Living Standards
Russell Brown Excerpts(11 years, 2 months ago)
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Mr Russell Brown (Dumfries and Galloway) (Lab)
Like other hon. Members, I congratulate my hon. Friend the Member for Leeds West (Rachel Reeves) on returning to her Front-Bench duties, although I appreciate that she has had to leave the Chamber for the time being.
When I first came to the House 16 years ago, people throughout the country and not just in my constituency, and especially women, were holding two or even three part-time jobs to make ends meet. The history is that 1997, when Labour came to power, was not a good time. It is true—I suspect Government Members would agree—that people were looking for a change, which is what happened in 1997.
Individuals and families were looking for some security and certainty in their lives. In all honesty, that is no different from what businesses were looking for. Businesses were looking for confidence. At the end of the day, if there is confidence in the business world, businesses will in turn believe that they can take that little gamble and create jobs. That is what happened over a sustained period when Labour came to government. Here we are in 2013. Despite what the hon. Member for Spelthorne (Kwasi Kwarteng) has said, the country is looking again for those things. The country and businesses are looking for confidence, and families and individuals are looking for security and certainty, to take them forward through these difficult times.
I do not deny that the prospects are very good in some parts of the country, but that is not true of many areas. The situation in communities is patchy. Back in ’97, there was a rapid reduction in unemployment. Department for Work and Pensions staff at the time were able to assist individuals who had been long-term unemployed. People who suspected that they would never find a job were finding work.
Where are we on living standards? We can talk about incomes, but income is not the only aspect of a living standard. The equation must include what people need to spend regularly. That is why people’s living standards in many areas are falling. I regret to say that we are returning to people, especially women, having to hold down two and three part-time, low-pay jobs to make ends meet.
Gavin Barwell
Is the hon. Gentleman seriously saying that, in his opinion, between 1997 and 2010, many hard-working people did not have to hold down multiple jobs to make ends meet?
Ian Mearns (Gateshead) (Lab)
I had the great privilege of visiting my hon. Friend’s constituency during the summer break. It must be difficult for people on part-time work to put together the combinations of part-time jobs in areas where the economic community is so disparate. I visited Stranraer, Wigtown and Withorn. They are relatively small places, and putting together the combination of part-time jobs to make a living wage must be very difficult in such a community.
Mr Brown
I thank my hon. Friend for visiting—I appreciate that he did not tell me that he was coming, but it was on unofficial business. He is right that, in that remote rural locality, jobs are few and far between.
My area lost 1,300 local authority jobs over nine quarters. In those same nine quarters—between June 2010 and September 2012—we lost 2,000 private sector jobs, including quality jobs. The figures are staggering. The average wage in Dumfries and Galloway is some 24% less than the national average. In May 2010, 460 people were long-term unemployed; there are now 970. Jobseeker’s allowance claimant numbers are above the UK average.
Worst of all—the House needs to take this to heart—is youth unemployment. Under the previous Conservative Government, we almost ended up with a complete lost generation. In my area, we have 8.9% youth unemployment. That is not acceptable when the Scottish average is 7.4% and the UK average is 6.2%. I will not stand by and allow the youth—those aged 18 to 25—to sit wasting. That is why, two weeks ago, I held a cross-party summit in my area to discuss the difficulties that we face.
I do not have the answers, but welfare reform has played a big part in what is happening on our high streets. We have seen the Government freeze benefits at 1% because they thought that it was the right thing to do, but all that has done is take money out of the local economy.
Mr Brown
No, because the hon. Gentleman would eat up my time, and I am not prepared to allow that to happen. I need all the time I have got.
Taking money away from the poorest, who would have spent it on the high street, is bound to have an impact on what is going on. It takes even more jobs out of the economy.
Let me put the record straight on energy and fuel costs. The hon. Gentleman made a point about fuel costs—[Interruption.] Never mind the hand signals. On 11 occasions over nine years, the Labour Government froze the planned fuel duty increase. When Labour came to government in 1997, duty and tax on fuel was 78%: when it left government, duty and tax was 66%. Let us not forget that the price of fuel sometimes increases because the price of oil increases.
I regret to say that in Dumfries and Galloway 41% of all households are in fuel poverty, with the average in Scotland being 28%. I am not boasting about those figures: I am frankly ashamed of them. We are a low-wage economy, after decades of low pay in agriculture and tourism.
I pay tribute to the hon. Member for Suffolk Coastal (Dr Coffey), who chairs the all-party group on off-gas grid. She has made a valiant effort, with support from the all-party group, to get the Minister with responsibility to make early payments of the winter heating allowance to those people who want to use it in time to buy cheaper fuel. Regrettably, her effort has failed, as the Minister has declined to make early payments.
Things may be going well in some Conservative Members’ constituencies, but the picture across the country is patchwork, and that should not be forgotten.
Chris Leslie
I would like to make a little progress in the time I have left. That is what people have lost thanks to the Prime Minister. That is the scale of the cost of living crisis, and those are the costs of the Government’s failed economic policies.
Mr Russell Brown
Those sums of money would make a great difference to households, but it is not only that. It is about what those sums when multiplied would do in the economy. We are starving the economy of much-needed money to make it vibrant.
