Oral Answers to Questions

Ian C. Lucas Excerpts

Tuesday 22nd May 2018 Commons Chamber

[Robert Jenrick]

My right hon. Friend is absolutely right. It is only with sound management of the public finances that we can continue to invest in the skills required to grow productivity, and that is exactly what we are doing with increasing investment in apprenticeships, through the apprenticeship levy, and with the T-levels, which will be largest change to our secondary education system since the introduction of A-levels and which we will be seeing in the coming years.

[Ian C. Lucas (Wrexham) (Lab)]

15. The unique cross-border region of north Wales and Cheshire is one of the most dynamic economies in the United Kingdom. Will the Treasury—which has promised a north Wales growth deal in, I think, at least three Budgets, but has yet to deliver a penny—please stop marking our homework, and give us the freedom to invest in the economy that we believe in?

[Robert Jenrick]

We have had numerous conversations with local partners in north Wales, and with the Welsh Government. I urge the hon. Gentleman to take the message to the Welsh Government, but they also need to engage with the UK Government to secure that important deal, which, as he says, will link the economy of north Wales with the north-west and the northern powerhouse to drive productivity.

Protection of Welsh Speakers from Defamation

Ian C. Lucas Excerpts

Tuesday 24th April 2018 Westminster Hall

[Liz Saville Roberts]

I agree entirely. We need to consider the effects on groups in how we deal with press regulation and in our regulation of hate crime and hate words.

[Ian C. Lucas (Wrexham) (Lab)]

I congratulate the hon. Lady on securing the debate. Does she agree that the refusal by the Independent Press Standards Organisation to apply clause 12 of the editors’ code of practice to groups such as speakers of the Welsh language shows how inadequate the regulatory system run by IPSO?

[Liz Saville Roberts]

I am grateful to the hon. Gentleman for raising something that I will raise anon. The two of us agree with the National Union of Journalists, which has raised that very point. Sadly, we live in a time when bigotry is increasingly acceptable. Hate words open the way to hate crimes.

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[Stuart Andrew]

I will come on to Rod Liddle’s comments later, but I will not make a comment about my hon. Friend the Member for Monmouth (David T. C. Davies) at this stage. I am sure the hon. Lady will not mind.

I was also immensely proud to be able to speak Welsh in the first bilingual Welsh Grand Committee that was held in this House in February. Again, I confess I was apprehensive, and I was worried that people would pick up on my mistakes rather than focusing on the content of what I was trying to say. I know that many speakers have that worry, but we all have to get over it, frankly, and we all have to support each other. I think I mentioned during the St David’s day debate that I was struck by the comments of the hon. Member for Dwyfor Meirionnydd:

“Only through the use of the language will the language live.”—[Official Report, Welsh Grand Committee, 7 February 2018; c. 81.]

Governments at both ends of the M4 can set policies and targets, and commit to certain service levels, and those are undoubtedly important, but what is critical is to support Welsh speakers to feel able to speak the language. We have a responsibility to continue to protect and support its use not only when dealing with officialdom, but as everyday conversation. I say we all have a responsibility. Yes, the Government have a role, but those who are fluent in Welsh also have to help those who are learning to feel confident to be able to speak it. If they make a mistake, it does not really matter; it is about giving oxygen to the language.

I know that the Welsh people as a nation have a sense of humour. Much of the debate has centred on the individual who tried to deride our language, and even though we have a Welsh sense of humour, and even though the author of the article says it was a joke, I have news for him: he is not much of a comedian. His articles were, frankly, downright rude.

The Government are committed to a free and independent press, and as such only intervene in cases where publishers have broken the law. I am sure that we all agree that that is vital to a strong and fully functioning democracy, in which the powerful can be held to account without fear. The hon. Member for Dwyfor Meirionnydd and others have mentioned IPSO, which regulates 95% of national newspapers, by circulation. The rights of individuals are protected under IPSO’s editor’s code, but not the rights of groups. I am sure that the hon. Lady and I will discuss that in the meeting we will arrange.

[Ian C. Lucas]

The crucial point is the Government’s position, so far as IPSO is concerned. The Secretary of State for Digital, Culture, Media and Sport recently asserted that he supports IPSO in its regulatory role. However, IPSO refuses to look at cases such as the one we are discussing. Does the Minister support the Secretary of State, or does he support people who want an appropriate regulator?

[Stuart Andrew]

The Government are committed to a free and independent press. That is an important part of what we do. We intervene only when the law has been broken. I have been asked if I will raise these issues with my colleagues, and I commit to do just that. Once I have had those meetings, I will be happy to reply to the hon. Member for Dwyfor Meirionnydd and, if he wants, to the hon. Gentleman too.

The issue of equalities has come up. The hon. Lady mentioned the various groups and individuals that are protected because of their age, disability, sex, sexual orientation and so on. However, there is already appropriate legislation to capture potential cases of defamation—the Defamation Act 2013. Unlike colour, nationality and ethnic or national origins, language is not, as she knows, an explicit aspect of race for the purposes of the Equality Act 2010.

Nevertheless, where an organisation, such as an employer or service provider, imposes language requirements that may in some way be linked to person’s nationality or national origins, it would be a matter for the courts to determine whether that might constitute unlawful indirect discrimination under the race provisions of the Equality Act.

