Budget Leak Inquiry

Derek Twigg Excerpts

Thursday 22nd March 2012 Commons Chamber

[Mr Gauke]

I agree. The focus on process not substance is very revealing.

[Derek Twigg (Halton) (Lab)]

I congratulate the Minister on some excellent press management this morning, and on the headlines, which have been very helpful to us. But I want to be helpful, so that he can be specific about the area of suspicion. Can he now say that no Treasury Minister directly, or special adviser indirectly on their behalf, gave information to the press about any Budget measures prior to the Budget yesterday?

[Mr Gauke]

Just to be clear, I will give the hon. Gentleman a Budget measure that was confirmed yesterday: personal tax statements. Ministers were aware that we were going to inform the press about personal tax statements, so the question he asks is extremely broad. There were measures announced yesterday in which Ministers were involved, but I am not aware of any Minister being aware of the briefing of market-sensitive information.

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.

Banking (Responsibility and Reform)

Derek Twigg Excerpts

Tuesday 7th February 2012 Commons Chamber

[Mr Hoban]

Indeed. My hon. Friend has made an important point which should be noted by the Opposition. Net lending takes into account not just banks’ gross lending but decisions that businesses make to pay down their debt, and that is what we are seeing. We are seeing businesses deleverage in the same way as banks are deleveraging. I do not know whether the Labour party believes that banks should stop businesses paying down their debt in order to force up the net lending figures.

[Derek Twigg (Halton) (Lab)]

rose—

[Mr Hoban]

I have already been generous in giving way, and I will be generous again in a minute.

We will implement a new seed enterprise investment scheme to encourage investment in early-stage companies, with income tax relief and a capital gains tax holiday to kick-start the programme. We will ensure that our adventurous and ambitious small enterprises receive the support that they need to become the next world leaders.

[Derek Twigg]

rose—

[Chris Williamson (Derby North) (Lab)]

rose—

[Mr Hoban]

Will hon. Members calm down for a minute, and allow me to deal with the point about credit easing?

I think that bank credit will remain the principal source of finance for businesses throughout the United Kingdom. That is why in our autumn statement we went further to ensure access to finance. Last year the Chancellor of the Exchequer announced two bold new credit-easing measures to provide up to £21 billion of new lending for UK businesses. Through the national loan guarantee scheme, we are allowing participating banks to raise up to £20 billion of funding with Government guarantees, lowering their cost of funding and enabling them to reduce lending rates to business by as much as 1%.

[Derek Twigg]

An increasing number of subcontractors in my constituency, especially in the construction industry, are having short-term cash problems, either because their contractors have gone out of business or because the contractors are deliberately not paying the subcontractors. However, when the subcontractors go to the banks for help, the banks say “We are not going to help you.” As a result, subcontracting businesses are going bust and people are being thrown out of work, although it would be possible for the banks to provide finance in the short term.

[Mr Hoban]

The hon. Gentleman should tell the businesses in his constituency to use the appeals mechanism that was introduced to enable businesses to challenge decisions by banks and ensure that they are reviewed. Since the introduction of that scheme, 40% of bank managers’ decisions have been overturned through the appeals process.

Autumn Statement

Derek Twigg Excerpts

Tuesday 29th November 2011 Commons Chamber

[Mr Osborne]

I remember visiting the Falmouth estuary with my hon. Friend and talking to the local harbour master, the port authority and others about the ridiculous situation whereby we cannot dredge the Falmouth estuary and expand the port. The specific reference in my speech to the EU habitats directive was in part a reference to what was happening in Falmouth. As Members will know, I am working extremely hard to overcome these problems so that we can get the estuary dredged, as it has always been dredged, create jobs in Falmouth and address the ridiculous imbalance in our society whereby, in order to protect seaweed at the bottom of the Falmouth estuary, we cannot dredge it and create hundreds of jobs in Falmouth.

