George Osborne
Main Page: George Osborne (Conservative - Tatton)Department Debates - View all George Osborne's debates with the HM Treasury
(10 years ago)
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John Stevenson (Carlisle) (Con)
13. What progress he has made on his policy to create a northern powerhouse for the UK economy.
The Chancellor of the Exchequer (Mr George Osborne)
In July I set out my plan to build a northern powerhouse to connect the great cities of the north with the counties that surround them—and, of course, north Wales—by investing in transport science, and by devolving powers from Westminster to elected city mayors. We now have plans for High Speed 3 and for major new science investment. Yesterday I signed an historic agreement with the civic leaders of Greater Manchester to create the first directly elected metro-wide mayor outside London, with powers over transport, economic development and policing. I hope that Manchester will be the first of many cities to take advantage of the greater devolution of powers. Today I have opened my door to discussions with any metropolitan authority that wants to adopt a new model of governance. All that is part of our ambition to reduce the decades-old gap between north and south, which is central to our long-term economic plan.
Mr Osborne
As a Cheshire Member of Parliament, I know that the north Wales economy is closely connected with the economy of the north-west of England. We have already committed ourselves to reopening the Halton curve, re-establishing a regular direct rail link between north Wales and Liverpool for the first time since the 1970s. That is something that my right hon. Friend asked me to do, and campaigned for. Moreover, High Speed 2 gives us the potential of a station at Crewe, which will greatly increase capacity for journeys to north Wales and reduce journey times. We are ready to listen to further ideas for ensuring that prosperity is experienced in north Wales as well.
Graham Evans
For 13 years Labour neglected jobs and growth in the north, including Weaver Vale, thus creating an economy that was dangerously unbalanced. Does my right hon. Friend agree that it is only the Conservative party, with its long-term economic plan, that will deliver job security for the whole United Kingdom, not just the south?
Mr Osborne
My hon. Friend is absolutely right. A record number of people are now employed in the north of England, but the gap between north and south grew under those 13 years of Labour government. If the House wants one example of a project that was waiting to be completed but was entirely neglected by the Labour Government, it is the Mersey Gateway bridge, which this Government are now building and to which they are committed—and, thanks to my hon. Friend’s campaigning, there will be no tolls for local residents.
Paul Maynard
I welcome the Chancellor’s obvious commitment to the northern economy. Does he agree that a commitment to exports will be at the heart of its regeneration, and will he join me in praising Victrex, a company in my constituency, which exports 97% of what it produces? Is that not what will drive a northern renaissance?
Mr Osborne
My hon. Friend, who is a powerful champion of the businesses in his constituency which employ local people, has told me about Victrex and its exporting success. That success is being replicated by other manufacturers in the north of England which are increasing their exports. The energy revolution in the Fylde area and on the Blackpool coast is creating the potential for a national college to develop the engineering and other skills that will be required. My hon. Friend has made a strong bid for that college to be in his constituency, and I am listening very carefully to the case that he is making.
Andrew Stephenson
I welcomed what my right hon. Friend said when he was in Manchester yesterday. However, a northern powerhouse must not just be about our biggest cities. In Pendle we have landmark regeneration projects such as the £30 million redevelopment of Brierfield Mill, which is in need of my right hon. Friend’s support. Will he tell me what benefits the northern powerhouse will bring to my constituents, and how his investments in transport and regeneration will help them?
Mr Osborne
Crucial to the vision of the northern powerhouse is not just supporting the great cities of the north, but ensuring that they are connected with the towns and counties surrounding those cities. We are investing hugely to improve transport links in Lancashire. My hon. Friend, who is such a champion of his constituency, has raised with me the Brierfield Mill site, which is now called Northlight. We are taking a close look at what we can do to redevelop the area and bring more jobs to his constituency, and that is due to his campaigning efforts.
