Investing in Britain’s Future

Roberta Blackman-Woods Excerpts

Thursday 27th June 2013 Commons Chamber

[Danny Alexander]

The road will be taken forward according to the plans set out previously. That will include some tolling for new capacity.

[Roberta Blackman-Woods (City of Durham) (Lab)]

The north-east leads the way in the British export industry, so can the Chief Secretary tell us what percentage of infrastructure spending will go to the north-east, and by when, to support the expansion of our manufacturing export base?

[Danny Alexander]

The hon. Lady is absolutely right to highlight the fact that the north-east is the only region in the country that is a net contributor to the UK’s exports. The infrastructure investment announced today, for roads, broadband and so on, will help those industries. I cannot give her a precise breakdown, but I urge her to encourage the local enterprise partnerships in the area to take a full part in the local growth fund, which is a huge opportunity for the north-east.

Spending Review

Roberta Blackman-Woods Excerpts

Wednesday 26th June 2013 Commons Chamber

[Mr Osborne]

I am grateful for that welcome.

[Roberta Blackman-Woods (City of Durham) (Lab)]

The Chancellor knows that the north-east is already suffering disproportionately from his Government’s cuts, so can he tell the House what percentage of infrastructure spending will come to the north-east, and by when?

[Mr Osborne]

My right hon. Friend the Chief Secretary will set out the regional breakdown tomorrow.

amendment of the law

Roberta Blackman-Woods Excerpts

Monday 25th March 2013 Commons Chamber

[Roberta Blackman-Woods (City of Durham) (Lab)]

I am very pleased to be able to participate in this debate, not least to demonstrate how little the Budget will do for the economy of the north-east. We need no further evidence of the failure of the Government’s economic policies than the forecast on growth and GDP outlined by the Office for Budget Responsibility.

In June 2010, the OBR forecast that growth in the UK would be 2.8%. In fact, as we know, it was minus 0.1 %. We have also recently heard that the growth forecast this year, bearing in mind that it is only March, has been cut in half from 1.2% to 0.6%. Given all of that, the Government needed to shake off their complacency and take responsibility for the flatlining economy that they have created. They should introduce measures that would support growth, both nationally and in areas that are suffering most under this incompetent Government, such as County Durham.

The number of job seekers in my Durham constituency has fallen by just 69 in a year, but it is still up by 450 since the general election. Some 25% of those claimants are young people, unable to take their first step on the career ladder. What is equally worrying is the types of jobs that have been created compared with those that have been lost. Information that I have received from the House of Commons Library shows that the new jobs that have been created are predominantly non-skilled or low-skilled. At the same time, the number of jobs in skilled trades and administration is falling—by 2,000 in the last period. That shows a worrying trend of downskilling the north-east economy, just as we need to up our game to compete with emerging economies internationally.

What did the Budget do to rectify that? Absolutely nothing. The North East chamber of commerce said:

“The Government has fallen short of providing the raft of measures that businesses and investors need in order to kick-start growth”.

Ed Cox, director of IPPR North, said:

“George Osborne has missed an opportunity today to enable the North to play its part in leading us out of our economic stagnation.”

We can look at two aspects of that, the first of which is housing in the north-east. Again, we heard a number of lip-service announcements made in the Budget. I am pleased that the Government finally seem to be waking up to the fact that there is a housing crisis, but they appear to be stoking demand for housing, rather than looking at how to increase supply urgently and drastically. The Chancellor—he is probably the only one who thinks this—says that the fundamental overhaul of planning laws is helping homes to be built and businesses to expand. I think that he is wrong on both counts. House building is falling and, as my right hon. Friend the Member for Leeds Central (Hilary Benn) said earlier, so is the speed with which planning decisions are being made. Research from the House of Commons Library confirms that no peacetime Government since the 1920s have presided over fewer housing completions than this Government have over the past two years. And it is getting worse; house starts fell in 2012 by 11% to below 100,000.

It does not get any better when we look at infrastructure. In their first three years, this Tory-led Government have spent £7.7 billion less in capital investment compared with the plans inherited from Labour, and over the course of this Parliament they are set to spend £2.1 billion less on capital investment than would have been spent under Labour’s plans. That has knock-on effects for constituencies such as mine, which are getting practically no investment whatsoever in the basic infrastructure to support either the housing that is urgently needed or the new roads and transport links that are necessary if we are to grow the economy.

It also does not get any better for families in my constituency. The measures in the Budget relating to child care will not come into effect until 2015. Families in my constituency need jobs, growth and hope now.

Autumn Statement

Roberta Blackman-Woods Excerpts

Wednesday 5th December 2012 Commons Chamber

[Mr Osborne]

My hon. Friend and I have a genuine disagreement on this matter. I think it is right for this country to honour its obligations to the world’s poorest. I think we should be proud to be a part of, and support, what will be the first Government in British history to reach the 0.7% target. I have had to rebase the aid budget because of the GDP forecast, as I do not want to spend more than 0.7% of national income. As a result, the Department for International Development has had one of the biggest adjustments to its budget of all Departments.

[Roberta Blackman-Woods (City of Durham) (Lab)]

Last year the Chancellor announced more money for infrastructure, but, as we know, not one single project has been delivered. Why should we believe the additional funding announced today will be any more productive?

[Mr Osborne]

That claim is simply not true. Road projects are being completed across the country and infrastructure is being deployed. The science infrastructure, for example, has now all been completed, and I have announced £600 million more for science. If the hon. Lady is saying that it takes a long time to get some infrastructure projects going because of the constraints in the planning system, however, she is right. That is why we have also taken steps to streamline the process we inherited so it is easier to get things built by tackling the bureaucracy that has to be dealt with, while at the same time allowing those who have objections to have them fairly heard.

