The Economy

Sammy Wilson Excerpts

Wednesday 26th November 2014 Commons Chamber

[Sammy Wilson (East Antrim) (DUP)]

May I welcome some of the news from the Minister today? The statistics show that there has indeed been an improvement in the economy. It is in the interests of none of our constituents to have an economy that is doing badly simply so that we can score political points. The fact that growth is higher than in the rest of the G7, unemployment has fallen, employment is up and productivity is up, which therefore helps competiveness, is good news and should be welcomed. I have no difficulty welcoming it.

The point of the motion, however, is that that news is not sufficient for smugness or complacency; for a simple acceptance that the plan is working, and that therefore we do not need to do anything more or make any improvements; or for somehow or other rubbishing suggestions just because they come from Opposition Members. The Minister and other Government Members who have spoken should look at some of the statistics.

I do not want to do the economy down. I have seen it happen in Northern Ireland, but people who do that simply talk themselves into a recession anyway, because if confidence goes down, businesses do not want to invest and consumers do not want to spend. Nevertheless, if there are warning signs, we ought to recognise them.

Despite what the Opposition have said, growth over the past few years has been predicated on Government spending. When we look at the figures for the composition of GDP, we see that the biggest increase has been in Government consumption. That is now shifting to consumer consumption, but the figures again show that that is predicated on increased consumer borrowing. Especially when wages are being squeezed in the economy, we ought to be worried about that. It will of course increase household debt, and if consumer spending is carrying economic growth, we should be worried. The Government have made much of wanting export-led growth. Again, the figures for this year show that exports are under pressure: they are not growing where they were growing in the past. There are therefore some warning signs.

Another warning sign is inequality. As has been highlighted, even those in work do not feel any better off. Rather than Government Members saying that it is good to have people in work, they ought to be concerned that even the benefits of their policy are not felt universally, and they ought to accept that something needs to be done about that.

[Mr Gregory Campbell (East Londonderry) (DUP)]

On that issue, does my hon. Friend agree that the nation of the United Kingdom as a whole should prosper, and that wealth needs to increase—with greater inward investment and greater support for small and medium-sized enterprises—right across the regions of the United Kingdom, rather than disproportionately in the south-east of England?

[Sammy Wilson]

Of course, one of the other inequalities is inequality between the regions. The economy in Northern Ireland has done better in this recession than we expected—we are increasing inward investment through some of the Executive’s micro-economic policies—but there are regional inequalities, as well as inequalities between economic sectors and individuals.

For that reason, we need to look at two issues in the motion. The first is that as the economy grows and the percentage of GDP that is attributed to profits rises, there is no reason why—through increasing the minimum wage or, indeed, through greater application of the living wage—we cannot start some degree of redistribution from those who hold capital to the work force. That would not be a bad thing; indeed, it would be good for the Government finances, because it would of course release an awful lot of the spending on tax credits. In a growing economy, we can afford to do that. It is not only those of us on the Opposition Benches who espouse that policy: the Mayor of London has been an advocate of it. He has argued that it is a Tory policy, and that it should not be captured by the Opposition. We need to look at doing that. Not only would it release some of the Government spending on tax credits, but it has been shown that it tends to increase productivity and leads to a lower turnover of staff, saving expense for employers.

The second issue is borrowing. I understand that we cannot simply borrow, borrow, borrow. However, as I have indicated, the Government are happy for some of the growth in GDP to be carried by household borrowing. Of course, businesses borrow for capital expenditure. Borrowing can provide a return and perform a social function. The motion highlights expenditure for a house building programme. That would have a big multiplier effect on the economy—a multiplier effect that would probably be greater than that of borrowing to pay for people to be on the dole. It therefore makes absolute sense.

Government Members are presenting the motion as one that simply says, “Oh, let’s borrow more money regardless,” rather than one that says, “Let’s borrow money to use where it will actually help the infrastructure of the economy; where it will provide a return; where it will pay for itself over a period of time; where it will deal with a social problem; and where it will perhaps increase the mobility of labour because, of course, more housing enables that to happen across the country.” That, to me, is a sensible policy.

For that reason, I am disappointed that the motion, or at least the ideas in the motion, has not been accepted. If there are warning signs that growth may falter, here are ways in which we can put money into the hands of those who spend most of their income—that is, the low paid—and into capital investments that will have a return, which may, in turn, have an effect on economic growth. For that reason, I will support the motion this evening.

EU Budget (Surcharge)

Sammy Wilson Excerpts

Monday 10th November 2014 Commons Chamber

[Mr Osborne]

Of course, giving away the rebate cost Britain billions a year. My hon. and learned Friend is right to draw attention to the pattern of forgetfulness on the Opposition Front Bench. They forget about the deficit and about immigration, and now they forget about the rebate. It reminds everyone why the British public are quite clear that they are unfit for government.

[Sammy Wilson (East Antrim) (DUP)]

Regardless of whether the bill has been rebated, does the Chancellor not recognise that for many UK citizens facing cuts in public services, £850 million extra going to a body which has not had its accounts signed off for 19 years, wastes billions through fraud and spends money on vanity projects, is not good value and that they object to it?

[Mr Osborne]

I completely understand the anger and frustration felt by all our constituents at the way money is spent by the European Union. That is why we are seeking reform and why both the hon. Gentleman and I would like to see the British people asked for their consent in a referendum.

