Oral Answers to Questions

Richard Fuller Excerpts

Tuesday 16th June 2015 Commons Chamber

[Mr Osborne]

What we are fighting for is Britain to be part of a reformed European Union. Now that we have finally persuaded the Labour party to come to its senses and support the referendum, we can get on with the business of negotiating a good deal for this country.

[Richard Fuller (Bedford) (Con)]

May we have a Treasury review into how effectively the balance sheets of housing associations are meeting the challenge of building new housing, looking in particular at their average cost of capital, the amount of leverage and whether a change in accounting policy would help to meet the housing challenge?

[Mr Osborne]

I congratulate my hon. Friend on his re-election; I enjoyed visiting him in Bedford just before the election. He raises an interesting point about how efficient housing associations are in increasing the housing supply, which is what we want them to do, and we are certainly looking at that at the moment.

Royal Bank of Scotland

Richard Fuller Excerpts

Thursday 11th June 2015 Commons Chamber

[Harriett Baldwin]

I welcome my hon. Friend to the House. He is right: over the past five years, we have taken painstaking steps to establish a system of regulation in the financial services industry that will ensure that never again will the taxpayer be forced to bail out a bank.

[Richard Fuller (Bedford) (Con)]

As my hon. Friend will know, there is a direct connection between the tolerance of reckless and illegal activities in financial institutions and the destruction of valuable banks such as RBS. Will she confirm that she will allow the Government to give full force to any recommendations concerning the fair and effective markets reform that was announced by the Governor of the Bank of England yesterday? Will she also confirm that unlike the last Government, who showered honours on bankers who were reckless, this Government will bring the full force of the law to bear?

[Harriett Baldwin]

I am pleased to welcome my hon. Friend back to the House. He has made an important point. In his speech, the Governor said that it was right to fine many financial services organisations that had behaved badly in both the recent and the distant past, because such behaviour reduces banks’ capital. Responsibility needs to fall on the individuals who are culpable, and also on the management of those individuals. Reducing the capital that is available through regulatory actions contracts the supply of lending to small businesses.

Bankers’ Bonuses and the Banking Industry

Richard Fuller Excerpts

Wednesday 25th February 2015 Commons Chamber

[Cathy Jamieson]

I am now becoming a bit confused about what Conservative Members are arguing for here. Do they want more or less regulation? [Interruption.] Did I hear someone say both? The important issue here is to ensure that regulation is fit for purpose, and that we do not simply have more of the same when we talk about new entrants into the banking system.

[Richard Fuller (Bedford) (Con)]

Let me help to clarify the matter for the hon. Lady. The point that she was trying to make is that having an enormous amount of regulation can be ineffective and bureaucratic, but, equally, having too little regulation will not work. What we need is effective regulation. One of the most effective aspects of regulation, when it comes to changing behaviour, is the potential for criminal prosecution of those who do wrong. That is not mentioned in her motion. Will she address that during her speech?

[Cathy Jamieson]

I thank the hon. Gentleman for giving some clarity. He is absolutely right that regulation is part of the process, but we also need a culture change and an attitudinal change. He is correct to identify the lack of prosecutions. Although that is not mentioned specifically in the motion, I recommend that he reads Labour’s document, which takes account of that point. Our agenda is not entirely punitive, because it is driven by economic imperatives. We all know that the performance of the banking sector is vital to the health of Britain’s economy. It employs more than 1 million people, each of whom has an important role to play in advising businesses and consumers, and helping them to manage their money, invest wisely and plan for the future. Without the banks, consumers would be unable to save and borrow. Businesses would not have access to the patient finance that they need if they are to grow and to create high-quality, well-paid jobs.

Too often in recent years, many banks have fallen short of the very high standards that we expect of them; that is a view shared across the House. In many instances, they have not acted with trust and they have not acted fairly. At times, they have acted recklessly and unethically. Instead of helping their customers, they have exploited them.

Banks and their employees operate in a high-skilled environment, dealing with sophisticated financial instruments that are often beyond the ken of the average consumer and small business owner. Rather than using that knowledge to guide and advise consumers, they have, in some instances, abused that knowledge to exploit them. In investment, consumer and business banking, banks have betrayed the trust of customers and undermined the integrity of the industry. In doing so, they have totted up some truly colossal sums in fines.

Indeed, 2014 was a record year for fines in the City of London, culminating in the £1.1 billion fine levied by the Financial Conduct Authority on five banks, including HSBC and the Royal Bank of Scotland, for their part in the forex fixing scandal. In recent times, four UK banks—Barclays, HSBC, RBS and Lloyds—have also paid £1.5 billion in compensation for mis-selling interest rate hedging products. Other recent scandals include LIBOR fixing and the mis-selling of payment protection insurance.

--- Later in debate ---

[Cathy Jamieson]

No, I am going to finish the point that I began.

Bonuses are a reward for exceptional performance in other industries, so that should be the case in the banking sector as well. However, despite the scandals that have emerged over the past year, most recently at HSBC, it looks as though this year’s round of bank bonuses will once again be very generous.

There needs to be more accountability in banking, and pay must be more closely aligned with long-term performance, so a Labour Government will embark on a serious and far-reaching programme of reform in the banking sector. We will reintroduce our successful tax on bankers’ bonuses, which generated over £3 billion in 2010, and act to ensure that this tax incorporates role-based pay or any other payments made by banks in an attempt to circumvent the EU bonus cap.

[Richard Fuller]

Will the hon. Lady give way?

[Mr Marcus Jones (Nuneaton) (Con)]

Will the hon. Lady give way?

--- Later in debate ---

[Andrea Leadsom]

I am glad that my hon. Friend has raised that point, and I am happy to reiterate my remark that the financial services sector employs up to 2 million in this country, most of them outside the City and many of them doing regular jobs in banks and call centres, or even in places such as a new dealing room that has been set up outside Birmingham, which I recently had the pleasure of visiting. All those people are as mortified as the rest of us at the behaviour of a few, so it is always important to remember that we are talking about the behaviour of a few, not of the many.

The third thing that the Government have done is to improve the accountability of bankers. I hope hon. Members will agree that the vast majority of people in the financial sector are decent people who have played by the rules and just want to get on with providing a valued and trusted service to their customers. We must have high standards in banking, because that is what will help the UK to continue to thrive as a leading and trusted financial centre. The sector remains a huge asset to the British economy, contributing almost an eighth of the total tax receipts and giving us a trade surplus of £16 billion last year.

