Oral Answers to Questions

Debate between Jerome Mayhew and Anthony Browne

Thursday 8th February 2024 Commons Chamber

[Anthony Browne]

I thank the hon. Member for her question. It is my responsibility to help roll out electric vehicles. We introduced the zero emission vehicle mandate to ensure that 22% of vehicle sales this year are zero emission. I should say that, throughout the life cycle of an electric vehicle, they are cheaper than petrol or diesel cars to drive. This Government have given £2 billion-worth of support to owners of electric vehicles and to charge point companies to help smooth that introduction. The specific question that she raises is about VAT, and that is a matter for the Treasury.

[Jerome Mayhew (Broadland) (Con)]

18. What steps he is taking to increase rail connectivity between Cambridge and Norwich.

State Pension Triple Lock

Debate between Jerome Mayhew and Anthony Browne

Tuesday 8th November 2022 Commons Chamber

[Jerome Mayhew]

I am grateful for the hon. Lady’s intervention; it brings to mind a number of the interventions and speeches from Labour Members talking about pensioners’ fears as they consider the outcome of the triple lock decision. Surely this debate, called by Labour, does not reduce fear but increases it, and that in itself is wholly irresponsible. It is scaremongering.

I am surprised that Labour wants to draw attention to pensions policy, because the Government’s activities over the last dozen years put Labour to shame. Let us look at pensions more widely, because pensioners get income from multiple sources. We have the state pension, but there are also private and company pensions, individual personal savings and other state benefits in addition to the pension.

I will focus first on auto-enrolment. Under Labour, members of the public increasingly just could not afford to save for their retirement—either that, or Gordon Brown’s famous tax raid on pension pots simply made it not worthwhile to save for a pension. If we look at the data, during the 2000s private sector pension membership declined. In the year 2000, 47% of people had private pensions, but by 2012 that had fallen to 32%—a decline of 47%. By changing from an opt-in to an opt-out system, auto-enrolment, brought in by the Conservative-led Government, transformed pension saving in this country. In my view, it was perhaps the single most important intervention of Government policy over the past decade.

The figures speak for themselves: now, 75% of employees are regularly saving and benefiting from tax-free employer contributions. I used to be an employer before coming to this place, and I employed hundreds of very young people—typically 18 to 25-year-olds. We had a company pension scheme and, as a responsible employer, I tried to persuade them to start pensions, but the take-up was very low. The impact of the change to auto-enrolment was amazing, and that has been backed up by our company contributions. It is a wholly beneficial thing and it has reversed the roles.

The other point worth making is that this is Conservative values in action. Not for us the state’s putting its arms around people and being wholly responsible for individuals’ futures; we want to see people’s being helped to take responsibility for their own futures, with the state there to help the most vulnerable, and that is exactly what the Government have done in this case.

It has also been mentioned multiple times that the state pension was not a Labour idea; it was instigated by the Conservative-led Government. The right hon. Member for Leicester South (Jonathan Ashworth) is no longer in his place, but I sometimes wonder what conversations in the Treasury were like in 1999, when he was part of Gordon Brown’s inner circle. Presumably, the debate was, “Do we raise the pension by 75p or 50p, or shall we push the boat out and increase it by £1?” It is rich for the Labour party to start lecturing the Conservative Government, whose policy the triple lock actually is, given its own lamentable record on pensions. Labour has nothing to teach us here.

[Anthony Browne]

My hon. Friend has made some interesting points, and I think this debate has been useful to remind the Chamber that the triple lock is our policy. Given the point he has just made, and continuing the Christmas theme, does he agree that Labour attacking our track record on the state pension is a bit like Scrooge attacking Father Christmas for not being generous enough?

[Jerome Mayhew]

I will let that intervention speak for itself, but I entirely agree with the sentiment behind it.

Since 2010, because of the Conservative triple lock, pensions have increased by £2,300 in cash terms and by £720 in real terms. There will come a point when the triple lock will need to be reviewed; because of its statistical ratchet effect, there will come a time when we should properly remove the triple lock to maintain balance between the various cohorts of society. To date, however, it has been a powerful tool to raise pension values above those Labour lows in the 2000s that we have heard about.

In addition to the triple lock, Labour also ignored the problem of people’s—overwhelmingly women—child-rearing years not counting towards the state pension. I am delighted that, again, it was the Conservative Government who stood up for women and for the family and the importance of child-rearing, so that now raising a family counts towards the new state pension. More than 3 million will now be £550 better off as a result.

