Fuel Prices

Glyn Davies Excerpts

Tuesday 15th February 2011 Westminster Hall

[Sheryll Murray]

The hon. Gentleman sets out a very good case for the introduction of a fair fuel duty stabiliser, which would cushion that effect.

Finally, I would like to mention the rural rebate and make the case for the whole of Cornwall to become a pilot for the rural rebate. We already have convergence funding, so there is already recognition that Cornwall is a special economic area. I ask the Chancellor to ensure that Cornwall is considered as a recipient of a rural rebate.

10.26 am

[Glyn Davies (Montgomeryshire) (Con)]

Thank you, Mr Turner, for calling me to speak in this debate, which is of huge importance. I, too, congratulate my hon. Friend the Member for Thirsk and Malton (Miss McIntosh) on securing this debate. This issue is probably more important and relevant to the problems facing my constituency at present than any other that I can think of, and it dominates a lot of conversations.

I intend to make a fairly short speech because hon. Members have raised most of the points I wanted to raise; I do not want just to repeat them. However, fuel duty is particularly important where I live for two main reasons. One is the absolute cost. As with a lot of rural areas, fuel is essential to us. We cannot just pick up a newspaper in a local shop; we have to drive to the shop. We cannot access any services without having to drive to them. That point is more relevant in a sparsely populated area than anywhere else.

The second issue is competitiveness, about which my constituency neighbour, my hon. Friend the Member for Brecon and Radnorshire (Roger Williams), made—twice, I think—an important point. Competitiveness is important because it affects not just transport hauliers from overseas but those in Britain. The position of small businesses and individuals where we live is incredibly difficult because of competition. The price of fuel is acting as an anti-regional policy that is persuading people to move out, simply because of cost. This is not about individual, large purchasing decisions; it is the accumulation of all the little things that everyone has to buy that makes living so much more expensive.

I do not live on an island, but Montgomeryshire, and Brecon and Radnorshire, are very sparsely populated. Most of the sparsely populated parts of Britain are probably represented here by hon. Members who have made interventions. We want something to be done, but I know perfectly well that that is much easier said than done. There are two issues that must be dealt with: we have to face up to the world market that has caused fuel prices to rise, and which we do not have any great control over; and there is the state of our public finances, which the Treasury has to deal with. We are in huge debt and massive interest payments must be repaid—that cannot be denied. To ask the Chancellor of the Exchequer to reduce taxation anywhere in the Budget is a difficult request, and a balance must be struck. However, we also know from what he has said previously that he is sympathetic on this issue. He has spoken about a fair fuel stabiliser in the past, and that is certainly one way to address it. I can see the question of the use of a fair fuel stabiliser giving rise to great difficulties, and I am certain that the advisers working for the Chancellor are looking at how those difficulties could be ironed out. I can see that there are problems.

The second issue, which interests me more because it is getting a lot of coverage, is one that many Members have spoken about today and which I would favour: giving some form of concession to the parts of the country that are deemed to be sparsely populated or rural, where the impact of the price of fuel is greatest. It is said that we are talking about a figure of only 5p per litre, and that the concession would apply only to the remotest parts of Britain. In that regard, I, like others who are present today, want to make a pitch for where I live. Rural Wales is sparsely populated, and if we are to start this initiative in the remotest parts of Britain—that is what is being discussed—and if the Chancellor has to negotiate with the European Union on how a pilot scheme might be introduced, I hope there will be an early roll-out to constituencies such as mine, where it might make a difference.

[Roger Williams]

My hon. Friend does not need my help—he speaks with great experience and passion on this matter—but some people consider Cumbria the most sparsely populated area in England, although, as he and I know, Powys is four times more sparsely populated. That may add some strength to his bid.

[Glyn Davies]

I am hugely grateful to my honourable neighbour, if that is a proper parliamentary term to use. No, I did not know that it was four times more sparsely populated. As he started to speak, I was intending to go straight to Google to find out the relative levels, but I accept the figure he gives. We know that Powys is sparsely populated. In the past, there would have been Government initiatives to address the problem, but I cannot think of any current great initiative. We need one, and we need to be added to the list of places where fuel price alleviation might be provided.

I wanted to make this contribution, first, because the issue is hugely important to my constituents, and, secondly, to encourage the Chancellor to recognise in his Budget that it is one of the greatest problems facing the remotest parts of rural Britain. The insidious impact is, as I described earlier, an anti-regional policy that makes it far more difficult to bring development to the remotest parts of our country.

