Transport Infrastructure (North Wales)

Ian C. Lucas Excerpts

Tuesday 26th November 2013 Westminster Hall

[Ian Lucas (Wrexham) (Lab)]

I pay tribute to my hon. Friend the Member for Alyn and Deeside (Mark Tami), and echo much of his introductory message about the strength of the economy in north-east Wales.

I want to start in a bipartisan spirit by quoting the Secretary of State for Wales—not something I do very often—who said:

“Together, Deeside and Wrexham make up one of the most important industrial areas in Europe”.

That is absolutely true. In fact, I would go further: we could say that together they form one of the most important industrial areas in the world. At the Dubai air show last week we heard the fantastic announcement that 50 A380 jets have been ordered, the wings for which will be built at Broughton in north-east Wales.

We need to be a voice for north Wales on a cross-party basis, to create strong infrastructure to support our industry. As my hon. Friend the Member for Alyn and Deeside said, there is no guarantee that that industry and those businesses will remain in north-east Wales. It is important to construct that infrastructure across north Wales and into north-west England—that link is crucial—so that we can compete with international businesses and competitors that would love to have those businesses and industries in their own countries.

In north-east Wales the infrastructure in my view is really from the 1990s, but is trying to cope with industry that is developing towards 2050, so we need a far-sighted approach. We welcome the investments in infrastructure that are now being made in the region. The Welsh Government have promised to invest £44 million on the line from Wrexham in Wales to Chester in England. That is crucial to the people of Wales; many people go every morning from my constituency of Wrexham across into England, to work for businesses such as General Motors in Ellesmere Port or the pharmaceuticals centres in Daresbury. They have high-quality jobs there and need to have contact with those areas. The businesses that employ those people want to ensure that they have access to a skilled work force.

We are also seeing developments in infrastructure in north-east Wales. Yale college in Wrexham has merged with Deeside college, creating Coleg Cambria, which will be a world-challenging organisation and will build support networks for competitive businesses. In Deeside and Wrexham we need a linked-up transport system, so that the fleet of buses that now travels from Deeside down to Wrexham and back is replaced by a modern, integrated transport system.

We have heard a lot about the Wrexham-Liverpool line, which goes right through this hugely important industrial area. The Wrexham industrial estate and Deeside industrial park have both been extremely successful in attracting important international businesses. We need to link those industrial estates; as has been said, it is extraordinary that a new estate such as the Deeside industrial park was built without a real public sector transport connection. I am afraid that it is also extraordinary that in the 1980s, the Wrexham-Chester railway line was reduced from a dual to a single track, one of the most short-sighted decisions I can remember a Government making. Fortunately that is going to be addressed.

We also need collectively—it is important that north Wales MPs speak collectively on this matter—to stress the importance within Wales of north-east Wales. We have colleagues who are eloquent in promoting different areas within the country. Only yesterday I saw a report that the south-east Wales local authorities are pressing for a metro system in their region. It is true that there has been massive investment in the past 10 years in the valleys lines and the Vale of Glamorgan line in south Wales. That sort of rail investment has not happened in our area in the past. It is coming now, and I have referred to the cross-border investment in the Wrexham-Chester line, which will lead to a big improvement and create a great deal of additional capacity. We need to say to our colleagues in the UK Government and the Welsh Government that if our tremendous industrial area is to sustain jobs and be internationally competitive, we need to work collectively to provide an infrastructure, in both skills and transport, that makes the area too good for any globalised company to leave. North Wales has to be the place where people want to be.

We have world-beating industries in our area—not just Airbus, but Toyota and JCB; Sharp is also based in my constituency. Those companies are at the cutting edge of research. We established a university in north-east Wales for the first time in 2008, when Glyndwr university was established; that needs to be part of a support network for our businesses. Businesses need to work together with our educational institutions to put together proposals for the Government on building an integrated cross-border system of transport, so that people who are now travelling across the border can do so more easily and far of them can use more public transport than at present. Wrexham and Flintshire are two of the counties in the UK with the biggest proportion of people who travel to work by car. That is creating pinch points in that 1990s transport network that I have referred to.

We need to look ahead to 2050 and construct a transport system that uses the tracks we already have for a modern rail system linking Liverpool, Manchester and north Wales. Liverpool and Manchester have extremely successful air transport networks, but we have dreadful links to those airports. Anyone who travels to those airports from the west would be insane to travel by train, so they travel by car, which will create additional pressure on the road network in the years ahead. We have to look at how we will link to those international hubs, given our international businesses.

We also need to look at High Speed 2, thinking ahead to its construction and how north Wales will benefit from that. As north Wales MPs, we need to press the Wales Office about HS2 to see how it will specifically benefit our area, and we need to press the UK Government to ensure that there is a plan for north Wales with regard to HS2. We have seen enormous improvements in the rail network down to London and down to Cardiff in recent years, mainly through investment in the west coast main line but also through investment in north-south networks within Wales. That has happened only because of insistent pressure from north Wales. We need to keep that going and look much more closely than we have in the past at the public transport system within north-east Wales, especially the rail system. We need local authorities, AMs and MPs to work together to speak out loudly on behalf of the region that we should all be proud to represent.

Finance (No. 2) Bill

Ian C. Lucas Excerpts

Thursday 18th April 2013 Commons Chamber

[Fiona O'Donnell]

Absolutely, and I thank my hon. Friend. I was not about to turn to that point, but I will develop it as it affects the local economy in East Lothian.