Finance (No. 2) Bill

Ian C. Lucas Excerpts

Committee: 1st sitting: House of Commons
Monday 18th December 2017 Commons Chamber

[Stephen Kerr]

It is my great privilege to follow the hon. Member for Bootle (Peter Dowd), whose speech was greatly entertaining, if a little devoid of something approaching accurate history. We were treated to a festival of revisionism on this country’s economic history over the past 10 years. I did agree with one thing he said—it was almost the first thing he said—which was that it is wrong to create a single category to describe bankers. He alluded to the fact that some may be called saints and others may be called sinners—he may have said that, but I cannot recall exactly the term he used—and that is undoubtedly the case, so to generalise about banking and bankers, as we often hear Opposition Members do, is extremely rash.

As for culpability for the events from the end of 2007 to 2009, the hon. Gentleman may wriggle on the issue, but the fact is that the Labour Government were indeed culpable, as were other politicians of that time who were holding senior office in this country, including the then First Minister of Scotland, Alex Salmond, who positively encouraged the Royal Bank of Scotland to engage in some of the more reckless initiatives that the leadership of that bank were engaged in. The result was that not only did they upend a great Scottish institution, but they nearly upended the whole United Kingdom economy.

[Ian C. Lucas (Wrexham) (Lab)]

Does the hon. Gentleman recall the shadow Chancellor at that time, the then Member for Tatton, calling repeatedly for the relaxation of what he described as the strict regulation that the Labour Government were imposing?

[Stephen Kerr]

The important thing to remember is who was in government and whose hand was on the tiller at the time, and it was a Labour Government’s.

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[Stephen Kerr]

My hon. Friend makes a first-class point. He provides me with an opportunity to remind the House that, thankfully, in September 2014, Scotland had the good sense to vote overwhelmingly to remain part of the United Kingdom. Part of the reason for that was, I am sure, the lessons we had learned as a country from our experiences between 2007 and 2009, particularly the recklessness of the Scottish National party Government and the First Minister at the time, Alex Salmond, in the way he conducted himself with respect to RBS.

Just so that the hon. Member for Glasgow North (Patrick Grady) is aware, I am talking about the bank levy in relation to bank closures. It is my firm belief that having bank branches in communities is part of the covenant between the public and their financial institutions, but that covenant that is clearly broken. People should expect the banking sector to keep businesses going with cash flow, loans, financial planning and so forth. People should also expect that bank branches are close by and serve the communities in which they live. Earlier, the hon. Member for Liverpool, Walton (Dan Carden) reminded us that high street banking is particularly important for people in our constituencies who are elderly or whose mobility is challenged in other ways.

In Bannockburn, Dunblane, Bridge of Allan and the Springkerse estate in Stirling, RBS and the Bank of Scotland are leaving communities without adequate access to banking. It is important to state these things in the context of our consideration of the bank levy.

[Ian C. Lucas]

The hon. Gentleman is making a powerful argument about local banking. Does he therefore support the Labour party proposals for the introduction of regional banks? A nation such as Scotland could have its own banking system to serve local communities, rather than the incredibly centralised system we have now.

[Stephen Kerr]

I am in favour of some fair competition in retail banking. We need to consider many important issues in the context of the future of retail banking, especially how it appears in the heart of our communities.

RBS is closing its branch in Bridge of Allan, which happens where I live. In the past eight months alone, the Clydesdale bank, the Bank of Scotland and the TSB have all closed their branches, and now RBS is, too. That leaves the post office on Fountain Road as the only place where anyone will be able to do any over-the-counter banking.

Public Sector Pay

Ian C. Lucas Excerpts

Monday 4th December 2017 Westminster Hall

[Helen Jones]

Indeed. The situation my hon. Friend mentioned is true of many people in the public sector. Between 2010 and 2016, food prices went up by 8.5%, electricity went up by 27.7% and gas went up by 24%. These are not things that people can do without; they are essential for a decent life. Note that I am not talking about an extravagant life; I am simply talking about a decent life.

[Ian C. Lucas (Wrexham) (Lab)]

My hon. Friend is making a powerful case. The continuous process since 2010 is taking money out of local economies. All the salaries she is referring to are normally spent on our high streets and in our local businesses. They are being hit hard by the Government’s sustained deflationary approach.

Budget Resolutions

Ian C. Lucas Excerpts

Wednesday 22nd November 2017 Commons Chamber

[Chris Evans]

My hon. Friend speaks from experience as the chairman of the Co-operative party, and he is absolutely right that we need a thriving co-operative sector in this country. Again, if we want to talk about the past and the reason why we do not have a strong mutual sector in this country, it is because of the raid that the Tory Government of the 1980s allowed on many of these institutions, with the most famous example being Bradford & Bingley. We allowed people to become members, and then turned these institutions into plcs—and look where that got us. We need fundamental reform from this Government.

[Ian C. Lucas (Wrexham) (Lab)]

Does my hon. Friend agree that one of the worst decisions of the Conservatives in the 1980s was destroying the great regional institutions that were building societies? Great organisations such as the Leeds Permanent and the Halifax building society, which created wealth and retained it in the regions, were destroyed.

[Chris Evans]

I absolutely agree with my hon. Friend. If ever anything tore into the very fabric of British society, it was that. It is terrible when we walk down the street now and see that so many of the famous building societies we grew up with are no longer there. That needs to be changed. We need to start talking about alternative co-operative models. As business finds it more difficult to borrow from traditional areas, we need to talk about the mutual sector, and about having more mutuality in our society and in our businesses, including employee share ownership schemes.