John Stevenson
The idea of a northern powerhouse is welcome, as is the introduction of an elected mayor, which I am sure will provide real leadership. However, it is vital for smaller places such as Carlisle to benefit as well, which will mean ensuring that the next generation has the right skills to enable local businesses to succeed and prosper. How will the Chancellor ensure that that happens?
Mr Osborne
Thanks in part to the efforts of my hon. Friend and the support he has given to investment in Carlisle, we have seen a 34% fall in the unemployment claimant count in Carlisle in the last year alone. We are also devolving more responsibility for setting the skills agenda to local businesses, so we can have skills that are specific to the Carlisle area. I am always happy to talk to my hon. Friend and to meet people he would bring to see me, to see what more we can do to make sure that Carlisle is part of the strong economic revival of the north of England.
Ms Gisela Stuart (Birmingham, Edgbaston) (Lab)
The Chancellor opened the door for other metropolitan areas to go down the route of the northern powerhouse. Has he given any consideration to what he regards to be an optimum size for those units? In the west midlands, would that be a Greater Birmingham and black country metropolitan area or an entire west midlands metropolitan area?
Mr Osborne
I do not think any one area is the same as any other area. There is a specific model for Greater Manchester, and of course the Greater Manchester councils had worked well together as a combined authority. Clearly Birmingham city council is much larger than Manchester city council alone, so I would like to have a conversation with the hon. Lady, and with Albert Bore and other civic leaders in Birmingham, about whether we can move to a mayoral model, perhaps just in the city. That is a discussion to be had with local people, however.
Mr Barry Sheerman (Huddersfield) (Lab/Co-op)
I must congratulate the Chancellor of the Exchequer on his organisational brilliance by peppering us with all these planted questions on this subject, but I tell him, as the co-chair of the Yorkshire group of MPs, that we are a bit canny in Yorkshire; we are a bit worried about this northern powerhouse. We agree with it and support it, but it is a bit close to the general election. Where has he been for four and a half years, and where is the money coming from? We have not seen any resources for it.
Mr Osborne
We have already made investments over the last four years in things such as the northern hub and the electrification of the trans-Pennine railway, which of course will have helped the hon. Gentleman’s constituency. I welcome his support for the northern powerhouse. This agreement with Greater Manchester was struck with Labour leaders of Manchester councils as well as the Conservative leader of Trafford and the Liberal Democrat leader of Stockport. I want to work across party divides with local Labour civic leaders and local Labour MPs to see what we can do for Huddersfield and other towns in the north of England so that they are connected to the northern powerhouse.
Chris Ruane (Vale of Clwyd) (Lab)
Can we see the colour of the Chancellor of the Exchequer’s money? How much is being allocated for so-called HS3, and has he ring-fenced the amount of funding for north Wales?
Mr Osborne
We will have developed and costed plans for HS3 from—[Interruption.] There was no proposal for HS3 from the Labour party for 13 years in government and then for four years in opposition. Labour Members are now complaining that I came up with a proposal four months ago. We already have detailed support for that proposal from David Higgins and we are going to have a costed plan for it. There was absolutely no attempt to connect the north of England from east to west under the last Labour Government. It is happening under this Conservative-led Government.
Mr Angus Brendan MacNeil (Na h-Eileanan an Iar) (SNP)
Is not the best way to have a northern economic powerhouse to have full fiscal autonomy for Scotland? After all, the Prime Minister did say that all options for devolution are there and all are possible. Does the Chancellor agree, or is he afraid of the competition from a more socially just Scottish treasury making better policies for the people of Scotland?
Mr Osborne
We will honour the commitments made during the referendum campaign by all the Unionist parties to devolve further fiscal powers to Scotland. We will honour the commitment we made, and I would ask the Scottish National party to honour the promise it made that this was a referendum which would settle the issue of Scottish independence at least for
“a generation…perhaps for a lifetime”—
I am quoting Alex Salmond. Perhaps the SNP should stop trying to reopen the question that was resolved, and work with us to make sure that Scotland has a great economic future.
