Paradise Papers

James Cartlidge Excerpts

Monday 6th November 2017 Commons Chamber

[Mel Stride]

As the right hon. Gentleman knows, there are many reasons why individuals use trusts. It may be that I want a trust for my children and I do not want it to be known publicly exactly how that trust will operate, for reasons of confidentiality. People may use overseas trusts because they are looking at dollar-denominated trading and need a jurisdiction in which that occurs. There is a whole variety of reasons. The idea that every time the word “trust” is mentioned it suggests something grubby or illegal is plain wrong.

[James Cartlidge (South Suffolk) (Con)]

With the tax gap at a record low and corporation tax in this country among the lowest in the industrial world, does it not confirm that we have achieved the key balance of a tax system that is both competitive and fair?

[Mel Stride]

My hon. Friend is correct. We have brought the corporation tax rate down from 28% to 19%, and it will go down further to 17%. The consequence is that we are raising twice as much corporation tax as we did in 2010.

Scotch Whisky Industry

James Cartlidge Excerpts

Tuesday 31st October 2017 Westminster Hall

[Mr Alistair Carmichael (Orkney and Shetland) (LD)]

I beg to move,

That this House has considered the future of the Scotch whisky industry.

It is a pleasure, as ever, to serve under your chairmanship, Mr Bone. I am delighted that the Exchequer Secretary is almost in his place. I also acknowledge the presence of, and support from, hon. Members from other parties. I shall take some interventions if time permits but, if colleagues will permit, I shall ration myself, in view of the constraints of time.

The Scotch whisky industry, like just about every other one, has a sense of uncertainty about its future at the moment. Given the wider political context, that is hardly surprising; but there is much positive to be said about the industry, especially for the medium to long term, if we get the big decisions right now. For Scotland, and especially rural Scotland, the industry is enormously important. It is also an important part of the UK economy as a whole. It is a massive exporter and earns in the region of £4 billion a year for us—20% of our food and drink exports are from that one industry. The export performance is crucial, as it underpins a market providing about 40,000 jobs, including about 10,000 directly in the industry. Of those, 7,000 are in the rural economy. Beyond that direct employment there is the supply chain and, of course, the burgeoning question of whisky tourism.

[James Cartlidge (South Suffolk) (Con)]

On the supply chain, it is important to emphasise that the jobs are not just in Scotland. A company called Erben in Hadleigh in my constituency provides much of the bottling technology, and bottle caps, to some of the biggest brands in the whisky industry.

[Mr Carmichael]

Indeed. The Scotch Whisky Association and the Wine and Spirit Trade Association would make that point: there is an industry and supply chain across the country. That includes the fact that the grain comes from farms throughout the country. The impact of the industry is particularly acute, however, in rural Scotland. The growth of whisky tourism, in particular, has been phenomenal in recent years, and has been transformative for the most economically fragile communities in Scotland.

Oral Answers to Questions

James Cartlidge Excerpts

Tuesday 24th October 2017 Commons Chamber

[Mr Speaker]

Order. As a very distinguished chartered surveyor, the hon. Member for The Cotswolds (Geoffrey Clifton-Brown) will know that the Cotswold is a very significant distance from the north or the north-west, but we will look forward with eager anticipation to hearing the hon. Gentleman at some later point.

[James Cartlidge (South Suffolk) (Con)]

10. What recent progress has been made on reducing the deficit.

[Kevin Hollinrake (Thirsk and Malton) (Con)]

15. What recent progress has been made on reducing the deficit.

[James Cartlidge]

I thank my right hon. Friend for that answer. May I make one simple request about the Budget: whatever measures he announces, he resists the temptation to pay for them by billing our grandchildren? Instead, will he continue the excellent work that has seen us slash by nearly three quarters, as a percentage of GDP, the record post-war deficit that we inherited from the Labour Government?

[Mr Hammond]

Yes. It is not responsible to make so-called hard choices by loading the price on to the next generation and the generation after that. We have to make difficult decisions and we have to bear the consequences of those decisions. At £65,000 per household, our public debt is still far too high, so I can confirm to my hon. Friend that we will continue the plans that we have announced to reduce the deficit in a measured and balanced way to ensure that debt falls as a share of GDP.

Mortgages: Eligibility

James Cartlidge Excerpts

Monday 23rd October 2017 Westminster Hall

[Paul Scully]

I appreciate my hon. Friend’s important point, which I will come to later. Rent clearly does not give any guarantee for the future but it gives a better guide to creditworthiness, in the sense that people have spent time paying rent regularly, on a monthly basis. As we heard, the petitioner spent £70,000 with little to show for it other than that he paid his bills, whereas obviously, when someone has the aspiration of home ownership, that same £70,000 could have been building up equity. If someone has a good record in one area, they would hope that that, combined with all the other checks that banks need to do, would be good for credit for a mortgage as well.

