Future Government Spending

Edward Leigh Excerpts

Wednesday 4th March 2015 Commons Chamber

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

Well, here is another opportunity to tell the House about the successes of our long-term economic plan. I must say that I am impressed by the Labour party’s courage in selecting the economic recovery for the last Opposition day debate of this Parliament, but not by its judgment. Given the catastrophic situation in which Labour left the country after 13 years in charge, Members might have thought that it would have the good grace to accept that our economic plan is putting Britain back on track, delivering growth, jobs and prosperity for hard-working households up and down the country.

[Sir Edward Leigh (Gainsborough) (Con)]

It is right that we focus on spending totals, but there is an even better argument. A careful academic study of National Audit Office and Public Accounts Committee reports over Labour’s time in government recently found that a staggering £230 billion was wasted on incompetence, inefficiency and undelivered programmes. That is a real legacy of 13 years of wasted Labour government.

[Mr Gauke]

My hon. Friend is absolutely right. Indeed, as a distinguished Chair of the Public Accounts Committee, he was heavily involved in identifying that wasteful spending. One of this Government’s achievements is the measures we have introduced to reduce such wasteful spending. In particular, the efforts of the Minister for the Cabinet Office in pushing forward reform and identifying efficiency savings have reduced the cost of Whitehall strikingly.

--- Later in debate ---

[Sir Edward Leigh]

I am not sure that it is wise for us to go on all the time about the fact that we have cut the deficit in half. We have cut it in half, but that disguises the real crisis that we are still experiencing. We are still borrowing £90 billion a year, which means that we cannot relax for a moment. It is madness to make unfunded borrowing and spending commitments.

[Mr Newmark]

My hon. Friend is absolutely right. That is why we had an emergency Budget which laid out clearly our long-term economic plan.

Let us consider our record in government since we picked up the pieces that were left by the last Government. As my hon. Friend has just said, we have halved the deficit. That is important, because it has kept interest rates low for mortgage holders and for business. Income tax has been cut for 25 million people, by about £705 per person. The personal allowance has been raised from £6,500 to £10,600, and some 3.4 million people have been taken out of tax altogether. Benefits have been capped to reward hard-working people. Employment is up, and youth unemployment is down. The Million Jobs campaign, which I put together, managed to persuade the Chancellor to abolish national insurance payments for those who hired people under 21. That has paid dividends, because it has accelerated the decline in youth unemployment. The state pension is also up by £800. Fuel duty has been frozen. Energy costs are down. Overall, wages now are rising higher than inflation; on the latest statistics, total pay is up by 2.1%, whereas inflation is only up by 0.9%.

Charter for Budget Responsibility

Edward Leigh Excerpts

Tuesday 13th January 2015 Commons Chamber

[Mr Osborne]

The last time it was not in deficit was when people followed Tory spending plans: there was a surplus at the end of the 1990s and 2000. That is what we advocate again.

At the moment of maximum danger five years ago, as much of the rest of Europe became engulfed in a sovereign debt crisis, Britain faced a choice: did we have the resolve to cut our spending, cut our deficit and set a course for economic stability, or did our country go on borrowing and spending our way to economic ruin?

[Sir Edward Leigh (Gainsborough) (Con)]

But surely we cannot relax for a moment. When we say we have cut the deficit by half that is good, but it gives the impression that the problem is solved and we are still borrowing £90 billion a year. The debt is still at about £1.7 trillion. Therefore, we cannot relax for a moment and we cannot allow there to be any sort of Government who let the anchor off. We therefore have to say no to a Labour Government.

[Mr Osborne]

My hon. Friend is absolutely right. Having brought the deficit down, we have to complete the job. We have to run a surplus and get our national debt down—that is what this debate is about. We remember Opposition Members in this House five years ago urging on us a ruinous course of more borrowing and more spending, the very same people who had presided over the borrowing and spending that had put Britain into such a perilous position.

EU Budget (Surcharge)

Edward Leigh Excerpts

Monday 10th November 2014 Commons Chamber

[Mr Osborne]

I agree that this was a totally unacceptable approach from the previous European Commission. To be fair to the new budget Commissioner, she has engaged constructively and got the rules changed so that it does not happen again. On the hon. Lady’s comment about finding a serious commentator who thought the rebate might not apply, I know the shadow Chancellor is not a serious commentator but he did not at any point raise this issue. The calculation on interest payments that he used in The Guardian on Friday was based on the assumption that we would pay £1.7 billion—that is how he came up with the number that he used to make his point. As a result, he did not expect the rebate to be applied or to be applied at this rate.

[Sir Edward Leigh (Gainsborough) (Con)]

The shadow Chancellor says that this reduction is entirely down to the rebate. So, if Tony Blair had not given away half the rebate, would we have got a 100% reduction?