Taxation of Pensions Bill

Sammy Wilson Excerpts

Wednesday 29th October 2014 Commons Chamber

[Cathy Jamieson (Kilmarnock and Loudoun) (Lab/Co-op)]

I look forward to an interesting debate on the detail of the Bill, both today and in Committee.

Opening the debate on Second Reading of the Pension Schemes Bill, the Minister for Pensions said:

“we will be very busy over the remaining months…taking the pensions system to a…better place.”—[Official Report, 2 September 2014; Vol. 585, c. 195.]

I agree with the first part of that statement: we will indeed be very busy. As for the second part, the extent to which we can improve the Bill remains to be seen. The efficacy of any Bill should be judged only according to its outcomes, and at this stage there are a number of concerns about the outcomes of this Bill, which are far from certain. There are a number of unanswered questions. My hon. Friends have asked a number of them today, and I am sure that more will arise during the Bill’s passage.

As the Institute for Fiscal Studies said at the time of the Budget, the reforms in the Bill will change the pensions landscape dramatically, in the ways in which people take income in retirement and the pensions industry is structured. As the Minister has explained, from 6 April 2015 those aged 55 and older—I should perhaps declare an interest, as I am a member of that age group—will be granted far more freedom. They will be able to gain access to as much of their pension savings as they wish, as often as they wish.

The Minister for Pensions has described the Opposition’s view of the new freedom as “ambivalent”, but that is something of a misrepresentation. We are not ambivalent about what the Bill purports to achieve. Since the reforms were announced in the Budget statement, our position has been consistent, but, for the avoidance of doubt, I shall restate it. We support increased flexibility and choice for savers, which is why we have long advocated reform of the annuities market to help people shop around to get a better deal. However, it would be remiss of us not to identify and highlight the potential problems and pitfalls that the Bill presents. One of my main concerns, which has already been raised today, relates not just to what it seeks to achieve, but to the speed at which it seeks to achieve it.

[Sammy Wilson (East Antrim) (DUP)]

Does the shadow Minister agree that, given the increasing array of choices now available, one of the most important decisions anyone can make will be how comfortably can they live in retirement? The guidance and help the Government provide on making these difficult choices is very poor.

[Cathy Jamieson]

The hon. Gentleman makes a very important point which I will deal with in some detail. It is one of the most crucial issues not just in respect of the Bill, but of the wider pensions landscape.

--- Later in debate ---

[Cathy Jamieson]

The hon. Lady makes an important point, and I listened carefully to her intervention on the Financial Secretary. As a constituency MP, I am aware of people who have been swindled out of their life savings through unregulated, unscrupulous people giving them bad advice; indeed, the Financial Secretary has heard me talk about this issue when considering other Bills. I am very interested in what the hon. Lady said about such an amendment, which we would want to consider to give as much protection as possible to consumers.

[Sammy Wilson]

A point that the Financial Secretary skirted round when he announced the changes to annuities was that they can now go down, as well as up, as a result of this legislation. Does that not bear out the concern raised by the hon. Member for North Down (Lady Hermon)? If such flexibility is provided for the providers, there is a real danger that people could be sold a pup and find that their income unexpectedly diminishes over time?

[Cathy Jamieson]

That is an important point, and these are exactly the reasons why it might have been useful if more time had been provided for discussion within the industry and with the partners in the process, so that we can get to that better place that I talked about at the outset. It is not just about giving people more choice; it is about giving them the ability to make choices that are wise not only at the moment when they choose to draw down or take part of the lump sum, but that are based on providing for the future.

One of our concerns is that although the reforms may well give greater choice, we have to consider whether that greater choice translates into better value and a better deal for those involved in the process. People making use of the flexibility will of course have new opportunities, but as we have heard, new opportunities potentially bring new risks. Those who purchase the wrong products, invest unwisely or fall victim to unscrupulous practices in the unregulated market will see their money swiftly evaporate. Those who use the new flexibility to take out cash from their pension savings may find that they are paying a higher rate of tax. We can also expect a deluge of new products to flood the market, and while some of them may well be good, by the very nature of things, some may well be less so. That is why it is important that people get good-quality guidance to help them make the right choice.

--- Later in debate ---

[Cathy Jamieson]

I agree with my hon. Friend. That fiasco is a recent memory for many of us, and it is our responsibility to ensure that all the risks, as well as all the upsides, are explored.

I should like to quote the ABI, which has stated:

“Giving customers more choice is welcome but it is also imperative to recognise that good guidance and advice is vital to prevent people making decisions which could lead to retirement poverty and/or to them giving up valuable benefits.”

That is a very important point. People in the industry also recognise that we need to have some caution and ensure that we do the right thing.

That brings me neatly to the fraught issue of the guidance guarantee. The Minister talked a bit about that in responding to interventions, and although I recognise that it is not within the specific ambit of the Bill, it has a great bearing on it. That guarantee is integral to the measures in the Bill, because if the Bill is to be a success, the guidance must be fit for purpose. It is not unfair to say that the continuing concerns and confusion over the guidance guarantee do not give confidence to people who are worried about how they are going to access the guidance. It seems as though the guidance was a secondary consideration. As I have said, the pension reforms were announced without the prior consultation with the industry that we might have expected. Some of the confusion was added to when the Chancellor stated that his reforms would be accompanied by advice, given that we know that what he really meant to say, and what was promised in the Budget, was unregulated guidance.

