HM Revenue and Customs

Julie Hilling Excerpts

Tuesday 5th February 2013 Westminster Hall

[Julie Hilling (Bolton West) (Lab)]

It is a pleasure to serve under your chairmanship, Mr Howarth. I start by congratulating my hon. Friend the Member for Hayes and Harlington (John McDonnell) on securing this important debate.

In 2010, the Public and Commercial Services Union commissioned one of the most comprehensive calculations of the UK tax gap ever undertaken. The report, by Tax Research UK, estimated that the tax gap could be as big as £120 billion a year. I accept that the report was criticised by tax professionals, Ministers, HMRC and many large companies, but we have learned since 2010 that that estimate is likely to be more accurate than HMRC’s estimate of £35 billion.

What is the tax gap? The tax gap includes tax lost to avoidance, which is people seeking to minimise their tax bill without deliberate deception, but contrary to the spirit of the law. A good example was seen when tax for those earning £150,000 a year went up to 50% and some payments were brought forward, so that people subject to the 50% tax rate did not pay tax on that amount of money. As we see now, payments such as bonuses are being paid late, so again, they miss the 50% tax rate. That is immoral, as I am sure that many in the Chamber would agree, but it is not illegal. There is also tax lost to evasion, which is the illegal non-payment and underpayment of taxes by making a false declaration. Interestingly, that includes not only fraud, but error and neglect, which I will briefly come on to later. The tax gap also includes late or non-payment of tax—tax not due or not paid on time.

Whether the tax gap is £35 billion, £120 billion, or somewhere in between—or, as some of the recent scandals with well known names show, possibly even higher—it is a heck of a lot money, and it could make a real difference at this time of austerity and devastation of public services. All Labour Members will argue that we need to grow our way out of a recession, and we can see the current consequences of trying to cut our way out of it, as the triple-dip looms. However, fundamental to that growth must be the effective collection of tax, and it seems the closure of local offices does not make financial sense.

When Starbucks, Amazon, Google, and the others were exposed for arranging their tax affairs so that they did not pay their taxes here, all of us could recognise that something was wrong. All who used their shops and services could say, “Hang on a minute. How could enormous companies like that be paying such little tax in this country?” They are household names. We could all question it.

[Mark Field]

It is important in the context of Starbucks and the other companies to point out that much as there was public outrage, they pay significant amounts of value added tax on the products that they produce, and they pay significant amounts of employers’ national insurance on the number of people that they employ. I accept that there was a lot of unrest, but to suggest that they pay no tax at all misrepresents the situation.

[Julie Hilling]

I accept the hon. Gentleman’s point, but it is like saying, “I pay VAT when I buy things in shops, and I pay other taxes.” People who are employed by all of us pay national insurance, but there is that whole bit of tax that should be paid, and there are those who are not doing so. As we know, many individuals and companies manage to avoid paying it, and as has been said, the tax system is so complicated that it makes it easy and possible for people to avoid tax. It is wrong, and in my view, absolutely immoral that people, particularly at this time of austerity, do that.

If Fred Bloggs of Bolton or Freda Brown of Wigan do not declare all of their tax, how will the tax collector in another area have any idea of the scale or scope of their business when they are not household names? Local knowledge is invaluable and it is a real asset in ensuring that the right tax is paid. As other hon. Members have said, it is also an important service in the local area. It is about assistance so that people can try to get their tax right, so that they are not evading tax by error or neglect—unwittingly or unwillingly. They should have people to talk to on their doorstep. Again, as others have said, HMRC is an important local employer with an important role in the local economy.

It is a disgrace that 20 million calls were not answered in 2011-12, that the estimated cost of calls was £33 million, and that the value of customers’ time was £103 million. How can we support and run a system that costs businesses so much? We need to be working to build our economy. How can it be right that trying to talk to people about paying tax costs industry that amount of money? It is a service that earns money. It beggars belief that we are cutting it to the level that we are, and reducing staff by almost 50%.

I am running out of time, but I hope that the Minister will explain how he expects to collect all the tax that is due by nearly halving the number of tax inspectors, by closing local offices, and through the cuts that are taking place. Having served on the Finance Bill Committee and seen even more taxes introduced from the previous Budget, I hope that the Minister will explain what the Government will do to simplify tax as a whole, so that people do not either manage to avoid or unwittingly evade their tax.

Autumn Statement

Julie Hilling Excerpts

Wednesday 5th December 2012 Commons Chamber

[Mr Osborne]

We have identified the hospital in Sandwell as a prime candidate for the new PF2. I know that it will help improve facilities for the many people my hon. Friend represents. It is a very good project and I hope that we will be able to proceed with it.

[Julie Hilling (Bolton West) (Lab)]

The Chancellor did not mention the other banks he has created—food banks. Is he not deeply ashamed that under his policies working people are dependent on food handouts to feed themselves and their families?

Finance Bill

Julie Hilling Excerpts

Tuesday 3rd July 2012 Commons Chamber

[Mr Gauke]

VAT is charged on all beverages. Typical sports drinks which are consumed primarily to rehydrate or quench thirst are already taxed accordingly at the standard rate, but some sports drinks companies have won court rulings that their products are not beverages because of their nutritional content and because they are not designed to quench thirst. The changes that we are introducing will ensure that all sports drinks are subject to the same VAT treatment whether they are consumed for rehydration or for nutritional purposes, because they are targeted at much the same group, and we think it only right to apply the same approach to consumers. The argument for the zero-rating of food is that it should apply to everyday essentials, but it is difficult to apply that argument to sports and nutritional drinks.

