EU Budget (Surcharge)

Kerry McCarthy Excerpts

Monday 10th November 2014 Commons Chamber

[Mr Osborne]

My hon. Friend is absolutely right. People in Nuneaton and across the country will have their chance to vote on whether Britain stays in the European Union. I want to see reform in Europe and I want to put that reform to the British people. The only way the British people will have that say is if they vote for my hon. Friend and other Conservative Members.

[Kerry McCarthy (Bristol East) (Lab)]

My constituents would have expected the Chancellor to negotiate the best possible deal on a rebate. They would also have expected him to negotiate down the surcharge. Is it not the case that he has not done the latter at all? It is not a penny less than it would have been and the accounts will show that the figure is still £1.7 billion.

[Heather Wheeler]

You would have paid the whole lot!

Oral Answers to Questions

Kerry McCarthy Excerpts

Tuesday 24th June 2014 Commons Chamber

[Nicky Morgan]

My right hon. Friend the Chancellor promised to fix the British economy, which is what we are doing. The hon. Gentleman might remember that the last Chancellor promised to abandon boom and bust, and we know where that got us.

[Kerry McCarthy (Bristol East) (Lab)]

8. What recent assessment he has made of the effect of the Government's policies on its commitments under the Child Poverty Act 2010.

[Luciana Berger (Liverpool, Wavertree) (Lab/Co-op)]

10. What recent assessment he has made of the level of child poverty.

[The Financial Secretary to the Treasury (Nicky Morgan)]

The Government are committed to our goal of ending child poverty in the UK by 2020. We are determined to tackle the root causes of poverty, not just the symptoms. Our draft child poverty strategy 2014-17 sets out our approaches, based on robust published evidence review. Work remains the best route out of poverty. We are making work pay and tackling low pay through our reforms to the welfare and tax systems. Universal credit, for example, will lift as many as 300,000 children out of poverty.

[Kerry McCarthy]

But this week the largest ever study of poverty in the UK, the Poverty and Social Exclusion project led by the university of Bristol, was published. It found that full-time work is not sufficient to keep families out of poverty and that the majority of children who suffer multiple deprivations live with both parents, at least one of whom is working, in small families, with only one or two siblings. When will the Government accept responsibility for the rising tide of in-work poverty and do something to help people who are trying their hardest but still struggling to get by, including the children who are living in those families?

[Nicky Morgan]

We have set out, as I have already said, a clear commitment by this Government to end child poverty by 2020. The hon. Lady’s question shows that there are a number of root causes of child poverty. Incomes, of course, are a very important part of that. We are working to raise the income of poor children’s families by helping them get into work and making work pay, and she will appreciate the rise in the national minimum wage. We are also raising educational outcomes for poor children, which is equally important.

Sixth-Form Colleges (VAT)

Kerry McCarthy Excerpts

Tuesday 17th December 2013 Westminster Hall

[Lisa Nandy]

Absolutely. The issue of the level playing field has come up time and time again. The hon. Gentleman is absolutely right about courses and the staff that sixth-form colleges can use. I am concerned that that loss of staff has also meant a loss of expertise. If the sector is hit by anything else, we will struggle to get it back.

[Kerry McCarthy (Bristol East) (Lab)]

This issue has certainly been raised with me by St Brendan’s sixth-form college in my constituency. Another issue is the fact that the VAT situation does not allow adults to use the building for more than a short amount of time. Otherwise, that incurs VAT as well. The academy schools in my constituency lobbied me about that in the past, but thankfully we managed to overturn the situation for them. In terms of community engagement, does she agree that not being able to use the buildings in the evenings is a wasted opportunity?

[Lisa Nandy]

Absolutely. I am grateful to my hon. Friend for raising that point. There is also a wider point: sixth-form colleges benefit not only their students but the wider community. I know from my constituency that they are institutions rooted in the wider community, and they play a much more beneficial role across our town than it would appear from looking only at their core activities.

