Trade Union Bill

Debate between Jeremy Lefroy and Stephen McPartland

Tuesday 10th November 2015 Commons Chamber

[Jeremy Lefroy]

I rise to speak to amendment 5, which appears in my name and those of my hon. Friends the Members for Stevenage (Stephen McPartland) and for Totnes (Dr Wollaston) and my right hon. Friend the Member for Haltemprice and Howden (Mr Davis). I do so with a heavy heart, because clause 14, to which the amendment relates, is entitled, “Prohibition on deduction of union subscriptions from wages in public sector”. As a Conservative, I am not greatly in favour of prohibition in many instances and I certainly am not in this instance. The clause was not in the Bill on Second Reading so we did not debate it and I am disappointed that it has been brought forward. Because it has been brought forward, I will speak to my amendment.

When we introduce a prohibition, we must ask what the penalties will be. If a union and an employer decide that this kind of arrangement is so important and so difficult to unwind that they will continue using it, what will happen to them? Will the police be involved? Will the employer and the union be fined? If there is a prohibition, there must be some way of enforcing it. There is no sensible way of enforcing this kind of prohibition on what is a relatively sensible arrangement between an employer and a union.

Let us be clear that we are talking about an agreement between an employer and a union, not something that is imposed on either of them. It is a partnership. In my view, it is generally a positive one as it enables people to work together. Surely that is what all of us are here to encourage. Nobody is required to have such an arrangement.

If my amendment were accepted by the Government at some point, it would require the cost to be reimbursed, as it is in many arrangements up and down the country, including in my county of Staffordshire, where there is a perfectly good arrangement between Unison and Staffordshire County Council.

[Stephen McPartland (Stevenage) (Con)]

I support amendment 5 because it is my understanding that local authorities and other such organisations would be able to charge a commercial rate to recover the costs.

[Jeremy Lefroy]

Yes, and they do. As I mentioned in an intervention on the hon. Member for Cardiff West (Kevin Brennan), some councils make a surplus from it that goes towards their services.

As has been pointed out, clause 14 singles out union subscriptions. There is no prohibition on other deductions for which there might not be compensation to the employer, such as deductions for season tickets, which have been mentioned, or professional fees. Even on my payslip as a Member of Parliament, the top deduction every month is £2 for the Members fund. There will be no prohibition on that deduction, unless the Members fund is a national union of Members of Parliament, which I do not think it is.

Other people have made the case much more eloquently than I have, so I will not detain the House any longer on this point.

Tax Credits

Debate between Jeremy Lefroy and Stephen McPartland

Thursday 29th October 2015 Commons Chamber

[Jeremy Lefroy (Stafford) (Con)]

It is a great honour to follow the hon. Member for Dumfries and Galloway (Richard Arkless). Indeed, I am one of those who have visited his constituency on holiday, and I remember one evening being bitten alive by midges on Clatteringshaws loch. We had to escape into our car and smoke cigars to keep them away—of course nobody under the age of 18 was in the car at the time, I hasten to add.

One noticeable thing that happened earlier this month, and which may not have come to everybody’s attention, was that the International Monetary Fund—not an organisation I have always had a lot of sympathy for, particularly when I was living in Tanzania in the 1990s—made a remarkable statement under its excellent managing director Christine Lagarde: excessive inequality damages growth and the economy. It is amazing and very welcome that the IMF has come to that conclusion. It has come to that conclusion not just in respect of developing countries, but in respect of any country.

In my opinion tax credits have been a means of reducing inequality and particularly excessive inequality in this country. That is why when I spoke in the Opposition-led debate last week I urged the Government to look again at the policy, especially its timing. I am very glad the Chancellor has said he will do that and will bring forward measures. I pay particular tribute to my hon. Friend the Exchequer Secretary because he has always been listening and is a great credit to his position, as indeed is the Chancellor’s Parliamentary Private Secretary sitting behind him, my hon. Friend the Member for Kingswood (Chris Skidmore).

