Oral Answers to Questions

Debate between Harriett Baldwin and Alison McGovern

Wednesday 21st November 2018 Commons Chamber

[Harriett Baldwin]

Of course the UK Government strongly condemn Hamas’s rocket firing and are deeply concerned about the civilian casualties. My right hon. Friend is absolutely right that the UK has zero tolerance and needs to be constantly vigilant. We do not fund Hamas, of course, but we need to be extremely careful to ensure that UK aid reaches the intended beneficiaries.

[Alison McGovern (Wirral South) (Lab)]

11. Because of DFID’s priority to get money to where it is most needed, this country has committed vast resources to the conflict in Syria. In addition, the Home Office says that about 10,000 Syrians are now in Britain. Is DFID prepared to bring the voices of those 10,000 Syrians in Britain together and hear from them about what they think should now happen in Syria, which is their country after all?

[Harriett Baldwin]

I pay tribute to the hon. Lady’s consistent campaigning on the issue. She is right to draw attention to the important role that UK aid has played in the humanitarian response in Syria. I am sure that she and other hon. Members will continue to make sure that the voices of Syrian refugees in the region, and of those Syrians who have found a home here, will continue to be heard in this place.

Yemen

Debate between Harriett Baldwin and Alison McGovern

Tuesday 24th April 2018 Commons Chamber

[Harriett Baldwin]

My hon. Friend raises a very important detail. The UK has great expertise in maritime matters, and we have deployed experts to Djibouti to help with that inspection process. In fact, UK support has helped to increase the proportion of ships that have been physically inspected by almost 10 times, from 8% to 77%.

[Alison McGovern (Wirral South) (Lab)]

May I press the Minister a little further? She gave a long answer a moment ago to my hon. Friend the Member for Birmingham, Northfield (Richard Burden) about a UN Security Council resolution. Exactly when can we expect to see one?

[Harriett Baldwin]

The UK led the drafting in March of the United Nations Security Council presidential statement, and as I understand it, that statement, which calls on all parties to comply with their obligations under international humanitarian law and to facilitate humanitarian access, and emphasises the need for an inclusive political solution, was widely supported.

Oral Answers to Questions

Debate between Harriett Baldwin and Alison McGovern

Tuesday 19th January 2016 Commons Chamber

[Alison McGovern (Wirral South) (Lab)]

May I return the City Minister to the issue of the cancelled FCA inquiry into banking culture? The Parliamentary Commission on Banking Standards chaired by the right hon. Member for Chichester (Mr Tyrie) pointed to the “Murder on the Orient Express” excuse where everyone was partly responsible but no one was really to blame. The Minister said before that Ministers had no role in the cancellation of that inquiry. Will she say, yes or no, whether any civil servants did?

[Harriett Baldwin]

No.

Women and the Economy

Debate between Harriett Baldwin and Alison McGovern

Wednesday 9th December 2015 Commons Chamber

[Alison McGovern (Wirral South) (Lab)]

Before I start my speech, I want to mention two fantastic women from the Wirral. My hon. Friend the Member for Wallasey (Ms Eagle) made us all proud deputising for the leader of the Labour party at Prime Minister’s questions. She, more than most, has done great things for women’s role in the economy. I am absolutely proud to be a Wirral woman today, not least in speaking in this debate on my daughter’s birthday—I hope she will be a future fantastic woman from the Wirral.

I want to say three things: about younger women, mums and older women. First, one of the most important measures for the future of younger women has been the apprenticeship levy. Although it is good that there is support for apprenticeships across the House, unfortunately, the reality of life for young women going into apprenticeships is that they will have less chance than their male counterparts of getting one that will pay them well. As has been said on several occasions, young women work in sectors that pay less. That is just a fact.

[The Economic Secretary to the Treasury (Harriett Baldwin)]

The hon. Lady is making a very important speech about apprenticeships. Will she join me in welcoming the fact that more than half of apprenticeships in this country are now being taken by women?

[Alison McGovern]

I would welcome that wholeheartedly if those apprenticeships paid women equally to men, but the fact is that they do not. We ought not to rest until they do, because women face a dual problem: the work they have traditionally done is valued less; and they are barred from better-paid sectors. We need both to get women into highly paid parts of our industry and to ask ourselves why highly skilled women end up with low pay in areas such as social care. Over the past week or so, I have had quite a bit of grief on social media. Lots of people are campaigning about this sort of thing, which is fine, but I would argue that the primary feminist cause in Britain today is the position of women working in social care. They are paid far too little for the important work they do, including younger women who want to make their career in social care.

