Public Service Pensions

Heather Wheeler Excerpts

Wednesday 2nd November 2011 Commons Chamber

[Danny Alexander]

I know that the hon. Gentleman has taken a long interest in these matters, but he is wrong in his characterisation. He is of course right that we are asking public sector workers to work longer, to set the normal pension age in line with the state pension age, but frankly that is happening to every single person in this country. Public sector workers cannot be immune from that trend any more than anyone else. He mentioned firefighters. Let me say that good discussions are taking place on the firefighters’ pension scheme. We have delayed setting a cost ceiling to take account of all the factors in the firefighters’ pension scheme, particularly the double accrual.

[Heather Wheeler (South Derbyshire) (Con)]

May I welcome today’s statement and pass on the comments made to me by teachers in South Derbyshire in both the private sector and the public sector? It is important that accrued rights remain and that it is easy to move between the two areas, because the private sector is very strong indeed in Derbyshire.

[Danny Alexander]

I am grateful for those comments. It is important that teachers, health workers and civil servants study for themselves what the Government are offering. There has been a great deal of misinformation around this debate. We are setting out a document today that describes the position in detail. A new website, too, will be available for public sector workers to see precisely what it might mean for them. I hope those people will seek to form their own opinion of what the Government are offering.

Arch Cru Compensation Scheme

Heather Wheeler Excerpts

Wednesday 19th October 2011 Westminster Hall

[Tom Greatrex]

I thank my hon. Friend for his intervention. I agree with him and will go on to ask the Minister—I am sure that he is expecting this—for a section 14 inquiry and for him to explain why one has not been instituted so far.

To me and to many of the investors, the deal brokered by the FSA—the payment scheme—sounds like an admission of defeat. They cannot work out what went wrong and why.

[Heather Wheeler (South Derbyshire) (Con)]

I thank the hon. Gentleman for the sterling work that he has done, along with my hon. Friend the Member for Vale of Glamorgan (Alun Cairns), to bring this matter to the fore. I am delighted that it is my hon. Friend the Financial Secretary to the Treasury who is here to answer questions. What the 15 people in South Derbyshire who have written to me about the matter have experienced is heartbreaking. They thought that they were doing the right thing, but they have been presented with this letter by the FSA saying, “Take it or leave it—70%. You’re lucky to be getting something quickly.” Is that really how we should play the financial game? Perhaps there should be a bigger inquiry into the way the FSA has been carrying out its duties?

[Tom Greatrex]

I thank the hon. Lady for her intervention. That all points to the case for a section 14 investigation to get to the bottom of these events and to prevent them from ever happening again.

To return to the payment scheme, it sounds like the FSA cannot work out what went wrong and why, and where the liability was.

Solar Power and Feed-in Tariffs

Heather Wheeler Excerpts

Tuesday 29th March 2011 Westminster Hall

[Alex Cunningham]

I do not think that the process will end any uncertainty. We will simply be saying to people, “Look, just walk away, because it won’t be financially viable for you to develop the sorts of project that you have in mind.” The Government policy is wrong. We need to ensure that the incentives are in place to develop these projects.

In Herefordshire, work is under way on a 300 kW installation on farm buildings that will not be viable when the new tariffs come into effect. Similarly, the UK’s first ever community-owned solar power station is due to be launched in Lewes in April and is expected to save more than 40 tonnes of carbon dioxide annually. Without the feed-in tariff, that development, to be built on the roof of a warehouse, will not go ahead either, as it is 100 kW in size.

[Heather Wheeler (South Derbyshire) (Con)]

I thank the hon. Gentleman for securing the debate. Can he expand a little on the thought that there ought to be a difference between companies that are looking to take on this fantastic new way of producing energy for the country and would use it to run their factories, and venture capitalists who might want to jump in on it? Can he not understand that, ultimately, if there is no more money, there is no more money, but perhaps the Government might consider changing the arrangements for companies that are producing energy, so that they will be green companies for the future and will look after their local environment?