We then had the unedifying and unhelpful intervention by the Pensions Minister, who appeared to make light of the need for guidance by saying:

“If people…get a Lamborghini, and end up on the state pension, the state is much less concerned about that, and that is their choice.”

That is not helpful at all and has not been during the process. On Second Reading of the Pension Schemes Bill, the hon. Member for Reigate (Crispin Blunt), who is in his place, asked for clarification on how the guidance guarantee would be funded. The Pensions Minister answered by saying that

“the £20 million is not an estimate of the annual recurring cost of providing guidance; it is a one-off seedcorn, getting-the-thing-going fund…if we need to set up websites, produce literature and create infrastructure, the £20 million will enable us to do so.”—[Official Report, 2 September 2014; Vol. 585, c. 198-99.]

That is a bit vague and non-specific. Less than a year from when this Bill comes into force, surely he should know exactly what the guidance will look like.

We now know that the Government propose to deliver the guidance across three platforms, only one of which will be face to-face guidance—that was what was initially promised. We also know that the Money Advice Service will not be involved in the delivery. The three agencies involved will be: the Pensions Advisory Service, which will provide over-the-phone guidance; Citizens Advice, providing face-to-face guidance; and gov.uk, to which this Minister referred. That raises the question of how the Government will ensure that guidance delivered across three different mediums will be of a consistent standard.

The crux of the matter, and what the consumer needs to understand, is: what will the guidance consist of? Will it be an interactive exchange, or will it be a list of questions that must be asked and areas that must be covered? The Financial Conduct Authority appears to think it will be the former, saying it should cover:

“the key facts and consequences of each”—

option—

including financial consequences, e.g. tax implications.”

The Pensions Minister, however, seems to think it will be the latter. He has said that there is a “world of difference” between

“a guidance conversation to get people to base camp”

and a

“sophisticated, individualised, tailored piece of…financial advice recommending products.”

The Pensions Minister has, however, been keen to assure us that the guidance is not being offered on the cheap—his preferred epithet is “budget”. The levy on the pensions industry will not be set at the level required to pay for

“full-blown, regulated, independent, tailored financial advice.”—[Official Report, 2 September 2014; Vol. 585, c. 199.]

Rather, it will be designed to generate only so much as is required to pay for what he terms the “cost-efficient” guidance version. To summarise, the guidance guarantee seems to amount to the following: it will not be regulated, personalised, or product-specific; it will be “cost efficient”, “substantially cheaper” than advice and funded by a “modest” levy on the industry—enough to get people to “base camp.”

That was what was said almost two months ago, but, sadly, judging by the evidence given to the Pension Schemes Bill Committee, things have not progressed much since. So bereft has been the Government’s approach to information gathering and analysis that we still do not know how many people are likely to take advantage of the new flexibilities. In evidence to the Work and Pensions Committee in April, the Pensions Minister was unable to give any firm indication. He said:

“I am not sure there is much point in me guessing. As I say, HMRC assumed that about 30% would take the cash...some of the annuity providers are saying it might be 70%- odd. We do not know.”

We are also reduced to guessing because, despite a freedom of information request from the shadow Pensions Minister, the Government have refused to publish any analysis they have conducted of the behavioural impact of these reforms. We do not know how many people are likely to make use of the new guidance, but a guidance pilot conducted by Legal & General found that only 2.5% of those offered guidance accepted it. The Pensions Advisory Service has estimated that take-up in the first year will be about 25%, so what happens in respect of the 75% who do not take the guidance? What backstop measures, or second line of defence, will be in place for those who do not take up the offer of guidance? In the first year at least, the answer appears that there will be none at all.

Again, the FCA has raised concerns about that, saying,

“we will have the usual supervisory work going on keeping a very close eye on products as they develop. If people choose not to take the guidance, they choose not to take the guidance.”

That means that, potentially, up to 75% of people using the flexibility in the first year will access their pensions and use the money without taking any guidance at all. I do not know whether the Minister finds that concerning, but I do, and I am not the only one. Just Retirement has described the lack of a backstop as

“a massive threat to the pensions freedom reforms.”

The need to install a second line of defence was endorsed by others within the pensions industry, including the ABI, which also expressed doubt about the rigour of the FCA’s consultation on guidance.

The ABI’s head of policy said:

“We have discussed it with our members. We are a little concerned the FCA consultation…was narrowly drawn, which is understandable because it didn’t have much time.”

Why did it not have much time? Is it because the Government are in such a terrific hurry to force these reforms through? We are being left in a situation where the first tranche of people taking advantage of these reforms could be seen to be the guinea pigs in this process, and that is not acceptable.

Let me deal with a point that my colleague raised about the Ipsos MORI research. The extent of the concern has been laid bare by that, because it found that up to 200,000 pension investors could take advantage of the new flexibility in the first year alone. It is estimated that that would generate an additional £1.6 billion of pension income for Treasury coffers, which is why I was asking the Minister what estimate he had made as to what the Treasury would receive. It might be seen as good news for the Treasury, but perhaps not as such great news for savers, because only 38% of these pension investors were able to state accurately how much tax would be deducted from a medium-sized pot and only 6% could accurately predict what rate of tax would be applied to large pension pots.