[Mr Andrew Turner (in the Chair)]

I call Andrew Bingham. You have until 20 minutes to 11.

Independent Financial Advisers (Regulation)

Glyn Davies Excerpts

Monday 29th November 2010 Commons Chamber

[Mark Garnier]

That is a recurring theme and I shall come on to that point, but the hon. Gentleman is right to raise it. It has been raised by huge numbers of IFAs who have got in touch with me, my hon. Friend the Member for West Worcestershire and with many other Members.

The three aims that the FSA has talked about are, I believe, laudable in principle, overall. It is not our intention tonight to derail the retail distribution review, which will improve standards for consumers. I suspect that not a single professional in the industry would disagree with the overall principles. Indeed, Which?, the consumer champion, strongly supports the measures contained in the RDR, and states that its members

“firmly believe that the IFA industry is best placed to offer this advice”.

However, the devil is, as always, in the detail.

In addressing the problems, the FSA has, through the RDR, introduced issues that disproportionately affect the IFA community. The IFA trade organisation, the Association of Independent Financial Advisers—AIFA—suggested in evidence to the Treasury Committee that although some 30% of IFAs strongly supported the RDR and 40% were rather ambivalent towards it, 30% would not put up with the RDR. The 30% who are against the RDR suggest that it would be better to leave the industry altogether, so the community of IFAs would shrink significantly.

[Glyn Davies (Montgomeryshire) (Con)]

Does my hon. Friend agree that that is particularly damaging in rural areas, where all the independent advisers are either one-man businesses or very small businesses, and that a huge proportion of the 30% who do not like the RDR are likely to come from such rural areas?

[Mark Garnier]

My hon. Friend makes an important point. Small businesses in rural areas are likely to be most affected because they have so few resources in their offices. As a direct result, poorer communities in rural areas will be denied access to independent financial advice. That is not a good thing.

Lord Turner, the chairman of the FSA, suggested that reducing the number of IFAs might well reduce the overall cost of investor advice. How can reducing competition possibly result in improved service to consumers? The key issues facing the worried community of IFAs can be reduced to just a handful of salient points. The first concerns qualifications, which are probably the cause of the biggest mailbags on this subject. It has been said, perhaps a little harshly, that IFAs hold a qualification no better than that of a McDonald’s burger bar employee—a qualification and credit framework level 3 pass, which is equivalent to an A-level.

The RDR requires all financial advisers to attain the QCF level 4 pass and, in the broadest sense, that is not unreasonable. However, it does not take into account the fact that a great many IFAs have a wealth of experience but, with an average age of 47, little enthusiasm to start taking exams. It is estimated that the exams will require 100 hours of study for each of four modules—that is 400 hours of study. We must bear in mind the fact that that is for a full-time professional who needs to earn a living and who may, as my hon. Friend the Member for Montgomeryshire (Glyn Davies) mentioned, be working by himself in a rural community with little support.

Financial Assistance (Ireland)

Glyn Davies Excerpts

Monday 22nd November 2010 Commons Chamber

[Mr Osborne]

If the hon. Lady looks around the western economies, she will see that countries with large budget deficits—we have the largest—are moving to take further steps to show how they are reducing them. I cannot see around the international scene a single group of people other than the Opposition who actually believe that the UK should be loosening the fiscal position from what we have set out. That really is completely incredible and carries absolutely no conviction in any other part of the world. As part of the Labour party’s re-evaluation of its entire economic policy, I suggest that it start with that.

[Glyn Davies (Montgomeryshire) (Con)]

I would like to ask a question from a Welsh perspective. We all understand the impact of a strong economy in Ireland on Northern Ireland, but does the Chancellor recognise that a strong Irish economy is also particularly important to Wales?

[Mr Osborne]

Yes, I do. Ireland’s links are not just with Northern Ireland, they are also with Wales, Scotland and England. The Irish banks were of course engaged in lending into the UK economy, UK banks have engaged in lending into the Irish economy, and many companies export to each other’s countries. We are deeply interconnected, which is why I have proposed this set of measures.

Oral Answers to Questions

Glyn Davies Excerpts

Tuesday 16th November 2010 Commons Chamber

[Danny Alexander]

I have to say that that sounds like rather an overestimate, but the hon. Lady is right to say that employers are spelling out their own plans for redundancies and for managing their work force in an appropriate way. I recognise that many staff will be very concerned about that, but I believe that it is right that they hear about specific plans from their own management, rather than draw conclusions from higher level aggregate numbers.