[Alex Cunningham]

With respect to the hon. Lady, that is not what this is about. It is about the feed-in tariff. I am all for companies developing their own solar power stations on the roofs of their factories or wherever to run their own businesses. They may well have a little surplus that they can feed into the grid. However, many organisations can develop solar power projects without relying on the feed-in tariff at all.

I could go on, but sadly I do not have the time to list all the projects and examples that I have been sent information on during the last few days. The Renewable Energy Association estimated, before the fast-track review of the FIT was announced, that, nationally, 17,000 new solar jobs would be created by the end of 2011. Those jobs are now unlikely to materialise as medium and large-scale projects are axed. At a time when the number of people unemployed stands at 2.5 million, we should be doing everything that we can to encourage the creation of green jobs. The Government’s review could end up costing jobs, rather than creating them.

Just as important is the renewables target, which aims to see 15% of UK energy coming from renewable technologies by 2020 under the EU renewable energy directive. We are third from bottom of the list of European countries in meeting our renewable energy targets, and the Government’s decision will not help. Many people in the renewables industry are very angry about that decision, and confidence in the Government has been shattered thanks to the mismanagement of the fast-tracked review.

Jeremy Leggett, executive chairman at Solarcentury, has said:

“Since the CSR, I’ve had numerous conversations with Ministers during which I have been assured that any urgent review of feed-in tariffs would be carried out after publication of a proper trigger and would in any case exclude built-environment PV. The Government has not only betrayed those assurances but today proposed feed-in tariff rates that would ensure the UK PV industry stalls. No renewables company or investor can easily be able to trust this Government again after the u-turn by Ministers who were so quick in opposition to call for a more ambitious feed-in tariff and so ready with empty promises in the early months of Government.”

That is quite a condemnation.

I have also been in touch with Eco Age, a company that has been involved in project managing the installation of a number of large 1 MW to 5 MW solar PV systems, which I am told have now all been frozen and are unlikely ever to happen thanks to the FIT review. I am told that just one of the projects—a 1.5 MW solar PV system on the roof of a 550,000 square feet UK super-warehouse—is likely to go ahead. That will be one of the largest roof-based solar installations in the country. Surely it is the type of project that we should be encouraging, but sadly, thanks to the Government’s decision, similar projects have now been scrapped. Eco Age makes the important point that large companies that were engaging with the idea of solar PV schemes have, as a consequence, also embraced other more sustainable practices across their businesses in relation to waste, water transport and procurement. That is a welcome development.

Various representatives from the industry have told me that DECC’s concerns about large-scale solar farms taking up too much of the FIT are unfounded. Large-scale roof-mounted systems are difficult to develop because most commercial property is leased to the tenant, who is not in a position to grant a lease for the roof to a PV company. Ground-mounted schemes, such as those on farms, are far easier because farmers really understand that we need 25 to 40-year lease arrangements to make developments worth while. Although interest in such schemes has been significant, the industry does not expect many actually to go ahead, because it is anticipated that many will struggle to get planning permission.

Amendment of the Law

Heather Wheeler Excerpts

Monday 28th March 2011 Commons Chamber

[Nadhim Zahawi (Stratford-on-Avon) (Con)]

As a nation, we borrow almost £150 billion a year. That is £12.5 billion a month, £410 million a day or an incredible £4,745 every second. By the time I sit down, we will have borrowed another £1.7 million. That is the economic reality that we face, and the reason why balancing the books and business growth are so vital to our country. As an entrepreneur and business man I feel that I have some knowledge of what will damage and what will encourage growth in business, and I am delighted to say that the plans set out in the Budget are most certainly of the latter variety.

I ask Members to imagine, if they will, that we are a group of men and women who are considering setting up or expanding a business. Times are tough, but there are now a number of incentives that can help us make up our mind. One of our earliest decisions is where to site our business. In the early stages, we want to make our capital and that of our investors go as far as possible, so we settle on an enterprise zone, where we get up to a 100% discount on business rates, new, superfast broadband and, as a manufacturing firm, access to enhanced capital allowances, giving us relief on investment in plant and machinery.