Chris Leslie
Of course my hon. Friend is right, and he understands that having that level of activity in the economy would have helped us get a better growth rate than we have had under the flatlining record of Government Members. Think of the different course the Government could have chosen. They could have tackled soaring energy bills with tougher regulation to pass on wholesale price cuts to ordinary customers, as my hon. Friend the Member for East Lothian (Fiona O’Donnell) suggested. They could tackle rip-off rail fares for commuters with an enforceable cap on train fare rises, they could protect tax credits for working people by reversing the millionaires tax cut, and they could cut income taxes with a new 10p starting rate to be paid for by a mansion tax on properties worth more than £2 million. However, they will not go that extra mile. Why? Because they do not understand the pressures that household budgets are under. After all, how could they? Government Members think that everything in the garden is rosy. They are either ignorant of the pressures on most households, or in their complacency they are ignoring the issue.
After three wasted years of a flatling economy, it is about time we had some economic growth. This growth, however, comes despite the Government’s economic policies, not because of them, and as everybody knows, growth is still falling short of what we ought to be seeing by now. Deficit reduction has stalled because the Government are borrowing more to pay for the costs of economic failure.
Finance Bill
Russell Brown Excerpts(11 years, 4 months ago)
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Chris Leslie
Times are tough, and for most people in the country life is getting harder. I confess, however, that I have not been lobbied by or seen those poor, unfortunate City investment managers knocking at my door, coming to my surgeries, or writing e-mails and saying, “Please, the one thing we need is the abolition of the stamp duty reserve tax. There is massive hardship among investment managers at this time, which demands a £150 million tax giveaway.” Frankly, I think the investment management community is doing reasonably well relative to the rest of the country. Moreover, I do not think that the City of London is uncompetitive. Indeed, all the evidence suggests the opposite and that the City continues to thrive and do exceptionally well—something like £5 trillion in funds is under the management of those investment managers affected by this tax change, and a tax cut of 150 million quid is small change to that community.
We are having this debate because we need to know why the Chancellor decided on this priority—cui bono would be the Latin adage. In whose interest is this? Who benefits from this change? I doubt it is my constituents in Nottingham East, and Government Members must forgive me if I am left with a slightly bitter taste in my mouth when we see the hardship caused by cuts to tax credits, the increase in VAT and the bedroom tax. The Chancellor says that individuals affected by those things must feel the pain and the squeeze, but when it comes to the City and the investment management community, I do not see how they are all in it together or sharing that anxiety.
Mr Russell Brown (Dumfries and Galloway) (Lab)
Yet again I am back on my old hobby-horse about the economy. If this measure is passed and people benefit from it, what will that do to the local economy? Will we see massive spending on our high streets? Will it help to regenerate the economy?
Chris Leslie
Dare I say that my hon. Friend knows the answer to his question? I do not think it will make a blind bit of difference to the success—or otherwise—of the investment management community, and I have seen no evidence from the Government that this measure is the thing that will transform the economy at this time, or make a massive difference to jobs and growth in society at large.
Let me put this in context: £150 million is a lot of money. In fact, it is exactly the same amount that the Chancellor cut from young mothers when he abolished the health in pregnancy grant—hon. Members will remember from the Chancellor’s first Budget that the health in pregnancy grant was given to mums-to-be to ensure they ate healthily and had a little help at that time. That was slashed; that had to go because £150 million had to be saved, yet in next year’s Budget the Chancellor is introducing a £150 million tax cut for the investment management community. That is about the same amount of money as was cut from the child tax credit supplement for one and two-year-olds in that original Budget. In fact, it is about the same amount of money that the pasty tax and the caravan tax were supposed to save—I am sure the Minister will remember that from the ill-fated omnishambles 2012 Budget. All the hassle that fell on the Chancellor’s shoulders at that time was due to saving £150 million. In that context, this is a strange choice by a strange Chancellor.
Chris Leslie
The point is the context in which these things arrive from the Government. Perhaps it is our fault that we have not successfully flagged up for the wider country what exactly is happening in the Budget or what will happen in future Finance Bills; but for the time being, it is incumbent on the Minister to do at least this one thing: let us have the distributional analysis showing who benefits from the change. Which deciles, in terms of the affluence of society, will gain the most from this £150 million tax cut? The case for it has not been made. It has not been high on the public agenda. There is no problem in the City or the investment management community of such significance that it merits this intervention by the Chancellor, at the expense of the health in pregnancy grant or the cuts to tax credits that merited the pasty tax and the caravan tax.
This £150 million tax cut is an incredibly important totem of the Chancellor’s priorities. It is a sign that he does not care about the fact that most people—the typical family—will be paying an extra £891 this year because of the tax and benefit changes made since 2010. Those who have found themselves pushed into greater deprivation and poverty will look at the decision and be absolutely disgusted that this is the Government’s priority now. This change has no justification. The Minister has not made the case for it. We need more information about who benefits from the arrangement.
All that comes on top of the Government’s giveaway on the bank levy, their failure to repeat the bonus tax, the millionaires’ tax cut from 50p to 45p and other changes hidden in the Bill, such as making the additional tier 1 debt coupon tax deductible for the banks, which The Times described thus: “Chancellor to the banks’ rescue with secret £1 billion tax break”. Lots of people will have questions, although not necessarily about this Minister’s priorities. He is doing the best of a bad job and having to cope with the hand he has been dealt. He is, I am sure, a decent and honourable chap, but when he goes home this evening, turns on the television and sees the hardship afflicting families up and down the country, I would ask him to keep in mind whether making a tax cut of £150 million for those investment managers was the right call to make at this point in the economic cycle, such as there is a cycle involved.