As I am running short of time, I must talk about the NHS. Our nurses do a fantastic job at the frontline. When someone is in need, our nurses are there, but very often this Government have not been there for them. Instead of nurses being given a pay rise, which I think we all agree they deserve, again today we got a very vague statement of “maybe, if and but”. That is not good enough for the most vital service workers in this country. I think, too, about all the people on universal credit. Again, this is all a sop to those who are in need. There should have been an announcement today about pausing universal credit so that it could be looked at and eventually changed. There is no good in plunging our most vulnerable people into abject poverty, but that is what this Government are about. They are very good at warm words.

Of course, every Chancellor’s speech has to end with a flourish, and we saw that today, with Conservative Members waving papers and cheering as the Chancellor announced, in his uninspiring tone, that he was going to abolish stamp duty on houses worth less than £300,000 in order, he said, to help millennials on to the housing ladder. Then minutes afterwards, as has happened in all his speeches—last time it was about national insurance contributions—we get the real story. Hidden away on page 154 of the OBR report is the clear statement that the temporary holiday on stamp duty will increase house prices by 0.3%. [Interruption.] The hon. Member for Spelthorne (Kwasi Kwarteng) is shouting at me. Judging by the OBR’s ability to predict the future, does he honestly think that house prices are going to go up by only 0.3%? I do not think so.

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[Priti Patel (Witham) (Con)]

It is a real pleasure to follow the hon. Member for East Dunbartonshire (Jo Swinson); this is the first time in a while that we have debated in the Chamber together.

I commend my right hon. Friend the Chancellor of the Exchequer for the Budget. From my ministerial apprenticeship at the Treasury three years ago, I recall the great efforts that the then Chancellor and the entire team made to put the Budget together, particularly as Ministers were lobbied constantly by a whole range of interests. It is, of course, a challenge to balance the needs with the responsibility to keep the public finances in good, sound, solid order. The Treasury should be commended for navigating those pressures and for continuing to put stability at the core of the Budget. Economic stability should rightly stand at the core of every Budget.

It is worth reminding Members, especially those on the Opposition Benches, of the progress that has been made in putting the public finances back in order after the appalling situation in 2010. Back then, the budget deficit exceeded £150 billion—more than our spending on health, education, policing and the armed forces. The level of public spending was financed by borrowing that was totally unsustainable. We know that the Opposition, who are chuntering away, never want to take responsibility for how they mishandled the public finances and love to point the finger of blame elsewhere, but it is a fact that before the financial crisis, the Labour Government racked up an eye-watering level of debt.

[Ian C. Lucas]

In 2010, the Conservative Government said they would eliminate the deficit by 2015. They were aware of the deficit at that stage, so why did they fail?

[Priti Patel]

The obvious answer is the scale of Labour’s economic mismanagement. The hon. Gentleman will recall that his party’s 2008 Budget planned for a £43 billion deficit, which is more than all the revenues raised in excise duty. That says everything we need to know about Labour’s financial economic management.

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[Joan Ryan]

If the right hon. Lady sat in my advice surgery and listened to what was said by families in Enfield, where over a third of children live in poverty, she would find that the amount of disposable income that people have is a major problem, and that most families feel that rising costs, particularly due to rent, have wiped out any possible gains.

Almost six in 10 Londoners in poverty live in a working family, so the picture of poverty has changed. Those people are not “scroungers,” as they are sometimes referred to; they are working people who are trying to get on in life. A third of all jobs in Enfield are classed as low paid and are below the London living wage, as recent research by the Trust for London has shown. The Government’s failure to address these issues has meant that many families are unable to just about manage today, let alone build for tomorrow.

Enfield now ranks as the London borough with the fourth highest food bank usage. Last year, 5,974 three-day emergency food supplies were provided to people in Enfield, with 2,434 given to children. The roll-out of universal credit in Enfield, which started this month, will make a bad situation even worse. The Trussell Trust has said that demand for emergency food parcels is 30% higher in areas where universal credit is being implemented. Week in, week out, I see many hard-working families at my constituency advice surgery who are living on or below the breadline.

I want to say a few words about housing. A great many constituents come to see me about problems that are related in some way to housing, particularly those living in the insecure private rented sector. The threat of falling into rent arrears, and of families being put at risk of eviction and long-term debt due to the roll-out of universal credit, has only added to their concerns. Stagnant wages, fast-rising rents and a crisis in housing supply have created a perfect storm in Enfield, which now has the highest eviction rate in the capital. Homelessness acceptances have risen by a staggering 82% over the past two years. Enfield has the second highest number of temporary accommodation placements in London, which puts even more pressure on an already strained housing market. Again, that is not a record of which the Chancellor can be proud.

Today the Chancellor said, “House prices are increasingly out of reach for many”—yes, they are. He continued: “It takes too long to save for a deposit”—yes, it does, if someone can save at all—“and rents absorb too high a portion of monthly income”. But the OBR report makes it clear that house prices will rise as a result of the measures announced today. When the hon. Member for Bath (Wera Hobhouse) intervened on the right hon. Member for Wokingham (John Redwood) to ask about houses for social rent, the right hon. Gentleman insisted that the Budget statement referred to that. I listened to the Chancellor’s speech and I have read through the printed copy, but I heard and read nothing about that. He did say that the Government would increase supply “including nearly 350,000 affordable homes”, but the question is: affordable for whom? There is nothing about houses at a social rent. I think that is a disgrace, completely ignoring the desperate need.

[Ian C. Lucas]

A Conservative Member said earlier that we should learn lessons from how bad things were in the 1970s. I was brought up in a council house during the 1970s, and that gave me a tremendous base in my life. We should be proud of that. The Conservative party should learn a lesson from that and treat people with some respect.