[Glyn Davies (Montgomeryshire) (Con)]

17. What recent discussions he has had with his international counterparts on the co-ordination of efforts to reduce Government deficits.

[The Economic Secretary to the Treasury (Justine Greening)]

The UK has been actively engaged in G20 discussions. The Prime Minister and the Chancellor attended the G20 summit on 11 and 12 November, which delivered the Seoul action plan and pledged to continue co-ordinated efforts to generate strong, sustainable and balanced growth. In this action plan, the advanced economies committed to

“formulate and implement clear, credible, ambitious and growth-friendly medium-term fiscal consolidation plans in line with the Toronto commitment, differentiated according”—

of course—

“to national circumstances.”

[Glyn Davies]

Bearing in mind reports of continuing threats to some of our EU partners, does the Minister agree that the International Monetary Fund’s recent growth forecasts underline the need for an ambitious and credible strategy for dealing with the budget deficit?

[Justine Greening]

My hon. Friend is right about that. The IMF clearly supported the efforts that the coalition Government have been making both in the emergency Budget and the spending review to get to grips with the terrible fiscal deficit handed over by the previous Government. The OECD also welcomed the balance that we struck in the spending review between not only protecting growth, but tackling debt.

Independent Financial Advisers

Glyn Davies Excerpts

Wednesday 20th October 2010 Westminster Hall

[Harriett Baldwin]

I agree, because according to Oxera’s survey for the FSA, 25% of firms are very or quite likely to leave the market. That will reduce access to advice for those living in rural constituencies such as mine. It will reduce access to advice for those with smaller amounts of money; the charges for explicit advice will be for those with higher sums of money.

[Glyn Davies (Montgomeryshire) (Con)]

Does my hon. Friend agree that there will be a particular effect on rural areas? I live in a rural area, where nearly all the financial advisers are small, one-person businesses. The imposition in relation to costs and time is particularly onerous for them. Many will simply close and the service in rural areas will disappear.

[Harriett Baldwin]

Yes, I agree. In London it does not really matter if one person goes out of business—there will be lots more financial advice available; but in rural constituencies such as mine and that of my hon. Friend there will be a significant impact on access.

The IFAs in West Worcestershire who have come to my constituency advice surgeries have also raised concerns about the exam. Most of the advisers I have seen have been—I know we should not mention age—in their late 50s or 60s. Speaking for myself—and obviously I am still very young—I am not as good at taking exams now as I was when I left university. That does not mean that I have not accumulated something else over the years. I hope that I have a little more wisdom and experience than I had then.

Oral Answers to Questions

Glyn Davies Excerpts

Tuesday 12th October 2010 Commons Chamber

[Mr Marcus Jones (Nuneaton) (Con)]

4. What recent representations he has received on steps to reduce the budget deficit.

[Glyn Davies (Montgomeryshire) (Con)]

6. What recent representations he has received on steps to reduce the budget deficit.

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

The Government’s plan to tackle the record budget deficit they inherited has been supported by the CBI, the OECD and, now, the International Monetary Fund. We have received more than 60,000 representations from the public as to how to go about deficit reduction and many of their suggestions are being put into effect. To date, we have received no proposals and no suggestions from the official Opposition, who created the deficit in the first place.

[Mr Osborne]

My hon. Friend is absolutely right about debt interest; this country is now paying £120 million a day in debt interest. Debt interest under the previous Government was forecast to rise to £60 billion a year, making it one of the largest items of Government expenditure. He talks about suggestions from Members of Parliament. The new leader of the Labour party said:

“I think whoever is the Labour leader will, by the time of the spending review, have to show that they have an alternative plan”.

So the clock is ticking.

[Glyn Davies]

The Chancellor attended the IMF conference at the weekend. Can he share with us what our international partners are saying about the coalition Government’s efforts to deal with the deficit?

[Mr Osborne]

As I am sure my hon. Friend is aware, the IMF’s article IV study of the United Kingdom said:

“The government’s strong and credible multi-year fiscal deficit reduction plan is essential to ensure debt sustainability.”

That is in marked contrast to last year’s IMF report on the UK. At the IMF annual meetings, which I attended last weekend, it was made clear that concerns about sovereign debt issues in Europe were one of the greatest threats to the world recovery. Of course, the decisions that we have taken in this House have moved Britain out of the financial danger zone and helped to deal with that potential threat.