At the beginning, like many businesses, our budgets are tight and banks are unwilling to lend, so we look to angel investors for support. The enterprise investment scheme offers tax relief to those investors, and thanks to the Budget the income tax relief on an investment has been increased from 20% to 30%, and the amount that an individual can invest in our business has been increased by 400%. Those changes will make investing in our business, which is an obviously excellent proposition, even more attractive.

[Heather Wheeler (South Derbyshire) (Con)]

Does my hon. Friend agree that businesses in my constituency will grow because of the reductions in corporation tax in the Budget?

[Nadhim Zahawi]

My hon. Friend is absolutely right, and I shall come to the effect of corporation tax in a moment.

As a result of the measures in the Budget that I described, our business has raised early stage finance and begun an expansion programme. As a small company, our R and D tax credit will increase from 175% to 200% this April, and to 225% this time next year. That will allow us to invest in products for the future, helping us to carve out a real niche in the market and to sell our products to the rest of the world. That is crucial. In the real world, that helped me and my business, as we evolved YouGov and invested in its future.

Often the smallest things such as changes in regulation, red tape, and complicated tax and health and safety rules greatly affect businesses.

Fuel Costs

Heather Wheeler Excerpts

Monday 7th February 2011 Commons Chamber

[Stephen Phillips]

I have not seen the comments made by the right hon. Member for Doncaster North (Edward Miliband). However, he was at the heart of the previous Administration, with all that that meant for the legacy inherited by this Government. Whatever opportunism Labour Members pursued—we saw it last week during the forestry debate from a party that sold off 25,000 acres of forest without any guarantees of rights of public access—we understand that it is the duty of the Opposition to oppose. However, I do not understand many of his policies, and I do not expect that I understand this one any better than any of the others.

We have heard about two mechanisms that might serve to address some of the difficulties associated with current high fuel prices. The first is the derogation. The Government have done more to take that forward during the few short months they have been in office than the previous Government did during the entire time they were in office. I congratulate my hon. Friend the Member for Caithness, Sutherland and Easter Ross (John Thurso) and his predecessor who have done so much work on this matter. It is gratifying that we at last have a Government who are beginning to take this issue seriously and to negotiate on it in Europe. I hope that in due course we will see this derogation.

On behalf of my constituents, I would like to hear from the Exchequer Secretary that the pilot, whatever that might be, is rolled out not just in the remote rural areas referred to in the amendment—the Inner and Outer Hebrides, the Northern Isles and the Isles of Scilly—but in areas of England affected by high fuel prices.

[Heather Wheeler (South Derbyshire) (Con)]

Could my hon. and learned Friend expand on the rural areas in England suffering with high fuel prices? It would be helpful for the Exchequer Secretary. Certainly in South Derbyshire we are seeing prices as high as £1.36 a litre. We are suffering too, and if that could be borne in mind when he sums up, it would be superb.

[Stephen Phillips]

I am sure that my hon. Friend the Minister will take into account the views from Derbyshire. I do not want to take up too much time dealing with that, however, because there are a number of other people who want to contribute to the debate.

What I want to hear from the Government Front Bench is that the pilot will be rolled out not just in island communities in Scotland or elsewhere, but in England. There are areas, such as the constituency that I represent, where it costs people an enormous amount just to live their ordinary lives, which is effectively a piece of discrimination via the tax system. We deserve the piloting of such a break, in just the same way as those areas of the United Kingdom where the pilot will take place deserve it.

This is not the subject of today’s debate, but a lot of my postbag is taken up with correspondence from constituents expressing concern about the Barnett formula and the way it effectively sends a subsidy—they would say at their expense—to Wales, Scotland and Northern Ireland. That is one of the issues that this Government will have to grapple with, at the same time as explaining to my constituents why the derogation will mean that there may be lower prices in other parts of the United Kingdom.