It is galling for my sixth-form colleges that while they are struggling with the impacts of the cumulative funding cuts, the Government are creating new free schools and academy sixth forms, with which they are required to compete but which are VAT exempt. Many people contacted me before the debate to point out, rightly, that a market does not function if competition is not fair. Many new free school sixth forms are struggling to fill their places, yet those places are funded too. Ministers are paying for places in new institutions to lie empty while successful and established sixth-form colleges are struggling to afford the students that they have.

Oral Answers to Questions

Kerry McCarthy Excerpts

Tuesday 10th December 2013 Commons Chamber

[Danny Alexander]

I know how important that project is for the college that my hon. Friend mentions. I can confirm that the Skills Funding Agency has told the college that it is prepared to make grant funding available for the project, subject to some additional assurances being received. Those assurances are being sought this week, and the agency hopes to respond to the college by the end of this week.

[Kerry McCarthy (Bristol East) (Lab)]

T2. Housing costs represent one of the biggest pressures on the cost of living, and a new study by Oxford Economics suggests that, by 2020, house prices will have risen by 35% and rents by 39%. What are the Government going to do about that?

[Danny Alexander]

I know that the hon. Lady takes a close interest in these matters, and she will have seen the Office for Budget Responsibility’s forecasts, which suggest that even by the end of the forecast period, house prices in this country will be below their level at the peak of the financial crisis in real terms. The action we are taking includes the large-scale investment in affordable housing that I described earlier, which will help people with those problems.

Oral Answers to Questions

Kerry McCarthy Excerpts

Tuesday 10th September 2013 Commons Chamber

[Mr Osborne]

It is a policy being delivered by a Conservative Chancellor and a Liberal Democrat Chief Secretary. The hon. Gentleman is right that together we have taken millions of the low-paid out of income tax. Of course, that is also delivering a tax cut to 25 million working people, and there is more to come next April. It is one of the ways that, by securing the economic recovery and having credible policies with the public finances, we can help people by, for example, increasing the tax-free allowance.

[Kerry McCarthy (Bristol East) (Lab)]

2. What recent assessment he has made of the effect of fiscal policy on family incomes.

[Stella Creasy (Walthamstow) (Lab/Co-op)]

8. What recent assessment he has made of the effect of fiscal policy on family incomes.

--- Later in debate ---

[Kerry McCarthy]

I thank the Minister for that reply, although he completely failed to talk about the real issue that I was hoping to raise: the extent to which ordinary families are being hit incredibly hard by the Government’s policies. We are hearing from Citizens Advice that inquiries about food banks have risen by 78% over the past six months, and one in four families is having to borrow to provide school uniforms. What are the Government doing about those real issues affecting real people?

[Sajid Javid]

I must say that if the hon. Lady is genuinely interested in the challenges that families face, she should recognise the causes: Labour’s recession, the deepest in our post-war history; Labour’s record budget deficit, the deepest in our post-war history; and Labour’s bank bail-outs, the largest the world has ever seen.

Finance Bill

Kerry McCarthy Excerpts

Monday 1st July 2013 Commons Chamber

[Catherine McKinnell]

The hon. Gentleman makes a helpful point. One would question to what extent the Government can rely on their general anti-abuse rule when they still have to invoke targeted anti-abuse rules, many of which we debated in Committee. Yet the GAAR is supposed to provide reassurance in relation to these matters. Will the Minister clarify exactly how it will work? As the hon. Gentleman says, there is much debate about whether it is too general or too narrow—too general to be effective or too focused on what could be deemed by a reasonable person to be egregious behaviour, and therefore arguably too narrow. I would be interested to hear the Minister explain exactly how the GAAR will work in reality.

The Minister will be aware of the concerns raised in Committee about how the GAAR’s effectiveness will be reviewed. Our amendment calling for an evaluation to be held two years post-implementation was dismissed on the grounds that it would be impractical. At what stage does the Minister think it would be practical to conduct a post-implementation review, given that this is one of the Government’s main tools to tackle tax avoidance? At what point does he think it would be appropriate to consider whether the GAAR needs to be strengthened by, for example, a penalty regime? He has said that it will be kept under review, so it would be extremely helpful if he could provide details of the time scales involved.

