Corporate Tax Avoidance

Jackie Doyle-Price Excerpts

Monday 7th January 2013 Commons Chamber

[Jackie Doyle-Price (Thurrock) (Con)]

I am very pleased to follow my hon. Friend the Member for Stevenage (Stephen McPartland). I think that his excellent initiative will do much to provide transparency, and to enable consumers to make informed decisions. If there is one thing that the debate has shown us, it is that consumer power is perhaps the most effective weapon that we have when it comes to ensuring that companies pay their fair share of tax.

I pay tribute to my hon. Friend the Member for Redcar (Ian Swales) for securing this important debate. Let me say for the benefit of some of my colleagues that I am happy to refer to him as my hon. Friend, and that I am gratified to see that so many of his own colleagues are present. That contrasts markedly with the attendance on the Opposition Benches.

As my hon. Friend the Member for Redcar will know, the debate was prompted partly by the work of the Public Accounts Committee—of which I am proud to be a member—and its work on tax avoidance by global companies. Our report at the back-end of last year found that HMRC’s performance in that regard was perhaps not as good as we would have liked.

I shall concentrate on some of the wider lessons learnt from the inquiry about how to make the UK tax system efficient and effective, while remaining competitive. I would like to associate myself with the comments made by my hon. Friend the Member for Cities of London and Westminster (Mark Field) and others about the debate becoming unduly political and playing to the gallery. It is good politics to attack global names as tax dodgers in the media, but we have to be careful about the messages we send out to potential investors in our country. I am pleased that, in the main, this debate has been a lot more mature than the debate that has played out in the media.

Members will know that the Committee heard evidence from Google, Starbucks and Amazon. We looked at the extent to which they exported their profits to more favourable jurisdictions and whether those arrangements could be described as fair. In that respect, the evidence supplied by Amazon was the least convincing—that has very much been the flavour of this debate. Those of us who have used Amazon—I am sure that many of us have—think we were dealing with a company in Slough, and those of us who visited our local post offices over Christmas would have seen just how much business Amazon was doing, yet, despite booking billions of pounds of sales through the UK, it pays less than £2 million in corporation tax, as has been said, with the profits being exported to the parent company in Luxembourg on more favourable terms.

Before we get too excited, we need to recognise that this is one of the things the European single market contributes to achieving—a company, wherever it is based in Europe, can sell across member states. The question is why, when Amazon has so much business here, it has chosen not to locate here. Ultimately, there is nothing wrong with trying to limit tax liability. After all, that money is earned and owned by the individuals and business; it does not belong to the Government. We need to look at what more we can do to encourage those firms to be more honest in their reporting of how much money is made here. In that sense, I associate myself with the comments of my hon. Friend the Member for South Norfolk (Mr Bacon): this is about simplicity of the tax system.

[Paul Farrelly]

Does the hon. Lady agree that it is not just a case of headline corporation tax rates—for instance, ours compared with Luxembourg’s—but about the special deals that those companies can do with the authorities in Luxembourg, the Republic of Ireland or the Netherlands, through which they pay very little tax and export their profits to tax havens? Does she agree that we need to do more at European level to ensure that those sorts of special deals do not happen in one jurisdiction in a way that disfavours another jurisdiction?

[Jackie Doyle-Price]

I suspect this will be a rare occasion, but I totally agree with the hon. Gentleman. The important point to which he alludes is that we cannot afford to take unilateral action in this area. We live in a global marketplace, and in reality some countries—even members of the EU—are perhaps less honourable in their dealings under tax treaties than we are. We all need to be a lot more savvy and a bit more mature about what will make our tax system more efficient and competitive, and that comes down to simplifying rates.

The hon. Member for Newcastle-under-Lyme (Paul Farrelly) mentioned the sweetheart deals made by other countries. In that respect, I would like to highlight the issue of Google. Google is an internet firm, but the language of the internet is English, so why would a company such as Google choose Ireland over Britain? It can only have been because of the offers made to it. Again, we need to use the institutions of the EU to ensure a level playing field and a genuine single market. We need to recognise that companies will locate where they like and make sure that everybody is doing their bit to ensure a genuinely competitive market between states.

In response to the comments of my hon. Friend the Member for Stevenage, I mentioned the issue of consumer power. Perhaps the most telling thing about what has happened since the PAC’s inquiry is how Starbucks has reacted. Amazon and Google are in near-monopoly positions, so competition cannot make them change their behaviour. There is no doubt that the negative publicity Starbucks faced following our inquiry forced it to make its gesture of offering to pay more corporation tax. We are in the bizarre position where that company seems to behave as if the amount of tax it pays is very much a voluntary contribution. It is incumbent on the Treasury and HMRC to make it clear that such a practice will not be tolerated.

