Finance (No. 2) Bill
Sheila Gilmore Excerpts(9 years, 8 months ago)
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Mr Gauke
I have heard the hon. Gentleman make both points in the past, and if I remember correctly, I responded to an Adjournment debate on those matters. There are significant benefits in our tax system for charities, but the Government look at cases partly depending on the demands on the public finances and what is affordable. We have looked in particular at hospices. There is a particularly strong case there, and to some extent they are put at a disadvantage compared with parts of the NHS because of the irrecoverable VAT that they pay. This is a matter that any Government would keep under review. I am sure that the hon. Gentleman, as a persistent Member, will raise the matter again if he has the opportunity to do so in future.
In new clause 1, the Opposition ask us to publish a report on the impact of the increase in the standard rate of VAT in 2010. No doubt, the hon. Member for Birmingham, Ladywood (Shabana Mahmood) will set out her thinking on that, but let me make a pre-emptive strike, if the Prime Minister has not already done so. Before I turn to the details and the imposition of VAT in 2010, I shall briefly set out the context for that decision.
Let us be clear that we increased the standard rate of VAT in 2010 as a consequence of the mess that the Opposition left the public finances in and the fact that, although the previous Government had left a mess, they had not left behind a plan to clear it up. Of course, a tax impact information note was published by HM Revenue and Customs at the time of the June 2010 Budget, but let us look at the situation that we inherited. At that time, the independent Office for Budget Responsibility’s pre-Budget 2010 forecast revealed that the structural deficit—the part of the deficit that will not go away with the recovery—was higher than previously thought: around £9 billion or 0.6% of GDP higher in 2010-11. Debt repayments were forecast to reach more than £67 billion by 2014-15, more than was spent on defence or on schools in England. The UK had one of the highest deficits of any advanced economy, so this Government had to take urgent action to eliminate the bulk of the structural deficit, which is a necessary precondition for sustained economic growth.
Sheila Gilmore (Edinburgh East) (Lab)
The Minister referred to the Prime Minister’s pre-emptive strike, but he will be well aware that similar statements were made before the last election. Does not the whole VAT issue illustrate the difference between the parties? The Labour Government’s response to an economic recession was to stimulate the economy by reducing VAT. The response of the incoming Government was to deflate the economy by increasing VAT.
Mr Gauke
The previous Government brought VAT back up. We know from his memoirs that the then Labour Chancellor of the Exchequer, the right hon. Member for Edinburgh South West (Mr Darling), believed that a Labour Government after 2010 should increase VAT. A Budget document was even published showing VAT going up to, I believe, 18.5%. I know that that was published by mistake, but it clearly shows that serious consideration was given to that. The previous Labour Government recognised that taxes would have to increase. They had proposals to increase employers national insurance contributions, or the jobs tax. Given that there is such uncertainty about the Opposition’s plans for what they would do in government, the question is whether they would rule out increasing employers national insurance contributions.
Ian Lucas
Indeed. My hon. Friend has made a very valid point. I think that we should all be interested to know what was the impact of the last Tory-Liberal Democrat increase in VAT, which was introduced in January 2011, because it should inform future policy. It seems extraordinary to me that that should be resisted.
According to the Office for National Statistics, the median salary in my constituency, Wrexham, has fallen by 7.4% in the last year. The town centre is, unfortunately, populated—like many other town centres throughout the country—by too many empty shops, and part of the reason for the emptying of those shops over the past few years has been a decrease in consumer activity. What VAT does—and this is why I am passionate about VAT—is take money out of the pockets of consumers on the high street and send it straight to the Treasury. It has a massive impact on local businesses. Those of us who run local businesses and employ people want to ensure that we have the best and fairest type of tax system to develop local economies.
That is why I want to know the impact of the 2011 VAT increase. I think that the Minister is a reasonable man. I cannot for the life of me understand why he does not want to have that information, or, if he has that information, why he does not want to share it with the House.
We have made a lot of progress today. The Prime Minister has been dragged, kicking and screaming, to a point at which he has ruled out a VAT increase by the Conservatives in the next Parliament—if he is ever in a position to make such a decision. That is major progress. It is certainly a change, not just from the Prime Minister’s position earlier in the current Parliament, but from the position that the Chancellor outlined in his Budget statement last Wednesday, when he set out the spending and taxation plans that he expected to be implemented. Why did he not tell us that the Tories were going to rule out a VAT increase in the next Parliament? That is what amazes me. What has happened between last week and this week? What happened yesterday?
What has happened, in my view, is that because the Labour party, in opposition, made a commitment not to increase VAT in the next Parliament, Lynton has been on the blower. He has said. “We are under pressure, Dave. We are under pressure, Prime Minister. We have to match the commitment that the Labour party has made. You have to rule out a VAT increase in the next Parliament.” So that is why the Prime Minister made his statement at the Dispatch Box today—a statement that I welcomed.
History will judge whether that promise will be kept. We heard from my hon. Friend the Member for Birmingham, Ladywood (Shabana Mahmood) about the history of Conservative commitments on VAT: about what happens before elections, and about what happens after them. When I speak to my constituents over the next six weeks, I shall remind them of that record. I shall remind them of what the Conservative party and the Liberal Democrats said before 2010 and what they did afterwards, and I shall remind them of what this Chancellor tried to do in 2012 with the pasty tax and the caravan tax.
The tax of choice for the Conservative party is VAT. History tells us that. If the Conservatives want to increase taxes, they increase VAT. The country will have to judge whether the commitment that the Prime Minister has given today is one that will stand the test of time.
Sheila Gilmore
It is a pleasure to serve under your chairmanship, Mr Hood. I was also going to say that it was a pleasure to be in the company of so many Members who had participated in Finance Bill Committees during this Parliament, but one by one they have disappeared from the Chamber—even the hon. Member for Dover (Charlie Elphicke), who has been one of the most assiduous Committee members—which is a shame as I was looking forward to hearing the usually very robust views they express, when we are upstairs in Committee at least. Presumably they have something else on their mind today.
The period we are in, which spans one VAT increase to possibly another, is a very interesting one. One of the things that the Government are trying to say—interestingly, some of the other parties are trying to say the same—is that there is no difference between the policies of the Government and the Opposition and that we would all have to make the same decisions. However, the Institute for Fiscal Studies has clearly stated that there is a huge difference between the forward plans of the Government and those of the Opposition. Our policies involve a different attitude towards spending cuts and tax increases in order to reduce the deficit over a period. That is what we said back in 2010; we were clear that we would be following a different pathway. We were not deficit deniers, as was sometimes suggested, but we were clear that we had a different view on how this could best be handled and that there would therefore be fairness in our measures. That remains the case because, prior to the Budget, the IFS said that, given our forward plans and taxation proposals, in contrast to the £55 billion of spending cuts the Conservatives would have to find, the Labour Opposition would be looking to make only £4 billion of spending cuts. More recently the IFS has said that in order to carry out our plans we would not need to make any further spending cuts in the forthcoming Government. So that is a very big difference in our policies. From that point of view, we are in a position to say not just that we would not increase VAT, but that we have a different and much fairer road to go down.
