Eurozone Crisis

Harriett Baldwin Excerpts

Thursday 3rd November 2011 Commons Chamber

[Mr Hoban]

My hon. Friend is right. If we had not taken the tough action we took when we came into office, the UK could be in the firing line, not just Greece and other eurozone member states.

[Harriett Baldwin (West Worcestershire) (Con)]

Two-year Greek interest rates reached 100% this morning. Will the Financial Secretary remind everybody how important it is for jobs and growth that despite the fact that we have a higher deficit than the Greeks, our interest rates are closer to those of the Germans?

[Mr Hoban]

My hon. Friend hits the nail on the head. It is because we took that tough action and are tackling our deficit, and have a credible plan for putting our public spending back on a firm footing, that we have lower interest rates than countries with a lower deficit than ours.

Public Service Pensions

Harriett Baldwin Excerpts

Wednesday 2nd November 2011 Commons Chamber

[Danny Alexander]

The full-time equivalent basis for pension reform is being approached in exactly the same way that the previous Government treated it. The hon. Lady’s tests for affordability, fairness and a workable settlement are all met. She did not say, in the end, whether she supported the deal on the table to date. It is incumbent on the Opposition to understand the deal and support it. It is also incumbent on them to make clear their position on strike action. I hope that she agrees with me that, in light of the new offer and the constructive approach taken to the negotiations, she should not support trade unions going ahead with strike action later this month.

[Harriett Baldwin (West Worcestershire) (Con)]

I welcome the extensive work that has gone into these proposals and would like to ask a question specific to my constituency and many others. Many teachers in my constituency work in the state sector, but over their careers they will often spend periods in the independent sector too. Will the proposals continue to allow inter-changeability between the two sectors?

[Danny Alexander]

If agreement is reached, they will. The arrangements that the hon. Lady describes are an important part of the discussions, but they depend on reaching a sustainable agreement on the future of public service pensions along the lines I have set out.

Jobs and Growth

Harriett Baldwin Excerpts

Wednesday 12th October 2011 Commons Chamber

[Ed Balls]

The hon. Gentleman would know the answer if he listened. I said that attempting to go £40 billion faster in deficit reduction than the plan the Chancellor inherited is not working, but pushing borrowing up. The right thing to do now is to expand demand—[Interruption.] Look, a one-year cut in VAT in its own terms would cost £12 billion. The question is what would be the impact on jobs, growth and deficit reduction. I am afraid that the Chancellor is borrowing not £12 billion more, but £46 billion more. The flatlining economy and rising unemployment mean that his deficit reduction plans are going off track. He should take the advice of the IMF and the OECD and change course.

[Harriett Baldwin (West Worcestershire) (Con)]

rose—

[Charlie Elphicke]

rose—

[Ed Balls]

I will make a little more progress, but I will take interventions from people who have not intervened. Good grief, I have given the hon. Member for Dover (Charlie Elphicke) enough of the wrong type of publicity already and do not want to do his career any more damage.

There is a credible alternative. Why will the Chancellor not act? He used to be so confident that his plan was working. It is patently not working. He and his cheerleaders on the Government Benches claim that however bad things get, he is trapped by the financial markets. He cannot take the advice of the IMF and the OECD and change course because it would lead to higher interest rates and recession. However, the IMF has said that we cannot have credibility without growth.

The markets know that rising unemployment and zero growth are undermining the Chancellor’s deficit reduction plan. One chief economist in the City at Baring Asset Management said last week:

“Growth is essential if the UK is to be able to finance new debt, repay old debt and convince the markets and credit rating agencies there is a modicum of competency in policymaking. The longer we pursue current policies, the more likely it becomes that the UK will be the next target”.

That is the real market view. We know that the credit rating agencies put out their press releases, but the real view, as the IMF has told us, is that having a flatlining economy and rising unemployment is the wrong way to get the deficit down. As I said, even the Chancellor’s friend at the IMF has said that

“growth is necessary for fiscal credibility”.

Britain has no growth. That is why our Chancellor is losing credibility.

[Harriett Baldwin]

Will the shadow Chancellor confirm that cutting VAT to 17.5% would cost £12.5 billion a year? Would that not simply shift demand from one year to the next?

[Ed Balls]

The Chancellor’s whipping team really must tell people to listen to the answers before they intervene.

The Nobel prize winner himself, Chris Pissarides, says in the New Statesman tomorrow that a temporary VAT cut is the right way—[Interruption.] I say to Government Members that Nobel prize winners who give good advice to the Chancellor should be listened to. Given that 70 more people are unemployed in the constituency of the hon. Member for West Worcestershire (Harriett Baldwin) than a year ago, perhaps she should start to listen too.