I wish to highlight another issue that the Committee found when it examined Starbucks and the more sinister impact it had on the marketplace here in the UK. This comes back to the degree to which the ability to export taxes on profits enables these companies to engage in anti-competitive behaviour. Despite the phenomenal growth in the presence of Starbucks throughout the UK, we were told throughout our inquiries that Starbucks had made no profits here. We were also told that Starbucks was committed to expanding its operation, as its presence in the UK was important to it. Those two statements simply do not add up. If we look a little more deeply, we find that it seems the most significant losses were run up during a bidding war with Coffee Republic for certain sites on our high streets, with the result being that Starbucks entered into more expensive contracts for property and Coffee Republic was reduced to having a mere fraction of the stores it had had hitherto. So we are talking about a global provider engaging in very aggressive anti-competitive behaviour against a home-grown provider, and the tax system, in effect, subsidising it to do so. I would like the Minister and the Treasury to reflect on the extent to which that sort of behaviour gives unfair competitive advantages to foreign providers.

I am running out of time, so I shall just come back to one point: we cannot afford to act unilaterally. I call on the Government to make full use of relationships in the G20, the OECD and the EU to lead a global effort to tackle these unfair and uncompetitive practices.

Autumn Statement

Jackie Doyle-Price Excerpts

Wednesday 5th December 2012 Commons Chamber

[Mr Osborne]

We welcome the work that the Silk commission has done. It asks some big questions about the devolution of fiscal powers to Wales. The Treasury and the Wales Office here in London are sitting down with the Welsh Assembly Government to work through the details of the proposals. I hope that the hon. Gentleman understands and accepts that we have taken a big step forward with the Silk commission and now have a text we can work on. How much we can implement will, of course, be a matter for democratic decisions in this House and in the Welsh Assembly in Cardiff.

[Jackie Doyle-Price (Thurrock) (Con)]

Businesses across south Essex will welcome the commitment that my right hon. Friend has made to improving the road infrastructure around the M25, which is its biggest constraint on growth and job creation. That illustrates the Government’s real commitment to creating more jobs in this vibrant sector. Does he agree that the Exchequer will benefit hugely from the increased tax receipts that will be generated by those increases in jobs and growth?

[Mr Osborne]

I congratulate my hon. Friend on the campaign she has fought on behalf of her constituents, and on behalf of jobs in Thurrock and elsewhere. The junction 30 upgrade will help to secure the largest port investment in the whole of northern Europe—it is a fantastic thing for the area, it will create many jobs and she has played a real part in helping to deliver it.

Public Service Pensions Bill

Jackie Doyle-Price Excerpts

Monday 29th October 2012 Commons Chamber

[Jackie Doyle-Price (Thurrock) (Con)]

I am pleased that Labour Members have acknowledged the need for the Bill and the need to reform our public service pensions. I was struck by several good points made by the hon. Member for Dumfries and Galloway (Mr Brown) and the right hon. Member for Wentworth and Dearne (John Healey), although I found the desire to pit Government Members against public servants disappointingly partisan. I have to advise Opposition Members that Government Members equally respect the contribution of our public servants. We have retired teachers and former armed service personnel here, and we greatly value their contribution. What sits behind the Bill is the desire to make public service pensions secure and beneficial for the long term.

Given that we are all living longer, it is simply necessary to ask people to pay higher contributions. Unless we do so, we will have to find more money from all taxpayers to support the deficit and the provision of public sector pensions. That is simply not fair. The cost to the taxpayer of public service pensions has risen to £32 billion a year, which is an increase of a third over the past decade. They cost just under 1% of gross domestic product in 1970, but the figure is 2% today and, without change, it will continue to rise. The average 60-year-old now lives 10 years longer than was the case in the 1970s, so it is simply not sustainable to leave pensions as they are.

We are tackling the challenge of funding public sector pensions at the same time as we are attacking our structural deficit and the aftermath of a financial crisis. That has led some of our public servants to conclude that they are being asked to bear the consequences of the actions of the bankers, but that is simply not the case. We are where we are because our current system is not financially sustainable, and it is disappointing that Opposition Members allow people to think otherwise. Even without the deficit, and even if the financial crisis had never happened, we would have to reform our public pensions to make them affordable and to secure their long-term future. With these reforms, our public servants will be guaranteed a secure pension with terms that are as generous as those enjoyed by anyone.

The need for change is simple. We all need to make provision for our own retirement, and if we do not put more in, the taxpayer will have to. The Bill will cut the costs to taxpayers by nearly half, while continuing to ensure that the public sector receives the best pensions available. The Bill is therefore a good deal for taxpayers and a good deal for public service workers. It is frankly unfair to expect future generations to pick up the tab by paying more taxes, especially when they are already dealing with the consequences of financial irresponsibility by facing higher taxes and higher house prices. I want all people—whether they work in the private or the public sector—to be able to keep more of what they earn and to pay less in tax. All taxpayers will benefit if we can reduce the burdens on the state and make public pensions self-funding.

Even with these changes, our public pensions will continue to be among the best available. They will also be progressive. A switch to career average pensions across the board will reduce taxpayer liability while letting employees keep their defined benefits. The pensions will also be fairer to all. Final salary schemes disproportionately benefit those on the highest earnings, and many low-paid workers will get a better pension under the Bill. I am pleased that the Government have made changes to benefit the lowest earners, meaning that 15% of our public sector workers will not have to make an increased contribution. I am also pleased that benefits that have been built up will be protected and that members will continue to receive a guaranteed benefit in retirement.