Mr Russell Brown
I come very much from the school that says that if someone is under a bit of pressure and struggling, it is only right for the Government to try to step in, but I am amazed by the figures. In 2011, the UK fund management industry was up 5%, after double-digit growth in the previous two years. The industry is not struggling. Why on earth should we consider giving even more money to people who, at the end of the day, are not in desperate need?
Chris Leslie
That is the £150 million question. The tax cut is £150 million in the key years, but it goes up to £160 million in financial year 2017-18. It gets greater and greater as time goes on. If we roll all the numbers together, as the Chief Secretary to the Treasury is wont to do when presenting figures in the Budget, we get a total of £600 million of tax cuts in this area in the Red Book. I am sure that you could think of a good use for £600 million, Mr Deputy Speaker. At the very least, we want a distributional impact assessment. We want to know who will benefit from the measures, and it is incumbent on the Minister to tell the House the facts.
Mr Gauke
I beg to move, That the Bill be now read the Third time.
The Finance Bill 2013 delivers the Government’s commitment to creating a tax system that is fair, that promotes growth and competitiveness and that rewards work. This Bill supports enterprise, helps families and ensures that everyone pays their fair share of tax.
We should pause for a moment to remember the background to the Bill. The Government inherited the largest peacetime deficit since the second world war, a deficit we have already reduced by a third over the three years since 2009-10. During this time, more than 1 million new jobs have been created by British business. We have had to make some tough choices, but the results show that we are making the right choices. The Government are leading the road to recovery—to putting the economy back on course—and this Bill continues that agenda.
Mr Russell Brown
Does the Minister recognise that the 1 million jobs that have been created are allocated disproportionately across the UK? My local authority area has lost 2,000 private sector jobs and the average wage has now fallen 24% below the national average. Some areas are hurting.
Mr Gauke
It was not that long ago that we were told that the reductions in public sector employment would not be met by new jobs in the private sector, but they have been met many times over. The reality is that we have an astoundingly good record on job creation over the past three years, despite the fact that the economy has faced significant challenges.
This Government have established a corporate tax system that attracts international investment to the country and that encourages UK businesses to grow. Corporation tax will be eight percentage points lower in 2015 than the levels we inherited in 2010. This Bill cuts the main rate to 21% next year and 20% the year after, which will give us the joint lowest rate in the G20, the lowest of any major economy in the world and the lowest rate this country has ever known.
The Bill does that alongside separate action to incentivise activity across the economy. It introduces a new above-the-line credit for large company research and development investment, provides reliefs that are among the most generous in the world for the animation and high-end television industries, and gives long-term fiscal certainty to the oil and gas industry on decommissioning tax relief.
Finance Bill
Russell Brown Excerpts(11 years, 4 months ago)
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Chris Leslie
I think the right hon. Gentleman is thinking of the bedroom tax, and we can come to that in a moment. I will come to the details of what a mansion tax would look like. We have looked carefully at the well-crafted and evidently well-thought-through proposal from the Liberal Democrats. They have proposed that properties worth £2 million or more should attract an annual charge, saying that that could net approximately £2 billion. That would allow an income tax band of around £1,000, which would give a tax cut of about £100 to those benefiting from the 10p band.
Mr Russell Brown (Dumfries and Galloway) (Lab)
It is interesting that the mansion tax could raise £2 billion. I wholeheartedly agree with such a proposal. If we could transfer that £2 billion from the pockets of the wealthy and give it to the poorest, it would undoubtedly find its way back into the economy. That is very much what is needed. We need to push more money into the economy, and to try as best we can to stimulate some kind of growth. We are seeing nothing at the moment.
Chris Leslie
My hon. Friend has touched on the other argument in favour of the proposal. This is not just a matter of fairness; there is also an economic imperative involved.
I apologise for boring the House about the need for growth and jobs in our economy. That seems to be anathema to some Members on the Government Benches. Many lower and middle income families have suffered increased taxes and cuts to their tax credits, and that is the price that they are paying for the failure of the Government’s economic ideology. The Government promised that all this pain would be worth while. The Chancellor promised that he had done all he needed to do, and that he would not need to come back and ask for more, but what did we see last week? He came back for yet more. That is the price to be paid for the Government’s failed economic plan. The economy is flatlining, and the Government have delivered barely 1% of economic growth since the fabled 2010 spending review in which they promised 6% by now. And let us not forget the rising deficit in the last financial year, up from £118.5 billion in 2011-12 to £118.7 billion in 2012-13. That is a rise in the deficit—
Geraint Davies
A moment ago I talked about Arab oil sheiks and now I am going to talk about Welsh milk shakes. On a serious note, what the Labour party has said is that when we take over in 2015, should the people of Britain give us their confidence, as I hope they will, we will inherit—this is self-evidently true—the current Government’s spending plans for 2015-16, so we will carry them out. As we make progress, I hope that the focus will switch to growth more than cuts, as it did after we inherited the Conservative party’s spending plans when we took over in 1997. We ran with those plans for a year and then we had consistent growth. The economy grew by 40% from 1997 to 2008 before the financial tsunami caused by sub-prime debt. I imagine that we will do the same in 2015. We offer no apology that we will have fiscal discipline alongside a focus on growth and that we will get people into jobs to pay down the debt. We will also change the composition of cuts to the rich and poor in certain areas.
Mr Russell Brown
My hon. Friend and I arrived in this House in 1997. In government, Labour confined itself to the overall spending of the previous Government, but we had different priorities which we put in place. It is not as if we came to power in a golden era. There was a debt and servicing it cost the equivalent of what was being spent on transport and defence put together. There was no golden inheritance. We had difficult choices to make as well.