[Sammy Wilson]

I know that the shadow spokesperson is not as cynical as I would be about some of this, but does she accept that HMRC’s own figures indicate that over the next budget period there will be a £4 billion windfall to the Treasury as a result of these changes? Of course, in the much longer term tax revenues will fall because there will be less income from the tax on annuities.

[Cathy Jamieson]

I would never suggest that the hon. Gentleman is cynical. He raises an important point, which again shows why I was trying to press the Minister on some of that.

I realise that I have taken up a considerable amount of time, and I want to give opportunities for other hon. Members to speak. However, I wish to raise just one other issue as I draw to a conclusion. I have mentioned the areas of uncertainty about the guidance versus advice debate, but I ask the Minister also to comment on the announcement about the abolition of the 55% tax on pensions at death—the so-called “death tax announcement”—made at the conference recently. I think that, at the time, the Minister said that annuities would not benefit from the tax cut. But it was certainly my understanding—the Minister can correct me if I have misunderstood—that the so-called value protected annuities will certainly so benefit, and that is still on the Treasury website. I have written to the Chancellor to ask for information, but I have not yet had a response. Clearly, uncertainty remains over the added potential for tax avoidance, which has been produced by the Bill.

In order to deter avoidance, the Government have introduced money purchase annual allowance rules, which, as the Minister said, places a £10,000 limit on the annual amount that can be saved tax free through money purchase agreements. The intention is to ensure that individuals do not use the new flexibilities to avoid tax on their current earnings. However, the rules still allow for £2,500 a year of salary to be “washed” tax free through salary sacrifice arrangements. I am interested to hear what the Government have done to address that risk and what further action they plan to take to guard against the new flexibilities being used in such a way.

Oral Answers to Questions

Sammy Wilson Excerpts

Tuesday 2nd September 2014 Commons Chamber

[Mr Gauke]

My hon. Friend is a doughty champion for her constituents and businesses located in her constituency. She raises an important point and I will make sure that both our embassy in China and the Department for Business, Innovation and Skills are aware of her concerns. The Government recognise the importance of trade with China and we want to do everything that we can to bring down barriers to enable as much trade as possible.

[Sammy Wilson (East Antrim) (DUP)]

During the past week, two reports have shown that export growth is down because of external factors such as slow growth in the eurozone, sanctions against Russia and the strength of the pound, and at the same time lending by banks to small businesses this year has fallen by £1,200 million, affecting their investment plans. Is there not a real danger that future growth will now be dependent on unsustainable consumer borrowing? What can the Government do, first to force banks to lend money to small businesses, and secondly to make known to small businesses the plethora of initiatives that have been taken to encourage exports?

Finance (No.2) Bill

Sammy Wilson Excerpts

Tuesday 8th April 2014 Commons Chamber

[The Temporary Chair (Katy Clark)]

Order. I remind hon. Members that we are debating a possible 50p income tax rate. Could they try to focus their arguments and interventions on that?

[Sammy Wilson (East Antrim) (DUP)]

I will do my best to abide by your ruling, Ms Clark—you probably want me to do more than my best.

Reference has been made to the fact that an historic event is taking place elsewhere in Parliament. I am sure that my colleagues will represent the Democratic Unionist party very well, but I have to attend this important debate. As a Unionist, I would have loved to see the President of the Irish Republic giving a speech to both Houses of Parliament with King Billy looking over his shoulder—I understand that King Billy is somewhere behind him while he gives his speech. Even better, tomorrow a republican will sit down to dinner with the Queen.

Things have changed in Northern Ireland, but the debate on the 50p rate has not changed. It is again a political football between Labour and the Conservatives. I want to make something clear at the outset. I do not wish to engage in a debate with some kind of class motive, or from the point of view of bashing the rich by imposing taxation on them. My party and I believe in lower taxation. Our record in Northern Ireland, where we have very limited power over taxes, has been one of keeping tax low. My basic philosophy, which may differ from that of some on the Opposition Benches, is that we should allow people to keep as much of their income as possible and to spend it as they see fit. That is the first point I want to make.

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[Huw Irranca-Davies]

I apologise for having left the Chamber. I had to address some young constituents.

The hon. Gentleman has made a number of good points. May I now ask him a question that I asked earlier? Why is there such a disconnect in the moral compass of the super-wealthy that they feel they would rather flee the country than pay a couple of extra pennies in income tax? Why do they imagine that they live in a different world, and that they do not need to sustain the public services on which everyone else relies?

[Sammy Wilson]

That is a very good question, but the fact is that we do not even know whether that is the way in which people behave. As has already been pointed out, many of those who pay the top rates of tax are employees, and many have their roots here. Their children are at schools here, they are involved in their communities here, and they have their families—their grannies, their mummies, their uncles and so forth. The assumption that people will suddenly cut all those ties when the marginal rate of tax is raised is extremely tenuous. I have not so far seen any figures that suggest that that happens. I can understand that if the marginal rate were raised from 45% to 90%, there might well be some incentive for people to leave, but when it is raised by only a few percentage points, is there really an incentive for people to avoid taxation by becoming exiles, given all the disruption that that may cause?

