Consumer Rights Bill

Lindsay Hoyle Excerpts

Tuesday 13th May 2014 Commons Chamber

[Stella Creasy]

I beg to move, That the clause be read a Second time.

[Mr Deputy Speaker (Mr Lindsay Hoyle)]

With this it will be convenient to discuss the following:

New clause 7—Debt management plan regulation—

‘The Financial Conduct Authority shall bring forward recommendations within a year of the commencement of this Act regarding the practice of directly charging consumers fees or charges for the provision of debt management plans, including recommendations on the phasing out of such practices.’.

New clause 9—Credit broker fees—

‘(1) The Consumer Credit Act 1974 is amended as follows.

(2) In section 160A (Credit intermediaries) after subsection (4) insert—

“(4A) Persons engaged in credit intermediary activity under this section or credit broking activity under section 145 shall not charge or take any fee from a debtor in respect of these activities until such time as an introduction results in the debtor entering into a relevant agreement.”.’.

New clause 11—Practices of rent to own companies—

‘(1) This section applies to credit agreements and consumer hire agreements taken out in respect of household goods specified in rules by the Financial Conduct Authority.

(2) The rules under subsection (1) shall—

(a) include a requirement on lenders to include in pre-contractual information adequate explanations and information allowing prospective customers to compare both the cash price of goods and the total cost of the credit agreement to a representative retail price for those goods;

(b) prohibit lenders from requiring customers to take out insurance sold or brokered by the lender as a condition of obtaining credit;

(c) set out specific steps lenders must take before taking action to enforce the agreement or recover possession of goods; and

(d) set out the steps lenders should take to check that the agreement is affordable and suitable for prospective consumers.’.

New clause 23—Consumer credit: bill of sale—

‘(1) Where a person is a purchaser of goods subject to a bill of sale, made in connection with a regulated agreement under the Consumer Credit Act 1974, in good faith and without notice of the bill of sale, title to those goods shall pass to that person.

(2) A creditor is not entitled to enforce a bill of sale made in connection with a regulated agreement by recovering possession of the goods except through an order of the court.

(3) If goods are recovered by the creditor in contravention to subsection (2)—

(a) the bill of sale will be treated as invalidly made; and

(b) the debtor shall be released from any outstanding liability under the regulated agreement.

(4) If the creditor has disposed of goods taken in contravention of subsection (2) the debtor shall be compensated to the value of those goods.’.

[Stella Creasy]

The new clauses lie at the heart of consumer issues: if consumers have no money in their pockets, they will not do very much consuming. A personal debt crisis is brewing because millions of people are trying to make ends meet and pay for the debt they took on to try to make ends meet previously. Household debt is at its highest since 2009, with people owing £1.6 trillion in personal debt. Some 43% of us say that we often or sometimes struggle to make it to payday—little wonder, given the way in which the cost of living has escalated. The new clauses come into play because debt repayment is increasingly the reason that people struggle to make it to payday. They reflect an attempt not to continue the good work that has been done in this House to address the consumer credit market, but to recognise that the Government’s belated conversion to the Opposition’s approach on payday lending needs to be just the start of the conversation on how we ensure that people have the pounds in the pocket they need. This is intrinsic to our economic future, given that consumer spending has accounted for so much of the growth we are now seeing. That, in itself, is perhaps one of the problems we face.

Let me explain the new clauses I wish to speak to today, because I know that other Members want to speak to the new clauses they propose. New clause 6 concerns what Members might call my bête noir—payday lenders. There are now 8 million loans annually, which are worth £2.2 billion. Those loans come with a cost. The National Audit Office estimates that they cost consumers £450 million a year of direct consumer harm, because of the failure to regulate the payday lending industry. For several years we proposed regulation of the industry, but it will come in only next year.

One in 10 British adults are likely to take out a payday loan in the next six months. That figure is going up, not down. It is little wonder that companies such as Wonga are making £1 million a week from our constituents—a 36% increase on the previous year—even though it is writing off huge swathes of its loan book. Some 40% of those who took out a payday loan said that it made their financial position worse, but many feel that they have little alternative. Credit unions are desperately trying to fill the gap, but it is an impossible gap to fill with the current level of need. It is time for payday lenders to pay their way. New clause 6 would enable an additional levy to be made on high cost credit companies to ensure that they provide funding for the debt advice and extension of credit unions that this situation requires. In fact, we believe the pressure on debt advice agencies and, indeed, credit unions is likely to increase, not subside, in the years ahead. We therefore think it time for the payday lenders to pay for the damage they have done.

New clause 7 also speaks to the growing personal debt bubble in our society, and to the conduct of the cowboy debt management agencies. We have already talked about legal loan sharks, and now it is time to look at the cowboys, but these are not just the stuff of nightmare. These companies are profiting from the misery of our constituents, exploiting the way in which debt management is done in this country.

The Government themselves admit that in excess of 1 million consumers each year are seeking advice on how best to deal with their financial difficulties. Many of us will know from our constituency surgeries the people who come to us in desperate need, often because they are about to be evicted for falling behind with their rent. We also encounter people who are struggling financially and who need help forming a debt management plan to deal with their creditors. That is the gap that these companies have filled.

About 7% of British adults report struggling to payday due to debt management payment plans, and 6% blame their payday loan problems on debt repayments. Bank loan repayments are the cause of 13% of those who struggle to payday. People are struggling because they are trying to pay back the debts they have accrued, especially over the last couple of years. It equates to about 2.5 million people that we know of who are already in a debt management plan.

Some debt management plans are available free, and I pay tribute to organisations such as Christians Against Poverty and StepChange for the work they are doing in providing people with free debt advice. After all, it is the most perverse of experiences for people struggling with financial debt to be charged to get out of the hole they are in. That is the challenge we are facing. It was estimated in 2010 that commercial debt management companies were making about £250 million a year from over-indebted clients. As I say, that was back in 2010. The Money Advice Service now tells us that there are 9 million people in our country who are over-indebted, so these are the people for whom these sorts of services may well be apposite. The need to reform how they work therefore becomes even stronger.

Ministers admitted in 2002 in response to questioning by the BIS Committee that there was evidence of some abuse of upfront fees, so let us talk about what is meant by that. We have an example from Clear View Finance of a gentleman for whom 90% of the money he was paying to the company was being taken in a fee, so a mere 10% of the money he was paying to clear his debts was going to his creditors—little chance for him to get out of the cycle of debt he was in any time soon! Yet when the Minister admitted that there was such abuse, he said that these companies had a role to play, so there was not really any need for any further regulation of them. We disagree, and we were disappointed when the Government voted in Committee against our proposals to deal with debt management companies.

We recognise that the Financial Conduct Authority has taken over the management of these companies, and it proudly trumpets that it is going to limit to 50% the amount a company can take in fees rather than pay out to creditors. We believe that we should go much further. We do not believe that people should be charged for being in debt when they come forward for help, and we want to see the phasing out of fees for debt management altogether.

Let me provide an example of why that would make a difference. StepChange, which provides this service for free, found that a client with a typical debt of £30,000 would have to pay for a commercial product almost an extra £6,000 in fees—£6,000 over and above the loan repayments. That extended the plan by approximately 18 months in comparison with one that StepChange had put together.

Taken in concert with new clause 6, which would provide the funding to increase debt advice, we believe that we can phase out fees for debt management, and we believe that that is the right thing to do—not to charge people for getting into debt, but to help them get out of debt. As millions of Britons are already in this cycle and millions more are likely to get into it as interest rates rise and they have increasing problems with their credit card and personal debt repayments coming home to roost, the case for reforming our debt management cowboy firms grows all the stronger.

Finally, new clause 23 speaks to another legal loan sharking practice in this country, which we believe is long overdue for overhauling. Citizens Advice chief executive Gillian Guy has said:

“The logbook industry is still in the dark ages and has been getting away with lawless practices. It is absolutely absurd that a firm should be able to take away someone’s possessions without any due legal process.”

Millions of people are affected, both those who take out logbook loans and those who buy a second-hand car without knowing that there is a charge against it, only to find that the car is being repossessed and that they have no recourse to any legal practice.

--- Later in debate ---

[Stella Creasy]

I beg to move, That the clause be read a Second time.

[Mr Deputy Speaker]

With this it will be convenient to discuss the following:

New clause 12—Right to full refund: ticketed events—

‘An event organiser must issue a full cash refund where their tickets are returned to them up to 24 hours before the start of the event.’.

New clause 13—Goods to be as described: meat products—

‘(1) All products containing halal and kosher meat shall be labelled as such at the point of sale by retail and food outlets.

(2) A food outlet is anywhere where food is served to the public.’.

New clause 14—Communications services: change of service provider—

‘(1) Section 3 of the Communications Act 2003 is amended as follows.

(2) At the end of subsection (2)(b) insert “with a switching process that is led by the receiving communications service provider”.’.

New clause 15—Right to corrective action—

‘(1) This section applies if either—

(a) the responsible economic actor has identified that goods supplied present a health and safety risk to the consumer; or

(b) the appropriate authority has identified that goods supplied present a risk to the public safety; and

as a result, the product is subject to corrective action by either party (a “recall action”).

(2) The consumer has the right to expect that the responsible economic actor for any goods supplied subject to a recall action must take all reasonable steps to inform all persons affected, or likely to be affected by the safety risks from the goods, within the shortest period of time practicable.

(3) The consumer, if placed at risk by goods subject to a recall action, has the right to prompt and effective action by the economic actor of that product to ensure that—

(a) the defect posing a safety risk to any persons affected or likely to be affected is eliminated;

(b) the actions required to achieve (a) do not cause significant inconvenience to the consumer; and

(c) all costs associated with the recall action are borne by the responsible economic actor.

(4) The Secretary of State will periodically gather and make publicly available information relating to safety incidents caused by recalled goods, and estimates of how many such goods still remain unaccounted for.

(5) The effectiveness of recall actions, and the procedures in place to achieve successful recalls, will be the subject of periodic review by the Secretary of State, with reference to public information on recalls in subsection (4) and any other relevant data.

(6) The Secretary of State may create or designate a body to act as a consumer product safety and recall authority.

(7) The Secretary of State may by regulations provide for the authority to—

(a) act to protect the public from identifiable and unreasonable risks of injury, death or household risk from consumer products;

(b) review products, test products, or receive or commission reports from other competent persons;

(c) direct corrective action to be taken by relevant economic actors, regulators or authorities;

(d) ensure and direct forms of consumer registration, from purchase of products, with databases which will be conducive to optimal fulfilment of (a) and (c) above;

(e) require notification by economic actors, including manufacturers, brand suppliers or traders, of significant evidence of concern in respect of the consumer safety of relevant products; and

(f) provide for accessible, intelligible information and advice to be available to consumers and relevant economic actors in respect of product safety, corrective actions and other guidances relevant to the authority’s work.

(8) For the purposes of subsections (4), (5), (6) and (7), the Secretary of State must consult with—

(a) market regulators;

(b) relevant authorities; and

(c) any other bodies he thinks appropriate.

(9) For the purposes of this section “economic actor” means—

(a) a “trader” as defined in section 2(2); or

(b) a manufacturer of “goods” as defined in section 2(8).’.

This new clause would enable new provision to be made regarding recall actions where a level of consumer safety risk has been identified. It would allow the Secretary of State to review and add to arrangements for corrective action for the protection of consumer safety.

New clause 16—Secondary ticketing platforms: product and seller information—

‘(1) The Secretary of State shall issue guidance to all traders who operate as secondary ticketing platforms on the application of the Consumer Contracts (Information, Cancellation and Additional Charges) Regulations 2013.

(2) Guidance issued under section (1) shall include how secondary ticketing platforms must inform consumers of—

(a) the chosen identity of the seller;

(b) the country of residence of the seller;

(c) information provided by previous buyers on the reliability of the seller and the tickets he has sold;

(d) information on any complaints made against the seller for failing to supply tickets;

(e) information on any complaints made against the seller for supplying fraudulent or invalidated tickets; and

(f) information on all other accounts currently or previously held with the secondary ticketing platform linked to the seller by virtue of personal, financial and contact information provided by them.

(3) Guidance issued under section (1) shall set out how information required under Part 2 of the Consumer Contracts (Information, Cancellation and Additional Charges) Regulations 2013 shall be—

(a) accurate; and

(b) prominently displayed before a buyer is able to purchase.

(4) Guidance issued under section (1) shall set out how secondary ticketing platforms must disclose clearly if the seller of the ticket is—

(a) the secondary ticketing platform themselves;

(b) individuals employed by the secondary ticketing platform;

(c) other companies linked to employees, directors or shareholders of the secondary ticketing platform;

(d) the event organiser or an agent acting on their behalf; or

(e) any other party connected to the event organiser of the event.

(5) Guidance issued under section (1) shall set out the status of tickets as unique goods with distinct characteristics which would affect—

(a) the enjoyment of the good by the consumer;

(b) the use of the good by the consumer; or

(c) the inherent value of the good in questions.

(6) Where a ticket is sold through a secondary ticketing platform, guidance issued under section (1) shall set out how the Consumer Contracts (Information, Cancellation and Additional Charges) Regulations 2013 apply to tickets as unique goods, including—

(a) how sellers must provide all relevant information about the ticket including but not limited to the face value of the ticket and a designated seat or ticket number;

(b) how secondary ticketing platforms will publish all the information about a ticket provided by the seller in a prominent and clear way; and

(c) what sanctions will apply for failing to provide this information under the regulations.’.

New clause 17—Secondary ticketing platforms: fraudulent tickets—

‘(1) Where a secondary ticketing platform becomes aware that sellers using their service have acquired tickets through illegal methods, or are selling fraudulent tickets, they have a duty to report this to the relevant law enforcement agency immediately.