East Lothian has a number of small towns, some of them market towns. Often, it is the poorest in those communities who spend their money in local shops in the high street; they are not able to take advantage of out-of-town supermarkets. Those high streets are struggling. The Government are taking money out of local economies—out of small high streets in East Lothian—which is having a negative effect. One group of businesses is, however, growing in our high streets: pawnbrokers and high street lenders, which will not improve the lot of the most vulnerable in my constituency.

[Ian Lucas (Wrexham) (Lab)]

That point about our high streets is incredibly important. It is not simply high streets in Labour constituencies that are suffering. Anyone who attends the meetings of the all-party group for town centres will know that, even in leafy Conservative and, dare I say it, Liberal Democrat seats, high streets are struggling. What evidence is there that the windfall for the richest people in our society will contribute in any way to income in our high streets and in our economy? The money is more likely to be spent in Bermuda than in Birmingham.

[Fiona O'Donnell]

My hon. Friend makes an excellent point. The problem is not restricted to high streets. In small rural constituencies, there may be one village shop, where the local post office is located. The post office network is also being put at risk as such small village shops are unable to make a profit. Therefore, we risk losing post office services. We are facing that now in East Lothian. Post office closures may not be planned, but that may be a consequence of the Government’s economic choices.

It seems almost too simplistic to make this point, but Government Members have boasted about the fact that the Government are hurting the richest 10% the most. However, if the Government choose to take £25 a week from a rich family, it will have a lot less impact than taking £17 a week from a hard-working family. Taking that from the richest will not mean they will present themselves at food banks looking for assistance to put food on the table, but that is what the Government are forcing working families increasingly to do. We look forward—that is perhaps the wrong term—to hearing the Trussell Trust’s latest figures on the number of people it has fed over the past year. All the indications are that the number has increased significantly; it may be over 500,000. That is a matter of real concern.

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[Jacob Rees-Mogg (North East Somerset) (Con)]

It is a particular pleasure to serve under your chairmanship today, Ms Primarolo. I welcome you back, and I am glad to see you in fine health.

I have been spurred on by the hon. Member for East Lothian (Fiona O’Donnell) to speak in the debate and to defend the Government’s policy, which is wise and right and good—[Interruption.] I do not often cheer up the Whips, but if I do so, that will be an added advantage. The amendment tabled by Her Majesty’s official Opposition is completely unnecessary and wrong-headed.

[Ian Lucas]

The hon. Gentleman said that the Government’s policy was wise. He is a moral man, so will he tell me how it can be right for the richest people in our society to have their income boosted while disabled constituents of mine are having theirs reduced?

[Jacob Rees-Mogg]

Because it does not actually work like that. We know from experience that high rates of tax reduce the amount of taxation that is received. The Laffer curve is not a myth. If you put rates up, tax revenues decline.

Food Banks (Wales)

Ian C. Lucas Excerpts

Tuesday 12th February 2013 Westminster Hall

[Kevin Brennan]

The hon. Gentleman will be aware of the powerful world economic forces that have been at work in the past 20 years. It has almost been like King Canute all over again, trying to hold back the forces of international capitalism over the past 20 years and trying to keep income inequality down. The previous Labour Government did possibly more than any other Labour Government in attempting to alleviate that. For example, they introduced the national minimum wage, which made a massive contribution to trying to alleviate the impact of income inequality, which, in a globalised capitalist system, is difficult to resist.

[Ian Lucas (Wrexham) (Lab)]

Last year, in Wrexham, the first food bank was set up since I first came to Parliament in 2001. This April, the richest people in Britain will get a tax cut because of this coalition Government’s policies. That is the type of ethical approach taken by this Government.

[Kevin Brennan]

Indeed. I am sure that other hon. Members will want to point out that, while this crisis is going on, the Government saw it as their priority to lower the income tax of the richest.

Finance (No. 4) Bill

Ian C. Lucas Excerpts

Wednesday 18th April 2012 Commons Chamber

[Nicholas Soames]

They do all those things, but they are also places that represent the spirit of England down the centuries. To trifle with them in this way is really not a sensible thing to do, either for the nation at the moment or for the future.

I beg the Treasury Minister to consider whether it would not be worth while laying this measure aside and considering how better it might be to come up with a different scheme. As the right hon. Member for Exeter said, the listed places of worship grant scheme could not possibly compensate for the kind of money involved in imposing a 20% VAT rate on alterations. I urge my hon. Friend the Minister to view this issue with great care, to pay attention and to understand the feelings in this House and elsewhere in the country among people who give of themselves to keep such places going. They mind very much indeed, and their views should be heard and considered.

[Ian Lucas (Wrexham) (Lab)]

I wish to speak in support of new clause 2, which stands in my name. It deals with a long-standing campaign that I have undertaken alongside a charity in my constituency, Chariotts, which offers dial-a-ride-type services to disabled people and has been established for a number of years. It has become more and more successful, transporting people in wheelchairs and those with severe disabilities across the constituency.

The problem in recent years is that as the charity has grown, so has the likelihood of its becoming registrable for VAT in the near future. A VAT anomaly exists that is relevant to Chariotts, as well as other organisations across the country, which is that there is an exemption from VAT for public transport vehicles with 10 seats or more, but not for those with fewer than 10 seats. That means that a disabled passenger undertaking a journey in a small vehicle will have to pay VAT on the journey. When the charity becomes registrable, there will be a 20% increase for disabled passengers, which is extremely serious for individuals on fixed incomes.

I have raised this issue on many occasions in the Chamber, as well as with the Exchequer Secretary elsewhere. He told me in a written answer:

“No estimates have been made of the cost of extending this zero rate as long-standing formal agreements with our European partners prevent us from unilaterally extending the scope of our existing zero rates or introducing new zero rates.”—[Official Report, 28 November 2011; Vol. 536, c. 718W.]