I have not yet dealt with the other limb to what is proposed—it is something that I understand the Government are looking at, and they must consider it carefully—namely, the fuel duty stabiliser. The fuel duty stabiliser, which we talked about in the election, is designed to smooth out, as the hon. Member for Banff and Buchan (Dr Whiteford) said, the spikes in prices that harm our constituents so much. To those who have read it, it is clear that the Office for Budget Responsibility report indicated that, although difficult, introducing the fuel duty stabiliser would not make that much difference to the revenue going to the Exchequer.

I did not understand the position of the hon. Member for Bristol East on that issue, as on so many other things. I am sure that in due course there will be some intolerant tweets about what I am saying about her across the Chamber, as that is her general way of dealing with me. I did not understand her or her party’s position on the fuel duty stabiliser, because she was unable properly to tell the House what it was, and I certainly did not understand her party’s position on the derogation from Europe. If the Opposition are to oppose in a responsible way, as the Leader of the Opposition has said, it would help if the Government and Members in all parts of the House knew what the Opposition’s position was, because at the moment, on this issue as on so many others, we do not.

Let me say a word about the question before the House. The difficulty with the motion, as the Government’s proposed amendment recognises, is that it does not take into account the concerns of constituencies other than those in the devolved Administrations. The motion is focused, no doubt for perfectly good political and tactical reasons, on those constituencies, not ours. It is for that reason, among many others, that I will not be supporting it, although I will of course support the amendment that my hon. Friend the Economic Secretary moved.

Independent Financial Advisers (Regulation)

Heather Wheeler Excerpts

Monday 29th November 2010 Commons Chamber

[Heather Wheeler (South Derbyshire) (Con)]

I declare my interest: I am an associate of the Chartered Insurance Institute, having studied for and passed my professional exams in 1985. Although I have not practised as an insurance broker since 1987, I wanted to speak tonight because I recall the debate when I was studying about how the importance of exams was a strong factor in professionalising the insurance sector. At the time, I felt that that was an over-egging of the situation, and here we are 25 years later and the Financial Services Authority is using a sledgehammer to crack a nut.

I am totally opposed to the new rules that the FSA is imposing on independent financial advisers. If I felt that it was imposing them because there had been bucket loads of horrendous examples of mis-selling, or because clients had been ripped off, or because there were statistics to show that IFAs had been responsible for the majority of the complaints in the industry, perhaps I could understand. But none of that is true. As we have heard, IFAs are responsible for only 2% of complaints from customers; the banks bear the brunt, at 61%.

[Mr Robin Walker (Worcester) (Con)]

I and congratulate my fellow Worcestershire Members on having this debate. Does my hon. Friend realise that the figures of 2% and 61% that she has just cited are further strengthened by the fact that the proportion of complaints against IFAs has gone down every year for the past five years and the proportion of complaints against the banks has risen every year over the same period?

[Heather Wheeler]

My hon. Friend is correct. Is that not interesting? Many of us have been trying to get to the background of why this retail distribution review was brought in and where the FSA was coming from. The statistics really speak for themselves, and I am astonished that we find ourselves in this position.

[Alun Cairns]

Even if the statistics were much worse than they are, does my hon. Friend believe that the proposals in the RDR would lead to improved and safer advice for clients? I certainly do not believe that they would, even if the statistics were worse.

--- Later in debate ---

[Heather Wheeler]

Absolutely. I thank my hon. Friend for bringing up that point. It is clear that the baby is being thrown out with the bathwater. Nobody at the FSA seems to want to explain why. IFAs that have offered solid advice for years, with unblemished records, should be granted grandfather rights. Like many other Members, I have been trying to find other areas of business where new rules are to be introduced without any grandfather rights. I cannot. Even licensed properties—pubs, to you and me—kept their grandfather rights when the new licensing laws came in a little while ago.

It has been estimated that the effect of the rules being introduced in 2013 will be that we will lose 30% of practising IFAs. Where will the business go? Yes, you guessed it: to the banks—to the people who have the record of providing 61% of the complaints from customers. What is the FSA saying about that? Absolutely nothing. We have to ask ourselves why the FSA is doing this. I cannot find a credible reason. As we have heard, on its own cost-benefit analysis, the cost of introducing these new rules has risen from £660 million to £1.4 billion to £1.7 billion.

