Finance (No. 3) Bill

Jack Brereton Excerpts

2nd reading: House of Commons & Programme motion: House of Commons
Monday 12th November 2018 Commons Chamber

[Jack Brereton (Stoke-on-Trent South) (Con)]

It is a pleasure to speak on Second Reading.

After all the years of hard work since 2010, and the necessary repair of the public finances after the catastrophic failures of the last Labour Government, this Budget was a turning point for our country. The Government are meeting their fiscal rules three years early and the deficit has been reduced to its lowest level since 2001. Debt has started its first sustained fall in a generation. The Bill reflects the success of that hard work and it rewards the British people for what they have achieved.

No Government have money of their own, only taxpayers’ money. It is right that hardworking taxpayers be allowed to keep more of their own money now that the economy is back on track; people in Stoke-on-Trent have more money in their pockets due to the measures in the Bill. It is also right that a new path is set for the public finances that reflects the huge efficiencies and fiscal improvements that have been achieved. Combined with Brexit, the Bill means that after eight years of hard work to get out of the mess left behind by the Labour Government, those of us on the Conservative Benches can focus on the measures that will take our country forward to a global future in the decades ahead.

What a contrast in approach: a Conservative party working to take us forward to the 2070s against a Labour party scheming to take us back decades to the 1970s. In his initial remarks, the shadow Minister, who is no longer in his place, tried to say that the Conservatives are not a party of opportunity. I would like to ask him what he would say to my constituents, as well as millions across the country, who were subjected to a life of dependency and worthlessness under the last Labour Government and who are now in work thanks to Conservative policies.

At a time of momentous change as we deliver on Brexit, the Government’s continuing commitment to sound economic management is to be welcomed. There are continuing efforts to make the tax system fairer, with anti-avoidance measures to ensure that legitimate reliefs are not abused. In addition, there are measures to increase the generosity of certain reliefs and exemptions where they encourage behaviours that are beneficial to the economy and to society. For example, the quintupling of the annual investment allowance, from £200,000 to £1 million, is a strong response to the very temporary uncertainty that Brexit might bring.

That measure is hugely welcomed by manufacturers in Stoke-on-Trent South, as it will be across the country. Indeed, when I visited Walkers Nonsuch Toffee last week, it was very clear that these measures will see it invest in more new machinery to build on the great success it is experiencing. I can tell you, Madam Deputy Speaker, that I very much enjoyed tasting some of its products on my visit. A family business since 1894, it exports England’s finest toffee from my constituency right around the world, with many of its largest growing markets in South Korea, Australia and China. Equally, I welcome measures such as the 60% increase in the charity small trading tax exemption limit to £8,000 and £80,000 depending on turnover, and the extension of the first-year allowance for electric car charging points for four years. While there is a case to be made for having reliefs and exemptions to encourage beneficial outcomes, there is also a clear case for increasing taxes on harmful and detrimental behaviours. That is why I welcome the action on white, high-strength ciders and continuing strong fiscal disincentives to smoking, both of which are having major impacts on the lives of individuals, public health and our NHS.

In addition, I welcome the measures for a new tax on the largest online companies to ensure that they pay a fair share. That is very important for the revival of our town centres, as is reducing taxes on smaller retailers and putting in place funding for the town centres in places such as Longton and Fenton, which I hope will benefit from the additional funding for the conversion of some of the empty units.

For areas such as Stoke-on-Trent, which is made up of six historic market towns with a strong manufacturing tradition, opportunities have arisen for a sustained revival. The Office for National Statistics last week reported that

“around half of total production growth in Quarter 3 was driven by manufacturing.”

That is very good to see and suggests that the slippage in quarters one and two was anomalous to a longer-term trend of manufacturing growth under this Government. Goods exports are also back in quarter 3 to a position where they are rising faster than service exports, which is a positive sign for a country that needs to rebalance our national economy to areas where people are skilled and proud to make things. No manufacturers are more skilled and proud than the local advanced manufacturers of Stoke-on-Trent.