Oral Answers to Questions

Edward Leigh Excerpts

Tuesday 4th November 2014 Commons Chamber

[Mr Speaker]

It is time to hear from a Lincolnshire knight—Sir Edward Leigh.

[Sir Edward Leigh (Gainsborough) (Con)]

If someone comes here to work from the European Union, and if they are in a relatively low-paid job and receive tax credits as a form of benefit, they might effectively be paying no tax at all. Will the Government tell the European Commission that we should have a new system by which people have to pay tax for at least three years before drawing any tax credits or benefits?

[Priti Patel]

We have already made changes to that whole area, and that is something we will look at further.

The Economy and Living Standards

Edward Leigh Excerpts

Thursday 12th June 2014 Commons Chamber

[Ed Balls]

In a second.

As I said, the first mistake is to bury our heads in the sand. The second mistake is to attempt to appease those who say that the problem is rapid globalisation and technological change and that therefore the simplest thing to do is to put up trade barriers, stop all migration to Britain and leave the European Union. That is the wrong approach as well.

We all know the depth of concern about immigration in our country, but when the Prime Minister claimed, foolishly, that he would reduce net migration to the tens of thousands, “no ifs, no buts”, he did the cause of sensible and progressive immigration reform no good at all, because he has failed. Net migration has not come down to the tens of thousands; it has stuck stubbornly above 200,000 a year. Even the Chancellor has admitted that the Government will not meet their immigration target. Sending ad vans around the country urging immigrants to go home has only undermined their credibility. That is not the right approach on this issue.

We need clear reform on this matter. We need tough new laws to stop agencies and employers exploiting cheap migrant labour to undercut wages and jobs. We need to strengthen our border controls, not weaken them. We need to ensure that people who come to this country can learn English, and we must provide the support to make that happen. We need fairer rules to make sure that people who come here contribute, cannot claim benefits when they arrive and can more easily be deported if they commit a crime. We need to reform the free movement of labour in Europe through longer transitional controls, stronger employment protection and restrictions on benefits. Those are the things that we have to do. We need reform, not posturing and pandering.

[Sir Edward Leigh (Gainsborough) (Con)]

But the fact remains that too many traditional, working-class voters voted UKIP in the European elections. That is a serious problem for both political parties. Should we not now regret that there was such unrestricted immigration from eastern Europe? Can we not learn the lessons of that?

[Ed Balls]

I am very happy to say to the hon. Gentleman that not having transitional controls in 2004 was a mistake, and one that we all still deal with the consequences of. The question is whether we should have allies in Europe whom we can persuade to do things better for the future or walk away from our European partners and find that we are treated with disdain in the decision-making halls of Europe. That is the real question for statesmanship and politics in our country at the moment.

Our view on that question is clear. We say that there is no future for Britain in walking away from the European Union. It is the biggest single market for the companies, regions and countries of the United Kingdom. We have to reform Europe to make it work better for Britain, but we are much more likely to win the arguments if we are fully engaged, rather than having one foot out of the door.

The Prime Minister and the Chancellor used to agree with that argument. They came though the Lobby with us in 2011 to oppose an arbitrary timetable for an EU referendum. Then, they changed their minds. The Prime Minister flounced out of a summit and decided to appease Tory Back Benchers by performing a U-turn. In the memorable words of Lord Heseltine,

“To commit to a referendum about a negotiation that hasn’t begun, on a timescale you cannot predict, on an outcome that’s unknown, where Britain’s appeal as an inward investment market would be the centre of the debate, seems to me like an unnecessary gamble.”

--- Later in debate ---

[Sir Edward Leigh (Gainsborough) (Con)]

The whole House has great respect for the right hon. Member for Blackburn (Mr Straw), who, as always, was careful to acknowledge that the previous Labour Government did make some mistakes. One of those has been all over the newspapers this morning. It was a decision that he was closely involved in and that I voted against: the decision to invade Iraq. That has proved to be one of the single most disastrous decisions ever made in foreign policy, and we have reduced that country to chaos. There are also lessons to be learned for the future, when next we think of involving ourselves in foreign countries with military ventures, whether in Ukraine or Syria.

The right hon. Gentleman was also generous in his description of the very difficult economic decisions that both Governments have grappled with. Of course he is right to say that the roof has to be fixed, but I am sure he would accept it when I say, as a former Chairman of the Public Accounts Committee, that there were productivity declines in areas such as the NHS and that extraordinary waste was involved in the rapid increases in expenditure, particularly on health and education. I am sure that both Governments have a lot to learn about that. I agree with him that we were probably wrong to agree to commit ourselves to accepting Labour’s spending plans, which were too high, and I have consistently argued that we should have addressed the deficit even quicker. It is a matter of regret that we are still spending more than ever before. That highlights the key challenge that both parties face: we have to keep addressing this deficit.