Secondly, I want to turn to the place of mums. In interventions, I have already raised the problem that lone parents will face with universal credit. I am afraid I take issue with the Tory view of the world which says that any state support for the cost of children is somehow undignified, that it is somehow welfare and that people cannot feel proud of themselves and their ability to look after their family if they in any way receive a cash transfer from the state.

Beveridge himself recognised that the cost of having children increases the amount people have to pay out. Our social security system should smooth people’s income across the period of their lives when they have children and their costs are higher, and they will pay into the system when they are in work without children and their costs are lower. That is how our system has always worked. It is an absolute myth to think that we have ever had a perfect situation when there was no poverty, people could just earn their wages and that was enough to pay for the cost of bringing up children. Basically, the Beveridge system was introduced precisely because people get poor at two points in their lives—with the cost of their kids, and with the cost of old age. We must accept that tax credits are an important part of the system and settlement we have had in our country for a long time. As I have already said, wages have an important role to play in the financial fortunes of women, but they will never fully resolve such problems.

Finance Bill

Debate between Harriett Baldwin and Alison McGovern

Tuesday 8th September 2015 Commons Chamber

[Harriett Baldwin]

I hope the hon. Lady recognises that the rate paid by building societies and smaller banks will be lower than it was at any time when she and the Labour party were in government. In fact, the measure brings the corporation tax rate to a level lower than when the Conservatives took power in 2010. In addition, 90% of building societies will be exempt from the charge because the first £25 million is exempt from the surcharge.

At the same time, we believe that the changes in clauses 16 and 17 will create a fairer, more competitive and more sustainable basis for taxing the UK banking sector. By rebalancing banks’ contributions towards a tax on profits, future charges will be more aligned with profit and capital accumulation. That reduces the risk of tax affecting banks’ decisions on where to invest and helps to ensure that tax does not impact banks’ ability to lend to businesses and individuals.

By aligning banks’ contributions with their activities in the UK, the changes recognise and reduce the impact of tax on UK banks’ ability to compete in overseas markets. They help to reflect the impact of regulatory reforms, which have reduced the risk of those overseas operations to the UK economy.

I shall draw my brief remarks to a close. The Government firmly believe that banks should make a fair contribution to the economic recovery. However, that contribution must be balanced with the need to maintain the competitiveness of the UK and to support lending to the wider economy. The changes in the clauses provide a better balance between those two objectives, and do so while providing long-term certainty and stability to the sector, and short-term revenue to the taxman. I therefore hope that clauses 16 and 17 and schedules 2 and 3 stand part of the Bill.

[Alison McGovern]

I, too, will make some brief remarks. I rise to speak to the Opposition’s new clause 1, which relates to clauses 16 and 17, concerning the Government’s changes to the bank levy rate for 2016 to 2021 and the introduction of a new surcharge of 8% on bank profits.

Before I begin my remarks and before I forget to ask the Minister, Members will be aware that the changes the Government are introducing are quite controversial in some quarters. Building societies have been expressing deep concern. However, I think I just heard the Minister say that 90% of building societies will not be affected by the changes because of the threshold. Will the Minister tell me, either in her remarks later or in an intervention now, whether she means 90% by number of institutions or 90% by size of building societies in total? The statistic does not reflect the concern that building societies have expressed in recent weeks. I will await her answer whenever she sees fit to give it to me.

Taken together, the clauses will completely reshape the structure of bank taxation in the UK, as the Government move from a tax on bank balance sheets towards a tax on bank profits. Alongside the impact on the banking sector itself, the clauses also have significant implications on tax receipts for the Exchequer. It is our belief that the changes have the potential to damage the competitiveness and diversity of our banking sector. New clause 1 calls for an urgent review to establish the impact of the new measures. Before coming on to the detail of new clause 1, I will briefly examine the case for a reduction in the bank levy in more detail.

