EU Referendum: Timing
Simon Hoare Excerpts(10 years, 1 month ago)
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Mr Dodds
I respect the hon. Gentleman’s point of view. I understand where he, as an English Eurosceptic, is coming from. I hope he respects where we in Northern Ireland, Scotland and Wales on both sides of the argument are coming from. We will weigh the arguments and consider whether his view should be tempered by the contributions of colleagues from other parts of the UK, some of whom might share his views.
Simon Hoare (North Dorset) (Con)
A phrase in the motion stands out as pretty strong stuff, and I would welcome the right hon. Gentleman’s explanation of it. It claims that the
“needlessly premature date risks contaminating the result”.
I thought we had already established across the House that the electorate can both walk and chew gum. I am not entirely sure how the result could be “contaminated”.
Mr Dodds
It is pretty obvious on an issue that the Conservative party has debated for many decades and the country raised many concerns about, that when the deal is finalised—the “t”s are crossed, the “i”s dotted and all the rest of it—we surely deserve more than a short 18, 17 or 16-week campaign for detailed consideration. If the Conservative party and others are really interested in putting the issue to bed once and for all, I think they will want the fullest and most comprehensive debate possible.
Stuart Andrew
I am sorry—there are two of them, including the right hon. Member for Gordon (Alex Salmond), who has defected by the looks of it.
Simon Hoare
I have heard a rumour that the Labour Members are all in a Trident submarine somewhere, sailing around and looking for things.
Stuart Andrew
That was a wise intervention.
I come at the issue having always supported a referendum. Dare I say it with the Government Whip on the Front Bench, but I was one of the rebels who voted for a referendum back in the day. I was four when the people of this country last had an opportunity to have a say on our relationship with Europe. That relationship has clearly changed over the past 40-odd years, and many of my constituents want the opportunity to discuss the matter and have their say again. That is backed up by evidence; in 2008, an organisation called Open Europe organised an all-postal ballot in my constituency, asking people whether they wanted a referendum and whether they supported the Lisbon treaty. Even though it was a voluntary postal ballot, more than 13,000 people took part in it, and more than 11,400—some 88% of those who took part—voted to say that they wanted to have the opportunity for a referendum on Europe. There is a clear appetite for such a referendum.
Many people have expressed to me their frustration about the fact that the referendum could be as late as 2017. They want to get on with it, regardless of which side of the argument they are on. I suspect that if there was a further delay because of the issues that have been raised in the motion, many of my constituents would view that with some scepticism.
When the European Union Referendum Bill was going through the House, I had sympathy with the views about the referendum being held on the same day as the 6 May elections. I am glad that the Government responded to the pressure that was applied, because those two things needed to be very separate, but to suggest that a longer period of separation is needed is, frankly, patronising. As others have said, it is not as though the Europe debate has not been going on for years and years. All who are for or against our partnership in Europe have made their points eloquently over the past four decades. In addition, the Government have also committed to allowing at least a six-week period between the elections and the referendum. I believe that that is more than adequate. Frankly, if those campaigns cannot get their message across in six weeks, perhaps they, and not my constituents, need to ask themselves some serious questions. My constituents are more than able to understand the issues that are being debated.
The truth is that there is history here. The previous European referendum was held only one month after the completion of the legislation. With the alternative vote referendum, there was plenty of time to discuss the issues. I know from being on the doorstep that many people understood what was being asked of them. When it comes to separating the issues, I refer back to my point about being patronising. Yes, the elections in May are incredibly important. In Wales, people will be elected to the Assembly, and in Scotland to the Parliament. There will be mayoral elections and the Northern Ireland elections. In my constituency, people will have to vote for their local councillors and for their police and crime commissioners.
Energy BILL [ Lords ] (Fifth sitting)
Simon Hoare Excerpts(10 years, 2 months ago)
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Clive Lewis
I have no doubt that they have made that investment in renewables. However, I am talking about investor confidence. I will give an analogy of investor confidence. I was in the Army, where we orienteered by taking a reference point from something 100 or 200 metres away that we could see on our map. However, if you want to make the best progress—if you want to allow your men to make the best speed—you look at the far horizon, find a point and aim for it.
That is what this is about: investor confidence for the long-term future. What the Government have done, with one fell swoop, by trying to end the renewables obligation early, is say they can chop and change as they see fit for political motives. That sends the wrong signal to the market and investors.