I have a minute and a half left, but I will not use it all, because others have set out the long list of additional benefits devised by the Government to assist with the cost of living crisis caused by the Russian invasion of Ukraine. We Conservatives recognise that pensioners are particularly vulnerable because they are on a fixed income, but there has been an additional £300 for winter fuel payments, the £400 discount on energy bills, £150 for affected council tax payments, and £650 additional means-tested support, as well as the additional payment for those with disabilities—and the list goes on.

On the triple lock, we will have to wait and see for nine more days, but even without it pensioners have been looked after by this Government. As the Prime Minister has repeatedly said, and as his record shows, all decisions taken by this Government will be compassionate and will look after the most vulnerable in society.

National Insurance Contributions Increase

Debate between Jerome Mayhew and Anthony Browne

Tuesday 8th March 2022 Commons Chamber

[Jerome Mayhew]

I am grateful to the hon. Member for his intervention. I suggest that a very good use of public money was emergency funding for PPE when we most desperately needed it in a national lockdown. It was inevitable that there would be a trade-off between speed—everyone in the House was cheering the Government on at the time—and maximising the effectiveness of every single contract. I hope that the Government make no apology for the speed with which they dealt with the crisis. They should be commended for that.

It has also been suggested that we should crack down on fraud. The hon. Member for Leeds West (Rachel Reeves) referenced a £4.7 billion headline in covid-related fraud, but she failed to give the Government credit for the actions that they have taken to address that. We have the Taxpayer Protection Taskforce, which has recruited 1,265 staff. We also have the work done on powers for the Insolvency Service and Companies House to link company directors directly to their bounce back loans, which has been used on 61,758 companies, catching loans worth £2.1 billion. The combination of those two factors means that the new estimate, which she did not find time to refer to, is not £4.7 billion but £3.3 billion. Fraud is therefore reduced to an estimated 7.5% of contracts, which is at least within spitting distance of the average for Government programmes of, I am sorry to say, as much as 5%.

[Anthony Browne]

My hon. Friend makes a valid point about the need to increase spending to pay for social care and has raised the different ways of doing that. Does he agree that if we are to increase spending sustainably, we need a sustainable source of money and that a one-off windfall that occurs in just one year cannot fund long-term commitments? Cutting back on fraud in one particular year cannot fund long-term commitments.

[Jerome Mayhew]

My hon. Friend is absolutely right. Even if we recovered all of that £3.3 billion, that would be for a single year only. The great mistake that the Opposition have made is to conflate single events—a windfall tax is another example—with ongoing revenue needs.

The next option is to borrow money. Of course, that is the easy response, and that really is the Opposition’s position, even if they cannot bring themselves to admit it from the Dispatch Box. However, that is not free money, because we have to service the debt and, eventually, we have to repay it. So we are passing the responsibility on to our children and our grandchildren for tax cuts now, which is essentially what the Labour party is arguing for. Our servicing of debt already cost an estimated £64 billion last year, which is £955 for every single member of the population. Because of inflation, which is a global phenomenon, and the likely rise in interest rates, that is forecast to rise to £75 billion for this financial year. The hon. Member for Leeds West says that the Government have a policy of buy now, pay later, but what could be a better description of Labour’s response to this pressing need? We want to improve social care, and we need to have a covid fightback, and we have got to pay for it.

There is the option to borrow, but, as I said, it is our children and grandchildren who will pay that price. I therefore believe that the Government are quite right to balance the increased social spending that we want to achieve with the tax necessary to pay for it. If we look at the total measures that the Government have brought in, we see that they are deeply progressive. Treasury analysis shows that they are net positive for 80% of households, whereas Labour’s plan to remove the national insurance contribution would actually help the top 10% the most—by more than £1,000. Surely that is not Labour’s policy.

No Conservative Government want to raise tax, but it is our duty before cheap popularity to be responsible custodians of national finances. That is a lesson that Labour has never learned.

Border Carbon Adjustment Tariffs and Decarbonisation

Debate between Jerome Mayhew and Anthony Browne

Wednesday 16th December 2020 Commons Chamber

[Jerome Mayhew]

My hon. Friend has anticipated a point in my speech

that I was coming to in a few minutes. He is absolutely right that, just in July this year, the EU started a formal consultation on the implementation of the border carbon adjustment process for the entire European Union—and not just there, but he will have to wait a moment or two before I come on to the other exciting news.

Let us look at steel. We can get a huge amount of tax benefit, plus increased competition, that will give a fair, competitive advantage to our domestic steel.