Geraint Davies
I am glad that my hon. Friend brings that point up in this debate about the mansion tax. In 1997, we had the same old Tory economics, which we are seeing again because history is repeating itself. There was massive unemployment and that was being paid for by cutting services for the poorest. There was a huge debt that the Labour party paid down. The interest on that debt was excessive. We all remember Black Wednesday. We made the Bank of England independent to keep interest rates low.
The Opposition are serious about keeping interest rates low and having fiscal discipline, but our priority is economic growth. That is what any sensible business would suggest. A business man in Swansea said to me the other day, “If I was running at a loss, the last thing I would do is sack my workers and sell my tools, because I would not have a business. I would tighten up and focus on new product development and sales.” That is the balance that we want. We want a mansion tax and a 10p rate, because if we can recover some money from the richest and redistribute it to make it more worth while for everybody to work, that has to be a good thing.
The right hon. Member for Wokingham (Mr Redwood) brought out his violin and gave the heart-breaking story of the poor people who have a two-bedroom flat in Chelsea worth £2 million. He said, “Isn’t that awful. Surely you wouldn’t do that.” That is in sharp contrast to what Tory Members say about the person in the two-bedroom council flat who will be punished because their children grow up, get on their bike and get a job, as Norman Tebbit said, and vacate their bedroom. They say that there is nothing wrong with the forced evacuation of such people from London to a one-bedroom flat in a lower cost area; but they say that it is wrong that somebody who is living in a £2 million two-bedroom flat should have to rebalance their asset portfolio to generate revenues to pay the mansion tax. If someone has a £2 million Chelsea flat, it is possible for them to rent it out at enormous rents, live somewhere else in the countryside that is many times bigger, pay the mansion tax and make a handsome profit. That is not a heart-rending problem compared with the bedroom tax. However, it appears that Tory Members are more concerned about people who own £2 million properties than people in council flats.
A woman from my neck of the woods in Swansea came to see me two weeks ago and said that she had been on the waiting list for 11 years, asking to be moved from her two-bedroom flat to a one-bedroom flat, but the council does not have any one-bedroom flats. Why is that? It is because the local council has rightly been building for families in need with children. Suddenly we have the bedroom tax, which makes no economic or social sense, but there is no admission of that from the Government.
We have made the sensible suggestion, which has been thought through by the Liberal Democrats, that we should make the council tax more progressive.
We are all aware that house prices have gone up and down in different areas at different rates. In London, there is a skewed situation, because there is very quick house price inflation compared with elsewhere. People are making enormous capital appreciations. In essence, the financial disaster was caused by the bankers and sub-prime debt. That is likely to be repeated as we approach the general election because the Chancellor and his assistant, the Exchequer Secretary, have suggested triggering more sub-prime debt by covering people’s deposits. On the one hand, they are telling the banks to run a tight ship and to have enough capital reserves to cover their lending, because they do not want them to go bust again. On the other hand, they are saying that they will subsidise the purchasing of new houses. That is likely to happen in London, because people know that there is price inflation and will take a punt with a lower deposit and at a lower risk, hoping that they will recover their money through an escalation in house prices.
The very high-value property in London is being gobbled up by foreign speculation. The expensive property is being bought by people who want to get their money out of places such as Russia and by people who have huge accumulations of money from trade or oil surpluses. There are many cases of blocks of flats in London being bought outright. Nobody is living in them because the people who buy them know that they will make so much money through appreciation that they cannot even be bothered to rent them out. It is unbelievable.
We are asking, at a time of difficult choices and austerity, for a percentage of those transactions by multi-millionaires to be redistributed to make life easier for people who work in communities across Britain, not just in London. I accept that most of these properties are in London. For example, the constituency of the hon. Member for Carmarthen East and Dinefwr (Jonathan Edwards) does not contain a £2 million house.
Oral Answers to Questions
Russell Brown Excerpts(11 years, 6 months ago)
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Sajid Javid
I have seen the report to which my hon. Friend refers. I have also seen similar reports—for example, from the National Institute of Economic and Social Research—which also show encouraging signs. Together, all those reports show that this Government’s policies are working.
Mr Russell Brown (Dumfries and Galloway) (Lab)
In reply to a question I tabled, which eventually ended up with the Cabinet Office, I was informed that between June 2010 and September 2012, 741,000 private sector jobs were created. Can the Minister explain the discrepancy between that figure and the fanciful figures of 1 million, and now 1.25 million, private sector jobs that he and his colleagues use?
Sajid Javid
The numbers I tend to look at are those provided by the Office for National Statistics. Those numbers show not that 1.25 million jobs were created in the private sector since the end of the first quarter of 2010, but that 1.31 million jobs were created. If we allowed for transfers from the further education sector, which we do not, the figure would be 1.5 million jobs.
Finance (No. 2) Bill
Russell Brown Excerpts(11 years, 7 months ago)
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Andy Sawford
My hon. Friend is absolutely right and I will say more later about capital spending in this country.
It was not just Tata Steel that shed jobs in my constituency; Argos also did so and Aquascutum closed. Those companies were affected because nobody had any confidence and nobody was spending. That happened because the Government chose—they made a deliberate political choice—to talk our economy down. It was a political strategy without any real regard for the damaging effects it would have on our economy. When they got hold of the levers of power, they revealed their real purpose: an ideological attack on the state and on the poorest in our society.