(2) A secondary ticketing platform must meet any lawful requests for information on sellers made by law enforcement agencies or courts.

(3) Where a law enforcement agency has notified a secondary ticketing platform that a ticket advertised through their service is, or is suspected to be, fraudulent, the secondary ticketing platform must remove that ticket and suspend the seller’s activities immediately.’.

New clause 18—Secondary ticketing platforms: seller profiles—

‘(1) Secondary ticketing platforms must provide a profile of information on sellers using their service.

(2) Profile information provided under subsection (1) must include, but is not limited to—

(a) the name of the seller;

(b) the country of residence of the seller;

(c) if the seller is a company or business, its registered number, if any;

(d) if the seller is a company or business, its registered office or address for service;

(e) a list of all current and past inventory sold or offered for sale by the seller;

(f) information on all other accounts currently or previously held with the secondary ticketing platform linked to the seller by virtue of personal, financial and contact information provided by him;

(g) information provided by previous buyers of the reliability of the seller and the tickets he has sold;

(h) information on any complaints made against the seller for failing to supply tickets, and the resolution of those complaints;

(i) the VAT registration number of the seller, if applicable; and

(j) information on any complaints made against the seller for supplying fraudulent or invalidated tickets, and the resolution of those complaints.

(3) Information provided under subsection (1) must be—

(a) accurate; and

(b) prominently displayed before a buyer is able to complete their purchase.

(4) Secondary ticketing platforms must disclose clearly and prominently where the seller of the ticket is—

(a) the secondary ticketing platform themselves;

(b) individuals employed by the secondary ticketing platform;

(c) other companies linked to employees, directors or shareholders of the secondary ticketing platform;

(d) the event organiser or an agent acting on their behalf; or

(e) any other party connected to the organisation of the event.

(5) Where a seller offers for sale more than 20 tickets to the same event, the secondary ticketing platform must take reasonable steps to verify the validity of the tickets.’.

New clause 19—Secondary ticketing platforms: ticket information—

‘(1) Where a ticket is sold through a secondary ticketing platform—

(a) the seller must provide all relevant information about the ticket; and

(b) the secondary ticketing platform must publish all the information about a ticket provided by the seller in a prominent and clear way.

(2) Information to be requested by the secondary ticketing platform and provided by the seller for the purposes of subsection (1) should include, but is not limited to—

(a) the face value of the ticket;

(b) any age or other restrictions on the user of the ticket; and

(c) the designated block, row, seat or ticket number, where applicable.

(3) Where tickets are being resold in contravention of the terms and conditions agreed to by the original purchaser, this must be stated prominently by the secondary ticketing platform at every stage of the purchasing process.

(4) Information provided by virtue of this section must be—

(a) accurate; and

(b) prominently displayed before a buyer is able to complete their purchase.’.

New clause 20—Secondary ticketing platforms: compensation—

‘(1) Secondary ticketing platforms must reimburse reasonable costs to a buyer where a ticket sold through their service is fraudulent or invalidated.

(2) For the purposes of subsection (1), reasonable costs must include, but are not limited to—

(a) the price paid for the ticket by the buyer, inclusive of all service and delivery charges;

(b) all travel expenses incurred by the buyer in travelling from their place of residence to the location of the event for which they had purchased the ticket; and

(c) any accommodation expenses incurred by the buyer for the sole purpose of attending the event for which they had purchased the ticket.

(3) For the purposes of subsection (1), reasonable costs should be defined as a total amount not exceeding twice the total purchase price of the ticket or tickets in question, including all additional fees and taxes paid.

(4) Claims made by a buyer against a secondary ticketing platform under this section must be proven by receipts or other documentary proof.

(5) The secondary ticketing platform must settle any claims under this section within 40 working days, other than where a suspected fraud or abuse related to the transaction in question is the subject of an ongoing investigation by the relevant statutory authority.

(6) Secondary ticketing platforms are permitted to take all necessary action to recover any monies paid out to consumers under this section from the seller of the ticket.’.

New clause 21—Secondary ticketing platforms: definitions—

‘(1) A “secondary ticketing platform” means a person or company operating an internet-based facility for the resale of tickets to events including in the United Kingdom, regardless of the country in which the owner of the service is registered.

(2) A “ticket” means anything which purports to be a ticket, including any item, tangible or intangible, which grants the holder entry to an event.

(3) An “event” means any sporting, music or cultural activity taking place at a specified time and place for which tickets are issued and required for entry or attendance.

(4) An “event organiser” means the person or persons responsible for organising and holding an event and receiving the revenue from the event.

(5) A “fraudulent ticket” means a forged or duplicated ticket.

(6) An “invalidated ticket” means a ticket which has been cancelled by the event organiser, or an agent acting on their behalf, after being issued.’.

New clause 22—Prohibition of fees in contracts for services: letting of residential accommodation—

‘(1) The provisions in this section apply to a contract for a trader to supply a service in connection with the letting of a residential premises.

(2) Subject to the provisions of this section, any person who demands or accepts payment of any sum of money from a person (“P”) for services in connection with a contract for the letting of residential premises shall be guilty of an offence.

(3) For the purposes of subsection (2), P is any person—

(a) who seeks to enter a contract to let residential accommodation, or

(b) who has a tenancy of, or other right or permission to occupy, residential premises.

(4) For the purposes of subsection (2)—

“letting” shall include any service provided in connection with the advertisement or marketing of residential accommodation or with the grant or renewal of a tenancy;

“services shall —

(a) include, and are not limited to—

(i) the registration of persons seeking accommodation,

(ii) the selection of prospective occupiers, and

(iii) any work associated with the production or completion of written agreements or other relevant documents.

(b) not include credit checks of person seeking accommodation.

(5) Where a person unlawfully demands or accepts payment under this section in the course of his employment, the employer or principal of that person shall also be guilty of an offence.

(6) A person shall not be guilty of an offence under this section by reason of his demanding or accepting payment of rent or a tenancy deposit within the meaning of section 212(8) of the Housing Act 2004.

(7) A person shall not be guilty of an offence under this section by reason of his demanding or accepting a holding deposit.

(8) A “holding deposit” for the purposes of subsection (7) is—

(a) a sum of money demanded of or accepted from a person, in good faith for the purpose of giving priority to that person in relation to the letting of a specific property, which is to be credited towards the tenancy deposit or rent upon the grant of the tenancy of that property, and

(b) not greater than two weeks rent for the accommodation in question.

(9) Costs incurred by persons seeking accommodation for the undertaking of credit checks shall be reimbursed upon the signing of a tenancy agreement.

(10) In this section, any reference to the grant or renewal of a tenancy shall include the grant or renewal or continuance of a lease or licence of, or other right or permission to occupy, residential premises.

(11) In this section “rent” shall include any occupation charge under a licence.’.

Amendment 6, in clause 2, page 2, line 15, at end insert—

‘(3A) The Secretary of State may by order made by statutory instrument provide that those who represent businesses with fewer than 10 employees and are purchasing goods or services for use within their commercial activities will be considered consumers.’.

Government amendments 9 to 14.

Amendment 5, in clause 48, page 30, line 3, leave out from ‘(5)’ to ‘resolution’ and insert ‘may not be made unless a draft has been laid before and approved by’.

Government amendment 15.

Amendment 20, in clause 84,  page 43, line 14, at end insert—

‘(2A) Section [Prohibition of fees in contracts for services: letting of residential accommodation] extends only to England.’.

Wales Bill

Lindsay Hoyle Excerpts

Tuesday 6th May 2014 Commons Chamber

[Hywel Williams (Arfon) (PC)]

I beg to move amendment 32, in page 6, line 20, after ‘description’, insert ‘, a tax credit of any description’.

This amendment would allow the Welsh Government, by resolution of the National Assembly for Wales, to introduce new tax credits.

[The Chairman of Ways and Means (Mr Lindsay Hoyle)]

With this it will be convenient to discuss the following:

Amendment 33, in line 32, leave out ‘, each House of Parliament and’.

This amendment would enable the Welsh Government, by resolution of the National Assembly for Wales, to introduce a new tax without the need for approval by resolution of both Houses of Parliament.

Amendment 40, in page 7, line 13, at end insert—

‘(10) In the event that the power to add new devolved taxes under Section 116C, or the power to add new devolved taxes under Section 80B of the Scotland Act 1998 is used, the Chancellor of the Exchequer must undertake a review of the benefits of symmetry in the devolution of taxes between Wales and Scotland.’.

Clause 6 stand part.

Government amendment 20.

Clause 7 stand part.

Amendment 7, in clause 14, page 19, line 5, at end add—

‘(3) The Secretary of State shall review the historical volatility of stamp duty land tax revenues in Wales, and place a copy of the review in the Library of the House of Commons.’.

Clause 14 stand part.

Clause 15 stand part.

That schedule 2 be the Second schedule to the Bill.

Clause 16 stand part.

Amendment 8, in clause 17, page 20, line 29, at end add—

‘(3) The Secretary of State shall review the historical volatility of landfill tax revenues in Wales, and place a copy of the review in the Library of the House of Commons.’.

Clause 17 stand part.

Clause 18 stand part.

Amendment 42, in clause 28, page 29, line 34, leave out paragraph (2)(b).

Amendment 43, in line 36, at end insert—

‘( ) Part 2, except the referendum-related provisions and sections 19 and 20, will come into force the day after the Secretary of State has laid a report before each House of Parliament on the further legislative steps needed to move to a model of reserved powers for the National Assembly for Wales; the report must be laid within six months of this Act receiving Royal Assent.’.

[Hywel Williams]

Recommendation 11 of the cross-party commission on devolution in Wales states that the National Assembly should be given a power to introduce specified taxes and any associated tax credits in Wales. This recommendation was not included in the Bill. That might have been merely an oversight by the Government, although those of us who are a little more sceptical suspect that they deliberately omitted it from the Bill. Whatever may be the case, amendment 32 seeks to align the Wales Bill more closely with the Silk commission recommendations.

We in Plaid Cymru welcome the inclusion of an ability to introduce specified new taxes. We note that the Silk commission recommendation 11 states that the Welsh Government should retain the revenue from these new taxes without a deduction from the block grant. I hope the Government will ensure that that is indeed the case. Perhaps the Minister will confirm that when replying to the debates.

Although the issue of Barnett was not within the remit of the Silk commission or this Bill, it is a closely related issue and I hope we will be able to debate at least some of it when we look at new clauses. It is important not least because Labour, if I correctly understand its position, has said that Barnett reform is a necessary condition before it will support greater financial powers for Wales. That is a significant statement on its part, I think.

The ability to vary income tax and access to potential borrowing for investments that can boost the economy and create jobs in Wales are the central tenets of this Bill, but there are several areas within the Bill that, if fully developed, could bring real benefits to the Welsh economy. That is why, in addition to the ability to introduce new specified taxes, the ability to introduce associated tax credits is so important. Although much careful research and preparation would be needed before introducing a new tax and associated tax credits, and it would be unwise to pre-judge where and when that might be done, at least giving the Welsh Government the ability to do this would give them much more freedom to act and take greater responsibility for developing our economy, which hon. Members on both sides of the House wish to see. We could raise the revenue, where necessary, and provide tax credits in order to stimulate activity or to provide assistance wherever it was felt necessary, be it for individuals, businesses or areas of industry.

The amendment aims to preserve the integrity of the original cross-party Silk recommendations. For Plaid Cymru it makes perfect sense, and I urge hon. Members on both sides of the House to support it. Should we not press the amendment to a vote, or were we to do so and it were to fall, Government Members might consider tabling their own similar amendments on Report. Given that the principle of new taxes has been conceded in the Bill and that tax credits could be introduced, we would wish that to be the case.

Wales Bill

Lindsay Hoyle Excerpts

Wednesday 30th April 2014 Commons Chamber

[Stephen Crabb]

I beg to move, That the clause stand part of the Bill.

[The Temporary Chairman (Mr Christopher Chope)]

With this we may take new clause 5—The National Assembly for Wales—

‘The Government of Wales Act 2006 is amended by adding at the end of section 1 (The Assembly)—

(a) The Assembly may change its name by means of a resolution agreed to by a simple majority;

(b) on the first occasion a resolution under subsection (6)(a) is passed, the expression “National Assembly for Wales” shall be replaced wherever it occurs in the GOWA 2006 by the name contained in that resolution;

(c) on any subsequent occasion, the name contained in a resolution under the terms of subsection (6)(a) shall replace the previous name in the same manner;

(d) unless the context requires otherwise, in any enactment, instrument of other document passed or made before this subsection comes into force any reference to the National Assembly for Wales is to be read as, or as including, a reference to the Assembly as renamed.”.’.

[Stephen Crabb]

Let me begin, Mr Chope, by welcoming you to the Chair. It is a pleasure to serve under your chairmanship.

Following the 2011 Assembly election, the First Minister of Wales announced that the Welsh Assembly Government wished to be known instead as the Welsh Government. That change was made in order to make clearer the respective roles of the Welsh Government and the National Assembly for Wales following the devolution of full law-making powers. Since then, the term “Welsh Government” has increasingly been used by people throughout Wales, and it is now the commonly used term for the Executive. However, “Welsh Government” remains an informal moniker, and “Welsh Assembly Government” is still the formal legal name in statute.

In recognition of the widespread use of “Welsh Government” as the generally accepted term, and following the request from the First Minister, clause 4 provides for the name of the Executive to be changed formally. That will mean that, for the first time, the new title can be used in formal legal documents, in keeping with common parlance. The clause provides that any reference to “Welsh Assembly Government” in existing legislation should be read as a reference to the “Welsh Government”, unless the specific context requires the former name to be used.