Banking oils the wheels of the economy, helps our businesses grow, fosters investment and boosts aspiration. When bankers get it right, it is a driver of this country’s growth. When they get it wrong, the damage is consequentially enormous, because it threatens the livelihood of millions of people in this country, as we saw during the financial crisis.

The public will want to know that this Government have made reckless misconduct leading to bank failure a criminal offence, and overseen banks being fined heavily for their worst excesses. There have been £450 million of fines for the disgraceful rigging of LIBOR and £1.1 billion of fines for the manipulation of foreign exchange rates—disgusting and unacceptable behaviour. I know that all Members will be reassured to know that the Serious Fraud Office has opened investigations into a number of individuals in relation to the manipulation of LIBOR and forex. Of course, many firms have sacked and dismissed staff found guilty as part of their own internal investigations.

[Richard Fuller]

My hon. Friend is now stressing one point that the everyday people feel is most important about the reform of our banking system—that when bankers do wrong, they should face criminal prosecution and the prospect of jail. Is she satisfied that we now have the right measures in place—measures that the last Government did not put in place—and will she assure the House that she will ensure that the Government use all their powers to enforce the regulations as far as possible?

[Andrea Leadsom]

That is an important point. This Government have taken every step we can think of to ensure accountability, prevent future wrongdoing and improve standards in banking. We are always open to new suggestions, but it is our genuine belief that we have fundamentally changed the underlying systems that banks work with. I can certainly reassure my hon. Friend that when I speak to the chief executives of banks, as I do regularly, they assure me that they, too, take the matter extremely seriously and have put in place checks so that they can indentify wrongdoing and punish the offenders under their own steam, as hon. Members will have seen in the press today.

Oral Answers to Questions

Richard Fuller Excerpts

Tuesday 27th January 2015 Commons Chamber

[Priti Patel]

Let us put this into some context. For a start, tax credit spending rocketed under the previous Government and throughout this Parliament we have made it abundantly clear that we support those with low incomes. Let us not forget either that the impact of Labour’s great recession is still being felt. We continue to help people with the cost of living through the increases in personal allowances, the freeze in fuel duty, cuts in council tax and, of course, by reducing the cost of child care.

[Richard Fuller (Bedford) (Con)]

Working tax credits are in effect a form of corporate welfare for employers who could pay higher wages, especially if tied to increased skills. Will the Minister continue her conversations with the Minister for Skills and Equalities about ways in which we can create a combination of those two, perhaps in the form of tax credits for training, such as proposed by Premier Inn?

[Priti Patel]

I thank my hon. Friend for his suggestion. He is right that more can be done through working with business and learning from their suggestions.

Charter for Budget Responsibility

Richard Fuller Excerpts

Tuesday 13th January 2015 Commons Chamber

[Ed Balls]

Of course that is exactly what the Chancellor has done in this Parliament. In 2010, when he set his first mandate, he said that this would be done by the end of the rolling five-year forecast period. In 2010, the Prime Minister clearly thought that that meant 2015 but the Chancellor now thinks it means 2018 or 2019, which is why he still says he is meeting his fiscal target. Everybody else can see it is a completely preposterous claim.

[Richard Fuller (Bedford) (Con)]

The shadow Chancellor has called this proposal a load of “pony and trap”, which I believe is a metaphor for something else. He has also called it a “gimmick”. He knows that many in his own party oppose it, but he has not explained to this House why he is forcing them to vote for it.

[Ed Balls]

The hon. Gentleman did not mention the quote from the TaxPayers Alliance, which also said it was a complete gimmick. That simply exposes the fact that the Chancellor has failed to meet his targets. Now let me come on to our fiscal position—

Finance Bill

Richard Fuller Excerpts

Tuesday 1st July 2014 Commons Chamber

[John McDonnell]

I will be fairly brief.

Under the last Government, I moved amendments like the new clause on virtually every Finance Bill. It has always made me anxious when Governments resist the requirement to provide information. That is all that is sought in the new clause. It simply looks to ensure that the House is properly informed about the impact of a differential tax rate. For the life of me, I could not understand why such amendments were resisted by the last Government, and I cannot understand why the new clause is being resisted now.

[Richard Fuller (Bedford) (Con)]

On the point about being informed, does the hon. Gentleman think it unwise that the Leader of the Opposition has already stated that he will increase the rate to 50p?

[John McDonnell]

I want openness and transparency. I would prefer people to put their cards on the table in the run-up to the general election, so that the electorate know where everyone stands. It would be invaluable for all parties in the House to have the information that is requested in the new clause, so that they could test it and see whether the hypothesis that has been put forward by the right hon. Member for Wokingham (Mr Redwood) and others is accurate. I do not believe that it is.

This debate goes much wider than the 50p rate of income tax. Members need to wake up to that. A few months ago, the Mayor of London ordered water cannon in case there are more demonstrations and riots. There is a deep feeling of unease and a building anger in our community about inequality. People do not usually mobilise and go out on the streets in the depths of a recession. Let us look at what has happened elsewhere: people get angry, mobilise and go out on the streets when they feel that the country is coming out of recession, but they are not sharing in the benefits from the sacrifices that have been made. We have asked people in this country to make immense sacrifices.

We should look at the various reports that have come out. A few months ago the Oxfam report exposed the fact that for the first time more of the people who are in poverty are in work than out of work. More children are therefore growing up in poverty in working families than in non-working families. I think that that is a first in the history of this country. A survey by Save the Children showed that, as a result of poverty, a staggering number of parents are going without food so that their children can eat. It showed the number of children who have never had a winter coat because their parents are unable to afford one. All that is building up into a significant anger about the inequality in our society.

Taxation rates are therefore not just about the income that they raise; they are about tackling inequality. The right hon. Member for Wokingham said that this has been happening over a long period. We now live in a society that is more unequal than it has been since Victorian times. It is true that for a short period in this recession, the Gini coefficient went down for two years. However, according to HMRC figures, it started rising again in 2012-13. I think that that will provoke anger in our community. Politicians need to be aware of that anger. Unless we do something about it, it will be difficult to contain.