[Julie Hilling (Bolton West) (Lab)]

I am desperately trying to understand what the Minister is saying will happen to sports and nutrition products. Is he saying that all drinks will now be subject to 20% VAT? What about other nutritional products that are not sold in liquid form?

[Mr Gauke]

Let me try to be helpful to the hon. Lady—not for the first time during our deliberations, I hope. We propose that drinks aimed at the sports nutrition market will be standard rated. We are not applying the same approach to meal-replacement drinks. There is a clear distinction between them, as one is more closely aligned to food than to sports drinks.

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[Catherine McKinnell]

Clearly, a family would gain more from a VAT cut because they spend much more on VAT as a proportion of their household income. The hon. Gentleman’s indignation at that response demonstrates just how much the Government are out of touch with the reality of the effect of their spending plans on households and household incomes. That would explain why this economy is going backwards rather than forwards under the Government’s plans.

[Julie Hilling]

Does my hon. Friend find the interventions of Government Members bizarre? The Government inherited a growing economy and we now have a double-dip recession created totally in Downing street by their efforts to have no other aim than driving down the deficit. They are stifling growth and making ordinary families pay the cost of their economic failure.

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[Catherine McKinnell]

My hon. Friend speaks a lot of sense and makes her point very forcefully. The Government seem to have tax-grabbed first and consulted later. They have sneaked through changes—the ones they have got away with, they have pocketed and the ones they have been seriously challenged on, particularly by their own Back Benchers, they have had to relent on. But that is no way to conduct tax policy or business.

[Julie Hilling]

Is my hon. Friend as confused as I am by Government Members saying that their local manufacturers were asking for a 5% increase and demanding to be charged VAT? That is what it sounds like.

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[Sarah Newton (Truro and Falmouth) (Con)]

When I came into the Chamber to listen to the opening part of this debate, I did not anticipate speaking. However, I am very pleased to have caught your eye, Mr Deputy Speaker, because I felt utterly compelled to join in, notwithstanding my current incapacity. It has been an illuminating debate.

I listened to the shadow Minister’s speech and the interventions of her colleagues, and I find it staggering that they are not going to listen to the submissions of my constituents on the pasty tax, caravans or fundraising for places of worship, on which many people work so hard. Oh no—their opinions do not count for anything to the Opposition. They are not going to listen to all the representations that have led to the Government’s sensible proposals. The listening exercise to improve and amend the Budget has led to proposals that respond directly to all the concerns expressed by my constituents, and I dare say by the constituents of a great number of colleagues.

[Julie Hilling]

I am really very confused. My constituents have been saying exactly the same thing, which is why Labour Members have been arguing against this dreadful Budget in the Chamber, the Public Bill Committee and wherever we can. We have said that the Government should not put VAT on pasties, caravans, hairdressers’ chairs and so on. I agree with the hon. Lady about that. Thank heavens, the Government listened to us a bit in the end, but sadly not enough.

[Sarah Newton]

It is surprising to me that, as far as we are aware from the comments of the shadow Minister, the Opposition will be voting against the very improvements that the hon. Lady says they have been working so hard to achieve. I do not doubt her good intentions or that she has been working very hard to represent her constituents, but if she was truly doing so, she would walk through the Lobby with the Government this evening, because they have listened thoroughly.

Let us take the pasty tax, for example. It will not surprise Members that I am keen to talk about pasties, because not only am I a big fan and regular consumer of them, but I represent Cornwall, where they are an incredibly important industry. When I listened to the Budget some months ago, it was clear to me that the Government were doing exactly the right thing. They had seen some dreadful anomalies in VAT on food that had led to huge unfairness. Independent owners of fish and chip shops in my constituency had to pay VAT, but other outlets selling hot takeaway foods did not. The Government’s attempt to sort out VAT struck me as perfectly reasonable.

We all know that what is really holding back growth in our economy is that for too long, small businesses have been massively overburdened by a dreadfully confused and muddled-up tax code. Under the last Government, the tax code multiplied and multiplied. We would probably have to use a wheelbarrow to carry all its volumes into the Chamber. The current Government are making a very reasonable effort to simplify some of the taxes that are such a burden on businesses in my constituency. They have listened carefully to the representations that have been made and are now going to create a level playing field for all people producing and selling takeaway food. That will benefit independent bakers in small businesses throughout Cornwall who bake pasties.

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[Andrew Percy]

I am being abolished at the next election anyway, so there are only three years in which the Government might have to worry about me. However, they would frankly be stupid—if that is not unparliamentary language—to look at the issue again. I think any Government will take note of the campaign.

The final assurance I seek from the Minister is that we will continue to be conscious that there will still be a potential impact, as was mentioned in interventions by the hon. Member for Kingston upon Hull North (Diana Johnson), who also fought valiantly. I hope that the Treasury will continue to monitor that.