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[Ian C. Lucas (Wrexham) (Lab)]

I am grateful to the hon. Member for Horsham (Jeremy Quin) for his courtesy in allowing those of us who have been here since 11.30 am to speak.

I want to talk about regional policy. My speaking time is restricted, but I am glad that the Chief Secretary to the Treasury is here as I want to raise a particular issue to do with Her Majesty’s Revenue and Customs in my constituency of Wrexham; it is directly connected to regional policy. There was a time when the Conservative party talked about rebalancing the economy and there seemed to be a commitment to something called the northern powerhouse. I recall attending a meeting a couple of years ago with the then Chancellor of the Exchequer and Lord O’Neill, who both talked with enthusiasm about investing in the north of England.

I have had some time to read the Red Book while I have been waiting to speak. There is a large section about investment in the Cambridge-Milton Keynes-Oxford corridor—one of the most affluent areas of the United Kingdom. I believe in an economy that serves the whole of this country. I want to tell the Chief Secretary to the Treasury about another corridor, which exists between Manchester and Holyhead and contains some of the world-leading companies in the UK, including Airbus, JCB and the Wylfa 2 nuclear project.

The private sector is investing in that area of the country. Virgin Media is investing in a superfast broadband network in my constituency of Wrexham, and a company announced last week that it was moving there, creating 250 jobs. They have confidence in the area. Unbelievably, the Government are moving the local HMRC office in Wrexham to central Cardiff. The only HMRC office in Wales will be in the centre of the city of Cardiff—the most expensive place in Wales. How any sane Government can pursue such a regional policy is completely beyond me. It is not only wrong in terms of regional policy, but it is taking wealth away from another part of Wales.

Any sensible Government would do the exact opposite. The Welsh Government, who are sensible, are setting up a development bank for Wales in Wrexham as opposed to Cardiff. I would like the Chief Secretary to go away and rethink what I think is the worst, most incomprehensible decision that any Government Department has made during my 16 years in the House. The Government need to reflect on whether they really believe in the United Kingdom and in investment in our regions and nations. Every indication that I have seen is that they do not support investment in infrastructure in the regions and nations of the United Kingdom.

In three separate Budgets, north Wales has been told that the plans for the north Wales growth deal are in hand—this is the hat-trick Budget. We have yet to see a penny piece of UK Government investment in north Wales transport infrastructure, including our rail network, for which the Government have had responsibility since 2010. They ought to be ashamed. It is about time they pulled their finger out. They need to do things differently.

Tax Avoidance and Evasion

Ian C. Lucas Excerpts

Tuesday 14th November 2017 Commons Chamber

[Dame Margaret Hodge]

I simply observe that the UK also has responsibility for the overseas territories and Crown dependencies, and I wish that its own tax code did not contain so many harmful elements that encourage tax avoidance.

Appleby’s lobbying illustrates another continuing problem. The Treasury, and other Ministers and Departments, listen only to a very small and exclusive group of tax professionals when making decisions on tax policy. It is one thing for the Government to consult stakeholders on issues, but it is quite another for the Government to be captured by the tax industry at the expense of the wider public interest. Tough and active regulation of the industry to ensure compliance with existing rules is therefore vital. Curtailing the influence of tax professionals on tax policy is essential, and making the advisers accountable for the schemes that they invent and market is central to the campaign to destroy tax avoidance.

The measures in the Finance Act 2017 represent one small step in the right direction of holding advisers to account, but the small print suggests that very few, if any, will be caught by the legislation. The definitions are too narrow, and the penalties too weak. Those measures have been introduced so that the Government can claim that they are acting, but until advisers are really called to account and properly punished for inventing schemes that are purely aimed at avoiding tax, the army of lawyers, accountants and bankers will continue to prosper. If the Government are serious about tackling tax avoidance, they must act strongly to deal with the illegitimate practices of those who make a huge living from peddling tax avoidance advice.

[Ian C. Lucas (Wrexham) (Lab)]

My right hon. Friend is making a powerful case. Does she agree that the approach of the prosecuting authorities in this country must also be improved? It is striking how seldom they proceed with the legislation that we introduce.

[Dame Margaret Hodge]

I entirely agree. I must now make progress, because otherwise I shall take up too much time.

More than half of the Appleby offices are located in British tax havens. More than half of the entities that were exposed in the Panama papers were incorporated in just one UK tax haven, the British Virgin Islands. Estimates of the wealth held in tax havens are by their nature difficult to verify, but they vary from $7.6 trillion to $32 trillion.

Oral Answers to Questions

Ian C. Lucas Excerpts

Tuesday 18th July 2017 Commons Chamber

[Mr Hammond]

The hon. Gentleman will know—I say that, but perhaps he will not—that public sector net debt will continue to grow until the deficit is eliminated. That is a simple arithmetic fact. His Government pushed our deficit up to almost 10% of GDP, and we have spent the past seven years getting it down to 2.4% of GDP. We will carry on getting the deficit down so that this country’s public finances get back into balance. We are a responsible Government, planning for Britain’s future.

[Ian C. Lucas (Wrexham) (Lab)]

3. What steps he is taking to incentivise private sector investment infrastructure projects in the nations and regions.

[The Exchequer Secretary to the Treasury (Andrew Jones)]

This Government are committed to supporting private investment, which finances about half our infrastructure. We have a trusted and stable regulatory system, and through the UK guarantees scheme we have supported projects worth more than £4 billion. We are also introducing innovative support such as the digital infrastructure investment fund, which will accelerate the roll-out of the ultrafast network.