[James Wharton (Stockton South) (Con)]

I am listening to my hon. Friend’s speech with great interest. We have already heard a lot about retrospection and the importance of certainty. Is it not the case that the reforms will hopefully give long-term certainty about the affordability of public sector pensions, so that future Governments will not have to review these pensions yet again and people will be able to plan properly for their retirements?

[Jackie Doyle-Price]

I completely agree with my hon. Friend. It is important that we bite the bullet now and lay the foundations for future security. If we delay, we will be asking for more contributions from taxpayers and workers themselves, so it makes perfect sense to deal with the problem. We cannot postpone the inevitable, and Government Members are not prepared to do so.

I am sure that many Members will have received representations on these issues. Most of those that I have received have come from police officers who are worried about the changes. Most public sector employees have recognised that the terms under which they were paying into their pensions were not sustainable in the longer term, not least because they have seen what happened to the pension provision of their friends and family members in the private sector. People in the private sector would have to contribute more than a third of their salary each year to get an equivalent pension, so I am not surprised that only a third of public sector workers voted to strike over this issue last November.

[Mark Reckless (Rochester and Strood) (Con)]

I understand that the public schemes are generally generous in comparison with those in the private sector, but does my hon. Friend have a view on the relative generosity of the police scheme, on which we have received a lot of representations? The police clearly have quite a high pension, but they pay a large amount in. Is it fair that they have had to pay so much more than civil servants, for example, whose contribution is much smaller?

[Jackie Doyle-Price]

My hon. Friend makes a good point. We will benefit from an examination of the individual schemes in Committee. My hon. Friend the Member for Bromley and Chislehurst (Robert Neill) made several good points about the financial sustainability of the local government scheme compared with others. We need to look at what we expect of all our public servants in the round, and the issues raised about the police are quite persuasive. We need to look in detail at what we are proposing not just for public sector workers as a group, but for individual worker groups. We also need to remind public sector workers who are witnessing the debate that their accrued rights are protected, and that there will be protection for those who are within 10 years of retirement.

The Bill will deliver sustainable public service pensions. It will almost halve the cost to taxpayers, and it will rightly ensure that public sector workers continue to receive the best available pensions. It provides a good deal for the taxpayer and for public servants, and I am happy to support it.

Jobs and Growth

Jackie Doyle-Price Excerpts

Thursday 17th May 2012 Commons Chamber

[Jackie Doyle-Price (Thurrock) (Con)]

Let me begin by emphasising that the priority that the Government are making of dealing with the deficit remains definitely the right one. Some of my hon. Friends have drawn attention to the emerging view that there is a choice between pursuing growth on one hand and pursuing austerity and dealing with the deficit on the other. The simple fact is that deficit reduction and the pursuit of growth are not mutually exclusive; indeed, we lay the foundations for lasting growth when we go back to living within our means.

Jobs and growth rely on investment by individuals and businesses, not on Government spending. We must not be complacent about the economic challenges that face the country, which, as many Members have recognised, are being exacerbated by the uncertainty and lack of confidence prompted by the eurozone crisis, but the need to hold our nerve and pursue measures that will strengthen our competitiveness is more important than ever at this time of economic turbulence.

Let us look at the realities of what is happening in the economy. Of course unemployment remains a great challenge. It is currently too high, and we need to do much more to ensure that everyone who wishes to work can find a job. However, it is also true that employment is on the rise and new jobs are being created. Many thousands of jobs are appearing on the horizon in my constituency. The Lakeside shopping centre is to be expanded, which will create new retail jobs. The new London Gateway port will create many thousands of new jobs, and is beginning to recruit for them. It is one of the largest inward investments in the country. The existing port of Tilbury, which has just celebrated its 125th anniversary, is also being expanded, with the promise of a further 10,000 jobs. Despite the global challenges, there is good news in our economy.

I was struck by the comments of the right hon. Member for Barking (Margaret Hodge), whose constituency is next door but one to mine. We are linked by the A13 and the c2c rail link. A 15-minute journey for her constituents will give them access to the new jobs that are being created on my patch. Let me say to all Members that when times are difficult, it is our role as leaders to inspire and encourage, not to tell our constituents that there is no hope.

In order to maximise the opportunities afforded by investment, the Government must remain vigilant in playing their part in building a competitive economy. Ministers must not be complacent about the growth that we are experiencing; additional measures are still needed to enable us to maximise the potential of that growth. That applies in two specific areas: we need to continue to invest in skills to ensure that our work force has the skills that employers need and want, and we need to ensure that our infrastructure is fit for purpose.

I have talked about the massive growth in the port facilities in my constituency. Within this decade, more cargo will be landed in Thurrock than anywhere else in the country. However, in order for that cargo to go where it needs to be—and, equally, to move the new manufacturing products that we will be exporting—we will need sufficient capacity in the road network to enable those items to be moved around the country. With that in mind, I welcome the recent announcement by the Under-Secretary of State for Transport, my hon. Friend the Member for Hemel Hempstead (Mike Penning) that we are finally looking at designing and working up proposals to improve junction 30 of the M25. That single project alone will unlock so much economic capacity in south Essex and will be a big tool in sustaining future growth. However, having made the announcement, my hon. Friend must do absolutely everything he can to ensure that the solution is fit for purpose. We cannot afford a sticking plaster; it has to deliver additional capacity. To be frank, the measure is a long time coming. It should have been done by the last Government when they widened the M25, but as usual when it came to infrastructure, they were very short-sighted.

