Autumn Statement

Debate between George Osborne and Sheila Gilmore

Wednesday 3rd December 2014 Commons Chamber

[Mr Osborne]

I can give my hon. Friend that assurance. This is a policy not just for cities, but for the shire counties that surround them. Rather like him, I represent a shire country seat outside a great northern city. This is about strengthening the transport links between the shire counties and the cities; it is about making sure that superfast broadband is available in our rural areas; it is about supporting towns and not just cities in the north of England. It is about ensuring that the whole thing is connected up in a way that it has not been before, so that the north of England has the economic clout of a great global city. I think we are well on the way to developing that.

[Sheila Gilmore (Edinburgh East) (Lab)]

Before the Chancellor of the Exchequer tells me the unemployment figures in my constituency, I of course welcome the fact that the claimant count is down—but that is not necessarily the same as unemployment, as the right hon. Gentleman knows. We are now getting closer to the point where we were through the whole of the first 10 years of the last Labour Government, so we have only gone back to where we were. However, a £6 billion increase on overall housing benefit spending over the course of this Parliament has contributed to the Chancellor’s failure to meet his deficit reduction targets. When will his Government actually tackle the underlying causes, which are high rents and low wages?

[Mr Osborne]

First, it is no good saying that the first 10 years of that Labour Government were great and that we should forget about the last three, which brought about the greatest recession since the 1920s. It is a bit like Mrs Lincoln being asked about that play.

We have taken a number of steps to try to cap housing benefit, rent increases and the housing benefit associated with them; we have introduced a cap on housing benefit payments. When we came to office, there were examples of some people receiving over £100,000 a year from taxpayers in housing benefit, which is of course totally unacceptable. We have taken those steps, and now we have the welfare cap as well. All I can say is that every time Labour Members stand up, we hear about a proposal to add to the housing welfare benefit bill, and that it would be good to hear some proposals from them to reduce it.

Charter for Budget Responsibility

Debate between George Osborne and Sheila Gilmore

Wednesday 26th March 2014 Commons Chamber

[The Chancellor of the Exchequer (Mr George Osborne)]

I beg to move,

That the modified Charter for Budget Responsibility, which was laid before this House on 19 March, be approved.

I am putting before the House today a charter for budget responsibility updated to include a new cap on welfare spending. I am conscious that this is a time-limited debate and will keep my remarks brief so that others can speak. The welfare cap marks an important moment in the development of the British welfare state. I believe the public back a welfare system that provides fair support for those genuinely in need and that supports those who have a disability and cannot work; those caring for others; those on maternity or paternity leave; and those who have lost a job and are trying hard to find work. The public, through their taxes on that hard work, are willing to pay for that support. It is a level of support that a country such as ours—we now have a growing economy—can afford to give.

However, that is not the welfare state we inherited in 2010. That welfare state was not fair and not affordable. It was not fair that some received £50,000, £60,000 or up to £100,000 in housing benefit, paid for by taxpayers who could never dream of affording homes with rents that big, so we capped housing benefit payments at just over £20,000 a year.

[Sheila Gilmore (Edinburgh East) (Lab)]

Will the Chancellor give way?

[Mr Osborne]

I will give way in a moment.

It was not fair that many out-of-work families received more as an income in welfare than the average family got from going out to work, so we capped the total benefits that one family can receive at £26,000. Thirty-six thousand households are now subject to the cap.

[Mr David Nuttall (Bury North) (Con)]

rose—

[Sheila Gilmore]

rose—

[Mr Osborne]

I will give way to the hon. Lady, then to my hon. Friend.

[Sheila Gilmore]

How many families received housing benefit at the level he first mentioned—the £50,000-plus mark? Is he aware that, of the families covered by the benefit cap, nearly half are in temporary accommodation provided by councils because they owe them the statutory duty?

[Mr Osborne]

First of all, 21,000 people have been affected by the housing benefit cap, so 21,000 people were receiving housing benefit more than that. Secondly, the hon. Lady seems to be suggesting that she is against the cap on benefits. That points to a wider truth that we will discover today about the welfare cap, and specifically whether the Labour party is committed to the cap we are setting out today, with the list of benefits in it. We will discover whether Labour is committed to the cap at the level we have set—not just the principle of a welfare cap, but the practical application of it.