Simon Hoare (North Dorset) (Con)
I am grateful to the hon. Gentleman for being generous with his time. May I put to him this countervailing thought? The onshore wind sector is now very mature. It has got a good basis and is “proving its worth”. Is the hon. Gentleman saying that it should always be subsidy-reliant?
I do not buy this lack of market confidence. Paris and everything else point to a decarbonisation of energy generation. Investors are not going to have that policy pulled from under their feet. That should give plenty of market confidence to the private sector and others to invest. To have them continually drip-fed public money, irrespective of which purse it is taken from, has to stop. If the market pretends to be surprised by that, the Government would be surprised, because our policy was trailed very well months in advance of the election.
Clive Lewis
I thank the hon. Members for their interventions. We are not talking about subsidies ad infinitum. We are just saying stick to the plan; that is all we are saying. Whether it is solar or wind energy, subsidy should be seen as a glide path. What the Government have done is chop the wings off. I have lists of quotes from investors who will say that this is not the best way forward.
A report last week from Bloomberg New Energy Finance research forecast that these measures will see the UK lose at least 1 GW of renewable energy generation, enough to power 660,000 homes over the next five years. The figures suggest that after 2020 the renewables infrastructure will collapse to almost nothing because of a lack of investment.
David Hostert, the analyst behind the research, said:
“Without some form of change in policy support, we could see investment drop off a cliff after 2019.”
Meanwhile, Maria McCaffery, chief executive of RenewableUK, said:
“The Government’s decision to end prematurely financial support for onshore wind sends a chilling signal not just to the renewable energy industry, but to all investors right across the UK’s infrastructure sectors. It means this Government is quite prepared to pull the rug from under the feet of investors even when this country desperately needs to clean up the way we generate electricity at the lowest possible cost—which is onshore wind. People’s fuel bills will increase directly as a result of this Government’s actions. If Government was really serious about ending subsidy it should be working with industry to help us bring costs down, not slamming the door on the lowest cost option.”
I come back to the point on bills, Let us look at what this saves the average household. According to the Government’s own assessment, the changes will save just 30p on consumer annual energy bills and increase the UK’s carbon emissions by 63 million tonnes.
Ultimately, these measures are a backtracking, chaotic travesty. They make no sense, punish one of our most cost-effective and successful renewable industries and endanger this country’s energy security by undermining investor confidence. As such, I urge the Minister to drop them.
Simon Hoare
I fear that there is an inherent danger in the amendments. It is simply the conflation, which I think the planning process should quite specifically seek to avoid, of arguments surrounding financial viability, whether funded from the private or public sector, and whether a proposal dovetails with planning policies and the acceptability and suitability of a particular physical proposal. By trying to conflate the two, the hon. Gentleman puts an undue weight on the viability case, which local authorities will find very difficult to opine upon, and even a very casual review of planning inspectors’ decisions would also suggest that the Planning Inspectorate itself finds it very difficult to balance the two as well.
Philip Boswell
I assure the hon. Gentleman that this is merely an attempt to clarify or articulate the position from a legislative perspective. It remains our firm intention that the decision remains, as per policy, with local authorities and local people.
Although statements from Ministers in the House of Lords have indicated that the Government intend for modified consents to remain eligible, clarity on this in the Bill would remove any doubt and allow investments to proceed. Amendment (l) provides for cases where a planning permission was granted on or before 18 June 2015, but where that planning permission has been varied under the provisions recorded in sub-paragraph (ii). Permissions under section 73 of the 1990 Act or section 42 of the 1997 Act are in law new permissions, and without this provision such further approvals based on permission granted before 18 June would be shut out from receiving a ROC. Deemed planning permission issued with section 36 consents can be varied under section 73 or 42, but there is a need to refer to section 90 of the 1990 Act and section 57 of the 1997 Act because they will be engaged on an application to vary section 36 consent under section 36C of the 1989 Act.
Amendment (m) ensures that applications to vary an existing 1990 Act or 1997 Act permission that was granted on or before 18 June, that may result in an increased capacity which takes the total generating capacity of the station above 50MW and must therefore be done by way of an application for a section 36 consent rather than by way of a variation of the 1990 Act or 1997 Act permission, will still qualify for the grace period. Amendment (n) ensures that a project is still eligible for the grace period where a planning permission granted on or before 18 June 2015 is superseded by a subsequent permission granted after 18 June 2015 for a generating station of the same or lower capacity on the same site.
Amendment (o) is a new amendment to cover judicial review and statutory challenges relating to planning permissions granted on or before 18 June 2015. It envisages that the planning permission which is ultimately granted or confirmed following court proceedings can be accredited under the RO. How much capacity may come through the door as a result of the amendment that can be easily quantified by reference to any proceedings now in the court.