That was quite a categorical no to extending the exemption, to go alongside the statement that European policy was preventing it from occurring. Imagine my astonishment, therefore, when I learned on Monday that the Budget introduces an exemption—a further VAT concession—for small cable-based transportation systems. Ski lifts and the like will benefit from a tax cut from 20% to 5%. There is to be a reduced rate of VAT for skiers on the piste. We have already heard about pasties and caravans. Now, for reasons that are unclear, the Government are giving a tax cut to people having a luxury holiday.

[Mr Reid]

Skiing is an important industry in the highlands of Scotland, and I am delighted at this tax cut.

[Ian Lucas]

I beg to differ. It will affect one particular sector. It is rather convenient that the Chief Secretary to the Treasury, who has Aviemore in his constituency, has been much more amenable to this tax cut than to a tax cut for disabled people not only in my constituency but in Skye, in the highlands of Scotland and right across the country. It is a disgrace that the Government said no to me when I asked for assistance for disabled people but then said yes to a request from the Chief Secretary to the Treasury, who has a major constituency interest. I want the Exchequer Secretary to tell the Committee how much this tax cut is going to cost the Treasury, and to undertake to look into the matter, for the benefit of disabled people and not of skiers.

[Several hon. Members]

rose—

Finance (No. 4) Bill

Ian C. Lucas Excerpts

Monday 16th April 2012 Commons Chamber

[The Chief Secretary to the Treasury (Danny Alexander)]

I beg to move, That the Bill be now read a Second time.

This year’s Finance Bill is the next step in delivering the coalition Government’s core aims of returning this country to sustainable, shared prosperity, dealing with the deficit, supporting the private sector, restoring economic growth and clearing up the mess that the Labour party made of the British economy.

[Ian Lucas (Wrexham) (Lab)]

Will the Chief Secretary give way?

[Danny Alexander]

I will take interventions, but I will make some progress first.

This Finance Bill sets out wide-ranging reforms to build a fairer, more efficient and simpler tax system that supports families, rewards hard work, promotes business and ensures that everyone pays their fair share.

[Ian Lucas]

Will the Chief Secretary give way?

[Danny Alexander]

I will give way now.

[Ian Lucas]

On the question of fairness, why has the right hon. Gentleman allowed a VAT concession for skiers going to the piste but refused my repeated request for a VAT concession for disabled people in wheelchairs using taxi facilities run by charities such as Chariots, in my constituency?

[Danny Alexander]

I am not aware of the particular issue that the hon. Gentleman mentions. He has not raised it directly with me before, but I am sure he has with my colleagues. I would be very happy to consider it. The issue of cable-powered transport systems has been raised many times by the industry, and a good case has been presented for the change.

The Bill builds on the strong foundations that we have secured in the past two years, safeguarding our economic stability, creating a fairer, more efficient and simpler tax system and driving through reforms to unleash the private sector enterprise and ambition that is critical to our recovery. We will not achieve that by returning to the model of unsustainable debt, irresponsible spending and over-reliance on one sector and one region.

We will not jeopardise the progress that we have made in tackling our debts. We will stick to our plans, because it is fair that we tackle those debts today so that we do not burden our children tomorrow.

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[The Exchequer Secretary to the Treasury (Mr David Gauke)]

We have had a wide-ranging debate, and I thank the 20 Back Benchers who contributed. Many of the speeches touched on the three great challenges that we face in our economy: how to reduce the deficit, how to ensure that we do it fairly, and how to ensure that the UK can be competitive and grow strongly. However, the first point was tackled exclusively by Government Members. Labour Members still show no recognition of the previous Government’s disastrous legacy or the fact that it is not credible to advocate that the way to reduce borrowing is to borrow yet more. A structural deficit of the size we faced meant that difficult measures on spending cuts and tax rises were necessary, but Labour Members continue to oppose almost every effective measure to reduce the deficit. That is why the country continues not to trust the Labour party on the economy.

The Bill is consistent with our determination to return our public finances to a position of respectability.

[Ian Lucas]

If the Government believe that it is not right to give tax concessions, why have they given skiers in Aviemore in the Chief Secretary’s constituency a discount on VAT, which the Exchequer Secretary says that the country can ill afford?

Amendment of the Law

Ian C. Lucas Excerpts

Monday 26th March 2012 Commons Chamber

[Mr Vaizey]

That gives me a chance to respond to one of the Labour party’s most important Back Benchers. If he thinks that we are not interested in art and culture, why is he never out of my office talking about art and culture and, in particular, our joint campaign to save the Wedgwood collection?

To support technology and innovation businesses we have protected the science budget and are funding new science capital projects, including £158 million for e-infrastructure. The total increase in capital funding since December 2010 is £495 million. I feel that point keenly because tomorrow is the 10th anniversary of the agreement between the previous Labour Government and the Wellcome Trust to build and site the Diamond synchrotron in my constituency. I must say, in a moment of cross-party unanimity, that the last Labour Government had two of the finest science Ministers we have seen in Lord Sainsbury of Turville and Lord Drayson. We have, of course, gone one better by appointing our own Minister for Universities and Science, who has two brains.

We will have increased the level of the small company research and development tax credit from 175% to 225% by April 2012. That is the largest programme of support for business innovation in the UK and will provide support of more than £1 billion a year. We have made it more attractive to invest in smaller high-risk companies by raising the tax relief available under the enterprise investment scheme. We have established 24 enterprise zones throughout England. We have introduced catapult centres, which will form a new elite national network to act as a bridge between academia and business. They will cover sectors such as high-value manufacturing, cell therapy and offshore renewable energy. The Technology Strategy Board is investing at least £200 million in the current spending review period to make that happen.