The second issue I would like to address is that of skills, particularly for the younger unemployed, who remain a significant challenge for us. I welcome the expansion of apprenticeships that we have witnessed—they have doubled in Thurrock, from 400 to 830 this year—but we also need to consider self-employed apprenticeships.

[Several hon. Members]

rose—

Amendment of the Law

Jackie Doyle-Price Excerpts

Thursday 22nd March 2012 Commons Chamber

[Jackie Doyle-Price (Thurrock) (Con)]

I am grateful for the opportunity to contribute to this debate and congratulate the Government on their increase of the personal tax allowance. I believe that a defining characteristic of the coalition Government is that we are taking so many more people who can least afford it out of paying tax altogether. It is an achievement of which we can be proud, and which reflects on both parties in the coalition. The measure also reflects the fact that Government Members have the right values when it comes to deciding who carries the burden of paying for public services. It should not be the lowest paid. We need to reward work and encourage aspiration.

The Opposition response has been predictable and disappointing. I was reminded why I got involved in politics in the first place many years ago when I heard the language of class war and envy being expressed by Opposition Members. They say, “Same old Tories,” but I say, “Same old socialists.” We have heard today the final nail going into the coffin of new Labour. The socialists are back in charge.

Let us be clear. The Government inherited an economy in which the state was borrowing more than it could afford. We certainly were not living within our means. The Chancellor’s achievement is that he has been able to reduce borrowing and establish credibility in the eyes of the markets, with the result that we retain confidence and continue to benefit from low interest rates. Our constituents benefit from lower mortgages.

I wholeheartedly welcome the Government’s decision to issue a statement to each taxpayer to explain how much of their tax is going on various areas of spending. It will strengthen the accountability of Government to the taxpayers. We on these Benches never forget that it is taxpayers’ money and we need to make sure that taxpayers have the opportunity to judge whether we are spending their money wisely and delivering the outcomes they wish to see.

What we really need now to move our economy on is a strategy for growth and job creation, and I wish to focus my remarks on those elements. I welcome the Government’s commitment to reviewing airport capacity in the south-east as that is clearly important for our international competitiveness. There has been a growing enthusiasm for a Thames estuary airport, most notably on the part of the Mayor of London. I have to put on notice my firm opposition to such a proposition. My objection is really that the Thames estuary reaches out to the rest of the world by ship and sea. In fact, the motto of the borough of Thurrock is “By Thames to all the Peoples of the World”. I want to retain the Thames estuary as a shipping centre, not as a centre for an airport.

The west London advocates of such an airport seem to think that north Kent and south Essex are economic wastelands waiting to be transformed, but nothing could be further from the truth. While the docks in east London have gone, they have moved east to accommodate the ever-larger ships. The ports in Thurrock are thriving and growing. The investment by DP World at Shell Haven and by Forth Ports at Tilbury docks mean that this sector will go from strength to strength. Within a couple of years, Thurrock will be the port capital of this country and it will strengthen the port of London and cement Thurrock’s role as a major logistics hub.

The debate about the future of a hub airport would have severe implications for Heathrow, if the new airport were constructed. The economic dislocation caused by such a move would be seismic. It would cost jobs and shift business: it would be displacement, not new economic activity. I hope very much that the review will consider what more can be done for Heathrow.

[Lorely Burt]

I totally agree with my hon. Friend about the inadvisability of a further airport in her lovely constituency. Does she agree that we already have the capacity in the west midlands—Birmingham international airport has 40 million spare passenger places?

[Jackie Doyle-Price]

I thank my hon. Friend for that intervention and I think a lot could be done by just increasing connectivity between existing airport capacity.

In the little time I have left I wish to address the issue of energy. The Chancellor has given notice that he will bring forward an energy strategy to look at what can be done to encourage more gas-fired power generation. I want to put on record a plea for biomass-fuelled generation to be given greater prominence in our energy mix. As part of a shift to more energy generation from renewables, we have had considerable emphasis on solar and wind, but when it comes to generating serious quantities of energy, biomass is clearly a great way forward. We are heading towards a situation in which a number of coal-fired stations will need to close due to their non-compliance with the large combustion plants directive from the EU. These stations are sitting on top of connections to the national grid and we could do much more to encourage energy companies to look at whether they can replace the redundant coal-fired plants with new plants that generate from biomass. That is something that the power station in Tilbury, run by RWE npower, is determined to do.

Opposition Members have mentioned regional pay. We already have regional pay. I live but two miles away from the boundary with London so public sector workers in my constituency are less well off than their London counterparts as they do not receive London weighting. We do not struggle to fill those public sector jobs. Public sector wages lag far behind those in the private sector in my constituency, and we need to encourage that elsewhere because we need to ensure that we are attracting the best talent into private sector jobs.