Infrastructure (Financial Assistance) Bill

Roberta Blackman-Woods Excerpts

Monday 17th September 2012 Commons Chamber

[Danny Alexander]

The hon. Gentleman, with the greatest of respect, has misunderstood the Government’s message. Part of the guarantee programme will extend the benefit of Government guarantees to housing associations, to enable an additional 15,000 affordable properties to be built. That is why it has been welcomed by the National Housing Federation, which speaks for housing associations in this country. Housing associations recognise that they will benefit from the guarantee, because it will reduce the cost of finance and help them to build many more homes for the sadly limited amount of money that is available to this country at the moment.

The plans are also supported by the Home Builders Federation, which said:

“Government now clearly understands the constraints on delivery and has outlined action to address them.”

The Government are committed to delivering a sustainable, private sector-led recovery that is balanced across industrial sectors and geographical regions; to moving away from an economy focused exclusively on the south-east of England, which is reliant on financial services and unsustainable debt, towards an economy supported by a wide variety of industries across the United Kingdom; and to making the UK one of the best places in the world to do business, attracting foreign investment and promoting our exports. To achieve that vision, the Government are committed to delivering world-class infrastructure, thereby giving firms access to the communication and transport networks that they need, wherever in the UK they happen to be.

[Roberta Blackman-Woods (City of Durham) (Lab)]

Will the right hon. Gentleman give way?

[Danny Alexander]

I am going to make some progress, but I will come back to the hon. Lady.

We want to allow Britain to compete on the world stage. Our national infrastructure plan sets out an ambitious but credible road map for delivering on that vision. There is a pipeline of £200 billion of upcoming investments in major necessary projects, most of which will be delivered through the private sector. In addition, we want to see billions of pounds of investment in housing and infrastructure to support our public services.

Even in more favourable circumstances, raising the private finance that is necessary to deliver on those goals would be a challenge. Given the disruption caused by the instability of international markets and the eurozone, and its adverse effect on capital markets, it is clear that decisive action is necessary to enable these projects to be delivered. The Bill will allow us to take that action and to bring forward the investment that is required.

[Roberta Blackman-Woods]

Will the right hon. Gentleman explain why it has taken so long for the Government to recognise that additional investment in infrastructure is needed if the economy is to grow?

[Danny Alexander]

Again, I do not agree. By looking at the way we use capital moneys across Government, the decisions we took in the 2010 spending review have enabled us, for example, to devote more capital moneys to the Department for Transport for investment in our transport infrastructure over these four years than our predecessors were able to devote over the previous four years. The same could also be said of communications and broadband infrastructure. This Bill is a major development along that road. Labour could have put in place a guarantee scheme at any point in the previous 13 years, but it chose not to.

--- Later in debate ---

[Roberta Blackman-Woods (City of Durham) (Lab)]

It is always a pleasure to follow the hon. Member for Suffolk Coastal (Dr Coffey), but I am afraid that I do not share her lack of recognition of the value of investment made by the previous Labour Government or her optimism about this Government.

I am pleased to be able to participate in this debate, even though the Bill is overdue. The Government seem to have come very late to the idea that we need investment in infrastructure if the economy is to recover from a double-dip recession. I must remind Government Members that the double dip of the recession was caused by the failed economic policies of their parties and their Government. Having come late to the realisation that investment in infrastructure is necessary, will their Bill deliver what is needed?

We know that the Government are trying to rush the Bill through as fast-track legislation. Surely this is a panic measure. When the economic recovery is nowhere to be seen, the Government are trying to rush through the Bill to create the impression that they have a plan. That is further emphasised by the existence of the Bill itself; it is not entirely clear whether new primary legislation is really necessary to authorise such expenditure. It could be argued that the Bill is seeking to create an impression that the Government have a sense of direction, when in reality they do not.

The Bill as drafted raises a number of questions. It allows for financial assistance to be made available to a range of project types outlined in clause 1(2), but there is no guidance or indication whatsoever about how projects and areas of expenditure will be prioritised. The lack of guidance means that we have no idea, in a strategic sense, in which area the Government want to see investment. I am deeply concerned that the Bill and its consequences could fall into the same trap that has been set for the regional growth fund. There is no strategic direction to the investment in the RGF and, as we know, delivery has been incredibly slow—only about a third of round 1 projects in the north-east have actually received their money and we have no idea when some of the round 2 money will come through.

My right hon. Friend the Member for Salford and Eccles (Hazel Blears) highlighted in her excellent speech the problems with not addressing procurement issues. There are no such measures in the Bill and the absence of guidance means that we do not know whether any priority will be given to projects that demonstrate social value and that would enable jobs to be created in areas with high unemployment.

Clause 1(2)(c) notes that infrastructure includes health and educational facilities. Are we to understand from this that Building Schools for the Future projects, which are much needed in constituencies such as mine and which were pulled by this Government only two years ago, can now be resurrected? The same could surely apply to hospitals. If those projects are to be resurrected, how will local authorities go about doing so? There are a number of issues. Surely it is atrocious public policy to pull projects in 2010 and then seek to bring them back in 2012. It is also really bad economic policy.

Although the main thrust of the Bill is to underwrite loans to the private sector, clause 1(4) appears to sanction direct expenditure from the Treasury. Will the Minister clarify whether that is the case? What does he think the balance will be between guaranteeing loans and funding projects directly? We need that direct expenditure.