We need to build on that success and I am pleased to say that the Budget maintains the momentum. We are cutting taxes on patents through a 10% patent box corporation tax worth some £900 million, which will be introduced next year and phased in. We are extending enterprise zones to Scotland, Northern Ireland and Wales. We are investing £100 million, which will leverage a further £200 million, in new university research facilities. We are introducing transport systems and future cities catapult centres. In a country with the world’s second largest aerospace industry, we have announced an investment of £60 million in a new aerodynamics centre to encourage innovation in aerospace design and the commercialisation of new ideas. Those measures will ensure that our world-leading universities and innovative small businesses can come together with global companies to commercialise new technologies, ideas and inventions in a wide variety of sectors.

[Ian Lucas (Wrexham) (Lab)]

Will the hon. Gentleman tell the House where the aerodynamics centre is to be based?

[Mr Vaizey]

May I congratulate the hon. Gentleman on his iPad cover, which is the same colour as a ministerial red box? It looked like he was using his ministerial red box. That is a rather nice conceit for an ex-Minister.

[Ian Lucas]

It’s the Budget.

[Mr Vaizey]

Oh, it was the Budget book. It looked like an iPad cover. Forgive me; I keep mistaking the hon. Gentleman for somebody who is on top of new technology. We have not yet decided where the aviation centre will be sited, and it may not even be in one place. It may be sited in two or three different areas.

To become Europe’s technology hub, we need world-leading digital infrastructure. The average broadband speed in the UK is already 7.5 megabits a second. In Northern Ireland, almost all the population have superfast broadband, and in England almost two thirds of the population do. In England, Northern Ireland and Wales, roughly three quarters of the population now have broadband. UK broadband coverage is in fact almost universal, with 91% of the country having access to speeds above 2 megabits a second, putting us in the top 20 countries worldwide. We are far ahead of many countries, including Morocco, where only one in 10 of the population have access to fixed-line broadband.

We have come a long way, but we need to go further. We are already investing £530 million in rural broadband, which will deliver superfast broadband to 90% of the country by 2015, two years earlier than Labour planned. More than half of our local broadband projects have been approved, and all will be approved by the end of this year. Procurement for some projects will proceed in the next few months.

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[Mr Vaizey]

Ultrafast broadband will of course benefit London, and across the 10 cities that I mentioned, the Chancellor’s Budget means that 40,000 businesses and 200,000 households will get ultrafast broadband. London is also getting it through private sector providers, to which I will turn in a moment. It is also worth noting that Virgin Media will provide free wi-fi on the London underground during the Olympic games. Some 3 million people will be able to get access to high-speed wi-fi in the 10 best-connected cities. The Chancellor also announced in the Budget an additional £50 million, which will be available to ensure that ultrafast speeds are available to the UK’s smaller cities.

I said in reply to my hon. Friend that the private sector is doing a huge amount to speed broadband roll-out. I can announce that this week, Virgin Media, after £110 million of additional investment—investment over and above the £600 million it invests every year—will complete the upgrade of its network, so all 13 million premises covered by it, which is about half the premises in the UK, will be able to access speeds of up to 100 megabits a second. Average speeds are set to be around 40 megabits a second, which makes Virgin Media’s broadband network the fastest in the world. [Interruption.] From a sedentary position, an hon. Lady accuses Virgin Media of bribing me to say that. I am not sure she will say that outside the Chamber.

[Ian Lucas]

Virgin broadband is not available in north Wales. The problem, as the Minister will hear from Government Back Benchers, is access to universal broadband, which the Government delayed from 2012 to 2015. What will he do about increasing services to ensure that we have universal broadband, the absence of which is preventing businesses from making progress in large parts of the country?

[Mr Vaizey]

I first need to get the hon. Gentleman an iPad—[Interruption.] He has one. At last he has an iPad! We have given £10 million to north Wales to put in place superfast broadband. As he well knows, we will get superfast broadband to 90% of the country two years before the Labour Government promised. We are not going to impose Labour’s telephone tax, which would have hit consumers and businesses. We will have the best superfast broadband in Europe by 2015—[Interruption.] My colleagues are saying from sedentary positions that that sounds excellent; it is excellent.

Having praised Virgin Media, let me also say that BT is investing £2.5 billion in rolling out broadband. Indeed, it has accelerated its plans so that it will deliver fibre to two thirds of the UK by 2014, a year ahead of schedule. It has already delivered to 7 million premises, and is currently adding an additional 1 million premises—the equivalent of the number in Singapore—every three months.

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[Andrea Leadsom (South Northamptonshire) (Con)]

This has been a great Budget for business growth, for work incentives and, as the Under-Secretary of State for Culture, Olympics, Media and Sport, my hon. Friend the Member for Wantage (Mr Vaizey) rightly says, for technology, too. However, I shall focus my comments on a huge potential opportunity for growth by using technology, which would transform the banking system, put people and small businesses first, and shatter the comfortable oligopoly of the big banks in our banking sector.

Bank balance sheets in Britain amount to 500% of our GDP, which compares with about 300% in Germany and France, and only 100% in the US. Britain is uniquely at risk from this highly profitable sector. Financial services employ 1 million people in the UK, including 250,000 in Birmingham alone, and generate 11% of our total tax take. However, banks in the UK are so highly concentrated that four or five players have 80% of the small and medium-sized enterprises lending market and 80% of the personal current account market, and only about 2% of that on their vast balance sheets is lent into the real economy—the bit that gives us our jobs and helps businesses to grow. We saw in 2008 how the crisis in banking could bring our economy to its knees. Our unique British dilemma is in deciding what to do about this critical industry which has the ability to make or break us. The Chancellor was right to set up the Independent Commission on Banking to look at how to improve the industry, but it missed a big opportunity, as it did not address the massive barriers to entry into the UK economy for new challenger banks.