It is right for us to ask what the Government—whether the coalition or the Conservative party; it is not always clear—would be doing. Not only have they said that they need to find those spending cuts to carry out their deficit reduction proposals, but they have also suggested further tax reductions through the continued raising of the tax threshold. At no time since that announcement was made by the Prime Minister at the Conservative party conference has there been any clarity as to where that money would be coming from. So not only are they clearly tied to making substantial departmental spending cuts, but they have not shown us how they are going to close this financial gap. That is why people are saying, “We think it’s going to be VAT.” It is hard to tell where else it might come from. Of course, if it is coming from somewhere else, we would expect that to be said. So the Prime Minister stands up and says, “Oh no, we won’t be increasing VAT,” but the other half of that statement has not been made. We do not know how he is going to square this circle.
Andrew Gwynne (Denton and Reddish) (Lab)
As we saw in 2010, what the Prime Minister says this side of an election is not necessarily the same as what then happens in future Conservative Budgets. Has my hon. Friend also pondered the quandary that they might stick to their pledge not to increase VAT this time, but they have not ruled out extending the scope of VAT to currently exempt items?
Sheila Gilmore
That is clearly another way the Conservatives might seek to close this gap they have opened up for themselves.
We need to know a lot more about this going forward, and so do the electorate. As hon. Members have said, VAT is a regressive tax. Even though those who have bigger spending power sometimes spend more and so may, in cash terms, spend more in VAT. It is a regressive tax, as are all these indirect taxes. Our position on this is clearly different: we do not believe it is right that people on low incomes should be taxed, in effect, to give other people tax cuts.
We have said a great deal about the 50p issue, which we will discuss later this afternoon, but one of my big concerns for some considerable time has been that low-paid workers already under the tax threshold were being offered nothing from the Government, who constantly talk about raising the tax threshold further. They have no plans to help those people any more. Those people face a real risk that if VAT is increased, they will end up paying the price of a reduction in income tax from which they will not benefit by one penny.
Sheila Gilmore
I thank my hon. Friend for her intervention. Of course the position she sets out is exactly what we saw in the early part of this Parliament when VAT was increased and a number of other measures were put in place. At that point, inflation hit about 5.5%, which then allowed the Government to say, “Aren’t we wonderful? We have just put pensions up by the biggest ever amount.” But that increase would have come even under the old system—even under a system that was simply tracking pensions to inflation—because of the inflation rate. Pensioners were not getting some amazing extra increase that year; there was a simple tracking of what had happened, largely because of the VAT issue.
Not only have many of those low-paid people not got any further gain to get if the tax threshold keeps increasing, but they have actually lost out at the same time, because one thing that has helped to pay for all this has been the reductions in things such as tax credits. Many low-paid people lost more in tax credits than they gained in the rise in the tax threshold. The Government keep endlessly repeating that low-paid people are the ones who have benefited, but that has not been the case in practice for many of these people, particularly those with families and children—they have particularly suffered. For them, the Budget is a bit of non-event and it will continue to be so.
That is why the £12 billion of welfare cuts that have been pencilled in for some two years now in various statements by the Treasury, and by the Chancellor in particular, are very important. Part of that approach might be to cut away further the support given to people in work, perhaps through the tax credits system, at some future point. Tax credit is to be replaced by universal credit, but the issue remains much the same in terms of how it tapers off and where the losses might come.
We already know that in many respects universal credit will be less beneficial for a lot of people in work, as they increase the hours of work they do. So how much of this £12 billion will come from that source? Again, people may be given a little bit with one hand, through the increase in the tax threshold, but find that they lose as a result of what the other hand is taking. We just do not know because we have been given no detail; it has been deliberately withheld, although one suspects that someone, somewhere has a plan. It would be strange if they did not have a plan. If, under welfare cuts, we are taking away things such as support for people who are in work, it is extremely important.
The other area is housing benefit, because, again, that is increasingly being claimed by people who are in work, not just by people who are out of work. Those people who are in work will be hurt again if there are further attempts to reduce the housing benefit bill, by eroding the amounts that individuals get. Again, we have this lack of clarity and detail. It is understandable why some of us are extremely suspicious about the alacrity with which the Prime Minister wished to distance himself from a VAT increase. For all the talk about a long-term economic plan, we have a lack of any clear policy and detail about what the Conservatives will do if they are re-elected. I hope that they will not be in government, so perhaps they do not need to give any detail, but the people who will be voting in a few weeks’ time deserve to know such things.
We should not be in the position that we were in before the 2010 election when we were promised things, such as that there would be no VAT increase, that were undone very, very quickly. I do not think that people were told about the scale of the reductions that would be made.
Barbara Keeley (Worsley and Eccles South) (Lab)
My hon. Friend is making a very good speech. She has returned to the point about the scale of the cuts. Is she as concerned as I am about that? My local council has been cut by 43% since 2010. We now have 1,000 people losing their social care packages this year. Is it not very frightening that what we face in the next couple of years are cuts that are deeper than anything we have seen before? I find that prospect frightening for social care and local services, which are already crippled, and for policing—for keeping our local community safe. Does she feel that way, too? We have already seen what has happened—
Sheila Gilmore
I thank my hon. Friend for her intervention. Clearly, those are the kinds of concern that people have.
On the VAT proposals, the changes and exemptions that the Government may wish to make for some worthy cause are welcome. I am talking here about the help for organisations such as hospices. But there is scope to go further. I will say something now that, although not Front-Bench policy, is perfectly legitimate to raise in Committee. As someone who has been very involved in housing, I know that the housing world is keen to see VAT relief on improving and restoring properties.
VAT can make refurbishing properties more expensive than rebuilding. Demolition and rebuild has become a cheaper option than preserving some of our properties. Having worked with many housing associations, I know that there have been times when they have wanted to do that kind of refurbishment and preservation work, but they had to do a massive upgrade behind that to bring the homes up to the required standard. Such a VAT exemption is something for which the housing world has campaigned for a long time. As we all want to increase sustainability, I hope that that is an issue that my own Front-Bench team will reconsider when they are in government.