One of the most widely held concerns about the GAAR is that it simply does not deal with many of the issues about which members of the public in particular are understandably angry with regard to corporation tax avoidance. The Minister has said that the Government have never sought to give the impression that they will deal with these issues, but many people feel that when they raise concerns about corporate tax avoidance the Government give the impression that their general anti-abuse rule will somehow deal with them.

We believe that the Government could and should use this Finance Bill to go much further on tax avoidance and on increasing tax transparency in particular. We have presented the Government with many opportunities to put their money where their mouth is and to take action now.

I was pleasantly surprised to read in The Guardian on Friday that the Minister voiced his intention to take firm action on this issue—the Minister is looking at me blankly; I am not sure whether he reads The Guardian—during last week’s Back-Bench business debate on multinational companies and UK corporation tax avoidance. I usually pay attention to everything the Minister says, but I confess that Friday’s revelation passed me by. Given his reported new-found enthusiasm for tackling the issue head on, the Opposition would like to take this final opportunity, through new clause 12, to persuade the Minister and Government Members to use this year’s Finance Bill to demonstrate a commitment to increasing tax transparency and to cracking down on tax avoidance both here and abroad. It is unfortunate that the Liberal Democrat Benches are devoid of Liberal Democrat Members, because this is their opportunity finally to walk the walk on this issue, given that they have been very good at talking the talk on it for so many years.

The nub of the issue is this: there has been a monumental breakdown in public confidence in the corporation taxation system and it is clear that the era of tax secrecy should end. At a time of austerity around the world, when people have lost or are losing their jobs and are seeing their services cut and the cost of living rising while the value of their wages does not, they are rightly angry when they see the complex and extraordinary lengths to which multinational companies may go in order to avoid paying their fair share of tax in the countries where their profits are actually being generated. People, including more than 1 million supporters of the IF campaign, are equally furious that aggressive tax avoidance activity is reducing the ability of developing countries to tackle the issue effectively and contributing to their failure to combat hunger and invest in the vital infrastructure that we take for granted. As the OECD estimates, these countries lose three times more through tax avoidance than they receive in aid every year.

The Opposition believe that rather than simply calling on the OECD

“to develop a common template for country-by-country reporting”,

which the G8 has said it will do, we should actively work with our G8 partners to ensure that all multinationals, regardless of sector, are required to publish a single, easily comparable statement on the amount of tax that they pay in each country in which they operate. That needs to be introduced as a matter of urgency.

[Kerry McCarthy (Bristol East) (Lab)]

My hon. Friend is doing a good job of spelling out the sheer ludicrousness of countries losing more by profits being put into tax havens than they are given in aid. I am sure that she is aware of the recent ActionAid report, which mentions a single transaction made through UK-linked tax havens that would have provided the Indian Government with $2.2 billion in tax if it had not taken place offshore. Surely that is something that the Government ought to rectify.

[Catherine McKinnell]

My hon. Friend gives a powerful example of how ludicrous the failure to act on this issue is.

At a stroke, statements would give people, whether they are experts or not, the information they need to assess the amount of tax that multinationals pay. That would give British consumers the power to take such matters into consideration when they decide who to buy from. It would also give developing countries a vital boost to their resources so that they could tackle hunger and invest in the infrastructure that they so desperately need.

As the Minister is all too well aware, the Opposition have backed the calls of the IF campaign for a convention on tax transparency. We saw the UK’s presidency of the G8 as a prime opportunity to take international leadership on the issue by launching a convention at the G8 summit to establish a global standard of public registration for the ownership of companies and trusts. As the House knows, the G8 nations took a step in that direction; we have acknowledged that steps have been made in the right direction.

The G8 stated in “Common principles on misuse of companies and legal arrangements”:

“Beneficial ownership information on companies should be accessible onshore to law enforcement, tax administrations and other relevant authorities including, as appropriate, financial intelligence units. This could be achieved through central registries of company beneficial ownership and basic information at national or state level. Countries should consider measures to facilitate access to company beneficial ownership information by financial institutions and other regulated businesses.”