In the final minute, I want quickly to say something about the Opposition’s VAT cut for millionaires, which I think is what they are proposing. Whereas we on this side of the House have decided to target tax changes at those struggling the most—for example, by raising the personal allowance and taking some of the poorest out of tax altogether—the Opposition policy is to issue a massive VAT cut for high earners and millionaires, and just to pepper money around. The Opposition are not quite sure how much—they have not told us, although we think the figure might be £12 billion—and they do not know for how long the measure would be in place. What a policy! The interesting thing we have learnt is that we now know that the Opposition’s official policy is to support, ultimately, VAT at 20%, because they have said that the measure would be temporary, meaning that they have therefore definitely agreed the 20% rate.

[Julie Hilling]

Will the hon. Gentleman give way?

[Andrew Percy]

No, I am not going to give way, because other people want to speak.

The shadow Minister talked a lot about VAT consultation and the Government’s failure, she said, to consult on the changes. I just wonder whether she has consulted very widely on her proposal to reduce the rate temporarily to 17.5%, because I suspect not.

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[Sheila Gilmore]

Of course the stress and anxiety affected confidence and well-being. Indeed, it may have led to a further plunge in demand as people anticipated the impending redundancy which, thankfully, did not come about in many cases. That is an important consideration at a time when the economy is struggling so much.

I think that a great deal of time was wasted because the Government included measures in the Budget rather than dealing with the position earlier. If they believed that there were anomalies in the VAT system, why did they not consult? As I have suggested before, they could have said “We are minded to look at these things” at the time of the autumn statement, rather than at a time when they were putting together a Budget that, apparently, they wanted to balance. We heard a lot about that at the time.

Why did the Government not say “We want to look at these anomalies and review them in a general context”? One of our amendments proposes that that should happen in future. If there is to be consultation, it should be proper consultation. Saying, as the Chancellor did in March, “This is what we have to do and this is why we have to do it, but we will have a bit of consultation afterwards” is putting the cart before the horse. I hope that that lesson will be learned for the future.

[Julie Hilling]

One theory being put about is that the Chancellor was hijacked by civil servants whose pet projects had been turned down by the Labour Government, who had said “Don’t be silly”, and the Treasury was suckered into proposing a load of nonsensical changes.

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[Mr Deputy Speaker (Mr Lindsay Hoyle)]

Order. May I inform hon. Members that I want to bring the Minister in at twenty-past?

[Julie Hilling]

I took my car for a service last week at my local garage, which is a one-man band. He said, “For heaven’s sake, will you get rid of that lot? They are ruining my business.” When I asked him what he meant and what the Government were doing that was ruining his business, his reply was, “VAT—the 20% rate is destroying my business, and all the other small business owners I know think exactly the same.” Sadly, a reduction in VAT from 20% is not an option in this debate, but putting VAT on to so many other things just increases the problem for hard-pressed businesses and struggling people.

[Bob Stewart]

The hon. Lady tells us that she went to her garage and the man said, “Get rid of that lot”, but what would her lot do instead to give him much more business? That is what I would be delighted to hear, and I hope that she can give me an answer.

[Julie Hilling]

What Labour would have had is jobs and growth. We would not have been in a double-dip recession and we would not be in this stupid position of cutting too fast and too deep, which is ruining the British economy. Unfortunately, we are not in government.

It has been incredibly difficult to prepare this speech, because it is hard to work out, in this omnishambles of a Budget, what this disorganised Government have done a U-turn on. Perhaps I should not call them U-turns, because in many cases the Government have done them only partially; I am not sure whether these are L-turns or C-turns. I thought that they had done a full U-turn on the caravan tax, but I discovered this afternoon that they have not done a full U-turn at all, and the pasty tax is as clear as mud. I was having a discussion with colleagues before this debate as to what food is now VAT-able and what is not. It seems that a rotisserie chicken that will be cold when someone eats it is VAT-able, whereas a pasty that comes out of the oven will not be, unless it is put on a hot plate. But what happens if the oven is put on low so that the pasty is just kept warm? Will that pasty be VAT-able or not? The Minister needs to explain to me and the nation how this proposal is different from his first proposal, and how it is to be policed. Will taxmen regularly visit all the sandwich shops in the country to check on their ovens? That needs further explanation.

What about the mess of heritage tax? Again, we saw panic among Government Members and a little U-turn, perhaps to silence the bishops and return some money to places of worship for their alterations. However, £30 million will not go far, and the tax has been a huge blow to many communities.

[Jim Shannon]

Some 30,000 listed building consents were given last year, with some £120 million being spent on alterations. Does the hon. Lady feel that that £30 million will be adequate compensation ?

[Julie Hilling]

I thank the hon. Gentleman for that intervention. Clearly, I do not believe that £30 million is anywhere near the sum needed to compensate. Of course, the Government have also said that those people will get lottery and Government grants, but hang on a minute: is that not just taking with one hand and paying back with another? The change has been a huge blow to many communities that have been working for years and years to raise enough money to rescue old buildings and convert them for use by the whole community, only to now have to find another 20%.