Lyn Brown
I understand that we are not talking to a benevolent Government here, but as my hon. Friend is listing what she would like to see VAT removed from, I would like to include sanitary products. I know that many of my constituents think that, as those are not luxury goods, they should be exempt from VAT. I just thought that I would add that to the list of things that should have VAT removed.
Sheila Gilmore
I think that campaign has taken off again, having been going for a considerable number of years.
Sheila Gilmore
Indeed. As the current campaigners have noted, there is no VAT on shaving cream, but there is on sanitary products, which suggests—
Sheila Gilmore
Yes, it is gender-made law. We will all have received a considerable number of e-mails about that recently, and I am sure that the campaigners would be pleased to hear the Minister commit at least to reviewing the situation.
Fiona O'Donnell
On that issue, growing a beard is an option for a man, but being unhygienic is not an option for a woman. My local food bank is increasingly having to offer women sanitary products because they simply cannot afford them.
Sheila Gilmore
That is a very interesting piece of information, and it is something that people should bear in mind—
The Temporary Chair (Mr Hood)
Order. It is very interesting, but we are straying a wee bit from what we are supposed to be debating.
Sheila Gilmore
Thank you for your guidance, Mr Hood. I am sure that you would not want me to stray on to the whole issue of food banks, which would probably take us to midnight.
In conclusion, new clause 1 would provide us with an opportunity to look at the impact of VAT changes over this Parliament. We believe that they have been regressive and that many of our constituents have been affected, and we are concerned about the future. We need to look very carefully at what has happened before any decisions are made on further increases. We are always taken to task for proposing new clauses to Finance Bills that would set up reviews, and I understand that there are technical difficulties. I am sure that current Government Members will have the same difficulty when they come to scrutinise a Finance Bill in opposition in the next Parliament. Perhaps we will then make the alternative criticisms.
It is important that we fully understand the impact of the VAT changes, and not just through some kind of impact assessment that is done theoretically, but through an assessment of what has actually happened; they are not always the same thing. However, such proposals have been turned down in every Finance Bill I have encountered in this Parliament. The hon. Member for Dover (Charlie Elphicke)—he has still not returned to his seat—and I are obviously similar; we are either terribly keen to serve on Finance Bill Committees, or we are such a soft touch that when our Front Bench teams or Whips ask, “Wouldn’t you like to serve on the Finance Bill Committee?”, we say, “Oh, all right then.” Some of us have certainly done our stints on Finance Bill Committees, and I am sure that we all hope to be able to do so again from a governmental position.
Mr Gauke
We have had a lively debate and heard contributions from a number of Members who could be described as Finance Bill recidivists. I am delighted that so many of them were able to participate on this, the last occasion to debate tax matters in this Parliament. The hon. Member for Edinburgh East (Sheila Gilmore) talked about VAT on sanitary products. Under EU law, we are permitted to have a reduced rate for sanitary products—indeed, it has been reduced to 5%—but they are not among the products for which we can have a zero rate under EU law. Consequently, without changes at EU level, it is not possible to reduce it further. I have a lot of sympathy with the argument that is made on that point, but it would need to be addressed at EU level.
Ian Swales
Another thing that the Government have done is to move towards localising business rates again. Certainly my part of the world, which had huge industrial sites such as the one I have mentioned, was pretty nonplussed when all that money was collected by a Government in the 1980s, taken to the centre and then doled out in different proportions. We need to move towards more localisation, not least to incentivise councils to drive economic development. I would argue that that has not been happening sufficiently in some parts of the country, and I live in one of them.
I understand the hon. Gentleman’s point, and there is also the issue about where people live, where they work and what services they use. The south-west has a particular issue when its population doubles every summer, because people may not make a contribution through taxes paid directly in the south-west, but they are using services there. There is another whole argument to be had about the location of rates versus how they are collected.
I will not detain the Committee long. The Government are on the right track with corporation tax. Let us put it this way: there is plenty of work for the next Parliament to do, and I shall watch with interest from afar.
Sheila Gilmore
It is a great pleasure to follow the hon. Member for Redcar (Ian Swales), because we have served together on a number of Finance Bill Committees during the past five years. The debates on the details of a Finance Bill in Public Bill Committee are often better than those on the parts of the Bill taken on the Floor of the House. The theory is that the debates on the more important and bigger parts of the Bill are taken in the Chamber and then the Bill goes upstairs, but the Public Bill Committee often allows us to have quite fruitful debates on many of the issues.
One thing that has been very clear during this Government—perhaps this has always been the case, but it seems to be growing—is that all the political parties are falling over themselves to talk about the importance of small and medium-sized businesses, and we are all the friends of small business. Small businesses are probably very pleased to hear politicians talk so much about them, but then the issue becomes one of whether it is talk or action. It is very easy to praise small businesses, but such businesses, especially new ones, sometimes feel that the system is set against them.
One new business in my constituency involved two young women who set up a fitness studio. They went into premises on what was effectively a redevelopment area after our old hospital had been relocated. Largely because of the financial crash and the recession, the whole redevelopment took longer than expected, so the population to support new businesses had not arrived at the expected rate. Although they got a rent holiday for the first 18 months from the developer who was renting them their premises, which was welcome, they were struggling with business rates. Oddly, even though my local council said that it wanted to encourage economic development and had particularly encouraged the redevelopment of that site, it was not particularly forthcoming with help for a new business.
Those young women were not in the region of having to worry about corporation tax—that was not where their business was. They had to worry about the rates. It was touch and go, but I was pleased to see recently that they are still there and have managed to overcome their initial difficulties. Some of the other redevelopment is beginning to happen, so I hope that they will continue to be successful. However, we do not always join the dots either locally or nationally. Things such as rates are essential for a lot of small businesses, and we have to support such businesses to the greatest extent that we can.
I have some sympathy with the hon. Gentleman in his points about business rates being retained locally. We have to work through the conflict between that and redistribution to ensure that different areas of the country are assisted in developing. When I was on the council in Edinburgh, we often raised the issue. It was and still is an expanding city, and it generates a lot of business. We have big events that generate worldwide attention, and a lot of businesses feel that they bear the cost of all that without necessarily seeing the rates coming back to the city. It is all very well to say that we get rates in because we have events such as the festival and big tourist attractions, but sometimes it feels that the rates are not coming back. I understand the tension between that and looking at the region or country as a whole and trying to build wealth. It is not easy, but we have to incentivise businesses as far as possible to feel that keeping on growing is to their advantage as well as to wider advantage.
Politicians and political parties must not just pay lip service to the importance of small business. We must do specific things to assist, and that is what amendment 2, moved by my hon. Friend the Member for Birmingham, Ladywood (Shabana Mahmood), is intended to do.