The current Government are winning the economic argument because there remains a lack of coherence in Labour’s spending plans. The whole country realises that there has been this monumental waste and the Government are addressing it. Perhaps we could have done more and we could have done it in a better way, but we are seeking to address it. This Labour Opposition, unlike the Labour Opposition before 1997, who accepted our spending plans before 1997, do not apparently have a coherent economic message to address that. We know that elections are won on the economy.

At the moment, we cannot deny that 2 million extra jobs have been created in the private sector, and I have to say, following an intervention from the Opposition Benches, that they have not all come from ex-members of the Bullingdon club. There are a lot of ordinary people who are getting these jobs. The Opposition have to address that problem, and we have to concentrate on the economy. It was significant and a bit of an innovation that, in the Gracious Speech, the Queen often mentioned the economy.

[Mr Straw]

I am extremely grateful to the hon. Gentleman for giving way and for his generosity towards me. Yes, of course I accept the 2 million figure that he mentioned, but does he acknowledge that a significant element of that 2 million, whether we like it or not, is composed of those migrants who have come in, about which he so much complains?

[Sir Edward Leigh]

Yes, of course I acknowledge that, but the point I want to make is that it is by concentrating on the economy during the last year of this Government that we will establish our credibility as a party of government. What worries me is that although there is so much in this Queen’s Speech that is excellent, especially the Bill dealing with pensions, we still sometimes forget the essential lesson that, as a Conservative party and a Conservative Government, where we do conservative things and address the economy in a conservative way, we win. Where we indulge in modernising gimmicks, we stumble and start to lose. Sometimes, we forget that. When we do conservative things, such as cutting the deficit, introducing a benefit cap and attempting—not enough—to deal with immigration, we win.

I am still worried about a couple of things in the Queen’s Speech. Is it really essential, when we are trying to address record spending and difficulties in the economy, to start talking about eradicating plastic bags in supermarkets? Is that a priority? Is it essential to start talking about the recall of MPs? It may at first sight be populist and popular, but it is very difficult to administer and probably will not solve any problems. For centuries, rogue MPs have consistently been kicked out of this place, so let us concentrate on the economy.

[Mark Hendrick (Preston) (Lab/Co-op)]

By modernising, which the hon. Gentleman is very much against, does he mean reneging on the pledge to commit 0.7% of the gross national product to international aid, which was a manifesto promise of the three major parties in this country?

[Sir Edward Leigh]

That is a manifesto promise. My views on that are well known. I have two daughters working in international development in Africa, and I am proud of the efforts that we have made on international aid. I am totally committed to spending properly on international aid, but the Department for International Development, like every other Department, must spend what we can afford to spend and what we need to spend. Frankly, it is somewhat economically illiterate to insist by legislation or by other means that a Department sets a fixed percentage of GNP on aid, health or anything else. What happens if there is a recession and the economy contracts? We could end up spending less on aid. I have consistently made that argument, but I am grateful to the hon. Gentleman for his intervention.

My point is that we must concentrate on the economy. We still face enormous challenges. It is very difficult to get to grips with some of these challenges while we are in a coalition Government. A lot has been made of immigration in this debate. The truth is that we have made a mistake—the shadow Chancellor was generous enough in response to my intervention to accept that—in allowing such high immigration from eastern Europe. We all accept that, especially when economies diverge so greatly, as happens between Bulgaria and Romania and ours. It cannot be accepted in the long term that there should be an untrammelled right of immigration from poorly performing economies to our own. We just have to accept that. Therefore, the European Union rules on this must be reformed. I should like to see legislation put in place, but it will not be possible while we are in a coalition.

We also have to address the problem of the referendum. The British people deserve a referendum. Nobody under the age of 55 has been given a referendum. It is virtually impossible to get a referendum Bill through via the private Member’s procedure. The referendum Bill should be in the Queen’s Speech. It should be a Government Bill. I say to my hon. Friends the Liberal Democrats, who are sitting in front of me, that they cannot deny the right of the British people to have a choice.

We need to address the concept of human rights. I am a great supporter of the Council of Europe and all its work; I am a member of it. The fact is that we cannot continue to have a proactive European Court of Human Rights in Strasbourg, which is defeating the efforts of the former Home Secretary, the right hon. Member for Blackburn (Mr Straw), and many others to deal with terrorism. There is much more that we need to do, which is why, for all that the coalition has achieved, we must get a clear result at the next general election. I hope from the bottom of my heart that it is a Conservative victory, so that we can address the very serious problems that still afflict our nation.

Consumer Rights Bill

Edward Leigh Excerpts

Tuesday 13th May 2014 Commons Chamber

[Fiona O'Donnell]

The two issues I am confusing are what people say and what people do.