As usual, Plaid Cymru Members wish to go even further and have tabled new clause 5, which seeks to devolve to the National Assembly for Wales the power to change its name through a resolution passed by a simple majority. In renaming the Welsh Assembly Government we are simply reflecting what the Executive are now commonly known as. The same is not the case in respect of the National Assembly; people within and outside Wales know the legislature as the “National Assembly” or the “Welsh Assembly”, and I detect no popular clamour in my constituency or any other part of Wales I visit for a change in the name of Wales’s legislature.

Finance (No. 2) Bill

Lindsay Hoyle Excerpts

Wednesday 9th April 2014 Commons Chamber

[Catherine McKinnell (Newcastle upon Tyne North) (Lab)]

I beg to move amendment 3, in page 8, line 25, at end insert—

‘55F Review

(1) Within six months of the passing of the Finance Act 2014, the Chancellor of the Exchequer must undertake a review of the impact of the tax relief for married couples and civil partners introduced under this Chapter.

(2) The review must in particular include—

(a) a calculation of the proportion of married couples and civil partners who are eligible for the tax relief in the financial year 2015-16;

(b) an assessment of the impact of this tax relief on those who are neither married nor in civil partnerships;

(c) the cost to the Exchequer of this tax relief; and

(d) an assessment of alternative tax reliefs that would benefit a greater number of families.

(3) The Chancellor of the Exchequer must publish the report of the review and lay the report before the House.’.

[The Chairman of Ways and Means (Mr Lindsay Hoyle)]

With this it will be convenient to consider clause 11 stand part.

[Catherine McKinnell]

It is a pleasure to serve under your chairmanship today, Mr Hoyle. I rise to speak to the Opposition’s amendment to clause 11 regarding the coalition’s proposed tax relief for married couples and civil partners. Before I begin, let nobody be in any doubt that the Opposition believe that marriage and civil partnerships are a force for good in society. Making a binding lifelong commitment to a partner in that way is truly to be celebrated. Let us not pretend, however, that the Government’s marriage tax allowance, introduced by clause 11 of this year’s Finance Bill, is anything other than a complete and utter dud of a policy.

--- Later in debate ---

[Steve McCabe (Birmingham, Selly Oak) (Lab)]

Does my hon. Friend agree that one difficulty with this proposal is shown in the analysis by the Institute for Fiscal Studies? Robert Joyce, the senior research economist there, says:

“The policy is not a general recognition of marriage in the income tax system”.

So the argument that has been made by the Government is false, in the sense that it gives an impression about this policy which is not actually true. He goes on to say that

“it is difficult to escape the conclusion that an income tax system which makes some people worse off after a pay rise has something wrong with it.”

[The Chairman of Ways and Means (Mr Lindsay Hoyle)]

Order. I think we need shorter interventions rather than speeches—I would sooner save your voice for later.

[Catherine McKinnell]

On the basis of my hon. Friend’s insightful intervention, I am looking forward to his speech on this matter. He makes the point well, and it is the point that I am seeking to make. As the Chief Secretary to the Treasury has said:

“This policy is not about children and families…it does nothing for millions of families with children struggling to make ends meet.”

--- Later in debate ---

[Mark Lazarowicz (Edinburgh North and Leith) (Lab/Co-op)]

I am grateful to my hon. Friend for giving way and for making such powerful points. When these points are put to the Government, they always say that the financial circumstances are such that there must be cutbacks somewhere. Is it not ironic that the Government are putting forward a policy that is so badly thought out that if anyone were asked to choose a priority for public spending, this would not be it? Should we not be taking real measures to tackle problems such as the bedroom tax and the changes in universal credit, all of which will cause much more damage than any benefit that this will bring about?

[The Chairman of Ways and Means (Mr Lindsay Hoyle)]

Order. I appeal for shorter interventions. We have time, but Members cannot make a speech as an intervention.

[Catherine McKinnell]

I thank you, Mr Hoyle, and also my hon. Friend whose intervention was powerful and to the point.

--- Later in debate ---

[Catherine McKinnell]

Indeed. Government Members often lament red tape and the complexity of the tax system. I am not entirely sure that they will be thanked for adding to it in this way and putting the burden of implementation on employers.

The apparent onus on taxpayers proactively to apply for this allowance is a concern that has been raised more widely. The Low Incomes Tax Reform Group has pressed the Government to ensure that a claim for the marriage tax allowance can

“be made on paper, as well as online; digital exclusion affects disproportionately people on low incomes, the very people to whom this relief is directed. It is particularly important that a paper copy is available since, in some cases, taxpayers will seek assistance from the voluntary and charitable sector with, perhaps, only one spouse being physically present at such meetings.”

LITRG goes on to urge that

“the claim/election process will be made as simple as possible—preferably a joint election rather than separate claim and election.”

I look forward to the Minister’s response to those concerns.

The complexity of the Government’s marriage tax allowance proposal has been commented on by the IFS, which stated, when the measure was first announced:

“One striking feature of the policy is that it complicates the income tax system. A transferable personal allowance for married couples capped at £1,000 and then withdrawn using a cliff-edge at the higher-rate threshold is not the simplest to understand. It is three years since another cliff-edge at the higher rate threshold was announced at the 2010 Conservative Party conference as a way of effectively means-testing Child Benefit, only to be removed and replaced with a less egregious taper at Budget 2012. The amounts involved here are less than in that case, which perhaps explains the willingness to cliff-edge again rather than implement a taper. Nevertheless, it is difficult to escape the conclusion that an income tax system which makes some people worse off after a pay rise has something wrong with it.”

One might think that, as my hon. Friend the Member for Edinburgh East (Sheila Gilmore) pointed out, a Government who have so boasted about being committed to tax simplification would want to avoid further complicating the system. At the launch of the Office of Tax Simplification, the Chancellor commented:

“A decade of meddling and intervening has made the tax affairs of millions of families and businesses across the UK extremely complicated. We need to sort out this mess.”

What does the Office of Tax Simplification make of the marriage tax allowance, which will clearly make the tax affairs of couples and employers more complex? We do not know because, in the words of the Exchequer Secretary in response to a written question I tabled:

“The Office of Tax Simplification (OTS) has not made an assessment of the proposals for a transferable tax allowance.”—[Official Report, 12 February 2014; Vol. 575, c. 642W.]

Why on earth not? What could Ministers possibly fear from the outcome of such an assessment?

It may be clear now that the Opposition oppose the Government’s marriage tax allowance and will vote against clause 11. We believe that the marriage tax allowance is perverse and unfair. It is a poorly targeted use of resources and is overly complex, and our amendment to clause 11 presses the Government to undertake a proper review of the cost, the impact and the benefits for those who will receive it and for the overwhelming majority of married couples and families who will not benefit at all.

Amendment 3 calls on the Government to ensure that any such review includes an assessment of alternative tax reliefs that would benefit a much greater number of families, because we are not just opposing the marriage tax allowance today. Indeed, we have said that a future Labour Government would scrap this policy and use the money saved, together with funding from a mansion tax on properties worth over £2 million, to reintroduce the 10p starting rate of tax, meaning a tax cut for 24 million people on low and middle incomes, by contrast with the 4.2 million couples who will benefit from the marriage tax allowance. Crucially, almost half of those benefiting from a new 10p tax rate would be women.

We know that the Liberal Democrats are apparently implacably opposed to the policy introduced by clause 11 and secured a deal in the coalition agreement to go so far as to abstain on the measure. I believe it was before the 2010 general election that the now Deputy Prime Minister described the Conservatives’ proposal for a transferable tax allowance for married couples as

“patronising drivel that belongs in the Edwardian age.”

I know that Liberal Democrats have, as some might say, an irritating habit of saying one thing before a general election, then doing precisely the opposite—university tuition fees and the VAT bombshell spring to mind—or of saying one thing at any point in the electoral cycle and doing precisely the opposite: for example, 46 Lib Dem peers voted to retain the bedroom tax just 24 hours after their party president, the hon. Member for Westmorland and Lonsdale (Tim Farron), said it was something his party could not “continue to support”. Although the Liberal Democrats may be thinking about abstaining on clause 11 as it stands, it is difficult to see how they could sit on their hands this afternoon and vote against our reasonable amendment.

We know that the Lib Dems apparently secured the policy of free school meals for every child in reception, year 1 and year 2 from September 2014, reportedly in exchange for agreeing to abstain on the marriage tax allowance. We of course back the policy, having piloted the idea in government in County Durham and Newham, with excellent results, but there are very real concerns about the way in which the policy was announced, and how it will be implemented. The initial pledge was for a “hot, nutritious meal at lunchtime”, but that is now being described as an aspiration. Ministers are now simply referring to a free, nutritious school lunch.

Many thousands of schools across the country simply do not have the facilities to ensure this provision. The Liberal Democrats have stated that around £80 million of the additional £150 million capital funding required for the project will come from an underspend in the Department for Education and an additional £70 million would be new money from the Treasury. [Interruption.]

I hear hon. Members on the Government Benches chuntering from a sedentary position. They seem very disturbed by the Liberal Democrat policy of free school meals and do not see how it is linked to the marriage tax allowance. Would they like to confirm that that was not an agreement, as has been reported?

[Mr Deputy Speaker (Mr Lindsay Hoyle)]

Order. The advice is not needed. There is a definite link, and if Members were to listen a little more closely, they would understand where the link is between the choice and where the money can be spent. Less advice and more listening might help all of us.

[Catherine McKinnell]

I thank the Deputy Speaker for his clarification. The link is clear. It is to do with the allocation of resources and the agreement that has been made. It also goes fundamentally to the heart of the Liberal Democrats and how they intend to vote on the matter. We believe they are likely to abstain on the measure, although we have not had that confirmed. We hope and assume that although they will abstain on the Government’s motion in relation to implementing the marriage tax allowance, they will support our call for a review. If the measure goes through, they would have as much of an interest as we would in ensuring that it is properly reviewed and monitored in the months to come, and that the Government take seriously the proposals for possible alternatives that benefit a larger number of families throughout the country.

The Opposition believe that the money allocated to the marriage tax allowance could be put to much better use elsewhere. That is why we have pressed the Chancellor to scrap it, and to use the money to give tax help to many more working people instead, including more married couples and more families.

--- Later in debate ---

[Susan Elan Jones (Clwyd South) (Lab)]

Does my hon. Friend agree that one of the problems of the married couples tax allowance as proposed by the Government is the situation of what might traditionally have been called the deserted spouse, often the wife who was left? What would happen in that situation? That is a very real issue to be answered.

[Mr Deputy Speaker (Mr Lindsay Hoyle)]

Order. May I say once again that we must have shorter interventions? I know that many Members wish to speak. We have been going for a long time and have not even got to the Back Benches yet.

[Catherine McKinnell]

Although my hon. Friend’s intervention took longer than Mr Deputy Speaker might have liked, it was a very good intervention.

I would be interested to hear what Government Members think about the fact that this provision could very much reward men who desert their spouses, leave them with the children to care for, and then receive a tax benefit, but only if they marry the woman they ran off with.

--- Later in debate ---

[Steve McCabe]

Hang on, you have to wait until you are invited.

[The Chairman of Ways and Means (Mr Lindsay Hoyle)]

Order. We are not having two Members on their feet. Let us see if I can help—Mr McCabe, are you giving way?

[Steve McCabe]

I think I will give the hon. Lady her chance.

--- Later in debate ---

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

I beg to move, That the clause be read a Second time.

[The Temporary Chair (Mr Peter Bone)]

With this it will be convenient to discuss the following:

New clause 6—Air passenger duty: Scotland

‘(1) The Scotland Act 1998, Schedule 5, section A1 (exceptions) is amended as follows.

(2) After “rates)”, insert—

“(1) Air Passenger Duty on all flights that are—

(a) originating from an airport or aerodrome in Scotland; and

(b) not part of a connecting flight from—

(i) a domestic UK airport or aerodrome; or

(ii) a territory specified in Part 1 of Schedule 5A of the Finance Act 1994.”.’.

New clause 7—Rates of air passenger duty (Scotland)

‘After section 30A of the Finance Act 1994 there is inserted—

“30B Scotland rates of duty

(1) This section applies to the carriage of a chargeable passenger if—

(a) the carriage begins on or after the relevant day; and

(b) the only flight, or the first flight, of the passenger’s journey begins at an airport or aerodrome in Scotland.

(2) Air passenger duty is chargeable on the carriage of the chargeable passenger at the rate set by an Act of the Scottish Parliament for the purposes of this paragraph.

(3) The rate of £0 may be set for the purposes of paragraph (2).

(4) Any rate set must not exceed the rate which would apply if this section were not in force.

(5) “The relevant day” means the day appointed as such by an order.

(6) Section 42(4) and (5) does not apply to any order under subsection (5).

(7) An “Act of the Scottish Parliament” means an Act passed under section 28 of the Scotland Act 1998.”.’.

New schedule 1—‘Air Passenger duty: Wales

Part 1

Rates of Duty from 1 April 2014

1 Section 30 of FA 1994 (air passenger duty: rates of duty) is amended as follows.

After subsection (4D) insert—

“(4DA) Subsection (4D) applies if—

(a) the passenger’s journey is a relevant Wales journey; and

(b) apart from subsection (4DB), subsection (2) would not apply to the journey.

(4DB) The applicable rate in subsection (2) applies to the journey instead of the applicable rate in subsection (3), (4) or (4A) (as the case may be).

(4DC) A passenger’s journey is a “relevant Wales journey”—

(a) in the case of a journey which has only one flight, if the flight begins in Wales; and

(b) in any other case, if the first flight of the journey—

(i) begins in Wales; and

(ii) is not followed by a connected flight beginning at a place in the United Kingdom or a territory specified in Part 1 of Schedule 5A.”.

The amendments made by this Part of this Schedule have effect in relation to the carriage of passengers beginning on or after 1 April 2014.

Part 2

Devolution of Wales long haul rates of duty

2 Chapter 4 of Part 1 of FA 1994 (air passenger duty) is amended as follows.

3 (1) Section 30 (rates of duty) is amended as follows.