The Government have doubled their housing budget and are investing £7.1 billion in the expanded affordable homes programme to deliver 225,000 affordable housing starts by March 2021. In addition, the housing White Paper sets out bold new plans to fix the broken housing market and build more homes across England. Starter homes, which are targeted at the first-time buyers we have been talking about, form an important part of the Government’s action to help more than 200,000 people become homeowners.

A £1.2 billion starter homes land fund will be invested to support the preparation of brownfield sites for starter homes and other affordable home ownership tenures. I am delighted that this year we will see the first starter homes being built on brownfield sites across the country. They will be built exclusively for first-time buyers between 23 and 40 years old, at a discount of at least 20% below market value. Alongside that, a new rent-to-buy scheme will help hard-working households to benefit from a discounted rent set flexibly at levels to make it locally affordable so that they can save for a deposit to purchase their home.

Stamp duty means that the average first-time buyer typically faces a tax bill of £11,427 here in the capital according to the Land Registry, which recorded the average price paid by new entrants to the London property market as £428,546. Even a starter flat costing a quarter of a million pounds attracts a stamp duty bill of £2,500. In my view, the Government should aim to take most first-time buyers and some downsizers purchasing smaller properties out of this tax entirely, to reduce the burden on family homes, and to fix anomalies such as those around shared-ownership properties, which are an increasingly popular way to get on the housing ladder.

The evidence is clear: stamp duty, like all transaction taxes, reduces the level of transactions. The effects can be pretty stark. For example, ahead of the buy-to-let surcharge in March 2016, mortgages soared by 71% but then dipped to 60% the month after. That was not just a short-term effect. Six months later, in December 2016, buy-to-let mortgage lending was down by nearly 40% on the year before, whereas other mortgage lending was up.

Introducing the buy-to-let surcharge clearly reduced transaction levels, and the best way to boost them again is to cut stamp duty for homeowners, which should boost transactions and economic growth. By focusing on residential homes, such a cut would also boost home ownership. At the same time, shared ownership—an increasingly popular way to help people buy part of a property—needs stamp duty reform. Currently, the providers of these affordable home ownership properties and their customers often pay twice: providers pay on the whole property and then shared owners pay again when they buy their share. Stamp duty in such cases should be charged only once, making it even more affordable for people to get on the housing ladder.

[James Cartlidge (South Suffolk) (Con)]

In my understanding—I have some involvement in shared ownership—the buyer elects when to pay, and one reason why is that if someone buys a share for, say, £250,000, the stamp duty at that point would be lower than if the price went up in future and they elected to pay at a later stage. If we reform the system, we should at least maintain the choice for the customer, because it works quite well.

[Paul Scully]

My hon. Friend is right that choice is important. I still believe that a simpler tax system would enable the system’s anomalies to be ironed out right at the beginning, rather than each Budget having to iron out any anomalies that come out over time, but I welcome his intervention.

I began by talking about supply, which is the most important thing, in my view. The Government have taken action on that issue. Last year saw the highest number of residential planning permissions being granted on record and the highest level of net housing additions since the recession. However, the average home still costs almost eight times people’s average earnings, making it difficult to get on the housing ladder. The proportion of people living in the private rented sector has doubled since 2000, with more than 2 million working households with below-average incomes spending a third or more of their disposable income on housing. That is why I am encouraged by the vision for housing set out in the White Paper. The starting point must be to build more homes, slowing the rise in housing costs, so it is right that the White Paper sets out measures to plan for the right homes in the right places, to build homes faster and to diversify the housing market.

Even if we can get enough houses, lower fixed costs for homebuyers and provide short-term help through schemes such as Help to Buy, there is still a significant structural issue that many young people, in particular, will face, and that is the difficulty in getting a mortgage. Tenants can be disadvantaged in getting credit beyond mortgages. Millions of people are excluded from affordable credit because they do not have a credit history. For the financially excluded, it is a Catch-22 situation: without a credit score, applicants are declined by mainstream providers and considered riskier customers, but the only way to build a credit score is to have a form of credit, such as a mortgage or credit card, in the first place.

Most people on low incomes manage their limited money carefully, yet banks, utility companies and other retailers can discriminate against them. An estimated 2 million people, many of whom are social housing tenants, take out high-cost loans because they cannot access more affordable credit. The Financial Inclusion Commission estimates what is often called the poverty premium—the extra spent on basic necessities such as gas and electricity, mobile phones, white goods and furniture—to be £1,300.

Big Issue Invest has an interesting initiative called the Rental Exchange that will chime with people who supported the petition. The organisation is working with Experian, the UK’s leading credit reference agency, to prevent low-income people from being caught in a vicious circle of no credit score and no lending. Since 2010, Big Issue Invest and Experian have been working with registered social housing providers to incorporate tenants’ rent payment history into their credit files, with no cost to either the housing provider or the tenant. The data are kept in a secure and compliant way, are not used for marketing purposes and are made available only if the tenancy information is relevant and the tenant has agreed to a credit check, or if it is strictly necessary for an organisation to check information about a tenancy, such as in a case of fraud. Tenants can opt out of the scheme.