The Government have tried to say that we should not worry too much about the heritage tax as it is really about charging millionaires who live in listed buildings and who get their indoor swimming pool tax-free, but there is no evidence for that. They conclude on the basis of a review of 105 applications that the majority of the work covered by the relief is

“not necessary for heritage purposes”,

but as nearly 30,000 listed building applications are made a year, that does not seem to me to be good evidence. From a sample of 12,049 applications, only 34 were for swimming pools. Perhaps we could deal with the problem in a slightly different way rather than imposing the heritage tax on all buildings. Indeed, 50% of those who live in listed buildings are in socio-economic groups C1, C2, D and E—supervisory, clerical, junior management, administrative, skilled workers, semi-skilled workers and unskilled workers. People in those groups are not usually millionaires.

That implementation of VAT will not raise a great deal of money in the scheme of things, but will be another blow to the construction industry and run the risk of more of our heritage buildings going to rack and ruin. Of course, once VAT is put on something it can never be returned to zero.

Skip taxes seem to have been introduced and then withdrawn. I think they probably have been withdrawn—who would know? The Government seem to be introducing a self-storage tax, however. Self-storage is often used by people in transition, such as those who are selling or buying houses or those whose homes are undergoing renovation. It is also used by people who have downgraded or moved to a different community and therefore have to live in much smaller accommodation. It is usually in a prime location so that customers can come and go as they choose, changing their winter wardrobe for their summer wardrobe or taking goods in or out of storage. Removals and storage providers have storage facilities as an ancillary part of the business and are therefore frequently in more remote places, as the location of the property does not need to attract customers. One reason for putting VAT on self-storage was to level the playing field for removal companies, even though they have different purposes. The effect will be that ordinary people will be hit again. Businesses that use self-storage to store documents and so on will be able to reclaim the VAT, but the ordinary person will not.

I think we still have a hairdressers tax. That will mean that self-employed hairdressers who rent a chair in a small salon will have no choice other than to register for VAT and decide whether to charge their customers VAT at 20% or to absorb the cost themselves. Of course, that will particularly hit females aged between 16 and 46—the very people whom the Government say they want to encourage to be entrepreneurs, start up their own businesses and pay into society.

The situation with sports nutrition is another unholy mess. If I have got this right—I hope that the Minister will correct me if I have not—sports drinks will become VAT-able, but sports nutrition products will not. If the Minister wants to intervene, I am happy for him to do so.

[Mr Gauke]

indicated dissent.

[Julie Hilling]

Does that mean that it will be exempt if a liquid product is made into a solid and people are just advised to drink water with it? What about weight-management products? More than 20% of the products in the sports nutrition category are for weight management. If they are slimming products, they are zero-rated, but they could also be considered to be sports nutrition products. We could have a bizarre situation in which men and women who exercise hard, follow a balanced diet and use sports nutrition products to help them get into shape would pay VAT, whereas those who skip meals, sit on the sofa and take magic slimming products would not.

It seems odd that we are making that tax change in Olympic year, when we are encouraging people to get fit, but it is typical of this Budget. It is a shambles that will create more anomalies than it will resolve. With all the U-turns—even though we welcome some of them—it is still totally confusing. Even after listening to the Minister this afternoon and spending many weeks on the Bill Committee, I am still not clear what the Budget says.

Secondly, the Budget rewards millionaires and punishes ordinary people. It punishes the squeezed middle and the battered base, which my hon. Friend the Member for Gateshead (Ian Mearns) frequently mentions. The VAT changes all hurt people who lead ordinary lives. They all hit hard-pressed businesses and do absolutely nothing for jobs and growth. The millionaires still get their tax cut, but they are not paying the tax that is due. If the rest of us decided not to pay our taxes, could we have a tax cut too? Or does that apply only to the very rich, who can also avoid their tax by paying accountants a great deal of money?

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[Bill Esterson]

I speak to people in my constituency all the time, and they tell me just how hard it is to find jobs. I have employed somebody who was on the future jobs fund, and they have been extremely successful, but people who have been out of work for more than six months, whether they have left school, college or graduated from university, find it almost impossible to get jobs.

The reality is that, in this situation, just as in previous decades under previous Conservative Governments, employers are already turning to people who have just left school or college or just graduated; they are not looking at people who have been out of work for a long period. The depressing reality is that we will see another generation of young people consigned to the scrapheap unless this Government take the action that the Labour party proposes in repeating the bankers’ bonus tax.

[Julie Hilling]

I wonder whether my hon. Friend, like me, sees a constant stream of young and older people coming to his constituency surgeries desperate for work. Does he agree that the future jobs fund provided something better than having to work in a supermarket for nothing?

[Bill Esterson]

My hon. Friend gained vast experience of dealing with young people before coming to Parliament, and she has been a strong advocate for them ever since. Her experience is very similar to mine. It is absolutely disgraceful that we have Ministers sitting there laughing at what is happening to young people up and down this country, who cannot get jobs because we have a Government who entered office when the economy was growing strongly—[Hon. Members: “Oh!”]—despite a global economic downturn and a global economic and financial crisis caused by the friends of people like the hon. Member for Gloucester (Richard Graham).

Finance Bill

Julie Hilling Excerpts

Monday 2nd July 2012 Commons Chamber

[Miss Smith]

I am pleased to confirm that. I am glad to hear my hon. Friend’s welcome for the scheme on behalf of his constituents and others in rural areas where we are piloting it.

