Economic Policy

Kevin Barron Excerpts

Monday 25th February 2013 Commons Chamber

[Mr Osborne]

I read in the paper that the Primrose Hill mansion my hon. Friend refers to falls just below the threshold for the new mansion tax proposed by the Labour economic team. However, my hon. Friend makes a good point: we must invest in economic infrastructure across the country. People have been calling for years for the electrification of the trans-Pennine route, and indeed the northern hub. It did not happen under a Labour Government but it is happening under this Government.

[Mr Kevin Barron (Rother Valley) (Lab)]

Does the Chancellor accept that the state of the British economy and its flatlining in terms of growth is a good example of how party political scaremongering at the Dispatch Box for three years does not work?

[Mr Osborne]

I am not sure I really understand what the right hon. Gentleman is getting at. Yes, of course we have a difficult economic situation, because we inherited a 11.5% budget deficit and were coming out of a contraction of the economy of 6%—the right hon. Gentleman talks about flatlining but there was a 6% contraction of the economy when the shadow Chancellor was in the Cabinet. That is what we are dealing with. As I say, we have reduced the deficit, created 1 million jobs, and we have low interest rates.

IMF

Kevin Barron Excerpts

Monday 23rd April 2012 Commons Chamber

[Mr Osborne]

My hon. Friend is right that countries in the eurozone do not have the option of devaluation if they want to remain in the eurozone. That is the logic of the single currency. That is why the Foreign Secretary, when he was leader of our party, said that it was

“a burning building with no exits”.

In that situation the question for Britain, rather than for members of the eurozone, is what do we do? What we can do is make sure that the global institutions that try to protect the world from instability, that try to provide shock absorbers for what happens in different countries, including in the eurozone, are well resourced to deal with whatever is thrown at them. I say to my hon. Friend and to Members across the House that it is possible to be very, very Eurosceptic and at the same time to be a believer in the international institutions that Britain helped to create 60 years ago.

[Mr Kevin Barron (Rother Valley) (Lab)]

Given the answer that the Chancellor gave to the right hon. Member for Wokingham (Mr Redwood), could he tell us exactly what was agreed this weekend that says that the IMF should give loans only to countries and not currencies?

[Mr Osborne]

The communiqué that was issued by the Finance Ministers and the European Central Bank governors said explicitly, with reference to the $430 billion that was provided by the countries at the meeting:

“These resources will be available for the whole membership of the IMF, and not earmarked for any particular region.”

Alcohol Taxation

Kevin Barron Excerpts

Wednesday 14th December 2011 Westminster Hall

[Dr Sarah Wollaston (Totnes) (Con)]

I have watched many of my former patients die as a result of alcohol; there is nothing like witnessing the end of the journey to focus one’s attention on the need to prevent people from becoming harmful drinkers in the first place. We are witnessing an unprecedented rise in hospital admissions and deaths from alcohol-related liver disease. Alcohol is directly responsible for more than 6,500 deaths and more than 1 million hospital admissions a year. It is the single largest cause of mortality in young people, accounting for one in four deaths among 15 to 24-year-olds—far more than die as a result of knife crime. There are now 1.6 million dependent drinkers in England alone.

However, the point about alcohol is that it does not just affect the drinkers themselves; it has a devastating effect on their families, especially children, and on entire communities. There are 705,000 children living with a parent who is a dependent drinker. Parental alcohol abuse is a factor in half of child protection cases.

The full costs are hard to quantify, but the bill runs to at least £20 billion a year.

[Mr Kevin Barron (Rother Valley) (Lab)]

The hon. Lady will know that I chaired the Select Committee on Health in the previous Parliament. We conducted an inquiry into alcohol, and it was the first time in many decades that a Select Committee had done that. We took evidence that the cost to the NHS could be as high as £55 billion a year. The situation is similar to that with tobacco: in the end, no one really knows the cost of the use of these products.

[Dr Wollaston]

I thank the right hon. Gentleman for that intervention. He is absolutely right. The study to which he refers took into account the reduced quality of life years associated with alcohol, which are extremely difficult to quantify.

In three years’ time, the Government will be judged not just on the economy, but on other tangible markers, such as violent crime, the prison population, health inequalities—even markers such as teenage pregnancy. It is hard to think of a social marker that is not affected by alcohol.