When I was director of Barclays Financial Institutions Group in the 1990s, an incredible consolidation took place in the financial sector. Banks merged with fund managers, broker dealers, private banks and building societies, creating today’s oligopoly of banks that are simply too big to fail.

[Ian Lucas]

The hon. Lady is making an interesting speech, and she is talking about the 1990s, when she was at Barclays. Does she agree that one of the major errors of the late 1980s was the incredible centralisation that took place through the privatisations and the ending of local building societies, and that that is a major reason why it is impossible to get local access to finance now? That issue needs to be addressed.

[Andrea Leadsom]

I completely agree with the hon. Gentleman.

Before Virgin took over Northern Rock, Metro Bank was the only company to have been granted a full banking licence in 100 years. I have met entrepreneurs who would love to finance and set up new banks, and we have seen the launch of some new financial services products through the likes of Tesco and Marks and Spencer, but competition remains woeful. At the latest meeting of my business breakfast club, members made it clear to me that switching their business between banks is nearly impossible. Banks that lend money to SMEs require that their customers also do their everyday banking and personal current account banking with them. Some banks even require businesses to switch from a floating-rate loan to a fixed-rate one—that is profitable for the banks, but it forces the business into a loan that it cannot pay back early without enormous expense.

One specific policy would be a game changer for Britain, radically transforming our banking sector in terms of choice and competition, for business and personal accounts alike. We should introduce full bank account portability; we should be able to change banking provider at the flick of a switch. As with mobile telephones, when we change our bank we should be able, if we so wish, to take our account details with us. The ICB has proposed a costly seven-day switching service, where banks undertake to assist customers to move their banking within seven days but customers will still have to change all their direct debits, cheque books and debit cards, and all their documentation. Instead, we could insist on the creation of a shared payments clearing system, where all banks participate and customers have a unique bank account number with a code that simply identifies which bank holds the account. Switching would then be simple because nothing, other than the identifier code, would need to change when someone changes banks. This would vastly transform competition in the sector. Of course the big banks will resist it, arguing that the costs outweigh the benefits, but I want to highlight five very real advantages of full account portability.

First, it would cut barriers to entry for new challenger banks. Increased competition would force banks to differentiate themselves to retain customers. This would lead to enormous improvements in customer service and differentiation of bank offerings. Secondly, new challengers would mean more banks and, over time, a reduction in the risk of banks being too big to fail. The US has more than 3,000 banks and when a retail bank fails there is hardly a ripple. We need diversity of financial services providers, and this would enable it.

Thirdly, industry experts claim that the impact of creating a new shared clearing infrastructure would mean the banks sorting out the problem of their multiple legacy systems that date back to the consolidation of the 1990s. New systems could lead to a reduction of up to 40% in the bank fraud that costs the sector billions each year and is passed on to customers.

Fourthly, multiple legacy systems within banks make it hard properly to evaluate business ideas. Banking is essentially a technology business and improving the single customer view would have a positive impact on banks’ ability to evaluate credit risks and lend more successfully.

Finally, account portability offers the potential for orderly resolution of a failed bank. The potential to close down a bank and move accounts overnight to a solvent bank could be a valuable tool in a future financial crisis. The Chancellor has been kind enough to tell the Treasury Committee that he would consider full account portability if the ICB’s preferred option of a seven-day switching service fails to improve the current low switching levels. I urge him to grasp the nettle now. Technology has the potential to drive a fundamental change in our banking system.

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[Ian Lucas (Wrexham) (Lab)]

I am pleased to follow the hon. Member for Stafford (Jeremy Lefroy), who made some valid points.

The focus of last week’s Budget should have been on encouraging business and consumer confidence, because the failure of this Government is above all the failure to facilitate demand in our economy. On the contrary, their policy has led to a lack of demand in the following ways and policy areas. The first has been by reducing public expenditure on capital projects, which is especially telling in those parts of the UK that depend significantly on the public sector rather than the private sector for investment. The effect is especially evident in the construction industry, which is still in dire straits because of the lack of demand from either the public sector or the private sector.

In addition—we must not forget this—this Government, of the Tories and the Liberal Democrats, have increased taxes on consumer spending by increasing VAT, which has reduced the income going to local businesses. When people spend money, that difference between 17.5% and 20% is taken out of the local economy. It does not go into local businesses; it goes straight to the Exchequer. Again, that is money being taken out of the economy. The Government are also reducing employee confidence, because they repeatedly talk about reducing jobs in the public sector, which diminishes demand—for example, by affecting the decision to move house, which has an impact on the housing economy and developments in the construction sector.

In all those ways, the Government are cutting demand at the very time we need demand in the economy to facilitate work for our young people. Indeed, we hear a roaring silence from the Government about our young people, who were barely mentioned in the Budget. The problem is that we have seen all this before. In the 1980s, when I was politically forged, I saw all that happening in the north-east, where I was brought up. For example, we saw 3 million unemployed, twice. [Interruption.] I am sorry that those on the Government Front Bench find that amusing, but that is what happened. A generation claiming benefits are still suffering the consequences of the Tory Government of the ’80s, and now we are seeing it again. That is why I feel passionate and angry about what this Government are doing—because what those policies did was drive people on to the dole, which at that time was paid for by two things: privatisations and North sea oil. We remember Harold Macmillan saying that the family silver cannot be sold off twice, and privatisation means it has now been sold. North sea oil returns are diminishing, so the Government are simply running out of money because they are not facilitating growth in the economy. One of the major reasons for that is that people and businesses cannot borrow money.