Catherine McKinnell (Newcastle upon Tyne North) (Lab)
The Chancellor talks about creating a northern powerhouse, but really is he not just struggling to play catch-up, because while he has been shifting funds from northern cities to wealthier parts of the country, the unemployment rate in the north-east is the highest in the country, wages for working people in the north have fallen by even more than the national average and across the north the number of people unemployed for a year or more is up 62% since the last election? Why will he not match Labour’s plan to devolve real power and £30 billion of funding not just to the north, but to all city and county regions?
Mr Osborne
Labour ran one of the most centralised Governments in history. It did not devolve any powers to anyone—
Mr Osborne
Not in England. In regard to playing catch-up, I would say to the hon. Lady that we have heard from Labour’s civic leaders in Greater Manchester that they want a directly elected mayor. We have heard from the Conservative Chancellor of the Exchequer. What is the view of those on the Labour Front Bench on this proposal? Last week, the Labour leader was in Manchester saying that the Labour party would never sign up to such a deal, but four days later all his civic leaders did so. What is the policy of the Labour party?
Jackie Doyle-Price (Thurrock) (Con)
2. What plans he has to bring forward legislative proposals to change income tax allowances and thresholds.
The Chancellor of the Exchequer (Mr George Osborne)
By next year, the personal allowance threshold will have reached £10,500. This will mean an £805 cut in income tax for the typical basic-rate taxpayer, and 3 million people being taken out of income tax altogether. Under a Conservative Government in the next Parliament, we would go further.
Jackie Doyle-Price
Enabling people to keep more of what they earn is the best thing any Government can do for ordinary hard-working taxpayers. Can the Chancellor tell me how many of my constituents in Thurrock will be likely to benefit from these proposals?
Mr Osborne
My hon. Friend is a champion for the hard-working people in her constituency. Not only have our personal tax cuts helped many thousands of those people, but if we go ahead with our plans to raise the personal allowance to £12,500, more than 5,500 people in Thurrock would be lifted out of income tax altogether and 58,000 of the people she represents would benefit.
Kate Green (Stretford and Urmston) (Lab)
Raising tax thresholds disproportionately benefits men, because many women earn so little that they do not even reach the lowest threshold. On the other hand, consumption taxes have a disproportionate effect on women who are responsible for managing the family budget. Will the Chancellor rule out any increase in VAT, in order to ensure that our tax system can be fair to both genders?
Mr Osborne
We do not need to raise VAT, because our plans are paid for by the Government living within their means. Does the hon. Lady speak for the Labour party, because she seems to be opposing the increase in the personal income tax threshold? That is a policy that has lifted many low-paid women out of income tax altogether, and I find it surprising that once again the Labour party is against the interests of hard-working people.
Mr Andrew Tyrie (Chichester) (Con)
By raising the personal allowance, the Chancellor has pulled 3.2 million people out of tax altogether. At the same time, however, he has dragged 1.6 million people into paying the higher rate of 40p. It is the marginal rates that matter, and that is a massive disincentive to wealth creation in this country. Does he acknowledge that, as soon as the fiscal room to do so is available, it will be essential to act to take as many people as possible out of higher-rate taxation altogether?
Mr Osborne
As my hon. Friend knows, people earning up to £100,000 who are paying the higher rate have seen the benefit of the increase in the personal allowance. They have seen their income tax bills fall. He is right to say that more people have been pulled into the 40p rate, however, and that is why we are proposing to increase the threshold to £50,000. That will be in our election manifesto, and it is something that we can deliver in the next Parliament so that people on middle incomes, as well as those on lower incomes, can benefit from a tax-cutting Conservative Government.
Chris Leslie (Nottingham East) (Lab/Co-op)
The Chancellor did not give us the small print relating to the promises that he has just repeated: terms and conditions apply. Will he acknowledge that there is a price tag attached to those promises, and will he tell us specifically what the cost of those commitments would be?