In my constituency, the number of claimants continues to rise month on month. The north-east is in particular need of investment, with a claimant rate in August 2012 of 7.9%, which is much higher that the UK average of 5.3%. We need good-quality infrastructure projects in the north-east because of its high levels of unemployment and because of the high level of job losses in the public sector.

The Prime Minister pledged that his Government would go on an “all-out mission” to get infrastructure projects under way, and the Chancellor promised to lay the foundations for future economic success, but unfortunately this Government have so far not delivered on their promises. The Chancellor said in his autumn statement that there would be £20 billion in new investment from the UK’s pension funds, but a year later there are no signs of the infrastructure we were promised or of the economic growth that we were told it would create. When challenged on their failure to carry through their promises, the Government admitted that only a small amount of investment would come from the UK’s pension funds and that the rest would be left to the private sector. Even that investment will not start until next year.

It is also not clear how much of the promised support will go into housing. The number of house building starts fell by 24% between the second quarter of 2011 and the second quarter of 2012. As well as having a negative economic impact, that will have worsened the housing shortage in many areas, including in my constituency.

The most recent construction market survey by the Royal Institution of Chartered Surveyors, which is for the second quarter of 2012, shows that infrastructure work loads in the north-east declined by 11%. That lack of investment can be seen across all sectors and across the UK. Similarly, public sector gross investment fell by 29% between 2009-10 and 2011-12. I am concerned about this matter because the north-east has seen the greatest drop in jobs in the construction sector, with a massive 30% loss. There have been job losses across the country, but the 4% loss of jobs in London contrasts very well—or very badly, depending on how one looks at it—with the loss of jobs in the north-east.

If the many stalled regeneration projects in my constituency are to start again, what we need from the Government is direct investment, and quickly. More than 2,000 young people in my constituency are out of work. That simply does not make economic sense. It is also a dreadful loss of talent. People who are leaving our universities with degrees in civil engineering are not able to apply their skills in infrastructure projects. It is time that the Government stopped using words and started taking action.

Finance Bill

Roberta Blackman-Woods Excerpts

Tuesday 3rd July 2012 Commons Chamber

[Sheila Gilmore]

The hon. Member for St Austell and Newquay (Stephen Gilbert) seemed to think that he was living in a parallel universe, and, indeed, most of we Opposition Members thought that we were living in one as well. The process that has taken place is rather like the process that takes place when someone says “I want £10 from you”, and then, after a great deal of argument, says “I will make it just £2, so you should be happy”, and we find ourselves saying “Thank you so much for listening.”

Yes, it was good that the Government listened. I do not think that any Opposition Member has said otherwise, although we might have preferred them to listen from the outset. They had an opportunity to do so on Second Reading. One or two Conservative and Liberal Democrat Back Benchers voted against the Government even then in order to make their views known, but many others who had heard the Government say that the measures were necessary voted for them. Yes, it is good that the Government have listened, but it might have been better had they never embarked on this road. We must ask whether it was sensible for the Treasury—which, one assumes, is in charge of our economy to some extent—to spend the last four months dealing with matters which it had, after all, generated in the first place.

[Roberta Blackman-Woods (City of Durham) (Lab)]

Does my hon. Friend agree that the Government listened only partially, especially when it came to the imposition of VAT on listed buildings? Churches will still have to undergo a bureaucratic process in order to claim it back, and other listed buildings will still be subject to VAT for repairs. That could really affect the country’s heritage.

--- Later in debate ---

[Sheila Gilmore]

That may indeed may be the case. I recall that in 2007 a new council took charge in Edinburgh—it was a Liberal Democrat-SNP coalition—and it announced that it was planning to close some 22 schools. There was a very interesting cartoon in the local paper. It showed officials coming out of a meeting with the new administration and turning to each other and saying, “We never expected them to accept all that. That was a starter for 10, and we thought we’d get beaten back.” The officials had put forward this proposal and the new and inexperienced administration had said, “Yeah, we’ll go for that.” It did them some reputational damage. They proposed closing 22 schools, but then had to roll back very substantially because of the public outcry. The officials had expected to be told, “Actually, that’s not what we want to do. That’s not sensible. Let’s see the proper workings before we ever go public on this.” Perhaps the suggestion that this Budget measure was a consequence of our having a very inexperienced Government and Chancellor was right, therefore.

[Roberta Blackman-Woods]

Does my hon. Friend not agree that that view is much too kind to the Chancellor and the Government parties, as they clearly dreamt up these mad ideas themselves?

[Sheila Gilmore]

I will resist the temptation to take up my hon. Friend’s invitation to agree with that view, because we have to be tolerant, to a degree, of inexperience. There is currently a strong cult of youth and inexperience in our politics, but that might change, and it might at some point in the future be acknowledged that there is merit in looking to those who have had experience of life and living before entering politics, rather than to those who become as exalted as the Chancellor of the Exchequer before they have lived and experienced a great deal of ordinary life.

I shall spare Members having to listen to me list all the listed buildings in my constituency that are not churches. Those who want to know what those buildings are can read the relevant Committee report in Hansard. There is an important point, however. It has been assumed that because the Government made a concession—albeit not a full one, perhaps—to churches, the problem has been solved. There are other listed buildings that are not churches, however, which will now face the 20% rate with no financial assistance or concession made to them. These buildings are equally important. Churches are extremely important as historical monuments, even if some of them are no longer used as churches. In Edinburgh, there are examples of churches that have been converted to other uses, but there are other buildings that are at risk, too, and imaginative alterations might be made to some of them in order to put them into community use. This extra cost will put some such community projects at risk, however, and will put some buildings at risk, too. If those buildings cannot be put into community use, it is likely that they will deteriorate and end up having to be demolished on safety grounds.

