Oral Answers to Questions
Maria Caulfield Excerpts(7 years, 9 months ago)
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Maria Caulfield (Lewes) (Con)
The Financial Secretary to the Treasury (Jane Ellison)
The UK’s wine industry benefited from a duty freeze at Budget 2015, which means that the price of a typical bottle of wine is 7p lower since the end of the wine duty escalator in 2014.
Maria Caulfield
The English wine industry is going from strength to strength, particularly in Sussex. I have five award-winning vineyards in my constituency. The Wine and Spirit Trade Association estimates that a 2% reduction in duty would not only boost the industry but generate an extra £368 million for the Treasury. Will that be considered in the Budget next week?
Jane Ellison
I heard those arguments directly from the Wine and Spirit Trade Association, alongside representatives from the all-party parliamentary wine and spirit group, recently. The issue of English and Welsh wine was raised, and I listened carefully to their Budget representations.
Oral Answers to Questions
Maria Caulfield Excerpts(7 years, 11 months ago)
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Craig Tracey (North Warwickshire) (Con)
Maria Caulfield (Lewes) (Con)
The Financial Secretary to the Treasury (Jane Ellison)
The Government absolutely recognise the key role that small businesses play in the economy, which is why, for example, at the autumn statement we announced an additional £400 million for the British Business Bank to help growing firms to access finance. Of course, we have taken a number of other steps, including introducing the seed enterprise investment scheme.
Jane Ellison
As a former co-chair of the all-party parliamentary group on retail, I could not agree more that independent retail, and retail generally, is a vital sector. My hon. Friend is right that we want to support independent retailers on our high streets, which is why, from April, 600,000 of the smallest businesses—occupiers of a third of all properties—will not have to pay business rates as part of the £6.7 billion business rates package that will kick in over the next few years. I hope that he agrees that that is a helpful bit of support for key local businesses.
Maria Caulfield
I recently attended my local chamber of commerce’s breakfast meeting in Seaford, and I met many small businesses that are pleased that the economy is doing so well and is being so expertly led by this Government. However, they have some concerns about the introduction of quarterly tax returns and the impact that would have on the costs of small businesses. They suggest the introduction of a threshold for the smallest businesses. Will the Minister consider that?
Jane Ellison
I, too, have a good relationship with my local chamber of commerce; we get vital feedback from our chambers of commerce. Of course, we are not introducing quarterly tax returns; my hon. Friend is referring to the “making tax digital” project. Although the Treasury Committee recently said that the long-term future can, and probably should, be digital, we understand that we need to look carefully at the consultation responses and at the concerns of small businesses. Of course, we have already exempted a number of the smallest businesses from the threshold, but we are looking carefully at the consultation responses and at the Select Committee’s report. We do not recognise the figure from the Federation of Small Businesses on the cost, and we have not seen the assumptions that underpin it; if I am to address those concerns, seeing those would be helpful.
Savings (Government Contributions) Bill (Second sitting)
Maria Caulfield Excerpts(8 years, 1 month ago)
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Peter Dowd
Q Can I just ask, on that basis, how well targeted you think Help to Save is on those with the lowest income? It is all very well to say “Save”, but if you have no money because you are on benefits or have a low income, how well targeted is that particular product?
Joseph Surtees: I think it is almost as well targeted as it could be without putting a huge onus on banks and, in a scenario in this case, running de facto means testing. We could possibly open up the eligibility. I know that the Institute for Fiscal Studies has done some work on this—which I have one or two questions about—but as a basic proposition it is pretty well targeted at the group that needs the savings the most. If you look at the figures, almost half of families with an income below £14,000, a category that a lot of the Help to Save target families fall into, do not have savings. We have one specific issue, which is to do with how it will help people under 25. That is very much to do with the benefits rules, which I can either discuss now or come back to later.
Maria Caulfield (Lewes) (Con)
Q I want to touch on one of the points raised in our previous evidence session, which was that someone can withdraw money from this lifetime ISA if they want to buy a home, but if they want to withdraw money for any other reason—you touched on some examples, such as if their washing machine breaks down or they have an urgent need to get money quickly—they face a penalty of between 5% and 6%. Are there certain criteria you would like to see where there are other options to withdraw money without hitting a penalty?