The root cause of this difficulty is the incredible centralisation in the banking sector, to which I referred earlier, which prevents businesses across the country from accessing demand. Again, we go back to the 1980s. Then we saw the demutualisation of great institutions such as the Northern Rock building society. It was based in the north-east where I was brought up, but it ended up a horrific behemoth in the mid-west of America, losing money and going out of business as a result of the American sub-prime mortgage crisis. The result is that a local organisation that had provided homes and jobs for local people was there no more. We need to go back much further than the last Labour Government to understand why all this happened. It happened because of what happened in the 1980s, as I have explained. We need a radical change of course.

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[Rachel Reeves]

This is not just about freezing an allowance; it is about freezing an allowance this year, next year and the year after, and for many years to come. It is also about getting rid of the allowance, because it is disappearing for people who will retire next year. Next year people will receive not a reduced allowance but no additional allowance at all, and as a result they will be £323 worse off because of the choices that this Government have made.

I am sure that in a moment we will hear protestations from the Chief Secretary about his great triumph in raising the personal tax allowance for working-age people, but families with children have already lost £450 on average from the VAT increase, and another £530, starting on 6 April, through cuts to tax credits and the freezing of child benefit. Does the Chief Secretary really expect families to be thankful to be getting less than half this back in 2013? Is it not more likely that they will see this for what it is?

[Ian Lucas]

My hon. Friend rightly stresses the importance of VAT. Charities are among the types of business that are affected by a VAT hike. Chariotts in my constituency provides services to disabled people, and it will have to hike its charges by 20%. That will have to be paid by those disabled people, because of the VAT increase that this Government are pursuing. Does my hon. Friend agree that that is a disgrace?

[Rachel Reeves]

I agree. These are hard times for the charitable sector, and the VAT increase has hit it hard. That is one of the many reasons why charities, as well as ordinary families and businesses, would benefit from a reduction in VAT to 17.5% until the economy recovers. Charities are also affected by changes in tax allowances, and many have expressed fears that that will also create a big black hole.

Budget Leak Inquiry

Ian C. Lucas Excerpts

Thursday 22nd March 2012 Commons Chamber

[Mr Gauke]

My hon. Friend is absolutely right, and our progress on oil and gas will be welcomed throughout the country and, especially, in Great Yarmouth.

[Ian Lucas (Wrexham) (Lab)]

On stamp duty specifically, will the Minister implement an inquiry into how many transactions of more than £2 million took place between the time that such reports were in the newspapers and the Budget announcement, and into how much that cost the hard-pressed British taxpayer and pensioners who are having to pay the granny tax?

[Mr Gauke]

On the general point about leak inquiries, I have said what I have to say on that, but we have to bear in mind that identifying a property of more than £2 million, reaching a conclusion on negotiations and exchanging in the course of one morning is somewhat ambitious.

Amendment of the Law

Ian C. Lucas Excerpts

Wednesday 21st March 2012 Commons Chamber

[Stephen Mosley]

Corporate tax rates, of course, are one incredibly important area, but there are many others. In my speech, I shall concentrate on some of the issues that the right hon. Member for Southampton, Itchen (Mr Denham) talked about, to do with investment.

Many people rightly ask, “How will we, in Britain, earn our living in the global marketplace of the future?” Like the Chancellor, I believe that there are sectors in which the UK can take a global lead, in which we have the ability to excel, and that have the potential to generate growth for future generations. The one that I will concentrate on is the digital economy.

The UK’s information technology and telecoms industry makes a gross value added contribution to the British economy of some £81 billion a year. That is around 9% of the total economy—it is a very similar figure to that for the financial services industry. Around one in 20 members of the work force—1.5 million people—are employed in IT and telecoms. There are around 100,000 unfilled job vacancies being advertised, and it is estimated that more than 500,000 new IT and telecoms professionals will be needed over the next five years. By exploiting the full potential of the technology industry, we could boost the UK economy by an additional £50 billion over the next seven years.

The Chancellor’s speech gave extremely encouraging signs that investment in information and communications technology is set to continue, but more needs to be done if we are to harness our real potential to make our country a global leader in the digital economy. We have a world-class base from which to grow further, but we require proactive engagement from the Government if we are to speed up growth and increase the economic potential of ICT businesses. We must be much more vigorous in promoting the industry to stimulate wider and sustained economic growth.

[Ian Lucas (Wrexham) (Lab)]

I am listening carefully to the hon. Gentleman’s speech, not least because he is my neighbour, and I agree with much of what he has said, but does he not regret that the Government put back the delivery of universal broadband by three years, from 2012 to 2015—two years after it will be delivered in Morocco, which I visited last week?

[Stephen Mosley]

If the hon. Gentleman, my neighbour, will bear with me for 30 seconds, I will get to broadband.

--- Later in debate ---

[Ian Lucas]

The hon. Gentleman is making a compelling case. Is he aware that just 4,000 taxpayers in Northern Ireland earn more than £150,000 a year?

[Sammy Wilson]

That is so, and I wish to discuss another measure in this Budget that will affect hundreds of thousands of people.

Living Standards

Ian C. Lucas Excerpts

Monday 5th March 2012 Commons Chamber

[Mr Gauke]

Let me just make a little more progress.

We heard the hon. Member for Leeds West (Rachel Reeves) set out the challenges and pressures on living standards, but it takes some cheek for Labour Members to complain about the consequences of their own irresponsibility in power. Their position today in this motion relating to living standards is the equivalent of that of a man who sets his house on fire, then complains, after the fire brigade has extinguished the fire, that it has damaged his carpets. We accept that difficult decisions have to be taken, and we have taken them, but the British public know that we have had take them now because Labour failed to take them when it was in power.

