Solar Power and Feed-in Tariffs

Richard Graham Excerpts

Tuesday 29th March 2011 Westminster Hall

[Mr Vara]

Clearly, many will argue that the domestic market has a priority; others will argue in the same way as my hon. Friend. A decision has been taken, though clearly this will be reviewed regularly. It is not definitive, it is an ongoing matter.

[Richard Graham (Gloucester) (Con)]

Will my hon. Friend consider asking Ministers whether they would contemplate allowing the same feed-in tariffs to community buildings, including sports clubs and other local organisations, rather than large-scale commercial manufacturing of solar power?

[Mr Vara]

I am more than happy to pass that on to the relevant Minister. I hope colleagues will forgive me: I have about eight minutes and I wish to make progress.

The coalition is determined to drive a step change in ambition for the deployment of decentralised renewables and clean microgeneration technologies. As part of that, we are fully committed to feed-in tariffs for small-scale, low-carbon electricity generation. To meet our 2020 and longer-term targets we need to make the best use of all technologies that deliver renewables. Solar photovoltaic is part of the total picture. We expect that it will deliver a relatively small proportion of the overall total, but it can make a real contribution, especially at the household and community scale.

Solar PV has the advantage of being the only renewable technology that can be delivered easily at scale in the domestic context. It can be deployed quickly and does not have the disadvantages of noise and other local impacts, and at the small end of the scale does not need complex and expensive grid connections. Through permitted development rights, microgen-scale solar PV does not need planning permission. It can provide a range of benefits to the wider green agenda by engaging households and communities in the energy that they consume, and taking action to reduce their carbon footprint. Solar PV can work hand in hand with other initiatives, including the green deal.

It is important to remember that solar PV can be deployed on a range of scales. That can be small systems of 2.5 kW on domestic roofs that will provide a typical household with about half its electricity needs, through community scale schemes on school and hospital roofs of 10s of kW, to industrial scale schemes of several megawatts in fields or on warehouse or factory roofs. We need to question whether all those types of installation are appropriate for bill payers’ support at the current level of technological development. That is why we have launched the comprehensive and fast-track reviews of the FITs scheme.

Oral Answers to Questions

Richard Graham Excerpts

Tuesday 22nd March 2011 Commons Chamber

[Mr Gauke]

A week ago, the shadow Chancellor was saying that we needed an immediate cut in the tax on fuel and now the Labour party is saying that we should start a process that will take about seven years. That does not strike me as being terribly helpful.

[Richard Graham (Gloucester) (Con)]

In terms of the value for money of decisions taken by the Treasury, whether on road fuel tax or other things, does the Minister agree that one of the best value creations of this Government has been the increase in apprenticeships, which is widely appreciated around the country? Does he agree that apprenticeships are critical both to our growth strategy and to the reduction of youth—

[Mr Speaker]

Order. I am sorry, but that question suffers from the disadvantage that it bears absolutely no relation whatever to the question on the Order Paper.

Fuel Prices and the Cost of Living

Richard Graham Excerpts

Wednesday 16th March 2011 Commons Chamber

[Justine Greening]

Absolutely. They left many tax bombshells, but perhaps that pre-planned tax increase was the tax road mine. There was a pre-planned additional per pence increase on fuel and a pre-planned year-on-year RPI increase—the so-called escalator. Ironically and utterly bizarrely, we are today debating a Labour motion that goes against the policy introduced by the previous Labour Government.

[Richard Graham (Gloucester) (Con)]

Given that I and several Conservative Members were not in the House for Labour’s last Budget, will the Minister confirm whether the hon. Member for Wallasey (Ms Eagle) and her colleagues on the Opposition Front Bench voted for the seven increases in fuel duty proposed by the Chancellor at that time?

[Justine Greening]

I do not know exactly how they voted, but the previous Labour Government consistently increased fuel duty on motorists, taking no account of whether that was affordable.