That is why Governments need to be seen to be addressing the appalling inequality in our society. One way of doing that is to redistribute wealth, as Governments ought to do. The new clause does not talk about the vast maldistribution of wealth in our society. One publication from the Treasury revealed:

“The top 10% of earners in Britain have salaries which are equal to more than the bottom 40% of earners”.

That is absolutely staggering, and that is just about earnings: in some FTSE 100 companies, the chief executive and the directors earn 166 times the average wage of the workers.

Taxation is about addressing inequality. The new clause simply looks at one element of taxation and asks for an accurate report on whether it helps in the redistribution of wealth and in tackling inequality.

[Richard Fuller]

The hon. Gentleman has expressed his concerns about rising inequality. Why does he think the Opposition have been so timid in proposing remedies? Are they afraid of something? Are they worried what the media might say?

[John McDonnell]

I will give the Labour party the benefit of the doubt. It has the national policy forum at the weekend, where there is the discussion and development of policy. That is the healthiest level of democracy we have had in the party for a number of years. I hope that it is bubbling up into a comprehensive programme that we can put before the electorate and that addresses the central issue of inequality. One way of doing that is to have accurate information before us, which is what the new clause seeks.

I will finish there because I know that other Members want to speak. I just warn the House that unless we address inequality, we will reap a whirlwind in our society. We saw riots only a few years ago. I think that the injustices in the distribution of wealth will provoke even greater conflict in our society unless it is addressed.

--- Later in debate ---

[Mr Gauke]

There is no evidence that HMRC’s original analysis was wrong. When the Opposition announced earlier this year that Labour would introduce a 50p rate, they claimed that a new £10 billion had emerged that had previously not been taken into account. That turned out not to be the case, however; they got that completely wrong. The data still point in the direction that HMRC’s conclusions are as I have suggested, and there is no reason to believe that the analysis was wrong. The fact is that the 50p rate is an ineffective way of raising money from the wealthiest.

[Richard Fuller]

Is the Minister as concerned as I am that Labour Members are not simply calling for a 50p rate? We have also heard calls for a 60p and a 70p rate. Are they not trying to set the tone for what has already been introduced in France—namely, a rate that is much higher than 50%?

[Mr Gauke]

I note the fact that the right hon. Member for Holborn and St Pancras referred to a rate of “at least 50p”, and I suspect that he speaks for many of his colleagues in that regard. The fact is that there is an ideological divide involved here, in that the Opposition want the higher rate, regardless of the practicalities.

The reality is that, if we want to raise money from the wealthiest, a high rate of income tax is ineffective. My right hon. Friend the Member for Wokingham (Mr Redwood) made it clear that the changes in the 1980s resulted in more income being raised from the wealthiest. If we want to raise money from the wealthiest, there are much better ways of doing it, as my hon. Friend the Member for Redcar (Ian Swales) said. For example, we have taken a number of steps to deal with avoidance and disguised remuneration—those measures were opposed by Labour, by the way—and to deal with stamp duty avoidance. We have increased stamp duty rates. We have also introduced measures relating to capital gains tax and restricted the cost of the pensions tax relief. Those measures have raised far more than the revenue forgone from the 50p rate.

We talk about priorities. Let me set out one fact for the House. Even if we put aside the additional sums raised from the wealthiest, and even if we put aside the damage to competitiveness from the 50p rate, for every £1 forgone as a result of our measures on the 50p rate, we have forgone £160 as a consequence of the increase in the personal allowance. That is where our priorities lie, and I am proud of that record.

--- Later in debate ---

[Chris Evans]

My hon. Friend advances the argument eloquently. We debate these issues and talk about employment rights, but if someone is in a poor workplace, is struggling to pay the rent or the mortgage and the bills, and faces a severe threat that they might lose their job, they might be forced into doing this. In many non-unionised businesses there will be nobody to police this, so those people might be forced into it. She powerfully made the point about how women, in particular, are in that type of situation.

I should have made my next point before the hon. Member for Eastbourne (Stephen Lloyd) intervened on me, but I will do so now. Paul Callaghan, partner in the employment team at Taylor Wessing, has said:

“Osborne is potentially forcing all new employees to waive the main employment rights including unfair dismissal and redundancy rights in exchange for £2,000 of shares. This makes Adrian Beecroft’s fire at will proposals look moderate.

From April it may become the norm for job offers to require this waiver which will also involve the loss of flexible working rights and stricter maternity rights. This is likely to have a disproportionate effect on women.”

Henry Stewart, founder and chief executive of the training company Happy Ltd, has said:

“I welcome anything which makes it cheaper and simpler to give employees shares, but coupling it with taking away employment rights is ridiculous. If as an employer you have a problem with unfair dismissals, you need to improve management—that’s what the government should be giving incentives for. I don't think it's been thought through.”

In a nutshell that sums up what I think of this proposal. Bad employers who are afraid of unfair dismissal cases, reprisals, recrimination and grievances from employees should think about how they are managing their staff and look hard at their human resources department.

Corey Rosen, founder of the National Centre for Employee Ownership, one of the world’s leading groups promoting share ownership, has said:

“There is a lot of employee ownership in our country, but not one of these employees and not one of these plans asks employees to give up any employment rights to get any of the various tax benefits associated with employee ownership.”

That is a voice from the United States, not somewhere known for being particularly friendly to those in trade unions or on employment rights.

Simon Caulkin, writer on management and business, has said:

“In effect, Osborne's cobbled-together scheme is a back-door re-run of the agenda of…Beecroft”.

Rebecca Briam, partner at Gannons Solicitors, said:

“It is unlikely to get off the ground.”

With only five businesses out of 200 wanting to take up the scheme, I think she is right. She goes on to say:

“The proposals will be unpopular with employees because the chances of benefitting are so slim.”

She said that it was

“unpopular with employers, especially privately controlled companies, because of the risks imposed to the share structure. Far from saving on payroll expenses, the total costs for an employer may well increase.”

Manufacturers’ organisation EEF said:

“Our members have indicated they would not implement the new status.”

The Federation of Small Businesses said:

“The scheme is unlikely to be appropriate for many small businesses.”

The Chartered Institute of Personnel and Development said:

“There is very little evidence as to why this policy is needed or what impact it will have.”