When the bank levy was introduced at the start of the previous Parliament, the Chancellor made it very clear there were two separate objectives behind the policy. First, it was designed as a revenue raiser, with the Chancellor targeting an income of £2.5 billion each year from receipts of the levy. The second objective was to cause banks to change the structure of their balance sheets. This was explained by the then Exchequer Secretary, the hon. Member for South West Hertfordshire (Mr Gauke), who said the levy was

“intended to encourage banks to move to less risky funding profiles, and…reflective of economic risk”.—[Official Report, 12 July 2010; Vol. 513, c. 733.]

He went on to dismiss the idea of a tax on bank profits, as it would not create the same kind of behavioural effects as the levy.

In and of themselves, either of those goals was perfectly reasonable and was supported across the House. However, it quickly became obvious that the two goals were incoherent in practice, because as banks changed their balance sheets the revenue from the levy went down. This caused the Government to raise the levy again and again, with a total of nine rises in just five years. Now, having marched the banks to the top of the hill, the Chancellor plans to march them back all the way down again with cuts to the levy every year, finishing with a rate of 0.1% by the end of the Parliament. After 10 years of this Chancellor, we will have had a total of 13 different bank levy rates—what a mess.

The Chancellor claimed in his Budget statement that the bank levy needs to be reduced because the levy has worked. That is an interesting theory given that the revenue target, one of his policy objectives, has been missed consistently. The main question for the Minister is this: if the Government believed that increasing the bank levy had a positive behavioural effect on the banks, does the Minister believe that reducing the level will have a similar effect in the opposite direction? I thought I understood the Minister to say that she did believe there would be some behavioural effects of the change. Perhaps she might say a bit more about that.

The OBR’s economic and fiscal outlook shows that the future revenue projections are based on the assumption that banks will continue to reduce their balance sheets. Will the Minister explain, for the purposes of clarity, on what basis that assumption has been made? If anything, the new policy framework seems to be incentivising banks to grow their balance sheets, especially outside the UK—that seemed to be what the Minister indicated just now in terms of competitiveness outside the UK—and to reduce their profits. Why is this the incentive structure the Government want to adopt? It is completely at odds with the stated policy objectives of the past five years and bears little relation to wider economic objects. Are the Government not breaking their principle that banks should be taxed according to the economic risk they pose to the economy, as the Minister mentioned?

--- Later in debate ---

[Harriett Baldwin]

It has been a great pleasure to have my Opposition shadow, the hon. Member for Wirral South (Alison McGovern), in the Chamber today making the points that she has. I sincerely hope that next week she will continue to be my Opposition shadow, because it is clear that she takes her role very seriously. I know that she supported the hon. Member for Leicester South when it came to nominating the leader of her party, so I hope that her point of view prevails when it comes to the announcement on Saturday.

[Alison McGovern]

I thank the Minister for giving way. First, I supported my hon. Friend the Member for Leicester West (Liz Kendall). Secondly, I thought I liked the Minister.

--- Later in debate ---

[Harriett Baldwin]

You are quite right, Mr Howarth. What I wanted to say was that one would not believe from the remarks that the hon. Member for Wirral South made at the beginning of the debate that the banking system had fallen into massive failure, meaning that this Chancellor had to take steps in 2010 to sort out the country’s banking system and the deficit. Listening to the hon. Lady this evening, one would have thought that banks were then paying less tax than they are today but in fact, after the changes in clauses 16 and 17, the banking sector will pay the lowest rate of bank tax in the G7.

One would also not believe from the remarks we heard at the beginning of the debate that over the 13 years for which the hon. Lady’s party was in power there was no increase in competition in banking. There were more than 20 inquiries into banking competitiveness, but they were obviously unsuccessful. The hon. Lady asked a number of questions, and although I do not want to detain the House for long with this entertaining discussion I want to respond to some of the points raised in the debate.

I was asked a couple of times about building societies, and I said that 90% of building societies would be unaffected by these changes. Obviously, the vast majority of building societies do not make a profit of more than £25 million a year, so the sector will benefit from the reduction in corporation tax over the life of this Parliament down to 18% by 2020.

[Alison McGovern]

I asked the Minister specifically what that 90% meant— 90% by number, or by size?

[Harriett Baldwin]

Absolutely, and it is 90% of all building societies. Clearly, a handful of building societies are big enough to be able to pay the additional levy contained in these clauses and, even after the surcharge, they will still be paying a lower rate of corporation tax than they were paying under the previous Labour Government. With the hon. Lady’s conversion to lower taxes, she should be welcoming and celebrating the fact that the Budget announces these long-term changes.