Independent Financial Advisers (Regulation)

Richard Graham Excerpts

Monday 29th November 2010 Commons Chamber

[Mr Matthew Offord (Hendon) (Con)]

The FSA has been held by some observers to be weak and inactive in allowing irresponsible banking to precipitate the credit crunch in 2007, which, as many Members will know, involved the shrinking of the UK housing market, increased unemployment, the public acquisition of Northern Rock, and the takeover of HBOS by Lloyds TSB. I remain fundamentally concerned that we have allowed the same organisation to undertake a review of independent financial advisers in this country.

As you are no doubt aware, Mr Speaker, the FSA has devoted massive resources to the RDR over the last three years, during which time it had taken its eye off the ball so far as the banks were concerned. Ironically, the FSA’s light-touch regulation of the banks, which are, as many Members have said, responsible for the vast bulk of consumer complaints, went on simultaneously with the massive intensification in regulation of financial advisers, who cause hardly any complaints to the Financial Ombudsman Service.

That all came at a time when the mortgage market virtually ceased to exist for financial adviser firms through a combination of tighter lending criteria and positively anti-competitive practices such as dual pricing by lenders. As a result, many financial advisers and mortgage advisers have gone out of business and many more will face the same fate in the next few years.

The sector employs thousands of people, such as my constituent David Barnett who is listening not so far away, and advises millions of others, such as me. Many people will struggle in the years of austerity to come, and those people—our electors—need us to help them to balance their budgets and avert financial disaster when the worst happens. They are looking to us to do that tonight. We must also look towards the financial advisers, many of whom are part of the creation of small and medium-sized economies in rural areas and in some suburban areas, such as my constituency.

The RDR is a long and complex affair, and I shall not repeat the details now. My understanding from my constituents is that it boils down to two main themes—remuneration and qualifications. As it stands, it looks as though the entire remuneration system will be changed to one that will cause confusion, confrontation and a loss of service to the mass market. Qualification requirements are being ramped up and thousands of advisers are under pressure to gain their diplomas before 31 December next year. At the very time when business conditions have never been more difficult, advisers are being forced to spend hundreds of hours earning diploma points when they could be earning a living for their families.

The latest directive from the FSA is a requirement that whenever a life assurance policy is sold financial advisers must illustrate to the client the total premium cost over the entire policy term. The total cost of a life assurance policy is irrelevant—the only costs relevant in the purchase of life cover are that the premiums for the contract recommended are demonstrably fair and competitive for the type and extent of cover being bought when it is bought in a free market and that they consider the potential cost to the client and the client’s family of not having the cover if he or she suffers disabling ill health or death. Requiring an illustration of the total cost over a period of 20 to 25 years simply creates an off-putting and distorted impression to the consumer. Financial advisers are being asked to spell out the total theoretical cost of life cover and thereby to accentuate its negative aspects. A simile for this would be vehicle manufacturers giving prospective purchasers the likely finance, running and maintenance costs of the vehicle they are selling over its projected life. The FSA has gone too far. In fact, it went too far a long time ago, although it should certainly ensure that advisers are competent and honest.

[Richard Graham (Gloucester) (Con)]

Does my hon. Friend agree with the former chief ombudsman that the idea that complaints will go down after the RDR is wishful thinking? Does he agree with the head of HBOS that the main beneficiaries of RDR will be the bank assurers? We are looking at the law of unintended consequences.

[Mr Offord]

I certainly do agree with my hon. Friend and many others who have made the same point. The main beneficiaries will be the big banks, including many of those that got us into the difficult situation that the coalition Government are having to address.

I should like the FSA to keep its nose out of normal commercial transactions and to leave business to businessmen such as the many constituents who have been mentioned tonight. If the FSA should be giving the public any message, it should be, “Protection is valuable and essential, so you should see an IFA and get some.” Instead it gives out the message, “Look how much you’ll spend over the life of a policy,” without addressing the benefits of that policy.

Independent financial advisers would like to be left to get on with their jobs, employ people, pay their taxes and look after their clients. They create wealth, look after our voters and, unlike the massive, over-complicated, expensive and unnecessary changes proposed by the FSA in the RDR, their requests are very small, simple, cost-free and necessary. They are just asking the Government to direct the FSA to revise the outcome of the RDR so that there is no change whatever to the current rules on remuneration and disclosure and to move the deadline for diploma qualification to 1 January 2016. I ask the Minister to ensure the same.