More than 150 registered housing providers, including housing associations, local authorities and arm’s length management organisations, are signed up to the Rental Exchange, representing 1.5 million tenants across the UK. Experian has tested the value of adding rent data to tenants’ files for each housing provider that comes on board, working with the provider to ensure that rent payment data are accurate before allowing them to go live. The testing has demonstrated some positive results, including an increase in digital identity authentication rates from 39% to 84% for social tenants when rent data are included in credit files. As well as allowing better deals while shopping, that makes life easier in other matters, such as signing up at a GP surgery or accessing benefits without paper copies of identification. In more than 70% of cases, tenants with no significant arrears have increased their credit score.

As well as tackling financial exclusion among the people on the lowest incomes, the approach can have a significant benefit for young people who might have a reasonable income but have not had the time to build a reasonable history for lenders to consider. Rental data add more weight to a credit file on the register, giving lenders more confidence that the applicant is genuine, and a positive payment history provides a strong indicator of good financial conduct. Lord Bird, founder of The Big Issue, has introduced a private Member’s Bill in the other place, the Creditworthiness Assessment Bill, which considers the wider implications and difficulties of financial exclusion, but I will limit the rest of my remarks to access to mortgages, as per the wording of the petition.

First-time buyers are much more likely to have been living in rented accommodation now than 20 years ago—66%, compared with 39%. Rent in London may have fallen over the last few months, but with a Greater London average rent of £1,564, the total amount spent on housing is still a huge proportion of the average household income, so it is hardly a surprise that so many people saw the suggestion in the petition as worthy of further consideration. I am pleased that the Residential Landlords Association supports the petition, although it expressed some concerns about the Rental Exchange system, as smaller landlords must go through another layer of bureaucracy in order to be included: their rents must first be paid to a “Credit Ladder” before being passed on to them. The RLA expressed concern that that muddies the water about who chases rent arrears and distances landlords further from tenants.

Although those issues can be overcome, the concerns point to the fact that even a seemingly simple move would need to be carefully considered so as not to create any negative unintended consequences. Clearly, the last thing that anyone would want is for lending to be relaxed to the point that triggered the mortgage market review in the first place. Back in 2010, the Financial Services Authority found that expectations of ever-increasing house prices and the ability to pass on risk to others led to relaxed lending criteria and increased risk-taking.

There is nothing in the petition to suggest greater risk taking; in fact, the opposite is the case. Having a more rounded financial history for applicants can lead to more informed decision-making by lenders. That transparency works both ways, and could have a negative impact on future applications for some. There are many other factors that lenders must consider, such as long-term income stability. Homeowners have other costs that renters do not have to pay, such as redecoration, insurance and so on. Maintaining a home is not cheap, especially when it comes to one-off but necessary maintenance such as roof repairs. House purchasing is a long-term commitment, and interest rates can rise more erratically than rents.

The Petitions Committee arranged a forum on the Money Saving Expert website, which 1,400 people viewed and a few people commented on. One person expressed concern that letting agents have too much power over tenants as it is, but the majority of commenters were largely supportive of an approach like the one mentioned in the petition. Some people wondered why Government needed to be involved in the first place, a sentiment with which I have always had sympathy. I am old enough to remember Ronald Reagan’s nine most feared words:

“I’m from the Government, and I’m here to help.”

The Budget is coming up. I make a belated plea to the Minister to take the feedback from the 147,000 people who have signed the petition and consider moving towards a solution in the forthcoming Budget. When he replies, can he let us know whether he thinks that there is a market-based solution that we can unlock with our world-leading fintech businesses? Petition Committee members always say that an e-petition debate is not the end of the petition process but the start of a campaign. Including rent payments in the assessment of mortgages is not without its possible negatives, but I believe that it is well worth considering. I suspect that a market-based solution will have the flexibility required to make it work; brief legislation cannot easily change as the market develops. I hope that the Minister and the Government will consider the petition seriously and do what they can.

I remember the joy of buying my first house, and the sense of freedom and achievement. I am now at an age when my children, the eldest older than I was when I first picked up those house keys, are looking at the options open to them with some concern and trepidation. Let us ensure that first-time buyers have every chance of getting on the housing ladder, fulfilling the aspiration that so many of us have had the good fortune to realise. Let us do what we can in this area as another piece of the jigsaw in supporting a new generation of homeowners.

--- Later in debate ---

[James Cartlidge (South Suffolk) (Con)]

It is a pleasure to serve under your chairmanship, Mr Hollobone; I think it is for the first time.

I congratulate my hon. Friend the Member for Sutton and Cheam (Paul Scully) on responding to the petition, which is on a very important subject, and I also congratulate other hon. Members who have spoken.

I need to declare my interests, as recorded in the Register of Members’ Financial Interests. I still have an interest in a company that brokers mortgages; I was a mortgage broker myself, and I hold the mortgage advice qualification, although I certainly do not practise day to day any more.