[Ian Lucas (Wrexham) (Lab)]

The Minister is peddling the persistent Tory untruth that this economic situation existed only in Britain. Will he now accept that there was a worldwide banking crisis in 2008, and that the action that was taken to reflate the economy had contributed to the size of the deficit by 2010?

[Mr Gauke]

I will happily re-fight the 2010 general election with the hon. Gentleman any time. He will remember how well his party did on that occasion. The fact is that the UK had the worst deficit of any major economy.

Jobs and Growth

Ian C. Lucas Excerpts

Wednesday 12th October 2011 Commons Chamber

[Rachel Reeves (Leeds West) (Lab)]

It is a privilege to wind up this debate as shadow Chief Secretary to the Treasury. I may be new to the job, but after five hours of debate today I am still no clearer on this Government’s plan for jobs and for growth. Even on the day when unemployment has reached a 17-year high, the Government have no plan for jobs and for growth. Today’s numbers are proof that plan A has failed.

While Government Members say that there is no alternative to the policies being pursued by the Government, the Opposition have put forward a five-point plan for jobs and growth which was set out by my right hon. Friend the Member for Morley and Outwood (Ed Balls), the shadow Chancellor, and supported by Opposition Members. My right hon. Friend the Member for Edinburgh South West (Mr Darling) reminded us that a year and a half ago, the economy was growing and unemployment was falling. How different from today. My hon. Friend the Member for Hackney South and Shoreditch (Meg Hillier) gave a vivid account of the impact that the Government’s policies are having on constituents in Hackney.

We heard about plans for jobs and growth rooted in the constituency experience from my hon. Friends the Members for Leeds East (Mr Mudie) and for Gateshead (Ian Mearns), my right hon. Friend the Member for Holborn and St Pancras (Frank Dobson), my hon. Friends the Members for Middlesbrough (Sir Stuart Bell), for Wolverhampton North East (Emma Reynolds), for Coventry North West (Mr Robinson), for Bassetlaw (John Mann) and for Great Grimsby (Austin Mitchell), my right hon. Friend the Member for Oldham West and Royton (Mr Meacher) and my hon. Friend the Member for Bristol East (Kerry McCarthy).

From the Government Benches we also heard some constructive speeches, particularly from the hon. Members for Chichester (Mr Tyrie), for Sevenoaks (Michael Fallon) and for Aberconwy (Guto Bebb). Some Government Members, however, defended plan A 100% but none of them, remarkably, wanted to talk about unemployment in their constituencies. One hon. Member gave a speech not even knowing that unemployment in his constituency was up 29.2% in a year. If that is not proof that plan A has failed, I do not know what is.

Let me rebut some of the Greek myths that we heard from the hon. Members for Spelthorne (Kwasi Kwarteng), for Rossendale and Darwen (Jake Berry) and for Bromsgrove (Sajid Javid), which they use as a smokescreen for their austerity programme. First, UK debt is just over 60% of GDP; in Greece it is over 150%. Secondly, the average maturity of our debt is roughly 13 years, compared with around six years in Greece. Thirdly, bond yields were falling in the UK ahead of the general election, but they were rising in Greece. Fourthly, Greece is part of the eurozone and so, unlike the UK, cannot devalue its currency. This is a story of two very different economies. The Greek defence for austerity simply does not add up.

I urge hon. Members to look at the facts. We have great British businesses, great British industries, great universities and people in all our constituencies who want to work hard and get on. Let us celebrate and build upon our successes, rather than talking Britain down. Instead of the mantra of resignation and defeat from Government Members, the shadow Chancellor has set out practical policies for jobs and growth. What a contrast and what a different message on how to support families feeling the impact of rising energy and food prices. What a different message to businesses worried about sales and accessing finance. What a different message to young people looking at the prospect of enormous debts when they leave university, with less and less hope of getting a job.

When Labour left office unemployment was falling, but today’s figures show that unemployment, at 2.57 million, is higher now than at any point during the recession, at a level last seen under a Tory Government. Youth unemployment, at 991,000, is the highest ever on record and is inching ever closer to 1 million. Unemployment for women has increased by 40,000 since May and is now above 1 million, the highest level since 1988. Last week’s GDP revisions show that GDP estimates for the second quarter had halved to just 0.1%.

Households are feeling the biggest squeeze on their income for 35 years, but our out-of-touch Prime Minister lectures hard-pressed families to pay off their credit card bills right now. Tell that to the ordinary families coping with the effects of the Government’s VAT hike. Tell that to the struggling small businesses trying to access credit from the banks. Tell that to the anxious young person who cannot even get a job. It is also crazy economics. Of course we all need to be prudent, but the Institute for Public Policy Research has calculated that if everyone were to pay off their credit card debts, consumer spending would be reduced by 6% and GDP would fall by 4%.

Growth has flatlined for nine months, starting before the European debt crisis. We have heard the Chancellor’s excuses. First he blamed the snow, then the royal wedding and now Europe. When will the Government stand up and take responsibility for their actions? The managing director of the IMF, Christine Lagarde, says growth is necessary for fiscal credibility, and she is right. It is because the economy has ground to a halt and unemployment is at 2.57 million that the Office for Budget Responsibility now forecasts that we will borrow £46 billion more over this Parliament than planned.