(2) After subsection (1) insert—

“(1B) Subsection (1) does not apply to the carriage of a chargeable passenger to which section 30B below (Wales long haul rates of duty) applies.”.

(3) Omit subsections (4DA) to (4DC) (as inserted by paragraph 1 above).

(4) The amendments made by this paragraph have effect in relation to the carriage of passengers beginning on or after the relevant day as defined in section 30B of FA 1994 (as inserted by paragraph 4 below).

4 After section 30A insert—

30B Wales long haul rates of duty

“(1) This section applies to the carriage of a chargeable passenger if—

(a) the carriage begins on or after the relevant day;

(b) the only flight, or the first flight, of the passenger’s journey begins at a place in Wales;

(c) the passenger’s journey does not end at a place in the United Kingdom or a territory specified in Part 1 of Schedule 5A; and

(d) if the passenger’s journey has more than one flight, the first flight is not followed by a connected flight beginning at a place in the United Kingdom or a territory specified in Part 1 of Schedule 5A.

(2) Air passenger duty is chargeable on the carriage of the chargeable passenger at the rate determined as follows.

(3) If the passenger’s journey ends at a place in a territory specified in Part 2 of Schedule 5A—

(a) if the passenger’s agreement for carriage provides for standard class travel in relation to every flight on the passenger’s journey, the rate is the rate set by an Act of the National Assembly for Wales for the purposes of this paragraph; and

(b) in any other case, the rate is the rate set by an Act of the National Assembly for Wales for the purposes of this paragraph.

(4) If the passenger’s journey ends at a place in a territory specified in Part 3 of Schedule 5A—

(c) if the passenger’s agreement for carriage provides for standard class travel in relation to every flight on the passenger’s journey, the rate is the rate set by an Act of the National Assembly for Wales for the purposes of this paragraph; and

(d) in any other case, the rate is the rate set by an Act of the National Assembly for Wales for the purposes of this paragraph.

(5) If the passenger’s journey ends at any other place—

(e) if the passenger’s agreement for carriage provides for standard class travel in relation to every flight on the passenger’s journey, the rate is the rate set by an Act of the National Assembly for Wales for the purposes of this paragraph; and

(f) in any other case, the rate is the rate set by an Act of the National Assembly for Wales for the purposes of this paragraph.

(6) The rate of £0 may be set for the purposes of any paragraph.

(7) The same rate may be set for the purposes of two or more paragraphs.

(8) Subsections (5) to (7) and (10) to (12) of section 30 apply for the purposes of this section as they apply for the purposes of that section.

(9) “The relevant day” means the day appointed as such by an order.

(10) Section 42(4) and (5) do not apply to an order under subsection (9).

(11) A Bill containing provision authorised by this section may not be passed by the National Assembly for Wales except in pursuance of a recommendation which—

(g) is made by the Minister of Finance; and

(h) is signified to the Assembly by the Minister or on the Minister’s behalf.

(12) “Passed”, in relation to a Bill, means passed at the final stage (at which the Bill can be passed or rejected but not amended).

(13) Duty paid to the Commissioners in respect of the carriage of chargeable passengers to which this section applies must be paid by the Commissioners into the Consolidated Fund of Wales.”.

5 (1) Section 33 (registration of aircraft operators) is amended as follows.

(2) After subsection (2A) insert—

“(2B) If the Commissioners decide to keep a register under section 33B below, an operator of a chargeable aircraft does not become liable to be registered under this section just because the aircraft is used for the carriage of chargeable passengers to which section 30B above applies.”.

(3) In subsection (3)(b) after “applies”, insert “or, if the Commissioners have decided to keep a register under section 33B below, that no chargeable aircraft which he operates will be used for the carriage of chargeable passengers apart from the carriage of chargeable passengers to which section 30B above applies.

(4) In subsection (7) after “section 33A”, insert “or section 33B below”.

6 After section 33A insert—

33B (1) The Commissioners may under this section keep a register of aircraft operators.

(2) If the Commissioners decided to keep a register under this section, the operator of a chargeable aircraft becomes liable to be registered under this section if the aircraft is used for the carriage of chargeable passengers to which section 30B above applies.

(3) A person who has become liable to be registered under this section ceases to be so liable if the Commissioners are satisfied at any time—

(a) that he no longer operates any chargeable aircraft; or

(b) that no chargeable aircraft which he operates will be used for the carriage of chargeable passengers to which section 30B above applies.

(4) A person who is not registered under this section and has not given notice under this subsection shall, if he becomes liable to be registered under this section at any time, give written notice of that fact to the Commissioners not later than the end of the prescribed period beginning with that time.

(5) Notice under subsection (4) above shall be in such form, be given in such manner and contain such information as the Commissioners may direct.”.

7 In section 34 (fiscal representatives) in subsection (5)—

(a) in paragraph (a) after “33A”, insert “or 33B”.

8 After section 41B insert—

41C Wales long haul rates of duty: disclosure of information

“(1) An officer of Revenue and Customs may disclose to the Secretary of State, the Treasury or the Department of Finance in Wales any information for purposes connected with the setting of rates under section 30B above, including (in particular) to enable the setting of rates under that section to be taken into account for the purposes of section 118 of the Government of Wales Act 2006 (payments by Secretary of State into Welsh Consolidated Fund).

(2) Information disclosed under subsection (1) above may not be further disclosed without the consent of the Commissioners (which may be general or specific).

(3) In section 19 of the Commissioners for Revenue and Customs Act 2005 (wrongful disclosure) references to section 18(1) of that Act are to be read as including a reference to subsection (2) above.”.

9 In section 44 of CRCA 2005 (payment into Consolidated Fund) after subsection (2)(cb) insert—

(cc) sums required by section 30A(15) of the Finance Act 1994 (air passenger duty: Wales long haul rates of duty) to be paid into the Consolidated Fund of Wales,”.

10 In column 2 of the Table in paragraph 1 of Schedule 41 to FA 2008 (penalties for failure to notify), in the entry relating to air passenger duty, after “33A(4)”, insert “or 33B(4)”.

11 The amendments made by this Part of this Schedule have effect in relation to the carriage of passengers beginning on or after 1 April 2014.

12 The rate of duty in force under section (30B) shall not be greater than the rate which would be in force if the section had not been enacted.’.

Clauses 72 to 74 stand part.

[Jonathan Edwards]

Diolch yn fawr iawn, Mr Bone. It is an honour to serve under the chairmanship of the best slow left-arm bowler in the Westminster cricket team.

It is with pleasure that I rise to support new clause 2 and new schedule 1, and I will be pushing for a vote at the appropriate time. The UK Government commission on devolution in Wales, headed by Paul Silk, published the first phase of its report in November 2012, which concentrated solely on fiscal powers. Some 18 months later we are still waiting for an essential part of the cross-party Silk commission recommendations to come to fruition: the devolution of responsibility for long-haul air passenger duty. The original cross-party report recommended that responsibility for APD be transferred to Wales at the earliest opportunity and that the Finance Bill was the appropriate vehicle for doing that. The commission had the 2013 Finance Bill in mind, following the precedent set during the 2012 Finance Bill when APD was devolved to Northern Ireland.

It therefore comes as no surprise that I am here yet again attempting to transfer APD to Wales, as was agreed by all the parties in the commission. I will seek to divide the House and to hold other parties to what their representatives on the commission said and, perhaps more importantly, what their representatives in the National Assembly say back in Wales. I would of course be ecstatic if by some divine intervention their masters here in London listened to them for once and voted in favour of the policies they advocate—I do not hold my breath in much hope.

I will go on to speak about the discrepancies between what the Unionist parties say in Wales and how they vote here on devolving APD. First, let me inform the House a little about the background to the UK Government commission’s recommendation to devolve APD as part of a comprehensive package of financial powers and about the stage we are at now. In short, the cross-party Silk commission recommended that powers over stamp duty land tax, the aggregates levy, long-haul APD, landfill tax and business rates be devolved in their entirety. It also advocated a sharing arrangement for income tax, with Wales having the ability to vary each individual income tax band and rate.

After having been made to wait for more than a year by the London Government to grace us with a response to the commission which they themselves set up, we find ourselves already having debated the Second Reading of the Wales Bill in this Chamber. We expect it to be confirmed tomorrow morning that the whole House will return to consider the Committee stage of that Bill after the Easter recess. Yet the Wales Bill has some glaring omissions. It seems like a long time ago now when, last autumn, the Prime Minister and Deputy Prime Minister swept into the Senedd building in Cardiff, to flashing camera lights and an adoring paparazzi, in order to announce new financial powers for Wales. Very few questioned what exactly was being proposed. Only later did it emerge that the Westminster Government were prepared to accept the cross-party commission recommendations only in part and that they would be ignoring some. That is despite the fact that they had representation on the commission in the form of a commissioner representing the Conservative party and a commissioner representing the Liberal Democrats.

In essence, the Government have cherry-picked the commission’s recommendations, even though they were agreed on as a comprehensive package of reforms. It is therefore greatly disappointing that the Westminster Government have decided to ignore the will of the people of Wales, who believe that Wales should have greater power over its own affairs, according to successive polls, not least the ones conducted by the commission while it gathered evidence as part of its reports. Those polls represent some of the most detailed research undertaken on attitudes towards devolution since we first had our own devolved legislature in 1999.

Finance (No.2) Bill

Lindsay Hoyle Excerpts

Tuesday 8th April 2014 Commons Chamber

[Shabana Mahmood (Birmingham, Ladywood) (Lab)]

I beg to move amendment 2, page 3, line 28, at end insert—

‘( ) The Chancellor of the Exchequer shall undertake a review, within six months of the passing of this Act, on the impact of an additional cut of one per cent to the main rate of Corporation Tax for financial year 2015-16, with particular reference to—

(a) the impact on businesses with fewer than 50 employees;

(b) the impact on investment by businesses with fewer than 50 employees; and

(c) alternative tax measures, including non-domestic rates, which would have a greater benefit for businesses with fewer than 50 employees.

( ) The Chancellor of the Exchequer must publish the report of the review and lay the report before the House.’.

This amendment would require the Chancellor of the Exchequer to publish a report on the impact of a cut of one per cent to main rate Corporation Tax on businesses, including small and medium sized enterprises (SMEs).

[The Chairman of Ways and Means (Mr Lindsay Hoyle)]

With this it will be convenient to consider:

Clauses 5 to 7 stand part.

That schedule 1 be the First schedule to the Bill.

[Shabana Mahmood]

Our amendment would require the Chancellor to publish a review of the impact of an additional cut of 1% to the main rate of corporation tax for 2015-16 with reference to the impact on businesses with fewer than 50 employees, their levels of investment and the impact of alternative tax measures such as a reduction in non-domestic rates—business rates—which we believe would have a greater impact on small and medium-sized enterprises, which tend to be businesses that have fewer employees and in the main occupy premises with a rateable value of less than £50,000.

Our amendment and our approach highlight the difference between us and the Government when it comes to business taxation. The Government have made a number of significant cuts to corporation tax. The main rate has been cut a number of times, and is due to be cut again from 21% to 20% next year. The main rate is paid by companies with profits of more than £1.5 million—about 40,000 or so businesses. The small profits rate is paid by companies with profits of under £300,000, and there is a marginal rate, which applies to companies with profits between £300,000 and £1.5 million.

The Government have announced cuts to the corporation tax rate in almost every fiscal event that we have had since 2010, with the rate falling from 28% in 2010 to 20% in 2015-16. This has brought the UK rate lower than most developed economies. As I said, the Government are planning another cut for April 2015 from 21% to 20%, at a cost of £400 million in 2015-16, rising to £785 million the following year, and £865 million the year after that. The cumulative corporation tax cut over this Parliament has been in the region of £10 billion. The Government’s central argument for cutting corporation tax is that a lower rate makes the UK more attractive as a destination for businesses to locate. They claim that a reduction in the main rate of corporation tax will reduce capital costs for businesses and promote higher levels of business investment.

Finance (No. 2) Bill

Lindsay Hoyle Excerpts

Tuesday 1st April 2014 Commons Chamber

[Julie Hilling (Bolton West) (Lab)]

Mr Deputy Speaker, I find these financial debates deeply frustrating and often very bad for my blood pressure, particularly when I follow—

[Mr Deputy Speaker (Mr Lindsay Hoyle)]

We do not want you to collapse—the hon. Lady does not have to speak if it has such a great effect.

[Julie Hilling]

I assure you, Mr Deputy Speaker, that I will not collapse. I might just get a little excited.

I find speeches such as that just made by the hon. Member for Redcar (Ian Swales) exceedingly frustrating. The Government say that they want to build a fairer society, but fairer for who? Their actions certainly are not fair for the 2.5 million people seeking work and the nearly 1 million young people still being left on the scrapheap. The Chancellor says that this is a Budget for makers, doers and savers, but it does nothing for those who are making do and who, far from saving, find themselves deeper and deeper in debt.

The worst thing is the continual ridiculous comment that the global financial crash was caused by my right hon. Friend the Member for Kirkcaldy and Cowdenbeath (Mr Brown). Powerful though he is, he did not bring down the world economy. Labour’s public investment did not cause the global credit crunch. Building new hospitals and schools and recruiting tens of thousands of extra nurses, doctors, teachers and police officers in Britain did not cause the sub-prime mortgage defaults in the USA that started the collapse of financial institutions throughout the world. It was not Labour’s public spending that triggered the world’s economic crisis but the global interdependency of reckless banking that triggered an economic meltdown in Britain and across the globe.

--- Later in debate ---

[Mr Deputy Speaker (Mr Lindsay Hoyle)]

Order. The hon. Member for Macclesfield (David Rutley) should answer the first intervention before we start on the next. I am sure that we can allow the hon. Member for North East Somerset (Jacob Rees-Mogg) to intervene after that.