Ed Boyd: As I said before, the detailed knowledge, in terms of the research that the CSJ has done, is on the Help to Save side rather than the ISA side of things. There is a valuable question about the accessibility and flexibility of accessing savings within Help to Save. I could give a comment on that—perhaps it is applicable across to ISAs. I would need you to be the judge of that.
Maria Caulfield
Q But do you think that there should be an option for those people to withdraw money quickly rather than just having being able to buy property as a penalty-free reason?
Ed Boyd: On ISAs?
Maria Caulfield
Yes, on the lifetime ISA.
Ed Boyd: We have not done the research on the ISA, so we do not have a view. I can probably only help with the Help to Save side of things.
Joseph Surtees: On that point, I would say—and this is applicable to both—that a lot of the behavioural research in this area talks about a process called hyperbolic discounting, which is to do with the fact that the further away something is, the less appealing it will be. So, any mechanisms we can have in any of these products that allow people to access them before two years, in the case of Help to Save, or before much further in the future, in terms of the LISA, will appeal and widen the eligibility a lot more.
Dr Eilidh Whiteford (Banff and Buchan) (SNP)
Q Some of the evidence we have taken this morning has already been more about long-term savings. In the evidence you presented just now, you emphasised the issue of accessibility and the need for people to be able to access their savings quickly to deal with external shocks. What kind of products do you think would be beneficial for people on low and average incomes for longer-term saving?
Ed Boyd: On the flexibility point in terms of accessibility of savings, there is a question. We produced a short paper on Help to Save off the back of a round table of experts in this area. One of the questions that kept coming up was whether there should be some friction for people taking out the money. For example, if someone starts to save for two years with the best intentions to make sure they get their Government bonus, but has one day of giving up on that plan, it would completely undermine it and they would not get the Government bonus. Potential frictions can be put in such as a 24-hour delay in taking out the money. I think that would be completely reasonable.
Where appropriate, someone could name a third party—a family member, husband, wife, carer or whoever—and when they say, “I want to bring it down in 24 hours”, that person is texted to make sure that there is enough friction to ensure that when the money is drawn down as a rainy-day fund, it is used for rainy-day activities and things that they really need the money for, rather than just for general expenditure. This would encourage people to save and make sure the money is used to help stop them getting into problem debt.
Joseph Surtees: I think there are two interesting points here, one of which is on Help to Save. There is a system in the UK that has proved very good at encouraging low-income people to save over a long period, and that is pensions auto-enrolment. So far, the opt-out rate for that is far lower than anticipated. It is only 10% when it was anticipated to be a quarter. People who are enrolled and have not opted out are those just above the enrolment limits.
That sort of approach is incredibly useful in this area, particularly for low-income people. When you look at products such as Help to Save, such as LISA, perhaps, if you can look at how to incorporate an auto-enrolment element into that—with Help to Save, you can in particular do it through the universal credit system. Universal credit has personal budgeting support which helps you to do that. Those sorts of little behavioural incentives will help to make it appeal and work better for these lower-income individuals.
Maria Caulfield
Q In your professional capacity, do you advise your clients to have pensions or savings or do you advise them to have both?
Bryn Davies: I do not give independent financial advice. I have to be very careful on that. I always promote the advantages of collective schemes and point out the advantages of having occupational schemes, and support unions when they are negotiating the best possible collective provision. I do not advise individuals about how to use their money.
Maria Caulfield
Q I am interested in why industry experts seem so against these schemes to encourage people to save, when we have heard from the experts in social mobility that these are good schemes to start people off on the savings process. Do you have a reason why that difference would be?
Bryn Davies: It is this interaction. There are all these different vehicles for providing it and the way they interact is not entirely clear. That is why we do need some sort of overarching review—a review of saving sounds quite attractive—specifically of pensions tax relief, so that we do not have these one-off initiatives where it is unclear exactly how they fit into the overall approach of encouraging saving. Taken individually, you could well say this is a good idea, but it is how they all work together that is the problem we face. That is why I am saying that, at this crucial stage of automatic enrolment, we should take a bit more time over introducing LISAs.
