Finance (No. 4) Bill

Seema Malhotra Excerpts

Wednesday 18th April 2012 Commons Chamber

[Owen Smith]

I am saying that Chancellors have to keep things under review. In a period of fiscal austerity such as we are in right now, I am confident that a Labour Chancellor—particularly one as knowledgeable and shrewd as my right hon. Friend the Member for Edinburgh South West (Mr Darling)—would have found ways to try to exact a fair return and a fair set of receipts for the Revenue from the bankers, who, we must all remember, were complicit at least to some degree in some of the problems that we have faced over the last few years.

[Seema Malhotra (Feltham and Heston) (Lab/Co-op)]

We all agree that the financial services industry is vital for our economy and that we want it to remain a world leader. However, we also understand that it needs to pay its share towards getting the deficit down and dealing with some of the consequences of the downturn. We have discussed the fact that the amount raised by the bank levy is just over half the amount raised by Labour’s bank bonus tax—£1.8 billion compared with £3.5 billion. However, a repeat of the bank bonus tax would not be permanent, but would be a temporary measure. It could be construed as temporary to do it again, realising that we need to pay the cost of tackling long-term youth unemployment, which, as we know from a report out today, could hit nearly 1 million. We need to look at priorities and deal with what is vital for young people’s futures.

Finance (No. 4) Bill

Seema Malhotra Excerpts

Monday 16th April 2012 Commons Chamber

[Rachel Reeves]

My understanding is that the Government parties matched us on spending and often called for additional spending, but the Liberal Democrats have changed their mind so often that it is sometimes difficult to keep up.

The fiscal challenges that this country faces are real, and we need to deal with the deficit and get our debt on a downward path, but the choice before us is how to do that and on whose backs. The Opposition’s priorities are to get unemployment down, to get our economy growing and businesses investing so that we can reduce the welfare bill and bring in more tax revenue, and to ensure that the biggest burdens of deficit reduction are borne by those with the broadest shoulders.

[Seema Malhotra (Feltham and Heston) (Lab/Co-op)]

I thank my hon. Friend for referring to Labour’s idea of increasing jobs for the young through a tax on bankers’ bonuses. Does she agree that that would make a huge difference to young people such as those in my constituency, where long-term youth unemployment has risen by more than 200% in the past year, and send a message to all young people that Westminster and politicians across the country were on their side in these tough times?

[Rachel Reeves]

My hon. Friend speaks on behalf of the thousands of young people in Feltham and Heston who have been hit hard by the Government’s policies. The Opposition think it would be much fairer to tax bank bonuses at 50% and use that money to create jobs and opportunities for young people, but the priority of the Chancellor and his friend the Chief Secretary is a tax cut for the richest 1%, paid for by ordinary families, hard-pressed pensioners, struggling small businesses, charities and young people. All that pain is not even getting the deficit down. The Government are borrowing £150 billion more than planned—the cost of their failed economic experiment.

Members of all parties have an opportunity tonight to dissociate themselves from this disgrace of a Finance Bill. We have given the Government a chance, and we have also given them a choice. If the Bill goes through unamended, it will go down as one of the most flawed and unfair Finance Bills in history—one that makes millions pay more so that millionaires can pay less, based on a Budget that gives a £40,000 tax cut to 14,000 millionaires while ordinary households fall further into debt and our economy falls further behind. It was not the Budget that Britain needed, and this Finance Bill should be sent back to the drawing board. The Opposition will vote against it, and I urge those with a proper sense of our country’s priorities to join us in the Lobby tonight and vote down the Bill.

Amendment of the Law

Seema Malhotra Excerpts

Monday 26th March 2012 Commons Chamber

[Seema Malhotra (Feltham and Heston) (Lab/Co-op)]

This Budget comes at a crucial time for the British economy—at a crossroads, when business and families are looking to the Government to know that they are on their side as the economy stagnates and they face tough times. Some measures in the Budget are welcome. The creative industries tax credit—an extension of the Labour Government’s film tax credit—is a step in the right direction. Video animation, high-end TV and other creative industries—Arqiva in my constituency is an example—are strong in west London. Hounslow’s chamber of commerce is in the process of creating with partners a creative industry cluster. This is, however, only one step in the right direction, and we need to do more to invest in our work force and ensure that we have the designers, technicians, artists and animators of the future.

Local businesses have cautiously welcomed changes to corporation tax, although not without apprehensions. More than 95% of the nearly 3,000 businesses in Feltham and Heston are small businesses, and it is the worry of many that the Budget will disproportionately benefit larger firms and not our innovators. As the director general of the British Chambers of Commerce said last week:

“Smaller firms will be disappointed George Osborne did not do more to support confidence and growth in the real economy.”

There are wider concerns about the Budget, as it missed the opportunity to maximise the creation of jobs and growth, which this country so badly needs. There is no necessary connection between cuts in corporation tax and growth. Businesses will just sit on assets if they do not believe that demand exists, as my right hon. Friend the Member for South Shields (David Miliband) so effectively argued. There is no overall coherent plan.

The losers of the Budget are the young, the old, people on lower and middle incomes and charities. An estimated 855 families in my constituency are set to lose their working tax credits, and nearly 18,000 families are to be affected by changes in child benefit—and this is the 13th worst-affected constituency in the country.