My immediate reaction to the proposition in the petition is, as others have done, to express my sympathy to those people who have signed it, and my understanding of their huge frustration at being unable to get on the property ladder and achieve their aspiration, which most of us in this Chamber have probably achieved and which previous generations have perhaps taken for granted, namely to own a home—their first home—so they can build a life for themselves. Indeed, we can have huge sympathy with the person who says they have paid £70,000 in rent.

My first point, based on my experience, is that rent payments are taken into account. We must distinguish between the initial decision in principle on application, which is normally automated and credit-scored, and further underwriting on a full application. If I want to have a rough sense of what I can borrow, I might get an agreement in principle from my bank for a certain amount. If I then find a property, have an offer for it accepted and go through the full application, as it is called, in my experience it is very rare, particularly if someone is a first-time buyer, that applicants would not have to provide bank statements. That was happening in 2004, when I started as a broker, and the main thing that underwriters are looking for on a bank statement is the consistent monthly payment of rent.

It is true that underwriters look at other things, and it is possible to tell a lot from a bank statement. I remember that before mortgages were heavily tightened up after the crunch—quite rightly so—underwriters would come back and say, “Can you ask them what these payments are?” and it would be discovered that they were for a debt that was not recorded on their credit reference, for example a debt from a casino. I am afraid that such a case would be declined.

As the hon. Member for East Lothian (Martin Whitfield) said, we do not have in-branch underwriting, typically; those days are gone. However, I think there is—and there should be—still a lot of manual underwriting on first-time buyer cases. The other point to make is that it has to be said clearly that someone paying their rent on time is not enough, because of other factors that may be in the background. Someone may pay their rent but be behind on paying off their credit card or in paying a utility bill.

The House of Commons Library briefing states that the Financial Services Authority—now the Financial Conduct Authority—conducted a

“detailed study into the predictive ability of applicants with poor credit history and found it to be a significant predictor and hence determinant of lending decisions: ‘Our findings show that the dominant characteristic present in all of the highest-risk lending combinations is whether the borrower has an impaired credit history.’”

If someone pays their rent, does not have bad credit and is on the electoral role—important for the credit score—they will probably get an agreement in principle. They will then go to a full application and their bank statements and so on will be assessed and the person who has the county court judgments and the defaults will, of course, be declined at that point, which is absolutely right.

I have mixed feelings about the exact call of the petition, but I have considerable sympathy with it and think that it presents a really good opportunity. I want to make a few points on the wider issue of mortgage availability. This month I received a copy of IFA Magazine, the main article of which is called, “Never Say Never Again”. That is a reference not to the “Thunderball” remake but to the possible re-emergence of sub-prime lending, which is a very serious issue. I quote Michael Wilson, who wrote the article:

“Quietly, almost surreptitiously, ‘impaired credit’ mortgages are coming back into the game—it’s just that you don’t see them advertised by the big players. Instead, alternative banks and pseudo-banks such as Masthaven or Pepper Homeloans or Magellan or Bluestone or Kensington Mortgages…are offering carefully risk-graded home loans to people who’ve had anything from a missed phone contract payment to a County Court Judgment.”

I remember, back in the days before the crash, the availability of sub-prime mortgages. There was an entire menu of grades of what were called adverse mortgages: light adverse, medium adverse and heavy adverse. Heavy adverse is, basically, “Do you have a pulse?” That was what it was like in those days. Extraordinarily, people who had bad credit, stretched affordability and a low deposit, wanting an interest-only deal, could get a mortgage, often even at a relatively competitive rate. The Government, through the regulator and the prudential authorities, should be extremely cautious about any return to that sort of risky lending to people who have failed to pay significant credit. Of course, there will always be discretion on relatively minor credit misdemeanours and so on.

We must think about greater access for, for example, the self-employed. I was on the Work and Pensions Committee before the election, and we had an investigation into the rise of the gig economy and a new breed of worker—they are called “workers”, with a capital “w”—who are self-employed but work very regular shifts and arguably have all the characteristics of employees but no employment contract. In my view, there have been abuses, because such workers do not get the security an employee would expect. In those cases, there is an argument that lenders should have much more discretion and we should not automatically say, as is usually the case with the self-employed, “Well, if you don’t have three years’ accounts, sorry, you can’t get a mortgage”. The world of work is changing, and lending needs to change with it.

The other issue, which I think will become even more important and on which we will get more correspondence, is lending into retirement. That is not necessarily lending to people who have retired; it is the opposite. If someone applies for their first mortgage at 50, as people do at the moment and will be doing more in the future, to defray the costs somewhat they might want a 30-year term. However, that would take them to 80, which is currently simply not be possible. Lenders would refuse outright to do that in almost any situation—even if someone had a gilt-edged pension agreed. We need to consider whether that is reasonable, given that we are going to be living longer and have a much higher statutory retirement age. Although we should always be as prudent as possible with lending, it is perfectly in order that someone, particularly someone younger, takes a longer term, perhaps even 40 years. For a 25-year-old, a 40-year term up to 65 on a capital repayment basis is perfectly sensible, obviously subject to all the other criteria being met.