Kelvin Hopkins
Q I am somewhat sceptical about the myriad private savings schemes and have argued the case for a much more comprehensive compulsory state savings scheme for everyone, on top of which people could save in other ways as well as in stocks and shares. What would be the case against having a universal state earnings-related system with defined contributions and defined benefits, which would be extremely efficient to operate, easy to administrate and which everybody would know they were going to get a good deal from? What would be the argument against that?
Calum Bennie: I don’t think there is an argument against that.
Maria Caulfield
Q I want to get to the bottom of the evidence that we were given earlier, especially from the experts and professionals in this sector, that these schemes—whether it is Help to Save or the LISA—are too complicated for those on a lower income really to grapple with, and therefore won’t be taken up and won’t be of use. What’s your experience? Do you think the way that these schemes are being set up is easily understandable and will encourage those on a low income to save?
Calum Bennie: We certainly don’t see any issue with that. If it’s us who are going to be promoting these schemes, then we will certainly make sure that our communications are clear and that they are researched in the first place. For instance, our ISAs—that is the basis of this product; it’s an ISA, with various add-ons—are as complicated or as non-complicated as you want them to be, and they are understood extremely well by our customers.
Maria Caulfield
Q Can you understand why some professionals in the financial industry sector are so against these measures, and yet those who promote social mobility are quite supportive of them? Can you understand the rationale as to why some people in your sector are not so supportive?
Calum Bennie: Perhaps they haven’t actually had the experience of working with lower to mid-income groups.
The Chair
Would any more Members like to ask questions? If not, I thank the witness for the evidence that he has given. We will now move on to the next panel.
Examination of Witnesses
Martin Lewis OBE and Jonquil Lowe gave evidence.
Oral Answers to Questions
Maria Caulfield Excerpts(8 years, 5 months ago)
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Mr Gauke
First, on the general point, I recognise what the hon. Gentleman is driving at in terms of uncertainty and the desirability to resolve the issue sooner rather than later.
It is the case that the UK did very well from the European Investment Bank in recent months in terms of attracting investment. There is no evidence as yet that the UK will be discriminated against during the period that we remain members of the EU, but the hon. Gentleman is right to raise the issue. We will continue to monitor the situation and we want to ensure that we continue to do well from the EIB.
Maria Caulfield (Lewes) (Con)
5. What fiscal steps he is taking to support businesses.
The Chancellor of the Exchequer (Mr Philip Hammond)
The Government are committed to ensuring that Britain has a competitive corporate tax system that encourages innovation and business investment. We have already announced a reduction in corporation tax to 17%—the lowest rate in the G20—and we are reducing the business rates burden by £6.7 billion. The Government have also increased the rate of research and development tax credits and set the annual investment allowance at its highest ever permanent level.
Maria Caulfield
I thank the Chancellor for his response and congratulate him on his new role. Many small businesses in my constituency face difficulties. The Costcutter on Claremont Road in Seaford employs four people, but the store is too large to benefit from the Government’s extension of small business rates relief to properties whose rateable value is less than £12,000. Will the Chancellor therefore consider reintroducing the retail rate relief, which last year helped such businesses with a £1,500 discount on their rates bill?
Mr Hammond
The retail scheme was a temporary arrangement until the current proposals were fleshed out fully, so I am afraid that we will not be able to reintroduce it. Many businesses that benefited under the old, temporary retail scheme will benefit from the permanent scheme that we have introduced to reduce the burden of business rates, but I am afraid that some may slip through the net.
The Economy and Work
Maria Caulfield Excerpts(8 years, 6 months ago)
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Mims Davies
I absolutely agree with what my hon. Friend says. It takes an hour to get between Portsmouth and Southampton, and that situation is untenable. We need it to take an hour into Waterloo from Portsmouth. Such investment will improve travel to Southampton airport, which will also see positive benefits from the Chickenhall Lane link road. That will also deal with the standing traffic coming into the town, where air quality is a real problem. Last Friday, I met the Solent local enterprise partnership, which is keen and ready to finalise its bid and make its business case to the large local major schemes fund. I thank the Chancellor for the support for this project in Eastleigh.