The hon. Lady also asked whether the numbers in the Red Book take into account the corporation tax changes, and indeed they do. She asked about revenues after 2020-21 and I am delighted that she recognises that it will be the Conservative party that will be making those decisions after the next general election. She asked about the Ernst and Young forecast in today’s papers, and even she got the giggles when she raised the forecast, which is really quite laughable. It takes into account only one side of the equation in terms of the potential rise in the take from bank corporation tax.

The hon. Lady asked about competition, and I have mentioned the competition track record of her party when in power, but it is helpful to be able to talk about the range of things my party did in the last Parliament to improve bank competition. It is a strong focus of this Government. I am glad that the SNP spokesman, the hon. Member for Kirkcaldy and Cowdenbeath (Roger Mullin), mentioned the ambition to have 15 new banks receive a banking licence. I understand that there are a large number in the pipeline. Indeed, one new bank has already got its licence this year.

--- Later in debate ---

[Alison McGovern]

I know that the Minister is trying to rattle through this quickly, but I have a question. We can all trade previous Governments’ records—I could draw attention to the impact on mutuals and building societies generally in 1986—but let us talk about the future. Clearly these changes will have an impact on building societies, which offer consumers a unique proposition because of their structure. Will she commit this evening to ensuring that the changes she is making will not harm the mutual banking sector?

[Harriett Baldwin]

Again, I am surprised that the hon. Lady seems to want me to keep mentioning the rate of corporation tax, because it is now lower for building societies than it was when her party was in power—it seems an extraordinary line of attack. Yes, a handful of building societies are large enough to pay the surcharge, but 90% of them—by number—will not only be unaffected by the change, but will benefit. Capital formation and the ability to retain earnings within the mutuals will improve as a result of the corporation tax reductions that we are introducing, which she opposed in the manifesto she stood on at the general election.

In conclusion—I will be quick, because I know that the Committee wants to express an opinion—I commend clauses 16 and 17 and schedules 2 and 3 to the Committee, and I respectfully request that the hon. Members for Wirral South and for Kirkcaldy and Cowdenbeath do not to press amendments 3 and 4 and new clause 1.

Question put and agreed to.

Clause 16 accordingly ordered to stand part of the Bill.

Clause 17 ordered to stand part of the Bill.

Schedule 2 agreed to.

Schedule 3

Banking companies: surcharge

Amendment proposed: 3, page 74, line 4, leave out “8%” and insert “the relevant percentage”.—(Roger Mullin.)

Question put, That the amendment be made.

European Union (Finance) Bill

Debate between Harriett Baldwin and Alison McGovern

Thursday 11th June 2015 Commons Chamber

[Harriett Baldwin]

I accept that the OBR has published figures that clearly show that there is a real-terms reduction in the overall envelope for the settlement period.

My hon. Friend the Member for Daventry also asked about the additional costs compared with the existing decision and any offsetting benefits. He raised a number of technical points about the VAT-based contributions, which are calculated by applying a call rate to a hypothetical harmonised VAT base—are not we glad we have him in this House, knowing all the information and all the right questions to ask on the details of the financial settlement? He also asked about the impact of the switch from ESA 95 to ESA 2010. It was taken into account in the own resources decision, but it does affect all countries’ GNI, so the effect on the contribution depends on how all countries’ GNI is revised. For the UK the key determinant of contributions is, in fact, the VAT base, thanks to our rebate, which the Labour party did not succeed in giving away fully in the early 2000s. Changes in the UK’s GNI are corrected in the rebate calculation.

The hon. Member for Luton North (Kelvin Hopkins) mentioned a number of negotiating red lines that he has, although he is in a slightly different position. He asked what are the Prime Minister’s red lines. The Prime Minister has clearly set out areas where he wants change, including reforming welfare to reduce the incentives that have encouraged such mass migration from Europe; increasing economic competitiveness to create jobs and growth for hard-working families; and protecting Britain’s interests outside the euro. They also include halting the constant flow of powers to Brussels, including by ensuring a stronger role for national Parliaments, and dealing with the concept of ever-closer union. That may be what some others want, but it is not for us.