Such views support the new clause that is before us.

Earlier, I talked about the vehicles that are created for the purpose of tax avoidance. Matthew Findley, partner at law firm Pinsent Masons, addressed that matter quite eloquently. He noted that the income tax positions of those receiving the shares is still unclear:

“There is nothing in what the Government has said so far that would stop senior executives or substantial shareholders from participating in the arrangement. This may mean that an opportunity still exists for such individuals, even if they may be viewed by some as the ‘wrong’ people politically to benefit.”

Paul Johnson from the Institute for Fiscal Studies talked about the potential for tax avoidance as the scheme

“prepares to put another billion pound lollipop on the table.”

He says:

“Just as Government Ministers are falling over themselves to condemn such behaviour, that same Government is trumpeting a new tax policy which looks like it will foster a whole new avoidance industry.”

An avoidance industry is something of which a Government who want to create jobs cannot be proud.

I support new clause 11. As there has been such a low take-up of the scheme—only five in 200 companies have said that they would consider it—a report needs to be produced. Numerous commentators from the business community have expressed the fear that a new tax avoidance scheme is being set up, which suggests that this is a pertinent and sensible new clause, and I urge the Government to accept it.

[Richard Fuller]

I am pleased to follow the hon. Member for Islwyn (Chris Evans), who spoke with great authority, drawing as he did on his experiences as a trade union official before he was a Member of Parliament. I will, if I may, draw on some of my own experiences of working with small businesses. In that regard, I draw Members’ attention to my entry in the Register of Members’ Interests.

I apologise to the hon. Member for Newcastle upon Tyne North (Catherine McKinnell) for missing the beginning of her comments. I thought that she spoke persuasively and eloquently about some of the issues and about the policy that the Government have introduced. She had me persuaded all the way, until she referred to the spare room subsidy as a tax. It is just not a tax, and it is such a shame when bad slogans happen to good people because all the persuasion power of their speeches is lost. The rest of her speech raised some important points.

We should put the new clause into context. The Government have an extraordinary long-term economic plan that is delivering improvements to the economic lives of my constituents in Bedford and Kempston. It impacts on their ability to find work and get into work. It also raises their average weekly earnings, which is a major concern for many people. It is good to see the plan starting to bear fruit.

Perhaps now is not a good time for an ordinary Tory Back-Bench Member to criticise the Government, but if my hon. Friend the Minister will forgive me, I will do so. We are looking here at a policy in search of a problem; we are not really looking at something that will have a dramatic impact on the well-being of our businesses or our employees. I am open to being persuaded by the Minister. He usually persuades me and I am sure that he will do so today, but perhaps I could go through some of my experiences from when I was in business relating to two parts of our debate.

On the one hand, we have employee and workers’ rights and, on the other, we have employee shareholdings. The approach seems to be to conflate those two issues into one policy and I am not sure whether that will ultimately prove to be wise. In my experience as an employer, although employees’ issues in employment sometimes concerned the extent of employee rights, red tape and regulation often led to far more concerns about the impact of government on the business. In addition, the problem was not necessarily the rights per se but the complexity of the regulations. For a small business, just understanding the regulations to comply with them causes problems. I am not sure that the problem was specifically the rights that were given to employees. Is the objective in this case to reduce the complexity of regulation for businesses through the use of the combination of employee shareholdings, or is there some other objective?

The hon. Member for Islwyn mentioned some of the issues when companies give shares to employees. For a large part of my life, I have worked with technology businesses and the provision of shares was a norm for business. It was a way in which many companies could afford to start, to grow and to prosper. In those circumstances, people were given shares not because of their employee rights but as an incentive either to reward effort or to encourage effort to promote the success of the company. It was also a matter of the trade-off of rewards. Many small companies did not want to use the cash they got from investors to pay high or market rates to their employees and wished to defer that by providing people with the opportunity to have shares to share in the ultimate long-term success of the business. That is a tremendously powerful model for many sectors, not just the technology sector but other sectors of our economy, in that people are willing to trade off immediate returns for long-term rewards.

When we consider other ways to think about compensation, which will, I think, be a growing issue over the next five years, we must consider how to encourage people to defer some of their compensation until later in their lives. I can understand how the promotion of employee shareholding helps with short and long-term rewards, but my concern is that combining that with employee rights means that clarity might be lost. Rather than being given a positive impression about why we are encouraging employees to become shareholders, people will instead ask whether there is a catch. It should be absolutely clear that there is no catch when people are being offered shares. This is clearly an issue of deferring compensation from period x to period y.

I am concerned that, as I have said, this is perhaps a policy in search of a problem. As with so much that Government do, we will see unintended consequences. If the new clause is targeted at small businesses, we must remember that the Government have other options at their disposal. Just a week or two ago, the Centre for Policy Studies produced some very positive policies about abolishing corporation tax for very small businesses and abolishing capital gains tax for investors. To my mind, that would have more of an impact on encouraging more entrepreneurial businesses. We have recently seen news about the merger of national insurance and income tax, which would alleviate some of the burdens and complexity for business in managing employees.

[Bob Stewart (Beckenham) (Con)]

When I visit small businesses in my constituency, I am sometimes quite shocked that, say, one person out of 10—a large proportion of the staff—has to spend all his or her time dealing with regulations and sorting out the problems they cause rather than getting on with making money.

[Richard Fuller]

My hon. Friend speaks from great experience and is, as usual, exactly on the point. For many small business people, the biggest constraint is time: they have to be the sales person, the accountant, the HR person and the form filler. The policy that has given rise to new clause 11 is supposed to be helping those people, but I think there are many other ways we can support our small businesses that would have a greater impact.

One of those is that the Department for Business, Innovation and Skills should lose its great focus on a grand industrial policy, centred on our large corporations, and start to show a bit of passion about our small businesses. I know that the Secretary of State is a good friend of the Treasury Bench—obviously, he is a member of it—but somehow we are not getting the focus and heart for our small businesses that we should be getting, and it would be good to hear that voice coming through louder and clearer.

I am drawn by Opposition Members’ eloquence on the questions they are raising about this policy. It did not occur to me at the start of our support for the policy that it was going to be a big policy that would have an impact on many businesses. I would be interested to hear an update from the Minister on where the policy is taking us and what our goals are when it comes to promoting employee shareholding. What are his concerns? Does he share my concern that, in trying to put together promotion of employee shareholding and reductions in employee rights, we may be failing to make progress on two issues, rather than making progress on both?