I want to be helpful to the hon. Member for East Hampshire on the e-mails that he is receiving from BrightHouse. I suggest that he follow up the matter with the Financial Conduct Authority. The last time we debated high-cost loans, I spoke about my experience with Wonga. I had received an e-mail offering me another loan when I was not aware that I had ever had a loan. I was told that the e-mail had not come from Wonga, that it was some kind of fraud and not to worry about it. I have recently taken this up with the FCA, which now has some authority to deal with the issue. I think that the authority will be asking the Government for more powers to get to grips with this. It suggested to me that a fraudulent application for a loan had been made in my name; my contact details were supplied, but Wonga failed to notify me of that and has retained my data on its files, and that is why it has been marketing products to me. He may wish to take up his case with the FCA and perhaps check out his credit rating—as I immediately did, to see whether the application had affected me. I admire his restraint in not rushing from the Chamber at this very moment to do that.

The exploitation that we have seen is plain and simple. Payday loan companies are not called legal loan sharks for no reason. They are predatory. They sniff out hunger, home in on and exploit the difficult situations in which so many of our constituents find themselves. The figures from one of my citizens advice bureaux in Haddington showed that debt-related cases accounted for 51% of its total inquiries from April to June 2013, a rise in East Lothian of more than 40% from the same quarter the previous year. That is why Opposition Members have been urging the Government to do something as quickly as possible. It is why we are saying that the cap needs to be introduced. It is welcome that the Government have changed their mind, but we would like to see that brought forward to 2014. People in my constituency and all our constituencies who are struggling with debt need help now.

While not everyone who borrows using a payday loan gets into difficulties, enough do as a result of the terms of the loan that the industry is now making billions of pounds. When one in three such loans are being used to pay off another payday loan, we need to call time on these lenders breaking their own codes of conduct and step in to reform the industry. It is time to have a levy on the industry so that companies have to give something back to the communities who are swelling their coffers but suffering at the same time. The hon. Member for East Hampshire said that the money suddenly injected into credit unions would not have the impact that we hoped. My constituency is served by a credit union, but it does not have a presence on the high street; it lacks visibility. It works through employers such as East Lothian council encouraging their employees to save with them, but it does not reach the people who wander off the high street into The Cash Store or BrightHouse. A cash injection to the credit union in my constituency to give it a high street presence would tackle the exploitation that I see among the poorest and most vulnerable people.

I understand that Members have worked on a cross-party basis—I will now try to take back some of the earlier sour remarks—but let us not be limited in our ambition today. I hope that they will get behind the new clause and make a difference to the people who are suffering in our constituencies.

[Sir Edward Leigh (Gainsborough) (Con)]

This is a useful debate. The trouble with the new clause is that, unless we are careful, if we legislate in haste on complex legal matters, we may be subject to the law of unintended consequences and make things worse. No one denies that a lot of people are under tremendous financial stress, and we all want more transparency. I agree that on many occasions the law needs to be updated.

The hon. Member for Walthamstow (Stella Creasy) talked about bills of sale and described them as a Victorian product. In fact, bills of sale have been around for centuries. The Bills of Sale Act dates from 1878, and was amended in 1882. That does not necessarily mean that bills of sale are wrong in themselves. I looked up the definition of “bill of sale”, which is

“a legal document made by the seller to a purchaser…that on a specific date at a specific locality and for a particular sum of money or other value received, the seller sold to the purchaser a specific item of personal property, or parcel of real property, of which he had lawful possession.”

It is a written instrument which evidences the transfer of title to personal property from the vendor or seller to the vendee or sellee. For instance, a typical bill of sale would be something very simple: “for the sum of X pounds I hereby sell to Larry Smith full ownership of a green John Deere harvester.”

A bill of sale is a simple, historic or traditional way of ensuring the transfer of title. I agree with the hon. Member for Walthamstow that things can become complicated, and that is evidenced in legal sources when a bill of sale is attached to a loan, as it can be used as evidence of a loan and security for a loan; so someone’s car, for instance, may be used as security for a loan.

Just because some bills of sale are misused and some people suffer as a result of the process or are under legal stress, that does not mean that we have to throw a century of careful legal practice and growth out of the window, as we might make things worse. If we over-regulate legal loan providers, we may well force people into the clutches of unregulated loan sharks. My suggestion to the Minister—and I agree that this is a serious problem—is that rather than attack bills of sale, which have been around for a long time and have been used in an entirely reputable and correct way and entirely transparently to transfer ownership, or just throw them out of the window by accepting a new clause that has not been thought through, the issue should go to the Law Commission, which can study all the evidence and practice and ensure that we protect consumers, achieve full transparency, and modernise the law. We should not rush through Acts of Parliament that can make things worse for people under stress and force them into the hands of loan sharks.