It is common practice within the sector for grid agreements to be varied by parties after initial agreement. Amendment (p) will clarifies that, provided a grid connection agreement is in place by 18 June, eligibility for grace periods will not be affected by any subsequent variations of that agreement. So far, Ministers have been unable to provide sufficient clarity that subsequent alterations or replacement of agreements would be eligible for the grace period. If the Government intend projects in those circumstances to proceed with construction and be accredited under the RO, that should be made clear in the Bill, for the avoidance of any further doubt and further delays. Amendments (q) and (r) are intended to make it clear that deemed planning permission is included within the definition of permission in the 1990 Act and the 1997 Act, and thus fall within the definition of planning permission.
Our amendments (s), (t) and (u) relate to new section 32LK of the Electricity Act 1989, inserted by Government new clause 2, which sets out the criteria for projects that would be eligible to meet the investment freezing condition. This condition is necessary—I thank the Minister for her stated intention of respect—because the way that the Government have chosen to close the RO a year earlier than planned through primary legislation has caused so much uncertainty that some investors cannot have stopped investment in onshore wind projects until the Energy Bill receives Royal Assent.
Amendment (s) addresses an illogicality within new section 32LK(4)(a)(i). The Government-drafted amendment envisages a developer requiring funding from a recognised lender, a term which is defined in subsection (5). However, it must have been intended that the only condition should be that the relevant developer required funding from any source, hence the proposed deletion of the reference to a recognised lender in this clause.
Amendment (t) deletes certain words as they unnecessarily narrow the definition of “recognised lender”. If the words proposed for deletion were included, they could exclude lenders who are new to the market and who have not previously given loans to onshore wind developers. Amendment (u) is consequential on amendment (t). The change proposed by amendment (t) removes the terms defined in subsection (6) from the definition of “recognised lender” so there is no longer any need to define those terms, making subsection (6) unnecessary.
I move on to new clause 3, and again I thank the Minister for her efforts and intents on new Northern Irish onshore wind. The new clause covers the development of wind generating stations in Northern Ireland. When the Energy Bill provisions were published, they related only to projects in Great Britain, because energy policy is devolved to Northern Ireland. Subsequently, Northern Ireland Ministers consulted on equivalent changes to the Northern Ireland renewables obligation, with cut-off dates for planning consent proportionate to this later consultation and notification date. Northern Ireland Ministers proposed setting two closure dates which related to different sizes of projects, and to the manner of connection to the Northern Ireland electricity market of these different project types. Smaller projects which connect at 33 kV to the Northern Ireland grid network would have to have been consented to by 30 September 2015. Larger projects which connect as clusters of projects would have to be consented to by 31 October 2015.
Northern Ireland Ministers have yet to announce their decision on Northern Ireland closure, as agreement between the Northern Ireland Executive and the UK Government has yet to be reached. This means that any subsequent Northern Ireland legislation cannot be enacted via the Northern Ireland Assembly until after the Bill is enacted. It is therefore necessary that the Bill is clear as to the limits of the application of the provision to Northern Ireland and that it respects timescales proportionate to the Northern Ireland generating stations. Failure to do this would mean that generating stations in Northern Ireland could be penalised because of a misalignment of timescales between reserved and devolved powers in the UK. I urge the Minister to seriously consider these amendments.
New clause 15 would,
“return to the Scottish Ministers the power to close the renewables obligation in relation to electricity generated by onshore wind generating stations in Scotland”.
Before the Energy Act 2013 was passed, Scottish Ministers had full control over renewables obligations in line with the Scotland Act 1998, which devolved powers to the Scottish Government regarding the supply of electricity from renewable sources. The Energy Act 2013 took back this control through a UK Government amendment tabled in the House of Lords that gave the Secretary of State the power to close the RO, including in Scotland. The justification for this change in the law was that it would facilitate a coherent and transparent closure across the UK and move toward the new contract for difference system. Those powers were taken back to Westminster under the previous Energy Act on the clear understanding and promise from the Government that there would be no policy implications; it was said to be just a technical change that would not affect any policy decisions.
At the time, the move was condemned by the Scottish Government’s Fergus Ewing, who said that the UK Government produced the amendment in the House of Lords with “no consultation or explanation”. He said:
“We are deeply concerned about this summary removal of the Scottish Government’s discretion in an area of such vital importance to our people and economy.”