[Roberta Blackman-Woods]

Does my hon. Friend agree that it is thoroughly irresponsible to bring in the increase on repairs on listed buildings without conducting a proper impact assessment, and that the Government should review this policy?

[Sheila Gilmore]

I agree. The Government have pointed out that VAT falls on repairs but it did not previously fall on alterations, and they say we should equalise the situation. That misses the point. Alterations often enable buildings to have a different use from their previous one. They are made to be able to function again for business, residential or community-use purposes. Such alterations are generally bigger projects than simply repairing the roof and ensuring that the rain does not come in. The costs involved can be great, and this 20% addition to the cost will therefore be very considerable and will put many such projects at risk. Many people have made that point, and do not feel the Government concession in respect of churches goes nearly far enough. We must bear that in mind. We will find out in the future whether these concerns were right.

In respect of VAT at least, this Budget has been shambolic. It is not good enough for people to say, “Well, because there has been a change, the whole process is now a good one.” It has not been a good one reputationally for the Government—and perhaps we, as Opposition Members, should be pleased about that. We cannot be pleased, however, when we see the effects that a declining economy has on so many of our constituents, who feel they are faced with a Government who truly are not caring.

Let us think about the arguments made in defence of some of these changes. On listed buildings, we have heard all sorts of arguments, such as, “The previous situation allowed rich people to build swimming pools.” There was no particular evidence of that, but the Chancellor obviously thought it was a good argument to put up because he liked the idea of presenting himself as being on the side of the small person rather than the rich—despite the overall effect of his Budget policies.

[Roberta Blackman-Woods]

Does my hon. Friend agree that if the Government were indeed concerned that alterations were going to be made to create swimming pools, the measure could simply have exempted such alterations?

[Sheila Gilmore]

That is indeed the case. Conducting research and finding good evidence before making and changing policy is of paramount importance. We have seen that in respect of many aspects of this Budget. We saw it in the debate yesterday in respect of the 50p tax rate. There were a lot of hypotheticals—a lot of “maybes” and “perhapses”—but there was not a lot of solid evidence.

This has been a poor piece of policy making. I congratulate the Government on turning, but if they had thought things through first, they would never have had to turn.

Oral Answers to Questions

Roberta Blackman-Woods Excerpts

Tuesday 26th June 2012 Commons Chamber

[Mr Osborne]

I point out to my hon. Friend that we have published that evidence. As I say, the matter is now with the independent pay review bodies, so let us wait to hear what they have to say.

[Roberta Blackman-Woods (City of Durham) (Lab)]

10. If he will discuss with his ministerial colleagues bringing forward the timing of public infrastructure investment in order to encourage economic growth.

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

We are having those discussions as we speak. We are already spending more on new roads and new rail now than we were at the height of the spending boom in the previous Parliament. We have provided £2.4 billion for the regional growth fund, £770 million for the Growing Places fund and £570 million for the Get Britain Building fund. We can also support infrastructure investment through the use of Government guarantees and will be announcing more about how we plan to do so later this summer.

[Roberta Blackman-Woods]

But will the Chief Secretary listen to the business leaders quoted recently in the Financial Times, who said that they had heard Ministers talking about infrastructure projects for months but with no visible results? Will he publish a timetable today, or very soon, for each region showing the projects that will be brought forward with their delivery dates?

[Danny Alexander]

The hon. Lady will have seen that last November we published the national infrastructure plan, which does precisely what she said and which was widely welcomed by business leaders and business organisations across the country. She will know that we are spending more on road and rail than the previous Government managed, including on a number of projects in her part of the world.

Child Benefit

Roberta Blackman-Woods Excerpts

Tuesday 22nd May 2012 Westminster Hall

[Mr Gary Streeter (in the Chair)]

There is obviously a lot of interest in this important debate. I have the power to impose a time limit, but I will not do so from the outset—let us see how we get on. However, a little self-restraint by colleagues would be most appreciated.

[Roberta Blackman-Woods (City of Durham) (Lab)]

It is a pleasure to serve under your chairmanship, Mr Streeter. I thank Gingerbread, the Child Poverty Action Group, the Institute of Chartered Accountants in England and Wales and the House of Commons Library for producing excellent briefings for today’s debate.

Eleanor Rathbone, the great advocate for family allowances, which we now know as child benefit, entered politics in 1909. It is extraordinary that, more than a century later, we have once again had to secure a debate in Parliament to champion the basic principles of child benefit. There have been threats to child benefit before, but since 1945 when family allowances legislation was introduced—a watered-down version of the child support that Eleanor Rathbone and others had campaigned for—only the coalition Government have introduced legislation for the demise of the principle of universality that underpins child benefit.

Not everyone on the Government side is happy with the proposed changes, as demonstrated by the lack, bar one or two, of any Back Benchers on the Government side who wish to take part in this debate. In an earlier debate, the hon. Member for Christchurch (Mr Chope) pointed out that the Government’s proposals ask those on higher incomes with families to contribute more, while those on higher incomes without children are not asked to contribute more. I do not see how that can be fair. I do not usually quote from the hon. Gentleman, especially in agreement, but he has hit the nail on the head.