I urge the Minister to reopen talks with the FSA, not to allow it to put 30% of IFAs out on the scrap heap and not to reduce individuals’ choice of where to go for financial advice. Finally, he should use all his charms—he knows that I know he has charm—on the FSA, because the Government are new and “choice” and “fairness” are the catchwords that represent us, not “draconian, bureaucratic, Stalinist centrists”.

Equitable Life (Payments) Bill

Heather Wheeler Excerpts

Tuesday 14th September 2010 Commons Chamber

[Priti Patel (Witham) (Con)]

I pay tribute to my hon. Friend the Member for Congleton (Fiona Bruce) for her outstanding maiden speech, and for the beautiful tour of her scenic constituency.

Right hon. and hon. Members have a big responsibility to deliver a fair resolution to policyholders who have been affected by this scandal of maladministration by the regulators. As we have heard, when in opposition, Conservatives and Liberal Democrats quite rightly pursued and scrutinised the previous Government, and sought to hold them to account for neglecting Equitable Life victims and for failing to establish a long-overdue compensation scheme. We rightly acted in victims’ interests to support them as the previous Government dithered, delayed and dragged their heels. Disgracefully, as we have heard, they left many policyholders to pass away, unable to receive the justice that they deserved. That applies to a number of families in my constituency. By contrast, we are passionately committed to delivering a fair, transparent and independent payment scheme for the losses that people incurred because of that dreadful regulatory failure. Obviously, the Bill is a strong, positive measure and a step in the right direction.

It is important to remember that Equitable Life policyholders did exactly the right thing. They chose to save for their retirement so that they could have a decent quality of life in their later years. One of my constituents wrote to let me know of a loss of something like £130,000 as a result of being forced to buy an annuity. There are some maths involved, but the loss works out at around £80,000 per year, which is a substantial amount of money to anyone, but particularly to a pensioner trying to make ends meet in this day and age. He is more than frustrated; he is desperate beyond belief to find out the next steps and what, effectively, he will get. Another of my constituents has had to rethink their plans for retirement off the back of their losses, and I could reel off a list of more than 100 names of constituents who have contacted me on this matter.

[Heather Wheeler (South Derbyshire) (Con)]

Will my hon. Friend give way?

[Priti Patel]

I will not, if my hon. Friend does not mind.

The 1.5 million policyholders affected and their families desperately need certainty, finality and, frankly, closure on this lamentable situation. Although policyholders in my constituency broadly welcome the Government’s decision and their commitment to begin making payments through the independent scheme next year, it is understandable that, owing to the actions of the previous Government, they remain sceptical. They have many probing questions for the Minister and the Government, as many colleagues in the House will recognise.

Transparency in the scheme is of course essential—the Minister referred to that—and although payments will begin next year, my constituents want to know when the process of making payments to all affected policyholders will be completed, as we have heard from other hon. Members. Let us be realistic. Processing payments is a challenging task made all the more arduous by the delays caused by the previous Government and the atrocious financial situation that we face, which we constantly hear about, but that is why it is important that all policyholders have their cases resolved promptly, in addition to receiving payments as soon as possible.

Where policyholders are not fully compensated for their losses, it is important that they are given clear reasons why not, and that they have an opportunity to restate their case when that is an option. I should welcome clarification from the Minister on any appeals process for policyholders who feel that an initial award by the independent commission is unfair to them.

The scheme will also need to address the implications for tax, tax credits, other benefits and means-tested benefits. Frankly, in view of the bureaucracy associated with Her Majesty’s Revenue and Customs and the current crisis of HMRC demanding money back from hard-pressed taxpayers and pensioners, policyholders in my constituency are genuinely concerned that although they might receive some compensation, they might also get a letter from HMRC demanding money back. After a decade-long struggle to receive justice and payment, the last thing that those policyholders need is a letter on the doorstep from a heavy-handed bureaucrat demanding money back.