At the end of the day, there was a statement about what could or should be achieved or considered by G8 nations, and the UK promised to establish a register at Companies House on beneficial ownership of companies in the UK, but to make it available only to HMRC, not the public. That was a step in the right direction, but the Opposition feel that it did not go far enough. We believe that we need proper transparency about who is holding their wealth behind shell companies and trusts in tax havens, not just secret lists at Companies House.

My hon. Friend the Member for Bassetlaw (John Mann) put to the Minister doubts about the effectiveness of the UK’s proposed arrangements. Those doubts have been well articulated recently. Private Eye commented:

“Those with knowledge of the Companies House reality would take a great deal of convincing that it is about to become a tough enforcer able to scare global or even home-grown tax evaders—any more than it has ever deterred conmen the world over.

Companies House is merely a receiver and filer of documents. It is not set up to be reactive, never mind proactive. ‘We do not have the statutory power or capability to verify the accuracy of the information that companies send to us,’ a Companies House official candidly admitted to the Mail on Sunday last month when the newspaper wanted to know if a foreign currency investment company director actually existed. Hardly surprising when it is considered that there are 3 million ‘live’ companies on the UK register.”

Aware of the Government’s steadfast opposition to our proposals on country-by-country reporting and a global standard of public registration of company ownership, we have tabled new clause 12 to ask HMRC and the Government to at least review the possible effect of those measures. It is eminently reasonable and perfectly sensible for Government Members to support it. Crucially, on the subject of abusive tax arrangements, it calls on the Government to consider what steps they could take when working alongside the Governments of developing countries—not should, but could—to assess how UK companies could report their use of tax schemes that might have an impact on those countries, and how the UK could then assist in the recovery of that tax.

--- Later in debate ---

We have heard Companies House much maligned, but a simple change to the financial statements that have to be filed to add to corporation tax returns, and perhaps some supporting computations, would not be too hard to achieve in law. We would then all be able to see how much tax the large companies have declared that they owe, and see how they got from their reported profit down to their taxable profits. Those who are not paying any corporation tax perfectly innocently because of the return of losses or other valid reliefs would not get the sort of bad publicity that Google, Starbucks and Amazon have had. There are some rather strange entries relating to how the commercial profit is put down on the tax form, so it would be valuable if we could scrutinise these matters and see what is going on.

[Kerry McCarthy]

What the hon. Gentleman says about the requirements he proposes for Companies House would go some way towards addressing the issue of transparency, but a recent report by ActionAid noted that one in 10 of this country’s top companies were not complying with existing Companies House rules on declaring how many subsidiaries and associate companies they had overseas. As I understand it, his suggestions relate only to accounts that would be filed in respect of their UK operations. We would not be able to tell from that whether such companies were channelling their profits through other companies and making use of tax havens, which is what people are really concerned about.

[Nigel Mills]

I agree with the hon. Lady’s sentiment, but I was confining my remarks to the content of new clause 12, which refers to

“a single easily comparable statement of the amount of corporation tax they pay in the UK.”

My thought was that the most single easily comparable statement would be the corporation tax return, which obviously has a consistent format, as everyone has to file it. She is right about the use of tax havens. Where tax havens are used underneath a UK corporate, HMRC has the power to get a group structure and to use the controlled foreign company rules to look at what is happening in the tax havens. It is clearly much harder for HMRC when those havens are sat above the UK, making it much harder to get the information because there is no shareholder ownership that obliges disclosure. That is why we need global work to get a clear and full corporate structure published. It will be interesting to see how much progress is made on that. It needs to be global, not just for the G20, because if one nation somewhere in the world will not agree to publish its share, that might be the one that blocks the attempt to disclose the havens.

[Kerry McCarthy]

I thank the hon. Gentleman for his generosity in giving way. Is it not the case that about one in five of the tax havens used by companies are UK-owned tax havens in UK overseas territories? To ensure some compliance, we should be able at least to start working with them to get them to share information.

--- Later in debate ---

[John Mann]

It is always a pleasure to follow the hon. Member for Amber Valley (Nigel Mills). I trust that Opposition Front Benchers were taking detailed notes, because the hon. Gentleman speaks common sense. It is no surprise that Ministers repeatedly ignore that common sense.