Ministers frequently refer to tax take predictions based on economic models, but it should be borne in mind that such predictions cannot specify the exact impact of tax changes with rapier-like incision. Their other argument is that, if the theory and the models cannot provide an exact picture, we should look at what has happened to tax revenue in practice over the past few years, because the proof of the pudding is in the eating. No doubt the Minister will give figures showing an increase in tax revenue from this particular income group, in which case we must ask whether it is possible to separate the various elements that have led to that increase.

I believe that the Government made a rather cynical attempt to ensure that they would achieve the result that they wanted by announcing the tax reduction a year in advance, knowing that that would give people an opportunity to defer the tax that they pay, thus enabling the Government to point to an increase in tax revenue in the first year of the new rate. Of course, if people are given advance notification and a chance to delay their payments, we will see the predicted outcome. I suppose it would be best to see whether the trend continues over a longer period, because we do not have any figures yet.

We know that while the incomes of certain groups have been frozen, incomes have been much more fluid at the top end of the income scale than at the bottom end, where there has been a blanket 1% increase. Indeed, there have been wage decreases in some parts of the private sector, especially at the lower end of the scale. How much of the increase is attributable to the fact not that there is more tax take from the same level of income, but that there is more tax take from increased incomes because there has been greater fluidity at that end of the income scale? Even after consideration, it cannot be said with absolute certainty that the reduction in the level of income tax has led to the increase in revenue.

--- Later in debate ---

[The Temporary Chair (Katy Clark)]

Order. I remind the hon. Gentleman that we are debating the 50p tax rate. A number of Members still wish to speak so perhaps he would address himself to the amendment before us.

[Sammy Wilson]

The point I was trying to make, perhaps at too great a length, was that the important thing was the headline rate when people were looking at places to locate their businesses. It is the same with income tax. While there may have been other tax changes that have affected the rich, when people make a judgment on the Government’s sincerity about austerity, they will look at the headline rate, and what they see when they look at the headline rate for those on middle incomes, for those on lower incomes—not in terms of the headline rate of income tax, but in terms of what has happened to their income—and for the most well-off in society is that there is a disparity, and that breeds cynicism. I believe an amendment such as this one will at least help to restore some confidence that when this House looks at what lies ahead, it is genuinely trying to make sure the burden is shared equally.

[Huw Irranca-Davies]

I apologise to the Committee for being absent earlier; I was with a group of young people from my constituency who are interested in politics and in what is being debated in the Chamber today. I am glad to have a few minutes now to say a few words.

The new clause and the amendment are innocuous and harmless proposals. They simply ask the Government to be transparent and to produce a review within a few months to show the effect of a 50p tax rate on those whose taxable income is between £150,000 and £1 million a year. I have struggled to find many such people in my constituency. I have tweeted about this on social media, asking people whether they think our amendment would be a bad idea, but, unsurprisingly, no one has come forward to say that they earn that much.

It is in the Government’s interest, as well as ours, to have this transparency. It is also in all our interests to tell people that we get the message about proportionality and contributing to public services. There is an emerging trend among the Conservatives to describe themselves as being the party of the working class and of working families. If that is the case they should support our proposals, because they would create full transparency and allow a debate to take place on whether we should set a tax rate of 50%, 49% or whatever. The proposals would also allow them to explain to working people—not the ones who earn between £150,000 and £1 million a year, but those who earn about £20,998, the median wage in Ogmore Vale—and to Conservative supporters why they think it is not a good idea to say to people, “Pay your share. We are genuinely all in this together.”

The hon. Members for Carmarthen East and Dinefwr (Jonathan Edwards) and for East Antrim (Sammy Wilson) have made good contributions to the debate, and I made a couple of mischievous interventions on them earlier. I have faith in the wealthy and the super-wealthy in this country. We will not have many Gérard Depardieus fleeing the country and heading off to Russia, or wherever the British, Welsh or Scottish equivalent might be. They will say, “We have respect for the communities that we work and employ people in, and it will not bankrupt us to stay here. We are not going to flee overnight to another country like some carpetbagger. We are not going to up sticks and relocate our premises.” That is not going to happen; it did not happen before, even when taxes were at much higher levels. It is a discredit to those people to suggest that it would happen.

In preparation for the debate, I looked into a few examples of people who had said that a return to the 50p tax rate would be a disaster. I was about to say that it would be wrong to name them, but one of them, the chief executive of Kingfisher, has been very outspoken in saying what a terrible detrimental effect such a measure would have. He has said that it would be a disaster for the country, and that entrepreneurs and businesses would flee. Well, okay, it might be just a coincidence that Ian Cheshire is an adviser to the Prime Minister as well as being the chief executive of Kingfisher. It might also be just a coincidence that he was knighted in the new year’s honours list. I am sure that that is pure coincidence. However, he clearly has a direct influence on the Government. When he says, “This is not good”, things happen. It is not only him, however.