The hon. Member for Redcar probably has a different view of economics from mine, but he appeared to be of the view that if a company is making a profit, it will be ploughing it back in the right directions. I do not think that is necessarily always the case. Big businesses in particular should make a good contribution to our society, and we have to ensure that they do. I urge the House to support the amendment.
Fiona O’Donnell
It is a pleasure to see you back in the Chair, Mr Hood.
I wish to talk particularly about the rural economy and the opportunities that the Government might be missing, given the importance of small and medium-sized enterprises to rural economies. Given that this may be my last contribution in this Parliament, I also want to reflect briefly on the political situation in Scotland.
We have had more than one eclipse in Scotland in recent weeks. It seems to be a daily occurrence that Alex Salmond’s moon blocks out Nicola Sturgeon’s sun. At one time, the current leader of the Scottish National party—people might easily be confused as to who that is these days, but I remind them that it is Nicola Sturgeon—did a U-turn on the SNP’s proposal in its White Paper “Scotland’s Future” to reduce corporation tax by 3%. I welcome that, because I do not think it would have been a progressive move or have provided the right environment for the stability, job creation, employment rights and pay and conditions that we want in a fair, modern and successful Scotland. The Minister may wish to reflect on that and the debate that went on around the referendum, because the measure was not popular with working people or businesses—certainly not with SMEs that would not have seen any benefit.
The Financial Secretary said that he does not want to do anything to risk the recovery, but I urge him to think about what more his Government can do to aid recovery in rural areas. Most of the conversation and discourse I have heard from Government Members—for example in the Enterprise and Regulatory Reform Bill Committee—was about employment rights. The Minister seemed to think that the way to help small businesses was to erode workers’ rights, but I think that has the opposite effect because it can be more difficult for them to recruit staff.
Much as I admire the beautiful city of Edinburgh, our capital, I am concerned that so many people from my rural constituency commute there for work. At a time when the population of East Lothian is set to grow at the fastest rate of anywhere in Scotland, with 10,000 more homes, we need jobs in our own communities. We must look at the impact that the Budget will have on SMEs with 50 or more employees, and we are asking the Government to pause and reflect on what that impact might be.
We are losing many skills in local, rural and remote economies, especially in the construction industry—that relates to the point raised by my hon. Friend the Member for Birmingham, Ladywood (Shabana Mahmood) about difficulties with lending. Small construction firms are finding it very difficult to access lending, which means that they are disadvantaged when it comes to procurement contracts. If they take on small housing developments in the community, the people working on the construction sites will often be local young men and women who are benefiting from an apprenticeship and learning skills, and they will be spending money in that local community. The healthy cycle of the rural economy is thus given new impetus and energy. Will the Minister at least reflect on that?
When small businesses fail, it does not make the headlines in the same way as when a large manufacturing company announces job losses. The news about Longannet, which is across the water from my constituency and where many of my constituents are employed, is deeply concerning. When a small business fails, it does not make the headlines in the same way, but for the rural economy and community it can be devastating. The village where I live in East Lothian, Pencaitland, has two village shops and a pub, and the thought that any of those could fold at any time would have a devastating impact on our community. At that point, community cohesion goes and the place becomes just a dormitory, somewhere people go to lay down their head at night, rather than the vibrant community we want.
We have heard much about devolution during this Parliament. When it comes to how we support and drive growth in the SME sector, we need to trust people at local authority and community level to make decisions about how businesses are supported, how they grow and create jobs and wealth, and how they provide sustainability. We must trust the people who know the area and the skill requirements to make those decisions. Talking about who gets to vote on what Bill does not have the same impact; it does not empower. It may take power away from individual MPs, but it does not empower communities, which is what devolution should be about.
I ask the Financial Secretary to consider the intervention I made on my hon. Friend the Member for Birmingham, Ladywood who spoke from the Opposition Front Bench. What evidence do the Government have that cutting corporation tax will create more jobs than supporting SMEs, particularly in the rural context?
I am very grateful to Members who have been sitting patiently and silently for allowing me to make this pitch on behalf of the rural economy. I look forward to hearing the Minister’s comments.
Future Government Spending
Sheila Gilmore Excerpts(9 years, 9 months ago)
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David Morris
Thank you, Mr Deputy Speaker, for indulging me. I got a bit carried away with the good news in my constituency. So, yes, where are we going in the future? The deficit has been halved. As the self-employment ambassador to the Government, I can say that one of the largest sectors in our economy is self-employment. I am sad to see that the Opposition have not recognised the importance of that sector.
David Morris
If the hon. Lady will let me finish, I will gladly give way. Labour’s manifesto, which we have seen on the internet, does not recognise the self-employment sector, as it sees it as a failure in the labour market, which is quite wrong. I say that respectfully to the Opposition. I was self-employed for 30 years, so I know what it is like to survive.
Mr Jackson
Absolutely. In more than two hours, we have not heard anything, except in relation to gun licences and, of course, the recycled bankers’ bonuses.
What a contrast between the Opposition and the Labour party on the cusp of the election on 1 May 1997, when I was a candidate and lost by the not inconsiderable majority of 19,500 in Brent South. No wonder Labour MPs are depressed when they are sober and catatonic when drunk, quite frankly, because they know there is an acute contrast between that historic election and now. The Labour Government led by Tony Blair was ambitious, and their programme was thoughtful, forward looking, positive, generous and optimistic. Tony Blair is now persona non grata in the Labour party, and it now has a core vote strategy, with a mean-spirited, peevish, insular, dreary collection of bungs to special interest groups, and smears and caricatures aimed at the Conservative party.
What is more, Labour policy does not stand up to any form of scrutiny. We have heard about the utilities price freeze—a disastrous policy that has damaged the industry and, perversely, will damage the interests of consumers. Wither Labour’s cost of living crisis? Today, the IFS says that prices are being outstripped by wages for the first time since 2007. There is no more cost of living crisis because wages are growing at 2.1% against a retail prices index of 0.9%. On fuel, council tax, food, beer duty and children’s air passenger duty, the Government have made efforts to reduce the cost of living of ordinary families. We have driven up the personal allowance, and we are committed to drive it up to £12,500 in the next Parliament.
Mr Jackson
No, I will not give way at present.