Financial Services Bill

Jackie Doyle-Price Excerpts

Monday 6th February 2012 Commons Chamber

[Jackie Doyle-Price (Thurrock) (Con)]

It is a great pleasure to have an opportunity to speak in what, in the main, has been a well-informed and thoughtful debate, and I pay tribute to all who have contributed to it. I want to pick up on some of the themes in the Joint Committee report, which my right hon. Friend the Member for Hitchin and Harpenden (Mr Lilley) has highlighted.

While the proposed structural reforms are welcome, there must also be changes in the culture and behaviour of the regulators and the firms they are dealing with if we are to deliver an appropriate system of financial regulation. We need a change in the regulatory culture and philosophy that will enable regulators to tackle issues as they emerge, rather than after the event.

We also need a culture in which politicians allow the regulators to do their jobs. I will be looking for reassurances from Ministers that they will not interfere with regulators and that regulators will be empowered to do the job given to them in law. As we have seen from the FSA report into RBS, under the last Government politicians were all too keen to tell the FSA to back off from being overly intrusive in its regulation. There can be no accountability if politicians get in the way of regulators doing their jobs as set out in law.

We must also ensure that the new regulators do not fall victim to regulatory capture. There was much criticism of the FSA following the collapse of HBOS and the revelation that a whistleblower had warned about the management of risk within the business. The FSA did write to HBOS and asked that action be taken in response to the issues highlighted by the whistleblower, but clearly the action taken was not sufficient. It might be noted that Sir James Crosby, the former chairman of HBOS, became the deputy chairman of the FSA. There are, of course, advantages in attracting senior practitioners to the boards of the new regulators. As we have discussed, we need people in place who understand the models of business and the financial products. However, we must not allow relationships between firms and the regulator to become too cosy and thereby to prohibit effective challenge.

I particularly welcome the creation of the new Financial Conduct Authority, which gives an opportunity to deliver much stronger protections for consumers. I say that as somebody who used to be a regulator in the consumer division at the FSA and an adviser to the Financial Services Consumer Panel. One of the comments made at the time of the financial crisis was that the FSA had spent too much time looking at conduct issues and not enough time considering prudential issues. In my experience however, it was not particularly good at conduct either. Again, we return to the point about the FSA not being empowered to do its job. It took five years for the FSA to deal with payment protection insurance mis-selling. The industry hired lots of lawyers to argue that there was no regulation to stop what it was doing, leaving the FSA powerless to take action without legal challenge even though it was blatantly obvious that the industry was mis-selling and ripping off consumers.

In such an environment, the regulator needs real teeth. It also needs the support of politicians and Ministers. It does not need politicians getting in its way; instead, it needs their support. The regulator will never be able to match the legal resources that the amassed banks can mobilise and it will therefore face an unequal fight unless we stand behind it when there is consumer detriment. Ministers need to be prepared to set out what behaviours they consider to be unacceptable. We have talked about naming and shaming. We need to think about how much further we might go in that regard. We might learn from what the Prime Minister did with the energy companies just a few months ago. If we were to give a signal that such behaviour will not be tolerated, that would give the regulator the clout to encourage firms to change their behaviour.

Clearly, that has been absent from our financial services regulatory regime. Instead, we have had an environment where the Prime Minister, the Chancellor and the City Minister were calling for light-touch regulation. That led to pressure on the FSA. We have heard today about the 8,000 rules that led to calls for light-touch regulation, but that focus on rules clouded the issue. What was needed was an environment where the regulator could tackle the risk of consumer detriment within the business it was supervising. We needed fewer rules, not a less active regulator.

That is where we come back to the whole issue of culture and behaviour by the regulator and the firms. We need a regulator that provides an appropriate challenge, and one that can exploit the source of profit in the business model and ensure that institutions treat their customers fairly. We need a regulator that challenges the behaviour of the firm, not its compliance with individual rules, and which will make it clear who is accountable for what in the regulatory system.

Finally, I wish to give my support for the transfer of the regulation of credit to the new Financial Conduct Authority. Consumer debt is probably the biggest cause of detriment to our financial industry and it has always lacked any transparency; it was not clear who was responsible for regulating that. The Office of Fair Trading has been a rather anonymous organisation to the public. As we have heard, the proposal also gives us the opportunity to ensure that the new high-cost lenders can be tackled. We have heard lots of discussion about the need for price regulation and caps, but this is about having responsible lending rules and making sure that a suite of products are offered to fit every consumer’s circumstance. I look forward to engaging in the debate further as the Minister develops those proposals, and I give my wholehearted endorsement to the Bill.

[Several hon. Members]

rose—

Jobs and Growth

Jackie Doyle-Price Excerpts

Wednesday 12th October 2011 Commons Chamber

[Jackie Doyle-Price (Thurrock) (Con)]

It is a great pleasure to follow the hon. Member for Bassetlaw (John Mann). I was rather shocked to find myself agreeing with a number of his constructive suggestions, which highlights the fact that this debate has been one of contrasts. There have been some very constructive contributions from Members on both sides of the House on how we can do more to encourage growth, but some have been disappointingly partisan. Our constituents expect us to give wise counsel when discussing important issues such as job creation and economic growth, not to engage in party political spats.