[Derek Twigg (Halton) (Lab)]

In view of the decision that the Chancellor has announced regarding the reduction in tolls on the Humber bridge, may I ask him—he, too, is a Cheshire MP—whether he will consider what can be done to reduce the proposed level of tolls on the Mersey gateway? More specifically, will he consider the condition limiting how much of the toll revenue Halton council can use to give discounts to local residents? As he knows, they can travel across the current bridge for free, but when the new bridge is built, both bridges will be tolled.

Eurozone Crisis

Derek Twigg Excerpts

Thursday 3rd November 2011 Commons Chamber

[Mr Hoban]

That is absolutely right: that is what Standard & Poor’s said in its report last month. When we came into office, the country’s credit rating was on negative outlook; now it is on stable outlook. That is a consequence of the action this Government have taken to tackle the mess left by the Labour party.

[Derek Twigg (Halton) (Lab)]

Have the Government drawn a line in the sand for the amount of money they will not exceed if asked by the International Monetary Fund to contribute to a greater extent specifically to deal with the euro crisis?

[Mr Hoban]

What we have said is that it is important that the IMF has the resources it needs to tackle the problems of the global economy. We have yet to receive a request from the IMF, but once we do so, we will respond to it appropriately.

Public Service Pensions

Derek Twigg Excerpts

Wednesday 2nd November 2011 Commons Chamber

[Danny Alexander]

It is true that in the private sector an enormous volume of contributions would be necessary to build up the pension pot that is required to fund the pensions that we are discussing today. The equivalent would be a pension pot of £600,000 or £700,000 a year. That is a measure of the Government’s recognition of the commitment that public service workers make.

[Derek Twigg (Halton) (Lab)]

The Chief Secretary said earlier that the general taxpayer rather than public service workers had been footing the bill. May I point out to him that public service workers are also taxpayers, and that it has not helped that some people have been able to use the high pensions of the best-paid in the public sector as a typical example of those in the rest of the sector? We all know that pensions in the rest of the sector are very low.

Will the Chief Secretary place in the House of Commons Library some typical examples of the way in which the change from RPI to CPI has affected different sectors? Perhaps he could include examples involving part-time workers such as those cited by my hon. Friend the Member for North West Durham (Pat Glass).

[Danny Alexander]

As I said earlier, that depends on a variety of circumstances, but today we are publishing a document that the hon. Gentleman can obtain from the Vote Office, entitled “Public sector pensions: good pensions that last”, and I am sure that it will provide much of the information that he requires.

Arch Cru Compensation Scheme

Derek Twigg Excerpts

Wednesday 19th October 2011 Westminster Hall

[Tom Greatrex]

I thank my hon. Friend for her intervention. I am sure that the Minister heard her entreaty. I agree with her that in seeking to ensure that the regulation is right, there is a great danger in looking to light-touch regulation. The consequence of that could well be the position that we find ourselves debating this morning. I am sure that the Minister will take that warning on board.

The third issue is the payment scheme negotiated by the FSA from Capita, HSBC and BNY Mellon. As everyone knows, they are careful to say that that deal is not an admission of liability. The FSA says and has said to investors that it is a “reasonable outcome” for them. It says that it saves time, given that a breach does not have to be proved in what the background note describes as a very complex case, involving multiple parties with different responsibilities. It says that it considered that it was appropriate to align the Financial Ombudsman Service decision making with the payment scheme rules.

[Derek Twigg (Halton) (Lab)]

I congratulate my hon. Friend on securing the debate. It is nothing less than a scandal that hard-working people are being treated in this way. They are suffering anxiety and concern when all they wanted to do was to secure their future. Two of my constituents have written to me to say this:

“Would it be possible for you to support a request for a Section 14 enquiry under the Financial Services Act? This will provide the best opportunity for all investors to receive an improved compensation package.”

I would welcome my hon. Friend’s view on that. Clearly, I would support such an inquiry if it could deliver an improved compensation package, because the concern and anxiety that people are suffering is terrible. Listening to what they have to say is heart-rending.

[Tom Greatrex]

I thank my hon. Friend for his intervention. I agree with him and will go on to ask the Minister—I am sure that he is expecting this—for a section 14 inquiry and for him to explain why one has not been instituted so far.