Unlike the hon. Gentleman, I am not volunteering to sit annually on the Finance Bill Committee. I was sadly not afforded the honour of participating this year, but the opportunity to participate in a debate on the Floor of the House could not be missed. I shall confine myself to expressing avid support for the excellent new clause 12 rather than straying into matters that would be better dealt with in the Backbench Business Committee’s debate on Thursday, in which I urge all Members to take part. I want to allow some of the adjuncts of matters raised in this debate—not least the issues of the role of Companies House, company structure and formation, and company records—to be discussed in appropriate detail, so that future Governments can be informed of what they should do, and the current coalition can be informed of what it has failed to do.

We know why the rhetoric from Government Front Benchers is as it is. They all now wish to become a bunch of pasty eaters and to be recognised in society and by the electorate for the way in which they are battling for the little man against the big multinationals. However, when it comes to the detail, the natural instincts of those on the Conservative Treasury Bench overwhelm the common sense of people such as the hon. Member for Amber Valley and other Back Benchers, who have pragmatic, practical, positive ideas that could be considered immediately. Some could be put into action.

What those Ministers fall back on is the perceived vested interest of the multinational. We have a charade, led by the Prime Minister and his sidekick the Chancellor —the Liberals are counted out of this; they are not important enough when it comes to economic matters—where the Government try to portray themselves as wishing to grab additional taxation. They have put up taxation such as VAT on the motorist, the consumer and the rest of society, so Conservative Front Benchers are a bunch of tax grabbers. Through the minimal changes that they are proposing and through the Prime Minister’s proposals to the G8, they wish to portray themselves as being the ones who are going to roll back against the multinationals.

[Kerry McCarthy]

My hon. Friend is, as ever, making a powerful case. We see the mismatch between the rhetoric and the action of the Government on other issues such as climate change; they claim to be the greenest Government ever, yet they do not implement measures such as the decarbonisation targets. Is he aware that, after the Prime Minister spoke at the G8 saying that he would tackle the tax issue, the Finance Bill Committee refused to consider amendments on the issue? Enough Food IF said:

“It seems like Treasury ministers haven’t got the memo. The government is saying one thing while doing another.”

Is that not exactly what is happening?

[John Mann]

I do so wish I had been offered the chance to sit on the Finance Bill Committee in order, day after day, to be able to get into the details and hold the Government more to account, although sadly next year ends with a 4 and I am unable in any year that ends with a 4 to sit on a Finance Bill Committee.

--- Later in debate ---

[John Mann]

I think the readers of the Worksop Guardian will hear my hon. Friend’s comments. Those such as your good self, Mr Speaker, who are expert at using the internet can read those pearls of wisdom without having to go all the way to Worksop or order a copy at this difficult time for the parliamentary budget. I recommend it to all.

Although I failed to be selected to serve on the Finance Bill Committee, I am prepared to volunteer for a new task, if it is not too late to do so. This relates directly to new clause 4 and the Minister’s speech, and I should make it abundantly clear that I am prepared to accept the task for no additional salary, directly or indirectly. It is to do with the advisory panel on the GAAR. If its members have not yet been selected, surely the Minister would love the opportunity to select an Opposition Member who is prepared to ask some questions that the public would perhaps want asked. I would be prepared to sit on this body without additional remuneration, should the Minister, the Government and the House wish that to happen. The Minister is not intervening, so perhaps I will have to put in a written application as well.

The question of the overseas territories is very important. Hansard will record precisely what the Minister said some minutes ago, but I shall paraphrase his comments as I did not have the opportunity to take down his exact words verbatim. In essence he said that we are the leaders in the world in dealing with tax avoiders, we are showing the way, and we are going to ensure that this all happens, yet we should not do more than anybody else. But the UK Crown dependencies and overseas territories are not German, French or American, and they rely on the British armed services to protect them in times of crisis or against the threat of invasion or assault. They rely on the British legal system and on the British royal family as part of their very essence, as democracies. Therefore, our relationship with these territories is a symbiotic one, in which we should expect absolute transparency in all matters relating to taxation and to companies and individuals from here.