I think that we would all agree that the contraction of the economy and the financial crisis were inevitably going to impact on economic growth. The major fault line between the two sides of the House appears to be the role that the Government can play in addressing that. The Opposition keep repeating their call that the Government must slow the rate at which we are cutting, but the irresponsible thing to do was to spend more than the country could afford in the first place. Trying to right that wrong by spending more money that we do not have is not the way to fuel growth. At the heart of the Opposition’s motion is the notion that Government spending can pull us out of the recession, but again that is simply not the case. It is time the Labour party learned that it is people and businesses that generate wealth, not the Government. It is our job as a Government to facilitate and enable private businesses, not to try to spend our way out of recession and load those businesses and individual owners with higher tax bills to meet that spending and to service the inevitable debt.

Some Opposition Members have done their best to highlight everything that is ill in the world, but we also have to recognise that a lot is going well in this country. Only last week my right hon. Friend the Secretary of State for Business, Innovation and Skills and the Under-Secretary of State for Transport, my hon. Friend the Member for Hemel Hempstead (Mike Penning), the Minister responsible for shipping, came down to the borough of Thurrock to celebrate the investment in Britain’s new global shipping port and logistics centre. That investment of more than $1 billion represents the largest job-creation project in this country at present, with the potential to create up to 36,000 jobs in what will be Europe’s largest logistics park and, in the short term, 1,000 jobs as the next phase of the project kicks off.

However, the port’s contribution to the economy does not end there. Rather, it is a great illustration of how private investment in one place has a positive effect throughout the local economy. Businesses around the region—27 million people will be within half a day of the port—will be able to take advantage of a more cost-effective way of getting goods into and out of the country. The facility will transform our maritime port infrastructure and play a massive role in helping Britain’s economy over the coming years. It is a real force for competitiveness and illustrates the impact of good private investment.

That is not the only investment taking place in my area. The port of Tilbury, now in its 125th year, is also investing in expansion. There is also massive investment at Tilbury power station to create the world’s largest dedicated biomass power station, which will be contributing to the national grid before the end of the year. Those are just a few examples of how private business is generating the investment that will create more jobs and add more wealth to the bottom line of the UK economy. The answer is not Government spending; it is private sector investment. Those examples show that Britain is open for business and that private sector companies have the confidence to invest in the UK.

When the Opposition highlight what is going wrong, they are talking our economy down. We have a lot to offer in this country and we should be encouraging it. One thing that has been mentioned is access to finance for small and medium-sized businesses. Only last week I visited Barclays bank in my constituency, where I was told how much money the bank had been able to lend to businesses. However, the complaint was that although money was still available in the pot, small businesses were not coming for finance because of the narrative coming from the Opposition Benches about how it was not available. Let me say this to Opposition Members. Please stop talking our economy down. What they say will become a self-fulfilling prophesy. We have a lot to offer in this country; it is about time we encouraged it, not beat it up.

The Economy

Jackie Doyle-Price Excerpts

Wednesday 22nd June 2011 Commons Chamber

[Jackie Doyle-Price (Thurrock) (Con)]

It is a pleasure to follow the hon. Member for Airdrie and Shotts (Pamela Nash), who spoke with considerable passion about the plight of some of her constituents. However, I am sure she will recognise that the best way of tackling the poverty that she described is by getting our economy working more effectively, incentivising people who want to create wealth and spreading more jobs. That is the way to tackle the problems that she articulated.

On that note, I congratulate the Chancellor of the Exchequer and the Treasury team on sticking with the tough decisions that will rebuild our economy and prevent it from spiralling further into debt, and in so doing lay the foundations for future growth. We must stick with our plan. There is no need for a plan B.

Let us get this correct: we inherited an economy built on credit and public spending. That is not a climate that will encourage wealth creation. We cannot keep taxing private enterprise in order to fund an expanding public sector. We need to incentivise our wealth creators and set the economy free. It is clear from recent economic figures that the economic fundamentals are strengthening. Indeed, John Cridland, the director general of the CBI, said this weekend that we are well into recovery, even though it does not quite feel that way.

[Lilian Greenwood]

I understand what the hon. Lady is saying, but does she not share our concern that although we are supposed to be in recovery, the growth figures keep being downgraded?

[Jackie Doyle-Price]

I was just getting to the explanation for that, which is the one that my right hon. Friend the Chancellor of the Exchequer gave at the Mansion House last week. He dissected the growth figures, which showed that although financial services were contracting, in the rest of the economy we were in a period of growth. We need to rebalance our economy, and to take it away from a large financial services sector and more towards manufacturing and other sectors.

I shall continue, because time is brief and many colleagues want to contribute, by bringing the debate to life with some real-life examples, and by drawing the attention of the House to some areas where we are making considerable progress. First, there is a genuine improvement in manufacturing—the Government amendment mentions an increase in activity of 4.2%. I have the privilege to represent a considerable amount of manufacturing industry, which is situated particularly in the west Thurrock area and in Purfleet. Among the large operations in my constituency is a Unilever plant that manufactures, among other things, Hellmann’s mayonnaise, Flora margarine and other spreads. The company very recently relocated its manufacturing operation for jars of Hellmann’s mayonnaise from the Czech Republic to Purfleet. Why? Because it was more cost effective. Do not let it be said that the UK cannot compete internationally for manufacturing presence.