Oral Answers to Questions

Debate between George Osborne and Sheila Gilmore

Tuesday 28th January 2014 Commons Chamber

[Mr Osborne]

I absolutely agree with my hon. Friend, and I congratulate Melissa on her business and her expansion plans. We are there to provide advice and support for women who want to grow their businesses. We are there to provide help, as I have set out, with tax-free child care. Above all, we are there to provide economic conditions in which businesses can grow and our long-term plan is, as the numbers show today, delivering that.

[Sheila Gilmore (Edinburgh East) (Lab)]

Of course, 0.7% is lower than 0.8% in the previous quarter, but leaving that aside—[Interruption.] With construction—[Interruption.]

[Sheila Gilmore]

Construction is down as well, but to return to the question—[Interruption.] Well, the Chancellor did not return to it. Support through tax credits and child care tax credits has been crucial for many women going into self-employment for the first time. Proposed universal credit rules will make it a lot more difficult for self-employed people. Will the Chancellor speak to the Secretary of State for Work and Pensions to help him to get this right for women entrepreneurs?

[Mr Osborne]

First, the economy shrank by 7% of GDP when the Opposition were in office. It is striking that no Labour MP has yet got up to welcome the good economic news today. They cannot bring themselves to welcome the news that jobs are being created and the economy is growing and, yes, we are reforming our welfare system with universal credit to make sure that work always pays.

Autumn Statement

Debate between George Osborne and Sheila Gilmore

Thursday 5th December 2013 Commons Chamber

[Mr Osborne]

My right hon. Friend is absolutely right. Some excellent housing associations have used private money and sold off some of the most expensive social homes in order to provide more resource for building more homes, which is precisely what we want to encourage. On the additional money in the housing revenue grant, which I know has been of particular interest to his party, we have said that that money should be available on a competitive basis to those councils that are going to work with housing associations, for example, to deliver the sort of innovative schemes that he champions.

[Sheila Gilmore (Edinburgh East) (Lab)]

Some of the predictions in the OBR report have not been mentioned today. One is an upgraded prediction on how much is going to be spent on certain benefits, such as employment support allowance, which by 2017-18 is going to be £2.1 billion higher than in the last prediction, and housing benefit, which is going up by £1.8 billion—again, higher than the previous estimate. Quite apart from the misery caused by things like the bedroom tax, these welfare reforms are simply not working. When is the Chancellor going to ensure that his Government get a grip on that problem, rather than let those bills spiral? Given these predicted rises in spending, it is going to be very difficult to put a cap on welfare.

[Mr Osborne]

Although the hon. Lady put her question in quite a partisan way, she hits on a very good point. There are sometimes big increases in welfare spending that are not subject to the kind of control that we in this House exercise on much smaller sums in Government Departments. Precisely because of the forecast increases in employment support allowance and housing benefit, it is right for us to bring those issues to the House and discuss them. It is a bit wrong-headed to complain on the one hand that housing benefit is going up too much while on the other hand campaigning to increase housing benefit. No doubt we will be able to have a fuller debate when we introduce the welfare cap.

Spending Review

Debate between George Osborne and Sheila Gilmore

Wednesday 26th June 2013 Commons Chamber

[Mr Osborne]

I think that they have better economic prospects than they did under the previous Government.

[Sheila Gilmore (Edinburgh East) (Lab)]

The best way to reduce the housing benefit bill is to tackle the structural reasons for the rise in spending. What steps has the Chancellor taken in the statement to ensure that that happens? Not by building houses at 80% of market rent, I suggest.

[Mr Osborne]

I agree with the hon. Lady, as one of the things that we need to do is build more homes, and that is what we have set out to do. The housing benefit budget ballooned under the Labour Government, and we have taken action to curb it. If she is against any of our housing benefit reforms she can always let us know. As far as I can see, the Labour party has not made a commitment to reverse any of them at the moment, but who knows, that might change.