As we have already heard, the 45p tax rate has raised more income for public services than was ever done by the 50p rate, which was put in place for cynical political reasons. We will not take any lectures from the party that abolished the 10p tax rate for the poorest working families. What sticks in my craw is the moral superiority of the Labour party in this debate. In 2011, 1,200 people in my constituency had been parked on out-of-work benefits—incapacity benefit or invalidity benefit—for more than 10 years during a period of economic growth. Some 5.2 million were parked on out-of-work benefits when the economy was growing quarter by quarter during the 13 years of the Labour Government. We will not take any lectures or moral indignation from the hon. Member for West Dunbartonshire (Gemma Doyle) and other Labour Members.
The top 1% of taxpayers are paying 25% of income taxes. We have driven up employment levels. More women than ever are working. Some 30.9 million people are working, despite the ludicrous prognostications of people such as David Blanchflower, who told us that 5 million people would be unemployed, and the right hon. Member for Morley and Outwood (Ed Balls), who said that we could not cut expenditure and have growth in private sector jobs—complete and utter nonsense. In my constituency, unemployment has gone down by almost 60% and youth unemployment by almost 66%.
Oral Answers to Questions
Sheila Gilmore Excerpts(9 years, 10 months ago)
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Andrea Leadsom
I congratulate my hon. Friend on expressing the importance of a second line of defence. The Government are determined to give pensioners the opportunity to make their own decisions about what to do with their pension savings. Nevertheless, it is vital to ensure that they have reasonable protections.
Sheila Gilmore (Edinburgh East) (Lab)
There were reports yesterday that some people who exercise these rights might face large tax bills that they did not know about. Will the Minister be absolutely clear about what measures will be put in place to ensure that people are not disadvantaged, because she knows, as I do, that people are already being approached informally to get them to exercise these rights?
Andrea Leadsom
I reassure the hon. Lady that we have sought to give people the opportunity to make their own decisions about what to do with their lifelong savings. That is far better than in the past, when they were effectively told, “You buy an annuity and that’s that.” We are putting in place clear protections, with a criminal measure on scamming and on pretending to be the Government’s pensions guidance service, and there will be proper guidance, with fully qualified guiders who are able to help people through the process. There is now a further line of defence, because pension providers will be required to point out to people the vital importance of taking guidance or regulated advice.
Oral Answers to Questions
Sheila Gilmore Excerpts(10 years ago)
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Danny Alexander
I am well aware of the importance of this connection to my hon. Friend and to other Members of Parliament in the area. As he will be aware, the east midlands has already benefited from investment of approximately £70 million to improve line speeds on the midland main line up to 125 miles per hour. Further electrification is due to be extended to Nottingham by 2019. A decision on the Robin Hood line is a matter for the local authority, but we would certainly look on the idea favourably.
Sheila Gilmore (Edinburgh East) (Lab)
The importance of infrastructure is surely a sign of the importance of Government investment as a way of growing our economy. Does the Chief Secretary therefore agree that one further way that we could move forward on this is to build at least 200,000 new houses a year to help to build our economy?
Danny Alexander
I totally agree with the hon. Lady. It is incredibly important to improve the rate of house building. I would set the figure at closer to 300,000 houses a year across the UK, rather than the 200,000 that she mentioned. She will know that in the autumn statement we extended the affordable house building programme for a further two years in order to build 275,000 affordable homes in the next Parliament. We are taking forward the idea of Government commissioning of housing, which would be a radical departure for this country, at Northstowe, and looking at it as a solution for the whole country.
Autumn Statement
Sheila Gilmore Excerpts(10 years ago)
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Mr Osborne
I can give my hon. Friend that assurance. This is a policy not just for cities, but for the shire counties that surround them. Rather like him, I represent a shire country seat outside a great northern city. This is about strengthening the transport links between the shire counties and the cities; it is about making sure that superfast broadband is available in our rural areas; it is about supporting towns and not just cities in the north of England. It is about ensuring that the whole thing is connected up in a way that it has not been before, so that the north of England has the economic clout of a great global city. I think we are well on the way to developing that.
Sheila Gilmore (Edinburgh East) (Lab)
Before the Chancellor of the Exchequer tells me the unemployment figures in my constituency, I of course welcome the fact that the claimant count is down—but that is not necessarily the same as unemployment, as the right hon. Gentleman knows. We are now getting closer to the point where we were through the whole of the first 10 years of the last Labour Government, so we have only gone back to where we were. However, a £6 billion increase on overall housing benefit spending over the course of this Parliament has contributed to the Chancellor’s failure to meet his deficit reduction targets. When will his Government actually tackle the underlying causes, which are high rents and low wages?
Mr Osborne
First, it is no good saying that the first 10 years of that Labour Government were great and that we should forget about the last three, which brought about the greatest recession since the 1920s. It is a bit like Mrs Lincoln being asked about that play.
We have taken a number of steps to try to cap housing benefit, rent increases and the housing benefit associated with them; we have introduced a cap on housing benefit payments. When we came to office, there were examples of some people receiving over £100,000 a year from taxpayers in housing benefit, which is of course totally unacceptable. We have taken those steps, and now we have the welfare cap as well. All I can say is that every time Labour Members stand up, we hear about a proposal to add to the housing welfare benefit bill, and that it would be good to hear some proposals from them to reduce it.
The Economy
Sheila Gilmore Excerpts(10 years ago)
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The Exchequer Secretary to the Treasury (Priti Patel)
Today the Opposition have reminded us why Labour can never be trusted with the economy again. So appalling is its reputation on all matters economic that even its former Chancellor, and now we hear its former Prime Minister, are seeking to join the exodus from the parliamentary Labour party, belatedly fleeing the scene of the economic carnage they helped to create. The hon. Member for Nottingham East (Chris Leslie) spoke about the 2010 autumn statement. Back then the former shadow Chancellor, the right hon. Member for Kingston upon Hull West and Hessle (Alan Johnson), forecast that there would be a “jobless recovery”. Since then Labour has become a broken record, and over the past four years it has been proved wrong about the economy and sought to mislead and frighten the public at every opportunity. Instead of presenting a sustainable economic plan to the House today, Labour Members come here and use this very rare debate on the economy to talk down the economy, and sneer at those who want to work hard and to get on in life, which is why I would like to start by bringing the House’s attention to a few basic economic facts about their track record.
With a record peacetime deficit, increased unemployment and a welfare system that was broken, Labour left Britain’s economy in a mess. On top of that they doubled income tax for the poorest, and insulted pensioners with derisory levels of state pensions, not to mention the mean-spirited 75p increase in state pension; that is how the Labour party rewards our pensioners after a lifetime of work. Labour also oversaw a doubling of council tax, increased the rate of fuel duty 12 times, and failed to support parents with child care costs, yet Labour Members have the audacity to come here today and lecture us about child care costs. The Government are reforming child care through tax-free child care and sustainably helping hard-working and hard-pressed families up and down the country.