Regarding lending in retirement, I went to a fringe event at a conference two years ago and the lenders were already thinking about people who have retired on good incomes. They might be 30 years from death and want access to credit. That will become a growing issue.

The point I most want to make, and about which I feel most strongly, is buy to let. My first speech as an MP, after my maiden speech, was on buy to let, and I said that we should consider things like a stamp duty surcharge and a tax on the interest relief. To my surprise, the previous Chancellor had the courage to introduce those measures—they are not exactly popular with some Conservative voters. We have mentioned the person who paid £70,000 in rent: they are paying a mortgage, just not their mortgage. They are almost certainly paying the landlord’s buy-to-let mortgage.

I have been to many events with buy-to-let landlords and defended these issues. I have nothing against those who invest in property. On the contrary, with the pensions system as it has been, it is understandable that people should invest, as their pension, in what they see as the safest asset, particularly when it has reliable rent income. However, it remains scandalous that a first-time buyer can only get a capital repayment mortgage, which is absolutely right—if someone takes out a debt they repay that debt, it is as simple as that—but it is still possible, almost as the default, to take out an interest-only mortgage for a buy to let. The criteria have tightened, but that issue is so significant because to calculate whether someone can obtain a buy-to-let mortgage, the key issue is coverage, which is that the rent covers the mortgage by, for example, 125%. That criterion will be met far more easily with an interest-only mortgage than a capital repayment one.

In my view, the bubble we built up in the property market would not have happened to the same degree if we had insisted on capital repayment, because far fewer landlords would have passed the test, prices would not have risen so steeply and some of the measures we have had to pass to calm the buy-to-let market might not even have been necessary. It beggars belief that we expect first-time buyers to repay the capital—as they should—but not landlords, who may own many properties.

We must remember that there is a moral issue here. When the banks crashed on the back of their own irresponsibility, the bail-out was funded by a national debt that is held by everyone. The property values of all those who own property, ultimately, were bailed out. The bail-out kept the bubble growing, in fact. If it had not been for the bail-out, we would have had an extremely deep recession, so it was the right thing to do, but we must recognise that it maintained the values of large portfolios—of all those who own property—but it is a cost borne by everyone, whether they rent or pay a mortgage. We therefore have a moral duty to try to find the best ways to encourage access to the property market and to overcome those problems, but we must not do that by returning to bad ways and ditching prudence.

Finance Bill

James Cartlidge Excerpts

Committee: 1st sitting: House of Commons
Wednesday 11th October 2017 Commons Chamber

[Anneliese Dodds]

I am sorry, but it is not the case that Governments are completely unable to do anything unilaterally to prevent profit shifting. They can, for example, decide whether to execute secret sweetheart deals with large multinationals through their tax authorities, or they can decide to be transparent.

[James Cartlidge (South Suffolk) (Con)]

Is the hon. Lady seriously suggesting that, under a Labour Government, HMRC would never negotiate with a company over its tax bill?

[Anneliese Dodds]

I referred to secret sweetheart deals, of which the experience in this country has been negative. The problem is with transparency. It is important to have an open tax system that allows for discussion, but many commentators would suggest that the relationship between some of the tax authorities and some of the companies they deal with is too cosy. The problems here are not to the same extent as those in many other countries, but we need to do something when the revenue from companies, particularly those focusing on intangibles, is going down.

One way to do that is to work with other nations, but we have again seen many negative developments in that area. The right hon. Member for Forest of Dean suggested that that was uniquely down to measures promoting a particular rate of tax, but that does not bear witness to what occurred. For example, the Government pushed strongly to prevent trusts from being included in registers of beneficial ownership. That is not about tax rates; it is about transparency. Again, when Conservative MEPs voted against country-by-country reporting, that was not about tax rates; it was about transparency.

Many of the most significant developments to remove harmful tax arrangements, particularly those exploited by multinational companies, occurred under Dawn Primarolo, who was a Labour representative when she chaired the multinational code of conduct group in which dozens of harmful tax practices were identified and removed. Labour therefore has a clear and strong record in dealing with these matters.

The Opposition will do everything we can to remove the gaping loopholes that still exist in the Bill, to toughen measures against aggressive tax avoidance and to prevent the burden being placed on some of the biggest casualties of austerity: those workers who have been made redundant. I hope that the Government will pay heed. In the interests of the British economy, they need to.

Finance Bill

James Cartlidge Excerpts

Tuesday 12th September 2017 Commons Chamber

[Peter Dowd]

I am afraid the hon. Gentleman’s memory is wrong about that, as are the memories of some Ministers, and I will come on to discuss that in a moment. This Finance Bill does little, if anything, to address the legitimate concerns raised in the IPPR report. On being provided with his speech last week, I suspect even the Financial Secretary asked—if only himself—whether he really had to present more worn out, tired platitudes that pass for Tory economic policy. He drew the short straw—a very short straw; in fact, he was the only one in the ballot. He was both the warm-up act and the main act. The Chief Secretary graced us with her presence for a short time and then went off with the Chancellor, calculator in hand, to work out how they will pay for all their U-turns.

