Charter for Budget Responsibility

Debate between Jonathan Edwards and Danny Alexander

Tuesday 13th January 2015 Commons Chamber

[Danny Alexander]

I am going to make some progress. The shadow Chancellor should be aware, because this is a very serious business, that if his party has a majority his first Budget will be judged by the OBR against achieving this goal in the financial year 2017-18. So unless he is telling us now that it is his deliberate intention to fail this test, he will have to set out between now and the election how he will find some £30 billion of deficit reduction. This is immensely serious and every Opposition Member should weigh that up before deciding which Lobby to vote in.

[Jonathan Edwards]

Following today’s vote these targets will be set in stone for the next Parliament, so does the Chief Secretary think that if they are missed in the next Parliament there should be ministerial resignations?

[Danny Alexander]

Each Government have to account for their own economic policy in their own way. I am proud that we have put in place a plan that has got the deficit down by half and, more importantly, got us the best economic growth in the European Union and the strongest record of job creation—Opposition parties are notoriously silent about that.

Let us put this matter into some sort of context. While we have been busy cutting the deficit, the shadow Chancellor and the Leader of the Opposition have spent their time marching their troops up and down the hill of deficit denial. If their votes today are to have any credibility, they will have to march them down that hill again. We have still not heard one word of acknowledgement for their role in the crash of 2008, let alone a word of apology.

By the end of this Parliament the Government will have halved the deficit as a percentage of GDP. That has meant facing up to reality and taking difficult decisions. This has been a process during which Labour voted against every measure that we have had to introduce to rescue the economy. There have been scores of votes on deficit reduction and, you guessed it, the Opposition voted against every one. So I say this to Labour: “Supporting this motion does not restore your credibility on the deficit. You have said your aim is to push out the time scale as far as possible. You are perfectly happy to borrow tens of billions of pounds more. That will mean more debt, more interest payments and the pain of rebalancing the books dragging on for years to come.”

Numerous contributions have been made to this debate, and I thank those who have spoken from the Conservative and Liberal Democrat Benches. We heard a wise contribution from the right hon. and learned Member for Rushcliffe (Mr Clarke), and excellent contributions from my hon. Friend the Member for Redcar (Ian Swales) and from the hon. Members for Hexham (Guy Opperman) and for Ipswich (Ben Gummer), in particular.

However, some Conservative Members have criticised me in this debate for the views I have taken on Conservative plans beyond 2017-18—the shadow Chief Secretary asked me about this, too. Let me send a note of warning to some of my Conservative colleagues. We formed the coalition to tackle the deficit in a timely manner. That is why we agree that the structural deficit must be eliminated by the end of 2017-18 and debt must fall as a share of GDP. Hitting that 2017-18 target will require further consolidation to the tune of some £30 billion, and to say that we can reach that figure by spending reductions alone, with some £12 billion coming from cuts to welfare, would be grossly unfair. It would hurt millions of families who are trying hard to make a success of their lives. Tax on the wealthy should and must play a significant part in how we finish the job in the next Parliament. But our real concern, and where we differ, is on what happens after that mandate is met. As a country we should not be wedded to austerity for austerity’s sake. People in this country supported our coalition approach because it has been necessary and successful in turning the economy around, but they will not support an ideological drive for an ever smaller state.

Finance (No. 2) Bill

Debate between Jonathan Edwards and Danny Alexander

Tuesday 1st April 2014 Commons Chamber

[Danny Alexander]

As usual, my hon. Friend is absolutely right. In particular, the measure will help small and medium-sized manufacturers outside London; they are the backbone of our economy.

[Jonathan Edwards (Carmarthen East and Dinefwr) (PC)]

Will the Chief Secretary to the Treasury tell the House where the UK lies in the global league of business investment as a percentage of GDP?

[Danny Alexander]

I do not have those figures immediately to hand, but I can tell the hon. Gentleman that, according to recent indices from major international firms, the UK is seen to be in the top two or three countries in the world for companies to invest in. One of the accountancy firms recently published an index showing that the environment for investment in the UK was now among the top half dozen in the world. Our position has improved significantly in recent years.

National Infrastructure Plan

Debate between Jonathan Edwards and Danny Alexander

Wednesday 4th December 2013 Commons Chamber

[Danny Alexander]

I can certainly put my hon. Friend’s mind at rest. He should not believe all the rumours that he hears about the European Union, particularly if they are circulating on the Conservative Back Benches. The truth is that we have just started the state-aid clearance process, which does take a bit of time and is there for good reasons. All the work that my right hon. Friend the Energy Secretary and his colleagues have done leads us to have a great deal of confidence that the clearance will be forthcoming.

[Jonathan Edwards (Carmarthen East and Dinefwr) (PC)]

What mechanisms will the Welsh Government need to put in place to access finance directly from the infrastructure plan for their own projects—or is it a matter of the Treasury determining which capital projects will be spent on in Wales?

[Danny Alexander]

That is a very good question. The Welsh Government’s capital budget is allocated to them through the Barnett formula, so they have complete freedom to determine how they use the money. I urge them to consider the principles laid down in the infrastructure plan as applicable to Wales. I draw the hon. Gentleman’s attention to our decisions in responding to the Silk review, whereby the Welsh Government will now have borrowing powers, particularly to fund the M4 project, which is such an important investment not just for Wales but for the whole UK.

amendment of the law

Debate between Jonathan Edwards and Danny Alexander

Monday 25th March 2013 Commons Chamber

[The Chief Secretary to the Treasury (Danny Alexander)]

Let me begin by joining the shadow Financial Secretary in his congratulations to the hon. Member for Leeds West (Rachel Reeves) on the birth of her child, as I think will Members in all parts of the House.

The debate has been very well attended. I think that there were 46 Back-Bench speeches. It has also been very well considered and, at times, passionate. I thank Members on both sides of the House for their contributions.