It is not possible to reduce the budget deficit while paying more in benefits and getting less through taxation. Austerity alone will not reduce the budget deficit without a plan for jobs and growth. As my right hon. Friend the Member for Edinburgh South West reminded us, 18 months ago unemployment was falling, and as my right hon. Friend the shadow Chancellor noted, John Maynard Keynes once said:

“When the facts change, I change my mind.”

John Maynard Keynes was a Liberal, and so too was the Chief Secretary to the Treasury. When he was a Liberal he said:

“We are in real danger of condemning a generation of young people to a cycle of unemployment and low expectations.”

How very prescient—on the day when figures reveal that youth unemployment has gone up to 991,000 under his watch. The Liberal Democrats were once progressives, but now they just represent failed economics, implementing the reckless policies that they said before the election would not work.

There has been much debate this afternoon about the growth strategy that the Government promised, instead of which we have simply had a strategy for failure. They increased VAT, costing families £450 a year, and cancelled the loan to Sheffield Forgemasters so that high-skilled jobs are now going to South Korea rather than south Yorkshire. They scrapped the regional development agencies and replaced them with a regional growth fund that is yet to spend a single penny. The Government have introduced what the Governor of the Bank of England described as the “weakest possible measures” to get banks lending—a ringing endorsement of their Project Merlin. Today the Government have announced the guarantee of a job interview for 50,000 young people, but young people want not just an interview but a guaranteed job or training—a real opportunity, which they had under a Labour Government before the general election and before the future jobs fund was scrapped by this Government. With policies such as these from the Government, no wonder the economic recovery has ground to a halt.

[Ian Lucas (Wrexham) (Lab)]

One of the most dreadful things that this Government are doing is that when they do spend money, for example on the rail or helicopter contracts, they do not support British businesses such as Bombardier and AgustaWestland but spend money on jobs and growth abroad. Should we not be spending British taxpayers’ money to preserve British jobs?

[Rachel Reeves]

I could not agree more with my hon. Friend, with 1,000 jobs going at Bombardier and Government policies putting people out of work and businesses out of business.

While the Government offer no relief, at least the Bank of England is offering some leadership, with an extra £75 billion through quantitative easing, which the Chancellor described just two years ago as

“the last resort of desperate governments when all…other policies have failed”.

Let me be frank. The last Labour Government were desperate to avoid a global recession becoming a global depression; desperate to ensure that unemployment did not hit the 3 million mark, as it did in the recessions of the 1980s and 1990s; and desperate to avoid the business failures and home repossessions that scarred our country in Tory recessions. Government Members should be desperate today, because unemployment is at a 17-year high, because borrowing in August reached a record high, because growth has stalled, and because plan A has failed.

Today, as we see the unemployment numbers, it would be nice to have a Government who reacted and said they have got it wrong. Instead, it takes Labour to come to the Chamber with a five-point plan: a £2 billion tax on bank bonuses and a guarantee of a job for young people; bringing forward long-term investment projects to get people back to work; cutting VAT temporarily to give immediate help to our high streets and to struggling families and pensioners; cutting VAT to 5% on home improvement repairs; and a one-year national insurance tax break for every small firm taking on extra workers. That is a five-point alternative that offers hope and unlocks opportunity.

We can call it what we will—plan A-plus, plan B, or the five-point plan—but this Government must come up with an alternative to help families struggling with rising prices and stagnant wages, to help businesses that cannot get a loan and are scared to take on new workers, to help young people who are facing record youth employment, and to help pensioners facing higher gas and electricity bills this winter. This Government must act for every struggling family, for every struggling business, and for every pensioner. They must act, with Labour’s five-point plan, to unlock the potential of every young person in Britain, to create jobs, and to get our economy growing. Their plan has failed. I urge hon. Members to support this motion.

--- Later in debate ---

[Danny Alexander]

I will not give way because I have little time to get through the points made in the debate.

Standard & Poor’s warned that our rating would come under pressure if the Government faltered in their commitment to fiscal consolidation. The markets have also backed us. When we came into government our gilt yields were tracking the likes of Spain and Italy. Since then, our yields have fallen to follow those of Germany.

Our plan makes a real difference to households and businesses. It allows families to stay in their homes and businesses to refinance their debt. As the Chancellor said, without a credible plan, interest rates would rise. A 1% rise in interest rates would take £10 billion out of the pockets of British families through higher mortgage costs, leading to higher repossessions and more job losses. That is the Opposition’s plan.

[Ian Lucas]

I am very grateful to the right hon. Gentleman for giving way. Given that youth unemployment is today approaching 1 million and that as a Liberal Democrat he touted for votes by offering the abolition of fees and by pursuing the policy of the Labour party, rather than the policy he is now pursuing, does he not think that it is entirely understandable that young people have no faith in politics? Should he not say sorry?

[Danny Alexander]

No, the hon. Gentleman should say sorry, and of course we are supporting Airbus, in his part of the country, as part of our strategy for creating jobs.

We have only to look across the eurozone to see the costs of political indecision and the price that comes from consolidating at the behest of the market rather than taking charge of one’s own destiny, as the Government have. We have seen the problems in the eurozone and are working to help, but we already have flexibility in our own plan. By taking the tough decisions that we have on fiscal policy, we have provided the space in which the Bank of England can act. In the Governor’s own words,

“monetary policy is the right way to take the strain of changes in the world economy.”

As we have already said, we are considering credit easing options as a way to inject money directly into the business sector. We will provide further details in the autumn statement, and I am grateful for the welcome given to that policy on both sides of the House.

Of course, today’s unemployment figures are a reminder of the difficult task that we face. Unemployment is not merely a statistic; it is a high cost for the individuals and families concerned. It is not a price worth paying, and that is why we will be relentless in our pursuit of growth.