Finance (No. 2) Bill

Edward Leigh Excerpts

Wednesday 9th April 2014 Commons Chamber

[Mr Burrowes]

As I said, we need to look at ways of supporting such couples to stay together, not least for the sake of their children. Too many children see their parents breaking up. We need to look at the evidence in support of marriage, because these decisions need to be based on evidence rather than on moral judgments. We have heard statistics relating to adults’ and children’s health and well-being, which I will not repeat. Members have talked about public health benefits, and mention has been made of smoking and other issues. Leading research has stated:

“If marriage were a drug it would be hailed as a miracle cure.”

Why are the Opposition so keen to avoid a basic measure to recognise marriage in the tax system? Members should not take my word for all this. Let us go across the Atlantic and hear what Barack Obama wrote in “The Audacity of Hope: Thoughts on Reclaiming the American Dream”:

“Many single moms—including the one who raised me—do a heroic job on behalf of their kids. Still, children living with single mothers are five times more likely to be poor than children in two-parent households. Children in single-parent homes are also more likely to drop out of school and become teen parents, even when income is factored out. And the evidence suggests that on average, children who live with both their biological mother and father do better than those who live in stepfamilies or with cohabiting partners.”

We have heard statistics to back that up today. Barack Obama went on to say:

“In light of these facts, policies that strengthen marriage for those who choose it…are sensible goals to pursue. For example, most people agree that neither federal welfare programs not the tax code should penalise married couples.”

He did not want to go against the Bush tax plan, and he recognised that it contained aspects of the Clinton welfare policies, but he wanted to ensure that proposals to reduce the marriage penalty would enjoy strong bipartisan support. It is a shame, given the bipartisan support for recognising marriage in the tax code across the Atlantic, that no such support exists here. We should learn the lessons and take a leaf out of the book of Barack Obama.

I mentioned that the children who were interviewed earlier for BBC “Newsround” would have been confused as to why anyone would disagree with this basic measure. Let us look at the recent history, since 2000, when marriage was not recognised in the tax system. We have heard many of the reasons behind the brokenness of Britain under Labour. One was the lack of recognition of the importance of marriage, not so much culturally as financially. That has certainly played a part, which is why there is a commitment at the heart of Conservative policy to reverse the 15 mistaken years of a system that did not recognise marriage.

One of the criticisms of transferable allowances for married couples is that they amount to giving a few privileged people a bribe to get married. It has been suggested that we are being discriminatory, but where is the discrimination in the tax system? According to the Institute for Fiscal Studies, the couple penalty facing those considering whether to marry is significant, at £44.70 a week, rising to over £85 per week for couples with children under 16. It is that group who have been discriminated against for many years. Our limited but important transferable allowance provision will begin to erode the discrimination and create a level playing field for those couples. Far from creating any kind of privilege, it will simply remedy an injustice that has been going on for 15 years in refusing to recognise the huge policy benefits of recognising marriage in the tax code.

We have heard that marriage is popular, but it is not popular only with a privileged minority. It is an aspiration that goes across social cohorts, and particularly among young people, 90% of whom aspire to marriage. Many of those people do not take up the opportunity to marry, however, and we need to look at the reasons for that. The transferrable allowance will not mean that all those people will suddenly get married. They will have to find an appropriate partner, for a start, and their marriage will of course be based primarily on love and being well-matched. The bottom line is an issue of social justice, however. Why are there particular barriers to marriage among poorer communities? People in those communities have just the same aspiration to marry, but fewer of them do so. We have to recognise that financial and cultural barriers are involved.

[Sir Edward Leigh (Gainsborough) (Con)]

No transferrable allowance will make anyone get married or stay married, or even encourage them to get married. The whole point is that when one person in a married couple—usually the woman—stays at home to look after the children, they are uniquely disadvantaged by the benefits system. This is simply a question of justice; we are righting an injustice in the benefits system.

[Mr Burrowes]

My hon. Friend is quite right. We are simply talking about justice. The Government need to take a lead in this area. The culture can change in many ways, but one way we can take a lead is through the introduction of a small financial instrument to recognise marriage in the tax system. That is what we are doing today, and it will help to bring about a change of character across the whole country.

--- Later in debate ---

[The Temporary Chair (Martin Caton)]

Order. I wish to call the Minister by 3.45 pm at the latest, so I ask the hon. Member for Gainsborough (Sir Edward Leigh) to ensure that he has sat down by then.

[Sir Edward Leigh]

I am grateful, Mr Caton. I apologise for not being here at the beginning of the debate, but I was at the Council of Europe. I wanted to come back here to speak on this measure especially, because I have campaigned for it for many years. This is a very proud moment for our party. We are fulfilling an election manifesto, and I am delighted that at last it will happen. I have no doubt that the party will unite today at 4 o’clock to vote through the measure.