My right hon. Friend the Secretary of State for Communities and Local Government opened the debate in his usual pugnacious style. He talked about planning, housing, mortgages and the help to buy scheme, which he described in some detail. He did not mention the announcement on zero-carbon homes, but my right hon. Friend the Member for Hazel Grove (Andrew Stunell) referred to it in detail.

There were contributions from Members representing all parts of the United Kingdom, and, I think, from all parties in the House except the Scottish National party. The hon. Member for Carmarthen East and Dinefwr (Jonathan Edwards)—

[Jonathan Edwards]

rose—

[Danny Alexander]

Will the hon. Gentleman give me a moment? I am going to say something about him. He made some serious points about borrowing powers. As he knows, they are being considered in the light of the Silk commission recommendations.

Many Government Members celebrated both the reaching of the £10,000 income tax personal allowance and the reductions in fuel duty, which one or two Opposition Members also welcomed. I will not single out every contribution, but my hon. Friends the Members for Halesowen and Rowley Regis (James Morris) and for Mid Dorset and North Poole (Annette Brooke) spoke passionately about those subjects. They also mentioned housing, including the important role played by affordable housing in the Budget.

Oral Answers to Questions

Debate between Jonathan Edwards and Danny Alexander

Tuesday 6th March 2012 Commons Chamber

[Danny Alexander]

I have not seen that report, but I can tell my hon. Friend that it is not a question I have asked myself.

[Jonathan Edwards (Carmarthen East and Dinefwr) (PC)]

16. What steps he is taking to create greater equality in gross value added between the countries and regions of the UK.

[The Chief Secretary to the Treasury (Danny Alexander)]

Economic development policy is devolved, although the UK Government continue to work with the devolved Administrations in Scotland, Wales and Northern Ireland, as well as with the English regions, including on policies to maintain low long-term interest rates and provide 100% capital allowances in designated enterprise zones.

[Jonathan Edwards]

Latest European Union statistics indicate that GVA per head in inner London is £109,278 while the figure for the south Wales valleys is £10,654. Will the Chief Secretary include provisions in the forthcoming Budget to equalise wealth levels across the British state?

[Danny Alexander]

Budget announcements are a matter for the Chancellor, but I recognise very much the point that the hon. Gentleman raises. That is why we have asked the Silk commission to consider changes to the financial provisions within Wales—we look forward to its report—but he will also know that the autumn statement saw an additional £216 million of capital funding going as a consequence to the Welsh Assembly Government. I am sure that he, along with me, wants to press them to announce how they will use that money.

Oral Answers to Questions

Debate between Jonathan Edwards and Danny Alexander

Tuesday 10th May 2011 Commons Chamber

[Danny Alexander]

No, I am afraid I cannot make that commitment. As I said earlier, our priority is to reduce the deficit. We have the Scotland Bill to take forward here, and in relation to Wales we have a process that is following on from the referendum and we have the Holtham commission to look at specific issues. I think that is the right set of priorities for the moment.

[Jonathan Edwards (Carmarthen East and Dinefwr) (PC)]

As the Chief Secretary knows, his Government have announced a Calman-like process for Wales following the successful referendum in March for further powers. Will he confirm that reform of the Barnett formula will be a precondition of any wider financial reforms to the way the Welsh Government are funded?

[Danny Alexander]

I cannot confirm that, no. We have said that we will consider the issues to do with tax powers raised in the second Holtham report as well as other issues that were brought forward at that stage. We made a commitment to the previous Welsh Assembly Government to engage in a conversation about those things. If the new Welsh Assembly Government want to take that forward, we will be open to that, too.

Finance Bill

Debate between Jonathan Edwards and Danny Alexander

Tuesday 6th July 2010 Commons Chamber

[Danny Alexander]

I will press on, if I may.

As my right hon. Friend the Chancellor said, this is a progressive Budget.

[Jonathan Edwards (Carmarthen East and Dinefwr) (PC)]

Will the Minister give way?

[Danny Alexander]

I am going to make some progress, but I will give way to the hon. Gentleman in a moment.

The Budget includes progressive measures such as increasing the rate of capital gains tax by 10 percentage points for higher rate taxpayers while keeping it the same for basic rate taxpayers. Clause 2 increases the rate of capital gains tax to 28% for higher rate income tax payers, but basic rate taxpayers continue to pay an 18% rate. The entrepreneurs’ relief lifetime limit will be extended from the first £2 million to the first £5 million. That implements the commitment in the coalition agreement to provide generous exemptions for entrepreneurial businesses.

--- Later in debate ---

[Danny Alexander]

I have given way a great deal, and I now give way to the hon. Member for Carmarthen East and Dinefwr (Jonathan Edwards).

[Jonathan Edwards]

On geographical fairness, does the right hon. Gentleman agree with the recommendations of the final Holtham report, published today, which calls for an immediate Barnett floor to protect Wales from further convergence, the implementation of transition mechanisms towards a needs-based formula, and a place at the table for the Welsh Government in discussions on fiscal autonomy for Scotland?

[Danny Alexander]

I am grateful for that intervention. I have not yet had a chance to read the second Holtham report, which is published today. However, in the course of a meeting with the Welsh Finance Minister, I undertook to meet Mr Holtham once he had published his second report, and I look forward to doing so and having a chance to discuss it directly with him. At this stage, I will not make any commitments of the sort the hon. Gentleman wants, except to note that on the path of public finances as they are at the moment, further convergence is not forecast over the next few years.

The changes to capital gains tax help to pay for further progressive measures such as our increase in the income tax personal allowance, which takes almost 1 million of the lowest-earning income tax payers out of income tax altogether. It also increases the incentive for people on low incomes to get a job. That is fairness.