Clearly, the original justification for stripping Scotland of a power devolved in 1998 no longer holds water. There has been a policy change by the UK Government, and it is one to which the Scottish Government dissent.
Simon Hoare
Picking up on the point just raised by the hon. Member for Norwich South, as far as I am aware the Minister has clarified that the carbon capture arena will now move within the purview of the OGA and it will be the OGA that will decide what is best to be done in that field, rather than the very costly blanket ban which the other place sought to impose on the Bill. The hon. Gentleman’s fear is misplaced.
Chris Heaton-Harris
I thank my hon. Friend; I could not have put it better myself and that is handy, because I was quoting from a Library document and I could not have told hon. Members what the next paragraph would have been, so I very much appreciate my hon. Friend’s help.
I gave a bit of a history lesson explaining why I set up what was almost a caucus, to use American terms on the day we are getting the results of the Iowa presidential caucuses. I think I could say that the 101 Members of Parliament I got to sign a letter and then campaign pretty hard were a caucus. The caucus that I led—it was not just me leading it; there were plenty of people taking a strong lead in this area—was certain about what it wanted to achieve when it came to the future policy for onshore wind. We wanted to make sure that onshore wind received no new subsidies. We were fed up with the way our communities had been treated.
As I said on Second Reading and as I think the Committee has agreed, I was quite happy about the second part of the commitment—a change to the law so that local people have the final say on wind farms—because I thought that that was pretty much the case, until a particular wind farm planning appeal came about. That was the Kelmarsh wind farm appeal, when the planning inspector ruled in favour of the development going through because he said that national policy in the area of renewable energy trumped all local concerns. And those local concerns were huge: they were concerns about a grade 1 listed building built in 1732 and about the site of the battle of Naseby. The inspector said in his report that this wind farm would have a “distinct visible presence” over Rupert’s viewpoint, King Charles’ oak viewpoint, Sulby hedges, the Royal Observer Corps lookout post and Mill Hill viewpoint. These are places and viewpoints from the battle of Naseby which I would argue—and I do argue with my colleagues—was the battle where Parliament fought for itself properly and won properly for the first time. The birthplace of Parliament was going to be overlooked by massive turbines, nearly the size of the London Eye.
The inspector said that national policy outweighs
“any harmful impacts it may have in terms of the setting of heritage assets, the living conditions of local residents in terms of visual impact and noise in particular, the…enjoyment of the countryside, biodiversity, notably bats, and other matters”
What I thought was a local issue to be dealt with local planners, which is where I think the whole Committee wants to return such matters, was being elevated to national policy level.
Jonathan Reynolds
Some interesting points are being raised, which the Government would do well to treat fairly.
The Minister mentioned the overperformance of onshore wind and our 2020 renewables target. I must stress this point clearly: there is a legally binding overall 2020 renewables target, but it is made up of a road map of targets for electricity, heat and transport, which are not binding but form our contribution to the overall renewables target. The target is for 30% of electricity generation, 12% of heat generation and 10% of transport to be renewable by 2020. When conceding that point, the Minister said that the problem is that the subsidies required for electricity and things such as onshore wind are such that we could not possibly try to overperform and that, frankly, we are not hitting our heat and transport targets.
If the Minister is worried about the impact of electricity subsidies on billpayers, she must get the briefing on how we will hit the heat target. To do so through the renewable heat incentive alone would require a budget in excess of the entire budget for the Department of Energy and Climate Change. The Minister will not save money by cutting back on this important area. She will almost certainly incur a much bigger liability for the taxpayer unless she can tell us that we are on track for our heat and transport targets, but we all know that we are not.
The Bill is needed to legislate for the Conservative party’s manifesto position, but the Government should recognise the UK’s pressing situation regarding investability. There are anomalies in the way that the Government’s objectives have been drawn up in the Bill and it is reasonable to correct them at this stage. Most of all, this group of amendments strikes the right balance between the Government’s objectives, investability and the national interest. I hope that the amendments will be considered properly.
Simon Hoare
It is a pleasure to serve under your chairmanship, Mr Bailey.
I was slightly anxious when my hon. Friend the Member for Daventry began his remarks with a clear US feel in talking about caucuses and the like. The Committee will know that today is groundhog day in the United States and listening to some of the speeches of Opposition Members, it did feel a bit like groundhog day today. Google is good for some things. [Interruption.] Trump that, as my hon. Friend says.