It was fascinating to note the reaction of one other person, when this debate was raging about 18 months ago. I will not name this individual, but people can look him up in the Daily Mail. It is pretty obvious who I am talking about. He had said that he objected to a 50p tax rate on the basis that people like him would no longer be inspired to go out and earn money. He was reported in the Daily Mail as being about to sell his £3 million mock-Tudor home. He was explaining that he was now in a great place but when he had previously had trouble expanding the property, he had solved the problem by snapping up the property of his next-door neighbour. This was in an area inhabited by rock stars, football players and other highly paid celebrities. He had snapped up the house next door so that he could put in a swimming pool, a games room and a garage block for his Bentleys. We do not have many garage blocks in Ogmore. The properties were in a patrolled, gated community with private security.

My constituents who are on less than £21,000 a year think that that is another world. They think, “Why doesn’t that guy think he should be paying a couple of pennies more to keep the national health service going, because I can’t afford to have private health care or to send my children off to private school? I need what the state provides.” I know that this is like an old comedy sketch—“I look up to him because he is better than me.” But, that is not the case. The person I am talking about was one of those hardworking Tory supporters who some Government Members would like to appeal to now as the working Tory voter. Let us have a reality check. To those who say, “We feel really unhappy about this change, and it will drive us off”, I say, “Go.” They should subscribe to the values and ethos of this country—from each according to his ability to each according to his need. If they do not, they are not living in the country in which I was brought up. They should think twice about saying that they will go. Most people will sensibly recognise the skills and the quality of the work force, the good environment here for building up companies and our position in the European Union, and they will stay in the country and continue to work. All this amendment asks is that at a certain point in time, not too long in the future, we should be told what the impact is on those who are earning £150,000 or £1 million. Be transparent and tell us.

Budget Resolutions and Economic Situation

Sammy Wilson Excerpts

Wednesday 19th March 2014 Commons Chamber

[Sammy Wilson (East Antrim) (DUP)]

I welcome the announcement that the Chancellor made about the growth figures. In my constituency in Northern Ireland, there has been a 19% fall in unemployment as a result of the increased growth over the past year. That means that 550 individuals are earning money who were not earning money this time last year. That is to be welcomed.

I do not want to take a partisan view of the Budget. Fortunately, we in Northern Ireland do not have to be involved in the competition between the Government parties and the Opposition party here. I want to look objectively at what was said in the Budget.

My first concern is about growth. The Chancellor gave the growth figures, but we must remember that the figures have been revised time and again. Even though it has the imprimatur of the Office for Budget Responsibility, one has to ask what that growth is predicated on and whether it is sustainable. The growth up until now has been determined by consumer expenditure. According to the figures in the Budget, consumer expenditure will not jump dramatically, but, compared with the last two years, we will see a 48-times jump in private investment and a three-times jump in exports. If all the measures that the Government have taken to improve investment, such as the reduction of corporation tax and the enhanced capital allowances that were announced last year, and all the measures that they have taken to improve exports have not worked in the past two years, on what is the Chancellor basing the massive jump in private investment and exports that he is predicting will sustain growth for the next year?

[Mr Brooks Newmark (Braintree) (Con)]

The hon. Gentleman makes a good point, but from a business man’s standpoint, the decision to invest is based on business confidence. When there is growth, they feel confident about investing in their businesses, which, in turn, creates jobs and more growth.

[Sammy Wilson]

I would accept that point if I had not heard Government Members saying for the past three years that businesses are now more confident because there is a firm hand at the helm. We have not seen that come through in the figures to date. That is my first concern. I want growth to be sustained. I want the Chancellor to succeed. It does not matter to me electorally whether he succeeds or fails, but it matters to my constituents.

My second point is about the distribution of growth. Most of the growth has been in the south-east of England. Regions such as Northern Ireland, where there has been growth of 0.3%, have not benefited.

[Mr Nigel Dodds (Belfast North) (DUP)]

My hon. Friend has picked up on a point that I was going to raise, which is the unevenness of growth across the UK. Northern Ireland has a relatively low level of growth, which is having an impact on jobs and investment. Given his expertise in, and experience of, Northern Ireland’s finances, I would be grateful if he indicated what more the Government could do to help regions such as Northern Ireland.

[Sammy Wilson]

I listened intently to the Chancellor, and I was pleased when he made the point that he wanted to ensure that growth occurred in all the regions of the United Kingdom. However, I was disappointed to listen to the rest of the speech, because I wanted to know what policies would be introduced to effect that more even distribution of growth. I welcome the setting up of the enterprise zone in Coleraine, but one has to bear in mind that that will just balance out the 350 jobs that have been lost in that town, where severe unemployment had already been caused by the closure of some companies. It is intended to balance out the impact that the central Government’s decisions have had on my constituents in Northern Ireland.

[Mr Redwood]

I would just like to correct the record. The forecast is for only a 4.7% increase in exports next year and an 8% increase in investment, which I think is achievable.

[Sammy Wilson]

The percentage growth in exports was 0.8% last year, and in the next year it is forecast to be 2.6%. By any calculation, that is more than a three times increase in the rate of growth. The Government have talked about the reduction in the cost of finance for exporters, but measures that were introduced in previous years did not have the intended effect. Of course, that is against the background of a strengthening pound, so there will be a difficulty there. On what is the Government’s optimism based? If it is on export and investment-led growth, past patterns do not show that happening.