I welcome the commitment to build 200,000 starter homes, and I would like women in refuges to be given higher priority on housing lists. That will achieve more safety for their children and more stability in schools, and it will improve their life chances, which is what we wish to see in this Government’s programme. In Eastleigh, we have recently seen town centre land that would have been ideal for housing given away and designated for a car showroom and two drive-throughs—this in an area where there is a problem with air quality. That is the kind of unhealthy and unwanted town centre regeneration that I am not keen to see in my constituency. I pay tribute to the local campaigners who have sought to point out the perversity of the application.
Hon. Members will not be surprised to see that I intend to discuss the ongoing lack of a local plan in Eastleigh—there are no neighbourhood plans in Eastleigh. Planning to protect green spaces and planning for more affordable homes, and more transparent planning rules are vital in Eastleigh, where there is a strategic vacuum. It is crucial that the pace of the progress that central Government are making is matched by local authorities picking up the pace and dealing with this issue. Sadly, Eastleigh Borough Council continues to fail its residents by ignoring calls for local plans. I sincerely hope that it gets on with it, for the sake of residents and businesses, and that the planning Bill can help and take full effect in our area.
I also want us to protect our green infrastructure, as it is important. We need to protect our chalk streams and areas such as the River Itchen, where one might see my hon. Friend the Member for Broxbourne (Mr Walker) fly fishing or angling alongside local anglers. It is very important to support such infrastructure and stop the pollution of vital rivers. Our Bill will promote green spaces over brownfield land, which is currently not being distributed properly in my constituency. Residents in Bishopstoke see and feel this; there is no localism in Eastleigh and no local plan.
Maria Caulfield (Lewes) (Con)
My hon. Friend does a tremendous job for her constituents. Does she agree that a neighbourhood plan, giving locals a referendum, is the way forward to plan for housing and infrastructure?
Mims Davies
Absolutely. Locking residents out of the planning process continues to make housing an adversarial issue, whereas our communities need to work together to bring forward the infrastructure that we see proposed in the Bill and the tie-in that residents need. I should thank my hon. Friend at this point. Areas such as Botley are struggling on GP recruitment because of ongoing issues with a local plan and the fact that they cannot recruit the clinicians they need. I thank her for her work in encouraging clinicians and nurses to come forward in these important careers. Getting more women into STEM subjects—science, technology, engineering and maths—and having that opportunity will help our local communities to grow and thrive.
The biggest decision of our generation will be made next month and it is clear that whatever the outcome it will have an effect on our economy. Clearly, opinions are divided, occasionally on the Benches in this Chamber and occasionally, as we see if we read The Times, in the Tea Room. But is it crucial that once we have voted we come back together—this Conservative majority Government—and unify, so that we can continue to deliver this strong economy and the services we need for all our constituents.
Tax Avoidance and Evasion
Maria Caulfield Excerpts(8 years, 8 months ago)
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John McDonnell
I gave way earlier to the hon. Gentleman. I will press on because I know that others want to speak and I am sure he will want to speak himself.
This is a world that the super-rich inhabit. They live by different rules and it is an alien world for the majority of the rest of us.
Maria Caulfield (Lewes) (Con)
Does the hon. Gentleman agree that his party’s opposition to the removal of the family home from the income tax threshold affects those on the lowest incomes in London and the south-east because it will mean that only the wealthy can afford to stay in London when the family home is sold and they have to pay inheritance tax?
John McDonnell
The hon. Lady makes an important point. We have supported the increase in tax thresholds to try to take people out of tax altogether, but the benefits overall have actually accrued to the highest earners rather than the lowest and we need a more sophisticated system than that. With regard to inheritance tax, the cut that was made this time around by the Government benefited the top 5% of the population. There must be a better way of ensuring that people can pass on their wealth to their children, rather than just benefiting the super-rich. We have to look at that again. I am happy to do that and meet her to discuss it.