Moving on to trade and our global approach, we need to ensure that trade is more international as we move through Brexit. Global Britain starts from a solid economic base, underpinned, of course, by the attraction of a world-renowned, trusted, legal system and sound rules of governance. As a country that plays by the rules, the UK is a great partner to trade with and a great place to invest in. I know that the Government will rightly enter all trade negotiations in a spirit of optimism and generosity in offering free and fair rules-based trade deals. There are great opportunities ahead.

In Stoke-on-Trent, despite manufacturing making up 15% of the economy, I am afraid that we do not export enough of the fantastic products that we make, falling well behind our statistical neighbours in the rest of Staffordshire. Far too often, historical trade beyond the EU has been occurring by chance rather than from concerted efforts to promote British products. Brexit must lead to opportunities to broaden trade and especially to help smaller businesses in places such as Stoke-on-Trent to export more, and it is pleasing to see the Department for International Trade ramping up its efforts in these global markets. We can look to open up new channels for inflows and outflows of foreign direct investment, particularly to facilitate UK direct investment in sales and distribution operations beyond the EU, and look to strengthen our presence in key markets of the USA, the Commonwealth, South America and south-east Asia, which promise many opportunities for Stoke-on-Trent’s fantastic export offer.

There is much to be positive about in the Government championing free and fair trade, but it is inescapably the case that some of our competitors, in an effort to boost their state-aided, quasi-private businesses, do not always play by the rules. So, where we are rightly open to proffering carrots, we must also be pretty clear that we will keep a few sticks if the agreed rules with our new trade partners are not kept. I know from correspondence I have had with Department for International Trade Ministers and, indeed, the Prime Minister, that this is very much the case and the intention, moving forward.

Global Britain is our future and we must be prepared for that future so that we can seize the opportunities available on the world stage. The Bill certainly moves us forward to that future. Through a fairer tax system, growth deals, city deals, sector deals, local funds, transport projects, devolved funding and international trade support for local businesses on the world stage, this Government are ensuring that no part of the United Kingdom is left behind and, as part of that agenda, I am very happy to support the Bill tonight.

Finance (No. 3) Bill

Jack Brereton Excerpts

Committee: 1st sitting: House of Commons
Monday 19th November 2018 Commons Chamber

[Jack Brereton (Stoke-on-Trent South) (Con)]

It is a pleasure to speak in this part of the debate. I really do think that this is the best Finance Bill that we have seen in some years. I return to the point that I made on Second Reading: Governments do not have their own money, only taxpayers’ money. It is absolutely imperative to remember that and to remember that taxes are paid in the expectation that they will be spent wisely and necessarily. Where the Government can find a way to enable taxpayers to keep more of their own hard-earned money, they should do so.

Helping families in constituencies like mine better to meet the costs of living is absolutely critical. I am therefore a strong supporter of clause 5, raising the personal allowance for us all and the scope of the basic rate to more of the middle earners who have previously been dragged into higher rates of taxes than they should have faced. These are not the top earners, but will often be the likes of middle management, senior nurses, or lower-rank inspectors in the police, and they have previously been penalised by this punitive higher rate of tax.

The increase in the personal allowance is the latest in a line of such increases. This will mean that a typical basic-rate taxpayer will pay £1,205 less tax in the next tax year than they did in 2010-11. Importantly, the increase to £12,500 comes a year earlier than planned. That can happen because the public finances are in a better shape than had been predicted, thanks to the hard work of the British people and the sound fiscal management of my right hon. Friends the Chancellor and the Chief Secretary, and the Ministers on the Front Bench. They know that taxpayers’ money is taxpayers’ money, and they have rightly allowed taxpayers to keep more of it as soon as it has been possible to do so, as we see in these clauses. This is combined with inflation coming back under control and wages rising again in real terms. The lowest paid have not only been taken out of income tax altogether but enjoy an increased national living wage.

[Leo Docherty]

I share my hon. Friend’s thoughts about the increase in the personal allowance. Does he agree that one of the very significant positive things in this Finance Bill is also the—I am sorry; I will let him continue.

[Jack Brereton]

I thank my hon. Friend for his comments.

As I was saying, allowing taxpayers to keep more than it would have been possible to do previously is combined with inflation coming back under control and wages rising again in real terms. The lowest paid have not only been taken out of income tax altogether but enjoy an increased national living wage, thanks to this Government. We are seeing the lowest paid paying less tax but also bringing home more money. The annual earnings of a full-time—

[Alison Thewliss]

Does the hon. Gentleman not accept that the national living wage is not actually a wage that one can live on, and that it does not apply to those under the age of 25? In fact, the gap for those aged 16 and 17 has been going up every year.