I would like to concentrate on two issues: the destruction by the Government of the universal principle, and the unfairness and unworkability of the proposed changes. The principle long established and supported on a cross-party basis is that society as a whole should contribute towards the upbringing of children, because we all share in the benefits of a properly supported future generation. Arguing for family allowances, Eleanor Rathbone captured that exactly:

“Children are not simply a private luxury. They are an asset to the community”.

The logic of accepting that view is that in a properly functioning society transfers are made to families with children—not away from them to pay for tax cuts to millionaires.

Her Majesty’s Revenue and Customs recently put out a press statement on the proposed changes, which told us that the Government’s plans for changing child benefit are legal. I have been in the House for a number of years and I am not familiar with Government Departments telling us that policy changes are legal. I can only imagine that it must reflect a measure of concern about the Government’s incompetence that Departments have taken to doing so. My concern, however, is not about the legality of the proposed changes, but that they are wrong and should not happen.

The CPAG has summarised the benefits of child allowances. They achieve horizontal distribution between families, from those without children to those with children, life-cycle redistribution—most people have children at some point and we want to help whenever families are most pressed—and intergenerational redistribution, and they place a value on all children. For those reasons and many others, the benefit should be kept in its universal form. The changes are grossly unfair and probably unworkable.

The ICAEW has branded the legislation seriously flawed in principle and in practice. It points to many problems and I will highlight a few. HMRC will be using the tax system to claw back from one individual a benefit paid to the other, which could be extremely difficult as families in similar situations will be treated differently. Despite the introduction of the taper, the changes could still lead to a huge disincentive for individuals to earn more. The worst aspect of the proposed changes is that a family with a single earner who has an income of more than £60,000 is significantly worse off through the withdrawal of the benefit, while two-earner couples with incomes of up to £50,000 each will not lose the benefit.

[Barbara Keeley (Worsley and Eccles South) (Lab)]

My hon. Friend is making a great start to the debate. When meeting people in her constituency during the local elections, was my hon. Friend struck by how hard that unfair and unworkable aspect of the change is hitting them? One voter I met, who voted Conservative at the last election, said that he will never vote Conservative again because of the unfair nature of the changes. I spent a long time talking to him and he just could not believe that they were going to be introduced.

[Roberta Blackman-Woods]

My hon. Friend has made an excellent intervention. The unfairness of the changes goes to the heart of the debate. I suspect that as more and more people wake up to what will happen to their child benefit next January, we will see an even greater public outcry.

The changes disadvantage single parents, and partnerships where one person has decided to stay at home. With changed family circumstances, it may be very difficult to claw back payments or decide who should pay them. Taxpayers could be penalised for failing to submit information that they have no access to, particularly if the relationship breaks down. The extra administration involved could place huge burdens on HMRC at a time of budget restraint, and particularly at a time of cuts in staffing levels. We are therefore left with a number of questions.

[Kate Green (Stretford and Urmston) (Lab)]

Does my hon. Friend agree that one problem is that it will be very difficult for HMRC and families to manage this process, given that family circumstances may change in the course of a year? What a person may believe at the beginning of the year is their child benefit entitlement or their tax liability could turn out to be different, leading to problems such as lump sums having to be paid back and the amount of time required by HMRC for administration.

[Roberta Blackman-Woods]

My hon. Friend makes an excellent point. The workability of the proposals will have to be reconsidered. We seem to be building into the system a number of problems for families. The Government could have learned from previous practice and not gone down this road.

We are left with a number of questions about the workability of the changes and the need for them, as well as questions about fairness. As late as 2009, the Chancellor was promising not to scrap child benefit. No doubt we will hear today that it has not been scrapped, but changed massively. More significantly, it has already been cut massively because of the lack of uprating with inflation. Therefore, child benefit and families with children have already been targeted for cuts, even without the cuts that have been made to tax credits.

[Sheila Gilmore (Edinburgh East) (Lab)]

Will my hon. Friend reflect on the fact that, in the run-up to the Budget, there was debate about child benefit and the coming changes to working tax credit, which affect some of the lowest-paid working couples in our society? The Government found enough time and energy to make some amendments on child benefit, but none to the proposals on tax credit.

[Roberta Blackman-Woods]

My hon. Friend makes an excellent point. She is right. The overriding question is, why have the Government chosen to target cuts in respect of families, particularly those with children? None of us have received a satisfactory answer; perhaps the Minister will provide us with one.

The second question is, why are women being targeted again by this Government? It is not only families with children that are being targeted, but women—mostly women who are single parents—and it is more likely to be women who are put under pressure not to claim by their partners, so that their partner’s tax does not change. Whether or not that happens in reality, the Government should not even countenance the possibility. Women will suffer in terms of pension credits if they do not claim. This is a real mess and is just one more aspect of the omnishambles Budget that needs to be changed.

It took more than 70 years from Eleanor Rathbone’s entry into politics to get universal child benefit paid to the mother for all children. I hope that it does not take another 70 years for these appalling changes to child benefit to be reversed.

--- Later in debate ---

[Kate Green]

My hon. Friend makes an important point. If women come under pressure to forgo child benefit, rather than their partner seeing an increase in their tax bill—I believe that that will happen in some families—they will lose the benefit of their national insurance credits. That will have a lifetime impact on those women and their pension entitlement. We cannot wish to pursue a policy that risks making women poorer throughout their life.

This benefit is directed towards children and has been designed to follow a child and stay with them even if their family circumstances change. That is particularly important if a relationship breaks down, because a woman may have no other source of income at that point. It may be an acrimonious dispute in which she is struggling to extract money from her former partner, and child benefit is often the only source of income on which she can rely to get through that family breakdown and make the transition to single parenthood. When I was director of the National Council for One Parent Families, even women in relationships that were financially well off described to me how important child benefit had been at that moment of family change. If women start to forgo that benefit under pressure from a partner who later decides to leave the household altogether, I worry that we will disadvantage those women and their children, which is something that we will regret.