My second point is about the Chancellor’s throwaway lines saying, “I am not in the job of easing up just because things are getting better”, and “We don’t want to spend more.” I am not asking the Government to spend more; I am asking them to spend differently and better. Of course we have to get the deficit under control, but what is the increase in that deficit at the moment? Of the percentage of our GDP that is debt, what is most of it made up of? It is made up of paying people to sit on their backsides doing nothing, instead of spending on investment in infrastructure projects, which would have a return. It would put people back to work, increase tax revenues and stimulate growth. We can examine the infrastructure projects in Northern Ireland, such as in tourism. For modest amounts of money, the Titanic signature project is now bringing in millions of pounds and half a million visitors a year, mostly from outside the state. There has also been the extension of the gas pipeline. Many Members have talked today about the cost of living, and one way of bringing fuel prices down is to give people alternatives. For modest public investment, we have been able to increase the coverage of gas pipelines in Northern Ireland, bringing people cheaper fuel and helping to bring down their cost of living.

[Mr Andrew Love (Edmonton) (Lab/Co-op)]

Will the hon. Gentleman give way?

[Sammy Wilson]

I do not have much time; otherwise I would be happy to give way.

Help has been given to industry in Northern Ireland for research and development, machinery and so on. I welcome the increase in capital allowances. In fact, one thing that we suggested was that if corporation tax could not be devolved to Northern Ireland, capital allowances should be increased so that companies were more able to invest using that mechanism. Such measures could stimulate growth and add to the productive potential of the economy. That is not about spending more; it is about spending differently. If we are finding it difficult to get private investment in the economy, it can be pump-primed with public investment, which can have an important impact.

I welcome some of the specific spending proposals in the Budget, such as the extra spending on infrastructure, filling in potholes and so on, all of which has Barnett consequences. I hope that in spending money to fill in potholes, the Government will not find themselves having to look for money to fill the financial holes in this Budget in a couple of years.

I also welcome the changes to pensioners’ savings. They will not have an impact on all pensioners, because many pensioners in my constituency have never earned enough to accumulate huge savings. Nevertheless, those who have saved should be able to experience the rewards.

The Chancellor has made a lot of helping industries with their energy costs. It is one thing to make temporary changes and give big energy users temporary help, but it is another thing to continue the mad policy of increasing reliance on renewables, which have pushed up energy bills. Once the temporary measures are over, firms will still have to face that problem. This country will have to reconsider its energy policy. I welcome the fact that the Chancellor wants to improve the extraction of oil from the North sea, despite what the hon. Member for Brighton, Pavilion (Caroline Lucas) said, and frack gas, which is a natural resource that will give us cheap energy. If we stick to a policy of dear energy, we will pay the consequences.

Oral Answers to Questions

Sammy Wilson Excerpts

Tuesday 11th March 2014 Commons Chamber

[Nicky Morgan]

The point made by the hon. Gentleman, which his constituents will appreciate, is that freezing fuel duty has enabled people to spend more money on themselves and their families in other ways. He needs to understand that fuel duty cuts and freezes since Budget 2011 have had to be fully funded through tax rises or spending cuts elsewhere. Any further action needs to be considered in the context of the wider public finances.

[Sammy Wilson (East Antrim) (DUP)]

Tomorrow, the FairFuelUK campaign will be handing in a petition calling for a reduction in fuel duty. Given that the National Institute of Economic and Social Research has indicated that a 3p reduction would increase jobs by 70,000 and GDP by 0.2%, does the Minister agree that such a measure should be given priority in the forthcoming Budget in order to help the economy on its way and to promote growth?

[Nicky Morgan]

That is a matter for the Chancellor. The hon. Gentleman will appreciate that the Government regularly receive a range of representations on fuel duty. We hear what he and many other campaigners, not only on fuel duty but on many other issues, have been asking for.

Tourism (VAT)

Sammy Wilson Excerpts

Tuesday 11th February 2014 Westminster Hall

[Sammy Wilson (East Antrim) (DUP)]

I thank the hon. Member for South Down (Ms Ritchie) for her speech on the impact of VAT on tourism. I take issue with what she and my hon. Friend the Member for Strangford (Jim Shannon) said, because I look across the Belfast lough to their constituencies, which are shrouded in mist and doused in rain, from the stunning coastline and glens of Antrim, which are bathed in sunshine.

I understand the Minister’s dilemma. He is being battered in all directions by people pleading special cases. As he contemplates this issue, he should think of one thing: what principles have the Government and the Chancellor laid down on the tax regime? The first is that tax changes should be judged by their impact on growth and efficiency. As the Minister contemplates that, I draw three facts to his attention. First, 19 Governments across Europe have reduced VAT on tourism, and some of them have done that not when fiscal times were good, but when they were difficult. France in 2009, Germany in 2010 and the Irish Republic in 2011 all did that when facing the same problems as the Minister. They made a judgment that, because of the tax elasticity in demand for tourism, there were benefits, and that has proved to be the case. Some 28,200 new jobs have been created in France, with 15,000 businesses saved. Tourism in the Irish Republic is up 16%.

Secondly, I do not want to go into the issue of the model, which has been referred to time and again, but that model shows that a reduction in VAT on accommodation and tourist attractions would be four times more efficient at generating GDP increases than the 2p reduction in corporation tax that the Government have announced. Extending that VAT reduction to food would be three times more efficient at generating GDP than the corporation tax reduction.