Oral Answers to Questions

Debate between George Osborne and Sheila Gilmore

Tuesday 12th March 2013 Commons Chamber

[Sheila Gilmore (Edinburgh East) (Lab)]

Is it not the truth that demand has been so sucked out of the economy by the Government’s policies that there just is not the growth? Telling us how competitive we are is living in cloud cuckoo land, given that even the Office for Budget Responsibility says that growth is going to be very slow, even in the coming year.

[Mr Osborne]

To get a lecture from the Labour party on demand! The economy shrank by 6% when the shadow Chancellor was in the Cabinet, and we are picking up the pieces of the mess he and his party left behind. One of those pieces was the deeply uncompetitive business tax system which meant that companies were moving their headquarters out of the United Kingdom. Companies are now moving into the UK because of the changes we have made.

Economic Policy

Debate between George Osborne and Sheila Gilmore

Monday 25th February 2013 Commons Chamber

[Mr Osborne]

I have made it very clear that although the credit rating is an important benchmark, it is one of a number of benchmarks. We are tested every day out there in the market, and what we have not heard from the shadow Chancellor is any alternative. It is all very well criticising the current Government’s economic policy, but what is the Opposition’s alternative? They have to have a policy to attack a policy.

[Sheila Gilmore (Edinburgh East) (Lab)]

This time two years ago the Chancellor was telling us that he had already created half a million new jobs, most of which were probably the result of the previous Government’s economic stimulus—[Laughter.] Unless, of course, people think this was an instant response in six months. Perhaps it was, but that still leaves us with a much slower rate of growth of new jobs since that date. He may not be aware that the Minister of State, Department for Work and Pensions, the hon. Member for Fareham (Mr Hoban) admitted at the last Department for Work and Pensions questions that free jobs—where people were working without wages—were included in his totals. Is it not time he re-examined the reality of these so-called “employment figures”?

[Mr Osborne]

Frankly, the numbers the hon. Lady quotes are nonsense. The employment creation rate last year—perhaps we should give her some credit for saying last year—was the highest since 1989.

Autumn Statement

Debate between George Osborne and Sheila Gilmore

Wednesday 5th December 2012 Commons Chamber

[Mr Osborne]

I will certainly look at the application if one is put forward by the Humber enterprise zone. I know that this benefits people across not only east Yorkshire, but north Lincolnshire, which my hon. Friend represents, and I know that the enterprise zones have some exciting ideas. There is, as I say, additional money in the Book which I did not mention in my statement, but it is there for additional infrastructure in the enterprise zones, and I will take a close look at the bid that he makes on behalf of his constituents in relation to the local enterprise zone.

[Sheila Gilmore (Edinburgh East) (Lab)]

Job creation is vital in order to reduce public spending and increase the tax take. The words the Chancellor used in his statement were very interesting. He said specifically that when counting his 1 million private sector jobs he started from the beginning of 2010. Half of those jobs were created in the first year of that period and arose from the Labour Government’s financial stimulus, so the rate of growth has in fact been decreasing, not increasing. Does he not agree?

[Mr Osborne]

First, unemployment had gone up under the Labour Government and they, like all Labour Governments in history, left office with unemployment higher than when they came into office. Secondly, if the hon. Lady looks at the employment forecasts she will see that, as I was saying to her hon. Friend the Member for Middlesbrough South and East Cleveland (Tom Blenkinsop), 1 million jobs are forecast to be created over the coming period. As I have said, we are in a tough economic situation—I am not trying to disguise that from the House today—but I think that the decisions we have taken to help businesses and working people will be warmly welcomed.

Professional Standards in the Banking Industry

Debate between George Osborne and Sheila Gilmore

Thursday 5th July 2012 Commons Chamber

[Mr Osborne]

I will give way to the hon. Lady, then I will proceed.

[Sheila Gilmore (Edinburgh East) (Lab)]

I want to take the Chancellor back to his comments a few moments ago in which he quoted something that had been said by Mr Diamond before the Treasury Committee. Is not part of the problem that that format does not get to the bottom of these issues? Statements of a general nature were made about some discussion that took place with certain Ministers. Do we not need a judicial inquiry?