[Jack Brereton]

The national living wage is a critical part of ensuring that some of the lowest paid in our society earn much more and take home more pay. Earnings for a full-time minimum-wage worker will have increased by £2,750 since it was introduced in April 2016.

[Leo Docherty]

rose—

[Jack Brereton]

My hon. Friend can have a better go this time.

[Leo Docherty]

I am very grateful to my hon. Friend for giving way and giving me another chance. He mentioned inflation. Does he share my view that the fact that the annual deficit has been reduced by 80% since 2010 is another very significant piece of progress with regard to inflation?

[Jack Brereton]

I agree with my hon. Friend’s comments, which show the responsible approach we on this side of the House have taken to the economy, compared with the approach the previous Labour Government took.

[Peter Dowd]

rose—

[Jack Brereton]

And now the hon. Gentleman is going to tell us about Labour’s future approach if they ever get back into office.

[Peter Dowd]

As the hon. Gentleman is talking about borrowing, does he agree that the Tory party in the last eight years has borrowed more money than all Labour Governments put together?

[Jack Brereton]

The hon. Gentleman will have seen the figures that show that debt is now coming down to lower levels than ever before, and we have seen the deficit back under control after the failings of the previous Labour Government who got us into an horrendous mess that working families in this country ended up paying for.

We are now seeing the numbers of low-paid workers at a record low, and we are seeing low taxpayers now paying record low levels of tax. The astonishing turnaround achieved in making work pay, not least through tax measures like those before us today, means that the Office for Budget Responsibility has now revised up its assumptions for the trend labour market participation rates and revised down its estimate of the equilibrium rate of employment. As the Treasury rightly highlights in the Red Book paragraph 1.15, both of these revisions raise the level of potential output, which is good news for the sustainability of the labour market boom which has undoubtedly been the greatest achievement of the policies pursued by this Conservative Government.

[Ruth George]

Would the hon. Gentleman not agree with the Institute for Fiscal Studies that the cumulative impact of personal tax and benefit reform since 2015 has been that the bottom two thirds of society is far worse off and that the only people who are better off under this Government’s policies are the top third?

[Jack Brereton]

I totally disagree. We have seen increases in the national living wage and reduced tax in this Budget, and further measures in this Budget to support UC.

[Vicky Ford (Chelmsford) (Con)]

Does my hon. Friend agree that the fact we should be looking at is the fact reported by the OECD that the proportion of jobs that are low paid is at the lowest level for the past two decades? We should be celebrating that.

[Jack Brereton]

That is absolutely right. We should be looking at those figures, not some of the figures being used by Opposition Members, who want to keep people on a level of pay that is lower than it would ever be, because they want to keep people out of work and keep people in the workless society we saw under the previous Labour Government.

We on this side of the House have made work pay, and the long-term benefits of doing so are clear in the expansion of our non-inflationary production potential. The last time unemployment was so low, 40 or more years ago, there were massive peaks in inflation. The contrast with today is stark and we should be proud of our work as a country in digging ourselves out of the mess left by the Labour party.

For people in Stoke-on-Trent making work pay has added to the renaissance of our fine, proud city and its industries, and the situation is the same in once-forgotten manufacturing towns across the country, which are seeing a revival in real jobs for real levels of take home pay. Indeed the ONS estimates that real household disposable income per head was 4% higher in quarter 2 of 2018 than at the start of 2010, and the OBR expects it will increase by a further 3.2% by the end of 2023. At the same time, income inequality is down, and is lower than it was in 2010. To refute a number of the claims made from the Opposition Front Bench, the number of children in absolute low-income poverty has fallen since 2010.

[Peter Dowd]

I hear what the hon. Gentleman says, but if he is so convinced of his policies in relation to the issues he is talking about, why will he not support the provision in section 5 of the Act of an impact assessment on child poverty and equality? What has he got to fear?