My heart sank when listening to an erudite but certainly groundhog day speech from the hon. Member for Norwich South, with all those surveys where this association says that and that association says the other, while 37% do such and such. As we all know, surveys can be made to say all sorts of things. “Bears prefer woods to bathrooms,” says one survey, “Turkeys don’t endorse Christmas as an annual event,” says another. The one survey that the Opposition parties seemed to neglect was the survey at the general election. That was a survey in which the British people said very clearly, among other things––particularly, though not exclusively, in rural England––that enough was enough. The survey at the ballot box demonstrated that this is an incredibly popular policy.
I have a fundamental support for how the Government are proposing to tackle the issue. My hon. Friend the Member for Daventry alluded to it. It would have been entirely within the purview of the Department––had it so wished, based on the election result––to say, “There we are. We’ve won. Any form of financial support or subsidy is going. You’ve got 12 hours to prepare and that’s it.” [Interruption.] For an Opposition Member to say that something the Government might do is very stupid takes a little brass neck. The hon. Member for Stalybridge and Hyde exhorted us all to take front and centre our duties to ensure that the investment markets had confidence in Britain. I look forward to the leaked transcripts of parliamentary Labour party meetings where he makes those points to his leader and the shadow Chancellor because I am not entirely sure that their policies do much to support confidence for investment in UK plc.
The stance that the Government have taken is to have a realistic timeframe whereby the industry, which must have been the most myopic ostrich if it did not see this coming, has time to rethink existing plans and, if it so wishes, seek alternative funding from the market. It is indicative that the Opposition say that this sector must always be subsidised. When David Davies of Llandinam literally sold the family silver––and almost the shoes on his feet––to pay the workers who were digging for coal in the south Wales valleys because he realised that there would be a market for coal to fuel the industrial revolution of which we were on the cusp, I doubt he sat down and thought, “Do you know what? I just wish there was a Government subsidy to support me doing this.” No, he realised that there was a market opportunity with profit attached to it and he went and did it. He did not need a subsidy and I do not believe wind should have one.
Philip Boswell
Does the hon. Gentleman understand that no tax was paid at that time? That gentleman therefore did not have to worry about that cost.
Simon Hoare
I am delighted to hear an SNP Member thinking about a no-tax economy to help entrepreneurs. I am sure he will take that to Holyrood.
Callum McCaig
I am ever so obliged. I thank the hon. Gentleman deeply. He said that this should not have come as a huge surprise. The date of one of the planning applications mentioned by my hon. Friend the Member for Coatbridge, Chryston and Bellshill was 28 May 2013. It does not cost nothing to get an application to that stage before going through the process. Will the hon. Gentleman remind the Committee when the Conservative manifesto was written?
Simon Hoare
The hon. Gentleman knows that it was clearly written post-2013, but the sector should have known of the irrepressible commitment of my hon. Friend the Member for Daventry, with his 101 Dalmatians, or however many it was, who had been making such comments during the course of the previous two Parliaments, and realised that something was likely to happen.
One thing that I find of genuine interest/concern—we sometimes have faux interests and concerns, but this is genuine—is that the onshore wind sector is fairly mature and well established. We do not need to argue about its bona fides. We do not need to argue about whether it is generating 1%, 5%, 6% or 14% of electricity, because it varies. It is here and we have it. Very often, Governments of all stripes will provide some form of financial support and backing to a nascent industry or sector, but once it is on its feet and has proven its bona fides, it should be able to stand on its own two feet without subsidy.
In the conversations I have had with people from the sector, the question that was always very hard, if not impossible, for them to answer was what cut-off point they envisaged for the ending of onshore subsidy. When I asked, “What are you saying to Government and to Ministers about how you see this support going?” the general response was, “We will continue to take the subsidy as long as it is there.” That is no way to run a policy, even if the books are buoyant and in the black. It is certainly no way to run a policy when the books are anything but.
I was interested when the hon. Member for Norwich South seemed to suggest that because the subsidy was coming from the public—from their direct debits, bank accounts, purses and wallets—and not directly from Her Majesty’s Treasury, there was some difference. I keep making this point: although the national average salary is around £24,500, in North Dorset it is £17,500. I do not think that my constituents saw it as particularly fair or equitable to provide, through their bills, subsidy to very successful businesses and the landowners who were also getting their percentage of the deal.
Simon Hoare
Let me make this point, because I think this is how the market operates, and will operate in future.