[David Rutley]

Thank you, Mr Deputy Speaker, but I hear a noise coming from North East Somerset, so I will give way at this point.

[Mr Deputy Speaker]

Order. The problem is this. I think that the hon. Member for Macclesfield rather than his hon. Friend the Member for North East Somerset is meant to answer the intervention from the hon. Member for North Durham (Mr Jones).

[David Rutley]

I will gladly do that. Throughout the debate, the hon. Member for North Durham has persistently made points that have been answered by Government Members, and many of them have been incorrect. He needs to focus on the work that we have done to reduce the deficit, which he clearly has not welcomed.

Charter for Budget Responsibility

Lindsay Hoyle Excerpts

Wednesday 26th March 2014 Commons Chamber

[Ed Balls]

I will make my speech on the welfare cap in a moment. I want to go back to the remark the Chancellor just made about last night’s vote. We have said that we do not think we should go ahead with the next cut in corporation tax and instead use all the money for a freeze in business rates for small businesses. Is the Chancellor really saying that large companies are business, but small businesses do not count? [Interruption.]

[Mr Deputy Speaker (Mr Lindsay Hoyle)]

Order. Just to remind everybody, shorter interventions would be helpful. We have 11 speakers to follow and I know the Front Benchers are desperate to hear the Back Benchers.

[Mr Osborne]

We are particularly keen to hear the Labour Back Benchers.

--- Later in debate ---

[Mr Deputy Speaker]

Order. I want to hear the Chancellor. All the howling behind the Chancellor is not helping me, or other people who want to listen to him. I want to hear the Chancellor as, I am sure, do those on his own side.

[Ed Balls]

rose—

[Mr Deputy Speaker]

It is up to the Chancellor to give way.

[Mr Osborne]

If the right hon. Gentleman has something useful to say, let us hear it.

[Ed Balls]

The Chancellor will not misrepresent Labour policy. All the money—[Interruption.]

[Mr Deputy Speaker]

Seriously, I could not hear the Chancellor and I want to hear the shadow Chancellor. I want a little bit more respect to both sides.

[Ed Balls]

We are proposing that all the money from deferring the cut in corporation tax goes to small business in a business rates freeze. That is not a rise in the taxes on business, unless the Chancellor thinks that somehow small businesses are second class and do not count. Is that really what the Chancellor is saying?

--- Later in debate ---

[Ed Balls]

We will raise the corporation tax rate to cut taxes—[Interruption.]

[Mr Deputy Speaker]

Order. I think we have heard enough noise. I want to hear the question that has been posed to the Chancellor of the Exchequer and I want to hear the reply. If people do not want to hear, I can explain where the door is. Somebody will be going through it if we do not have calm.

[Ed Balls]

The Chancellor must not mislead and misrepresent on the welfare state or on business taxes. Labour is not committed to an increase in business tax. He has said that three times. Every time he has said that, he has misled this House. I am saying that all the money from the corporation tax rate will go back to small business. That is the right position. Every time he misleads this House I will correct him, Mr Deputy Speaker.

--- Later in debate ---

[Ed Balls]

I have said to the Chancellor that that statement is a direct misleading of the House and, Mr Deputy Speaker, I would ask the hon. Gentleman to withdraw that statement now.

[Mr Deputy Speaker (Mr Lindsay Hoyle)]

It was not aimed at an individual; it was aimed at the speech, I presume.

[Ed Balls]

We have said, Mr Deputy Speaker, that all the money from not proceeding with a further cut in corporation tax will go to small business with a business rates—[Interruption.] When the hon. Member for Skipton and Ripon (Julian Smith) and the Chancellor say that is a tax rise for business, that is only true if they do not think small businesses are proper businesses, which is a bit like saying, “If you didn’t go to Eton, you didn’t go to a proper public school.”

--- Later in debate ---

[Ed Balls]

First, I went to an even lesser private school than the Chancellor of the Exchequer. [Interruption.] Neither of us went to Eton, unfortunately. [Interruption.] I agree with the hon. Member for The Wrekin (Mark Pritchard) that the rise in employment is good news, but I am concerned that in his—[Interruption.]

[Mr Deputy Speaker (Mr Lindsay Hoyle)]

Order. Mr Shelbrooke, we missed you on Budget day, but I am not missing you today, am I?

[Ed Balls]

The thing I am concerned about—this relates directly to the welfare cap—is that in the constituency of the hon. Member for The Wrekin long-term youth unemployment has gone up by 129% since 2010. I presume the hon. Gentleman would agree that that rise, based on the jobseeker’s allowance claimant count, is a real concern. I think he should be backing our welfare reforms. The fact is—[Interruption.] If the deputy Chief Whip, the right hon. Member for Chelsea and Fulham (Greg Hands), is saying that because the hon. Member for The Wrekin has got a large majority, he does not have to worry about youth unemployment, that would be rather revealing. I hope he was not saying that.

Let me get on to the subject of the welfare cap. The Chancellor has failed to balance the books, he is contradicting his own charter by increasing national debt when it says he should be reducing it in 2015, and he has failed to control welfare spending. We have had plenty of tough talk and divisive rhetoric from the Chancellor, but his failure to tackle low wages, to deal with the cost of living crisis and to get more homes built means that he is spending £13 billion more than he planned in the spending review of 2010, and in last week’s Budget that was revised up by £1 billion in social security spending next year and the year after.

I want to explain where we are. We support the welfare cap. We support what is in the welfare cap. We agree that long-term bearing down on the costs of ageing is a good idea, but it should not be in the welfare cap in the next Parliament; we have agreed with that all along. We have also said we would match the Government’s spending in 2015-16, and the welfare cap over these five years, which we support, would rise on that basis. Although we support that, however, we will make different—

[Mark Pritchard]

On a point of order, Mr Deputy Speaker. I said that the shadow Chancellor is a fair and reasonable man, and I know he would not want, even unintentionally, to mislead the House. He has got a lot of figures before him, so I have a great deal of sympathy for him, but the fact is that in my constituency of The Wrekin there has been a fall of more than 27% in youth unemployment over the past 12 months.

[Mr Deputy Speaker (Mr Lindsay Hoyle)]

That is a point of correction, rather than of order.

[Ed Balls]

I will repeat exactly what I said a moment ago, because unlike the Chancellor I am not going to mislead the House on any matter in my speech.

[Mr Simon Burns (Chelmsford) (Con)]

Withdraw!

[Mr Deputy Speaker (Mr Lindsay Hoyle)]

Mr Burns, I think you need to relax as well. No hon. Member will mislead this House, and I am sure that is not what the shadow Chancellor intended to say and I am sure he will be happy to withdraw it.

[Ed Balls]

The Chancellor said three times that Labour was proposing a rise in business taxes and that is untrue, Mr Deputy Speaker.

--- Later in debate ---

[Ed Balls]

I will not give way. We know from the head of the OBR that if an agreement is reached by this summer, this reform independently to audit all tax and spending commitments, including all issues referring to social security spending, can be done in time for next year’s general election. It is a matter of political will. The Chancellor seems to be happy to spend his time, and that of the House, trying to set political traps—traps that keep backfiring on him—but he does not seem happy, and neither do other Government Members, to join the hon. Member for Ipswich and allow the OBR to audit the Conservative party manifesto or our manifesto, so that we can have a proper, open and transparent debate at the next election. Why does the Chancellor not join this cross-party consensus and let the OBR play that role? What has he got to hide? This is really not a trap—it is just the right thing to do.

[Mr Deputy Speaker (Mr Lindsay Hoyle)]

May I just announce that we will start with a five-minute limit and see how we go from there?

--- Later in debate ---

[Mr Burrowes]

Nothing to hide!

[Mr Deputy Speaker (Mr Lindsay Hoyle)]

Order. Mr Burrowes, you have nothing to hide, and I certainly do not want to hear you shout again—I want to hear Mr Gummer. You may not. If you do, you know where to go. Mr Gummer, you have the Floor.

[Ben Gummer]

Thank you, Mr Deputy Speaker. To return to the core of the matter, this is important because it will hold both Governments and Oppositions to account. The shadow Chancellor might have wished to misconstrue the purpose of my private Member’s Bill. It is a pity he does that when he claims he is trying to forge a cross-party consensus, because it is wrong—

--- Later in debate ---

[Ben Gummer]

Not at all. Now his Back Benchers may wish to draw their own inference from that. In private, the shadow Chancellor has been going round saying that he would change it. He would put one in and take one out. [Hon. Members: “Ah.”] Even in the House, he will say that he will supplement one benefit—withdrawing the winter fuel allowance from richer pensioners will raise £100 million and he would use it to pay for the reversal of the under-occupancy charge, which will cost £500 million. How does he make up that £400 million difference? He has been forced to come to this House to explain his maths. That is precisely why this cap is important. It forces a degree of accountability on the shadow Chancellor in making him explain to the British public how his sums add up, when it is clear that they do not. How does he account for the £400 million difference between the two? [Interruption.] I wish to know the answer as does the British public. [Interruption.]

[Mr Deputy Speaker]

Order. The hon. Gentleman has only 30 seconds remaining. Stop shouting him down. I want to hear him.

[Ben Gummer]

The cap is good for Government finances and it is good for accountability because it forces the Opposition to be honest, even though they are seemingly unwilling to be so. It is also important in terms of how we deal with this welfare crisis. It will force Governments to deal with the underlying causes of welfare dependency rather than just jacking up the bill every time they are faced with a difficult problem.

--- Later in debate ---

[Several hon. Members]

rose—

[Mr Deputy Speaker]

Order. The time limit is now down to four minutes.

amendment of the law

Lindsay Hoyle Excerpts

Monday 24th March 2014 Commons Chamber

[Alec Shelbrooke (Elmet and Rothwell) (Con)]

First, I offer my condolences to the right hon. Gentleman, as a fellow Leeds MP, for the loss his family has suffered. As a fellow Leeds MP, he will know some of the pressures of development in Leeds, with some 70,000 units to be built in the city, despite talk in the Leeds core strategy. Does he agree that we must be careful about where these large-scale developments are built? If we are massively to change the shape of the village of Scholes in my constituency, say, that would have the unfortunate effect of lowering house prices and putting people into—

[Mr Deputy Speaker (Mr Lindsay Hoyle)]

Order. I think that the right hon. Gentleman, as he knows the area so well, has the message.

[Hilary Benn]

I am grateful to the hon. Gentleman for his kind words. If he will bear with me, I shall directly address his point about where the houses should go in a moment.

We need to build more homes. Everybody recognises that. That is why, for example, we called for a help to build fund supported by Treasury guarantees to assist small and medium-sized builders in accessing finance to build some of those homes. I welcome the fact that the Government have listened and set up a builders’ finance fund, but history teaches us that we need to do more if we are successfully to change the way in which the market works.

Let me reflect on that for a moment. In the 1930s, when we reached the highest level of private house building ever achieved in the UK, the top 10 house building companies had a market share of 6% or 7%. In 1988, firms completing fewer than 500 units a year produced about two thirds of UK housing but by 2012 that had fallen to less than a third. In other words, as the number of small and medium-sized builders has declined and the big firms have grown larger, it has become easier for the more dominant firms to buy up the land. That is why small and medium-sized builders and custom builders say that it is hard for them to get access to land, so I agree that it is about helping them with finance, but it is also about enabling them to get the soil they need to build on.

The Secretary of State spoke about self-build and the House will remember that the former Housing Minister, now the chair of the Conservative party, promised a self-build revolution and pledged to double––double––the self-build sector. But the facts show that, last year, far from doubling the size of the sector, the number of self-build homes fell to the lowest level for 30 years. That is some revolution.

--- Later in debate ---

[Several hon. Members]

rose—

[Mr Deputy Speaker (Mr Lindsay Hoyle)]

Order. There will be a six-minute limit on speeches—I have increased it by one minute.

[Nicholas Soames (Mid Sussex) (Con)]

May I join in the expression of condolence to the right hon. Member for Leeds Central (Hilary Benn) and say how sad I was to hear his news?

I want to welcome the Budget and reflect for a moment on the Chancellor’s considerable achievement. Fortified by a coalition and stronger for it, with the most appalling legacy left by the last Government, he has managed to turn things around so that our country is now well on the path to better days, with a growing economy, a remarkable number of new jobs emerging and an exciting future about which we can all be optimistic —in particular, I hope, our young people, many of whom are having a tough time of it.

I want especially to mention the Chancellor’s wise decision to freeze fuel duty, which is now 20p lower than it would have been under a Labour Government. Together with a well judged freeze in the council tax, on which I congratulate my right hon. Friend the Secretary of State for Communities and Local Government, that will make a real difference to hard-pressed families in Mid Sussex and elsewhere. I want particularly to congratulate the Chancellor on the welcome plans that have been set out for supporting exports, science and innovation, and of course on the game-changing package of support for savers and pensioners, which has undoubtedly commanded the broadest support possible, and rightly so.

I hope that people now realise—I truly think that they do—the profound difference between the wilful, almost grotesque irresponsibility of the last Labour Government and the steely, genuine determination of the current Administration to get on top of the serious difficulties with a long-term economic plan whose success is now quite clear for all to see. However, the new networked world in which we in this country have to make our way, and for which it must be said we are ill prepared, is manifesting every day a global flow of ideas, innovations, new collaborative possibilities and new market opportunities, not only here but all over the world. To be frank, if we get it right, the world should be our oyster.

There are plenty of businesses and people who understand that. They understand that by tapping into the global flow of new ideas and opportunities, they can become the key to something that we badly need in this country: far greater productivity. It is nowhere near good enough here, and it is the key to growth and increasing prosperity.