[Anthony Browne (South Cambridgeshire) (Con)]

I commend my hon. Friend and his campaign for border carbon adjustment payments, which makes absolute sense. There is no reason why people who are not green should get a competitive advantage over those countries that are leading in the battle to become carbon neutral. My question is a somewhat technical one: we have a very complex economy, how do we work out which products need border carbon adjustment payments and which ones do not, or do we just focus on one key industry, or do we try to do it across the board?

[Jerome Mayhew]

I thank my hon. Friend for his intervention. The answer is that there are many different ways that we could approach it. The simplest would be to choose the five or six key carbon-heavy industries and start with them. As we get more knowledge of how to implement this kind of scheme, we could spread out to the wider economy. I suggest that the best way to do that would be to look at the carbon-emitting credentials of the energy market in the third country and assess in broad terms what its carbon contribution is. For example, in China, the coal contribution to the energy mix is between 70% and 80% and we would use that as the basis for the carbon contribution of its imports. When we get a bit more sophisticated, we could look at giving rebates to individual businesses that can demonstrate that they have a low-carbon approach despite the high-carbon attitude of their country as a whole. That would benefit behaviour and would not be protectionist, but would merely be a fair assessment of the carbon cost of transactions.

Moving on to energy, we naturally assume that we create all the energy that we use in this country domestically, but that is not the case. On average, we import, via undersea interconnectors, about 7% of the electricity that we use in this country. Members may recall that, last May, we trumpeted in the press that we had a two-week period in which we were coal free. We had coal-free electricity for two weeks. That was very exciting, but what the newspapers failed to mention was that, during that two-week period, we imported from Holland 40 GW of coal-fired electricity. The reason that we did that was not that we lacked generating capacity in the United Kingdom, but that it was cheaper to import coal-fired electricity from mainland Europe than it was to use our own. The reason why it was cheaper was that it was entirely tax-free, whereas we imposed a carbon tax on the generation of our own domestic electricity. Unbelievably, we actually incentivise the importation of high-carbon coal-generated electricity at the expense of our domestic manufacturing processes. How can that be right? A border carbon adjustment would sort that out in a jiffy.

What single better way is there to forward this Government’s levelling-up agenda than by putting in place the economic conditions for the market to want to re-industrialise in the UK, and all that with no need for Government subsidies. In fact, not only does it not require Government subsidies but it will actually produce an annual windfall for the Treasury year after year. Working out how big that windfall might be has a number of imponderables in it, but the Grantham Research Institute of Climate Change and the Environment has produced a report on this and, again, using the assessment of a carbon price between £50 and £75 a tonne, starting in 2020 and working up towards 2030, it assessed that the gross amount that the Treasury could recover under this process would max out at £36.7 billion a year. I stress that that is the gross amount. Members may well take the view that, rather like VAT, this is a tax that is consumer based and would impact poorer households disproportionately as a percentage of their gross income. The Government might very well want to use some of that £36.7 billion to cushion the blow and to make it more acceptable for lower-income families, perhaps by investing in insulation for their houses or other measures.

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[Jerome Mayhew]

The example that my hon. Friend gives—that of Germany—would fall neatly into the European Union, which is consulting on this very issue, so in that case, it would be a coalition of the willing to allow us to go forward, I hope, with a form of equality between the European emissions trading scheme, or its successor, and the approach that we would take ourselves. However, I accept that that would be up to country-by-country negotiations.

Is there international support for this approach? Do we have a realistic prospect of bringing the world community together and with us at COP26? I say that there is, because President-elect Biden has already spoken about “carbon adjustment fees” against

“countries that are failing to meet their climate and environmental obligations.”

That is a clear indicator that the incoming Administration in America is taking this seriously. I know that there is many a slip between a statement of intent and action, but it is something that we can potentially get behind at COP26. The European Union, as has been mentioned, just this July launched a formal consultation on the implementation of a border carbon adjustment, and it is worth noting that for the President of the Commission—I think it was part of her manifesto when she was first appointed— this is one of the key objectives for her presidency.

[Anthony Browne]

I commend my hon. Friend on his absolutely fascinating speech. It is clearly good to try to get global co-operation on this as a coalition of the willing, as he put it, among as many countries and trading partners as possible. If we fail to do that, does he think that the UK should go on its own, or would that be too difficult and put us too much out on a limb in the global trading system?

[Jerome Mayhew]

I say that we go it alone. I think it is one of the great freedoms that we have from Brexit. We have taken the trouble to get our independence. What use is it if we are not prepared to use it—if we are too scared to use our independence to make a bold statement and say, “This is the right thing to do. We are going to do it. Follow us if you like.”?