[Owen Smith (Pontypridd) (Lab)]

The latest manufacturing output numbers show a clear decline, not an increase. There was an increase over the last year, but that was largely because people restocked after running their inventories down during the crisis. Does the hon. Lady concede that manufacturing now is going in the wrong direction?

[Jackie Doyle-Price]

The hon. Gentleman wilfully ignores what I just said. I gave one illustration of inward investment and an improvement in manufacturing in this country. That decision was taken by a thriving company because it is cheaper to produce here than in eastern Europe. He should look at the evidence instead of constantly talking the economy down.

Jobs are increasing. My father has lived all his working life in Sheffield, and many hon. Members are familiar with the economic problems in South Yorkshire. He has spent his entire working life as a builder and labourer. For much of the past decade, he struggled to find work, and has been in and out of work on short-term contracts. When he was laid off last year, he did not hold out much hope of finding more work, given the prevalence of eastern European gangs in that area of work, but last week, the day before his 63rd birthday, he re-entered the world of work, in Sheffield, so it is clear that the economy is indeed moving in the right direction.

[Paul Blomfield (Sheffield Central) (Lab)]

Will the hon. Lady give way?

[Jackie Doyle-Price]

I shall press on, if that is okay.

The Government’s measures will encourage more people to fill newly emerging jobs. I am delighted that in the last Budget, we began to move towards increasing the income level at which income tax is paid, which will make the most difference at the margin. With our welfare reforms, that will incentivise people to get back into work.

There has also been an improvement in investment. The biggest inward investment in the UK is for the London Gateway port, which is being constructed in the borough of Thurrock. That will add to the area’s existing port facilities at Tilbury, which this year celebrates its 125th anniversary—we all wish it many more years of success—and Purfleet, where the roll-on/roll-off container business is again booming. Even before DP World opens, the tonnage landed in Thurrock exceeds that of Dover and Felixstowe. That is a good sign that in my constituency at least, the economy is definitely moving in the right direction.

Having spoken of all that is going well, I would like to tell my colleagues on the Treasury Bench about matters on which the Government need to raise their game, so that we make the most of the economic opportunities that are available to us. First, we need to do more to encourage investment. We need to make investment easy and to ensure that there are no barriers in its way, particularly in the planning system. Some firms have had to pay absolute fortunes to protect species on brownfield sites, and section 106 agreements seem to be used by local authorities, and indeed on occasion by Government Departments, as cash cows to fund projects that go beyond the benefit needed. Our overall objective is to encourage economic growth and job creation, so we need to ensure that those measures do not act as barriers to investment, but encourage it.

On the banking sector, I thoroughly support the objectives behind Project Merlin and agree that there is a need to ensure that our banks lend to people who want to buy their own homes and to businesses. However, we need to bear in mind that businesses are much less risk averse, and that they are looking at other ways of financing investment where possible. We must avoid putting the taxpayer in the position of lender of last resort for projects that are riskier than projects that we should support.

[Mr Andrew Love (Edmonton) (Lab/Co-op)]

I thank the hon. Lady for giving way before she leaves the subject of Project Merlin. She will have seen the lending figures for the first quarter. To put it mildly, the figures for lending to small and medium-sized business are disappointing. Does she believe, as I do, that the Government need to take firmer action to ensure that the banking sector lives up to its Project Merlin commitments?

[Jackie Doyle-Price]

We should absolutely encourage more lending to sustainable businesses and business propositions, but we should not encourage banks to lend just to meet that target. Lending must be based on real demand, which, as I said, is falling, because firms are finding other ways to fund investment. It must also be based on an appropriate degree of risk, because it is inappropriate for the taxpayer to stand as guarantor of such loans.

In conclusion, there is more realism in the economy. We are building an economy on real wealth creation, not credit or an inflated public sector. There is much to celebrate, despite the best efforts of Opposition Members to talk our economy down. They must consider the impact of their words. Confidence is central to economic growth—confidence is all, and every negative message undermines it. When confidence is undermined, the recovery will slow. This is not about partisan games; it is too important. We all need to recognise the real progress that we are making.

Public Accounts Committee

Jackie Doyle-Price Excerpts

Thursday 16th December 2010 Commons Chamber

[Jackie Doyle-Price (Thurrock) (Con)]

I, too, have the pleasure of being a member of the Public Accounts Committee, serving under the probing chairmanship of the right hon. Member for Barking (Margaret Hodge). I want to follow up some of the points made by my hon. Friend the Member for North East Cambridgeshire (Stephen Barclay). Sometimes serving on the Committee does feel a bit like being in “Groundhog Day”, as we see the same issues arising again and again in relation to delays in executing contracts, poor management and so on. I want to concentrate on one theme leading from that, which is leadership.

Leadership is crucial to the delivery of any programme. It involves the ability to take ownership, and to ensure that projects are delivered to deadline and on budget, and that they are fit for purpose and deliver the objectives that they are meant to achieve. Too often, we have found such leadership lacking. My message to my colleagues on the Front Bench is that, given the public spending constraints that we now face, value for money is of central importance, and the Treasury needs to play a much stronger role in ensuring that Departments deliver their obligations. For that reason, I heartily endorse the sentiments in the motion, which will put ministerial accountability at the heart of delivering value for money. Hitherto, the Committee has not called Ministers to give evidence, but I am fast coming round to the view that there is a case for doing that, so that Treasury and Cabinet Office Ministers can tell us what they are doing to ensure that their colleagues across government are delivering against their obligations.