[Ian C. Lucas]

The north Wales Mersey Dee region hosts world-beating businesses such as Kellogg’s, Airbus and JCB, but we need competitive infrastructure in order to ensure that we remain competitive. For that reason, and in the absence of the public sector investment we are crying out for, may we please have the ability to deliver private sector investment? What are the Government going to do to deliver roads and rail?

[Andrew Jones]

I simply do not recognise what the hon. Gentleman says; investment in our infrastructure is at a record high. We are seeing investment in roads, rail and south-east air capacity—in all modes of transport. The point is how we deliver that investment, and it is a combination of public and private. He is clearly right to champion the requirement for infrastructure in his area and to highlight its impact on the economy, but to say we are not doing anything is just factually wrong.

Financial Statement

Ian C. Lucas Excerpts

Wednesday 8th March 2017 Commons Chamber

[The Chancellor of the Exchequer (Mr Philip Hammond)]

I report today on an economy that has continued to confound the commentators with robust growth, a labour market delivering record employment and a deficit down by over two thirds. As we start our negotiations to exit the European Union, this Budget takes forward our plan to prepare Britain for a brighter future. It provides a strong and stable platform for those negotiations; it extends opportunity to all our young people; it delivers further investment in our public services; and it continues the task of getting Britain back to living within its means. We are building the foundations of a stronger, fairer, more global Britain.

As the House knows, this will be the last spring Budget. The Treasury has helpfully reminded me that I am not the first Chancellor to announce the “last spring Budget”. Twenty-four years ago Norman Lamont also presented what was billed then as “the last spring Budget”. He reported on an economy that was growing faster than any other in the G7, and he committed to continued restraint in public spending. The then Prime Minister described it as the

“right Budget, at the right time, from the right Chancellor”.

What the Treasury failed to remind me was that 10 weeks later the Chancellor was sacked. So, wish me luck today!

Last year, the British economy grew faster than the United States, faster than Japan and faster than France. Indeed, among the major advanced economies Britain’s economic growth in 2016 was second only to Germany. Employment is at a record high; unemployment is at an 11-year low, with over 2.7 million more people enjoying the security and dignity of work than in 2010—a very far cry from the 3 million unemployed predicted by the Labour party. I am pleased to report, on International Women’s Day, that there is now a higher proportion of women in the workforce than ever before. I am even more pleased to report that, as my right hon. Friend the Prime Minister has remarked, since 23 February there is a higher proportion of women in work in the parliamentary Conservative party.

But, Mr Deputy Speaker, there is no room for complacency, and you will not find any on these Benches. As we prepare for our future outside the EU, we cannot rest on our past achievements. We must focus relentlessly on keeping Britain at the cutting edge of the global economy. The deficit is down, but debt is still too high. Employment is up, but productivity remains stubbornly low. Too many of our young people are leaving formal education without the skills they need for today’s labour market, and too many families are still feeling the squeeze, almost a decade after the crash. So our job is not done, and our task today is to take the next steps in preparing Britain for a global future—to equip our young people with the skills they need, to support our public services and to help ordinary working families as we build an economy that works for everyone.

I thank the Office for Budget Responsibility under Robert Chote for its report received today. Let me also take this opportunity to thank my right hon. Friend the Chief Secretary and my ministerial team, who really are the unsung heroes of the Budget, doing much of the heavy lifting over the last few weeks, and of course my excellent Parliamentary Private Secretary, my hon. Friend the Member for Salisbury (John Glen).

I turn now, Mr Deputy Speaker, to the OBR forecasts. This is the spreadsheet bit, but bear with me because I have a reputation to defend. The OBR forecasts the level of gross domestic product in 2021 to be broadly the same as at autumn statement. However, the path by which we get there has changed. Reflecting the recent strength in the economy, the OBR has upgraded its forecast for growth next year from 1.4% to 2%, and I do not see too many people on the Opposition Front Bench indicating flatlining. In 2018-19, growth is forecast to slow to 1.6%, before picking up to 1.7%, then 1.9% and returning to 2% in 2021.

Resilience in the economy is reflected in a strong labour market. Since 2010, the employment rate has risen from 70.2% to 74.6%, with positive news for all parts of the United Kingdom. Unemployment has fallen fastest in Yorkshire and the Humber, and Wales; wages have grown fastest in Northern Ireland; and productivity has grown fastest in Scotland and in the north-east. This positive trend is set to continue over the forecast period. The number of people in employment is set to grow in every year, with a further two thirds of a million people in work by 2021. The OBR forecasts inflation at 2.4% this year, then 2.3% next year and 2% in 2019. Most importantly, despite higher than target inflation, real wages continue to rise in every year of the forecast.

While the economic forecasts are broadly unchanged since the autumn, the OBR has substantially revised down its short-term forecast of public sector net borrowing. The OBR attributes this change to a number of one-off factors that it does not expect to lead to a structural improvement over the forecast period. Combining these factors with the higher short-term forecast for growth and taking into account the measures that I shall announce today, the OBR now forecasts borrowing in 2016-17 to be £16.4 billion lower than forecast in the autumn at £51.7 billion, then £58.3 billion in 2017-18, £40.8 billion in 2018-19, £21.4 billion, £20.6 billion and, finally, £16.8 billion in 2021-22—all lower than forecast at autumn statement.