Mr Osborne
It is around £7 billion when we add it all up. That would be paid for by lower public expenditure. These are tax cuts that are paid for. I note that that is not the approach taken by the Labour party, which would increase tax, increase borrowing and increase spending, sending the economy back into the mess that it left it in.
Chris Leslie
So we have established that this would mean £7 billion of lower public expenditure. What elements of public expenditure would be involved? Would the Chancellor cut the police again? Would he take the money from schools and hospitals? Or are we to judge him on his usual track record, which would mean that after the election he would simply add it on to VAT?
Mr Osborne
What we have seen under this Government is a party that is able to bring our public finances under control; to reduce the welfare bill; and to make sure the egregious waste in Westminster and Whitehall that took place under the previous Government no longer takes place. We will fund that by lower public expenditure, because once we get the public finances under control we are going to keep them under control.
Ian Murray (Edinburgh South) (Lab)
3. What assessment he has made of the effect of tax receipts on the deficit in the last 12 months.
Mr Dennis Skinner (Bolsover) (Lab)
T1. If he will make a statement on his departmental responsibilities.
The Chancellor of the Exchequer (Mr George Osborne)
The core purpose of the Treasury is to ensure the stability and prosperity of the economy.
Mr Skinner
How on earth can the Chancellor of the Exchequer justify a tax cut of £3 billion to those getting more than £150,000—like Nigel Farage—while at the same time cutting the wages of nurses and midwives? What a load of hypocrisy.
Mr Osborne
We have cut taxes for 25 million working people. In Bolsover, there are more people in work, fewer people unemployed and the claimant count is down by a third. It is the Conservative party that is the party of the working people now.
Mr David Amess (Southend West) (Con)
T4. Does my right hon. Friend agree that the level of employment is a good economic indicator? If so, will he join me in congratulating Southend businesses on their outstanding apprenticeship schemes, which have helped a huge number of young people and reduced youth unemployment by 47%?
Mr Osborne
I certainly congratulate Southend businesses on the apprenticeship schemes they run. Apprenticeship schemes number 2 million in this Parliament and we aim to take that figure to 3 million in the next Parliament. That is all towards achieving our goal of full employment. We have the highest number of people in work, but we want to go further still.
Ed Balls (Morley and Outwood) (Lab/Co-op)
The whole country was shocked to learn on the night the Prime Minister arrived at the European Council that the European Union is demanding from the UK a backpayment of a staggering £1.7 billion. The Prime Minister was unclear on this last week, so may I ask the Chancellor just how long before the Council meeting did he and his Ministers and officials learn that the UK was going to be asked to pay more, and why on earth did he not tell the Prime Minister?
Mr Osborne
First of all, may I say that it is very good to see the shadow Chancellor in his place? We had heard disturbing rumours that there was going to be a shadow Cabinet reshuffle. We waited nervously by the phones, but we are absolutely delighted that he is still in his place.
Let me answer the shadow Chancellor’s question directly. There was a meeting at the Commission on Friday 17 October. On Tuesday 21 October, Treasury officials prepared advice for me, and the Prime Minister was aware of the advice on Thursday 23 October. That is very similar to the timetable that the Dutch Government have set out.
Ed Balls
The revisions of the Office for National Statistics came months beforehand and the Financial Secretary knew weeks before. The Chancellor knew only two days before and he still forgot to tell the Prime Minister. Was he not just asleep on the job?
Let me ask the Chancellor another question about the way in which Europe is affecting the public finances. The Government promised to get net migration down to the tens of thousands. According to the latest figures, net migration is 243,000—up 38% on the previous year. Will the Chancellor confirm that his Budget forecast for net migration has been revised not down, but up? What is his assumption for net migration for the 2015 public finance forecasts?