Maria Caulfield
I thank the hon. Gentleman for being extremely generous in giving way, but there are low-income families in London and the south-east whose home’s value has increased beyond recognition. They are now asset rich but income poor. How will the Labour party help them if it does not take them out of inheritance tax?
John McDonnell
The important thing now, as my hon. Friend the Member for Bolsover (Mr Skinner) has said, is that we build more homes to house those people. That will be an effective way of reducing prices, too. That will give access to home ownership to thousands more in the capital.
Mr Gauke
I think the hon. Gentleman is actually being helpful—not that I ever doubted that he would be. When there is artificial, contrived behaviour and when schemes are clearly contrary to the intentions of Parliament, we need to take strong action. We are also entitled to be critical of those involved in promoting such schemes. Indeed, we brought in a regime whereby we can name and shame the promoters of tax avoidance schemes that are clearly contrary to our intentions.
Maria Caulfield
I thank the Minister for giving way. If Opposition Members want to be helpful, they could speak to the unions. Unison paid no corporation tax in 2011 or 2012, despite owning £51.6 million of stocks and shares and generating an income of over £5 million.
Mr Gauke
It would be fair to say that I try to make it a rule not to comment on the individual tax affairs of taxpayers, but perhaps those who are happy to wade in on such debates should answer such questions.
HMRC is committed to exposing and acting on financial wrongdoing. Its specialist offshore unit is currently investigating more than 1,100 cases of offshore evasion around the world, with more than 90 individuals subject to current criminal investigation. The motion calls for greater HMRC resourcing. This shows precisely why at the summer Budget of 2015 we confirmed an extra £800 million to fund additional work to tackle evasion and non-compliance by 2020-21.
We have already heard quite a lot today about HMRC resources and headcount. I have to concede that there was a period when the numbers working in compliance and enforcement fell—that period was up to 2010. If we look at where the numbers were in 2010 compared with where they are today, we see that the enforcement and compliance numbers are higher than they were when the Prime Minister, the Chancellor and I took our respective positions—there has been an increase. I accept that much more of HMRC’s work on processing self-assessment forms, for example, has been automated and the number of staff working in that area has fallen. However, the number of people working in compliance and enforcement has increased over the past six years.
Maria Caulfield (Lewes) (Con)
I am grateful for the opportunity to speak in this debate. I welcome the measures being taken to tackle tax avoidance, but I feel that the events of the past few days, and this debate in particular, are more about the politics of envy.
As a result of this Government’s measures, the top 1% of earners are paying 28% of income tax, a figure that is likely to grow. In the figures released in the past couple of days by the Leader of the Opposition, the Chancellor and the Prime Minister we can see evidence of the fact that those who earn more, pay more, with the Prime Minister paying nearly £76,000 in income tax—double the amount that I earned as a nurse just months ago. That shows that there is equality in this country—if someone earns more, they pay more.
I accept the point of the hon. Member for Newport West (Paul Flynn) that there is a difference between what is said in this House and what is done here. Opposition Members talk about reducing inequality in taxation but then oppose the measures that have seen 3 million of the lowest paid people in this country taken out of tax altogether. Opposition Members voted against measures, not just in the Budget just gone but in last year’s Budget, that froze fuel duty, VAT and national insurance—which, again, help the lowest paid people in this country. The Labour party introduced the 10p tax rate, which actually hit the lowest paid. We will take no lectures on tax equality.
In the short time that I have, I shall touch on inheritance tax, which seems to be at the front when Opposition Members lead the march of their politics of envy. They assume that inheritance tax is there only to tackle people with high incomes and a lot of assets. My constituency, Lewes, is in the south-east, and I am seeing more and more low-income families whose houses—their family homes—have increased in price, through no fault of their own, so that they now fall into the bracket for inheritance tax, and are having to move out of their family home when that tax is due. They are asset rich but income poor. That means that people who are nurses, like me, or teachers or cleaners, and cannot afford to pay inheritance tax, are having to leave their local areas. That is a particular issue in London and the south-east. For Opposition Members to dismiss that issue and claim that only wealthy people with huge incomes pay inheritance tax is very misleading.