Lives have been ruined and it is scandalous that, two and a half years after the ombudsman reported, six years after Penrose and almost a decade after the whole scandal came to light, justice has yet to be delivered. It is right that the Government should tackle the issue and the Bill is a great step forward. Fairly compensating those who have lost out has to be a priority for the Government. Having seen the shambles of the previous Government, I welcome this Government’s commitment to policyholders. The Bill is an absolute must and is long overdue.

--- Later in debate ---

[Jim Shannon]

My hon. Friend must have read my mind. The parliamentary ombudsman’s report describes the Equitable Life situation as a decade of regulatory failure, and her second recommendation is that the Government should set up and fund a compensation scheme with the aim of putting people who have suffered a relative loss back into the position they were in before maladministration occurred.

The issue facing us is the percentage of the value of the Equitable Life schemes. A report commissioned by the previous Government suggested that policyholders lost up to £4.8 billion in this debacle and proposed that they should receive a package of about £400 million. However, there is no guarantee of that figure, which has been bandied about by many. They are not new figures, and I am sure that some here could repeat them in their sleep, especially the Financial Secretary to the Treasury, who has been reminded of them several times in letters from constituents of mine, forwarded through my office, yet they bear repetition so that all here will be under no illusion about the situation.

I remind hon. Members that this is not merely a number-crunching game that we are playing; we are playing with the quality of people’s lives, and it is essential that the Bill be subject to any decision reached. In July, the Financial Secretary said in the House:

“Consistent with the ombudsman's recommendation, Sir John has advised that relative loss for an individual policyholder should be capped at the absolute loss they suffered.”—[Official Report, 22 July 2010; Vol. 514, c. 577.]

Yet I remind the Financial Secretary that when he was a shadow Treasury Minister he wanted to ensure compensation for injustice. I ask that this be done and that we compensate for the injustice that all those people have suffered over years of unnecessary struggle.

I agree wholeheartedly with Chris Wiscarson, chief executive of Equitable Life, when he said:

“Let’s not make Equitable policyholders victims three times over. First, at the hands of the regulators, as so clearly articulated by the parliamentary ombudsman”—

as colleague have indicated—

“second, at the hands of the Labour government who failed to bring closure over a decade; and now third, compensation that will be decimated if Sir John Chadwick's advice, meant for the Labour government and slated by the ombudsman, is used.”

I am aware of the financial position. We all know that we have to make hard decisions over the next few years about how the money will be spent. We are not running away from that. Indeed, I am fighting against reductions in grants that mean that Northern Ireland Housing Executive constituents are living with damp in their homes; that worthy disability living allowance recipients are being stripped of their support; and that roads are ruining cars because there is no money to fix them. I see all of that, and everybody else sees it, but I accept that we must take into account the fact that the money is unavailable. However, to compensate Equitable Life members with 10% of their investments is scandalous and can never be acceptable.

Today, it is my desire, and that of many in the House, that reasonableness be made the basis of any decision.

[Heather Wheeler]

I wonder whether the hon. Gentleman is in the same position as I am. I have a family of constituents—two generations—affected by this problem, and the desperation of those who write to, e-mail and meet me in my constituency is phenomenal. Has he found that in his constituency too?

[Jim Shannon]

Yes, it is replicated, right across the United Kingdom, for families, individuals and others. Indeed, there is sometimes a whole string of people affected, including people with different jobs. It does not matter what their jobs are: they can be fishermen owning their own boats or bin men collecting bins and getting rid of the rubbish. Those are the ups and downs—the highs to the lows, and everywhere in between—so the hon. Lady is absolutely right: everyone is affected.

What really worries me is that those who are affected have reached the golden age of retirement, when their mortgage has been paid off and when they know that they do not need to work any more or slog their guts out—if I can use that terminology in this House—but have time to enjoy the finer things, such as laughter and joy with their families. The terrible, horrendous situation in which they find themselves has stripped too many of our pensioners of their joy and placed on their shoulders both financial worry and a burden that should be long behind them. Today is the day for us to shoulder some of that load and burden, and to help them along life’s road. That is our purpose as MPs in this House. Today is the day for us to step up to the mark and reset the balance for those who have waited for help for some 10 years. Today is the day for action. Let it be the right action.