[Mike Kane]

It is a delight to follow the hon. Member for Bedford (Richard Fuller), who spoke with such authority about his work now and previously with small businesses. It was a pleasure to serve with him on the Finance Bill Committee, where generally he spoke loyally from the Government Benches on his party’s agenda, even though he disagrees slightly with the policy before the House now. It is also a pleasure to follow my hon. Friend the Member for Islwyn (Chris Evans), who spoke articulately and ably, using his experience as a former trade union official.

I believe that shares for rights as it has been proposed lacks common human dignity. We know that the main purpose of Government is to protect individuals, communities and their property from exploitation and harm; Government must also provide a stable economic, social and legal framework for businesses and economies to thrive. The proposal does not do that. As I mentioned earlier, Lord O’Donnell described shares for rights as a form of modern-day slavery. It creates a two-tier market and a two-tier work force—one part having sold its rights and the other retaining them. I think that that is wrong for our economy.

The policy was announced with great fanfare in 2013, but the shares for rights scheme cannot be described as anything other than a massive flop. It is also proving to be another bone of contention in our fractured coalition. The Under-Secretary of State for Business, Innovation and Skills, the hon. Member for East Dunbartonshire (Jo Swinson), and the Secretary of State are nowhere to be seen near the proposal. The real problem, though, as the Chancellor has found, is that it has been impossible to get employer organisations to back the scheme. As my hon. Friend the Member for Newcastle upon Tyne North (Catherine McKinnell) said, according to the most recent information we have—hopefully, the Minister will update us—there were 19 expressions of interest by December last year. The Office for Budget Responsibility says it could be used as a tax dodge, costing us—the Treasury—nearly £1 billion a year. In this age of austerity, that is the last type of policy we need to be introducing.

Ministers seek to introduce the scheme without proper discussion, and without proper consultation, as my hon. Friend the Member for Islwyn said, and have proceeded in what can only be described as a very chaotic way. Following the publication of the details of the scheme, a Government source was quoted as saying that the scheme was on “life support”, but Ministers still went ahead. As was mentioned earlier, John Cridland, director-general of the CBI, said that this was a niche idea that businesses really do not want. There is unanimity among people who really care about employers and their rights and those Opposition Members who believe that employees should also be shareholders and work hard in their small and medium-sized enterprises, where most employees now reside.

Oral Answers to Questions

Richard Fuller Excerpts

Thursday 1st May 2014 Commons Chamber

[Mrs Grant]

I grew up in an area close to the north-east, and I know how fabulous it is. We have an excellent domestic tourism package, and VisitEngland has launched two brilliant “holidays at home” campaigns, which have generated millions of pounds of incremental spending. I hope that the hon. Lady’s constituency will benefit from that.

[Richard Fuller (Bedford) (Con)]

As chairman of the all-party parliamentary group on American football—and I declare my interest in that regard—I can tell the House that when it comes to sport-related tourism, I know of no sport that has the same potential. Will my hon. Friend join me in congratulating the National Football League on hosting three American football games at Wembley this year, and will she welcome the visitors who will come to support the Miami Dolphins, the Oakland Raiders, the Detroit Lions, the Atlanta Falcons, the Dallas Cowboys and the Jacksonville Jaguars?

[Mrs Grant]

I probably just need to say yes to all that—and many congratulations to all concerned.

Oral Answers to Questions

Richard Fuller Excerpts

Tuesday 11th March 2014 Commons Chamber

[Mr Gauke]

I have to remind the hon. Lady of the state of the public finances when we came to office and the very difficult circumstances that we face. The fact that 2.7 million people have been taken out of income tax as a consequence of our policies shows the emphasis by the coalition Government on supporting those in low-paid work.

[Richard Fuller (Bedford) (Con)]

The Minister is absolutely right about the commitment of our Liberal Democrat and Conservative colleagues in increasing the tax threshold. What consideration has my hon. Friend given to looking similarly to national insurance contributions?

[Mr Gauke]

My hon. Friend makes an important point. We have to look across the board, and what we see is a Government who, in difficult circumstances, while taking difficult decisions to reduce the deficit, have made every effort to ensure that work pays. I am sure that we will continue to do so.

--- Later in debate ---

[Sajid Javid]

The failed regulation by the previous Government that led to Government ownership of RBS also produced a system of governance that is done on an arm’s length basis. Those are commercial decisions for RBS. If the hon. Gentleman wants to make representations to it, he can do so through me if he wishes.

[Richard Fuller (Bedford) (Con)]

T1. If he will make a statement on his departmental responsibilities.

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

The core purpose of the Treasury is to ensure the stability and prosperity of the UK economy. I can tell the House today that I am publishing the first review of compliance with the rules on tax arrangements for public sector workers. Compliance with those rules has been high, but details have been passed to Her Majesty’s Revenue and Customs in 125 cases where appropriate assurances have not been received, and I have imposed financial sanctions on two Departments that have breached the rules. The intention is to send a clear message that everyone should pay their taxes.

[Richard Fuller]

Since 2010, unemployment in Bedford has come down and average weekly earnings have gone from below the national average to above the national average thanks to the commitment of local people to making difficult decisions in tough economic times and the Government’s commitment to their long-term economic plan. Does the Minister agree that the biggest risk, given that the British Chamber of Commerce is forecasting higher growth next year, is for us to abandon that plan and adopt the policies of the shadow Chief Secretary to the Treasury, who has never had a proper job in his life?

Fairness and Inequality

Richard Fuller Excerpts

Tuesday 11th February 2014 Commons Chamber

[Jonathan Edwards]

In that regard, the Democratic Unionist party and Plaid Cymru share a common vision, in that we need to empower our respective Governments to deal with the economic and social challenges that our people face.

I want to set out how and why this inequality has been allowed to take a grip and, indeed, been actively pursued by the powers that be. I will also set out how that can be reversed, and how places such as Wales can become more prosperous and egalitarian societies. We have seen the over-concentration of power, status and influence in a narrow and unrepresentative financial elite over the past three decades. That has allowed greed, avarice and hubris to take hold among the elite’s own ranks, while poverty, destitution and exclusion have risen among much of the rest of society.