I am surprised by the Government’s approach because it introduces a policy that will act as a disincentive to work. Universal child benefit does not disadvantage those who move into paid employment, because the benefit remains. The incentive to increase income through more working hours or going for a promotion will be removed for some families, and I cannot understand why Ministers, who are often concerned to incentivise people to maximise their income from employment, wish to go down such a route. The Government have the right objective, but this policy seems particularly perverse.

As my hon. Friends and the hon. Member for Christchurch have highlighted, the complexity that is being introduced into the system is completely at odds with the Government’s stated intention to simplify the tax system. Simplicity is not just an advantage in itself, but it means that payment is more reliable, and more likely to be accurate and more predictable. There is also much less stigma attached to the receipt of a simple universal flat-rate payment for all families.

One criticism is often levelled against the payment of child benefit to richer people, and it would probably have been made this morning had more hon. Members attended the debate—today there are mostly proponents of child benefit in the Chamber, which is perhaps why the point has not been raised. I want to put on record my response to those who ask why we are giving child benefit to people on higher incomes and asking those on lower incomes to help pay for that. The fact is that we do not—and should not—make the same argument when it comes to the national health service or our children’s education, and we do not make it for the tax system or say that higher earners should not receive the benefit of the recent increase in the tax threshold. As I am sure the hon. Member for Christchurch will remember, the higher rate of child benefit for the first child was intended to replace what had previously been the married couple’s tax allowance. It seems particularly perverse that we are now effectively seeking to tax a tax allowance, instead of understanding that in every other part of the tax system, such allowances stretch across the income spectrum. Now, we have decided to treat child benefit differently.

[Roberta Blackman-Woods]

My hon. Friend is making an excellent speech and she has touched on the heart of the problem caused by the proposed changes. The Government are destroying the principle of universality that has underpinned this benefit for years. We should think of all children as being important to our community, and we all share in the benefits that children bring to society. To denigrate the principle of universality says something about the values of this Government. What will be next?

[Kate Green]

I am grateful to my hon. Friend. Her point about universality is fundamentally about the social glue, integration and the sense of communal interest in our children that universal benefits bring.

As others have said, these proposals are unjustifiable as a matter of principle, and unworkable in practice. Hon. Members have alluded to the difficulties of coping, both for families and for the Revenue, when family circumstances change. It may be complicated to pick out who has been a member of a household over the course of a year, or to state at what point they became one, so it may be difficult to assess at what point that should result in a tax liability.

--- Later in debate ---

[Sheila Gilmore (Edinburgh East) (Lab)]

I do not intend to say very much in this debate. The reason why I did not seek to catch your eye before, Mr Streeter, was that I thought that I might have to leave. I will have to leave before I have the benefit of the Minister’s response and I apologise for that, but I am serving on the Finance Bill Committee.

I want, however, to say a little about the difficulties that can arise in relation to family structures and so on. As someone who was a family lawyer, I know how relationships can not only break up but re-form, and that may happen over a relatively short period. That is a practical aspect of this issue that I am not sure has been taken fully into account. As family lawyers, we used to joke that we achieved a higher rate of reconciliation than marriage guidance counsellors. People’s lives are not linear. They do not necessarily go straightforwardly through this process: “Oh, I’ve fallen out with my partner. Now we’re separating and that’s it.” It is very common for people to encounter a circumstance that leads to a break-up and then to reconcile. It may be a very serious situation. Even in cases of domestic violence, people reconcile. As a solicitor, I might sometimes have wished that they had not; nevertheless, they do so.

A relationship structure can change quite a lot, even in a single financial year. That is an additional layer of complication. It should not be assumed that just because people are paying higher rates of tax that relationship breakdowns do not happen, because that is far from the case. That is yet another practical issue that must be addressed.

The position could have been very different. Perhaps all Governments wonder how they arrived at certain decisions. If we look back at this one, it seemed to arise from what looked like a clever wheeze. It was announced at a party conference, which is never a good time to announce policy, because it is the headline of the day that is very much wanted. I suspect that the thinking was, “Ah! We can really get the Labour party here. We are going to take a benefit away from higher rate taxpayers and the Labour party won’t dare to oppose that, so we will have got them on the run.”

We said right from the beginning, as well as dealing with all the issues about fairness and the reason why child benefit and its predecessor, family allowance, were introduced in the first place, that there was a practical issue. Many of the practical criticisms were voiced at that time. This all dates back to October 2010. A year later, those practicalities had apparently not been thought through very carefully. Some amendments have now been brought into being—at the last gasp—but those changes produce yet more anomalies. They produce a marginal rate of tax for some families that is far higher than presumably anyone would think was desirable for people who are in the middle ranges of income. Some families will face marginal tax rates of 50% to 60% because of how the changes take place and particularly the tapering. That has been introduced to try to make things a bit better, but arguably may make things a whole lot worse, because it introduces a whole new level of complexity.

Hon. Members have mentioned not just the community charge but the ill-fated and, in my view, ill-thought-out 10p tax rate abolition proposal. I have said this before and I know that many of my colleagues have. I was not in this place at the time, but as party members and activists, we have a view on these things and we thought, “Oh no, this is not good.”