Thirdly, to be parochial, the estimates for the Northern Ireland economy show that a VAT reduction could result in 10,000 new jobs in the tourism industry, a 50% increase in tourism revenue and a 40% increase in the number of hotel industry jobs. All those jobs would be available to young people and would help deal with youth unemployment. The reduction would also help increase investment in hotels. One hotel owner told me that they take £500,000 a year, and a 15% reduction in VAT would give them £75,000 to invest in facilities and to train and take on new staff. I hope that the Government will listen to those arguments.

Oral Answers to Questions

Sammy Wilson Excerpts

Tuesday 28th January 2014 Commons Chamber

[Mr Gauke]

To highlight one measure, the introduction of the employment allowance in April will mean that the first £2,000 of jobs tax will not need to be paid. It is worth noting that some believed it was not possible that growth in private sector job creation would outweigh public sector jobs lost. Indeed, in 2011 the shadow Chancellor said that that whole idea was a “fantasy”.

[Sammy Wilson (East Antrim) (DUP)]

As the Chancellor is keen for an Opposition Member to endorse his growth figures, I welcome them—[Hon. Members: “Hooray!”] However, a report yesterday indicated that much of the growth in the private sector has been concentrated on London and not on other parts of the United Kingdom. What policies is he undertaking to ensure that the growth we are experiencing is experienced by cities across the UK?

[Mr Gauke]

First, may I express my gratitude for the first part of the hon. Gentleman’s question? As to the second part, he should be aware that in 2013 the focus on London changed and that only one in five of the new private sector jobs was created in London. Indeed, over the course of this Parliament employment is up in every region and nation of the United Kingdom.

Consumer Rights Bill

Sammy Wilson Excerpts

Tuesday 28th January 2014 Commons Chamber

[Vince Cable]

Some of us find this a passionately interesting subject. The enthusiasm shows, I know. There is the ombudsman for the public sector. One could argue that the legislation will bring the private sector up to the same standards of scrutiny that we would expect when there are failures in public administration.

[Sammy Wilson (East Antrim) (DUP)]

I am extremely interested in what the Secretary of State has been saying, which is important for consumers throughout the United Kingdom. As some of the measures that he has been speaking about today are devolved to Northern Ireland, in the interests of consistency, how will he ensure that whatever is introduced in this House is also introduced in other parts of the UK where there is devolution?

[Vince Cable]

There have already been discussions with the Northern Ireland authorities, and we plan to introduce the same measures in Northern Ireland. There is agreement on the subject. I cannot say off the cuff where we are in relation to Scotland and Wales, but there are discussions with devolved authorities to try to ensure that this is widely applied. Everyone agrees that these are improvements and it would be desirable if everybody throughout the UK benefited from them.

--- Later in debate ---

[Vince Cable]

The hon. Gentleman is right that the safety aspects are dealt with separately. I was under the impression that the relevant law was tightened up several years ago. I am familiar with it because a colleague who formerly represented Richmond Park in the House had a family tragedy in circumstances similar to those that the hon. Gentleman describes. I understood that the regulations relating to defective electrical equipment had been tightened, but that is a specific point that we can check.

[Sammy Wilson]

With regard to the time it can take for products purchased from manufacturers based overseas to be returned, or the number of times someone may have to be called out to repair a product before it is fit for purpose, does the Bill set out a time scale within which repairs must be done, products must be replaced or money must be returned?

[Vince Cable]

As I tried to explain when describing the reforms relating to deficient goods, repairs must be done the first time round. If they cannot be done in a reasonable time, there will be cash compensation. Previously that was ambiguous and unsatisfactory. There will be either a repair or cash compensation, and that will be much clearer than it has been in the past.

Let me talk about the provisions in the Bill that relate to competition law and the role of private actions. Competition is good for growth and one of the pillars of a vibrant economy, so a key part of the work is tackling anti-competitive behaviour. The European Commission—I quoted some examples a few moments ago—has estimated that cartels can raise prices by between 20% and 35%. Despite the strong competition framework that the Government are putting in place, the Office of Fair Trading has shown that businesses believe that the current regime for private actions is too slow and costly. As a result, businesses and consumers rarely get redress when they have been harmed by anti-competitive behaviour. In 10 years, there has been only one collective action case in this country, and only one 10th of 1% of the consumers who were eligible signed up to it.

We have tried to strike a careful balance. We do not want an American-style system of prodigious and constant litigation, which would be costly and benefit only lawyers. None the less, we believe that there is some imbalance in the current system that needs to be redressed. We will try to discourage parties from engaging in costly court cases by encouraging alternative dispute resolution. We propose reforming the Competition Appeal Tribunal by introducing a fast-track regime so that small and medium-sized companies can get quicker and cheaper access.

For example, let us take a car garage that relies on spare parts from a large supplier that has started withholding supplies to drive up prices, showing cartel-type behaviour. Previously, the garage would have had to take costly legal action in the High Court, possibly bankrupting itself in the process—it is a small company up against a big one. Under the Bill, the garage could take the case to the Competition Appeal Tribunal, which could swiftly issue an injunction resulting in the supplier having to restart its supply.

We will also introduce an opt-out collective action regime for consumers and businesses that have been harmed by anti-competitive practice, with safeguards to ensure that cases are appropriate and merit that approach.