The uneven economic development of the UK and the concentration of so much wealth and power around London and the south-east distort much of the UK’s public life. They influence and shape many of the political, media and business perceptions about what is good for the entire UK, and lead to geographical polarisation and a super-concentration by Westminster politicians on certain sectors of the population whose opinion is seen as worth courting and listening to.

[Richard Fuller (Bedford) (Con)]

I am listening with great interest to what the hon. Gentleman is saying. Does he think that that concentration of power and authority in London and certain other parts of the country was a natural change that occurred as a result of global changes and that the Government did nothing to mitigate it, or does he think that it was a result of active Government policies over the past three decades?

--- Later in debate ---

[Stephen Crabb]

I am not sure that I recognise the figures that the hon. Lady gives.

[Richard Fuller]

Will the Minister assure the House that he understands the figures even if the Opposition do not, and that between 1995 and 2010 the total indebtedness of the UK went from twice the size of the economy to five times the size of the economy, making us the most indebted major economy in the world?

[Stephen Crabb]

My hon. Friend explains it very well for the benefit of Members of all parties. Under the previous Labour Government, the trajectory of public spending was set on a reckless course, and when the banking crisis hit, the true consequences were felt by hard-working families throughout the country.

--- Later in debate ---

[Mr MacNeil]

Very good, Mr Deputy Speaker.

It is a slight concern of mine, however, that the captains of industry, as they get called, or the high-bonus City bankers or hedge fund managers, have never had that experience at a young age and have not engaged meaningfully with sympathy for the situation that others may be in as they gobble all the chocolates of productivity that our economy has produced, believing instead that they are self-made men and self-made women who worship their own creators.

[Richard Fuller]

Before the hon. Gentleman moves on from his Milk Tray doctrine of equality, will he accept that very many of us do learn those lessons in school and do not necessarily need the Government to act for us to fulfil our responsibilities as individuals? What would he say about considering ways to exhort people who have wealth, regardless of the taxes they pay, to give more to others?

[Mr MacNeil]

The hon. Gentleman’s intervention is laudable, and I understand what he says, but I disagree. The consensus post the great depression of the 1930s showed the importance of regulation, and that lesson was probably forgotten by the 1980s in the era of the Reagan-Thatcher deregulation that led up to the precipitous problems that finally exploded six years ago. In the absence of regulation, people have to look into their own hearts, but sometimes we can spend far too long doing that. The rule of politics, Parliament and Government is to ensure that we have the structures whereby all can benefit and they are not just dependent on the whim of some well-meaning individuals who may be a minority among the wealthy and could direct their contribution in the wrong way.

Before I get to the body of my speech, I have a final example of something that I think informs the human condition, namely the observations of anthropologists on hunter-gatherer societies. I hope this will also inform the debate, because I think that inequality is essentially about human choices—perhaps even bias—whether they be conscious or subconscious.

Anthropologists note that hunter-gatherer bands did two main things: they hunted and they gathered, hence, of course, the name—there is no need to be a Nobel prize winner to spot that. The crucial observation is that they treated the products of the hunt and the gather very differently. The products of the hunt were shared out almost instinctively, with many people who might not even have been on the hunt getting a share. Anthropologists explain this as the sharing of luck and good fortune, with those on the hunt realising that they might not have had a successful hunt in different circumstances and that, given the way in which the society of the day was arranged, they might earn the good will of others who might be lucky on another day.

That sharing, however, was not mirrored in the gather, and anthropologists reckon that that was due to the labour and endeavours of the individual graft and application of the gather.

--- Later in debate ---

[Guto Bebb]

Obviously, I do not accept most of the hon. Gentleman’s arguments; certainly, we should be careful about taking lessons from the Irish implosion. Ireland is probably one of the few countries to have a banking crisis even greater than ours. Many of the eastern European accession countries have managed to create vibrant economies by imposing low-tax regimes, and the whole of the UK should look carefully at those countries’ performance.

In the debate about whether we have a 50p, a 45p or a 40p tax rate, I remind Labour that it found the 40p tax rate completely acceptable for the vast majority of its 13 years in government. What is the purpose of income tax? That is a question that is often forgotten. Its purpose is not to bring down and punish the successful. If we believe in a more equal society, we want more money coming into the Exchequer, because that means we can do more to support the less well-off in society, but we have lost sight of that argument. If we reduce taxes and get more money coming into the Exchequer, that is something that should be welcomed. Time and again, it has been shown that when taxes are reduced, more often than not, the result is more economic activity and a greater success story.

[Richard Fuller]

Does it not strike at the economic illiteracy of the shadow Front-Bench team that they are far more interested in a headline tax rate than in raising revenue to pay for the public services people want?

--- Later in debate ---

[Richard Fuller (Bedford) (Con)]

The hon. Member for Oldham East and Saddleworth (Debbie Abrahams) brings to this House a wealth of experience and understanding from her previous work in the area of health, and I hope that the House listened carefully, as I did, to her comments about the interaction between differences in health and the perpetuation of inequality in our country. However, I did disagree with some points in her critique, which I shall discuss later; most importantly, there was an absence of a full understanding of the context in which this Government are taking actions to address fairness and inequality.

I, like many people, get somewhat concerned and uneasy when I hear politicians bandying around words such as “fairness”, “equality” or “inequality”. History has taught people that when politicians profess themselves in favour of fairness, they too often end up enriching themselves and those politicians who would rally people to the banner of equality too often end up repressing those same people once power has been given to them. So it was with some trepidation that I came to this debate, but the prospect of being able to listen to perspectives on those issues from Members of this Parliament from different parts of the UK attracted me, and I have not been disappointed, either by the opening speech or by those of other hon. Members.

Judgments about what is fair or not fair, or about the balance between equality and inequality, are best left to individuals and families. People are perfectly capable of making those decisions based on what they have learned from their parents and grandparents, on what they have been taught in school or, perhaps, on the lessons they have learned in their church, synagogue, mosque or temple. Politicians fall rather low down the list of people who can be persuasive on those topics. Nevertheless, we shall battle forth.