Oral Answers to Questions

Richard Graham Excerpts

Tuesday 16th November 2010 Commons Chamber

[Mr Gauke]

It does families and everyone else in this country no good if we do not get to grips with the fiscal crisis. If the Opposition are saying households paying higher rate income tax should continue to receive child benefit while those who do not earn so much contribute towards that, it once again shows that they are not getting to grips with the scale of the crisis.

[Richard Graham (Gloucester) (Con)]

Does the Minister agree that the logic of the policy outlined by Opposition Members is that any child from Prince William and Catherine Middleton would benefit from child tax benefit, whereas the poorest of my constituents would not?

[Mr Speaker]

Members really should not refer to members of the royal family in questions. That is strongly to be deprecated, and it certainly should not happen again. I ask the Minister to give a very brief reply.

Equitable Life (Payments) Bill

Richard Graham Excerpts

Wednesday 10th November 2010 Commons Chamber

[David Rutley (Macclesfield) (Con)]

Like many others hon. Members, I have had a huge amount of correspondence on this issue. I have also met many of the policyholders and heard their sad tales and the way in which this drawn-out saga has affected their lives. I congratulate the Equitable Members Action Group on its hard-fought campaign and commend the great work that has been going on in the all-party parliamentary group. That has given many of us in this House, particularly new Members, an awareness of the situation. None the less, it has been a drawn-out saga, and I am delighted that the Minister has taken very speedy action to address the outstanding issues. He has made this Bill a priority and put forward £1.5 billion to assist with compensation at a very difficult time for the economy. Those are genuinely positive developments. As my hon. Friends the Members for Harrow East (Bob Blackman) and for Stratford-on-Avon (Nadhim Zahawi) have said, we have also had clarity on the tax treatment, which is welcomed by all of us.

I congratulate the Minister on his quick choice of National Savings & Investment to lead forward the speedy implementation. At the time of his ministerial statement, I remember his assuring the House that there would be a clear communication plan to help him inform policyholders on developments. I continue to urge both him and his Treasury officials to learn from previous compensation schemes to ensure that this one has flawless implementation. That is what the policyholders deserve after years of waiting. We cannot let them down at the point of implementation and operation.

Although it is essential to have clear information available through e-mails and websites, we must not forget the age profile of the people whom we seek to help. They are, typically, older—much older—and will need written communication and properly manned contact centres to ensure that they get the customer service that they need.

[Richard Graham (Gloucester) (Con)]

Does my hon. Friend not agree that it is a real scandal that no settlement was made during the long years of the previous Government while many thousands of innocent victims, including my mother, died, and that that should remain on the previous Government’s conscience for ever?

[David Rutley]

I agree. It is a tragedy that this has taken this long. Today’s debate has been reasonable, but I felt let down by the uncharacteristic tone that was struck by the hon. Member for Nottingham East (Chris Leslie).

Comprehensive Spending Review

Richard Graham Excerpts

Thursday 28th October 2010 Commons Chamber

[Lilian Greenwood]

I thank my hon. Friend for that interjection. In fact, the latest figures for both consumer and business confidence are going through the floor.

Never mind the extra 1 million who will be out of work, the extra £700 million that we will have to spend on jobseeker’s allowance or the loss of tax revenues; the Government’s attitude is, “Cut deep and keep your fingers crossed.” But did the Prime Minister say that when he was in Nottingham? Did he tell those children about his gamble? Of course not, just like he did not tell them that their families, many of whom are in the poorest 10%, would be hit harder than anyone else. He did not mention that for all the talk of fairness, families with children will have to pay more than twice as much as the banks towards reducing the deficit. He did not mention that although his friend the Chancellor talked about continuing the decent homes programme, the funds have actually been cut.

[Richard Graham (Gloucester) (Con)]

I am sure that the hon. Lady and all hon. Members present agree that future jobs are vital. Will she therefore join me in welcoming last quarter’s figures, which show the greatest increase in new jobs for more than 20 years?

[Lilian Greenwood]

I am absolutely delighted that new jobs are being created. My concern is that when the cuts start to feed through that will no longer be the case.