All of that will inevitably, and sadly, involve seismic change. I congratulate the Government on the announcement in the Budget of £42 million for the new Alan Turing institute and £74 million for the cell therapy manufacturing centre and the graphene innovation centre, all of which will greatly increase our chances of helping to export our way out of financial difficulties by accessing the fastest-growing markets around the world, particularly in the life sciences, agricultural products, science, medicine, energy and of course services.

My great anxiety is how our country will cope as we try to respond to changes in technology, globalisation and markets that have, in a very short time, made the decently waged, medium-skilled job increasingly unavailable. That is very serious for an economic model such as that in our country, and it is my firm belief that in not too short a time, most of the decently paid jobs will inevitably be those where high skills are at a premium.

I applaud the work of my right hon. Friend the Education Secretary and the Department for Business, Innovation and Skills as they try to answer those challenges, but we must now acquire a new level of political imagination, a combination of further, large education reforms, and an unprecedented collaboration among schools, businesses, universities and the Government, to change fundamentally how people are trained, and enable them to keep on training and learning throughout their working life. That will require major tax reforms and for us to consider in a more careful manner—I say this very deliberately—some of the immigration changes that are under way, in the interests of our economic growth.

Those ideas need to come from across the political spectrum. They will not be the prerogative of any one party, and there will need to be a willingness to meet people half way. We need to attract and enable the kind of talent to come to this country that can constantly spin off new ideas and start-ups, which are undoubtedly already the cause of most new, good jobs. It makes perfect sense: if we are to have more employees, we need more employers. Although that huge transformation, driven by the networked world and all that it involves, takes place—

[Mr Deputy Speaker (Mr Lindsay Hoyle)]

Order.

Amendment of the Law

Lindsay Hoyle Excerpts

Thursday 20th March 2014 Commons Chamber

[Ed Balls]

The site for that new and welcome investment was designated under the last Labour Government as a result of my hon. Friend’s campaigning. We all want manufacturing investment to rise, but what worries me is that over the past two years, since the Chancellor’s “march of the makers” speech, manufacturing output has actually fallen by 1.3%. That is the reality.

As for house building, it is at its lowest level since the 1920s. We believe that the new Governor of the Bank of England is right to be worried that the recovery is not yet secure or balanced. That is why it is vital that the Chancellor does more to get more homes built for millions who aspire to get on to the housing ladder but find it hard at the moment. I have to say to him, we backed Help to Buy, but he should have reduced the limit from £600,000. There should not be a taxpayer guarantee for people buying homes for £500,000 or £600,000. We also need to do more to invest in affordable housing. That is the only way to avoid a lop-sided recovery, demand running ahead of supply and rising prices, putting pressure on the Governor of the Bank of England to slow the housing market through higher mortgage rates earlier than we need in the recovery. That would put business investment at risk and undermine the budgets of hard-working people across our country.

The Chancellor should have listened to the CBI, the International Monetary Fund and the Opposition and acted more boldly to boost investment in housing supply. He should have listened to Labour, and he should have listened to the Business Secretary, too. We have both warned of the danger of lop-sided and unbalanced growth. Like us, the Business Secretary was right to warn back in 2010 that the pace of deficit reduction risked choking off recovery. The Prime Minister was wrong last autumn to dismiss the Business Secretary as a Jeremiah when he warned about the unbalanced nature of the recovery by saying:

“We mustn’t now settle for a short-term spurt of growth, fuelled by an old-fashioned property boom…there are already amber lights flashing.”

I also remind the House of what the Business Secretary said about unbalanced growth just a few weeks ago:

“The shape of the recovery has not been all that we might have hoped for”.

He was right to make those warnings, but time after time over the past few years when he has publicly made such warnings about the risks, he has been ignored. The problem is, the Business Secretary is a member of the Cabinet that is doing the ignoring. How can he keep on ignoring himself again and again?

As for the top-rate tax cut, which I know a number of Government Members have criticised, I remind the Business Secretary that he said at the weekend:

“I don’t understand why people need a million quid a year.”

What we do not understand is why he has given people on a million quid a year a tax cut of £42,500 each and every year. He asks for sympathy—he told The Guardian a few weeks ago that

“since being in government I have become much more enslaved these days”.

I say “Free the Cable One”. Is it not the sad truth that he is not enslaved but in hock? He is not captive, he has capitulated. It is a Tory agenda, and he is part of it. He knows it, and he should get out of it before it is too late.

As for the Chancellor, he has certainly been busy in recent weeks, and not just preparing his Budget. The manifesto is being written, the team is being assembled, the campaign is under way. But the enemy is not called Ed, and it is not the general election that is preoccupying him. He has his eyes on a different prize. This is what his new best friend, the Education Secretary, said to The Mail on Sunday—[Interruption.] Government Members do not want to hear what he said, do they? [Interruption.]

[Mr Deputy Speaker (Mr Lindsay Hoyle)]

Order. I think we do want to hear what the right hon. Gentleman has to say.

[Ed Balls]

They do not want to hear this, so before I remind people of what the Education Secretary said, let me tell the House what was said yesterday about the cost of living, the Budget, and all those matters, by the outgoing Conservative hon. Member for Thurrock (Jackie Doyle-Price): “The biggest impediment”—[Interruption.] I really think that hon. Members, especially those with small majorities, should listen to what she said.

Financial Statement

Lindsay Hoyle Excerpts

Wednesday 19th March 2014 Commons Chamber

[Mr Deputy Speaker (Mr Lindsay Hoyle)]

Before I call the Chancellor of the Exchequer, it is convenient to remind hon. Members that copies of the Budget resolutions will be available in the Vote Office at the end of the Chancellor’s speech. It may also be appropriate to remind hon. Members that it is not the norm to intervene on the Chancellor of the Exchequer or the Leader of the Opposition.

[The Chancellor of the Exchequer (Mr George Osborne)]

I can report today that the economy is continuing to recover, and recovering faster than forecast. We set out our plan, and together with the British people we held our nerve. After the mess we were left, we are putting Britain right, but the job is far from done. Our country still borrows too much; we still do not invest enough, export enough or save enough, so today we do more to put that right.

This is a Budget for building a resilient economy. If you are a maker, a doer or a saver, this Budget is for you. It is all part of a long-term economic plan—a plan that is delivering security for the people of this country. I have never shied away from telling the British people about the difficult decisions we face, and just because things are getting better, I do not intend to do so today. Yes, the deficit is down by a third, and now in the coming year it will be down by a half, but it is still one of the highest in Europe, so today we take further action to bring it down.

Yes, investment and exports are up, but Britain has 20 years of catching up to do, so today we back businesses who invest and export. Yes, manufacturing is growing again, as my hon. Friend the Member for Pendle (Andrew Stephenson) just reminded us, and jobs are being created across the country, but manufacturing halved under the last Government, with all bets on the City of London. So today, we support manufacturers and back all regions of our country. While as a nation we are getting on top of our debts, for many decades Britain has borrowed too much and saved too little, so in this Budget we make sure hard-working people keep more of what they earn and more of what they save.

Yesterday we set out our support for parents with tax-free child care. Today support for savers is at the centre of this Budget, as we take another step towards our central mission: economic security for the people of Britain.

Let me turn to today’s forecasts from the Office for Budget Responsibility. I am grateful to Robert Chote, Steve Nickell and their team, and thank Graham Parker for agreeing to serve with them for another term. It is a credit to the OBR that we now take it for granted that the figures presented at this Dispatch Box are not fiddled but fair and independent. A year ago at the Budget, the OBR forecast the economy to grow by just 0.6% in 2013. It now confirms that it grew by three times as much. At the autumn statement, it significantly revised up its expectations for future growth. Today I can tell the House it is revising up its forecast again. A year ago, it predicted that growth in 2014 would be 1.8%; at the autumn statement, 2.4%; today, the OBR forecasts growth in 2014 of 2.7%. That is the biggest upward revision to growth between Budgets for at least 30 years. Growth next year is also revised up, to 2.3%; then, it is 2.6% in 2016 and 2017; and with the output gap closed around a year earlier than previously predicted, growth returns to around its long-term trend, at 2.5%, in 2018. Taken together, these growth figures mean our economy will be £16 billion larger than was forecast just four months ago.

There is another prediction the OBR makes today that the House will want to know about. Six years ago, Britain suffered a great recession. We had the biggest bank bail-out in the world. We had the biggest deficit since the war. We suffered the deepest recession in modern times—or as the shadow Chancellor put it, some mistakes were made. But later this year the OBR expects Britain to reach the point when our economy is finally larger than before it collapsed six years ago. That is because we are now growing faster than Germany, faster than Japan, faster than the United States—in fact, there is no major advanced economy in the world growing faster than Britain today.

But we should be alert to the risks. The euro area is slowly recovering, but as the OBR cautions today,

“further damaging instability remains possible”.

There is volatility in emerging markets, and while for now the OBR does not expect the situation in Ukraine to have a “large impact” on us, it does warn that an escalation risks higher commodity prices, higher inflation and lower growth. It is a reminder of why we need to build our economy’s resilience.

At home, the biggest risk is clear: abandoning the economic plan that is working. And nowhere is the success of that plan more evident than in job creation. Today again we are reminded that the most important consequence of our plan is more people in work, with each job meaning a family more secure. Some in this House predicted that our plan meant a million jobs would be lost. They were spectacularly wrong. The pace of net job creation under this Government has been three times faster than in any other recovery on record: 1.3 million more people in work. The latest figures today show a staggering 24% fall in the claimant count in just one year, and the fastest fall in the youth claimant count since 1997. The OBR now forecasts one and a half million more jobs over the next five years and unemployment down from the 8% we inherited to just over 5%., and the OBR predicts earnings will grow faster than inflation this year and in every year of the forecast. That is why the country can afford a real-terms increase in the national minimum wage. This is a Government whose plan is delivering jobs. We now have a record number in work; a record number of women in work; and for the first time in 35 years, a higher employment rate than the United States of America. That is what we mean when we say we are getting Britain working.

There can be no economic security if there is no control of the public finances. Before I presented my first Budget to this House, the Government were borrowing £1 in every £4 they spent, and we were faced with the threat of a sovereign debt crisis. We have taken difficult decisions, each and every one of which was opposed. But thanks to those decisions, the IMF now says that we are achieving the largest reduction in both the headline and the structural deficits of any major advanced economy in the world. There were those who said repeatedly that the deficit was going to go up. Instead, I can tell the House that the OBR has revised down the underlying deficit in every year of its forecast. Before we came to office the deficit was 11%. This year it says it will be 6.6%—lower than forecast and down a third; next year, 5.5%—down a half; then it will fall to 4.2%, 2.4% and reach 0.8% in 2017-18. In 2018-19, it is forecasting no deficit at all; instead, at plus 0.2%, a small surplus. But only if we work through the plan.

The Government’s fiscal mandate is met, and continues to be met a year early, yet while the underlying structural deficit falls, it falls no faster than was previously forecast, despite higher growth. This goes to the heart of the argument this Government have made: faster growth alone will not balance the books. Securing Britain’s economic future means there will have to be more hard decisions—more cuts. The question for the British people is: who has the credibility to deliver them?

Let me turn to the underlying cash borrowing numbers. Britain was borrowing £157 billion a year before we came to office. This year we expect to borrow £108 billion. That is £12 billion less than forecast a year ago. Indeed, even since the autumn statement the OBR has revised down borrowing in every single year. In 2014-15 it says it will fall to £95 billion. Then it falls again to £75 billion in 2015-16, then £44 billion, and then down to £17 billion. In 2018-19 we will not be borrowing at all—we will have a small surplus of £5 billion.

Taken together, these new figures mean Britain will be borrowing £24 billion less than was forecast. That is more than we spend in an entire year on the police and criminal justice system. Lower borrowing and a smaller deficit mean less debt. While we meet the debt target one year late as before, the OBR has revised down national debt in every single year of the forecast. It expects it to be 74.5% of GDP this year, 77.3% next year, peaking at 78.7% in 2015-16—lower than the 80% previously forecast—before falling to 78.3% in 2016-17, then falling to 76.5% and then 74.2% in 2018-19.

So, growth is up, the deficit is set to halve, debt is lower. and the biggest single saving of all is a £42 billion reduction in the interest payments we will have to make on that debt, saving every family in the nation the equivalent of almost £2,000, money that was going to creditors around the world, now going to pay for the NHS and other public services.

It is because we have a credible fiscal plan that the Bank of England can provide the support needed to businesses and families. Yesterday I confirmed the appointments of Anthony Habgood to chair the court and Ben Broadbent and Minouche Shafik to be the new deputy governors for monetary policy and for markets and banking respectively. All three make a strong team at the Bank stronger still.

I today reconfirm my remit for the Monetary Policy Committee, including the target of 2% CPI inflation, which the OBR expects will be met this year, next year and in the years ahead. I also set out the remit for the Financial Policy Committee, the body created by us to avoid the mistakes of the past. Although the OBR forecast that house prices will remain below their real-terms peak until at least 2018, I have asked the committee to be particularly vigilant against the emergence of potential risks in the housing market. To enhance our resilience and protect us from economic shocks, we will also continue rebuilding our foreign exchange reserves. Those reserves are now 50% higher than when we came to office.

Of course, the prerequisite of sound money is a sound currency, and the £1 coin has become increasingly vulnerable to forgery. It is now among the oldest coins in circulation, and one in 30 £1 coins is counterfeit. That costs businesses and the taxpayer millions each year, so I can tell the House that we will move to a new, highly secure £1 coin. It will take three years. We will consult industry. Our new £1 coin will blend the security features of the future with inspiration from our past. In honour of our Queen, the coin will take the shape of one of the first coins she appeared on: the threepenny bit. A more resilient pound for a more resilient economy.