I mentioned two other things last week, one of which was predictability. Income is about predictability; it is not just about levels of income, and if we cannot predict our income it is a great driver into relative poverty. We see that all over the world. The proposals originally before us would lead to cuts of perhaps 10% or 15% in people’s income without their knowing what is going to happen, as the hon. Member for Nottingham North (Mr Allen) and others have said. They would be getting a letter in December or January for something starting in a couple of months and would not have an opportunity to correct that.

I also mentioned the problem of scarcity. For those with a low income things are more expensive. The inflation rate is much higher for people on low incomes than for people on higher incomes. They are not buying electronic equipment, which comes down in price every year, or flying with Easyjet on holiday, both of which have brought the inflation rate down. We need to bear that in mind. The inflation rate may be 0% at the moment, but it is certainly not 0% for people on the lowest incomes.

[Stephen McPartland]

Does my hon. Friend agree that the real poverty in this country is poverty of education, of opportunity and of aspiration and that the people on the lowest incomes are trying to work their way out of that poverty?

[Jeremy Lefroy]

Absolutely; if we see everything in terms of income we are a poorer society, as John F. Kennedy once so magnificently said.

Members have also talked about the fallacy of trickle-down economics—and it is a fallacy. It was supposed to be the way in which the poor would get richer, but, as I have seen around the world, that is rubbish. What we need is surge-up economics, because those on lower incomes spend their money locally, and it goes into taxes and VAT. Of the £4.4 billion, probably several hundred million pounds will be spent on VAT and will come straight back into the Treasury. So we have to remember the consequences and effects on the local economy of the loss of this spending power, as the hon. Member for Dumfries and Galloway said. If one thing is to be reduced, we must see the other sources of income increase simultaneously.

There is also the impact on those on fixed incomes such as carers, which I mentioned last week and other Members have mentioned. Full-time carers who will not see rises in their income often have no opportunity to go out and work more hours. There is also the impact on the self-employed, and indeed on farmers in my constituency who have seen their milk prices, their only source of income, fall. They are reliant on tax credits as much as anyone else. Sometimes, people see them as asset-rich because of their farmland, but they are the ones providing our milk, wheat and other things on which we rely, week in and week out. Their incomes are low, and they, too, rely on tax credits.

I want to look to the future. Other hon. Members have mentioned areas in which we could raise the extra income to offset the cost of delaying the tax credit reductions. I mentioned a couple last week and I shall not repeat them. I want to make a couple of points about the future, however. The first is about national insurance. There has been talk in the past about merging national insurance and income tax, but I think that would be a big mistake. It is incredibly important to have a progressive national social insurance system to which people contribute—even those on low incomes, perhaps at a very low rate—in which they feel they have a stake and from which they are entitled to receive benefits if the need arises. I urge the Government to look closely at how we can improve the national insurance system, rather than getting rid of it. Perhaps we should consider adopting something like the German system, to which we would contribute more but which would provide guaranteed benefits for when people were sick or out of work and for when they eventually retired.

Secondly, we need to look at our savings. We do not save enough; that is a fact. If we look at other countries around Europe, such as Italy, we see that they are far better at saving than we are. The Japanese are excellent at saving. We have one of the lowest savings rates. When my colleagues and I produced a report on social stability last year, we emphasised the importance of introducing a lifetime savings account, which could perhaps be supported through tax-free contributions over the course of a person’s lifetime. People would be able to draw down funds from such an account at difficult times in their lives, perhaps if they became seriously ill or were out of work. Such an account could eventually be converted to become part of their pension. That would encourage people to put aside money, supported by the state, to top up any benefits they might need to claim. Those benefits are always likely to be fairly basic, because they are paid out of the state system, but it is to be hoped that people would still be able to live on them.

I welcome the Chancellor’s statement this week, but I encourage him to look at all the incredibly important points that have been made by Members on both sides of the House in a spirit of co-operation. Above all, I thank the right hon. Member for Birkenhead (Frank Field) for his initiative and his sagacity in bringing forward this debate.