To me and to many of the investors, the deal brokered by the FSA—the payment scheme—sounds like an admission of defeat. They cannot work out what went wrong and why.

Eurozone

Derek Twigg Excerpts

Monday 10th October 2011 Commons Chamber

[Mr Osborne]

My hon. Friend is right to call it fiscal activism, because one has to step in and take difficult decisions, which the Opposition have ducked, to get the deficit under control, to have a credible plan and to allow monetary policy greater freedom of manoeuvre. We are monetary activists while being fiscally responsible and that is the right approach. The alternative advocated by the Opposition is a big increase in interest rates—[Interruption.] Let me let hon. Members into a little secret. The Chancellor does not set the interest rates. They are set not only by the Bank of England but by the markets and if we abandoned our plan and suffered the credit downgrade that the shadow Chancellor is, in effect, advocating, interest rates would go up, families would face higher mortgage bills, people would lose their homes, businesses would go bust and jobs would be lost. That is not a path we will go down.

[Derek Twigg (Halton) (Lab)]

May I refer the Chancellor to Hansard from 12 September, column 770? He might recall that I raised with him the serious problems that small businesses are having in gaining access to financial support, based on talking to businesses in my constituency. Will he tell me what changed in the three weeks between 12 September and his speech at the Tory party conference? If the policy he announced then turns out to be a practical source of extra help, I will welcome it, but he made no mention of it on 12 September and seemed to suggest that enough was being done anyway.

[Mr Osborne]

I always listen closely to my Cheshire colleagues.

Independent Banking Commission Report

Derek Twigg Excerpts

Monday 12th September 2011 Commons Chamber

[Mr Osborne]

Yes, I will certainly do that. One of the discussions going on in international circles at the moment is how to make all the various standard-setting bodies more accountable. They are very powerful institutions now and they are not really accountable to national Parliaments or international bodies that represent national Governments. Discussion is going on about how the Financial Stability Board, which is the organisation that brings together different banking areas and different countries to discuss regulation, might be able to make the international accounting standards more accountable.

[Derek Twigg (Halton) (Lab)]

Small and medium-sized enterprises are going to be at the heart of any future economic recovery. I went around a number of businesses in my constituency during the summer recess and the message I was getting, which is different from what the Chancellor has said, was that they are still finding it difficult to get banks to provide lending and support. What is the Chancellor going to do about it? Those businesses cannot wait around for a few years for legislation to happen, so what is the Chancellor going to do today, next week and next month to improve the lending and support from banks, as it is still a problem for the businesses in my constituency?

[Mr Osborne]

I have already talked about how the Merlin agreements try to protect and indeed increase small and medium-sized business lending at a time when many of these banks are shrinking their balance-sheets, which were over-extended. We have talked a lot about timetables. The Lloyds divestment and the creation of a new challenger bank are things that have to be got on with this year. The offer has to be put to bidders this year and it must be completed by 2013—and, hopefully, sooner. In other words, we are encouraging the creation of a new presence on the high street, which should give the hon. Gentleman’s constituents greater choice and competition.

Oral Answers to Questions

Derek Twigg Excerpts

Tuesday 21st December 2010 Commons Chamber

[Danny Alexander]

I agree completely, and it is worth adding that if the Government did not have a plan to reduce the deficit, as the previous Government did not, and we lost control of our public finances, the poorest in society would suffer most from that failure to take decisive action.

[Derek Twigg (Halton) (Lab)]

We read this morning that the Business Secretary has said that the Conservatives wanted to cut the winter fuel allowance in the comprehensive spending review. Will the Chief Secretary put it on the record today that there will be no cut to the winter fuel allowance and no change in the eligibility criteria during this Parliament?

[Danny Alexander]

We are sticking to the winter fuel allowance. We announced that in the spending review, and we have not changed our position. In addition, we have made permanent the £25 a week level of the cold weather payment. The previous Government had planned to return it to £8.50 a week. Imagine what that would be doing now to the millions of families who are suffering in the cold.