[Mr MacNeil]

I do not disagree in any way, shape or form that people can make assessments about what is iniquitous or unfair, but the hon. Gentleman needs to go further down the road, because when people see inequity and unfairness they do not have the power to do anything about it. That is when this place and national Parliaments around the world have to regulate, reform things and so on to make sure we have the situation we had after world war two: a better settlement for the greatest breadth of citizenry.

[Richard Fuller]

I am grateful to the hon. Gentleman for that helpful intervention. Let us assess the ability of Government today to fulfil that positive role. One of the most important aspects of fairness is the future that we bequeath to our children and grandchildren. It is a natural aspect of human behaviour to want to give the best start in life to our children and grandchildren. One of the worst aspects of the context in which we are operating today, as a Government and as a Parliament, is that under the previous Government, we built up the most significant amount of debt to pass on to our children and grandchildren. One of the most important aspects of what the Opposition call the cost of living crisis—my constituents think of it as trying to meet the family budget—is the debt that was left by the previous Government for this Government to deal with.

The Opposition like to talk about the level of Government debt at that time, but a Chancellor of the Exchequer is custodian not just of part of the economy but of the entire economy, and, before he makes a decision, he has to look at the strength of the economy. It is an incontrovertible fact that the level of indebtedness of this country in 1995—Government debt, household debt and corporate debt—was about two times the size of the economy, and when the Labour party left office, it was five times the size of the economy. We do not need to have a credit card to know that we have to pay off all that debt, and not just part of it.

[Debbie Abrahams]

Will the hon. Gentleman explain the decisions that were made in the Health and Social Care Act 2012, which had nothing to do with the debt? We recognise the economic context, although we could quibble about the causes and whether we reduced the level of debt. I believe that we reduced it while we were in power. None the less, the specific policies of the Act had nothing to do with that debt. They were choices that the Government would have driven through regardless of the economic context.

[Richard Fuller]

The hon. Lady is repeating the point that she made in her speech. I am sure that the Minister will want to address it now or later. Earlier on, she missed this major contextual factor, which is somehow the Government must be able to manage the economy while dealing with a substantial overhang of debt, and individual families are doing that as well. That is a root and crucial part of how we can achieve a more equal society. We cannot achieve an equal society if we permit Government to pass on massive debts to future generations without any liability themselves.

[David T. C. Davies]

My hon. Friend is making an excellent speech. Does he find it as extraordinary as I do that that debt was being racked up from 2001 onwards at an average rate of about £30 billion a year, long before the financial crisis struck?

[Richard Fuller]

I appreciate my hon. Friend’s intervention. He is drawing our attention to the Government part of the debt, but I have to tell him that the stewardship of the economy by the Government was worse even before then. We, as people who can vote in Governments and as citizens, have to take that responsibility ourselves, too. We are responsible for what this generation does, whether it is our Government, our corporations or any other aspect of society, but we pass on those consequences to our children and grandchildren and they will inherit either a more equal and more prosperous society or a less equal and less prosperous society because of the decisions that we make as individuals and the way in which we hold our Government to account.

[Sheila Gilmore]

rose—

[Richard Fuller]

With respect, others wish to speak, so I will move on now to specific parts of the motion.

Let me address the issue of austerity measures and why they are in place. First, there is the fact that we have accumulated too much debt. Another issue is the ripple effects of that debt crisis. As the Government deal with the overriding debt, individual families, especially those in vulnerable circumstances, are pushed to the edge and need to go to payday lenders and other high interest rate lenders to deal with the consequences of that macro-financial situation. The individual circumstances of individual households have to be taken into account.

The other issue—again, it is the legacy of what occurred in preceding years—is the way in which house prices have become detached from incomes. Shelter is running a campaign on the issue, and although it is an interesting point to raise, I think that it is about 10 years too late. In the Living Wage Commission report, to which many hon. Members have referred, there is an interesting chart—figure 1.21—which looks at the ratio of house prices to earnings for the years 1952, 1975, 1997 and 2012. For the entire period from 1952 to 1997, the ratio of house prices to income fell. In 1952, it was five times the average income, but by 1997, it was 4.1 times. In the period from 1997 to 2012, it rose from 4.1 times to 6.7 times; 100% of that increase took place in the period to 2007. If we look at the cost of living and the cost of housing—part of enabling people to own their own home, get on the property ladder and pay their rent—we see that the issue of inequality will take time to resolve, because it took us a long time to get into that mess in the first place.

The motion refers to women and relative pay. I want to draw to the attention of the House, not by way of answer but by way of contribution to the argument, the House of Commons economic indicators report for February 2014. It looks at the gender pay gap and it makes the broad point that the overall pay gap between men and women has decreased steadily from 1997, but in considering whether the gap will be perpetuated in the future, it examines the gender pay gap by age range. For women and men between 18 and 39, the pay gap oscillates between 1.4% and 0.3%. For women over 40, it oscillates between 12% and 18%, which raises a question for policy makers such as the Minister: is that issue to do with career breaks and will it persist over time, or is it the result of a fairly good news story, with younger women and younger men on average having access to the same sort of jobs and pay, so that in about 20 years’ time the differential will go down? I do not put that forward as an answer, because I do not know the answer, but as a contribution to the debate and to broaden understanding.

There have been a number of contributions about the working poor, poverty and the living wage. We have discussed raising wages from the minimum wage level to living wage levels, but too frequently that would result in a small pay increase for the individuals concerned. It is a transaction between the employer and the Government in terms of the interaction of benefits and compensation. To contradict my hon. Friend the Member for North East Somerset (Jacob Rees-Mogg), who discussed the free market in wages—it is a small difference—I would argue that if in the low-pay sector Government are topping up wages to the tune of £10,000 on a £13,000 wage, which is the case for a married person with two children earning the minimum wage, the free market is far from working. There could be a strong argument, not only from the point of view of public finances but in order to have a freer market, for urging the Government to increase the pressure on companies by removing that subsidy, which is supporting labour. However, I should be interested to hear more from my hon. Friend.

[Jacob Rees-Mogg]

Is my hon. Friend aware that someone working 40 hours a week in receipt of the minimum wage would pay over £2,200 a year in tax, which must be part of the problem? I include in that employers’ national insurance.