The accumulative impact of the Government’s Budgets, including this one, will have an effect on individuals. The Institute for Fiscal Studies tells us that the average family will be £891 a year worse off, but that figure tells only part of the story. The other part is how the cuts to services will impact on all residents, particularly those who most rely on public services. Buses have been cut in my constituency, the ambulance station in Corby is due to close and children’s services, particularly for those with special educational needs and their families, have been decimated. Respite care has been lost and there are fewer police and police community support officers than when this Government came to office, and there is a real threat of cuts to my local hospital. The huge impact of those cuts to services on families means that they are worse off.
The Government’s policies have impacted on those who most needed their help—the children plunged into poverty and the disabled people hit by the bedroom tax and the pernicious Atos reviews that this Government have failed to intervene in and stop. Those out of work and unemployed in my constituency have been stigmatised by this Government and left desperately chasing the few vacancies that exist.
The Government say that there are more people in work, but that is not true in my constituency. Moreover, what sorts of jobs are being created? They are part-time, low-paid jobs for underemployed people in my constituency —fragile employment for people working through agencies on zero-hour contracts and on the margins of the labour market, there to be exploited. And the Government say that that is okay.
Mr Russell Brown (Dumfries and Galloway) (Lab)
In the last couple of weeks, I received an answer from the Cabinet Office on the private sector jobs that have been created. The Government now talk about 1.25 million private sector jobs and for a long time spoke about 1 million. Is my hon. Friend surprised to learn that, in fact, between June 2010 and September 2012, the figure is only 750,000?
Andy Sawford
I thank my hon. Friend for bringing the real figures to the House. He is right that the Government are grossly exaggerating the total number of private sector jobs that have been created and, crucially, the nature of those jobs.
Budget Resolutions and Economic Situation
Russell Brown Excerpts(11 years, 8 months ago)
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Vince Cable
I am sure that we would have free petrol in a perfect world.
Let me deal with some of the points of economic substance that have been raised. The first was about job creation. It is true that in the last set of figures there was a very small increase in unemployment. However, that happened against the context of the last three months, in which 130,000 new jobs were created, vacancies rose and redundancies fell. In this Parliament, we have created 1.25 million new private sector jobs. It is difficult to understand why, if the economy is performing as badly as the shadow Chancellor claims, a large number of new private sector companies are creating jobs in that way. There are regions of the country, such as the west midlands, that in the boom periods saw a decline in private sector employment. That is now being comprehensively reversed.
The question put by my hon. Friend the Member for Portsmouth North (Penny Mordaunt) is apposite: why does the Labour party think that 600,000 jobs are being predicted by the OBR in the coming year? We got the ludicrous answer that it has something to do with immigration, but immigration is about the supply of labour, not the demand. Where is the demand coming from, other than a favourable business environment that encourages small companies to establish and grow jobs?
Mr Russell Brown (Dumfries and Galloway) (Lab)
We have listened long and hard to the Government about the number of private sector jobs that have been created—it went from 1 million, to 1.2 million, fell back to 1 million for some reason, and yesterday we heard an announcement of 1.25 million new jobs. Will the Secretary of State put in the Library a complete breakdown of those jobs that states where they are located—not just percentage-wise but numbers-wise—which sectors they are in, and the hours that people are working, so that we know exactly what is happening?
Vince Cable
I understand that some of those details were placed in the Library yesterday, and the hon. Gentleman is free to consult them. I hope he is not trying to deny that the phenomenon is taking place.
Mr Russell Brown (Dumfries and Galloway) (Lab)
I will try to be as quick as I can because I know that others want to make a contribution to this debate.
I will not get into the knockabout. If we are all honest with one another, every Government who come in after a period out of office inherit problems that they have to tackle. I am not running away from the fact that because of what the previous Government did to support banks, this Government were landed with a bigger problem than any of us would have wanted.
The debate this afternoon has been interesting. The hon. Member for North Swindon (Justin Tomlinson), my hon. Friend the Member for Luton South (Gavin Shuker) and the hon. Member for Aberconwy (Guto Bebb) all mentioned one word, which is vital to everything we do within the economy, and that word is confidence. Without confidence, we are going nowhere, and growth runs hand-in-hand with confidence.
I took the opportunity last night to speak to about a dozen people in my constituency. I had given them a commitment. Some were small business owners and they pointed out that some of the commitments that the Government gave yesterday were about what lies in the future, not about how they were going to get from where we are in 2013 to 2015. My constituency is in an area that depends very much on small and medium-sized enterprises for running the local economy, and there is little confidence out there in my locality.
On the concept of the private sector providing jobs, only this week I have heard announcements of the loss of 36 jobs in two private sector companies, one in the food industry and one in engineering. It is a different picture in different parts of the country.
Youth unemployment rose to 9.8% in my constituency yesterday—1,080 young people. For the fourth month running, unemployment overall rose and stands at more than 3,500. I want to say something about those young unemployed people. The issue is about more than just a job. One of my colleagues on the Opposition Benches—I will not mention names—shared some information with me. He had asked some questions about mental health problems and the astonishing figure came back to show that 32.9% of 16 to 25-year-olds have a mental health problem. That may be just depression or stress, but the figure is 32.9%. When we look at those figures region-wide and overlay them on to the youth unemployment figures, the result is frightening. The figures merge together. It is more than people just being out of work. Long-term ill health can begin to set in.
I say to the Government and the Treasury team dealing with the Budget that we do not want a re-run of what we experienced in this country in the 1980s and early 1990s, when we ended up with long-term second and third generation unemployed, a situation that my party tried to tackle. It is not good for individuals, families or communities and, above all else, it is not good for the country.