Finance Bill

Harriett Baldwin Excerpts

Tuesday 28th June 2011 Commons Chamber

[Harriett Baldwin (West Worcestershire) (Con)]

New clause 16, which is on the amendment paper in the right hon. Gentleman’s name, has not been selected for debate. Will he explain why it was late and unable to be selected?

[Mr Hanson]

The hon. Lady will know that we have tabled several amendments to the Finance Bill. Mr Speaker chose not to select new clause 16, but he did select new clause 10, which calls for a review of the impact of VAT on things that are important to my hon. Friends’ constituents and hers: family incomes, businesses and jobs. If she looks at what the leader of her party said during the general election—[Interruption.] Perhaps the hon. Member for Chelsea and Fulham (Greg Hands) should listen to this, because during the general election the then Leader of the Opposition said during the Cameron Direct campaign in Exeter:

“You could try, as you say, to put it on VAT, sales tax, but again if you look at the effect of sales tax, it’s very regressive, it hits the poorest the hardest.”

I agree with the Prime Minister. Does the hon. Member for Chelsea and Fulham agree with his right hon. Friend?

The Economy

Harriett Baldwin Excerpts

Wednesday 22nd June 2011 Commons Chamber

[Ed Balls]

I find that baffling as well. The fact is that cutting VAT was an effective stimulus, as the IFS said, which led to strengthening growth and falling unemployment a year ago. Now that cut has been reversed, and our position on the policy has been consistent. We propose not a move all the way from the Government’s deficit reduction plan to halving the deficit in four years, but a step along the road. That would be the right thing to do, and it would deliver for the constituents of Government Members a boost of £450 a year for a family with children, and of £275 a year for a pensioner couple. Why do they oppose action that would put money in people’s pockets and help to get the deficit down in a fairer way?

[Harriett Baldwin (West Worcestershire) (Con)]

The right hon. Gentleman says that he likes to do his politics on the record. On the “Daily Politics” show on 14 March, he said:

“We’ve made no commitments at all, it would be totally irresponsible for an opposition to behave”

in that way. What is responsible about an unfunded £51 billion tax cut?

Eurozone (Contingency Plans)

Harriett Baldwin Excerpts

Monday 20th June 2011 Commons Chamber

[Harriett Baldwin (West Worcestershire) (Con)]

Madame Christine Lagarde is clearly an outstanding candidate to be head of the IMF, but is the Minister slightly concerned that she is French and, given that the French banks have a very large exposure to the Greek problems, that she might therefore be conflicted in her approach to the problem?

[Mr Hoban]

Madame Lagarde is a strong candidate for the role of director-general of the IMF. My hon. Friend is absolutely right to point out that she is French; that fact has not escaped us in ECOFIN meetings. Madame Lagarde said on “Newsnight” a couple of weeks ago that she recognised that the bail-out of Greece involved a series of agreements between eurozone countries, and that that should remain the case.

Regulatory and Banking Reform

Harriett Baldwin Excerpts

Thursday 16th June 2011 Commons Chamber

[Mr Hoban]

My statement today has demonstrated the action that we have taken over the past year to create a more stable and sustainable banking system. That should give comfort to my hon. Friend’s constituents in respect of the safety of their savings. Savers and depositors should be mindful of the limits on deposits imposed through the financial services compensation scheme, but the range of interventions that we are making, through this statement and further reforms, will ensure that we have a safer, more sustainable banking sector in the future—one that does not impose a burden on the taxpayer, but makes sure that it continues to meet the needs of businesses and households across this country.

[Harriett Baldwin (West Worcestershire) (Con)]

Does the Financial Secretary share my astonishment at the selective recollection of historical facts by Opposition Members? The run on Northern Rock started well over a year before the global financial crisis, and it was the first run on a bank in this country for more than 100 years. In rebuilding the stability of the financial system, will the Financial Secretary repeat for my constituents the reassurance that their deposits up to £85,000 are now effectively guaranteed by the Financial Services Compensation Scheme?

[Mr Hoban]

My hon. Friend makes two important points. The first is to recognise the role played by the Financial Services Compensation Scheme in protecting depositors up to that £85,000 limit. The other point is that there is collective amnesia among the Opposition about their role in the financial crisis. Yes, Northern Rock took place before the global financial crisis—and they were the champions of light-touch financial regulation and introduced the tripartite system of regulatory reform that was shown to fail during the crisis. The Opposition need to recognise their responsibility; until they do so, it will not be possible for them to move on.