Although some of the children whom the Prime Minister and Deputy Prime Minister were talking to will have had improvements to their homes—new windows and doors to make them secure, or new boilers or better insulation to make them warm—their classmates will not all get the same opportunity. The Prime Minister did not tell them what will be happening to some of the schools that they will go to when they leave Welbeck primary, or to the schools that their brothers and sisters might go to. The projects to rebuild Trinity and Fernwood secondary schools in my constituency have been scrapped altogether. As for the projects to rebuild Nethergate, Farnborough and Bluecoat, a few months ago, the Secretary of State for Education said that they were unaffected, but they are now being told that there is a cut of 40% in the funding available. I am sure that if the Prime Minister had asked the kids at Welbeck they could have told him that “unaffected” means not affected. Sadly, that is another broken promise and it is not fair.

Finally, let us nail the myth that this is all Labour’s fault. When he spoke in the Chamber last week, the Chancellor did not mention the word “recession” once. We have just come through the biggest economic crisis in generations—a global recession. If he does not understand why the deficit is high how can he possibly understand how to fix it? The deficit went up because we had a huge fall in output and tax receipts plummeted. Spending went up so that we could protect people’s homes and jobs, protect businesses and prevent the recession from becoming a depression. Labour took the right decisions and the Conservatives would have made the wrong choice every time. They are gambling with people’s jobs and homes and they have no plan for growth.

--- Later in debate ---

[Mr Raab]

I thank the hon. Lady for her intervention, but the problem is that the university budget as it was configured under the previous Government was simply unsustainable. That is but one of the many examples of where they ducked the problem of reform and we have addressed it.

[Richard Graham]

Would my hon. Friend like to ask the House which party introduced charges on university education?

[Mr Raab]

I will resist the temptation, but I thank my hon. Friend for his question.

Finally, the comprehensive spending review promotes the economic growth that we need—growth driven by the private sector. That is what creates jobs and pays for public services. The July Budget restored confidence, cutting corporation tax and reversing the jobs tax. Employment was up by 178,000 in the last quarter. Economic growth in the last two quarters was the highest that it had been for 10 years. We must build on that—nothing can be taken for granted—and that is why I welcome the investment in infrastructure and science. I support the plan for tax breaks in national insurance for start-up companies in their first year. However, that measure will be confined to certain regions. Will Ministers say what assessment has been made of the net effect on tax revenue of extending that important measure across the country?

I know that time is short, and I want to allow others the time to have their say. It is right that every measure in the CSR should be robustly debated and scrutinised, but without an alternative, overarching deficit plan, criticism of those measures fails the test of credibility and relevance.

Savings Accounts and Health in Pregnancy Grant Bill

Richard Graham Excerpts

Tuesday 26th October 2010 Commons Chamber

[Richard Graham (Gloucester) (Con)]

Before coming here I read a document from the Save Child Savings alliance, which hon. Members might have had a chance to look at. I thought it would be helpful to run through some of its points about why it is so important to maintain and retain child trust funds, and answer them one by one. Its first major point is that child trust funds are all about fostering a long-term savings culture. I am sure that everyone in the House, from whatever party, will agree that that is a major national goal. However, the point about a long-term savings culture is that every form of fund or saving, including pensions, is exactly that—savings. So we cannot look at CTFs in isolation. The SCS alliance’s second major point is that keeping CTFs will help to protect the savings culture in the UK. To that, we could add the CTFs’ original goal of spreading financial literacy.

The question at stake this evening, therefore, concerns two main points: first, how effective have CTFs been in delivering either their original goals or the aims suggested by the SCS alliance? Secondly, what choices and other alternatives are available to provide the best for our nation’s children? The results so far show that CTFs have, over their lifetime of just over five years, accumulated £2 billion of assets, which is a reasonable absolute figure on its own. However, £1.4 billion of that was provided by the Government, and only £600 million by the families and friends of those participating. As mentioned by my hon. Friend the Member for Blackpool North and Cleveleys (Paul Maynard), the take-up amounts to 70%, with 24% of open accounts having received no contribution from participating families or friends.