The hon. Member for Coatbridge, Chryston and Bellshill was discussing the planning system. Anybody who has any understanding of the commercial planning process—onshore wind turbines are part of that process as much as supermarkets or hotels are—will know that there are risks attached to it. People can spend an awful lot of money optioning up the land, paying consultants, having surveys done and so on, yet still fall foul of the process. Even if someone does not fall foul of it and secures consent, they might suddenly find that the funding regime from the banks or pension funds has altered or the appetite for the product they were seeking to develop has waned. They just have to chalk it down to experience. If we have some form of system in which as soon as anybody makes a planning proposal the automatic presumption is that, de facto, they will always have consent, that would be a very dangerous sign to send to the commercial development sector.
Philip Boswell
Does the hon. Gentleman agree that under the Twentyshilling Hill wind farm timeline, the sunk costs incurred before 18 June 2014 were £3.5 million, plus commitments of £3.3 million, totalling £6.8 million? The point is that these included placing deposits on turbines with Nordex. Such orders in the industry are long-lead orders and often have to be placed a year or more in advance. Does he not agree that for a project of such efficacy, one has to plan ahead and commit?
Simon Hoare
No, I do not, with the greatest of respect. I can recall in my own commercial career working on a project for at least 11 years, where the client had spent somewhere in the region of £8.2 million propounding a planning proposal and still was not in sight of securing a consent. This is the point that I make. If someone is in the commercial development sector—the energy sector or whatever—there are risks attached.
Jonathan Reynolds
There is a point that has to be stressed here. Onshore wind developers are not arguing against the closure of the RO. They are not arguing for anything that might be unreasonable in terms of the risks that they knew were involved in the planning system. They are asking for the Government’s promises on sunk costs to be honoured. That is what the group of amendments does. They are not about demanding subsidy for ever or about asking for compensation for reasonable risks that were known to be there. It is about the Government honouring their promise on sunk costs.
Simon Hoare
I hear what the hon. Gentleman says. He obviously has a little more faith—I will be charitable and say faith—because I am not entirely convinced that any sector that is so sated by subsidy would ever turn round at any point and say, “Do you know what? Now is a really good time to end the subsidy.” There will always be a reason. We heard it from the solar sector: “Give us another 10 more years because we are on the cusp of doing something quite exciting with storage batteries.” Why they did not think about that when the sector was nascent, I do not know. People who receive a subsidy will always find an argument for the maintenance of the status quo.
The hon. Member for Southampton, Test, who leads for the Opposition, is about to burst a blood vessel unless I let him in. Having listened to him for the past two and a half days, I am loth to do so, but of course I will let him in.
Dr Whitehead
May I gently ask the hon. Gentleman whether he has ever heard of digression? When the subsidies for wind were first introduced, one of the reasons that they received clearance for state aid in the EU was that they were not permanent and were based on digression, and everyone agreed that that should be the case. Secondly, I could have sworn the hon. Gentleman was here earlier in the debate when we were discussing the application of subsidies to a mature industry: North sea oil and gas exploration. Will he compare what happened earlier in the debate and what is happening now?
Simon Hoare
In fairness to the hon. Gentleman, he makes a valid point, and I will answer his point in the way that I have answered it when constituents have talked to me about it. For those who try to seek a golden thread of thinking that runs through all of energy policy, they will look in vain, because there are inconsistencies. I am a huge supporter of the nuclear sector. I must confess it makes me slightly glow. [Interruption.] No, that is not the word I am looking for. It is not a rational approach to say I do not like subsidies for onshore wind, but I can understand the need for a subsidy for the nuclear sector. The problem with what the hon. Gentleman is trying to find—and he is legitimate in his search—is that we have so siloed our means of energy generation that they have to be viewed silo by silo, rather than according to the product that is being generated: electricity.
I do not want to take up the Committee’s time more than I need to, but I want to slightly echo what my hon. Friend the Member for Daventry said. My hon. Friend the Minister may recall that I mentioned this point on Second Reading in the House. At some point, there will need to be a side conversation between her Department and the Department for Communities and Local Government about the national planning policy framework. There is a slight danger that in the Localism Act 2011, we raised too much expectation of the phrase “local decisions”.
The Minister confirmed this morning—we are absolutely right to keep to this regime—that an aggrieved applicant would still be able to trot off to the Planning Inspectorate to appeal a decision, in the same way as the Secretary of State will be able to recall an application that may have been determined favourably by the local planning authority. Again, both an aggrieved applicant and an aggrieved third party will still have recourse to the courts for a judicial review, but the wording of the national planning policy framework—I am afraid I do not have the paragraphs to hand—provides a strong and reliable crutch to the inspectorate. It says that national planning policy, such as decarbonisation and so on, will trump a number of the key topics that my hon. Friend the Member for Daventry was talking about: areas of outstanding natural beauty, sites of special scientific interest, heritage and listed buildings and so on.