[Julie Hilling (Bolton West) (Lab)]

Like other Members, I welcome the Government’s U-turn on petrol tax—another U-turn on the omnishambles of the Budget—but does the hon. Lady recognise that the increase in VAT means that the cost of petrol has increased during the time of this Government, and not decreased as one might imagine?

[Miss Smith]

I shall say two things in response to that. First, as a result of all the actions that this Government have taken, including what we have had to do on VAT, the price of petrol and diesel at the pumps is still lower than it would have been under Labour—whose Members are, on the whole, absent today. Secondly, the decision that we are legislating for today combines our determination to help families with the necessity of keeping Britain safe in the global storm and with our credible plan to deal with the country’s debts.

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[Sheila Gilmore]

My hon. Friend makes an important point. When the raw product goes up in price, the pump price goes up very quickly, but a downward turn seems to take a great deal longer to reach the consumer. We have made similar arguments about other energy price rises.

The hon. Member for Argyll and Bute (Mr Reid) suggested that it was all right for the Government to make U-turns such as this, because they had found savings elsewhere. That is nice to know, but if such savings could be found so easily, maybe the Government could have avoided some of the other things they have done. After all, we spent a lot of time in the Budget debate and before talking about the plight of couples who were losing tax credits because they were deemed not to be working enough hours. That change affects a small number of people—from memory, I believe it is about 500,000. We were told that if it were not implemented, it would cost the Treasury £500 million. We were told that it was impossible to go back on that decision, because money was so tight.

Like all Governments, the current Government are making choices. In the past two years, they have said that certain things have to be done and are not choices. They have said that they have been forced into them. However, all Governments make choices—that is part of governing.

[Julie Hilling]

Does my hon. Friend recognise that the Government have chosen not to do a U-turn on the granny tax, which is aimed at the people who are least able to pay, but continue to reduce the top rate of tax?

[Sheila Gilmore]

Indeed, and a lot of people would be glad to see the Government make U-turns in other areas, and in fact in their entire economic policy. It has been misguided, and the Opposition were clear from the start that it was the wrong way to reduce the deficit.

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[Sheila Gilmore]

I do not dissent from my hon. Friend’s view. The new President’s general intention is indeed to break away from the fixation with austerity measures. That is not the same as saying that we do not want to deal with the deficit. The question is how to do that successfully and ultimately reduce borrowing.

The last Government have been misrepresented as having constantly increased the national debt. That is simply wrong. It was substantially reduced under the Labour Government, but what caused that process to go into reverse—I am not going to say it did not—was the recession and the economic stimulus that was put in to get us out of it. Our view remains that had the policies that were in force between 2008 and 2010 been continued, rather than going into a double-dip recession we would have begun to climb out of the recession.

[Julie Hilling]

Does my hon. Friend agree that we had growth in the British economy at the time of the general election, but we now have a recession made totally in Downing street? If the Government have such a big underspend, why on earth do we face a double-dip recession, and why are ordinary people suffering so much at their hands?

[Sheila Gilmore]

rose—

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[Cathy Jamieson]

The problem is that the Government are giving with one hand and taking away with another. According to the Institute for Fiscal Studies, many people will be £511 a year worse off. That may not seem a lot of money to one of the millionaires who will benefit from that £40,000, but it will make a big difference to a low-paid worker who is struggling to make ends meet and is feeling the pinch because of rising prices for food and other commodities.

[Julie Hilling]

Not only have the Government cut the rate of tax at the top—admittedly there is a welcome relief for people near the bottom, although of course those at the very bottom will not benefit at all—but the squeezed middle are being hammered in all directions. Because the threshold at which people will start to pay the higher rate has fallen, more people will be dragged into it, and people are also being affected by the tax credit and child benefit measures.

[Cathy Jamieson]

That is absolutely true. As I said earlier, that is exactly what happens to those who cannot work for the extra hours that would increase their working time to the 24 hours that would entitle them to maintain their working tax credit. These are people who want to work and pay their way—they want to do the right thing—but for some reason the Government have chosen to clobber them the hardest at the same time as giving millionaires a tax break. That makes no sense to me, although Government Members may say that it is a point of principle.

A commentator—I think that it was Fraser Nelson of The Spectator—recently suggested that the best definition of “Osbornism”, if there can be such a definition, had been provided by Groucho Marx:

“These are my principles. And if you don’t like them—well, I have others.”

I hope that the Government have received the message loud and clear from the Opposition and from the British public. We do not like the principles that are at the heart of the Government’s economic policy. We do not like, or accept, the principle of asking millions to pay more so that millionaires can pay less. That is why we are giving the Government the opportunity to put their well-practised U-turning skills to good use once again.

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[Julie Hilling]

Was my hon. Friend as surprised as I was when the Government refused to release the tax details of their Front-Bench Members?

Beer Duty Escalator

Julie Hilling Excerpts

Monday 2nd July 2012 Commons Chamber

[Gavin Williamson]

I would never expect anything other than an intervention from a great colleague of mine, who also is a farmer, to enable us to understand the whole process of the brewing industry and to put it into perspective for us.

[Julie Hilling (Bolton West) (Lab)]

I congratulate the hon. Gentleman on securing this debate, and he is being extremely generous with his time. Does he agree that it is also ironic that we are increasing the tax on beer, which drives people to drink much more harmful substances—drinks with a much stronger alcoholic volume—so raising the duty all the time is not good for the nation’s health either?