However, there are other compelling reasons for taking action. At a time of squeezed police budgets and when the NHS needs to find efficiency savings of £20 billion, we should not be pouring that money down the drain because of the problems that this country has with alcohol. About half the offenders in some prisons are jailed for an offence in which alcohol played a significant role. The relationship between crime and alcohol is not linear, but the positive association between violent crime and alcohol is compelling. There is a wealth of evidence to link alcohol price increases and reduced rates of homicide, rape, robbery, assault, motor vehicle theft and domestic violence.

--- Later in debate ---

[Dr Wollaston]

I thank my hon. Friend for making that point. We need to show what minimum pricing means in practice if we set a reasonable price. If we set a minimum price of around 45p a unit, as the Scottish Government are planning to do, in a Bill introduced at the end of October, it would mean that a bottle of whisky containing 28 units could not be sold below £12.60, a bottle of wine containing 10 units could not cost less than £4.50, and a pint of beer with two units could not cost less than 90p. Such prices would not suck all the fun from a night out; in fact, they would not raise the price of alcohol in the on-trade at all.

[Mr Barron]

Will the hon. Lady give way?

[Dr Wollaston]

May I make a little progress? The case against a minimum price of between 45p and 50p a unit may hang on the loss of income to the Treasury. Alcohol duty raised £9.5 billion in 2010-11, which is equivalent to 1.7% of total Government revenue. There is a certain illogicality in the bands set by the European Union, so to a certain extent, as my hon. Friend the Member for Burton (Andrew Griffiths) said, there is great encouragement towards higher strength products.

The amount received by the Treasury is the same whether a product is sold in a pub or a supermarket. VAT is levied on top, but there are no specific data on where and on what products it is levied. Will the Minister set out estimates of the loss of income that would arise from the introduction of a minimum unit price of between 45p and 50p? Will she also set that against the benefits in estimated savings to the Home Office, the Department of Health and the Ministry of Justice that would result from a reduction in alcohol-related harms?

The Department of Health leads on alcohol policy. It has stated repeatedly that it does not wish to disadvantage moderate drinkers on a low income. However, it has failed to point out that harmful drinking disproportionately affects the poorest and most vulnerable in our society, and is a significant contributor to health inequality. A report on the Department’s behalf from September 2011, titled “Narrowing the health inequalities gap”, makes it quite clear that if it were not for alcohol-related deaths, and if we had had an effective policy, the objective to narrow the overall life expectancy gaps for the spearhead local authority areas—the most deprived areas in our country—

“would…certainly have been achieved for males; and would be well on the way to being achieved for females.”

The evidence is not just that low-income groups suffer the most health harms, but that they suffer the most harms as a result of violence in their communities.

If we look at the evidence from some shopping basket data published in a university of Sheffield study, we can see that for

“a 50p minimum price, a harmful drinker will spend on average an extra £163 per year whilst the equivalent spending increase for a moderate drinker is £12.”

In other words, the published data state that such a policy will not penalise low-income moderate drinkers.

The deprived spearhead communities have the most to gain from an effective alcohol policy. A minimum or floor price can be set that is not regressive and is affordable for anyone who is not drinking at hazardous levels. As one of my correspondents pointed out:

“If you can’t afford 50p per unit it is a good sign that you are drinking too much.”

The charge is often made that without an increase in duty the profits will go to the drinks industry and retailers, not the Treasury. I can understand that, but if we can introduce windfall taxes on energy companies, why not have windfall taxes on supermarkets that profit from windfall gains? With more than 31 billion units sold in the off-trade, why not even consider a health levy on unopened bottles, perhaps of between 5p and 10p a unit, targeting just the off-trade? That would be more than enough to allow for decent treatment programmes. Evidence shows that for every pound we invest in such programmes, we save £5 in wider benefits to the economy because of reduced harms.

[Dr Wollaston]

I could not agree more.

Finally—I know that other Members would like to come in—there are those who argue that a minimum price is illegal under EU law. If so, why are the Scottish Government so confident that it is not? I draw the Minister’s attention to a reply given by Mr Dalli on behalf of the European Commission to a question put by an MEP on that point. The bones of the reply are that

“the Commission fully shares with the Honourable Member the conviction that there are strong public health reasons for the EU to tackle alcohol-related harm including minimum pricing measures.”