The banks are the worst examples of complex structures that they themselves do not understand. They allow money laundering from Mexican gangsters—the worst kind—as proven by many successful US court proceedings. Big banks at the top are happy to tell us that they do not understand their own structures because they are so complex, but the structures are established in order to maximise profit—in other words, to minimise taxation—in territories that rely on our armed services, on our legal system and our democracy to underpin and oversee them. That is a cost to us that we rightly bear, yet corporates and individuals can hide things behind the opaqueness of structures there, so that these days my constituents cannot even discover who owns their football club and what moneys are there. This applies to even the most simple of examples, never mind the biggest and most complex of banks, financial institutions and other multinationals.

[Kerry McCarthy]

I wish to give one example. The Cayman Islands have a population of about 57,000, yet 92,000 companies are based there and it is estimated by the Bank for International Settlements that $1.4 trillion of bank assets and liabilities are there. My hon. Friend has raised an important question: how on earth can a country that is so small govern what Professor Jeffrey Sachs describes as a financial “time bomb” in its own territory?

[John Mann]

Somebody is making money, because my own football club would appear to have been part-based in the Cayman Islands, in a structure that then took it into the British Virgin Islands and into Monaco and who knows where else. There are intricate webs criss-crossing these so-called “tax-efficient countries”—these tax havens for tax dodgers, corporate and individual. This Bill follows the biggest financial crisis since the 1930s, with working people losing real income year by year, unemployment rising, a worldwide recession, and people less well-off than they were five years ago. The Bill, however, contains no constructive, detailed, productive proposals on how we are going to deal with these territories. We spend taxpayers’ money providing the armed services to guarantee them and then we turn around and claim that we are the world leaders. I say poppycock to us being the world leaders. This is an excuse of a policy. This is an excuse of an attempt in a Finance Bill. This is an embarrassment to the coalition partners, who would love, if they could come up with some ideas, a robustness to put behind it.

The big dividing point in British politics at the moment is this unwillingness to deal with the tax dodgers. These little clauses—new clause 4 and new clause 12—in their own small way encompass the problem in front of us and in front of the British people.

Finance (No. 2) Bill

Kerry McCarthy Excerpts

Thursday 18th April 2013 Commons Chamber

[Fiona O'Donnell]

As ever, my hon. Friend makes a reasonable and forceful contribution to the debate. This is shocking complacency from Government Members—their constituents and mine will be watching them—as unemployment rises and as families face an average cut of £17 a week as a result of all the changes they have made since 2010.

[Kerry McCarthy (Bristol East) (Lab)]

I might be pre-empting what my hon. Friend is about to say, but with these measures are we not seeing a return to the discredited policy of trickle-down economics, whereby the Government think that if we give more money to the wealthy, they will spend it and boost the economy? However, we know that they are less likely to spend the extra money going into their accounts, whereas people at the bottom, who are really struggling to get by, will spend the money we give them. If we are looking at the economic impact, it is better to give that money to the poorer people.

[Fiona O'Donnell]

Absolutely, and I thank my hon. Friend. I was not about to turn to that point, but I will develop it as it affects the local economy in East Lothian.

East Lothian has a number of small towns, some of them market towns. Often, it is the poorest in those communities who spend their money in local shops in the high street; they are not able to take advantage of out-of-town supermarkets. Those high streets are struggling. The Government are taking money out of local economies—out of small high streets in East Lothian—which is having a negative effect. One group of businesses is, however, growing in our high streets: pawnbrokers and high street lenders, which will not improve the lot of the most vulnerable in my constituency.

--- Later in debate ---

[Jacob Rees-Mogg]

The problem with that argument is that we have facts that show that the amount of revenue has gone down. Over a three-year period it has gone down very substantially, because the rate was high. The hon. Lady’s comments also serve to illustrate the following point on my behalf, for which I am grateful: when tax rates are raised, people change their behaviour so that the tax they pay is reduced. That is where the Laffer curve comes in. Income is reduced when tax rates are too high.

[Kerry McCarthy]

I am sure that the hon. Gentleman is a student of behavioural psychology, as he is of so many other subjects, so can he explain why the Government believe that if we give more money to wealthy people that encourages them to work harder, whereas the lower paid are encouraged to work harder if we give them less money?