[Roberta Blackman-Woods]

Is not the point about the 10p tax rate debacle—I think we would all accept that that is what it was—that when the outcome of that policy was made obvious, the Labour Government of the day reversed most of the adverse consequences of the policy? We see no indication from the current Government that they will do the same.

[Sheila Gilmore]

I agree. The point that I was making was that, sometimes, what looks like a clever idea to start with quickly unravels into something that is much more difficult. The slight amendments that were made to the current proposal before it was introduced into the Budget, far from addressing the issues, are making the whole thing even more complicated. Not much time seems to have been given to work these things through. Some campaigners are suggesting to the Government that it is not too late. If they are still minded to implement this proposal in some way, shape or form—I hope that they will not want to—they should at the very least not go ahead with it starting from January of next year, given that it has been so poorly thought out and the implications and problems have not yet been fully resolved. To put a hold on it and perhaps come back if they think that they have solved those problems—ideally, they would not come back with it at all—would be sensible at this stage. I urge the Minister to give that very serious consideration.

--- Later in debate ---

[Cathy Jamieson]

I thank the hon. Gentleman for that intervention. It is not for me to interpret what the Conservative Whips Office is able to do to deliver people to the debate and ensure that they turn up. None the less, we have heard some very powerful speeches, not least from the hon. Gentleman himself.

[Roberta Blackman-Woods]

Perhaps we should also note, especially as the idea for the policy appears to have come from Liberal Democrat members of the coalition, that there are no Liberal Democrats here at all to defend their ridiculous policy.

--- Later in debate ---

[Cathy Jamieson]

My hon. Friend makes another useful point. We raised that issue with the Minister on the Floor of the House. Many people, because they get a bonus at work or because they are self-employed, will find at the end of the year that they have earned either more or less than they anticipated. Many self-employed people are not earning huge sums of money, so such issues are critical to them.

[Roberta Blackman-Woods]

My hon. Friend is being most generous. A back-dated pay increase is another circumstance that must be quite common.

[Cathy Jamieson]

That is an important point.

[Cathy Jamieson]

My hon. Friends have given very practical, real-life examples of the kind of circumstances in which people may feel penalised for doing particular types of work or for taking on additional risks and responsibilities. A thing that we hoped that we could persuade the Government to do, if nothing else, was not to implement the changes straight away, and perhaps the Minister could come back on that point. If they are intent on doing this—the Opposition believe that they would be wrong to do so, and I hope that they will pull back—at the very least would they be prepared to pause, produce a report and look at the circumstances in which people would be adversely affected?

My hon. Friends the Members for Bishop Auckland (Helen Goodman) and for Stretford and Urmston raised the tax implications, and my hon. Friend the Member for East Lothian (Fiona O’Donnell) mentioned national insurance contributions. The main concern around those is that when organisations such as the Institute of Chartered Accountants and others that deal with tax issues day to day say that the principles are wrong, it is of serious concern. The Minister has to say whether taxing an individual in respect of money that was paid to someone else is not a fundamental change in how individual taxation is dealt with. I will give him the opportunity to intervene if he wishes, but perhaps he prefers to answer in his speech. Such organisations have looked at the proposals and raised serious concerns. It is a shift and could open opportunities in other ways for similar proposals to be brought in, which would be extremely concerning for the reasons that other hon. Members have set out.

Until I heard the Minister’s earlier comment, I was not aware that his wife was a lawyer. I am sure that she has some views about how, rather than defending the policy, the Government now seem to be relying on describing it as absolutely legal, as was identified earlier. None the less, there are questions about how they arrived at that position. When the regulations to justify the legality of this were introduced in Parliament, were they discussed in relation to child benefit or any other benefit issues? Was it ever anticipated that those regulations would be used in such a context? Could he deal with that issue in his response? If he cannot answer today, I have tabled a parliamentary question that I hope he will answer in due course.

I want to give the Minister time to respond, so I will speed up. I have made those points because the report from the Institute of Chartered Accountants identified the issue of HMRC using the tax system to claw back a benefit from one individual that was paid to another. The tax system is based on individuals and the benefit system is based on households, so that undermines the principle of taxation. I have not seen anything from the Minister that describes how a household will be interpreted in the tax regulations. Families in similar financial situations could be treated quite differently, which undermines the policy of fairness. Changed family circumstances could, as we have heard, make it difficult or impossible to calculate the clawback, or determine who should pay it; and, indeed, we have heard examples showing that if family circumstances change during the year someone will be presented with a tax bill at the end of it, leading to greater uncertainty about family budgets.

There has also been concern about collecting the charge through PAYE coding. The report by the Institute of Chartered Accountants in England and Wales states that it could lead to delays of up to three years, and undermine the efficiency of the whole system, because any coding adjustment is an estimate, and it would be necessary to re-estimate the code repeatedly. We are no longer just dealing with the principle of child benefit; we are dealing with a fundamental change to the taxation system. That should be scrutinised further. I hope that the Minister will be able to give some responses to the issues that have been raised this morning. Will he also address the point made by my hon. Friend the Member for East Lothian—she raised, it, indeed, on the Floor of the House—and others about women who might forgo the opportunity to claim child benefit, but would not receive credits for their national insurance contributions? That is a serious matter that has not been addressed.

[Roberta Blackman-Woods]

Is it not critical that women should understand at this stage that that is a possible outcome of the changes? People have already started writing to me on the issue, and the Government need to take action.