Will the Minister set out today whether there have been discussions with the Scottish Executive on the matter? Will she also comment on what steps the Treasury will take to tackle supermarkets’ plans to undermine Scotland’s decisive action to tackle the carnage caused by alcohol? Tesco recently e-mailed Scottish customers to reassure them that they will still be able to access cut-price deals after the Act is in force, as the products will be delivered from across the border. Will the Minister join me in condemning that e-mail from Tesco?

Yesterday, the Select Committee on Health returned from a visit to Carlisle, and it is clear that the city is expecting an increase in cross-border sales. It would prefer to see us use an evidence-based policy to protect the north-west, which has suffered from the devastating impact of alcohol. There have been many calls for effective minimum pricing and numerous models show the amount of lives and money saved, so I do not want to go over them in detail, other than to point out again that a 50p minimum price could save nearly 10,000 lives a year.

We have shown that Britain is prepared to stand our ground in the EU when it comes to the City of London. Now is the time to put the lives of our young people ahead of the theoretical risk of a legal challenge. A precedent exists in the loi Evin, which the French introduced to protect children from the effects of alcohol marketing in France. It has been challenged repeatedly by the industry in the EU’s courts, but it was upheld on the grounds of the health benefits. I fully agree with that.

[Mr Barron]

I agree with the hon. Lady regarding unit pricing, as did the Select Committee. One issue that caught my ear in her presentation is that of spirits. For 10 years, I have sat in Budget speeches in the House of Commons Chamber, when everyone cheered when the duty on spirits never went up. Then a £6 bottle of vodka became the choice for binge drinking. That is one of the lessons that the Treasury should learn.

[Dr Wollaston]

I could not agree more. Pricing plays, and has played, a role in the massive increase in the drinking of vodka, particularly by young women.

There are other ways of levelling the playing field, if the Treasury wants more income after minimum pricing. I know that the Minister is aware of the paper written by Dr Nick Sheron in which he argued that we could vary VAT between the on and off-trades to achieve minimum pricing, without damaging our pubs. I accept that the Treasury is convinced that that would be illegal under EU law. That is just another example of the completely illogical rules by which alcohol duty is set from across the channel, and is a prime example of the intrusive and frustrating way so much of our legislation is controlled by the EU.

I finish by asking the Minister not to commit to a floor price that will be meaningless. Will she assure the House that she will meet her Scottish counterparts to discuss why they are convinced that it is legal to introduce a realistic minimum price for alcohol? Can she assure me that the Government will look at the consistent and evidence-based advice from health experts on minimum pricing, and at least ensure that supermarkets south of the border do not undermine what is happening in Scotland? Can she also assure me that the Treasury recognises that alcohol is not an ordinary commodity, but a psychoactive, teratogenic carcinogen, which also happens to be addictive?

I finish with a story from one of my constituents, who spoke to me after trying to stop a drunken lout urinating on a semi-conscious vulnerable woman in the street. Is that the picture of Britain that we want to send to the rest of the world in our Olympic year? It really is the picture that other people are starting to have of Britain, and it is completely preventable. We just need bold action from the Government. Otherwise, we are abandoning another generation of young people. There is no such thing as a free lunch and equally no such thing as a cheap drink. We are all cross-subsidising cheap deals in supermarkets by paying extra for our groceries and other products. There is no such thing as a cheap drink: we are all paying a heavy price.

Oral Answers to Questions

Kevin Barron Excerpts

Tuesday 1st November 2011 Commons Chamber

[Chris Williamson (Derby North) (Lab)]

2. What assessment he has made of the effects of the 2011 Budget on long-term unemployment.

[Mr Kevin Barron (Rother Valley) (Lab)]

12. What assessment he has made of the effects on unemployment of the outcome of the comprehensive spending review.

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

The independent Office for Budget Responsibility published its forecast for unemployment in March. Unemployment is a serious problem for the UK, with about 1 million people continuously on out-of-work benefits for more than a decade. This Government have introduced a number of reforms to the welfare system, including the Work programme—the biggest single payment-by-results employment programme this country has ever seen, which is expected to help 2.4 million claimants over the next seven years.

[Danny Alexander]

I am not sure that Labour’s five-point plan would help the British economy, given that it involves spending an extra £20-odd billion, putting at risk the fiscal credibility that is so important to maintaining employment in this country. Nor do I think the hon. Gentleman should be so critical of the Work programme, which after all is designed to tackle the legacy of 1 million people who have been out of work for more than 10 years—a legacy for which his party is responsible.