[Mr Osborne]

I am very grateful that I took that intervention, because right at the end, the hon. Lady said that there were allegations that Ministers had been involved. As I said, it is extraordinary that they are all blaming each other. The people who were in the Treasury are blaming the people who were in No. 10, and the people who were in No. 10 are blaming the people who were in the Treasury. Why do they not take responsibility collectively for the absolute mess that they made of regulating our banks, including the LIBOR market, during their time in government?

The Economy

Debate between George Osborne and Sheila Gilmore

Tuesday 6th December 2011 Commons Chamber

[Mr Osborne]

The OBR was also very clear in its analysis of why there had been weaker growth. Over the past seven days the shadow Chancellor and others have paraded around the TV studios citing the OBR’s numbers while refusing to accept the OBR’s analysis of what lies behind those numbers. The OBR is very clear; it gives three reasons for the deterioration in the economic forecasts. First, it attributes the primary reason for the weakness since its last forecast to the external inflation shock of the high oil price. Secondly, it attributes the current weakness in the economic position to the lack of confidence caused by the eurozone crisis. Thirdly, it says its assessment both of the boom before 2007 and the subsequent bust and of the impact of the repair of the financial system is greater than it had previously estimated. That is its independent analysis. The Opposition cannot agree that we should now have an independent body and accept the figures it produces, only then to reject the analysis on which those figures were arrived at.

[Sheila Gilmore (Edinburgh East) (Lab)]

The OBR does not say that the cause of reduced growth is that the recession was found to be deeper. It does say that the recession was found to be deeper but, crucially, it also says the recovery during 2009 was stronger than previously forecast and that the further decline in growth happened only in the latter part of 2010.

[Mr Osborne]

The OBR is very clear that the cause of its downgrade of the trend growth rate is the—[Interruption.] Is it any wonder that the economic credibility of the Labour party is falling week after week? The shadow Chancellor has backed it into the incredible position where only Communist parties in western Europe agree with it. The reason he has done that has nothing to do with the future political prospects of the Labour party. Rather, it has everything to do with his own personal record. He cannot be the Labour politician who admits that his party made mistakes in the run-up to the 2007 crisis, because he was the Labour Government’s chief economic adviser. That is the position the Opposition find themselves in, and Labour Members know it. They are all going around telling anyone who will listen that that is their problem. Until they face up to the reality of the economic situation confronting this country—a reality they helped to create—they will not be listened to by anyone in this country.

The choice we faced when we saw the OBR’s first-round forecast was not whether to fiddle the figures; instead, it was whether we should take action to respond to the changed economic circumstances. We could have done nothing, but given international events I thought that was not a risk worth taking. It may have seemed to be the easier option, but not when we considered the possible consequences for the credibility of our country in the credit markets and the risk of a rise in interest rates of the kind that so many of our neighbours have experienced. The other option was to take further action to ensure Britain was on course to meet the fiscal commitments we have made, and that was what we chose to do, with a package of measures designed to tighten policy in the medium term while using short-term savings in current spending to fund one-off capital investment in our country’s infrastructure.

As I explained last week, we have put the total managed expenditure totals for 2015-16 and 2016-17 on a declining path. We have made changes to the tax credit entitlements. We set pay increases in the public sector for the two years after the freeze at an average of 1%. We have recalibrated overseas aid spending so we hit 0.7% of national income in 2013. We have also increased the state pension age to 67, starting from 2026.

That money saved in the short term has been used to fund the youth contract, new nursery provision to two-year-olds, new free schools and school places, and a major programme of road and rail building, and to help with the costs of living by extending the small business rate relief, keeping rail fare increases low, and freezing petrol duty next month, but the permanent savings—

Autumn Statement

Debate between George Osborne and Sheila Gilmore

Tuesday 29th November 2011 Commons Chamber

[Mr Osborne]

We have not made an exact estimate of the number of jobs that will be saved, but I am certain that these measures will help to keep such industries in the United Kingdom. It is important that we do not price our industry out of the world market. That would do nothing to reduce our carbon emissions, but it would damage our economy. We have worked with the energy-intensive industries and the business organisations to develop our package, and I think that it achieves the right balance between ensuring that those industries remain competitive and meeting our international environmental obligations.