Mr Osborne
The reason there has been an increase in European migration is that the British economy is succeeding while the economies in Europe sadly are not. That is why we want to seek a different relationship with the European Union, to take into account that and other features of our relationship. I notice that the last Labour Chancellor now supports a referendum on Britain’s membership of the European Union, but the shadow Chancellor does not. The truth is this: we will set out our forecasts to the independent Office for Budget Responsibility, but the idea that Labour would get a better deal in Europe is total fantasy, alongside the shadow Chancellor’s fantasy that Labour left us with a golden economic legacy and that he has been right all along and everyone else is wrong. The right hon. Member for Lewes (Norman Baker) has resigned, so there is now a vacancy for a conspiracy theorist at the Home Office—the shadow Chancellor should apply.
Andrew Jones (Harrogate and Knaresborough) (Con)
T7. Small businesses and retailers are the backbone of our economy. With small business rate relief, a relief for businesses re-occupying long-term empty properties and other discount schemes, this Government have shown their support for small business. Will my right hon. Friend go further and review the business rate system to ensure that it is fair and does not deter investment?
Mr Osborne
My hon. Friend makes a good point about the impact of business rates. That is of course why we have extended small business rate relief and helped 360,000 small properties. It is why we have offered the £1,000 high street discount to stores in Harrogate and elsewhere around the country. We are going to review the business rate system to make sure that it is simpler, fairer, more transparent and more responsive to economic circumstances, and he is very welcome to take part in that review.
Gavin Shuker (Luton South) (Lab/Co-op)
T2. What is the link between the Chancellor’s £7 billion of unfunded tax cuts and his blocking of the OBR from auditing the tax and spend plans of other political parties ahead of the election? I suggest that the clue is in the question.
Mr Osborne
Interestingly, we conducted an independent review by one of the Canadian officials involved in auditing their finances—
Mr Osborne
The right hon. Gentleman says “Come on”, but there were no independent forecasts when he was in the Treasury. He was the economic adviser who cooked up the forecasts, and came to the House and as a result misled this country about its economic fortunes. The OBR is working as an independent institution. The independent review of the OBR said that we should not extend its powers. We do not want the Labour party undermining the independent institution that has brought confidence back to public statistics.
Margot James (Stourbridge) (Con)
T8. Last week, the Queen opened a new Jaguar Land Rover plant in Wolverhampton, which is creating 1,400 new jobs. The enterprise zone and the black country city deal are set to create nearly 10,000 more new jobs. Does my right hon. Friend agree that we could go even further in Birmingham and the black country if our local authorities followed the example set by those of the northern powerhouse?
Mr Osborne
The investment by Jaguar Land Rover is very welcome. I was at one of the Jaguar Land Rover plants in September, and saw the incredible investment that is going in there. The new engine plant in the black country is a huge and welcome investment in the west midlands. I take very seriously my hon. Friend’s suggestion that we should talk to authorities in the west midlands to see if we can build on what has been achieved in Greater Manchester. I would be very happy to start those discussions with civic leaders and local MPs.
Heidi Alexander (Lewisham East) (Lab)
T3. Will the Chancellor confirm that the only way to reduce the £1.7 billion bill from the EU and avoid paying interest requires the UK to secure support from a qualified majority of EU members on rule changes and get a vote in the European Parliament on delaying the deadline for payment? How confident is he that he can achieve that?
Mr Osborne
We are operating under a tough set of rules. The rules were put in place in 2007.
James Morris (Halesowen and Rowley Regis) (Con)
T10. There are now 1,217 fewer people claiming unemployment benefit in my constituency than in 2010. Does the Chancellor agree that we need to continue the job of reducing business taxes to incentivise business to create jobs, rather than to adopt the policy of slapping higher taxes on business, which will only have the effect of destroying jobs?
Mr Osborne
My hon. Friend is absolutely right. I have been lucky enough to visit successful manufacturing businesses in his constituency with him and, indeed, to see the investment that as a result we are able to make in new hospitals in the west midlands. He of course makes the very strong point that if you increase business taxes—that is the official policy of the Labour party—in such a competitive world, you will destroy jobs, reduce revenues and not be able to fund good public services.
Bridget Phillipson (Houghton and Sunderland South) (Lab)
T5. Will the Chancellor, as the self-styled champion of the north, now look again at his early decisions and their impact, and will he commit to a fairer funding settlement for north-east councils?