Many better forms of savings are available in the marketplace for achieving the same ends. In particular, I highlight the existing individual savings accounts, which came from the original personal equity plans of the 1980s. These provide significantly more investment options, have, by and large—although not altogether—delivered better performance and have much lower costs. They can be designated to children, which is important, and cost the taxpayer nothing.

[Owen Smith]

Is that not an unfair comparison, because the ISAs have been in place for much longer than the child trust funds? It is extremely early in the life of CTFs for one to conclude that they will not achieve what they might achieve, and what we would hope they would achieve. A good point was made earlier about the point at which families tend to invest in long-term savings for their children. We can safely assume that more would have been paid in by families and friends at later stages, as more expendable income became available.

[Richard Graham]

The hon. Gentleman is right that this is a short period of history over which to judge them, but the fact remains that the annual management costs for CTFs, at 1.5%, are significantly higher than most of us would need to pay for an alternative form of savings. That will not alter over time. In answer to the suggestion that, in time, parents, families and friends might put more into the accounts, there is nothing to prevent them from opening an ISA or, as the Minister suggested, a new denomination of children’s ISA—if one becomes available—in their child’s name. Although I think that half the point made by the hon. Member for Pontypridd (Owen Smith) is right, I do not think that the overall impact of CTFs would be positive.

[Catherine McKinnell]

The hon. Gentleman made a point about accessibility and the fact that 25% of child trust funds set up by the state are not taken up by the individuals. How does he suggest that that 25% of people benefiting from those savings funds will benefit from ISAs, given that they are unlikely to walk into a financial institution to arrange one for their children?

[Richard Graham]

I have a specific suggestion on that, which I will come to in a moment. Meanwhile, I am sure that the hon. Lady will have noted earlier the intervention from my distinguished colleague on the Work and Pensions Committee, the hon. Member for Stretford and Urmston (Kate Green), who in an earlier career pointed out that CTFs do not necessarily reach the most vulnerable families. Arguably that was a flaw in the concept at the beginning.

[Kate Green]

It is important to clarify this point. I did not say that they did not reach the poorest. I said that it was difficult for the poorest to participate in the savings element. However, as my hon. Friend the Member for Newcastle upon Tyne North (Catherine McKinnell) just pointed out, with an ISA product there would not be any element of asset building for the very poorest, because they would be unable to save for themselves.

[Richard Graham]

The only difference is that CTFs are funded by the Government, so we come to the argument about whether that funding can be used more effectively in the context of the goals. I was going to come on to that. I suggested that there are alternative forms of savings that are more effective than CTFs, have lower management fees and better performance, and come at no cost to the taxpayer.

I come to the next point made by the SCS alliance. It argues that CTFs have been

“one of the most successful government savings schemes ever”.

Members will agree that everything is relative. Clearly, CTFs did better than the previous Government’s attempt to create a savings scheme—the stakeholder scheme—which is a scheme that not even the right hon. Member for Delyn (Mr Hanson), in one of his more elaborate flights of fancy, could conceivably describe as having been an outstanding success. However, by comparison with the success of other savings schemes not run by the Government, CTFs have done only a relatively modest job.

The important thing is that, although Governments can, do and should create the structure for savings schemes, their track record in running them is not good. For example, do Members believe that we should be paying people to work for Her Majesty’s Revenue and Customs and spend their time advertising and promoting CTFs, or do we believe that they should be ensuring that benefits go to the right people and that we all pay the tax that we should pay? HMRC should not be in the advertising business.

[Catherine McKinnell]

rose—

[Richard Graham]

I have given way to the hon. Lady already, but I am happy to do so again

[Mr Deputy Speaker (Mr Lindsay Hoyle)]

Order. If hon. Members are going to give way, they should give way quickly. If not, the hon. Member trying to intervene must sit down.

--- Later in debate ---

[Catherine McKinnell]

On the hon. Gentleman’s point about HMRC officials spending their time promoting savings accounts to children and parents, the idea is to give a hand-up, rather than a handout. Rather than benefits being handed out to families, the idea is to encourage saving in a family and to make it accessible to families that would not otherwise easily access saving funds. That is a hand-up, rather than a handout, and I would have expected Government Members to support such a programme.