Overall, public sector net borrowing as a percentage of GDP is predicted to fall from 3.8% last year to 2.6% this year. For those who care about such things, it means we are forecast to meet our 3% EU stability and growth pact target this year for the first time in almost a decade, but I will not hold my breath for my congratulatory letter from Jean-Claude Juncker. Borrowing is then forecast to be 2.9% in 2017-18, and then to fall over the remainder of the Parliament to 1.9% in 2018-19, then 1% and 0.9%, before reaching 0.7% of GDP in 2021-22, its lowest level in two decades.

The OBR expects cyclically adjusted public sector net borrowing to be 0.9% in 2020-21, giving us £26 billion of headroom against the headline 2% target in our new fiscal rules, maintaining our fiscal resilience over the period. The OBR’s forecast of lower near-term borrowing, coupled with recent strength in the economy, means lower debt across the period. The OBR now forecasts that debt will rise to 86.6% this year, before peaking at 88.8% next year, 1.4 percentage points lower than forecast in the autumn. It then falls in 2018-19—for the first time since 2001-02—to 88.5%, and continues to decline to 86.9% in 2019-20, 83% in 2020-21 and then reaches 79.8% in 2021-22.

At the autumn statement, I set out our plan to return the public finances to balance in the next Parliament—a plan that is now underpinned by our new fiscal rules. That plan strikes the right balance between reducing our deficit, preserving fiscal flexibility and investing in Britain’s future. Some have argued that lower borrowing this year makes a case for more unfunded spending in the future. I disagree. Britain has a debt of nearly £1.7 trillion—almost £62,000 for every household in the country. Each year, we are spending £50 billion on debt interest—more than we spend on defence and policing combined. Borrowing over the forecast period is still set to be £100 billion higher than predicted at Budget 2016.

So the only responsible course of action is to continue with our plan, undeterred by any short-term fluctuations and undistracted—[Interruption.]—by the reckless policies advanced by the Opposition. We on this side of the House will not saddle our children with ever-increasing debts. [Interruption.] Mr Deputy Speaker, I think Opposition Members may need to have a word with their own Front Benchers, who propose borrowing another half a trillion pounds with which to saddle our children and burden their futures. So the Budget that I set out today will again fund all additional spending decisions over the forecast period.

A strong economy needs a fair, stable and competitive tax system, creating the growth that will underpin our future prosperity. My ambition is for the UK to be the best place in the world to start and grow a business. Under the last Labour Government, corporation tax was 28%. By the way, they don’t call it the “last” Labour Government for nothing. From April this year, corporation tax will fall to 19%, the lowest rate in the G20. In 2020, it will fall again to 17%, sending the clearest possible signal that Britain is open for business.

I am listening to the voice of business.

[Ian C. Lucas (Wrexham) (Lab)]

Resign!

[Mr Hammond]

The one place where I will not hear the voice of business is on the Opposition Benches.

I committed at the autumn statement to review, with business, our R and D tax credit regime. We have done so and concluded that it is globally competitive. But to make the UK even more attractive for R and D, we have accepted industry calls for a reduction in administrative burdens around the scheme and will shortly bring forward measures to deliver that.

In a digital age, it is right that we develop a digital tax system, but in response to concerns about the timetable expressed by business organisations and by several of my right hon. Friends, including the Chairman of the Treasury Committee, I have decided that for businesses with turnover below the VAT registration threshold I will delay by one year the introduction of quarterly reporting, at a cost to the Exchequer of £280 million.

I have heard, too, the calls by North sea oil and gas producers and the Scottish Government to provide further support for the transfer of late-life assets. As UK oil and gas production declines, it is essential that we maximise the exploitation of remaining reserves, so we will publish a formal discussion paper on the options in due course.

There is one further area in which I can announce action to back British businesses. My right hon. Friend the Communities and Local Government Secretary and I have listened to the concerns raised by colleagues in this House and by businesses about the effects of the 2017 business rates revaluation. Business rates raise £25 billion per year, all of which, by 2020, will be going to fund local government, so we cannot abolish them, as some have suggested; but it is certainly true in the medium term that we have to find a better way of taxing the digital part of the economy—the part that does not use bricks and mortar. In the meantime, there is scope to reform the revaluation process, making it smoother and more frequent to avoid the dramatic increases that the present system can deliver. We will set out our preferred approach in due course and will consult on it before the next revaluation is due.

The revaluation itself is by law fiscally neutral. Ahead of this revaluation, the Government committed to a package of cuts to business rates now worth nearly £9 billion, permanently doubling the rate of small business rate relief to 100%, and raising the thresholds so that 600,000 small businesses are taken out of paying rates altogether. The revaluation has undoubtedly raised some hard cases, especially for those businesses coming out of small business rates relief, so today, as I promised many of my right hon. Friends, I address those concerns with three measures which apply to the national business rates system for England. First, any business coming out of small business rate relief will benefit from an additional cap. No business losing small business rate relief will see their bill increase next year by more than £50 a month, and the subsequent increases will be capped at either the transitional relief cap or £50 a month, whichever is higher.

Secondly, recognising the valuable role that local pubs play in our communities, I will provide a £1,000 discount on business rates bills in 2017 for all pubs with a rateable value of less than £100,000—that is 90% of all pubs in England. Thirdly, on top of these two measures, I will provide local authorities with a £300 million fund to deliver discretionary relief to target individual hard cases in their local areas. This fund will be allocated to local authorities by formula, and my right hon. Friend the Communities and Local Government Secretary will set out details in due course. Taken together, this is a further £435 million cut in business rates, targeted at those small businesses facing the biggest increases, protecting our pubs, and giving local authorities the resource to respond flexibly to local circumstances.