Sound money depends, too, on sound public finances. We are entering a critical phase and we must learn from the past. Every time a post-war Government have embarked on public spending cuts, real spending has risen back to its previous heights within three years. Sure enough, there are those today who say: “Ease up, spend more, borrow more.” That would mean debt rising towards 100% of GDP, undermining growth. It would be a huge mistake, and we are not going to let that happen.

Many Chancellors faced with a recovering economy and improved borrowing forecasts before an election would be tempted to squander the gains. I will not do that today. These gains were hard won by the British people, and we are not going to jeopardise their economic security. Britain is not going back to square one, so in this Budget all decisions are paid for. Taxes are lower but so, too, is spending, for we must bring our national debt substantially down. Analysis published today shows that just running a balanced current budget does not secure that. Instead, Britain needs to run an absolute surplus in good years. We will fix the roof when the sun is shining, to protect Britain from future storms.

So I can confirm that, in addition to the cuts this year and next, there will be cuts in the next Parliament too. To lock in our country’s commitment to this path of deficit reduction, we will seek the support of Parliament in a vote, and I will bring forward a new charter for budget responsibility this autumn. We are taking further difficult decisions now so we can reduce the deficit and protect our NHS and schools and meet our obligations to the world’s poorest by contributing 0.7% of our national income to help them. I am proud that we are doing that.

On public service pensions, we implemented the reforms proposed by John Hutton. Once again the House will want to thank him for his work. We will ensure that schemes are properly valued, saving the taxpayer over £1 billion a year. We are continuing with pay restraint in the public sector—an essential part of maintaining sound finances and economic stability. We will also insist on the prudent management of departmental finances. Thanks to the efforts of my colleagues in Cabinet, these now regularly come in under budget. In order to lock in these underspends, I said in December that we would reduce spending by £1 billion in 2015-16. Today, I am making that overall billion-pound reduction permanent.

I look forward to the work my excellent colleague the Chief Secretary is now doing, with the Cabinet Office, to find further efficiencies. Difficult decisions on public service pay and pensions, further savings in Departments, a cap on welfare bills—none of these decisions is easy, but they are the right thing to ensure that Britain lives within her means.

We set out today the details of that welfare cap, and we will seek the support of Parliament for it in a vote next week. From housing benefit to tax credits, the full list of benefits included in the cap is published in the Budget document today. Only the state pension and the cyclical unemployment benefits are excluded. I am setting it at £119 billion in 2015-16. It will rise, but only in line with forecast inflation, to £127 billion in 2018-19.

Britain should always be proud of having a welfare system that helps those most in need, but never again should we allow its costs to spiral out of control and its incentives to become so distorted that it pays not to work. In future, any Government who want to spend more on benefits will have to be honest with the public about the costs, will need the approval of Parliament, and will be held to account by this permanent cap on welfare.

The distributional analysis published today shows that the Budget decisions, and the decisions across this Parliament, mean that the rich are making the biggest contribution to the reduction of the deficit, because we are all in this together. [Interruption.]

[Mr Deputy Speaker (Mr Lindsay Hoyle)]

Order. The right hon. Gentleman needs to get to the end of the speech without anybody having to intervene.

[Mr Osborne]

The independent statistics show that under this Government income inequality is at its lowest level for 28 years, lower than at any single moment under Labour. Thanks to my right hon. Friend the Prime Minister’s leadership we have driven the international efforts to develop tough new global tax rules that stop rich individuals hiding their tax and companies shifting their profits offshore. Here at home we are collecting twice as much as before through compliance—collecting the taxes that are due—and the number of registered tax avoidance schemes has fallen by half.

While the vast majority of wealthy people pay their taxes, there is still a small minority who do not. We will now require that those who have signed up to disclosed tax avoidance schemes pay their taxes, like everyone else, up front. This will apply in future to schemes covered by our general anti-abuse rule too. If people feel they have been wronged, they can of course go to court. If they win, they get their money back with interest. We have already consulted on this idea; now we will implement it. The OBR confirms that this will bring forward £4 billion of tax receipts and it will fundamentally reduce the incentive to engage in tax avoidance in the future.

Public tolerance for those who do not pay their fair share evaporated long ago, but we had to wait for this Government before there was proper action. Today we go further still. I am increasing the budget of Her Majesty’s Revenue and Customs to tackle non-compliance. We will block transfers of profits between companies within groups to avoid tax. We will increase tax credit debt recovery rates for those with sufficient earnings. We will give HMRC modern powers to collect debts from bank accounts of people who can afford to pay but have repeatedly refused to do so, like most other western countries. We will increase compliance checks to catch migrants who claim benefits that they are not entitled to, saving the taxpayer almost £100 million. We will take action to curb potential misuse of the enterprise investment and venture capital trust schemes, and we are expanding the new tax that we introduced to stop people avoiding stamp duty by owning homes through a company.

We will expand the tax on residential properties worth over £2 million to those worth more than £500,000, and from midnight tonight anyone purchasing residential property worth more than £500,000 through a corporate envelope will be required to pay 15% stamp duty. None of this applies to homes that are rented out. Many of these are empty properties held in corporate envelopes to avoid stamp duty. This abuse will end.

Another abuse has been the manipulation of the LIBOR rate. Our regulators are broadening their investigation to the foreign exchange markets and I will keep the House informed. Financial services are a hugely important industry to this country which I want to promote around the world. But I also want the fines paid by those who have demonstrated the worst values to support those who demonstrate the best of British values. I am talking about the men and women in our armed forces who risk their lives to keep us free. So I will continue to direct the use of the LIBOR fines to our military charities and our emergency service charities too. Because the sums continue to grow through the fines, I can today extend that support to our search and rescue and lifeboat services, and provide £10 million of support to our scouts, guides, cadets and St John Ambulance. I am today waiving inheritance tax for those in our emergency services who give their lives protecting us.

I will also relieve VAT on fuel for our air ambulances and inshore rescue boat services across Britain, and provide a new air ambulance for London, all in response to huge and heartfelt public demand and the campaigns of my hon. Friends the Members for Hexham (Guy Opperman), for Brentford and Isleworth (Mary Macleod) and for Argyll and Bute (Mr Reid).

Tomorrow is the 21st anniversary of the IRA bomb that killed young Tim Parry and Johnathan Ball. Survivors for Peace was set up by Tim’s parents, Colin and Wendy, and it no longer receives lottery funding. My hon. Friend the Member for Warrington South (David Mowat) and the right hon. Member for Dulwich and West Norwood (Dame Tessa Jowell) have both raised this issue, and I know myself what incredible work they do. To honour the memory of all victims of terrorism, we will provide the funding that this programme needs. Last month with the Under-Secretary of State for Scotland, my right hon. Friend the Member for Dumfriesshire, Clydesdale and Tweeddale (David Mundell), I visited Lockerbie to pay my respects on the 25th anniversary of that tragedy. We will support the scholarships created for local people there to study in the United States.

Further, this summer, many services of remembrance will be held in our cathedrals to mark the great war, so we are providing £20 million to support the repairs that these historic buildings need. We will also support the celebration of the 800th anniversary of the signing of the Magna Carta next year. King John’s humbling defeat centuries ago seems unimaginably distant—a weak leader who had risen to the top after betraying his brother, compelled by a gang of unruly barons to sign on the dotted line. I will provide a grant to the Magna Carta Trust to ensure that today’s generation learns the lessons of the past.

We will not have a secure economic future if Britain does not earn its way in the world. We need our businesses to export more, build more, invest more and manufacture more. Our exports have grown each year and the OBR today forecasts rising export growth in the future. Our combined goods exports to Brazil, India and China have risen faster than those of our competitors, but we are starting from a low base and we have many lost years to catch up. Britain has to up its game on exports, and today we do. With Stephen Green, and now Ian Livingston, we are expanding the reach and support that UK Trade & Investment offers British businesses. For many firms the truth is that they can win the contract only if they are backed by competitive export finance. For decades the British Government have been the last port of call, when we should be backing British businesses wanting to sell abroad. Today, we fundamentally change that, and we are going to start with the finance we provide our exporters. We will double the amount of lending available to £3 billion, and I can announce that from today the interest rates we charge on that lending will be cut by a third. Instead of having the least competitive export finance in Europe, we will have the most competitive.

We will also reform air passenger duty to end the crazy system where you pay less tax travelling to Hawaii than you do travelling to China or India. It hits exports, puts off tourists and creates a great sense of injustice among our Caribbean and south Asian communities here in Britain. From next year, all long-haul flights will carry the same, lower, band B tax rate that you now pay to fly to the United States. Private jets were not taxed at all under the previous Government. Today they are, and I am increasing the charge so they pay more. And because we want all parts of our country to see better links with the markets of the future, we are going to provide start-up support for new routes from regional airports, such as Liverpool, Leeds or, indeed, Inverness. More support for businesses; competitive finance; cheaper global flights—I want the message to go out that we are backing our exporters, so that wherever you are around the world you cannot fail to see “Made in Britain”.

One key British export is the North sea’s oil and gas. We will take forward all recommendations of the Wood report, and we will review the whole tax regime to make sure it is fit for the purpose of extracting every drop of oil we can. We will introduce now a new allowance for ultra-high pressure, high temperature fields to support billions of pounds of investment, thousands of jobs and a significant proportion of our country’s energy needs. Even with these measures, the North sea is a mature basin, and the OBR has today revised down the forecast tax receipts by a further £3 billion over the period. The Scottish economy is doing well and jobs are being created, but this is a reminder of how precarious the budget of an independent Scotland would be. These further downgrades in the tax receipts would leave independent Scots with a shortfall of £1,000 per person—Britain is better together.

Our country needs to export more and it also needs to build more. House building is up 23%, but that is not enough. That is why we are making further reforms to our planning system and offering half a billion pounds of finance to small house building firms; it is why we are signing city deals across the country to get more built, with a new funding deal this week for Cambridge; it is why we are giving people a new right to build their own homes and providing £150 million of finance today to support that; it is why we are funding regeneration of some of the worst conditions in urban housing estates that we have in this country, and we are extending the current support for mortgage interest scheme to 2016; and it is why we have got Help to Buy.

We are extending the Help to Buy equity loan scheme for the rest of the decade, so that we get 120,000 new homes built. In the south-east, where the pressure is greatest, we are going to build new homes in Barking Riverside, regenerate Brent Cross and build the first new garden city in almost 100 years at Ebbsfleet. The Opposition have said they already announced the homes in Ebbsfleet a decade ago, and they did make the announcement. Do you know how many homes have been built since then? It is less than 300; it was more “ebb” than “fleet”. Instead, we are going to build 15,000 homes there, put in the infrastructure, set up the development corporation and make it happen. I thank my hon. Friends the Members for Dartford (Gareth Johnson) and for Gravesham (Mr Holloway) for their tremendous support. And we will be publishing a prospectus on the future of garden cities. Taken all together, the housing policies I announce today will support over 200,000 new homes for families—we are getting Britain building.

We are also going to get Britain investing. Britain has under-invested for decades. We are the first Government to have committed to long-term and rising capital budgets, and this autumn I will set out the detailed plans for the projects that will be supported for the rest of the decade. We have been reminded again this week of the benefits of high-speed rail and what that will bring to the north of our country, and I am determined that it goes further north faster. Today, I have approved a £270 million guarantee for the Mersey gateway bridge, thanks to the hard work of my hon. Friend the Member for Weaver Vale (Graham Evans). And, tomorrow we introduce legislation to give new tax and borrowing powers to the Welsh Government to fund their infrastructure needs, and they can start now on work to improve the M4 in south Wales.

Because of the exceptionally poor weather this winter, I am making an additional £140 million available, on top of what has already been provided, for immediate repairs and maintenance to damaged flood defences across Britain. Our roads have taken a battering, too. My hon. Friend the Member for Northampton North (Michael Ellis) has been a very persistent campaigner for resources to repair the potholes in his constituency and across the country. His persistence has paid off and I am making £200 million available, which local authorities can bid for—I trust Northampton will be making an application.

Modern infrastructure is part of a successful economy. So, too, is a modern industrial strategy. If Britain is not leading the world in science and technology and engineering, we are condemning our country to fall behind. So we will establish new centres for doctoral training, for cell therapy and for graphene—a great British discovery that we should break the habit of a lifetime with and commercially develop in Britain. To make sure we give young people the skills they need to get good jobs in this modern world, we have doubled the number of apprenticeships, and I will extend the grants for smaller businesses to support over 100,000 more apprentices. And we will now develop new degree-level apprenticeships, too.

In my maiden speech here in this House I spoke of Alan Turing, the code breaker who lived in my constituency, who did more than anyone else—almost—to win the war and who was persecuted for his sexuality by the country he helped to save. I am delighted that he has finally received a posthumous royal pardon. Now, in his honour, we will found the Alan Turing Institute to ensure that Britain leads the way again in the use of big data and algorithm research. I am determined that our country is going to out-compete, out-smart and out-do the rest of the world.

Government investment is part of the story, but we need business investment, too. When we came to office, Britain had one of the least competitive business tax regimes in Europe—now we have the most competitive. Thanks to the Office of Tax Simplification, we have already cut burdens on administration, and I am grateful to Michael Jack, John Whiting and their team for their hard work. Today, we accept their recommendation to move the collection of class 2 national insurance contributions into self-assessment, abolishing for 5 million people this wholly unnecessary bureaucracy. And we have cut business tax rates, too. Corporation tax was 28% when we came to office. In just two weeks, corporation tax will be down to 21%, high street stores will get £1,000 off their rates and every business in the country will get the employment allowance—a £2,000 cash-back on jobs. Next year, corporation tax will reach 20% and we take under-21s out of the jobs tax altogether.