I have a couple of other points to make. The feeling that success is measured only in wealth is absolutely wrong. We do not simply measure success in wealth, but—I think my hon. Friend the Member for South Suffolk (James Cartlidge) made this point earlier—nor should we penalise those who have done well. It would be a sorry day if this country became a place in which, when someone has done well, has set up a successful business, is contributing to their local economy and is employing people, they were penalised, and not only that but frowned upon as well.
This party is trying to help people, whether they are on a low income or have been successful. We are the party of low taxation, whether people are poor or rich. [Interruption.] I see Opposition Members laughing, but I welcome the measures this Government have taken—both the crackdown on illegal tax avoidance and the measures introduced to take the poorest out of taxation altogether. I hope that Opposition Members will desist from the politics of envy and deal with the problem of tax avoidance.
Budget Resolutions and Economic Situation
Maria Caulfield Excerpts(8 years, 9 months ago)
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Mr Osborne
My hon. Friend is absolutely right. The analysis shows that, had we not taken the decisions to reduce the structural deficit, we would have added £1 trillion further to our national debt. That is proof that we can never trust Labour with the nation’s public finances.
Maria Caulfield (Lewes) (Con)
Does the Chancellor agree that Conservative Members will not take lectures on fiscal management from the Labour party? Its legacy from 13 years in government was a Post-it note saying that there was no money left.
Mr Osborne
My hon. Friend is absolutely right. That is all we found in the Treasury—a letter saying, “I’m sorry. There’s no money left.” After 13 years of a Labour Government, that summed up their economic achievement.
The Economy
Maria Caulfield Excerpts(9 years, 1 month ago)
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John McDonnell
Of course that is true, but there are false economies. On a cross-party basis, we came to the conclusion that cutting tax credits to working families would be a false economy because it would remove an incentive to work—one of the principles on which many of our budgetary proposals are founded.
John McDonnell
I will press on with my speech, because Mr Speaker has warned me that a large number of Members want to speak. I will come back to the hon. Lady.
It would be helpful to have an assurance today that no one will lose out. I have said repeatedly that if the Chancellor withdraws the tax credit cuts in full and fairly, he will have our support. On fairness, will Ministers also assure us that if the Chancellor does scrap his tax credit cuts, it will not be paid for by cutting the benefits and support for families elsewhere? I seek that assurance because, unfortunately, the Chancellor has a bit of a reputation for giving with one hand and taking with the other.
Maria Caulfield
I appreciate the hon. Gentleman’s wish for cross-party support in reducing the deficit. I take it from his stance that his party wants to control the deficit, so where does he suggest the cuts should be made? Should they be made in the health service, schools, local government or defence? Will he give some suggestions as to how he would reduce the deficit?
John McDonnell
We have raised this matter time and again. I think that Members on both sides of the House found it incongruous that, at the same time as the Chancellor was seeking to cut working families’ tax credits, he was reducing inheritance tax for the wealthiest families in our country. People saw that as being basically unfair.
There is much that we hope the Chancellor will address in next week’s statement. We agree that we must continuously bear down on the deficit and debt, but that has to be done with realistic good judgment and fairness. I say that the judgment must be realistic because it will undermine confidence in government if we go through another comprehensive spending review like the one in 2010, when the Chancellor announced that he would eliminate the cyclically adjusted current deficit in the five-year period—that is, by this year—whereas he has cleared only half of it. In the last financial year, the current budget deficit stood at a massive £44 billion. I also remember the Chancellor saying in 2010 that he would reduce the debt to 69% of GDP. It now stands at over 80%.
The mistakes of the last CSR should not be repeated in this one. Our fiscal rules must be realistic, achievable and fair. The Chancellor’s rules, for all the revisions in recent weeks, have been none of those things.
Housing and Planning Bill (First sitting)
Maria Caulfield Excerpts(9 years, 1 month ago)
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Teresa Pearce
Q 83 So you are in the same position as the wider federation of the G15?
David Orr: As a wider federation, what we have been trying very clearly to do is to locate the responsibility for the decision where it lies, which is with the Government. It is not a decision for us, and it is not a proposal we have ever sought or have ever endorsed, and we have no plans to do so.