[Cathy Jamieson]

It is an important point. I want to put another couple of related questions to the Minister. In the budget for dealing with the consequences, a certain amount of money was put aside for marketing. I raised with the Minister on the Floor of the House the issues of what information is available, and how to assess who is likely to be caught by the circumstances. I would like to hear exactly how the Minister intends to communicate to the individuals involved—to get the information out, and get the advice to those likely to be affected. How will he ensure that people do not make damaging decisions at a point in their lives when it may be easier to do that, without looking at the longer-term consequences? We all know that there are situations—we heard examples in the debate—in which an individual in a household may feel under pressure to do something that is not particularly to their advantage.

I hope that the Minister will be able to deal with the points I have made. I will finish by returning to the point about section 18(2)(a) of the Commissioners for Revenue and Customs Act 2005, which the Government have cited, arguing that it makes the use of the tax system legal in the present context. The understanding of the Association of Chartered Certified Accountants is that that use of the provision is a last resort in the giving of one partner’s information to another. ACCA suggests that only where taxpayers who must talk to one another to make the system work correctly do not do so should the section be brought into play. How will the Government assess when to use it and breach confidentiality? There are serious issues about what information about one partner will be given to another. Will it be only “Your partner is in a higher tax band”, or will it be detailed information? I do not think we have had an answer to that.

I hope the Minister can give us the information this morning. It is worth noting that earlier in the week the Institute of Chartered Accountants warned that the new tax would be an “operational disaster”. Surely that should be of concern to the Minister, and should mean that we get answers this morning, and that the Government think again.

Business and the Economy

Roberta Blackman-Woods Excerpts

Monday 14th May 2012 Commons Chamber

[Roberta Blackman-Woods (City of Durham) (Lab)]

It is a pleasure to follow the interesting speech of the hon. Member for Cleethorpes (Martin Vickers). I am not sure whether he was saying that his constituency was better off under the Labour Government, but I think he should have done.

[Martin Vickers]

Will the hon. Lady give way?

[Roberta Blackman-Woods]

I am sorry, I will not, because we are really short of time.

Despite a few reasonable measures, the overriding sense is that the Gracious Speech delivers priorities that are out of sync with those of my constituents and the rest of the country. It was more notable for what was left out than for what was included. The first line promised that the legislative programme would focus on

“economic growth, justice and constitutional reform”,

but in fact there was a complete lack of legislation to boost the economy in the north-east or anywhere else, or to address the concerns of people in my constituency and the region as a whole.

We need a plan for jobs and growth. The north-east has the highest unemployment rate in the country, with 11.6% of people of working age being without a job. Particularly worrying is the number of unemployed 16 to 24-year-olds. In County Durham, 8.6% of people in that age group are claiming benefits, and in my constituency long-term youth unemployment is up by a massive 129% on this time last year. Without strong Government action, we risk creating a generation of young people who will never experience stable employment and an economy that will take a worryingly long time to recover. It is no wonder then that business has slammed the content of the Queen’s Speech. This March, an Experian report showed that County Durham was in the top 20 areas for export potential and that businesses in the north-east, the north-west and Yorkshire and the Humber—the areas most likely to be hit by this new made-in-Downing-street recession—are doing the most to drive export growth.

Improving our infrastructure and links between the north and south is vital not only for the regions but for the British economy as a whole. Areas such as Durham are key to our international competitiveness and long-term economic success. It is therefore essential that I ask why so little Government attention has been paid to improving infrastructure in the north-east. The Government talk a lot about supporting manufacturing but where are the policies to back it up? The only thing that this coalition has manufactured is the double-dip recession. The recent welcome investment programmes in the north-east by Hitachi and Nissan were actually started under the previous Labour Government.

We saw last week that the regional growth fund is expected to deliver only 41,000 jobs—well below the 500,000 claimed by the Deputy Prime Minister, the right hon. Member for Sheffield, Hallam (Mr Clegg). What is more, those jobs cost an average of £33,000 each to create, compared with the £6,500 average under Labour’s future jobs fund. The shambles is partly due to the Government’s decision to do away with regional development agencies, which promoted and defended the interests of the regions, as One North East did so well. In particular, they should not have got rid of the RDAs without putting in place a viable alternative.

The loss of One North East has been keenly felt across the region. For instance, the announcement recently that more than 300 jobs will move to Ireland following the closure of the Kerry foods factory in my constituency is a disaster for many of my constituents, but it is only one of several closures of food processing factories in the north-east this year alone. There is no regional body to pick up this issue, to think about what can be done to improve the competitiveness of the food processing sector and, critically, to maintain and grow these jobs in the north-east, so we are seeing the loss of private sector jobs in addition to the huge loss of public sector jobs

There is no strategy either for innovation. One North East put universities at the heart of its plan for growing the north-east economy, and we needed that innovation, but it is now extremely difficult for universities to engage with economic development because of the fragmentation: we have two local enterprise partnerships, two enterprise zones, 12 local authorities, the regional growth fund, “BIS local” and further bids in several constituencies. As a result, there is no clear way for universities to engage. The Government would say that they created LEPs to take on that role, but in practice local government is bearing the brunt of the austerity measures, which means that it simply does not have the resources to create the much-needed jobs in my area and elsewhere.

Static Caravans (VAT)

Roberta Blackman-Woods Excerpts

Thursday 26th April 2012 Commons Chamber

[Mr Stuart]

My hon. Friend is absolutely right.

[Roberta Blackman-Woods (City of Durham) (Lab)]

I thank the hon. Gentleman for giving way and for securing this important debate. Does he agree with Mr Ballantine, who runs Ideal Caravans in Langley Moor in my constituency, that the Treasury must look at this issue again if jobs are not to be lost in an area that is already experiencing high levels of unemployment?