The right hon. Member for Barking referred to the Committee’s report on the 2007 comprehensive spending review. Ministers should read that report, to see where things might go wrong in the current spending environment. There was a massive discrepancy between Departments in the degree to which they were able to deliver against the cuts that were required of them. In particular, the Department for Communities and Local Government had achieved only 5% of its required savings halfway through the inquiry. That brings me back to the importance of leadership and the importance of government as a machine ensuring that the principle of value for money really is pushed all the way through the system.

Other colleagues want to speak in the debate so I shall close by drawing the House’s attention to the private finance initiative, which has been the subject of a great deal of work by the Committee. In the recent past, the machinery of government has been rather too attached to PFI as a funding stream, with delivery being focused on completing a deal rather than on whether the PFI contract really represented value for money for the taxpayer and whether it would deliver what was required. The Committee examined the role of the PFI after the credit crunch. We found that the banks had increased the cost of financing PFI projects by up to a third, and that the risks had been transferred back to the public sector at an additional cost of £1 billion to the taxpayer.

It is not surprising that financing costs rose following the credit crunch, but it is very disappointing that the Treasury did not use that occasion to challenge the view that the PFI was still an appropriate funding vehicle for many projects. The contract for the widening of the M25 has already been mentioned. The cost of that was increased by 23%, or £660 million. In the past few weeks, the Secretary of State for Transport has had to announce significant cuts in his expenditure. It is clear that the delivery of other projects has been jeopardised. We are locked into some PFI contracts for 30 years, which means that those that are of poor value will clearly be of ongoing poor value to the taxpayer.

Moreover, a contract of that length is not suitable for some services. Facilities need to be able to react to the constantly changing needs of hospitals, for example. If we nail everything down in a PFI contract, we embed inflexibility in the system. NHS South West Essex primary care trust in my constituency is in a very poor financial state, and is implementing a severe programme of cuts to deal with an overspend. Sitting in the middle is Brentwood community hospital, an underused facility funded by an expensive PFI contract.

My message to the Government is very simple. The Treasury and Ministers throughout Government must be vigilant and fleet of foot in ensuring that their Departments deliver value for money, and a central part of that will consist of responding to the findings in our reports. I look to the Treasury in particular to ensure that appropriate leadership is given, and that we deliver better value for the taxpayer.

Comprehensive Spending Review

Jackie Doyle-Price Excerpts

Thursday 28th October 2010 Commons Chamber

[Jackie Doyle-Price (Thurrock) (Con)]

In the brief time available, I would like to direct my remarks to some of the changes announced this week as they relate specifically to my Thurrock constituency.

In building a programme of spending to go forward, the Chancellor has rightly recognised the importance of infrastructure investment for creating the right conditions for businesses to grow and for the UK to become a more competitive economy. However, there are a couple of constituency issues that I would like to put to him, and I want to ask him to think about whether, as we go forward, we are really serving my constituents well—in particular, the businesses within the constituency.

Paragraph 2.25 of the spending review states that

“subject to consultation… charges on the Dartford Crossing”

will be increased,

“alongside accelerating plans to improve traffic flow.”

At this stage, it is not clear what those plans are. Motorists who are regular users of the crossing will witness that it is operating way beyond capacity and has regular delays. Moreover, the congestion regularly spills out on to the road network in Thurrock, so my constituents are regularly faced with misery, caused by the congestion that is caused by users of an over-used crossing.

The local economy in Thurrock is uniquely dependent on logistics. We have a thriving port at Tilbury and we are now witnessing a massive inward investment on the part of DP World, which will generate upwards of 16,000 jobs once it is on stream. That will require a fully functioning road infrastructure network for those businesses to be the success that we want them to be in creating the jobs that we need. I urge the Chancellor, when considering where the proceeds of the tolls will be directed, to show some sympathy for making greater investment in the road infrastructure in Thurrock.

It is particularly regrettable that the Secretary of State had to announce yesterday that the proposed improvements at junction 30 had also been shelved. It is regrettable because DP World, which was investing in Thurrock, would also have made a private sector investment contribution to the road improvements. I hope that we will soon get more clarity on the road infrastructure improvements that we are going to get to increase capacity at the crossing.

Having said that, and although the increase in charges at the crossing are regrettable, I quite understand why the Chancellor finds himself in this position. At this stage, he is not able to turn down a nice little earner for the Government, given the mess that the public finances are in, thanks to the Labour Government.

I want to make another suggestion. When we are looking to see where we can get the most bang for our buck in public spending, we must remember that Thurrock is in Essex, and Essex is known for its entrepreneurial spirit, if for nothing else. Everyone recognises that the road improvements—at junction 30 in particular—are essential for creating the investment that could unlock 36,000 jobs in the area. It is my contention that, for every £1 invested in Essex, we will get more bang for the taxpayers’ buck. I hope that the Chancellor and the Secretary of State for Transport will bear this in mind when they consider their options for increasing spending in future.