[Jacob Rees-Mogg]

The hon. Lady—my near neighbour, as she represents a Bristol constituency—is very wise and does, I am sure, understand this point. The answer is that the question being asked differs between benefits and earnings, although the argument is essentially the same. Inevitably, where there is a level of benefits that discourages people from working, if that increases more slowly, it encourages people to work. It is an identical argument to the one that says people keep more of the money they earn if taxes are set lower.

Economic Policy

Kerry McCarthy Excerpts

Monday 25th February 2013 Commons Chamber

[Mr Osborne]

My hon. Friend is absolutely right. In Nelson, Barnoldswick and places he represents, there are successful small and medium-sized businesses, as well as large firms such as Rolls-Royce, which are exporting more. We are supporting them with lower business taxes and helping them with vital economic infrastructure. We have to go on supporting those businesses, as he does, because they are the backbone of this country, and they will provide the secure and stable economy that we need in the future.

[Kerry McCarthy (Bristol East) (Lab)]

The Chancellor talked about reviving dead bodies, and he may recall the Hollywood film about medical students trying to create near-death experiences. It was called “Flatliners”. Can the Chancellor predict when the UK will regain its triple A credit rating from Moody’s and say what needs to be done in the interim to make sure that we do so?

[Mr Osborne]

I will not make a prediction about that. [Interruption.] Moody’s is clear that we can win the rating back provided that over time we show our commitment to dealing with our debts and rebalancing our economy, and we will of course provide that commitment. Its market notice is clear that a reduced political commitment to fiscal consolidation—the policy advocated by the shadow Chancellor—would risk further downgrades.

Oral Answers to Questions

Kerry McCarthy Excerpts

Tuesday 11th September 2012 Commons Chamber

[Mr Speaker]

Order. I am greatly obliged to the Chief Secretary, but from now on we need rather shorter exchanges if I am to maximise the number of Back-Bench contributors.

[Kerry McCarthy (Bristol East) (Lab)]

The Chief Secretary will know that one thing that is really hitting people at the moment is the rising cost of food. A huge number of people, even those in work, are having to resort to going to food banks. What action are the Government taking to address that situation?

[Danny Alexander]

The hon. Lady will also know that the substantial increases in the personal allowance are putting more money in the pockets of people on low incomes who are working hard. We protected the lowest-paid public sector workers from the impact of the pay freeze, and she will also know that out-of-work benefits went up by 5.2% this year.

Oral Answers to Questions

Kerry McCarthy Excerpts

Tuesday 24th April 2012 Commons Chamber

[Mr Hoban]

My hon. Friend raises an important point, and having visited his constituency, I know it is very rural. He might encourage businesses in his constituency to apply for the rural economy grant scheme, which is worth £60 million and is open to businesses operating in rural areas in certain markets, including agri-foods, tourism and digital media technology. I would encourage them to do so.

[Kerry McCarthy (Bristol East) (Lab)]

18. What estimate he has made of the revenue which would accrue to the Exchequer from maintaining the additional rate of income tax at 50 per cent in 2013-14.

[The Exchequer Secretary to the Treasury (Mr David Gauke)]

The 50% rate raised a fraction of what was expected, which is why we are reducing it to 45% from April 2013. Maintaining the 50% rate would accrue an extra £50 million on top of what is expected in 2013-14, rising to £100 million a year once the impact on self-assessment receipts is included. However, any additional yield could be offset by reduced indirect tax revenues, and as such it may raise nothing relative to the 45% rate.

[Kerry McCarthy]

I think the Minister has somewhat deliberately obfuscated matters. What I wanted was a figure. It has been estimated that the 50p tax rate could have raised £3 billion in future years when there was not a forestalling effect. Have not the Government made a deliberate decision that they want tax cuts for millionaires as opposed to money being put back into the pockets of hard-working people?

[Mr Gauke]

It is worth pointing out that this £3 billion figure that the shadow Chancellor and others recite suggests an entirely static process. Nobody believes that a 50p rate has no behavioural impact whatever, but that is the Labour party’s ridiculous position. That was not its position when in government, and it is not a position that any credible economist would support.