[James Cartlidge (South Suffolk) (Con)]

On U-turns and our national debt, will the hon. Gentleman clarify whether it is still Labour policy to spend £100 billion clearing all outstanding student debt?

[Peter Dowd]

I do not mind Government Members making up their policies on the hoof, but they should have respect and not make ours up on the hoof.

As I was saying, when the Chancellor and the Chief Secretary waltzed off, they left the Financial Secretary to do the business, and he did a very good job last week. He managed to keep a straight face throughout his adumbration of how remarkably well the economy is doing, but amnesia had taken hold.

Finance Bill

James Cartlidge Excerpts

2nd reading: House of Commons
Tuesday 12th September 2017 Commons Chamber

[James Cartlidge (South Suffolk) (Con)]

I thought I would take a leaf out of the shadow Chancellor’s book by bringing a red book into the Chamber to wave around in his style. It is a copy of “The Middle Way”, by Harold Macmillan, written in 1938. I brought it here because I think that what is significant about the Bill is not any of the individual measures, which we all accept are very technical—they are not particularly headline-grabbing or, dare I say, sexy—but the context. This is a serious point. I think many people feel that they are still living in a time when capitalism itself—in which I believe very strongly—is being questioned. It worries them that it is not seen to be fair, and they fear that our economic system is not rewarding everyone evenly.

Here we are, eight years after the credit crunch and its major impact. Macmillan wrote his book in 1938, nine years after the Wall Street crash, but, then as now, the impact of the crash was still being felt by society, and there was a drive towards populism. I believe that such a move to populism can be resisted only through sensible measures from centre parties that address the injustices of capitalism while still ultimately supporting its success and its growth.

We are very fortunate, in that when Macmillan wrote that book there was high unemployment and a deep depression. The situation was very different, but it was comparable in the sense that people on both the left and the right were turning to much more extreme alternatives. Interestingly, Macmillan’s answer was a national living wage. His answer was nationalisation. His answer was making all kinds of what we might typify as socialist interventions in the economy. Since 2008, we have nationalised the banks. A Conservative Government have introduced a range of measures that could be seen as potentially hitting—dare I say—our voters.

I think that the most classic example, for which I had argued myself, is the introduction of measures relating to buy-to-let landlords. We have seen a huge surge in that area of home ownership, with people owning multiple portfolios. I know that those measures have not been popular with the few. If we were the party of the few and not the many, we would never have introduced them, but we had the guts to do so because we felt that that was right at a time when first-time buyers were struggling ever harder to get on to the property ladder.

I think that this is the key point. The sense of injustice that is out there now, and which leads people to question our economy, is about asset wealth. Yes, wages have been under pressure since the crash, but when we came out of the crash, what did we do? In order to escape the worst effects of the depression, we pumped huge amounts into the economy. Inflating assets again, the help-to-buy scheme and quantitative easing—all those measures were right at the time, and in many ways continue to be.

[Kirsty Blackman]

The hon. Gentleman has been talking for three minutes, but I do not think that he has mentioned the Finance Bill yet. Are we going to have a discussion about it at some point?

[James Cartlidge]

That was a charming intervention by the hon. Lady—is that the best she can do? I am talking about our current economic context, which is why we have introduced this Finance Bill, and I was coming on to say that its measures could be seen by some as an attack on large corporations. The measure on dividends—I have to say that I still receive dividends—will be unpopular with some of our voters, who are some of the richest people in society, but we feel at this time that we have to strike a balance, and I support the balance we are striking. We are bringing in permanent non-dom status, but at the same time we will be encouraging non-doms to invest in this country, incentivising them to use money held legally abroad so that it comes here.

To me, that is the most important aspect of this Finance Bill: it acknowledges that there is still for the wider public what Ted Heath called the unacceptable face of capitalism—those people who are seen to be abusing the system with avoidance, evasion and all the other tactics. It is right that we are tough on those, and we have been incredibly successful in that, but the difference between us and the Labour party is that we act from a standpoint of fundamentally believing in capitalism. We believe in free enterprise, and in the idea of people standing on their own two feet, being brave, taking risks and creating businesses. We understand that in order to protect that system, just like Macmillan said, sometimes we have to take measures that can be seen to be even potentially anti-business, but the alternative is throwing the baby out with the bathwater wholesale by a party which now is fundamentally against our economic system.

There may be people who are unhappy with some of these measures, such as on dividends or the buy-to-let taxes I mentioned, but the alternative is a case of out of the frying pan and into the fire—into the arms of a Labour party whose leadership, at least, is fundamentally against the capitalist system. When those people attack with vigour the measures such as those we have taken on tax avoidance, saying we could go so much further, they do so because fundamentally they do not believe in the entire system. I do, and I think these measures are sensible. They help us to strike a difficult balance at this difficult economic time, and that is why we should support the Bill.