[Sheila Gilmore (Edinburgh East) (Lab)]

The Government have made a virtue of wanting to make work pay. How does it make work pay first to reduce child care tax credit, and then not to upgrade working tax credit in the same way as out-of-work benefit?

[Mr Osborne]

We are uprating the child care element of child tax credit, along with other elements of child tax credit, in line with September CPI inflation, so it is not true to say that we are not uprating child tax credit. We had to make a difficult decision on working tax credit, but we think that one of the best ways of supporting low-income working people is to take them out of the tax system altogether.

Eurozone Crisis

Debate between George Osborne and Sheila Gilmore

Thursday 27th October 2011 Commons Chamber

[Mr Osborne]

We would, of course, have been laughed out of the summit. We would not even have been able to sign up to the Council’s conclusions. The Labour party policy has no plan to reduce the deficit—[Interruption.] Well, if there is a plan, let us hear it. Let us hear one example. The Labour party has no plan to reduce our deficit, which is higher than that of almost any of the countries we have talked about. It has a plan basically to pull us out of the International Monetary Fund and a plan to join the euro—such plans would be treated as slightly bizarre at some of these meetings.

[Sheila Gilmore (Edinburgh East) (Lab)]

More constituents have contacted me about the financial transaction tax than ever contacted me about Monday’s debate. They will be pleased to have heard the Chancellor say that he supports this in principle. Will he go to the G20 to argue vigorously in favour of this tax?

[Mr Osborne]

What I would say about the financial transaction tax—[Interruption.] I am not sure that it is Labour policy. There is a debate about this tax, but attached to it is a serious red herring. People would like a financial transaction tax to be used to pay for the aid commitments into which big western countries entered. That is what all the non-governmental organisations that contacted the hon. Lady and others are arguing for. Britain is meeting its international aid commitments out of its own resources, and we do need a financial transaction tax across Europe for other countries to meet the aid commitments they entered into. When it comes to the principle of the financial transaction tax, one cannot oppose it, as we have a stamp duty on shares, but I would say that if we impose such a tax in Europe, all the business would disappear overnight to Hong Kong, Singapore and elsewhere. We know that because that is what happened when the United States imposed a form of transaction tax on the euro-dollar market—it moved to London—and when Sweden introduced a financial transaction tax in the early ’90s, its entire business moved to London almost immediately. We have many case-studies. I understand why people are emotive about this issue, but surely the question is, “Are you meeting your aid commitments?”—and this country is. We should all be proud of that.

Independent Banking Commission Report

Debate between George Osborne and Sheila Gilmore

Monday 12th September 2011 Commons Chamber

[Mr Osborne]

John Vickers explicitly examines the argument that this will somehow undermine credit and comes to the conclusion that it will not. He says that, first, because the broader benefits of a stable banking system to the banks themselves and to the economy outweigh the costs and, secondly, because retail banks will, as I say, be more encouraged to use their retail deposits to support retail lending.

[Sheila Gilmore (Edinburgh East) (Lab)]

One of the forms of banking competition that many people in Britain want is the encouragement of more mutuals, with a legal safeguard to prevent them from being refloated. What plans does the Chancellor have to progress that agenda?

[Mr Osborne]

We do want to see more mutuals created—we have explicitly said that in relation to Northern Rock, while not ruling out other potential options for Northern Rock. We have also taken action to strengthen credit unions, which are another part of the piece. It will be good to see mutuals growing, and the proposals in the report, particularly those on competition and the switching of current accounts, will help the mutual sector.

Oral Answers to Questions

Debate between George Osborne and Sheila Gilmore

Tuesday 22nd March 2011 Commons Chamber

[Mr Osborne]

If my hon. Friend will allow me, I will keep my personal views on this matter private while we await the publication of the independent commission that has been set up to look at this issue, and which I, the Business Secretary and the whole House will have to consider. It is producing its interim report in April, and will produce a final report in September. Let us remember that the commission was set up by this Government to ask the difficult questions of the kind that he is asking, because we are determined not to repeat the mistakes of the past.