[Gavin Williamson]

The hon. Lady makes a very valid point. One of the consequences of having a Scotsman as Chancellor for quite a period of time is that the duty on Scotch whisky seemed to be frozen. Perhaps now that we have an English Chancellor what we need is to freeze the duty on English beer. There is so much that we need to be doing. We need to be reviving our pubs. We need to be seeing that vigour and sense of community returning to all our pubs across the country.

Business and the Economy

Julie Hilling Excerpts

Monday 14th May 2012 Commons Chamber

[Julie Hilling (Bolton West) (Lab)]

I am pleased to speak in the debate, because I want to dispel the myths that are so often spoken by Government Members. If there was any doubt before the Budget and the Queen’s Speech, the Government have now made it obvious to everyone that they are totally out of touch with the real everyday concerns of ordinary people. Their only growth strategy is to take away people’s rights at work.

The economy is not in recession because of the UK’s employment rights but because the Government are cutting spending too far and too fast, hitting business confidence and choking off growth. They do not seem to understand that removing the rights of workers will only increase job insecurity, harm work force morale and productivity and lower consumer confidence. It will make things worse not better. Just like taxes on pasties, caravans and hairdressers, their proposals will hit the poorest hardest, but, funnily enough, the rich get a tax cut. Only 6% of small and medium-sized enterprises think excess regulation—all regulation, not just that on employment rights—is a barrier to growth, but there is consensus that the real problems are a depressed economy and difficulty with bank lending.

The Government are very keen on international comparisons and, according to the OECD, out of the 36 richest countries the UK has one of the lowest levels of worker protection, beaten only by America and Canada. I do not think that that is a record of which to be proud. The Prime Minister said his proposals will make it easier to hire people, but we are not all that stupid and we know that what he is really saying is that they will make it easier to fire people. He thinks that with 2.7 million unemployed and more than 1 million young people without work, making it easier to sack people will increase growth. With reasoning like that, it is no wonder we are in a double-dip recession.

Government Members seem to hold the view that it is difficult to sack people, but as a former trade union official who frequently had to tell members that they had no case with the mantra, “The law is as it is, not as we’d like it to be,” I can tell them that it is already shamefully easy to dismiss workers. The Government’s change to the qualifying period for unfair dismissal claims to two years means that almost 60% of all employees under the age of 24 are now not protected, 1.4 million part-time women workers are not protected and 32% of all black and minority ethnic employees are not covered.

If someone manages to win a case at tribunal, the average award is £4,500—hardly a fortune. The average cost of defending a tribunal, however, is £8,500 plus about £5,000 to pay off the employee. It seems obvious to me that employers should therefore obey the law, just as they would in any walk of life. If they pay their employee what they are due, treat them properly and do not discriminate, they will not end up in a tribunal.

The Business Secretary said earlier that an employer should be able to get rid of an underperforming employee, and of course they can with no changes to the current law as long as they follow simple, fair procedures. Having attempted to protect the jobs of such employees, I can attest to how easy it is to sack them. We have to ask what those businesses are doing, as surely they cannot reach the end of two years of employment and then say that the employee is underperforming. What is happening with their recruitment policy and with their management of that employee? If, after two years, that person is underperforming, the company should ask itself what is wrong with its business, with how it is managing those people and with the work it is asking its employees to do.

I welcome the notion of early conciliation, but I hope that there are no devils hidden in the detail. Proposals to charge workers to bring a case at tribunal, however, are fraught with problems and are yet another barrier to justice, hitting ordinary people at some of the most difficult times of their lives, just like the other measures that the Government have brought in to remove access to justice for so many ordinary people.

Government Members have made various other suggestions about weakening employment protection, including removing small firms from legislation. As about 44% of private sector employment is in SMEs, that would create a second-class citizen at work and make it harder for small firms to recruit good staff.

There have been rumblings about equality legislation, but as the Fawcett Society stated:

“Cutting red tape can all too easily mean scaling back on equality. Many of the regulations being revised—such as protections from unfair dismissal—have been vital in shoring up women’s security in the workplace.

Considered against a 25 year high in women’s unemployment, watering down these kinds of regulations poses a very real threat to women’s ability to get and keep work. A healthy labour market cannot exist if women are not enabled to take their rightful part in it.”

How true.

There are also worrying things said about health and safety legislation. We have one of the lowest incidences in Europe of fatal injuries at work, but we should not be complacent, as the figures do not include those killed in road traffic accidents, members of the public killed by work activities, suicides attributed to work-related stress, or those no longer in work who die from mesothelioma or other work-related illnesses. Many people killed at work worked in small and medium-sized enterprises. Of course, there are many thousands who suffer as a result of non-fatal but often life-changing incidents. Fewer inspections and less enforcement will lead to more deaths, injuries and ill health at work. Reductions in health and safety should not be considered by any Government in a civilised society.

The Government are turning the clock back to a time when people had to choose between heating and eating, were dependent on food banks, and had to beg from their neighbours for food to feed their children, and when workers had fewer rights. It clearly is not working. They need to change course now.

--- Later in debate ---

[Julie Hilling]

What was my hon. Friend’s view when he heard the Prime Minister say:

“You call it austerity, I call it efficiency”?