[Mr Barron]

Is it not true that the increase in unemployment caused by the comprehensive spending review is a heavy burden both for the individuals and the families concerned and for the economy? What does the Minister say to the fact that the Government have had to borrow £46 billion more this year than they were planning to borrow?

[Danny Alexander]

The right hon. Gentleman is absolutely right that unemployment is a heavy burden for any individual or any family. We inherited from Labour the largest budget deficit this country has ever seen. It was incumbent on this coalition Government when we came into office to take the action necessary, otherwise we would have found ourselves in a position that many other European countries face, which would have been a great deal worse for the very people the right hon. Gentleman claims to be concerned about.

Oral Answers to Questions

Kevin Barron Excerpts

Tuesday 6th September 2011 Commons Chamber

[Mr Osborne]

Of course I am well aware of the pain and burden that the big rise in the international oil price has caused to British businesses and, indeed, British families. That is why we took action in the Budget with a £2 billion reduction in fuel duty.

My hon. Friend mentioned hauliers in her constituency. The average haulier will benefit by approximately £1,700 this year as a result of the measures announced in the Budget, in comparison with the last Government’s fuel duty plans. Those measures were funded by an increase in tax on North sea oil companies, which was controversial and was opposed by the Labour party.

[Mr Kevin Barron (Rother Valley) (Lab)]

T2. The carbon price floor taxation policy within the electricity market reform is designed to push up the cost of electricity produced from high-carbon fuels such as coal. That could close what remains of indigenous coal production in this country, and also vastly increase the costs of energy-intensive industrial users such as steelmakers. Is the Chancellor prepared to look again at that policy, or consider compensating the industries that will fall foul of it?

[Mr Osborne]

We are looking specifically at the impact not just of the carbon floor price but of all the other environmental policies of recent years on energy-intensive industries. I hope, in the autumn forecast at the end of November, to give the House an update of what we propose to do to help.

Equitable Life

Kevin Barron Excerpts

Thursday 22nd July 2010 Commons Chamber

[Mr Hoban]

My hon. Friend makes an important point. Some of the changes that I want to make to the process of ensuring that Equitable Life policyholders receive justice are to do with speed and transparency. More information will be available to policyholders on the Treasury website, where they will be able to see some of the work that Sir John has done and the letter that Towers Watson provided to us. There will also be questions and answers on the website to help address their concerns.

[Mr Kevin Barron (Rother Valley) (Lab)]

Given that the Financial Secretary said that the cost to the Exchequer will be considered in the light of what is affordable according to the spending review, will the independent commission, which is designing the disbursement scheme, have terms of reference that allow it to challenge or influence the amount in the light of its findings?

[Mr Hoban]

I may be old-fashioned, but I think that it is up to Parliament to decide amounts that are spent and taxes that are raised. The commission will have a role in designing the scheme, but it is important that Parliament takes a view about how much should be spent. I remind the right hon. Gentleman that the ombudsman herself said in her report that we need to take into account the impact of any compensation arrangements on the public purse.

Government Spending Cuts

Kevin Barron Excerpts

Wednesday 26th May 2010 Commons Chamber

[Mr Laws]

My hon. Friend makes a very good point. He will also be aware that some of these funds are going to be used to avoid part of the tax on jobs that the previous Administration were intent on, and that will help to preserve employment in this country.

[Mr Kevin Barron (Rother Valley) (Lab)]

Could the right hon. Gentleman tell the House what is fair about cutting the future jobs fund, which was aimed at helping 8,000 young unemployed people in Yorkshire and Humberside? Would he personally be happy to see youth unemployment rise to the levels that we saw in the recession of the early 1990s?

[Mr Laws]

Of course we would not, but I have to tell the right hon. Gentleman that the policy that we set has to be informed by the facts, and the facts and advice that we had from the Department for Work and Pensions about the future jobs fund suggested that it was simply not effective and that the money was wasted. We have a £156 billion deficit to deal with, and if we did not tackle the wasteful expenditure we would have to make cuts in the areas that matter. I repeat the point that I made to the right hon. Member for Don Valley (Caroline Flint) a moment ago: we are reinvesting money in apprenticeships, which will make a real difference to many of the young people about whom the right hon. Gentleman cares.