 27th most deprived borough will face the largest cut in local government expenditure among those authorities. I am amazed—although I should not be amazed, really—that the Liberal Democrats are going along with this deliberate attempt by the Tories to push money out to Tory authorities at the expense of the most deprived areas in the country.

Why is this issue important? It is important not just so that local authorities can maintain crucial services such as education, social services, development and so on—many people on low incomes are particularly affected by cuts to those services—but so that local authorities such as Halton can regenerate and attract businesses to their areas. Indeed, Halton borough council has been particularly good at attracting development—it was mentioned the other day in a BBC report—whether in shopping and retail facilities, or development by other businesses, such as Stobart and Tesco, which opened up a chilled warehouse that is a large employer. Halton has been particularly good, including on planning and trying to encourage business.

The Chancellor talked about trying to reform the planning system to ensure that local authorities do more to secure investment and attract businesses to this country, and, of course, to their localities. We have fantastic opportunities in Halton, not only in our retail facilities or the developments by Stobart, but in business development, in areas such as the Heath business park, which is one of the foremost business parks in the region, and Daresbury laboratory, which Labour saved from closure and invested in and, I am pleased to say, whose science and business development the current Government are continuing to invest in. Our local authority has been able to achieve much in difficult times. A lot of that was put in place thanks to investment by the last Government. However, the cuts made by this Government are having a negative impact and will cause councils around the country a great deal of problems.

Interestingly again, there was no mention of the NHS in the Budget. That is no surprise. The Liberal Democrats have now supported the Health and Social Care Bill, which we have heard so much about. I have to say to them that every other month we get new recruits joining the Halton Labour party from their party, because they are fed up with the Liberal Democrats’ support for the policies of this Tory Government. In fact, people can no longer see the difference between Tories and Liberal Democrats, which is why—I am guessing—Liberal Democrats in my constituency are saying that what they are doing is a disgrace.

I want to say a couple of things about infrastructure. I agree with the Government that investment in infrastructure is crucial to give the economy a boost and attract more investment, not least from overseas. With the Olympic games, Crossrail and so forth, we have seen massive investment in London and the south-east. That will of course benefit certain parts of the country, but it will not deliver major benefits to areas in the north-west such as Halton. On the credit side for the Government, they have given the go-ahead to the Mersey Gateway bridge in Halton—a scheme, by the way, that was started under Labour and supported by Labour, and signed off by the coalition some 18 months in government. The project will help to provide up to 4,000 to 5,000 jobs in the Merseyside and Cheshire areas. We have all-party support for the scheme, which will be crucial for encouraging investment in my area, as well as the wider Merseyside and Cheshire areas. However, it will also provide hundreds of construction jobs, which will be important, as we have a particular difficulty with the construction industry at the moment.

At the same time, however, the Government are taking the lion’s share of any toll revenue over and above what is projected, as well as any savings on the project, and they are also limiting the discounts that the council can give to local people. It is important that local people, who use the current crossing for free, should get big discounts or pay nothing at all. I have already written to the Government, but we cannot get a proper answer to why they are doing that. Why should they take the lion’s share of any additional income or savings? They should be ploughed back into Halton, so that local people can be given bigger discounts.

My final point is about town centres and shopping centres. I did not hear much from the Government about how they are going to encourage the regeneration of town centres. We had a debate in this place a number of weeks ago, and I did not hear much in that either. For various reasons, areas such as Widnes in my constituency have done well at improving their town centres and developing their shopping and leisure facilities. However, as I mentioned in a previous speech, Runcorn is struggling to regenerate its town centre, for various reasons that I do not have time to go into today. Runcorn has potential, not least the attraction of its waterways, but the Government have had nothing to say about that. What we want to hear from them is what they are going to do, in real monetary terms, to help town centres such as Runcorn.