Oral Answers to Questions

Harriett Baldwin Excerpts

Tuesday 10th May 2011 Commons Chamber

[Danny Alexander]

I am not sure that the right hon. Gentleman opposed any of the items on that list in votes in the House.

As I said earlier, we have cut income tax by increasing the income tax threshold. We have also introduced a triple lock on pensions, increased cold weather payments, and increased the child element of child tax credit. Of course we must look at the way in which the income tax system works, but our priority has been to cut income tax for people on low and middle incomes by increasing the tax threshold. That is the tax priority of this Government.

[Harriett Baldwin (West Worcestershire) (Con)]

7. What steps he is taking to ensure that the Financial Services Authority exempts from new domestic regulation businesses employing fewer than 10 people and new businesses for the next three years.

[The Financial Secretary to the Treasury (Mr Mark Hoban)]

Where the Government are granting new powers to the Financial Services Authority through primary and secondary legislation, we will seek to apply the moratorium. The FSA is, however, an independent regulator with powers to make rules under the Financial Services and Markets Act 2000. The Government’s policy on exempting micro-businesses and start-ups from new regulation will therefore not apply automatically to rules made by the FSA.

[Harriett Baldwin]

In his testimony to the Treasury Committee, the chief executive of the FSA said that up to 10,000 jobs—in many cases, those of small independent financial advisers—could be lost as a result of the retail distribution review. Will the Financial Secretary meet the chief executive of the FSA as a matter of urgency to discuss ways in which the impact could be mitigated?

[Mr Hoban]

I know that my hon. Friend has campaigned tenaciously for IFAs. I remind her that although the FSA is an independent regulator—this addresses her question directly—it has an obligation to assess the impact of its rules on businesses, including small businesses, and to make its rules proportionate. I should add that it is not planning any initiatives by means of its powers under the Financial Services and Markets Act apart from those that are already under way.

Amendment of the Law

Harriett Baldwin Excerpts

Monday 28th March 2011 Commons Chamber

[Harriett Baldwin (West Worcestershire) (Con)]

I rise to speak in support of my right hon. Friend the Chancellor’s historic and pivotal Budget. Today we have heard Conservative Members give examples of what a difficult hand the Chancellor has been dealt in producing a Budget. We have heard about the £120 million a day—£840 million a week—that the Government have to pay in interest. We have heard that interest has, in effect, become one of the biggest Government Departments. That is why it is so important to point out the difference between the deficit and the overall debt. In setting out the path that he did, my right hon. Friend still has to live with the fact that debt will be rising in every year of this Parliament until the last one. That means that the debt interest bill is still growing, despite the tighter economic conditions that he has imposed.

I think I am probably somewhat different from other Members of this House in that I did not aspire to come here when I was a student. Indeed, I managed to survive the first 40 years of my life without it ever crossing my mind that I should stand for Parliament. Shortly after Tony Blair’s second election victory in 2001, the right hon. Member for Kirkcaldy and Cowdenbeath (Mr Brown) gave another historic Budget in which he departed from Conservative spending plans for the first time. At the same time, that Government were beginning to evaluate whether the conditions might be right to enter the euro. Those two horrors were the impetus for me to seek election to this place. I vowed, as a mother, that I wanted to ensure that my children did not grow up in a country that was facing bankruptcy, and yet I failed to get here soon enough to stop the rot. I am therefore very grateful to the Chancellor for having finally set out a path that will enable my children—and one day, I hope, grandchildren—to enjoy opportunities of the kind that I enjoyed when I left university.

Enough of me; I think I should talk about the Budget. I welcome the Budget’s focus on growth and the private sector. When the right hon. Member for Morley and Outwood (Ed Balls) was an adviser to the previous Prime Minister, he set out something called a neo-endogenous growth strategy. Again, I realised quite early on that the problem with such a strategy is that before long the marginal impact of increased Government spending decreases, and one runs out of money. We therefore need to focus on private sector growth, which is why this Budget is so pivotal. A lower tax rate for businesses will bring in higher tax returns.

[Mel Stride (Central Devon) (Con)]

My hon. Friend makes a powerful point about the importance of lowering taxation on businesses to provide growth. Does she agree that the Chancellor was immediately vindicated the next morning, when Sir Martin Sorrell was on the “Today” programme explaining that WPP, the world’s largest advertising agency, would consider relocating to the UK as a direct result of the Budget?