Summer Adjournment

James Cartlidge Excerpts

Thursday 20th July 2017 Commons Chamber

[James Cartlidge (South Suffolk) (Con)]

I pay tribute to the hon. Member for Heywood and Middleton (Liz McInnes), not only for that moving speech, but for showing a lot of fight on behalf of the victims in those terrible cases. I pay tribute to her campaign for justice, which I hope she continues with; we will all support her in that endeavour.

I wish to raise the case of a constituent, Mr Chris Francis of Constable Road in Sudbury. He contacted me almost a year ago today to express his concerns about a large metal barrier that had been erected across the garden gate at the rear of his property. When I first heard about it, I thought it was perhaps just another constituency case, but he explained that he is blind and used the gate to safely and easily access his property with his guide dog, Nimbus. Central to his concern about the barrier was the fact that he would no longer be able to use his back door as an exit in an emergency—I emphasise that we are talking about an emergency. Mr Francis was not notified or consulted by Calibre Homes, the company that erected the barrier.

I went out to Constable Road to see the houses, all ex-council houses that back on to an estate called Suffolk Court. The company that manages the estate had erected the barriers outside rear gates that had been used for many years. Suddenly, the residents of these houses woke up to find that they could not open or close them. The barriers were covered in anti-burglar paint, they were ugly and, in my view, the way they had been built was aggressive.

In November, I went back to see Mr Francis to update him on the progress of his case, or lack of it. I had been telling Babergh District Council that I thought the residents had a right of way, and asked the council to help me to prove that; the council was going through the inevitably slow legal process of doing so. When I went to see Mr Francis in November, I was shocked to discover that he had suffered a severe stroke—a right-sided total anterior circulation infarct. Mr Francis is 62 and, as I said, blind. He is a Royal Air Force veteran: he was a parachuting instructor in the RAF for 10 years. He then set up his own parachute school. He was a very active man and has lived a brilliant life.

When I saw him that day, he was in a most distressing state. His sister, Anne, who has been a stalwart by his side, explained to me the circumstances of his stroke. She came to Mr Francis’s property to find that he had collapsed at the front door. She could not go through the front door because his key was in it, so immediately called the ambulance service, which tried to access the house from the rear.

The report states that

“the delay in getting into the property was due to a tall metal fence, which obstructed their ability to get through to the back of the property. It was in fact so high it was unsafe for them to climb over to gain entry. Therefore, they requested the attendance of the Police to gain access.”

The police report states:

“There was no safe entry point to the front of the property as the male had collapsed by the front door. Efforts to get to the rear of the property to assess an entry point were severely hampered by the large fencing. I was eventually able to scale it after using a wheelie bin to get some extra height. Not all officers would have been able to do this…In relation to delay, I would say the fencing added about 10 minutes to police gaining entry…This would have removed a delay of medical attention by about 30 minutes as Ambulance on arrival would have been able to go straight into the property.”

In other words, if the barrier had not been there, there would have been an extra 30 minutes for an ambulance to attend to this man suffering a stroke. Everyone in the Chamber will know that the NHS has an acronym for treating stroke, and that is FAST, because the speed of treatment is critical. My constituent suffers from significantly reduced mobility, speech and wellbeing. He relies on considerable assistance from his sister and family and requires a wheelchair.

My main reason for raising this case is that I believe that Calibre Homes—I have corresponded with the company and it has shown no willingness to remove the barriers, has been unable to justify them and, in my view, has been most aggressive—has in effect contributed to the severity of the stroke suffered by my constituent, a blind veteran. That is absolutely shocking. In fact, it has continued with that rather belligerent attitude. Anne Francis, the sister of my constituent, has been in communication with Calibre Homes, pleading for the removal of the fence to help him have a better quality of life. Indeed, the Suffolk County Council occupational therapist has reported on access possibilities, stating that

“the front wheelchair access is not practical in part due to the shared porch and part the gradient required…I would think they have a strong case if disability is the issue, and the rear is the only wheelchair access” .

Mr Francis requires an electric wheelchair that needs to be housed outside but requires rear access. We have asked Calibre Homes, which has refused to grant this permission or remove the fence.

I ask Members to bear in mind that, in my view, that barrier is unjustified because those residents have a right of way. They had been walking out of the back of their homes for donkey’s years and suddenly they woke up to find these things straight out of an American penitentiary centre stuck in the concrete at the back of their houses, covered in burglar paint. It is absolutely reprehensible.

I want to finish with a point about Calibre Homes. I have been in correspondence with the company. It is aggressive in the way that it writes, it could not care less about my constituent and it has shown not a shred of humanity or compassion for someone who is suffering severely and has served this country. I wish Mr Francis well in his recovery, I will work with Babergh District Council to try to prove the right of way for those residents and I will fight his corner. He is vulnerable and needs me to do that. I will fight for him and my constituents against this company, which has no scruples.

Oral Answers to Questions

James Cartlidge Excerpts

Tuesday 18th July 2017 Commons Chamber

[Elizabeth Truss]

The right hon. Gentleman still has not acknowledged the truth of the figures that I cited—the 3% pay rise for over half of nurses and the 3.3% rise for teachers. He simply will not look at the facts. The reality is that public sector workers are, rightly, paid in line with the private sector to allow the public and private sectors to flourish so that we can create wealth in this country. In addition, public sector workers have a 10% premium on their wages in pension contributions, and that is in the Office for Budget Responsibility report.