Just as a strong economy requires a tax system that is competitive, a strong society requires one that is fair; and because I have committed to funding my spending decisions in this Budget rather than borrowing more, I make no apology for raising additional revenues and for doing so in ways which enhance the fairness of the system. First and foremost, that means collecting the taxes that are due. Since 2010, we have secured £140 billion in additional tax revenue by taking robust action to tackle avoidance, evasion, and non-compliance.

These actions have helped the UK achieve one of the lowest tax gaps in the world, but there is more that we can do. In this Budget, we set out further actions to stop businesses converting capital losses into trading losses; to tackle abuse of foreign pension schemes; and to introduce UK VAT on roaming telecoms outside the EU, in line with international standard practice. From July, we will introduce a tough new financial penalty for professionals who enable a tax avoidance arrangement that is later defeated by Her Majesty’s Revenue and Customs. Taken together, these measures will raise £820 million over the forecast period.

As well as collecting taxes that are due, a fair system ensures that those with the broadest shoulders bear the heaviest burden. As a result of the changes we have made since 2010, the top 1% of income tax payers now pay 27% of all income tax, a higher proportion than in any year under the last Labour Government. But a fair system will also ensure fairness between individuals, so that people doing similar work for similar wages and enjoying similar state benefits pay similar levels of tax. As our economy responds to the challenges of globalisation, shifts in demographics, and the emergence of new technologies, we have seen a dramatic increase in the number of people working as self-employed or through their own companies. Indeed, many of our most highly paid professionals work through limited liability partnerships and are treated as self-employed. There are many good reasons for choosing to be self-employed or for working through a company—indeed, I have done both in my time—and I will always encourage and support the entrepreneurs and the innovators who are the lifeblood of our economy.

People should have choices about how they work, but those choices should not be driven primarily by differences in tax treatment. My right hon. Friend the Prime Minister has asked Matthew Taylor, chief executive of the RSA—the Royal Society for the encouragement of Arts, Manufactures and Commerce—to consider the wider implications of different employment practices. I look forward to his final report in the summer, and am grateful to him for sharing his preliminary thoughts. He is clear that differences in tax treatment are a key driver behind the trends we are observing—a conclusion shared by the Institute for Fiscal Studies and the Resolution Foundation.

An employee earning £32,000 will incur, between him and his employer, £6,170 of national insurance contributions. A self-employed person earning the equivalent amount will pay just £2,300—significantly less than half as much. Historically, the differences in NICs between those in employment and the self-employed reflected differences in state pension entitlement and contributory welfare benefits, but with the introduction of the new state pension last year, these differences have been very substantially reduced. Self-employed workers now build up the same entitlement to the state pension as employees—a big pension boost to the self-employed.

The most significant remaining area of difference is in relation to parental benefits, and I can announce today that we will consult in the summer on options to address the disparities in this area, as the Federation of Small Businesses and others have proposed. The difference in national insurance contributions is no longer justified by the difference in benefit entitlements. Such dramatically different treatment of two people earning essentially the same undermines the fairness of the tax system. Employed and self-employed alike use our public services in the same way, but they are not paying for them in the same way. The lower national insurance paid by the self-employed is forecast to cost our public finances over £5 billion this year alone. This is not fair to the 85% of workers who are employees.

The abolition of class 2 NICs for self-employed people announced by my right hon. Friend the Member for Tatton (Mr Osborne) in 2016 and due to take effect in 2018 would further increase the gap between employment and self-employment. To be able to support our public services in this Budget, and to improve the fairness of the tax system, I will act to reduce the gap to better reflect the current differences in state benefits. I have considered the possibility of simply reversing the decision to abolish class 2 contributions, but the class 2 NIC is regressive and outdated—it is absolutely right that it should go—so, instead, from April 2018, when the class 2 NIC is abolished, the main rate of class 4 NICs for the self-employed will increase by 1% to 10%, with a further 1% increase in April 2019.

The combination of the abolition of class 2 and the class 4 increases I have announced today raises a net £145 million a year for our public services by 2021-22. That is an average of around 60p a week per self-employed person in this country. Since class 2 contributions are payable at a flat rate while class 4 is chargeable as a proportion of profits, all self-employed people earning less than £16,250 will still see a reduction in their total NICs bill. This change reduces the unfairness in the NICs system and reflects more accurately the current differences in benefits available from the state.

Alongside the gap between employees and the self-employed, there is a parallel unfairness in the treatment of those working through their own companies. Britain has the most competitive corporate tax regime in the G7, and we are determined to make Britain the most attractive place to start and grow a business, but to do that, we must ensure that our corporate tax regime does not encourage people across the economy to form companies simply to reduce tax liabilities, pushing the burden of financing our public services on to others.

HMRC estimates that existing incorporations cost the public finances over £6 billion a year, and the OBR forecasts that at the current rate of increase, an additional annual cost to the Exchequer will occur from those choosing to incorporate of £3.5 billion a year by 2021-22. The gap in total tax and NICs between an employed worker and one who has set up his own company will normally be greater even than the gap with the self-employed, and there are several perfectly legal ways in which that gap can be made bigger still. This is not fair, and it is not affordable. Fairness demands that this discrepancy in treatment be addressed, just as I have addressed the discrepancy with the self-employed.