The Budget contained measures for small and medium-sized enterprises, which I would love to have seen happening sooner. I have concerns about what is being proposed in respect of house building. Is the confidence there for private sector house building? I would much prefer to see more money invested in public sector housing.
Finally, I shall mention something that is dear to the hearts of my constituents in a rural area—road fuel prices. Although he is not here, I want to mention the hon. Member for Argyll and Bute (Mr Reid). He does himself no credit, nor does anyone else, by saying that had a Labour Government been in office, road fuel would have cost 13p or 18p a litre extra. The price at the pumps today is a false price, with crude oil priced at $93. When we had the same price at the pumps previously, crude oil was $140 per barrel, so we have a false price. The weak pound is ratcheting the price up, and with a weak pound and no increase in exports, there is a problem lying in the undergrowth. That problem could well be inflation, and I would like to hear the Minister say something about that when he winds up.
Guy Opperman (Hexham) (Con)
The good constituents of Hexham will welcome action on fuel duty, support for the victims of Equitable Life, action on increased infrastructure, tax-free child care, decreases in corporation tax, support for business and the raising of the personal allowance up to £10,000 by 2014, which will take millions more low-paid people out of tax altogether.
The action on fuel duty is the most important thing to the people of Hexham and Northumberland. There is a stark contrast between a Labour Government who raised fuel duty 10 times in 13 years and this Government who have managed, even in these difficult times, either to keep it flat or to reduce it. I listened to the speech by the hon. Member for Dumfries and Galloway (Mr Brown), with whom I have debated fuel duty on many occasions, and it was as if I lived on a different planet, certainly not the one on which the previous Prime Minister increased fuel taxes. The reality is that the hon. Gentleman and I have the same sorts of constituents and this Government are looking after them with regard to what is the most important issue to them, namely fuel. The previous Government kept raising fuel prices. They were woeful.
Mr Russell Brown
All I will say, as I have told the hon. Gentleman before, is that the previous Government—this is a fact—froze or abandoned potential increases on 13 occasions over nine years.
Guy Opperman
There may have been plenty of times when the previous Government chose not to raise prices, but they did increase them on 10 occasions, and those with long memories in Northumberland and in Scotland remember that. [Interruption.] Opposition Members may chunter, but that is the bottom line.
The full acceptance of the Heseltine report was particularly welcomed in the north-east. It was specifically called for by the north-east chamber of commerce and has been welcomed by business. Exports from the north-east are up, jobs have improved dramatically since May 2010, and the number of apprentices has doubled. There has been a dramatic improvement. The Corus plant was shut by the previous Government—it was the titanic industrial issue in the build up to the 2010 election—but reopened by this coalition Government.
This Budget comes at a time of self-examination in the north-east. The January declaration and Lord Adonis’s review of the north-east, which I am contributing to and support wholeheartedly, are making a real difference to understanding how the region can improve itself. That is an example of proper self-examination from a detached standpoint.
Bank lending is another important issue. I welcome the Business Secretary’s statement on developments on the business bank and the fact that the Opposition have finally begun to realise that local community banking is a good idea. Sadly, when I invited the shadow Minister, the hon. Member for Hartlepool (Mr Wright), to support my campaign for local community banks in a debate on manufacturing on 24 November 2011, he declined to do so, and the point was raised with him again on the same day the following year. The proof of the pudding lies in the fact that, during an April 2012 debate on the Financial Services Bill, the Labour party voted against clauses in favour of greater competition for local banks, greater ease of entry and greater ability to open a local bank. Why would Labour Members vote against greater competition and a local community bank that makes money for the community, with profits going back to the community? It is illogical in the extreme.
I welcome the fact that the Labour party has finally come on board and accepted that local community banking is a good thing. It has taken a while and I hope that Labour Members will back up what they are saying in public with votes in support of greater competition for local people. It is vital that our campaign for local community banks continues. The work done by the Financial Services Authority is to its credit. It has made it much easier to set up a community bank.
Oral Answers to Questions
Russell Brown Excerpts(11 years, 8 months ago)
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Danny Alexander
That matter is under consideration, and announcements will be made in due course.
Mr Russell Brown (Dumfries and Galloway) (Lab)
But surely the Minister cannot run away from the fact that the largest single increase in fuel prices at the pumps was the VAT increase. Also, over the past two weeks the weakening pound has driven up prices at the pumps. That needs to be seriously considered.
Danny Alexander
I do not run away from any of the decisions the Government have made, and the hon. Gentleman should not run away from the fact that the ratchet on fuel prices planned by his party in the last Parliament, which was baked into the public finances, would have dwarfed the increase to which he refers.
Tax Fairness
Russell Brown Excerpts(11 years, 8 months ago)
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Mr Gauke
We are left with the same issues of complexity of valuation across the board, and the issues of the asset-rich, cash poor. That is why my part of the coalition is not keen to proceed with that matter, but it is worth pointing out that we are raising more money from property. There is a stamp duty land tax of 7% on residential properties costing £2 million or more, a policy that is easy to administer and will not impact on existing home owners.