Sinéad Butters: Similarly, we pride ourselves on our strong relations as community-based housing associations, and therefore we do not endorse the sale of high-value council homes in order to fund this.
Maria Caulfield (Lewes) (Con)
Q 84 If I understand it correctly, you both say that you agree that those who earn more should pay more, and I think you have both said that housing associations should have the discretion to set rates, but I understand that there is already provision to set higher rents for those who earn £60,000 or more. How many associations use that provision at the moment and, for those that do not, why not?
David Orr: Very few of them do, partly because there are very few people in those circumstances and partly because housing associations do not always know because they do not have a particular obligation to require that information from their tenants. We do not have very detailed data. Also, it is partly because it is very administratively complex to impose such things.
My view is that we should not think about this in terms of specifically focusing on individual households. We should offer different products at different prices in different parts of the housing market, among which people have the opportunity to choose. Our housing market is not nearly varied enough, and housing associations are an integral part of providing more variety and different pricing in different parts of the market.
I also think that we need to be smarter about how we turn things from a threat into an offer if someone is a tenant of a housing association and their income increases. Rather than pay-to-stay, I would much rather the housing association was in a position to say, “If your income is increasing, we would be happy to sell you a small equity share in the property that you live in.” That has the same effect of providing cash that the housing association can use, and the tenant gets an active benefit from it rather than just paying a higher rent. We have to be much more creative about how we look at all of this and how we change that relationship. In order to do that—to echo what Sinéad was saying—housing associations have to be much more free to run and manage their own businesses. This is a theme that we will be coming to all the time.
Maria Caulfield
Q 85 I agree with you in that sense, but if you are not actually collecting that information, that makes it very hard to gather evidence for that argument. If we really need to target—
David Orr: We don’t need to collect evidence about people’s income if we are making them an offer by saying that if they are in a position to buy an equity share that will gain in value over time, we will provide that for them.
Maria Caulfield
Q 86 Okay, but if we really want social housing to be for those on a lower income, if you are not collecting that information it makes it very difficult to gain support for your argument. You are not collecting information on which of your tenants actually earns that amount in the first place. I find it hard to understand how you have that evidence if you do not collect it yourselves.
David Orr: We presently have no legal basis for requiring that information. We can ask.
Maria Caulfield
Q 87 Hence why it is in the Bill.
David Orr: Well, pay-to-stay is in the Bill. One of the mechanisms that would deliver that is by requiring information to be given—
The Chair
Order. We have four minutes, and four Members are trying to catch my eye. The current point has been explored reasonably well.
Welfare Reform and Work Bill
Maria Caulfield Excerpts(9 years, 1 month ago)
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Owen Smith
Well that may or may not be true, but it is a very large proportion. Without doubt there has been a welcome increase in employment and self-employment, but my point is that 60% of self-employed sole traders are currently eligible for tax credits.
Owen Smith
I will in a moment.
That is why the Bow Group, the Adam Smith Institute, Lord Lawson and many other respected Conservative economists think that this change is a false economy. Not only will it damage the incomes of working people; it will damage our economy. The Bow Group—which you will remember well, Mr Speaker—said that these cuts will be “devastating” for our economy.
Owen Smith
The hon. Gentleman should start by explaining to the 3,700 constituents in his constituency who will lose out as a result of the measures for which he will no doubt vote and speak today—[Interruption.] I will answer the specific question he asks. The truth is that under the previous Labour Government, when this iteration of tax credits was introduced, the steady state amount of money we spent on tax credits was £23 billion per annum. In 2009-10, after the crisis, that went up to £30 billion. The bankers’ recession saw a spike in the necessary spending on tax credits, and it has stayed at £30 billion under his Government—another measure of this Government’s rotten economic record.
Maria Caulfield
Many of my constituents have contacted me to say that they are just above the tax credit limit and that their hard-earned taxes are subsidising low pay. What does the hon. Gentleman say to them?
Owen Smith
I would first of all say to the 3,000-odd people in the hon. Lady’s constituency of Lewes who are going to be hit by the changes that they should be ringing her up and asking her why on earth she is voting for a 10% reduction in their income. I think they would be interested to hear her justification.