[Jack Brereton]

The reason is that the facts show that the number of children living in absolute poverty has fallen since 2010 and will continue to fall, because of the policies of this Conservative Government.

[Vicky Ford]

Does my hon. Friend agree that for every £1 those on low income pay in tax, £4 of public spending goes towards them, whereas for those on higher income, for every £5 they pay in tax they receive only £1 back in public spending, and that is because we are a fair society, which means that well-off people contribute to helping those on lower incomes?

[Jack Brereton]

I thank my hon. Friend for those comments, which show that the highest earners are paying their fair share, while the lowest paid in society are being supported as much as we can. That is what this Government have been doing: reducing taxes for the lowest paid in society and ensuring that the lowest paid can be paid more.

I reject many of the views of the hon. Member for Oldham East and Saddleworth (Debbie Abrahams). She made some comments about statistics and then used statistics in her own way. I will also refer to the G7 by saying that only in the UK and Japan have the lowest paid seen their wages grow in that time, and income inequality is lower than it was previously.

[Debbie Abrahams]

On a point of order, Dame Eleanor. The hon. Member for Stoke-on-Trent South (Jack Brereton) suggests that I have used statistics inappropriately. I can cite all my sources of evidence; can he?

[The First Deputy Chairman of Ways and Means (Dame Eleanor Laing)]

Order. The hon. Lady knows that that is not a point of order for the Chair; it is a point of debate, and, as I have said many times in here—and so has Mr Speaker—fortunately it is not the duty of the Chair to decide between one set of statistics and another. It all depends on how one applies the statistics, and the hon. Lady is perfectly at liberty to intervene on the hon. Member for Stoke-on-Trent South (Jack Brereton), as is he to take an intervention from her, where they can continue the argument between them, but I will take no part in it.

[Jack Brereton]

Thank you, Dame Eleanor. The statistics I have used show that income inequality is lower than it was before the crash, and this is all alongside our continuing to reduce the deficit and debt, and meeting our targets three years early, while continuing to invest more in our vital public services. This responsible approach to public finances has seen our economy and the number of jobs boom, compared with the spiralling-out-of-control economy under Labour.

I was pleased that the Minister with responsibility for high streets—the Under-Secretary of State for Housing, Communities and Local Government, my hon. Friend the Member for Rossendale and Darwen (Jake Berry)—visited my constituency on Friday and talked about some of the measures we are taking in this Budget to support towns like Longton and Fenton in my constituency, helping to address some of the issues on the high street. I hope we can get some of the £650 million pot announced in the Budget to convert many of their empty premises back into use and help with business rates to ensure that retailers with a rateable value of under £51,000 will receive relief, as that will be hugely welcome by the smallest retailers in our towns.

I also want to comment on some of the views expressed by Opposition Members about entrepreneurs’ relief. I was shocked that some of the views were so anti-business and anti-enterprise. We must condemn those views, which are damaging businesses in constituencies up and down the country.

[Peter Dowd]

rose—

[Jack Brereton]

Can the hon. Gentleman answer that one?

[Peter Dowd]

The hon. Gentleman must not misquote. We are looking for an assessment of entrepreneurs’ relief, and if he believes that what he suggests is good value for money for taxpayers he would support a review of that relief. What is wrong with that?

[Jack Brereton]

I just wanted to talk about the relief in Stoke-on-Trent as well. Entrepreneurs’ relief in my constituency will help many businesses that are starting up. We have some fantastic retention rates in Stoke-on-Trent; we have some of the highest new business start-up retention rates in the country, and that relief is critical in helping those businesses.

The measures introduced in the Budget to increase the time period from 12 to 24 months will help to ensure that it is businesses that are genuinely contributing to our economy that will receive the relief, making a huge contribution to the development of new technologies and innovation that we so much support in our economies throughout the country.

The proposed reductions in corporation tax in the Budget and the relief on capital allowances, which my hon. Friend the Member for Gloucester (Richard Graham) spoke about, will also be a huge support for many of the businesses in my constituency, particularly manufacturers. Around 15% of the economy in Stoke-on-Trent is made up of manufacturing businesses. Those measures will be a huge support for those businesses, increasing the amount of machinery and equipment that they can buy. Increasing relief on capital allowances and the investment allowance up to £1 million will help more of those businesses to buy new equipment and invest in the plant in their factories. I welcome that measure, which will help not just those manufacturing businesses, but the huge number of businesses up and down the country that produce that machinery and the workforces in those industries, which are so valued up and down the country.