I finish with a quotation from a letter from one of the many people who wrote to me:

“I, like many others, in fairness expect and deserve compensation, as recommended by the Parliamentary Ombudsman and promised by the coalition Government, and not a figure based on the Chadwick advice, which the ombudsman himself described as an unsafe and unsound basis on which to proceed”.

With that in mind, I would urge hon. Members to support the legislative change and the amendments that will arise from it. In my book, Mr Deputy Speaker, that is worth fighting for.

Equitable Life

Heather Wheeler Excerpts

Thursday 22nd July 2010 Commons Chamber

[Heather Wheeler (South Derbyshire) (Con)]

I am delighted with the Financial Secretary’s announcement. The largest postbag that I receive as a south Derbyshire MP is about Equitable Life. It is disgraceful that the matter has been going on for so long. I therefore congratulate my hon. Friend and greatly look forward to the announcements next April.

[Mr Hoban]

I am grateful to my hon. Friend. She is not the only Member with a bulging postbag as a consequence of the issue. I am surprised at how many more of my constituents have announced that they are Equitable Life policyholders since I became the Minister responsible. I believe that there is good news in the statement, and I hope that hon. Friends will contact their constituents who have policies to let them know about the coalition’s progress.

Capital Gains Tax (Rates)

Heather Wheeler Excerpts

Wednesday 23rd June 2010 Commons Chamber

[Alok Sharma (Reading West) (Con)]

I start by congratulating my hon. Friend the Member for Carlisle (John Stevenson) on his passionate speech and on speaking up for localism. That is something that Government Members strongly believe in, and I hope that we will see it acted out in the Government’s manifesto.

Having listened to Opposition Members during today’s debate, it is interesting that not a single one of them had anything positive whatsoever to say about this Budget; in fact, many of them have denounced it in no uncertain terms. There has been a great deal of shaking of heads and gnashing of teeth. What always happens in these cases is that Labour develops something called collective amnesia about why we are having to make these tough choices on public expenditure and on taxation. Let me therefore remind them, once again, why that is the case. I see that the hon. Member for Easington (Grahame M. Morris) is laughing, but he really should try to understand why this is happening. The reason is very clear. Under Labour, we have had the deepest recession on record and the longest recession of all the G20 countries. Under Labour, we have ended up with the largest deficit in Europe, and the national debt has doubled.

Let me quote what the co-chief investment officer of Pimco, the largest bond fund manager in the world, said in January 2010:

“The UK is a must to avoid. Its gilts are resting on a bed of nitroglycerine. High debt with the potential to devalue its currency present high risks”.

The trajectory under Labour’s plans is pretty clear. If we were to do what Labour is suggesting, we would have the potential loss of our triple A debt rating, higher interest rates, more business failures, and sharper rises in unemployment—everything that nobody, on either side of the House, wants to see. There has been a lot of talk about Greece. Perhaps Labour Members should look at what happens in a country such as Greece when it does not get to grips with its public finances and there is a loss of confidence by the capital markets.

In 1997, the Labour Government inherited a golden economic legacy. In 2010, what did Labour leave the current Government? Oh yes—a note from the former Chief Secretary to the Treasury declaring, “I’m afraid to tell you there’s no money left.” That is exactly why we are having to make these cuts. Let me absolutely clear about this, although Labour Members may not agree: out there—outside this House—very many members of the general public take the view that these public expenditure cuts are ultimately Labour’s public expenditure cuts, and that the tax rises are ultimately Labour’s tax rises.

Of course, the pied piper of Labour’s decade of debt—the right hon. Member for Kirkcaldy and Cowdenbeath (Mr Brown)—has not been seen in the House for quite some time, but I hope he has had the chance to reflect on the damage his Government’s policies did to our economy, and that when he returns, he will say the one word we had hoped to hear from a Labour Member: sorry. I am sad to say that we have not heard it.