There is no doubt that marriage is the fundamental institution of society. It is the one that contributes the most to the cohesiveness and sustainability of society, and I do not think that anyone disagrees with that. But for too many families, the tax system simply punishes marriage. Why do we have a tax system that does that? It should facilitate marriage. The system has led to numerous social problems that, aside from the obvious human cost, create an undue financial burden on the state. Ultimately, if we promote marriage and support it in the financial system, the state saves money, and we create a happier society. Creating a transferable allowance will strengthen the institution of marriage—that may be only a message, but it is a strong one. It will provide benefits for adults, children and society as a whole.

I am afraid that marriage rates are at an all-time low. The scale of family breakdown as a social problem is increasing all the time. It is estimated that it has cost us between £24 billion and £41 billion to deal with it every single year.

The absence of a transferable allowance obviously makes marriage less attractive to prospective husbands and wives and more costly than it should be for some people. However, that is not the main point. The main point is that we are creating a powerful message that marriage works and it is good for children. As I said in an earlier intervention, a married couple where one partner stays at home is uniquely disadvantaged by the tax system. That cannot be fair.

I agree that policy must be based on evidence, and the evidence is absolutely clear. Regardless of socio-economic status and education, co-habiting couples are between two and two and half times more likely to break up than equivalent married couples. The poorest 20% of married couples are more stable than all but the richest 20% of cohabiting couples. The 2004 Blanchflower and Oswald study in the US and UK shows that the effect of marriage on mental well-being is estimated to be equal to that of an extra $100,000.

A 10-year study of British households found that the health gain from marriage may be as much as the benefit from giving up smoking. The Centre for Social Justice found that those not growing up in a two-parent family were 75% more likely to fail at school, 70% more likely to become addicted to drugs and 50% more likely to have an alcohol problem. We should pay tribute to the Prime Minister, the leader of the Conservative party, for constantly expressing his support for the institution of marriage.

Marriage is even a predictor of survival rates in patients with lung cancer, according to The Independent newspaper. The transferable tax allowance will be in line with international best practice. This is not some way-out wacky idea from the Christian right, but what most countries do. Of the biggest countries in the OECD, it is only the UK, Mexico and Turkey that do not have a transferable allowance. It is only 24% of the population of all the OECD countries that are not benefiting from this transferable allowance for married couples. It is a common idea that is widely accepted all over the world. It works; it is normal; it is good.

The UK is one of the only countries in the OECD not to recognise marriage in the tax system. The comparison between the United Kingdom and the OECD average is telling. The tax burden on the single earner married couple with two children on the average wage in the United Kingdom has increased from being 33% greater than the OECD average to now being 42% greater. Clearly, the problem is growing. Introducing a transferable allowance for married couples will disproportionately benefit poorer families and those in the lower half of income distribution. I am proud of what we are doing and I am proud that at last, this afternoon, we are recognising marriage in the tax system.

Amendment of the Law

Edward Leigh Excerpts

Thursday 20th March 2014 Commons Chamber

[Ed Balls]

I do not agree, but I will come on to that in a moment.

We will study very carefully the proposals put on the table for discussion. We have just had a statement. The proposals are important, and it is important to have more flexibility and choice. We have been calling for reforms of the annuities market: to be honest, the price of annuities and competition in the market have not been good enough over the past few years. I must say that we all remember the pensions mis-selling of the early 1990s, and we need to make sure that there is a tight grip on tax avoidance. That is why we will look carefully at the proposals.

I must tell the hon. Gentleman that if he looks at table 3.6 on page 87 of the Office for Budget Responsibility’s report on this so-called Budget for savers, he will see that the savings ratio was 7.2% in 2012 and 5% last year and—here is what will happen to savings in the next five years—then goes from 4.1% to 3.6% and down to 3.2%. The Budget for savers will see savings fall every year in the next five years, with each of the figures revised down by the OBR in its latest forecasts. I must say that I am not sure whether this is quite the Budget for saving that it is stacked up to be.

What we desperately needed was a Budget that delivered for the many, not just a few at the top. What a wasted opportunity it was. The annual increase in the personal allowance is outweighed completely by the 24 tax rises that we have seen since 2010. The Chancellor’s welcome conversion to the importance of capital allowances for business investment means that he has reversed the cuts to capital allowances that he made in 2010. Let me tell him what the OBR says in the Budget documents about the overall impact of all the Budget measures:

“The measures in the Budget are, in aggregate, not expected to alter the OBR GDP growth forecast.”

This Budget will have no impact on growth at all.