--- Later in debate ---

[Richard Fuller]

My hon. Friend is absolutely right. This Government have sought to reverse the level of tax that people on low incomes pay, unlike the previous Government. In addition, with the employment allowance, the Government have a tool to encourage employers to increase pay for people on low incomes, and I hope that the Chancellor will do something about that.

We talk a lot about improving skills, which is important, but that does not work for everyone. Not everyone will want to take on additional skills. One aspect of pay that during my career in business changed dramatically was the recognition of tenure. It used to be the case that by doing the same job for two, three, five or 10 years, not improving one’s skills but just getting better at what one did, an increase in pay could be anticipated. We have lost sight of that too much over the last 10 or 15 years. We have said it is just one rate for the job, with no regard to tenure. I ask the Government to look at tenure as part of a more widespread response to the persistence of low pay in this country.

In addition to the promotion of a living wage by councils, there is an important point about the commissioning that councils do. There have been reports in the media recently about the commissioning of various types of service by local authorities that impact on the pay that can be earned by individuals, which is also an important point for the Government to consider.

I will not get into the debate about the rise of food banks under the last Government compared with now. Food banks provide a good service and I encourage people to support them as much as possible. I went to the food bank in Bedford and I pay tribute to the All Nations Church, to the Salvation Army and to the other Churches that run the food bank.

[Gordon Banks]

May I entice the hon. Gentleman to go into the matter of food banks a little? Has he seen the latest newsletter from the Trussell Trust, which somewhat contradicts the Minister’s position earlier? It says that 42% of all food bank users cite benefit-related problems as the reason why they use food banks.

[Richard Fuller]

I have not seen that report, but I have seen the data on those using the food bank in Bedford. For a large proportion of people the causes are related to benefit changes. I do not have the statistics, but within that group some people have been sanctioned for not complying with the benefit rules. Would the hon. Gentleman support policies that sanction people for not conforming with the benefit rules, or does he believe that they should not be sanctioned?

[Sheila Gilmore]

My constituents are not being sanctioned for not looking for a job, but for one-off incidents. One constituent rearranged an interview with the Work programme provider because of difficulties with her child’s school start times and was told that that was okay, but she was subsequently sanctioned. People are being sanctioned for minor infringements, almost on a whim.

[Richard Fuller]

I do not want the hon. Lady to conflate two things. If the 42% figure reflects the situation in Bedford, it is to do with the broader issues of benefits, which includes sanctions, changes to benefits and the specific examples that the hon. Lady mentioned, where the reason is fairly spurious or there is just a plain error. I do not believe such cases make up the 42% proportion, but they are part of it. But I am a Tory, so I understand that large bureaucracies forget the individual and people are caught by that. In my constituency—as I am sure the hon. Lady is in her constituency—I am creating a form with the local food bank provider so that when circumstances such as she describes occur, my office can be informed straight away. It is important that we as Members of Parliament use our power, when such spurious changes to benefits are made, to shorten the time that they take to resolve. For some of my constituents that can take six, seven, eight weeks or more, which is not correct if a sanction has been inappropriately applied.

[Gordon Banks]

I endorse what my hon. Friend the Member for Edinburgh East (Sheila Gilmore) said. I commend the hon. Gentleman on his work in moving things on for his constituents in respect of food banks. I do the same, as I am sure do many other right hon. and hon. Members, but I have had constituents who have been sanctioned because they have been ill and then, because they are sanctioned, they have no money to go to appointments, and are sanctioned again. That system is totally out of control.

[Richard Fuller]

I will not dwell on the matter. I have asked the hon. Gentleman whether he supports the process of sanctions. I would be interested to hear him explain in his speech what type of sanctions he supports and how he would implement them, if he had to take that responsibility.

The final part of the motion asks the Government to halt their spending cuts. If they halt that process, they have to look at increasing taxation. I am sure many hon. Members know that the ways in which we raise tax are moving more and more towards fewer people paying a larger proportion of tax, with 1% of the population paying 30% of income tax and 29,000 people paying 14% of income tax. On the one hand, this may be seen as an aspect of inequality. On the other, it may be seen as a fairly dangerous way in which a Government can raise money, in which case the shadow Chancellor’s proposal to increase tax rates again is probably inappropriate.

In some of the contributions from even those on the Government Benches, we convey the impression that the Labour Government were benign on tax. I draw the attention of the House and the Minister to what was going on between 2000 and 2010. It is in a House of Commons Library note called “Income tax: the additional 50p rate”, which looks at the top rate of tax, including social security contributions, between 2000 and 2010. It shows that in France that rate went down 10.6 percentage points, in Germany it went down by 5.8 percentage points, but in the United Kingdom between 2000 and 2010 that rate went up by 11 percentage points. So it is not fair to use the word that has been common in this debate or to maintain the perspective that somehow, under the Labour Government, the rich were getting off with low tax rates. The Labour Government were taxing people at a high rate. They started the process of a higher proportion of taxes being raised from fewer people, which results in a very difficult situation for people overall.

We have had an interesting debate and I look forward to hearing more contributions from hon. Members on fairness and equality. I have not yet been persuaded that politicians are best placed to determine that. I believe that individuals make their own judgments. I hope that by using some of the information that I have presented today, other contributions may be better placed to consider the issue.

Oral Answers to Questions

Richard Fuller Excerpts

Tuesday 10th December 2013 Commons Chamber

[Mr Gauke]

I am not sure that the hon. Lady heard the Chancellor correctly if that is what she thinks he said. The reality is that we have to get the deficit down and we have gone through two years of great challenges in the economy. Our argument was that because of those challenges it was more difficult to get the deficit down. Labour argued that the economy could not grow while getting the deficit down. We were right; they were wrong.

[Richard Fuller (Bedford) (Con)]

The record deficit left by the last Labour Government was, in essence, a tax on the future opportunities of our children and grandchildren, denying them opportunities that our generation was able to have. Will my hon. Friend assure the House that he will not repeat the mistakes of the last Labour Government and that he will prioritise further reductions in the deficit so that our grandchildren can have the same futures that we have enjoyed?

[Mr Gauke]

My hon. Friend is absolutely right. It is irresponsible to future generations if we do not take action to reduce the deficit. The approach we had from the party—[Interruption.] The shadow Chancellor has just said that the deficit is going up. He has been saying that all along, and I am afraid he is just plain wrong.