[Ian Lavery]

If I was not in the palace of varieties and the great hall of democracy, I would answer that exactly as I would like to.

I have mentioned public sector jobs—500,000 of them. Those jobs have not been lost. They have been torn from the economy; they have been stolen from ordinary people; they have disappeared because of the actions of this Government. Those jobs have been lost because of nothing other than the ideology of an incoming Government. We are desperate for growth, jobs and investment, but what do we have? We have a double-dip recession.

There is good news in my area, with Bernicia and Akzo Nobel having decided to locate there. That is absolutely fantastic, and I hope that it will continue, but there are problems with the regional growth fund and with not distributing money fast enough. Statistics announced at the weekend suggest that each job costs some £33,000, but that is not what it was like under the old regional development agency system. We had a shining light—a beacon—in One North East, which was providing brilliant results for the region. Sadly, though, it was abolished within weeks of the Government being elected.

If new companies are to be encouraged into our region, they need to be incentivised. Enterprise zones are fine, but if an area is not part of one and is surrounded by them, it will have huge problems, as we do in Wansbeck. The enterprise zone needs to be extended up through the Alcan site and around the town of Ashington, but the capital allowances must come with that extension. It is no good extending enterprise zones without capital allowances; it may as well not happen. I appeal to Ministers to consider extending the enterprise zone in south-east Northumberland around the Alcan site and to bring with that what capital allowances can be afforded.

We need to protect deprived areas from the effects of the discussions that are taking place in Europe about EU state aid. I urge the Government to give serious consideration to ensuring that small and medium-sized enterprises will still be able to get EU state aid after 2013. That is essential because otherwise we will have a double whammy. We also need infrastructure in south-east Northumberland in the form of the Ashington, Blyth and Tyne rail line, so that we can get to and from other areas.

The Queen’s Speech offered little to my constituents. We have done everything we can to try to get them on to an even keel. I simply ask: do this Government care?

Finance (No. 4) Bill

Julie Hilling Excerpts

Thursday 19th April 2012 Commons Chamber

[Rachel Reeves]

The idea that pensioners have been protected from the squeeze on living standards is simply not true. It is divisive and distorts reality when Government Members try to make that point, and conceals the fact that many older people are under genuine pressure. We should do what we can to help them, not see pensioners as a soft target for stealth taxes, as the Chancellor so clearly does.

[Julie Hilling (Bolton West) (Lab)]

The increase in pensions has not actually kept up with the cost of living, because if the Government had not been so mean as to change to CPI, but had used RPI, pensioners would have an amount of money that kept in touch with the increasing cost of living.

[Rachel Reeves]

I thank my hon. Friend for that intervention. All hon. Members know that the average rate of inflation for pensioners is often very high—higher than it is for ordinary families—because they spend more of their income on gas, electricity and food, the rates of inflation for which are going up at a higher rate.

--- Later in debate ---

[Charlie Elphicke]

On the contrary, I am really delighted that we have delivered on the pensions triple lock guarantee. Some hon. Members might recall that back in April 2000—it was a long time ago so perhaps the hon. Lady has forgotten—the basic state pension rose by 75p. That was the kind of care and concern we saw for pensioners from the Labour party, whereas the Conservative party is ensuring that we have the highest ever increase in the basic state pension, in cash terms, of £5.30 a week.

[Julie Hilling]

I thank the hon. Gentleman for giving way because he makes this link between the 75p increase, which did not go down well at the time but was based on inflation, and this increase, which is of course also based on inflation. Pensioners will get no benefit whatever—no increase in their pension—from this amount. It simply compensates them for the rate of inflation. In fact, they will lose out because it is based on the consumer prices index, not the retail prices index. For most pensioners, the inflation they feel is much closer to RPI; indeed it is above that because of the way their expenditure has to be made.

[Charlie Elphicke]

The hon. Lady forgets that the way the triple lock works involves not just inflation but earnings. At the moment, earnings are not rising at a great rate of knots because of the massive economic mismanagement of the Labour party that this Government are trying to put right, and that is not being assisted by the chaos in the eurozone. Over time, however, earnings will outstrip inflation and I suspect that will happen in the latter part of this year, so that has a bearing on age-related allowances.

Finance (No. 4) Bill

Julie Hilling Excerpts

Wednesday 18th April 2012 Commons Chamber

[Julie Hilling (Bolton West) (Lab)]

Does my hon. Friend agree with John Carr, the managing director of Carr’s pasties in Bolton, that when VAT was introduced on food in 1980, it was a total mess? It meant, for example, that biscuits were deemed a luxury although cream cakes were not. Will not this change in VAT create an even bigger mess? Is it not a ridiculous measure to have introduced?

[Cathy Jamieson]

I thank my hon. Friend for that intervention. I want to give plenty of opportunity for Back Benchers to contribute to the debate. It is not just a debate about pasties; it is also about caravans. I know that many Members will wish to speak on that issue because of its importance for their local industries. [Interruption.] I would be happy to take an intervention from Ministers or from one of those senior Tory MPs quoted as having met the Chancellor today to lobby on the issue of caravans. Does anyone want to give us an update on that? No, I see no takers at the moment. Perhaps we will hear about it later. [Interruption.]