In 2010, this Government took the tough decisions that were needed to pull this country back from the brink. We can have a stable, prosperous society only if a Government spend their citizens’ money carefully, and it is right that we took that approach to the European level of government as well.

[Alison McGovern]

Can the Minister confirm how the deficit is going?

[Harriett Baldwin]

I would be delighted to confirm that. When we took office in 2010, the deficit was the largest in our peacetime history, at well over 10%. It has more than halved over the past five years and will be eliminated during this Parliament.

[Alison McGovern]

The Minister says that the deficit has halved. Will she confirm the Government’s pledge in 2010?

[Harriett Baldwin]

The deficit halved—more than halved—over the course of the previous Parliament. Is the hon. Lady now arguing that she would like to have cut spending more? I have not heard that from Labour Members in this Chamber over the past five years. I have heard constant bids for more borrowing, more spending and more taxation, and nothing at all about reducing the deficit.

[Alison McGovern]

The Minister challenges me on what I would pledge. I did not write the Chancellor’s emergency Budget that set the Government on the wrong course. So let me ask her this: how did the pledge go to get debt falling, not rising, for most of the previous Parliament?

[Harriett Baldwin]

I must be living in a parallel universe. I have walked through the opposite Lobby from the hon. Lady on numerous occasions when we have taken the tough decisions on spending that we needed to take in order to clear up the mess that her mentor, Mr Gordon Brown, left behind.

In the negotiations on the European budget in 2013 we achieved real, historic change. We got a great deal for the United Kingdom, we proved that we can achieve reform in Europe, and we protected taxpayers’ interests. That historic agreement will be formalised with the passing of this Bill, and I commend it to the House.

Question put and agreed to.

Bill accordingly read a Second time.

European Union (Finance) Bill (Programme)

Motion made, and Question put forthwith (Standing Order No. 83A(7),

That the following provisions shall apply to the European Union (Finance) Bill:

Committal

(1) The Bill shall be committed to a Committee of the whole House.

Proceedings in Committee, on Consideration and Third Reading

(2) Proceedings in Committee, any proceedings on Consideration and proceedings on Third Reading shall be completed at one day’s sitting.

(3) Proceedings in Committee and any proceedings on Consideration shall (so far as not previously concluded) be brought to a conclusion one hour before the moment of interruption on the day on which those proceedings are commenced.

(4) Proceedings on Third Reading shall (so far as not previously concluded) be brought to a conclusion at the moment of interruption on that day.

(5) Standing Order No. 83B (Programming committees) shall not apply to proceedings in Committee and on Consideration and Third Reading.

Other proceedings

(6) Any other proceedings on the Bill (including any proceedings on consideration of any message from the Lords) may be programmed.—(Margot James.)

European Union (Finance) Bill (Money)

Queen’s recommendation signified.

Motion made, and Question put forthwith (Standing Order No. 52(1)(a)),

That, for the purposes of any Act resulting from the European Union (Finance) Bill, it is expedient to authorise the charging on, and payment out of, the Consolidated Fund or the National Loans Fund of any sums which, by virtue of the amendment of the European Communities Act 1972 made by that Act, fall to be charged on or paid out of either of those Funds.—(Margot James.)

Finance (No. 4) Bill

Debate between Harriett Baldwin and Alison McGovern

Thursday 19th April 2012 Commons Chamber

[Alison McGovern]

That point was very well made. I am never surprised by the ability of people to brush over things. We have heard this afternoon that this is a minor technical change. As I said, I am quoting the BBC itself—[Laughter.] I know that Conservative Members are not always the greatest fans of the BBC, but it states that

“it is a ‘middle-income’ range of 40% of pensioners who will not get what they might have expected from the tax system.”

[Harriett Baldwin]

Much as we all love and admire the BBC, not everything that it puts on its website to do with benefit changes is accurate. I am sure that the hon. Lady would want to find a more reliable source.

[Alison McGovern]

Would the hon. Lady like to intervene on me again, then, and say what proportion of pensioners will be affected, if she thinks the BBC is unreliable?

[Harriett Baldwin]

A BBC website had a wholly inaccurate story yesterday about the changes to employment and support allowance, so it is not an accurate source. That is the point I am trying to make.

[Alison McGovern]

Is the hon. Lady therefore saying that the proportion is not 40%? She indicates that she does not know—that is fine.