[Harriett Baldwin]

Those sentiments were echoed by businesses in my constituency, where entrepreneurs welcomed and cheered the measures set out in the Budget. I also received a communication from a non-dom in west Worcestershire—I did not think we had one, but we do. He is so pleased with the clarity of the Budget that he is going to bring lots of money in on a remittance basis to invest in businesses in the UK.

I have a couple of questions for those on the Front Bench. I do not think that we can enjoy sustained economic growth until we resolve the problems with our banks. I agree with the hon. Member for Telford (David Wright), who said that Japan suffered from slow growth for many decades because it did not do anything about its banking sector. The sooner we get rid of the state’s ownership of so much of the banking sector, the better it will be for the health of the economy.

Given that the Financial Secretary is on the Front Bench, I will take this opportunity to read a passage from the Budget speech:

“from April, we are going to impose a moratorium exempting all businesses employing fewer than 10 people, and all genuine start-ups, from new domestic regulation for the next three years.”—[Official Report, 23 March 2011; Vol. 525, c. 956.]

I ask the Financial Secretary to raise this point with the Financial Services Authority, which we know is the regulator of many small, independent financial advisers. I suggest that he take this opportunity to suggest that small IFAs employing fewer than 10 people might be exempt from the increased regulation in the retail distribution review.

In conclusion, I believe that this Budget will be seen as historically pivotal, because it will create real jobs, real growth and real prosperity. Such real prosperity can come only from investment in business and from exports. There will be exogenous growth—the exogenous growth of the private sector. I look forward to supporting the Budget in the Lobby tomorrow.

Fuel Prices

Harriett Baldwin Excerpts

Tuesday 15th February 2011 Westminster Hall

[Miss Anne McIntosh (Thirsk and Malton) (Con)]

Good morning, Mr Turner, and I offer a warm welcome to what appears to be a very well attended debate. I am delighted to have secured this debate, and I am particularly pleased about its timing, which is before the Budget on 23 March.

This debate is timely, because it examines the impact of fuel duty, particularly in remote rural communities such as those in North Yorkshire. I will just set the scene by outlining the prices as of yesterday, 14 February 2011. People would be hard pressed to buy unleaded petrol in Thirsk, Malton or Filey for less than £1.30 a litre, and they would be hard pressed to buy a litre of diesel for less than £1.36 a litre.

I want to spend some time outlining the impact of these prices on rural communities, and I also want to set out why I fear that the diesel duty differential is affecting rural communities so harshly. Finally, I want to discuss the options to address this issue.

It is no secret that oil prices have reached a record high—barrel prices have reached $100. The fuel duty and VAT element of petrol prices both impact on drivers and as many people regard those elements as a form of double taxation, their effect on petrol prices is highly inflationary. It is generally thought that 20% of the running costs of a truck are accounted for by the cost of fuel duty at this time.

There is a high dependence on cars in rural areas, where we have limited public transport and where the car is a necessity for many people, particularly the elderly, those on fixed incomes and those with young families. In the words of the AA, in rural areas those on lower incomes are already being priced out of the market.

[Harriett Baldwin (West Worcestershire) (Con)]

I congratulate my hon. Friend on securing this extremely important debate. I represent a rural area myself. Does she agree that there are so few petrol stations in rural areas that the existing rural petrol stations can charge much higher prices than petrol stations in towns?

[Miss McIntosh]

The problem is that the sale of fuel in rural areas tends to be less per vehicle. I have learned that people tend to “tank up” for two or three weeks at a time. That has an impact, as rural petrol stations do not face the competition for customers that exists in urban areas.

A particular concern for North Yorkshire is that we have had extremely adverse weather this winter, particularly in November and December, and in addition we have a particular reliance on 4x4 vehicles. I want to declare an interest, in that I run a partial 4x4 vehicle to ensure that I can access parts of my constituency that I would otherwise be unable to reach. We know that 4x4 vehicles are more fuel-efficient than they were in the past. However, for the reasons that I have given, diesel prices at the petrol pump are higher than they were in the past.

In preparing for this debate, I was surprised by diesel prices in the UK. I had understood that they were the second highest in Europe. In fact, the helpful note provided by the Library for this debate shows that the UK has the highest diesel prices in the EU, despite a pre-tax price that is among the lowest in the EU. The differences in diesel duty rates in EU countries are incredibly stark compared with those for petrol. In some member states, where there are lower diesel duty rates, the diesel discount is nearly 50%. By contrast, the diesel duty rate in the UK is 18p a litre, or 47%, higher than in any other EU country and more than 25p, or 80%, above the simple average for the other 26 member states. It is shocking that the higher cost is passed on to those of us who live in rural areas.