At a time when people on middle and low incomes are being squeezed by rising fuel prices, and with families seeing cuts to their working tax credits and child benefit and long-term youth unemployment in Feltham and Heston up by 208% in the last year, it is the wrong priority to cut taxes for people earning over £150,000. We could instead have seen a cut in VAT to stimulate spending and make life a little easier for so many people. Local businesses have told me that they would have liked to see more to support them in employing young people—for example, a reduction in national insurance contributions for employers. The Chancellor’s announcement that charities will not be able to claim tax relief on higher rate gifts is also sending shockwaves through the third sector. The Government need to work with philanthropists and those involved in encouraging giving to explore ways of reducing this impact.

The Government promised change, but things have got worse, not better. Their policies have failed on jobs, growth and the deficit, and the Chancellor’s new Budget does little to address these grave problems. There are still 1 million young people unemployed, 800 of whom live in my constituency, and the Budget does not do anything to help them. It is not too late for the Chancellor to change his mind and turn it into the Budget for fairness and growth that my constituency so desperately needs.

Amendment of the Law

Seema Malhotra Excerpts

Thursday 22nd March 2012 Commons Chamber

[Vince Cable]

It is certainly true. My hon. Friend’s central point, which was made very effectively by the Labour Government when they were in office, is that in a highly mobile world, we have to take account of marginal rates of tax in comparable countries. The current top rate of marginal tax in Canada, Australia, France and Germany is around 45%, and that is the level to which we have moved.

[Seema Malhotra (Feltham and Heston) (Lab/Co-op)]

Does the Secretary of State acknowledge that business leaders, who will benefit from the tax cut, said yesterday that the priority should have been to cut taxes for those on low and middle incomes in order to stimulate consumer spending? Does he agree that that should have been the priority, rather than cutting the 50% rate?

[Vince Cable]

I do not know where the hon. Lady has been for the past 24 hours. The central feature of the Budget was a very large tax cut for exactly the group of people she describes, and it will have exactly the consequences that she describes.

Let me get back to the core issue, which exercises me and the shadow Chancellor. The basic economic strategy of the Government is to get back to a stable, sustainable form of economic growth. I want to address head-on his central criticism, which he has made many times. It can be summarised in the phrase “too much, too fast”. This Government have a deficit reduction programme that was developed following the autumn statement, and it involves removing the structural deficit over a period of six years.

The Darling plan, which the last Government set out, involved a deficit elimination programme of seven years. What I am not clear about, particularly in view of the stridency of the shadow Chancellor’s views, is: what is the Balls plan? Is it for seven years, eight, 10, 20 or never? What is the alternative speed of deficit reduction that the Opposition are urging on us?

We are acting, successfully, on good advice. A few weeks ago, the head of the International Monetary Fund, Christine Lagarde said:

“Those countries that have fiscal space, and that can slow down their fiscal consolidation efforts are very few, and I’m afraid Britain is not in that particular group.”

That is because of the sheer scale of the structural deficit that we inherited.

Oral Answers to Questions

Seema Malhotra Excerpts

Tuesday 24th January 2012 Commons Chamber

[Danny Alexander]

As I said in my answer to my hon. Friend the Member for Henley (John Howell), alongside the national infrastructure plan, we announced in the autumn statement significant new investment in infrastructure projects this year, next year and the year after that, all of which will both contribute to growth in the immediate term and help to build the better infrastructure we need to ensure that our growth is stronger in the medium term.

[Seema Malhotra (Feltham and Heston) (Lab/Co-op)]

5. What assessment he has made of the Office for Budget Responsibility’s most recent forecast of levels of unemployment in 2012.

[The Financial Secretary to the Treasury (Mr Mark Hoban)]

In line with the weaker outlook for gross domestic product growth, the OBR has revised up the projected level of unemployment over the near term, peaking at the end of this year before falling. In the autumn statement, the Government committed to important new steps to support private sector job creation and reduce unemployment, such as nearly £1 billion for the youth contract; an initial £1 billion for the regional growth fund; and a £21 billion package of credit easing to support firms and encourage job creation.

[Seema Malhotra]

I thank the Minister for his answer. The youth claimant count last year in my constituency of Feltham and Heston rose 25.2%. The long-term claimant count for over-50s rose 48%. Both statistics are more than twice the UK average. What measures have the Government taken to tackle unemployment in Feltham and Heston, and when does he expect the number of unemployed to fall?

[Mr Hoban]

The hon. Lady makes an important point, but let me be clear: as she will know, youth unemployment in her constituency peaked in December 2009—it is actually lower today than it was then. No one should be complacent about youth unemployment, but she should recognise, as the right hon. Member for South Shields (David Miliband) did, that youth unemployment is not a problem that this Government created, and that it is a long-term challenge and grew even when the economy was booming. We are taking steps—such as the youth contract and boosting the number of apprenticeship places—that will benefit every constituency in the country, including hers.

Youth Unemployment and Bank Bonuses

Seema Malhotra Excerpts

Monday 23rd January 2012 Commons Chamber

[Seema Malhotra (Feltham and Heston) (Lab/Co-op)]

Will the right hon. Gentleman tell us how many jobs the Work programme has created?

[Danny Alexander]

I cannot give the hon. Lady that information—[Hon. Members: “Ah!”] I welcome her to her place and congratulate her on her election. In due course the Minister of State, Department for Work and Pensions, my right hon. Friend the Member for Epsom and Ewell (Chris Grayling) will provide that information. I can tell her, however, that Work programme providers are making a difference across the country, helping people to come off all sorts of benefits and acquire the necessary skills and support to get back into work.