[Richard Graham]

The answer is that we all want to encourage hand-ups to everybody, through whatever means possible, but that brings us to the second point about the difficult decision that the Government have had to take in their proposals—and which we as individual Members have to take—which is: what are the alternatives? I will come to that in one second, but on the Government’s role in running saving schemes, one crucial lesson that I hope will be learnt from the stakeholder experience and, now, from CTFs is that the Government should operate such schemes at arm’s length. When it comes to the creation of the national employment savings trust—or NEST—by the Department for Work and Pensions, I very much hope that that lesson will be taken on board.

The question then is one of choice. What could we do for our children with the money that the Government have been spending on CTFs that would be more effective? My belief is that the best investment that any of us can make as parents for our children is an investment in education. Therefore, Members need to focus on several crucial changes that have been made in the education of our children. Those changes will cost the Government and the taxpayer significant amounts of money, but that is an investment on which I believe we will all see a significant return. First, the retention of Sure Start children’s centres, which were begun by Labour, is an important move by the Education Secretary. Secondly, there is an extension of the availability of free education to every three and four-year-old in the country. Thirdly and most significantly, there is the poor pupil premium, which will cost the Government some £7 billion over this Parliament and which comes on top of baseline funding for schools.

I really believe that the most important thing that any of us can invest in is education. This is not about money: I do not believe that there is any evidence that financial literacy in this country has improved as a result of CTFs, nor, in a sense, could it, because the children are not involved. Children benefit from financial literacy programmes that go into schools and talk about what type of mobile telephone package they should have and so on, not from being given a lump sum of money that goes into an account with which they have no involvement. From the choices available to the Government, the best way to spend the money was and should be in education. For that reason, I shall be supporting the Bill.

--- Later in debate ---

[Catherine McKinnell]

My hon. Friend ably makes a point that I was about to make myself. Families are being asked to bear the brunt of the mistakes made by bankers. The Government plan to take £190 away from the pregnant mothers who need it most. I believe that that constitutes a shameful attack on the most vulnerable and needy in our society. The Government tell us that the banking levy would bring in £2.4 billion, but my hon. Friend the Member for Walsall South set out the economic case—the “you do the maths” case—very clearly.

[Richard Graham]

I promise that my intervention will be briefer than the last one.

How fair does the hon. Lady think it is that those with money in child trust funds pay £25 million a year in fees at the last Government’s prescribed rate of 1.5% a year, which reduces the amount of money in the funds?

[Catherine McKinnell]

rose—

PAYE Contributions

Richard Graham Excerpts

Wednesday 8th September 2010 Commons Chamber

[Mr Gauke]

As I said earlier, concession A19 is for taxpayers who have acted in good faith when HMRC has had an opportunity to respond. However, I should also make the point that PAYE has always involved circumstances in which information comes to light after the tax year is completed and an adjustment must be made. That has happened throughout the existence of PAYE, but it has increased over the years as working patterns have changed, which is why we need to look at more fundamental reform of PAYE.

[Richard Graham (Gloucester) (Con)]

Following earlier suggestions of hotlines, what advice would the Minister give to my constituents who feel that they might be affected, but who do not want simply to wait for a letter in their post?

[Mr Gauke]

I urge them to wait. I understand the frustration, but if we are to provide support to people efficiently and effectively, it is better to wait. Limited support can be provided until that letter arrives, so I urge his constituents to be patient.

Oral Answers to Questions

Richard Graham Excerpts

Tuesday 13th July 2010 Commons Chamber

[Mr Hoban]

The independent forecast published by the OBR at the time of the Budget demonstrated that employment would rise over the course of the next five years.

[Richard Graham (Gloucester) (Con)]

Five thousand small and medium-sized companies in Gloucestershire will welcome the Minister’s comments on progress for economic growth in the south-west, but will he tell us what specific plans the Government have to deal with the red tape and bureaucracy, which many of those businesses feel is an impediment to growth?

[Mr Hoban]

My hon. Friend is right to point out the barriers to investment that red tape can create. That is why we have set out a series of specific measures in the Budget to reduce the burden of red tape. We believe that that will help up to 500,000 businesses in the south-west.