Mr Osborne
The whole United Kingdom has had to make difficult decisions because we inherited a record budget deficit, but I am willing to work with councils in the north-east to see whether we can build on what we have achieved in Greater Manchester. There is real potential to do that and to make key investments in the infrastructure of the north-east. For example, I think there is a strong case for the A1 north of Newcastle to be dualled.
Richard Graham (Gloucester) (Con)
This Government’s support for apprenticeships has hugely helped the 40% drop in youth unemployment in Gloucester. Will my right hon. Friend confirm that the Government will continue to look constructively at new and innovative vocational schemes in sectors where there are jobs available—such as HGV drivers, haulage companies, and electroplaters for the Poeton company—but a shortage of skills at the moment?
Mr Speaker
Order. I try to get in as many Members as possible, but I think some colleagues have forgotten—or perhaps never learned—that topical questions are supposed to be shorter. Please do not abuse the process because you are spoiling it for other people.
Mr Osborne
I know that my hon. Friend the Member for Gloucester (Richard Graham) has worked with local employers to improve skills, and I visited a successful apprenticeship and training scheme with him. We want to ensure that local employers are involved in shaping those apprenticeships and further education courses, and that is precisely what we are now setting up.
Mr William Bain (Glasgow North East) (Lab)
T6. The Institute for Fiscal Studies has forecast that under the Chancellor’s current policies 900,000 more children will be in relative poverty by 2020 compared with 2011. Is his real attitude towards the working poor in this country too much stick and too little carrot?
Guy Opperman (Hexham) (Con)
May I urge the Chancellor to meet me and my hon. Friend the Member for Carlisle (John Stevenson) so that we can make the case for including the dualling of the A69 in the autumn statement? Hopefully such a meeting could be before the autumn statement takes place.
Mr George Osborne
My hon. Friends the Members for Hexham (Guy Opperman) and for Carlisle (John Stevenson) have made a strong case for improving transport links in the north of England and between the north-east and Carlisle. They have already brought the A69 to my attention, and I would be happy to have that meeting.
Karl Turner (Kingston upon Hull East) (Lab)
T9. Given that the Chancellor is claiming to be the champion of the north, will he explain why he has given a £3 billion tax cut to people who earn £150,000 a year, while people in Hull are on average £1,600 a year worse off?
Mr Osborne
We have cut taxes, including taxes for people in the north of England, for 25 million working people. Under the Labour Government, the gap between the north and south increased. We are working across party divides with local authority leaders to get in the investment and change this decade-long imbalance in our country.
Greg Mulholland (Leeds North West) (LD)
The last Labour Government cancelled the Supertram scheme in Leeds and then told the city that it could only have a bus-based solution. Does my right hon. Friend agree that as well as devo-max and “devo Manc”, we also need “devo Yorks”?
Douglas Carswell (Clacton) (UKIP)
The Chancellor has rightly said that Europe is in danger of pricing itself out of the world economy, and one way in which it is making itself uncompetitive is through its costly renewable energy agenda. Will he try to persuade his neighbour in Downing street to abandon that dogma and liberalise the UK energy market?
Mr George Osborne
The Prime Minister achieved a good deal for the United Kingdom, and got away from the solid and fixed renewables target that the Labour Government signed up to. If the hon. Gentleman wants Britain to leave the European Union, that will be achieved with a Conservative Government offering a referendum, and him having a vote and seeing what the outcome is. [Interruption.] Under the Conservative Government, the British people will get a referendum. We will make the argument for staying in a reformed Europe, and the hon. Gentleman can make the case he wants to make. That will not happen under a Labour Government.
Caroline Dinenage (Gosport) (Con)
May I urge the Chancellor to support the Secretary of State for Business, Innovation and Skills in calls for banks not to shut the last branch in a town? HSBC is about to shut its last branch in Lee-on-Solent, leaving businesses with no banking support at all.