In the past four years, I spent a lot of time talking to businesses and business organisations in Reading, so I should like to spend the rest of my speech talking about the measures in the Budget for them, particularly small and medium-sized businesses, which are the backbone of our economy, save to make one point on public services. We can all agree that we want a world-class health service and the best schools for our children, and we want dignity and financial support in retirement for our pensioners, but to fund high-quality public services, we need a vibrant private sector to lead growth and recovery.

Businesses in my constituency in the past few years have invariably told me that they feel overtaxed, overburdened by red tape and regulation, and overwhelmed by a complex tax system. They want help in getting credit flowing. The base rate may be 0.5%, but that bears little relation to the spreads that businesses must pay when they go for bank debt. We need to get to grips with that. Above all, businesses want us to tackle national debt and to get some confidence back into the country. That is what we hope the Budget will do.

We talked about over-regulation and the tax system. Because of the previous Government, we now have the longest tax code in the world. According to the Federation of Small Businesses, small businesses spend seven hours a week filling out forms. According to the British Chambers of Commerce, new regulation since 1998 has cost British businesses almost £77 billion.

The Thames valley and Reading are relatively prosperous parts of the country, but the recession did not pass us by. Shops closed, businesses folded and people lost jobs. Labour Members say that Labour did a lot to help local businesses, but I can tell them that local businesses in my part of the world and the rest of the country got by because they helped themselves. They increased productivity and took pay cuts, and instead of people working five days a week, they worked four. There has been a lot of pain in the private sector.

[Heather Wheeler (South Derbyshire) (Con)]

My hon. Friend is absolutely right to draw attention to the fact that small and larger businesses have taken the hit. We hear so often from Labour Members that they are worried about what is happening in the public sector, but that sector needs to take a leaf out of the book of the private sector, in which people have taken 10% cuts and four-day weeks. That has not happened at all in the public sector. We are looking for an increase in productivity. A 25% reduction does not necessarily—

[Mr Speaker]

Order. I just very gently say to the hon. Lady that an intervention must be just that; it must not be a mini-speech.

Budget Resolutions and Economic Situation

Heather Wheeler Excerpts

Tuesday 22nd June 2010 Commons Chamber

[Barry Gardiner]

I am happy to give an answer to the hon. Gentleman. We introduced the first legislation on climate change anywhere in the world. We put in place carbon budgets and feed-in tariffs. We ensured that we set a reduction target for 2050 of not just 50% but at least 80%, with interim budgets that can be examined every year, so that Parliament can hold the Government to account. The Labour Government achieved substantial things on the environment, but I agree with the hon. Gentleman that we did not do enough. I often spoke from the Government Benches to ask my own Ministers to go further. In addition, the system of renewables obligation certificates is a good deal more generous in Scotland than in England. However, does the Budget address the environment? Not one whit; we heard only a mention of an investigation into duty for planes rather than passengers.

[Heather Wheeler (South Derbyshire) (Con)]

If the hon. Gentleman reads page 57 of the Red Book, he will see that it states:

“Legislation will be in the Finance Bill introduced in the autumn for an enhanced capital allowance for zero-carbon goods vehicles.”

If that is not a green element, I do not know what is.

[Barry Gardiner]

The hon. Lady is new to the House and might not have had the opportunity to read earlier Red Books. The previous Government were also doing quite a bit on zero-carbon vehicles.

The Budget is a dreadful missed opportunity. It should have ensured that we can resolve the problems with our public finances and pull the country through the recession. It should have achieved that in a staged and phased way. The Government tried to paint a dichotomy between those who appreciated that this had to be done—that this was the inevitable Budget—and, as they put it, those on the other side who said, “No, no. Hold back.” However, it was never like that. Labour Members said that this must be done, but more progressively and slowly. We said that we must not jeopardise the recovery now by taking a macho posture that goes too far, that chokes off recovery and that will ultimately be self-defeating.