On the mansion tax, we have made no secret of the fact that the two parties disagree. If we did not disagree on some things, we would be one party, not two. But in the circumstances that we are in, it has been perfectly possible for two parties to work together in a sensible and mature way and to reach agreement on a host of measures that have made our tax system fairer, easier to understand and competitive. We heard much from the hon. Member for Nottingham East to the effect that we should do more to help low-income workers. May I just remind him and the House of the progress that we have made in raising the personal allowance? In 2010, someone on £6,500 was paying income tax at 20%. From next month, someone has to earn £9,440 before paying any income tax at all. Our measures on the personal allowance have provided a huge tax cut for millions of people and will take more than 2.2 million of the lowest earners out of income tax altogether. In fact, over the course of this Parliament, someone working full time on the national minimum wage will have seen their income tax bill cut in half.
Let us contrast our record with that of our predecessors. Let us remember that when the right hon. and absent Member for Kirkcaldy and Cowdenbeath (Mr Brown) did his last Budget, rather than cut taxes for the working poor, he increased them. People talk about the scrapping of the 10p rate, but Labour did not scrap it, they doubled it. They turned it into a 20p rate. For example, someone earning £9,000 a year in 2007 would have heard a Labour Chancellor stand up and announce that a Labour Government were going to increase their income tax bill by more than £200. Last year, someone on £9,000 a year would have heard a Conservative Chancellor stand up and announce that a coalition Government were going to take them out of income tax altogether. Our constituents on £9,000 a year will soon be paying no income tax at all, saving more than £500 since the coalition came to power. Labour turned a 10p rate of income tax into a 20p rate. This coalition has turned a 20p rate into a 0p rate.
Mr Russell Brown (Dumfries and Galloway) (Lab)
Will the Minister remind the House what he did with the personal allowance for pensioners? Am I not correct in saying that he froze that?
Mr Gauke
There is no particularly sensible reason why there should be a different personal allowance for someone who is 64, compared with 65 or 75. It is clearly a simpler and, I believe, fairer system that one personal allowance should apply to everybody. That was never an option available to the Labour party because the main personal allowance for someone under the age of 65 was so low. We have been able to increase it substantially so that one personal allowance can apply to everybody. That is a simpler and fairer way to deal with that issue. At the same time, we have increased pensions, thanks to the triple lock guarantee, by much more than we would have done if we had stuck with the plans that we inherited. Last year, pensioners saw their biggest increase in the state pension.
Mr Russell Brown (Dumfries and Galloway) (Lab)
I apologise for the fact that, as I indicated to you, Mr Deputy Speaker, I shall need to leave the Chamber at about 2.30 pm, although I shall return, so thank you for calling me now.
I support the motion, the fundamentals of which simply call
“on the Government to bring forward proposals for”
a mansion tax “at the earliest opportunity”. It is a proposal—nothing more, nothing less—that I should have thought the junior coalition partner supported.
I should like to remind the House, especially the Liberal Democrats, of a speech on tax and fairness delivered last month by the Deputy Prime Minister, in which he said:
“I continue to believe we should ask for what would be a modest contribution from the very wealthy, either in the form of a Mansion tax—a 1% levy on properties worth more than £2m—applied just to the value over and above £2m; my preferred option. Or, alternatively, we could introduce new council tax bands at the top end, again, affecting properties worth over £2m. . . Nothing could do more to demonstrate a commitment to greater fairness in our tax system. I will continue to make this argument, in this Coalition and beyond. My approach is simple: taxes on mansions; tax cuts for millions.”
Only time will tell whether there is the slightest hint of sincerity in those words.
We are debating the issue today only because our nation’s economic uncertainty and problems mean it is right that we do so. What is the current problem? It is squeezed living standards and a flatlining economy. Families are working harder for longer and for less, yet almost daily they witness prices going up and up. The talents of millions of our young people are being wasted and small businesses, which will drive our economy, are being held back by banks and a Government who are not on their side.
Yesterday evening I met representatives of a number of small and medium-sized enterprises based in the London area. They told me and other Labour Members that banks need to work for them and not against them, which has been their experience of the past two or three years: banks are not lending to the most entrepreneurial businesses, and in their eyes everything is going backwards. The economy is not growing and has flatlined over the past two years, and the deficit is going up. Government borrowing is increasing as a result of economic failure. Those of us who watched closely in the ’80s and early ’90s saw what economic failure did to the nation. We are witnessing nothing short of trickle-down economics: the middle is being squeezed and almost daily there is a race to the bottom.
The Government’s economic vision is of a race to the bottom in wages and skills, rewarding only those at the very top and leaving everyone else squeezed as never before. Next week taxes will be cut by an average of £100,000 for 13,000 people earning more than £1 million, yet millions of working families will be asked to pay more as their tax credits are cut.
The Government refuse to stand up to the energy and train companies that are squeezing family budgets. Debates have been held in the House over a prolonged period, but nothing has been done to protect some of our poorest families and communities.
Andrew Gwynne (Denton and Reddish) (Lab)
From listening to everything said by Members on the Government Benches one would think that everything in the garden was rosy, but my hon. Friend makes a point that has been echoed by research from the Institute for Fiscal Studies: that under the measures in the Government’s autumn statement the poorest 40% in society are losing much more than the richest tenth.
Mr Brown
My hon. Friend is correct: the figures given by the IFS are there for all to see and cannot be disputed. We are seeing real pain and suffering, hard as never before, in many communities. I am sure that constituents of hon. Members on both sides of the House are looking to their MPs for guidance and support. I fear in particular for young families. Those of us who are slightly more senior in years know what it is like to be told that we have to tighten our belts, but younger families find it difficult to cope with such comments.