[Sheila Gilmore (Edinburgh East) (Lab)]

2. If he will bring forward proposals for a scheme to provide looked-after children with a savings account or trust fund funded by contributions from the Exchequer; and if he will make a statement.

[The Chancellor of the Exchequer (Mr George Osborne)]

In October, the Government announced that we will create a new tax-free children’s savings account to be known as the junior ISA. We expect the accounts to be available from this autumn, and will be setting out details of how they will work next week. As the hon. Lady and the right hon. Member for Wythenshawe and Sale East (Paul Goggins), who is my constituency neighbour, will know, Barnardo’s and Action for Children have proposed that these accounts be used to support saving for looked-after children. I know that these children face particular challenges, and I can tell the House that the Department for Education will work with others to make the necessary funding available to ensure that we can provide the support that they deserve. We will work with charities and interested parties to develop detailed proposals funded by the Government, so that junior ISAs can best support these children.

[Sheila Gilmore]

There were warm words on this last summer when the child trust funds were abolished, and there are warms words now, but will the Chancellor tell us when such a savings scheme, backed by the Government, will be introduced for looked-after children?

[Mr Osborne]

I have just announced the money for the scheme that the hon. Lady asked me about, and we will now engage with Barnardo’s and Action for Children. I have seen their report, “On Our Own Two Feet”, and we will provide the funding to make the scheme a reality for looked-after children.

Bank Bonuses

Debate between George Osborne and Sheila Gilmore

Tuesday 11th January 2011 Commons Chamber

[Mr Osborne]

That is one of the issues being considered, and I noted the Governor’s comments. The code of practice has a number of constraints on how bonuses are paid. It is a vast improvement on last year’s situation, and will help create a better regulated banking sector.

[Sheila Gilmore (Edinburgh East) (Lab)]

When the Chancellor’s colleague the Prime Minister said in 2009 that no bank with significant taxpayer support should pay bonuses of more than £2,000, was he jumping on an Opposition bandwagon or was it a serious policy initiative? If it was the latter, what has changed since 2009?

[Mr Osborne]

That was about the time when the right hon. Member for Kirkcaldy and Cowdenbeath (Mr Brown), the then Prime Minister, said:

“The day of big bonuses is over.”

That is the kind of rhetorical—[Interruption.] That is the situation that we have inherited—no proper code of practice, no permanent bank levy, no plan for improving the system of regulation. We are putting in place measures that we believe will materially improve lending in this economy and the regulation of our banking system. Every single one of them has, for opportunistic reasons, been opposed by the Labour party.

Autumn Forecast

Debate between George Osborne and Sheila Gilmore

Monday 29th November 2010 Commons Chamber

[Mr Osborne]

This has been one of the most difficult issues that the international community and, of course, the Irish people have had to wrestle with. For reasons of financial and economic stability, it was decided that it was not possible and would not be sensible to ask the senior debt holders in the Irish banks to take a haircut. That is exactly what did happen in late 2008, in some of the US bank rescues, with pretty disastrous effects, so that is why that decision was taken. Subordinate debt holders in the Irish banks will suffer losses and I think that is appropriate.

[Sheila Gilmore (Edinburgh East) (Lab)]

Given that the nearest year for prediction in the OBR report suggests that growth will fall in relation to previous predictions—it was 2.6%, then 2.3% and is now 2.1%—what confidence can we have that predictions further out than now will be any more reliable? Is it not likely that growth will not rise as much as predicted?

[Mr Osborne]

I said right at the beginning of my remarks that these are economic forecasts and that we should treat them with the caution with which one should treat all economic forecasts. At least we explicitly acknowledge that and the forecasts are independently produced. What we have here is a central forecast; previously, Chancellors just gave a number and asserted that that was the forecast come hell or high water. That is not what the OBR is doing today. However, one can take confidence that its growth forecast for next year is in line with those of most independent commentators and forecasters. It happens to be very close to the numbers that the European Commission produced today, which were not available to the OBR or the British Government until today. We can have confidence that it is part of a group of people who look to the UK and see it growing sustainably over coming years and jobs being created.