[Rachel Maclean]

Does my hon. Friend agree that when we are talking about support for businesses, through entrepreneurs’ relief and all these other measures, we are talking not just about the people who own those businesses, but about the people working in them who have a job because of these measures?

[Jack Brereton]

Absolutely, and we want to see the number of those workers and the opportunities and jobs in those industries continue to grow. That is why it is so shocking to hear views from the Opposition that would damage the jobs miracle that we have seen over the last few years in this country.

Wages are rising, inflation is stable, unemployment has been so low for so long that the Office for Budget Responsibility believes that the equilibrium rate has fallen, income inequality is down and disposable income is up. This is the extraordinary record of making work pay. It is a huge economic success story, after the financial meltdown that the Labour party presided over. I want to see the success continue, and I know that to do so this House must support the Bill. I shall continue to do so, not least because of the concrete measures it contains for putting money in the pockets of Stoke-on-Trent’s very many hard-working people.

[Thelma Walker (Colne Valley) (Lab)]

I begin by reflecting on the purpose of our society—the purpose of our communities, locally and nationally. The great Labour Prime Minister Clement Attlee said:

“No social system will bring us happiness, health and prosperity unless it is inspired by something greater than materialism.”

I agree with Clement Attlee. To me and many others in this House, the aspiration is to create and be part of a community and society that cares for one another and enables everyone to succeed in life, in whatever form success takes—a society that is safe and secure from cradle to grave and that provides accessible healthcare, quality housing, outstanding education and secure employment. A Government’s ultimate goal should be the wellbeing of its citizens, and there is much evidence to suggest that higher levels of wellbeing can lead to higher levels of job performance and productivity and greater job satisfaction. That is the society I want to live in.

Unfortunately, to say that that is not a reality under the current Government is an understatement. This Finance Bill does nothing to deliver the people of this country’s wellbeing. On new clause 2, a UN report just last week told us that the Government have inflicted “great misery” on our people, with

“punitive, mean-spirited and often callous”

austerity policies, driven by a political desire to undertake social re-engineering rather than by economic necessity. This is from the United Nations poverty envoy. We are told that levels of child poverty are

“not just a disgrace, but a social calamity and economic disaster”.

The Budget was an opportunity to make some attempt to right those wrongs. Did it offer full and fair funding for our teachers and education service? No. Did it offer reassurance for those suffering the consequences of the cruel and callous roll-out of universal credit? No. Did it attempt to put an end to the causes of homelessness and destitution? No. Did it commit to funding our police services to help halt the massive increase in violent crime? No. Did it commit to funding our local councils, suffering 50% cuts, which are damaging the very fabric of our society? No. Did it do anything to relieve the hardship felt by so many women across our country? No.

Some 14 million of our citizens—our people; a fifth of the population—are living in poverty. One and a half million are destitute, with no money for even basic essentials. Up to 40% of children will be living in poverty by 2022. This Finance Bill is about lip service and rhetoric—pretending to care about the poor and vulnerable, but doing nothing substantial to address the misery and suffering felt by so many in our society. There is so much poverty and inequality in our country, and our country has never been more miserable or divided—divided geographically, generationally and economically. We have poverty in our cities, towns and villages, but under this Government there is a poverty of compassion, a poverty of empathy and a poverty of insight into what real, ordinary people’s lives are like.

My mum said to me a few years before her death, having lived through the depression in the 1930s and survived the Manchester blitz in the second world war: “I’m glad I’m at the end of my life and not at the start when I look at what this Government are doing to our society. They’re punishing people for being poor”. Enough now. The people of this country have had enough. Labour will keep up the pressure and fight for those who are stuck in poor-quality housing, those who are struggling to feed their families and those who are not yet old enough to understand what poverty is and how it may impact their life. They deserve better.

I would like to finish with a quotation from the philosopher Thomas Paine:

“It is error only, and not truth, that shrinks from inquiry.”

It is interesting that the Government are currently facing so many questions and inquiries, both within this House and beyond.