Over the past two years the Government’s approach has been shown to be not working, but Labour Members know that it can never work. Prosperity will be achieved only when everyone plays their part in building the economy—a recovery made by many, not just a few at the top who believe they are aiding some recovery. That is the lesson of history. In the industrial revolution, which I know was way back, it was those who went down the mines, spun the cotton, built ships and constructed bridges who drove the economy forward. The nation is crying out for a fairer tax system, which we will put at the heart of our new priorities. As well as cancelling the millionaires’ tax cut and the changes to tax credits this April, a Labour Budget would tax houses worth more than £2 million and use the money gathered to cut taxes for working people. A fairer tax system would send a message about how Britain will succeed in the years ahead that says: “When you play your part and make your contribution to the economy, you will be rewarded.”
The Labour party would tackle vested interests. We need to act when working people are paying more than they should. We have said that we would break the stranglehold of the big six energy companies, stop the price rip-offs of the train companies on the most popular routes and cap the interest on payday loans.
Our country has to change. We must end the culture that says that university is always best and that vocational education is second class. That simply is not true. We see the need to create a new technical baccalaureate to complement A-levels. We see the need to give employers, for the first time ever, control of the money for training. We see the demand for Britain’s employers to step up and offer real apprenticeships and proper training.
Today, we are increasingly two nations with high-skilled, high-paid jobs for those at the very top, but low-skilled, low-paid jobs that involve long hours for too many people. A one nation economy needs to support businesses that create sustainable middle-income jobs by introducing a modern industrial policy.
Mr Deputy Speaker (Mr Nigel Evans)
Order. I hope that the hon. Gentleman’s question will be about the mansion tax, because it seems as though the speech is going somewhat wider.
Stewart Hosie
I very much agree with the tenor of what the hon. Gentleman is saying, particularly in relation to fair taxation. However, I remind him that barely any of the sensible things that he wants to do were achieved in the 13 years of the Labour Government. Some of what he says is therefore rather galling to listen to.
Mr Brown
The hon. Gentleman and others in this House have complained long and hard over many years about the investment that was made in this country by the Labour Government and the work that they did to stabilise and take forward the economy. There is a reluctance to remember what had to be done at the time of the crisis when the banks failed. We had to support the economy of this country by supporting those banks.
To conclude, I will return to the point that I made at the beginning of my speech. All we are asking is that the Government bring forward proposals for a mansion tax at the earliest opportunity. We are not asking that a mansion tax be introduced, but we need to engage in the debate. I would go further and say that what our nation needs and deserves above all else is an open discussion about taxation and what it means to our country. What can taxation deliver for the people of our nation? Our European neighbours have such discussions.
I hear what Liberal Democrat Members say, but any sincerity that they have must be shown in the Division later this afternoon.
Infrastructure
Russell Brown Excerpts(11 years, 9 months ago)
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Mr Russell Brown (Dumfries and Galloway) (Lab)
Perhaps I can answer the Minister’s question. The investment that the previous Labour Government put into the west coast main line was swallowing up money that could have been spent elsewhere. He is right about investment in schools, hospitals and so on, but will he tell the House what the previous Conservative Government’s idea was for funding capital projects? Am I correct in saying that it was private finance initiatives—millions spent but not a brick laid?
Greg Clark
It is not clear to me whether the hon. Gentleman is criticising PFI. If PFI was initiated by the previous Conservative Government, the champion of it—the party that relied on it and put it off balance sheet, and that misused it and mortgaged the future of our country—was clearly the Labour party.
After 13 years of the Labour Government our roads were more congested, our railways were creaking, house building was at its lowest level since the 1920s and electricity customers were facing black-outs for the first time since before the war. Our great cities were as poorly connected as they had been a century earlier, while across Europe and the world, new roads and railways brought cities together in 21st-century networks of prosperity. As the excellent report published recently by the London School of Economics states,
“infrastructure has been neglected, particularly in the areas of transport and energy. For example, more than a fifth of the UK’s electricity-generating capacity will go out of commission over the next decade and Ofgem…has warned of power shortages by 2015.”
That is the reflection after 13 years of neglect of Britain’s infrastructure.
Public Service Pensions Bill
Russell Brown Excerpts(11 years, 11 months ago)
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Mr Russell Brown (Dumfries and Galloway) (Lab)
On Second Reading, I fully recognised the views expressed on the Opposition Benches about public sector pensions being some of the poorest pensions, but I want to return briefly to the point I made about police pensions.
There will be some bitterly disappointed police officers out there this evening. We have heard in the past few minutes about goalposts shifting, while we have also heard about the physically demanding work of prison officers, but it is the exactly the same for our police officers and firefighters. On Second Reading, I commented on the massive changes and pointed out that there is no time for some police officers to recover when the computation is reduced to something like a 30% figure and they are having to work an extra seven years. The projected pension when they first joined the force is now reduced to around 70%. The decisions made in this House have been life-changing ones.
Mark Durkan
On the subject of the implications of pension changes for the police, does my hon. Friend recognise that a far bigger cohort of the Police Service of Northern Ireland is affected, because there has been such a turnover since the Patten commission? These people and their families are still facing targeting by dissidents, and they feel mugged by the Government.
Mr Brown
I thank my hon. Friend for that intervention. Yes, I fully recognise the difficulties faced across the water in Northern Ireland.
I shall finish now because I know my hon. Friend the Member for Cumbernauld, Kilsyth and Kirkintilloch East (Gregg McClymont) wants to contribute to the debate. As I was saying, what has been determined in this place this evening and over the past few weeks amounts to life-changing issues. Let us hope that there is a chance for some of it to be corrected in the other place.