So businesses are keeping more of their money to create jobs and invest in the future—today, I want to go further. Many of the enterprise zones we created are now flourishing, so the business rates discounts and enhanced capital allowances will be extended for another three years. And I can confirm that, with the Northern Ireland Executive, we will establish the first enterprise zone there near Coleraine. I am raising the rate of the research and development tax credit for loss-making small businesses from 11% to 14.5%. Two years ago, I launched the seed enterprise investment scheme to help finance start-ups. It has been a great success and I am making it permanent. We are backing investment into social enterprises with a social investment tax relief at a rate of 30%. And we are supporting our creative industries, too. The European Commission has today approved the extension of our film tax credit, and I will apply the same successful approach to theatre, especially regional theatre. From this September, there will be a 20% tax relief for qualifying productions—and 25% for regional touring. And we are expanding by a third the size of the cultural gift scheme.

But I want to do something today that helps all businesses to invest. In 2012, I increased the annual investment allowance tenfold to £250,000. This generous allowance was due to expire at the end of this year, but all the business groups urged me to extend it. So we will, but we will do more. We will double the investment allowance to £500,000, extend it to the end of 2015 and start it next month—99.8% of businesses will get a 100% investment allowance. Almost every business across Britain will pay no up-front tax when they invest in the future. It costs £2 billion in the short term, so when we say that we are going to get Britain investing and to back growth around the country, we mean it.

A resilient economy is a more balanced economy, with more exports, more building, more investment and more manufacturing too. We have got to support our manufacturers if we want to see more growth in our regions. To those who say that manufacturing is finished in the west, I say look at America, which will see up to 5 million new manufacturing jobs by the end of this decade, and I will tell you why. US industrial energy prices are half those in Britain. We need to cut our energy costs. We are going to do this by investing in new sources of energy, new nuclear power, renewables, and a shale gas revolution. We are going to do this by promoting energy efficiency. Today, we are tilting the playing field—extending the 2% increase in company car tax in 2017-18 and 2018-19 while increasing the discount for ultra low emission vehicles, and reducing the rate of fuel duty on methanol. But above all, we are going to have a £7 billion package to cut energy bills for British manufacturers, with benefits for families and other businesses too.

First, I am capping the carbon price support rate at £18 per tonne of carbon dioxide from 2016-17 for the rest of the decade. This will save a mid-sized manufacturer almost £50,000 on its annual energy bill, and it will save families £15 a year on their bills too, over and above the £50 we have already taken off.

Secondly, I am extending the existing compensation scheme for energy-intensive industries for a further four years to 2019-20. Our steelmakers, chemical plants, paper mills and other heavy energy users make up 35% of our manufacturing exports and employ half a million people. This scheme helps the companies most at risk of leaving to remain in the UK.

Thirdly, I am introducing new compensation worth almost £1 billion to protect these energy-intensive manufacturers from the rising costs of the renewables obligation and the feed-in tariffs, otherwise green levies and taxes will make up over a third of their energy bills by the end of the decade.

Fourthly, I am exempting from the carbon price floor the electricity from combined heat and power plants, which hundreds of manufacturers use. This entire package will be delivered without any reduction in the investment in renewable energy.

Today, I have cut the cost of manufacturing in Britain. Half of the firms that will benefit most are in the north of England, and a third are in Scotland and Wales. Thousands of good jobs are protected. We have a more resilient economy, a Government on the side of manufacturers and a Britain that makes things again.

We are backing exports, backing manufacturing and backing a Britain that builds. We also want to help hard-working people keep more of what they earn and of what they save. That is what we have done by freezing council tax, freezing fuel duty and raising the personal allowance to £10,000. From next year, there will be tax-free child care—20% off for up to £10,000 of child care costs for parents, and an early years pupil premium to help the most disadvantaged.

Today we can do more to help. Let me start with duties. I can confirm that the fuel duty rise planned for September will not take place. Petrol will be 20p lower per litre than it would have been under the plans of the previous Government.

Turning to gambling duties, fixed odds betting terminals have proliferated since gambling laws were liberalised a decade ago. These machines are highly lucrative, and therefore it is right that we now raise the duty on them to 25%. We will also extend the horserace betting levy to bookmakers who are based offshore, and we will look at wider levy reform and at introducing a “racing right” to support the sport.

While the number of betting machines have grown, the number of bingo halls has plummeted by three quarters over the last 30 years, yet bingo duty has been set at the high rate of 20%. Now that fuel duty is frozen, my hon. Friend the Member for Harlow (Robert Halfon) has turned his energy and talent into a vigorous campaign to cut bingo duty, ably assisted by my hon. Friend the Member for Waveney (Peter Aldous). They want the rate cut to 15%. I can go further. Bingo duty will be halved to 10% to protect jobs and to protect communities.

Let me turn now to tobacco and alcohol duties. Tobacco duty has been rising by 2% above inflation and will do so again today, as previously confirmed. This escalator was due to end next year, but there are no sound health reasons to end it, so it will be extended for the rest of the next Parliament.

We have introduced new laws to prevent alcohol from being sold below minimum tax rates, and this helps to prevent supermarkets from undercutting pubs and it helps to stop problem drinking. It is a far more targeted approach than the alcohol duty escalator, which was introduced by the previous Government and hated by so many responsible drinkers. Today, I am scrapping that escalator for all alcohol duties. They will rise with inflation, with these exceptions: Scottish whisky is a huge British success story. [Hon. Members: “Scotch whisky.”] To support that industry, instead of raising duties on Scotch whisky and other spirits, I am today going to freeze them, and with some cider makers in the west country, who have been hit hard by the recent weather, I am going to help them by freezing the duty on ordinary cider too.

Then there is beer. I know the industry, led so ably by my hon. Friend the Member for Burton (Andrew Griffiths), has been campaigning for a freeze, but beer duty next week will not be frozen; it will be cut again by 1p—pubs saved, jobs created and a penny off a pint for the second year running.

It is a central part of our long-term economic plan that people keep more of the money they have earned. When we came to office, the personal tax allowance was just £6,500. In less than three weeks time, it will reach £10,000. That is an income tax cut for 25 million people. Today, because we are working through our plan, we can afford to go further. Next year, there will be no income tax at all on the first £10,500 of your salary—£10,500 tax free and £800 less in tax every year for the typical taxpayer. Our increases in the personal allowance will have lifted over 3 million of the lowest paid out of income tax altogether, and I am incredibly proud of what we have achieved.

I can also confirm today that the higher rate threshold will rise for the first time this Parliament, from £41,450 to £41,865 next month, and then by a further 1% to £42,285 next year. Because I am passing the full benefit of today’s personal allowance increase on to higher rate taxpayers, people earning £42,000, £43,000, £50,000, £60,000—all the way up to £100,000—will be paying less income tax because of this Budget. We have tax cuts for those on low incomes, and those on middle incomes too—help for hard-working people as part of a long-term economic plan delivered by a coalition Government and a Conservative Chancellor. I am linking the rate of the transferable tax allowance for married couples to the personal allowance, so it will also rise to £1,050—help for 4 million families that they will take away and that we are proud to provide.

Our tax changes will help people in work, but there is a large group who have had a particularly hard time in recent years, and that is savers. This matters not just because they are people who have made sacrifices to provide for their own economic security in retirement. It matters too because one of the biggest weaknesses of the British economy is that it borrows too much and saves too little. This has been a problem for decades and we cannot fix it overnight. It is no surprise that the OBR forecasts the savings ratio falling, so today we put in place policies for savers that stand alongside deficit reduction as a centrepiece of our long-term economic plan.

The reforms I am about to announce are only possible because, thanks to this Government, we have a triple lock on the state pension; more people are saving through auto-enrolment; and we are introducing a single-tier pension that will lift most people above the means test. That secure basic income for pensioners means that we can make far-reaching changes to the tax regime to reward those who save. Here is how. First, I want to help savers by dramatically increasing the simplicity, flexibility and generosity of individual savings accounts. Twenty-four million people in this country have an ISA, and yet millions of them would like to save more than the annual limits of around £5,500 on cash ISAs, and £11,500 on stocks and shares ISAs. Three quarters of those who hit the cash ISA limit are basic rate taxpayers. So we will make ISAs simpler by merging the cash and stocks ISAs to create a single new ISA. We will make them more flexible by allowing savers to transfer all of the ISAs they already have from stocks and shares into cash, or the other way round, and we are going to make the new ISA more generous by increasing the annual limit to £15,000—that is £15,000 of savings a year tax free, available from 1 July. I am raising the limits for junior ISAs to £4,000 a year too.

But the £15,000 new ISA is just the first thing we are doing for savers today. Secondly, many pensioners have seen their incomes fall as a consequence of the low interest rates that Britain has deliberately pursued to support the economy. It is time Britain helped them out in return, so we will launch the new pensioner bond, paying market leading rates. It will be issued by National Savings & Investments, open to everyone aged 65 and over, and available from January next year. The exact rates will be set in the autumn, to ensure the best possible offer, but our assumption is 2.8% for a one-year bond and 4% on a three-year bond. That is much better than anything equivalent in the market today. Up to £10 billion of these bonds will be issued. A maximum of £10,000 can be saved in each bond. That is at least a million pensioner bonds. Because 21 million people also invest in premium bonds, I am lifting the cap for the first time in a decade from £30,000 to £40,000 this June, and to £50,000 next year, and I will double the number of million-pound winners.

I still want to do more to support saving, so, thirdly, we will completely change the tax treatment of defined contribution pensions to bring it into line with the modern world. There will be consequential implications for defined benefit pensions upon which we will consult and proceed cautiously, so the changes we announce today will not apply to them. But 13 million people have defined contribution schemes, and the number continues to grow. We have introduced flexibilities, but most people still have little option but to take out an annuity, even though annuity rates have fallen by half over the last 15 years. The tax rules around these pensions are a manifestation of a patronising view that pensioners cannot be trusted with their own pension pots. I reject that. People who have worked hard and saved hard all their lives, and done the right thing, should be trusted with their own finances, and that is precisely what we will now do: trust the people. Some changes will take effect from next week. We will cut the income requirement for flexible draw-down from £20,000 to £12,000; raise the capped draw-down limit from 120% to 150%; increase the size of the lump sum small pot fivefold to £10,000; and almost double the total pension savings someone can take as a lump sum to £30,000. All of these changes will come into effect on 27 March.

These measures alone would amount to a radical change, but they are only a step in the fundamental reform of the taxation of defined contribution pensions I want to see.

I am announcing today that we will legislate to remove all remaining tax restrictions on how pensioners have access to their pension pots. Pensioners will have complete freedom to draw down as much or as little of their pension pot as they want, anytime they want: no caps; no draw-down limits. Let me be clear: no one will have to buy an annuity.

We are going to introduce a new guarantee, enforced by law, that everyone who retires on these defined contribution schemes will be offered free, impartial, face-to-face advice on how to get the most from the choices they will now have. Those who still want the certainty of an annuity, as many will, will be able to shop around for the best deal. I am providing £20 million over the next two years to work with consumer groups and industry to develop this new right to advice. When it comes to tax charges, it will be possible to take a quarter of your pension pot tax-free on retirement, as today, but instead of the punitive 55% tax that exists now if you try to take the rest, anything else you take out of your pension will simply be taxed at normal marginal tax rates, as with any other income—so not a 55% tax, but a 20% tax for most pensioners.

The OBR confirms that in the next 15 years, as some people use these new freedoms to draw down their pensions, this tax cut will lead to an increase in tax receipts. Government Members understand that when you cut a tax rate that is punitively high, that can increase revenues. These major changes to the tax regime require a separate Act of Parliament, and we will have them in place for April next year. What I am proposing is the most far-reaching reform to the taxation of pensions since the regime was introduced in 1921.

There is one final reform to support savings that I would like to make. There is a 10p starting rate for income from savings. It is complex to levy and it penalises low- income savers. Today, I am abolishing the 10p rate for savers altogether. When I abolish a 10p rate, I do not sneakily turn it into a 20% rate like the last lot: I am turning it into a 0% rate: no tax on these savings whatsoever. We will almost double this zero-pence band to cover £5,000 of saving income. One and a half million low-income savers of all ages will benefit. Two thirds of a million pensioners will be helped.

The £15,000 new ISA; the pensioner bond; people given access to their own pension pots; a right to impartial advice; the 10p rate for savers abolished to zero—the message from this Budget is this: you have earned it; you have saved it; and this Government are on your side. Whether you are on a low or middle income, whether you are saving for your home, for your family or for your retirement, we are backing a Britain that saves. The central mission of this Government is to deliver economic security. We are not promising quick fixes. Instead we are taking the next steps in our long-term plan. The forecasts I have presented show growth up; jobs up; and the deficit down. Now we are securing Britain’s economic future with: manufacturing promoted; working rewarded; saving supported. With the help of the British people, we are turning our country around. We are building a resilient economy. This is a Budget for the makers, the doers, and the savers, and I commend it to the House.

[Hon. Members]

More!

[Mr Deputy Speaker (Mr Lindsay Hoyle)]

Order. If you like the Budget, I need to put the Question.

Provisional Collection of Taxes

Motion made, and Question put forthwith (Standing Order No. 51(2)),

That, pursuant to section 5 of the Provisional Collection of Taxes Act 1968, provisional statutory effect shall be given to the following motions:—

Pension schemes (registration of pension schemes etc) (Motion No. 29.)

Alcoholic liquor duties (rates) (Motion No. 45.)

Tobacco products duty (rates) (Motion No. 46.)

Stamp duty land tax (threshold for higher rate applying to certain transactions) (Motion No. 73.)—(Mr George Osborne.)

Question agreed to.

[Mr Deputy Speaker (Mr Lindsay Hoyle)]

I now call upon the Chancellor of the Exchequer to move the motion entitled “Amendment of the Law”. It is on this motion that the debate will take place today and on the succeeding days. The remaining motions will be put at the end of the Budget debate on Tuesday 25 March.