The dividend allowance has increased the tax advantage of incorporation. It allows each director/shareholder to take £5,000 of dividends out of their company tax-free, over and above the personal allowance. It is also an extremely generous tax break for investors with substantial share portfolios. I have decided to address the unfairness around director/shareholders’ tax advantage, and at the same time raise some much-needed revenue to fund the measures I shall announce today, by reducing the tax-free dividend allowance from £5,000 to £2,000 with effect from April 2018. About half the people affected by this measure are director/shareholders of private companies. The rest are investors in shares with holdings typically worth over £50,000 outside individual savings accounts. Of course, everyone will benefit from the generous £4,760 increase in the annual ISA allowance to £20,000, and the further increase in the personal allowance to £11,500 from April.

I now turn to duties and levies. Unusually for a Chancellor, I am delighted to announce a reduction in the expected yield of a tax—the soft drinks levy. I can confirm today the final rates of 18p and 24p per litre for the main and higher bands respectively, but producers are already reformulating sugar out of their drinks, which means a lower revenue forecast for this tax. This is good news for our children. In further good news for them today, I can confirm that we will none the less fund the Department for Education with the full £1 billion that we originally expected from the levy this Parliament, to invest in school sports and healthy living programmes.

I am freezing for another year both the vehicle excise duty rates for hauliers and the heavy goods vehicle road user levy. I am introducing a new minimum excise duty on cigarettes, based on a pack price of £7.35, and I can also confirm that I will make no changes to previously planned upratings of duties on alcohol and tobacco. The tax measures I have announced enhance the sustainability of our public services into the future and, by improving the fairness of the system, help us to keep tax rates low.

Economic policy does not exist in a vacuum, and economic growth is a means, not an end in itself. The objective of our economic policy is to support ordinary working families and to build an economy that works for them. Government Members know that we can achieve rising living standards and deliver investment in our vital public services only if we have a strong economy and sustainable public finances. It is a simple proposition, yet one that Opposition Front-Benchers seem to find strangely difficult to understand.

We start from a strong base: real wages have grown for 27 straight months; the wages of the lowest-paid grew faster last year than in any of the previous 20 years; and the poorest households have seen their labour incomes rise more since 2010 in the UK than in any other country in the G7. Last year, we delivered a pay rise to over a million of the lowest-paid through the national living wage, and next month we take more steps to support working families with the cost of living. The national living wage will rise again to £7.50 in April, which is over £500 more for a full-time worker than this year and £1,400 more than when the national living wage was introduced. The personal allowance will rise for the seventh year in a row to £11,500, and the higher rate threshold to £45,000; 29 million people will be better off, with a typical basic rate taxpayer paying £1,000 less than in 2010. We will meet our manifesto commitment to increasing the thresholds to £12,500 and £50,000 respectively by the end of this Parliament.

I can also confirm today that the new National Savings and Investments bond that I announced in the autumn statement will be available from April, and will pay 2.2% on deposits up to £3,000—a welcome break for hard-pressed savers. The universal credit taper rate will be reduced in April from 65% to 63%, cutting tax for 3 million families on low incomes.

Next month, we will see the introduction of our flagship tax-free childcare policy, which will allow working families across the UK to receive up to £2,000 a year towards the cost of childcare for each child under 12. The scheme will be rolled out to all eligible parents by the end of the year, and in addition, from September, working parents with three and four-year-olds will get their free childcare entitlement doubled to 30 hours a week. That is worth around £5,000 a year to a young family with a three-year-old and both parents working. By the end of this Parliament, this Government will be spending on childcare £6 billion a year.

These childcare measures represent a further huge step forward in support for ordinary working families, and for women in the workplace. I am delighted to use the occasion of International Women’s Day to announce three additional measures—well, not quite announce them, because my right hon. Friend the Prime Minister has already announced two of them.

HMRC Estate

Ian C. Lucas Excerpts

Tuesday 10th January 2017 Commons Chamber

[Jane Ellison]

I think that, for the most part, what the right hon. Gentleman has said is just a political points-score. The facts simply do not bear it out. Since 2010, HMRC has secured more than £130 billion in additional compliance revenues, and in 2014-15, as I said earlier, the United Kingdom’s tax gap fell to its lowest-ever level of 6.5%.

[Ian C. Lucas (Wrexham) (Lab)]

In Wales, the facts are that the Government are creating one national centre in Cardiff, the most expensive site in the country; that the office in Wrexham is not small, given that it employs 350 people; and that the alternative site proposed by HMRC is in Liverpool, but that has not yet been identified. This is a shambolic policy. It is ill-conceived, and it is being badly implemented. The Minister should listen to my colleagues from Wales—she has heard from many of them today—and reconsider the policy, because it is very bad indeed.

[Jane Ellison]

I note the hon. Gentleman’s criticisms but cannot agree with the thrust of his points. HMRC will respond in detail to this report. This is a programme over a period of time and we will learn from each move. I do not recognise the description the hon. Gentleman just gave, but I do understand the point made, especially about some of the larger offices, and I realise that until the site in Liverpool is identified things are a bit more unsettling for his constituents who work in the Wrexham office than they might otherwise be.

Budget Changes

Ian C. Lucas Excerpts

Monday 21st March 2016 Commons Chamber

[Mr Gauke]

Indeed. My hon. Friend makes a good point, and he is absolutely right to raise that. As I pointed out earlier, my right hon. Friend the Secretary of State for Work and Pensions will address that point, I am sure, later this afternoon.

[Ian C. Lucas (Wrexham) (Lab)]

Last Wednesday, the Chancellor announced that this was a Budget for the next generation. Which member of the next generation will succeed the Chancellor?

[Mr Gauke]

Is that really the best the hon. Gentleman can do?