Sheila Gilmore (Edinburgh East) (Lab)
Surely the biggest mistaken forecast was that of the current Chancellor when he came to this House in 2010 and told us the deficit would be eliminated during the course of this Parliament.
Priti Patel
This Government have cut the deficit by over a third, so we will not take any lectures from the Opposition or the hon. Lady about that—notwithstanding the fact that when in office Labour failed to prepare our young to compete against the brightest and the best when it came to skills, jobs and education, and that was just the tip of the iceberg.
Since 2010, this Government have worked hard to turn this situation around. By working to our long-term economic plan, we have seen the deficit cut by over a third, income tax cut for over 25 million people, benefits capped to reward work, and 1.7 million more people in employment, while over 2 million more private sector jobs have been created and employment is the highest on record. We have created 1 million apprenticeships. The state pension has increased. More children are in good and outstanding schools. Over 50,000 families now have a home thanks to our Help to Buy policy. This is a good start, but we are the first to recognise that the job is far from finished.
Sheila Gilmore (Edinburgh East) (Lab)
I rather suspect that the few people who may be listening to this debate will feel that it is running a similar course to previous debates. Sometimes it feels as if we are talking about different countries and different experiences, but I genuinely think that we all want and support many of the same things. I take exception to some of the portrayals of Labour party policy and politicians as not wanting to see people in work or not supporting people in employment. That is simply not the case and never has been.
Some 350,000 single parents alone were enabled to work as a result of the introduction of tax credits in the early part of this century. All were grateful to a Government who enabled them to take jobs that they had previously been unable to do.
Nick de Bois
Notwithstanding the good intentions behind tax credits, is not the reality that that Labour party policy is encouraging and funding corporations to pay less in the full knowledge that the state will pick up their employment bill?
Sheila Gilmore
If I have time I will come back to some of those important issues.
The point I was making was that the policy of the last Labour Government focused on getting people into employment and making work pay, not on encouraging people not to work as is so often alleged. We do not get the chance to challenge some of the statements and generalisations that have been made as much as we want. Earlier in this debate, the hon. Member for Ipswich (Ben Gummer) said—and perhaps he misspoke—that unemployment is now the lowest in our history. That is slightly astonishing, given that unemployment was lower than it is now, by some considerable margin, in all years between 1998 and 2008, when the recession struck, and of course the 1950s and 1960s saw considerably lower unemployment rates. There is no need to exaggerate the position.
Nor is it true that long-term unemployment was much worse during the years of the Labour Government. I am glad to hear that in 2013-14, the last financial year, long-term unemployment—people unemployed for more than two years—fell for the first time since 2003. But in 2008, as the recession was striking, that level of long-term unemployment was 200,000. It peaked at 460,000 in 2013, and this is the first fall since then. That is a considerable increase in the number of people unemployed long-term for many years during the period of this Government.
We hear a lot about the fall in jobseeker’s allowance payments in various constituencies, and coalition Members are happy to throw those figures back at every Opposition Member who speaks. But not every reduction in jobseeker’s allowance translates into someone being back in employment—and certainly not back in full-time employment. Many people cease to be entitled to jobseeker’s allowance because they come to the end of their entitlement, not necessarily because they are in a job or eligible for any other benefit.
The Minister suggested that the last Government did not do much for older people, but pensioner poverty was slashed during that time. During this welcome—although slow—recovery, we are seeing some alarming issues for people attempting to work. The number of people who are self-employed is much higher than it has ever been—it was 15% in 2014—and indeed two thirds of the increase in the total number of workers between 2008 and 2014 has been among the self-employed. The problem is that a lot of that self-employment is not generating a high level of income. We have to ask what is happening. When those figures for the high level of self-employment are given, the assumption is that we are talking about thrusting entrepreneurs who are doing very well, but the average earnings of the self-employed have fallen. They are now getting £200 and some a week, which is less than half that of employees.
A lot of self-employed people are struggling, either because their businesses are very new or, possibly, because they have been encouraged to become self-employed as an alternative to unemployment, but find that their earnings and family income are very low. That is an important point to consider, as is much other low-paid employment, when we look at the tax take. The deficit will rise this year—having come down by one third, which was not the total reduction we were promised—and that has a lot to do with reduced tax take. We argue that that has a lot to do with the underemployment that people are suffering and self-employment on very low earnings.
People are in self-employment of a very dubious kind. I met a constituent last Friday. He is in his 50s and he has always been a construction worker. He cannot get permanent employment in that area, even in a city such as Edinburgh where unemployment is relatively low. He has signed up with an agency. Periodically, it phones up to offer him work—four days here or five days there, with gaps in between. Recently, he was phoned up at about lunchtime and asked if he could get down to a building site that afternoon. “How long will the job be?” he asked. “Oh, just today and tomorrow.” So that was one afternoon and one day’s work for someone who is a skilled tradesman and has worked all his life. That is having a devastating effect on his ability to pay his rent, remain in his home and hold his head up as a valued worker. If that is the kind of employment we are encouraging, we must do something about it.
Gordon Birtwistle (Burnley) (LD)
The performance of the economy is a great debate for today. As a brief history of the problems that we face, we all accept that in 2009 the country suffered a catastrophic heart attack in its economy. We can blame the collapse of the banks or the incompetence of the previous Government—I think that both were responsible for the problem. But that is past. What we have to do now is repair the economy.
My belief is that the economy can be repaired only by prosperity. We have to create prosperity, but Governments do not create prosperity—they create the environment for prosperity. Prosperity is created by the thousands of companies that are creating jobs and the millions of people working in those jobs. There has been more prosperity created in a nanosecond outside than there has been in the Chamber since this debate started. Prosperity needs investment by companies. The Government do not invest, but they do provide the environment and the confidence for companies to invest. That is what has been happening over the last four and a half years.
Four and a half years ago, the country was basically bankrupt. We cannot turn that round in four and half years—it will take longer. As long as we create the environment to ensure that the turnaround takes place, I am confident that it will happen. Look at my constituency. When I became the MP in Burnley—[Interruption.] The shadow Minister may think this is funny, but I think it is very serious. I really hope that the Government create the environment for the prosperity that we all need.
Four and a half years ago, unemployment in Burnley was approaching 9%. It is now 3.5%. There has been massive investment by the Government and the private sector. Almost £100 million has been invested in the small town of Burnley. The hon. Ladies in the Chamber might know Boohoo, an online ladies fashion company. Boohoo came to Burnley in 2009 with 46 people. It now employs more than 700 people and is investing £20 million in a brand-new factory. Hopefully, it will have 1,500 people by this time next year. It is so confident in the Government’s economic plan that it realises it can afford to invest £20 million of its own money, while giving the whole work force a 15% increase. It is investing for the future. [Interruption.] It may well not be happening in the shadow Minister’s constituency, but I can only say what is happening in Burnley.