[James Cartlidge (South Suffolk) (Con)]

2. What progress is being made on reducing the national debt.

[Michelle Donelan (Chippenham) (Con)]

6. What progress is being made on reducing the national debt.

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

Debt has climbed steadily since 2009 as a result of the high levels of deficit. Since 2010, we have reduced the deficit by three quarters, so national debt will now peak at just under 90% of GDP this year. As the OBR’s “Fiscal risks report” of last week makes clear, that level of debt—a legacy of Labour’s recession—leaves us vulnerable to future shocks, which is why the Government have committed to eliminating the deficit and reducing the level of debt as a share of GDP. As a result of the actions taken to bring the public finances back under control, the OBR now forecasts that debt will start falling next year and will be below 80% of GDP by 2021-22.

[James Cartlidge]

Those figures are welcome, but will my right hon. Friend confirm that were the Government to pursue a policy of wiping all outstanding student debt, that would cost in excess of £100 billion and cause the national debt to surge? Will he also confirm that the biggest beneficiaries by far would be the top-earning graduates in the country?

[Mr Hammond]

My hon. Friend is absolutely right. He might have added that were anyone to suggest that they were able to do that, they could be accused of practising a deception on the people to whom they were offering that proposal. The cruelty of that would become apparent when it would have to be admitted that the proposal could not possibly be delivered. We face a debt challenge in this country, and we cannot borrow our way out of debt. The Opposition would do well to acknowledge that. Stronger growth and sound public finances are the only sustainable way to deliver better public services, higher real wages and increased living standards.

Balancing the Public Finances

James Cartlidge Excerpts

Tuesday 11th July 2017 Westminster Hall

[James Cartlidge (South Suffolk) (Con)]

It is a pleasure to serve under your chairmanship, Ms Ryan. I had 90 seconds at the end of the Queen’s Speech debate, as the last Government Member to speak, and I will continue that speech for these two minutes.

The point I made then was that austerity is not a choice; that is a facile argument. It is a mathematical reality determined by the size of the national debt, and most importantly, the future liabilities we are starting to accrue. The Office for Budget Responsibility says that in 50 years’ time, public spending is expected at current prices to be £156 billion larger than it is today, which is the cost of the NHS plus £10 billion. We have to find that money somewhere or consign our children and grandchildren to terrible austerity.

There are two suggestions for where we find that money. The most important relates to productivity in the public sector. According to the Institute for Fiscal Studies, if the last Labour Government

“had managed to maintain the ‘bang for each buck’ at the level it inherited in 1997, it would have been able to deliver the quantity and quality of public services it delivered in 2007 for £42.5 billion less”—

that is equivalent to the defence budget. The enormous savings that come from better productivity cannot be underestimated.

The other part of this, which I feel most passionately about, comes from the debate that came up in the general election about care and the intergenerational covenant. It is a staggering fact that the value of equity in the homes of those over 65, according to Savills, is now £1.5 trillion and earnt £26,000 last year for each pensioner household, compared with average national earnings of £27,000, or a graduate entering the workplace on £19,000, with no prospect immediately of getting on the housing ladder and no occupational pension, probably retiring at 75.

If people think we can put off that issue through parliamentary arithmetic, they are deluded. Economic arithmetic means that at some point in the future, as a mathematical certainty, whether we like it or not, the issue of equity for those who benefited from the housing boom will come up. We have to decide whether we deal with it voluntarily or put it off until we are bankrupt and in desperation.

--- Later in debate ---

[Peter Dowd]

In a moment, if I may.

A Government can balance the books in many ways, and very many difficult decisions have had to be taken during the past seven years. No one doubts that. However, this Government chose the path of austerity over the long-term prosperity of everyone in the country. Some hon. Members have said that that was not a choice, but it was. The Government chose to cap public sector wages and to cut local council budgets by 40% and in certain cases by as much as 60%, with more on the way.

[James Cartlidge]

Does the hon. Gentleman remember that the 2010 Labour manifesto promised a 1% cap on public sector pay? Does he think that that was because the Labour party does not support public sector workers, or because it was the right thing to do given the circumstances of the economy?

[Peter Dowd]

The reality is that that pay cap has now been institutionalised. It has been there for virtually a decade and it will continue. The Government have also chosen to underfund the NHS and cut £4.6 billion from social care, and they now threaten huge cuts for schools. However, despite those huge and deeply unfair budget cuts to public services, the Government have been able to find £70 billion of tax cuts for those who need them least of all.

Throughout the election campaign, which I might add is a happy memory, we were told that there was no magic money tree that could be used to solve the nation’s financial problems. If anything was magic about it, it was that it turned into a cherry tree, and the Prime Minister proceeded to pick the cherries and hand at least £1 billion-worth to the Democratic Unionist party to keep her in No. 10.