I do not think that we need to ramp that up too much, but I welcome the fact that instead of segregating proposals by size, local councils will be able to determine applications through the democratically elected process of the council chamber. Local people will, of course, be able to have a say there and will be able to appear as third parties at a public inquiry, but the final decision will not be taken by local people if an applicant decides to appeal. In my constituency, prior to the election, we had a terrible proposal for a very obvious place in terms of local vista and impact. North Dorset District Council turned it down, to the huge relief of the community, and the applicant read the room and did not appeal, realising that they would not get it. However, that avenue will remain open to an aggrieved applicant or developer.
It goes back to the point that I was making to SNP Members and others: all planning has a risk. In the absence of a provided subsidy, it may well be that applicants and landowners will think far more carefully about what they are applying for and where they apply for it. If they are reliant on the private sector to fund their initiatives and enterprises, we may find—
Simon Hoare
I am just coming to a close, if the hon. Gentleman will forgive me.
Rather than jiggery-pokery such as applying for two turbines in a 22-acre field to establish the principle and then coming back for more through variations to consent, which the amendments from the hon. Member for Coatbridge, Chryston and Bellshill sought to protect, we may well find that local communities and their planning authorities will see the whole picture at the start of the planning process rather than planning by salami-slicing, having established the principle.
The Government are absolutely right in their approach to the subsidy. My hon. Friend the Member for Daventry spoke wisely about the civil war. I must say that I would probably have found myself more of a cavalier than a roundhead, but there we are. However, there is an important point to make. If the civil war was about the proportionate balance between Crown and Parliament, the clauses inserted in the other place are, without over-egging this particular pudding, potentially as significant. If the Salisbury convention is to mean anything, something that passed the survey of the general election and a policy that commanded strong public support should not be challenged by the other place. I hope that we do not get involved in an overly long game of ping-pong with their lordships, because the view of the democratically elected House, certainly on this matter, must prevail.
Matthew Pennycook
When I drafted my notes for this speech earlier today, I did not comprehend that it was quite on an English civil war-type level of debate, but I will do my best.
Before I move on to my substantive comments, I will refer to the very interesting debate we had earlier about variability and balancing. It is worth returning to because—like so much of the debate on this issue, and not only in Committee and on Second Reading—we hear less about the costs of particular subsidies or how onshore wind forms part of our energy mix and more about the politics of onshore wind, which is really not what we are discussing when we consider what is the contentious part of the Bill.
Earlier, the hon. Member for Daventry raised the issue of intermittency, but I agree with my hon. Friend the Member for Stalybridge and Hyde that he did so in a way that did not shed much light on the subject, because the notification of inadequate system margin event that he talked about—I believe that it was a NISM event in November, and incidentally it does not mean that the lights are about to go out, but merely that the National Grid would like to see a larger safety cushion of spare generating capacity being brought on to the grid, which is not an unusual practice for the industry—was not caused just by an extended period of low wind, although that was part of it. It was also caused by unexpected plant faults and losses, so it was not just the fault of wind. When one drills down into the costs of that NISM event, one finds that it was in the hundreds of thousands, and not the calamitous figures that we got in the press.
Similarly, I am sure that we can have an extended debate about base load and about whether the idea of large coal-fired or nuclear power stations for base load is outdated, as Steve Holliday, the CEO of National Grid, has himself argued.
However, what cannot be denied is that onshore wind is a flexible technology that helps National Grid to balance the network quickly, by ramping output up and down at times of constraint or system imbalance and, as the Royal Academy of Engineering has estimated, it requires no specific extra back-up until we hit 50 GW of onshore wind, which is five times the current level on the system.
When it comes to the costs of balancing to account for the increased variability, which is a product of moving towards a more decarbonised and flexible energy system, gas is far, far more expensive than wind. For 2014-15, 7% of the costs of balancing the grid were due to payment to wind. In the equivalent year, the balancing costs associated with gas amounted to £240 million, which is five times as much as the costs associated with wind. So we need to bring some sense to the debate about what these technologies do and, in a sense, approach it—as I hope the Government still do—in a technology-neutral manner.