As for the Chancellor’s 1p cut in beer duty, welcome as it is, it means that people have to drink 300 pints to get one free. This morning’s Tory poster says:

“Bingo! Cutting the bingo tax & beer duty to help hardworking people do more of the things they enjoy”.

How patronising, embarrassing and out of touch that is. The Tory party calls working people “them”—them and us. Do the Tories really think that they live in a different world from everyone else? Does that not reveal just how out of touch this Tory Government are? It is no wonder that they do not understand the cost of living crisis and no wonder that the Chancellor did nothing in the Budget to tackle it.

We are told by the Chancellor that he did not know that the poster was coming out. The Tories’ chief election strategist did not know about the ad campaign that came out straight after his Budget—pull the other one! It gets worse. I hear that the Prime Minister did not properly understand what the Chancellor was saying. Apparently, when he told the Prime Minister that he wanted to cut taxes for Bingo, the Prime Minister thought he was referring to an old school chum: “Hurrah, another tax break for millionaires. Bingo, Bingo!”

It is okay though, because we know that the job of the chair of the Conservative party is safe. No. 10 says that the Prime Minister has full confidence in the Tory party chair. That’s the end of him then! According to The Sun, the Tory party chair is currently on a tour of northern cities, presumably to see how the other half live. I wonder how it is going. Can you imagine, Mr Deputy Speaker? “Goodness me, the houses even have indoor toilets these days.” I wonder whether he is looking for pigeon fanciers up north. My advice to him is to change his name back to Michael Green. That was a bit safer.

The problem with the Budget was not what it did, but what it did not do. Where was the freeze on energy prices that Labour has called for? Where was the 10p starting rate to cut the taxes of 24 million working people? Where was the expansion of free child care to 25 hours a week for working parents? Where was the compulsory jobs guarantee, paid for by a tax on bank bonuses? Where was the cut in business rates for small firms? Where was the new investment in affordable housing? Where was the reversal of the £3 billion top rate tax cut to balance the books in a fair way? We got none of Labour’s cost of living plan to balance the deficit in a fairer way, just more of the same. Working people are worse off, while millionaires get a tax cut—just more of the same from the same old Tories.

[Sir Edward Leigh (Gainsborough) (Con)]

If I may gently return to the Budget, I understand that the Labour party accepts the welfare cap—that is fair enough—but that it wants to restore the spare room subsidy, which would cost £465 million. Will the shadow Chancellor explain to the House what other bit of welfare he would cut?

[Ed Balls]

I will. We have said very clearly that we would take the winter fuel allowance away from the richest 5% of pensioners, which would be a saving. We would also invest in affordable housing to get the housing benefit bill down. I do not know whether the Chancellor gets to read the OBR report. I think that he should listen to what it says:

“The rising proportion of the renting population claiming housing benefit may be related to the weakness of average wage growth relative to rent inflation. This explanation is supported by DWP data, which suggest that almost all the recent rise in the private-rented sector housing benefit caseload has been accounted for by people in employment.”

People in employment are seeing their wages fall and are having to claim housing benefit. It is no wonder the welfare bill has gone up by £13 billion since 2010.

It was not supposed to be this way. We all remember what the Chancellor promised in 2010: he would make people better off, balance the books by 2015 and rebalance the economy for the future. We know that people are worse off. We also know, after three years of flatlining growth, that his commitment to balance the books in 2015 is in tatters. He does not expect a balanced budget in 2015, but a deficit of more than £75 billion. It is all in the OBR report. There will be £190 billion more in borrowing than he planned in 2010. The national debt is rising this year, next year and the year after.

--- Later in debate ---

[Vince Cable]

It does, but the figures produced over the last year suggest that long-term unemployment is falling, along with unemployment in general.

[Sir Edward Leigh]

My right hon. Friend is making an excellent speech in favour of hard work. I read in the papers yesterday—so it cannot possibly be true—that the Chief Secretary had boasted that he had personally vetoed any indexing of relief for higher-rate taxpayers. Surely my right hon. Friend, who is pro-enterprise, cannot think it right that a police sergeant is paying higher-rate tax.

--- Later in debate ---

[Sir Edward Leigh (Gainsborough) (Con)]

I may not agree with all that the hon. Member for West Bromwich West (Mr Bailey) says, but he always speaks with calm courtesy and forensic good sense, so we are grateful for his comments. I am also grateful that my hon. Friend the Financial Secretary is sitting on the Front Bench. I hope that what I am going to say is not entirely off message from what the Government believe. Because I respect and admire him so much, I have a sneaking suspicion that privately he might agree with much of what I will say.

The fact is that, for all the huff and puff, when it comes to what it actually puts into and takes out of the economy, the Budget represents a 0.3% change—£2 billion out of £732 billion of spending. That is somewhat worrying when we consider the very big challenge we face on deficit reduction and, following what the hon. Member for West Bromwich West said, what could be a debt-fuelled boom, which is the traditional British way of climbing out of recession.