The Government, thanks to the Business Secretary, are managing to rebalance the economy. It was way of out of sync when the coalition came to power, relying on the banking and service sectors while forgetting about manufacturing. What have we done? We have backed the aerospace industry with vast sums of money. It is the most successful industry in the country, creating hundreds of thousands of jobs.
Sheila Gilmore
Earlier, the hon. Gentleman said that in his view Governments do not create jobs, but he has just given an example of where Government investment has enabled jobs to be created.
Gordon Birtwistle
I did not say that Governments do not create jobs; I said that Governments do not create prosperity. Prosperity is delivered by the people who are working outside this building.
We have rebalanced the economy. We have backed aerospace and there are now hundreds of thousands of people working in the aerospace industry. In Burnley, we have invested more than £20 million in the old Michelin tyre factory, which is now serving an advanced aerospace supply chain. Lots of new American and British companies have come in and created high skills jobs with higher salaries. We backed the automotive industry. As was said earlier, we now export more cars than ever before. In fact, we are plus on exports—we used to import more cars than we exported, but we now export more than we import.
Taxation of Pensions Bill
Sheila Gilmore Excerpts(10 years, 1 month ago)
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Cathy Jamieson
My hon. Friend makes a valuable point which I will address in due course. Before I do so, I want to put on the record one of the concerns expressed by the TUC, which, in keeping with the point made by my hon. Friend, said that it believes that
“the measures contained in the Bill are being rushed in, thus overturning the emphasis on consensus and consultation that has been a positive feature of pensions policy making over the last decade.”
Sheila Gilmore (Edinburgh East) (Lab)
Is my hon. Friend concerned that, given the speed of these changes, some of the other longer-term reforms such as auto-enrolment may be impacted on? Is she worried that these issues might not have been properly looked at?
Finance Bill
Sheila Gilmore Excerpts(10 years, 5 months ago)
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Mr Gauke
Let me quickly try to address some of the points that have been raised, many of which related to guidance. As I said earlier, the issue features in Labour’s new clause 9, but it is not directly related to the Finance Bill. I will be as helpful as I can. On the question of whether guidance will only be face to face, the face-to-face offer will be available to those who need and want it. However, that is not to say that it will be the exclusive delivery channel. Not everyone will want face-to-face guidance, as my hon. Friend the Member for Rochford and Southend East (James Duddridge) has made clear. For many people, both now and in the future, other channels will better suit their needs. We are currently considering the appropriate range of options for delivery channels, to ensure that consumer needs are properly understood and met, building on the views and evidence received during the consultation. We have asked the Financial Conduct Authority, working closely with the Pensions Regulator, the Pensions Advisory Service, the Money Advice Service and consumer groups, to co-ordinate a set of clear and robust standards that the guidance will have to meet.
The point was made about costs and, in particular, the £20 million funding. It is important to realise that that is a development fund for the purpose of getting the initiative up and running; it is not to pay for the ongoing costs of the scheme. We will talk more about that later.
Sheila Gilmore (Edinburgh East) (Lab)
Does not that illustrate the need for gathering and publishing the information, as proposed by our new clause 9? We are constantly hearing new things, such as, “There will be more costs for guidance, but we don’t know what they are or what will happen.” If the information is going to be gathered anyway, as the Exchequer Secretary constantly assures us, why not publish it to make sure we get this right?
Mr Gauke
I do not know whether the hon. Lady was present earlier—[Interruption.] I am pleased that she was. She will have heard me say that we have consulted on this matter and will respond shortly. If I may provide a little more clarity, that will happen before the summer recess, so it is at that point that we will set out our proposals and, obviously, there will be an opportunity over the months ahead for the House to give them considerable scrutiny.
To address the particular point made by the hon. Member for Kilmarnock and Loudoun (Cathy Jamieson) about whether the numbers in the tax information and impact note have been changed, the answer is no. The TIIN has been amended to take account of the Government new clause and new schedule, but the impacts remain the same, so there is no fiscal cost. I hope that that clarification is helpful.
Lastly, to be clear about the guidance—we will get the full details on it—as we have said throughout, it will be impartial and will not include recommendations for specific products or providers. It will not be a sales process; it is important that the sales process is separate.
I hope that that information is helpful to the House. I hope that new clause 13 can be added to the Bill, and I advise my hon. Friends to oppose the Opposition’s new clause 9.
Question put and agreed to.
New clause 13 accordingly read a Second time, and added to the Bill.
Catherine McKinnell
We are still at 2010; we will get to the present day in due course, but the hon. Gentleman seems to miss the point somewhat. Obviously, the Conservative party would like to airbrush out the unpleasant blip in 2010, when it almost abolished the investment allowance, and all the impacts that flowed from that, which were evident from the fall in business investment. That is the point that our new clause reinforces. The decision taken at that time was terrible. I do not know what the thinking was behind it—whether it had been planned for a long time by the Conservatives while they were in opposition, or whether it was simply a case of spitefully thinking, “It’s a Labour policy, so we will reverse it”—but it had catastrophic implications. As the hon. Gentleman’s question indicates, they had to think again.
Sheila Gilmore
I am sure that my hon. Friend, like me, welcomes the Government’s conversion and the way in which they have changed their policy. However, it is reasonable for us to question why the original decision was taken.
Catherine McKinnell
We can only speculate on what on earth was going through the Chancellor’s mind when he slashed an incentive that was clearly supporting those businesses in the very manufacturing industries that he claims to champion in making long-term investments, and creating and safeguarding the jobs that we need so desperately.
Catherine McKinnell
It is a little desperate to try to justify what is proven to have been a flawed decision-making process back in 2010. By the Chancellor’s own accounts, the measure was a huge blow to all those businesses that aspire to grow, invest for the long term and create jobs.
Sheila Gilmore
Does my hon. Friend agree that it seems odd to suggest that the chopping and changing was due to a sudden discovery that the economy was improving? The decision, in effect, to reintroduce the allowance was taken in 2012, when growth was extremely low. It would appear from these plans that, having declared an intention to increase the allowance briefly to £500,000 for one year only, it could drop down to £25,000 in January 2016. What kind of investment planning are companies able to do on that basis?