Budget Resolutions and Economic Situation

Julie Hilling Excerpts

Friday 23rd March 2012 Commons Chamber

[Julie Hilling (Bolton West) (Lab)]

Well, what a Budget! People were hoping for a Robin Hood tax, but instead they got a Sheriff of Nottingham Budget—a Budget where the poor pay for tax cuts for the rich, and people at the bottom in terms of income, opportunity and aspiration pay the price for something that was not their fault.

Despite the claims of the Government parties, this is not the mess of the last Labour Government, either. When the banks imploded and affected the whole globe, the last Prime Minister had a choice: did he allow us to lose our homes, jobs and pensions, and the country to go into depression, or did he invest in infrastructure and ensure that our economy did not disintegrate? He rightly did the latter. Of course we must now pay down the deficit, but not at the expense of low and middle earners, not so deep and fast that we choke off growth, and not in a way that is totally unfair. The Budget has benefited people who got us into this mess and made the innocent pay. It is a Budget that has cut taxes for the richest. It has increased stamp duty on houses selling for more than £2 million, even though only 4,000 are sold each year. I wonder how many of those will now be sold for £1,999,999.

On transport, I welcome the further £130 million for the northern hub, but I will be even happier when the Secretary of State confirms that we will get the whole of the hub. Will she tell us today whether we will get the other £330 million that we need to complete the project? Will she also tell us whether there is to be any new rolling stock? Electrification and improvements to lines are more than welcome, but they are not much use without the right trains. We need an end to the nonsense of diesels running under wires.

The announcement of investment in rail was the only good news on transport for my constituents. The Government say that people should travel to get to work, but how? Train fares have gone up by 11%. Bus fares have also gone up and, according to the Campaign for Better Transport, one in five services have been cut. Fuel costs are at an all-time high. There was a moment of optimism during the Chancellor’s weasel words when he said that he did not propose any further changes to fuel duty, but he forgot to say that the duty would go up by 3% in August, and hard-pressed motorists might now have to pay for road tolling as well.

My surgery is already full of people who have nowhere else to turn—people who are losing their homes because they have lost their jobs or been off work because of illness, who are desperate because their long-saved-for pension funds have collapsed, who are losing their tax credits, and who are waiting weeks for their benefit when they lose their jobs and have no money for food.

I was told of a young man who was eating dog biscuits because that was the only food in the house. I was told of a 25-year-old lone parent with a young baby, who had no income whatever and had been relying on handouts from friends who could no longer support her. I heard about another lone parent with three young children being paid £47.50 a week in benefits. She was unable to survive on that and was about to lose her home. I also heard about a recently separated mother of three who was trying to set up a new home. She had claimed benefits but, two months later, her claim had still not been processed. There are so many ordinary people, and so many stories of suffering and desperation. Ordinary people were already suffering before the Budget, but life is now going to get a whole lot worse, especially for the 270 working couples in Bolton West who are about to lose £3,870 a year.

I shall finish by reading an e-mail that I received yesterday from Nicola. She said:

“I’m currently living with my partner and two children. I work 16 hours a week and I’m currently receiving maternity pay. I’m aware that when the tax credit changes in April, we’ll need to be doing 24 hours between us. My partner has completed all the relevant work programmes but still can’t get a job, which leaves me to try and get the extra hours, but because I’m on maternity leave, even if I got the hours, they wouldn’t start till August. Surely I don’t have to give up my job, which would mean losing my maternity benefit, but how else can we survive?”

I hope that the Government are proud of themselves. It will no longer be “Love thy neighbour”; it will be, “Can you feed thy neighbour?” Actually, I do not hope that the Government are proud; I hope that they are ashamed that they have put money in the hands of the rich and taken food out of the mouths of the poor.

Tax Avoidance (Public Servants)

Julie Hilling Excerpts

Thursday 2nd February 2012 Commons Chamber

[Danny Alexander]

Yes, the hon. Gentleman is absolutely right on the point of fact. It is fair to say that this Government have taken strong action to deal with both tax avoidance, where we wish to remove schemes that people use to minimise the amount of tax they pay, and tax evasion, which, as he says, is illegal. We announced an initial £900 million in the spending review for HMRC to invest for that purpose. As a result, we are, for example, quadrupling the number of court cases for tax evasion, to ensure that we make an example of people.

[Julie Hilling (Bolton West) (Lab)]

At this time of austerity, when the poor are being made to suffer for the behaviour of the rich, is the right hon. Gentleman ashamed that his Government have failed to do anything to stop such tax avoidance? What will he do to close that loophole across all taxpayers?

[Danny Alexander]

I think a better way to characterise what is going on in the economy at the moment is that the whole country is being made to pay for the mistakes made by the previous Government. I have already set out the action that we taking. An urgent review is taking place, both in Departments and through the Treasury, which I put in place because I take such matters incredibly seriously. That review is of a piece with the enormously wide range of action to tackle tax avoidance and tax evasion that has been put in place by this Government. As just one example, the high net worth individuals unit was not put in place by the previous Government until they had been in office for 12 years. That was 12 years of inaction on tax avoidance in that part of the population. Contrast that with the record of this Government and we see a coalition Government who view making sure that everyone pays their fair share of tax with the utmost seriousness.