I wanted to try to start on a positive note, however, so I should quickly say that I think this Budget will be remembered for its entirely freedom-loving, Thatcherite, people-trusting measures on annuities. However, those points have been made repeatedly, so I do not need to labour them.

I want to talk about what is happening to higher rate taxpayers. The top 5% pay 45% of all income tax. The top 1%—just 30,000 people—pay 30% of all income tax, which is more than the lowest 50%. Let me say gently to the Business Secretary—he is not here, but I am sure he will read Hansard avidly—that I think he was being slightly disingenuous when he replied to my intervention in which I bemoaned the fact that we are not indexing the higher rate tax. He said, “Well, we’ve made a start”, but it is a very small start. Under this Budget, 400,000 more people will still be dragged into paying higher rate tax. Some 1.4 million middle-earners—small business men; managers; hard-working nurses, matrons and teachers at the top of their professions; police sergeants—have all been dragged into this higher rate of tax during this Parliament, on our watch.

The higher rate of taxation is almost turning into the standard rate. The top half of taxpayers contribute 90% of all tax intake. When Nigel Lawson introduced the 40p rate in 1988, it was paid by just 1.35 million people. Now, 4.5 million people pay the higher rate of tax, and by 2015 that figure will have risen to nearly 5 million. I personally do not believe that this is what the higher rate of tax was designed for. It should attack people on higher rates of earnings, and that means those who earn a reasonable amount of money; it should not attack police sergeants, senior matrons or classroom teachers. That is wrong and inequitable.

We need from the Government a sense of mission and direction, and the sense of mission and direction that I want to see is one that is aimed at simplifying all taxation. After every Budget speech—rather like the Secretary of State, I think I have now sat through 18—I make the point again and again that simplification pays off. When we reduce taxation on the top earners, as we saw when we reduced the top rate of tax from 50% to 45%, we encourage enterprise, remove avoidance and even evasion, and generate more income and growth. This is a Conservative philosophy of enterprise and rewarding hard work, and that is what a Conservative Government must be about. I earnestly enjoin the Government to try to right this inequity against higher rate taxpayers in their next Budget, or, if not, in the manifesto.

Financial Services (Banking Reform) Bill

Edward Leigh Excerpts

Wednesday 11th December 2013 Commons Chamber

[Sajid Javid]

I agree with the right hon. Gentleman that it is certainly possible to have a better system than the current one. There will be a number of changes, including the moves towards a cap and the change of regulator from the Office of Fair Trading to the FCA, which set out in October some of its planned measures with regard to continuous payment authorities, roll-overs, advertising and affordability. Those are all part of a package that will help to protect consumers in the sector.

[Sir Edward Leigh (Gainsborough) (Con)]

I am sorry to say this to the Minister, but he has not replied to the point made by my hon. Friend the Member for Beverley and Holderness (Mr Stuart). Of course, the Government can do what they like—they can set a cap—but the Minister must respond to the point that the Government cannot legislate against sin. The fact is that people are desperately hard up. If we legislate or put a cap on one thing, the evil moves to another, almost worse practice. The Minister must make some effort, in the real world, to answer my hon. Friend’s point.

[Sajid Javid]

If my hon. Friend will allow me, I will, as I move on, provide more information on that particular point.

Autumn Statement

Edward Leigh Excerpts

Thursday 5th December 2013 Commons Chamber

[Mr Osborne]

The people who sucked up to the bankers and brought the British banking system to its knees are sitting on the Labour Benches. [Interruption.] The shadow Chancellor shakes his head. He is in denial. He was the City Minister when RBS bought ABN AMRO and when Northern Rock was selling 125% mortgages. I agree with the hon. Member for Bolsover (Mr Skinner) that working people have paid a very high price for that catastrophic economic failure.

[Sir Edward Leigh (Gainsborough) (Con)]

In warmly congratulating the Chancellor on putting hard-working families and enterprise growth at the centre of the statement, may I draw his attention to those people in hard-working families who occupy key managerial positions and who typically earn just over £40,000 a year? More and more of those families are being dragged into paying higher rate income tax—perhaps as many as 2 million by the end of this Parliament. I ask him to bear those people in mind because they are the key to our recovery.

[Mr Osborne]

I agree with my hon. Friend that we want to help people on middle incomes as well as those on low incomes. Many of the measures, in particular those on fuel duty and rail fares, will help those people. The personal allowance is now passed through so that those who pay the higher rate of income tax, although not those who pay the top rate, get the benefit if they earn less than £100,000. The benefit is therefore flowing through to those people as well. That is all part of what we are doing to help working people in both the middle and lower income brackets.