Sheila Gilmore
Does my hon. Friend want to reflect on the suggestion made earlier that it did not really matter to people whether the investment allowance was clear? Surely, when putting forward a formal business plan, people are not necessarily just working on a year-to-year basis; they want to know what, if things go on as they are, they could do in a year’s time, two years’ time, or three years’ time.
Catherine McKinnell
My hon. Friend makes an absolutely valid point. Businesses do not work in electoral cycles or annual tax return cycles; they plan for the future. Businesses have told us how unhappy they have been with the chopping and changing of this policy.
I am very surprised that the hon. Member for Redcar takes such a strong stance in supporting what has clearly been a disastrous Government policy. I would have thought he would have liked to distance himself from it, but he has obviously tied himself to this mast, and I am disappointed that he will not come through the Lobby with us. We will push our new clause to a vote, because we believe that the Government need to take stock and learn from their mistakes, and that this has been an absolute disaster of a policy, in terms of the Chancellor’s indecision.
Question put, That the clause be read a Second time.
Office for Budget Responsibility (Manifesto Audits)
Sheila Gilmore Excerpts(10 years, 5 months ago)
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Nicky Morgan
I am going to make some progress.
As our amendment makes very clear, we are not suggesting that the issues that the shadow Chancellor’s proposals present are insurmountable, but we do believe very firmly that the independence and operation of the OBR is critical. We need to make sure that independence and impartiality is preserved, and as such, Parliament would need time to scrutinise the proposals properly and the OBR still needs time to establish itself fully as an independent fiscal watchdog before being drawn into the political heart of a general election.
Let me turn to the situation that the Government inherited in 2010. First, it is worth reminding the Chamber of exactly why and when the OBR came into existence. Hon. Members will need no reminding of the economic inheritance left to this Government by the Labour party, and on taking office we recognised the need to act quickly in the short term to establish our country’s economic credibility for the long term. The creation of the OBR was vital in that respect.
Back in 2010, our country urgently needed a full and independent assessment of just how bad the problem was because, again and again, the possibility of fiddling figures was tempting, and some would argue that that temptation had been responsible for some of the greatest fiscal policy mistakes of the past 40 years.
Sheila Gilmore (Edinburgh East) (Lab)
One of the slightly odd things about the Minister’s line of argument is that in its initial reports the OBR predicted that growth would be much faster than turned out to be the case, which suggests that the situation then was not quite as dire in the OBR’s view as the Minister is trying to suggest. What happened, surely, was that Government policies then crushed growth.
Sheila Gilmore (Edinburgh East) (Lab)
Having listened to this debate, there seems to be confusion, or perhaps a conflict of views, on the part of Government Members. The hon. Member for South West Devon (Mr Streeter) was at least consistent in his position, which was not that it is a bad time to do this but that it is a bad idea altogether. Indeed, he did not seem to be all that keen on having an OBR at all. The position of Government Front Benchers, not just today but when this has been raised before, has generally been to say, “Yes, it probably could be quite a good idea and it should be done at some point in the future”—it is always “at some point in the future”. Those two positions do not hold together.
A lot of the reasons that have been given for not doing this now do not stand up to scrutiny. The Minister told us that it is a difficult time of year because it would run into the autumn statement and the Budget. If we are going to continue to have fixed-term Parliaments with May general elections, that will be a problem every single time, not just now. Another argument is that it is too difficult because there is not enough time to recruit people and get something like this off the ground. When the OBR was set up on an interim basis, it got off the ground very quickly. We were told, even at that stage, that we should accept its ability to produce a report, as it did in advance of the emergency Budget in 2010, that was a good and credible piece of work. That happened between May and June. The arguments about there not being enough time to get people in place do not stand up.
Much as I always enjoy the mellifluous tones of the hon. Member for North East Somerset (Jacob Rees-Mogg), who can get carried away with his own rhetoric, what he said was not correct. He suggested that we would be asking the OBR to look at every single proposal that came up over a period of time and any changes to it. That is not what the motion says. It asks for the auditing of proposals included as part of a general election manifesto. That is not the same as looking at policies that may change because there has been further debate or, as he suggested, through force of circumstance because there are changes out there in the real economy. By the time we are coming to the eve of an election, parties will be producing manifestos with specific proposals. Some of the things that have been debated and proposed by Labour will make it into the manifesto, while perhaps some will not. It is important that those proposals are audited so that there can be some judgment on them.
Despite all the protestations we have heard from the Government Benches about how the OBR must in no way be compromised or brought into the political fray, I have no doubt that as we get closer to the general election campaign, if we are not already in it, we will hear Government spokespeople say, “The OBR says this”, “The OBR says that” or “The OBR has audited our figures.” On that basis the OBR will already have been brought into the political fray, so why not do it properly and have it audit the manifestos of the parties that can form a Government? If Government Members do indeed think that that is a good idea in principle, let us just get on with it.
Debbie Abrahams
I am sorry, but I do not have time.
To deny information to the public is absolutely shameful, and that is where the problem lies. Other parties do not want to change; they want the status quo. They want to preside over a country where there is growing inequality. The average person will have £1,600 a year less in their pocket next year compared with 2010, and the average family has lost £974 since 2010 because of the tax and benefit changes, but bank bonuses have soared and the top-to-bottom pay ratio for FTSE 100 companies stands at 300:1. The Government are presiding over such inequalities.
Sheila Gilmore
If we propose policies, as the Leader of the Opposition did last week on the provision of training opportunities for young people, it is clearly important for the public to understand that the policies will cost what we say they will cost, and surely this proposal would help.
Debbie Abrahams
Absolutely. That is my major argument. I cannot understand any party not wanting to provide information to enable people to make informed decisions.
Oral Answers to Questions
Sheila Gilmore Excerpts(10 years, 5 months ago)
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Sheila Gilmore (Edinburgh East) (Lab)
13. What plans he has to review the effects of the Help to Buy scheme.
Diana Johnson (Kingston upon Hull North) (Lab)
14. What progress his Department has made on the Help to Buy scheme.
Sheila Gilmore
I thank the Minister for that reply, but when in five London boroughs, for example, the value of properties sold under the scheme has been over £400,000, have we not reached the point at which we should be reviewing this urgently, because at the same time we are hearing increasing calls for the Financial Policy Committee to look at cooling the housing market? We could be cooling the mortgage market on the one hand and encouraging higher prices through Help to Buy on the other. It does not make sense.
Andrea Leadsom
The hon. Lady should be aware that the numbers just do not support what she is saying. In fact, 94% of all completions under Help to Buy are outside London, the average price of a home under the mortgage scheme is around £151,000, which is well below the UK average of £260,000, and only 1.3% of total mortgage lending is under the Help to Buy mortgage scheme.