By bringing the Committee’s attention to this point, I am only drawing attention to what I believe is actually the driving force behind the early closure of the RO and the Government’s insistence on reinserting these clauses, which is not a hard-headed calculation of what is required to balance the energy trilemma, or to meet the costs of controlling the levy framework; it is about the politics of the windy caucus and the understandable anger of constituents in parts of the country who have had onshore wind projects foisted on them when they do not support such projects.
As we have heard, onshore wind has been a success story. It is proven; it is mature; and its costs are coming down. That is precisely because of the conducive framework for investment that was provided by 10 to 15 years of energy policy consistency and a large degree of consensus about that policy. It is that consistency and the investor confidence that comes with it that the Government have played fast and loose with since May 2015.
The hon. Member for Daventry said that this whole debate turns on this point, and in a sense he is right to say so. However, to label it dancing on the head of a pin does him a disservice, given the number of people who have invested substantial amounts of money over long periods of time, because—as we heard from hon. Members before—the lead-in times for these projects go back years. Those people invested in those projects in good faith and they did not invest to see them close early.
I am very clear about the manifesto commitment. We are not talking about the localist aspect; there is no dispute about that. The manifesto is very clear that local people will have the final say. On the nebulous wording
“we will end any new public subsidy”,
it is clear that the renewables obligation is not a new public subsidy. It is an existing subsidy that was legislated for by the coalition Government in 2013, and investors were right to think that it would continue. As recently as 13 October 2014, the then Minister—now the Secretary of State—said that
“the RO will be closed to new capacity from 1st April 2017”,
and there have been other similar statements.
Andrea Leadsom
I am sure, then, that the hon. Gentleman will be delighted about our commitment to further deployment of offshore wind and to the new nuclear programme, both of which are a low-carbon future for the UK. Targets for decarbonisation and new gas, and a big decarbonisation away from coal and into gas, are the bridge to a low-carbon future. I am sure that he will welcome the certainty that we have given investors with that, and the opportunity for UK plc to get more jobs, more growth and more business in the supply chain as a result of our changes in policy.
I will come specifically to the amendments tabled by the hon. Member for Coatbridge, Chryston and Bellshill, whom I thank for his excellent portrayal of the intention behind them. I hope to give him some reassurance on some of those points. My hon. Friend the Member for North Dorset is absolutely right to point out that the survey of the ballot box, which is the best survey, has entirely supported our policy on wind. He raised the question of appeals and judicial reviews. The appeals process is still in place for onshore wind. However, any appeal in England on a decision taken after 18 June will need to take into account the clear statement made by the Secretary of State for Communities and Local Government on 18 June, which sets out the new considerations to be applied to proposals so that local people have the final say on wind farm applications, fulfilling the commitment made in the Conservative election manifesto. Importantly, it also makes it clear that planning permission should be granted only if the development site has the support of the local community and that it can be demonstrated that any planning impacts identified by affected local communities have been fully addressed. My hon. Friend is right to raise that point and I hope he is reassured.
Simon Hoare
That is a huge comfort. Will my hon. Friend clarify either now or on Report that the guidance being issued by the Secretary of State for Communities and Local Government in June is of equal status and standing to the guidance in the national planning policy framework?
Andrea Leadsom
My hon. Friend may be asking me about a specific legal point, so it may be better if I write to him. I have been clear on the intention, but he is asking me something that I should probably write to him about afterwards.
I am grateful to the hon. Member for Greenwich and Woolwich for his insightful points about NISMs and the associated costs. It is exactly right that a NISM does not mean that the lights are about to go out, and the associated costs are actually relatively small. As we have said all along, energy security is our top priority and we are not prepared to risk it in anything that we do. He also rightly points out that we are trying to decarbonise at the lowest cost and that we totally support renewables. As many hon. Friends have already pointed out, 98% of solar has been deployed since 2010. In 2015, the UK increased its investment in renewables by 25% compared with 2014. At the same time, EU investment decreased by 30%. This Government have shown a strong commitment to renewables deployment. I hope that hon. Members are reassured by that.
Turning to the amendments to new clauses 2 and 3 and new clause 15, I remind hon. Members the Government have listened carefully to the views of industry and are committed to deliver their manifesto commitment. The amendments have a range of effects, predominately in relation to the eligibility criteria for the grace period conditions set out in new clause 2. I will also cover amendment (a) to new clause 3, which relates to Northern Ireland, and new clause 15, which is specific to Scotland. I will address each of the key proposals in turn.
Amendments (a) and (b) to new clause 2 relate to changing the eligibility date or moving to planning application. The amendments suggest that the key eligibility criteria start date be either pushed back to a later date or moved entirely to include those projects with a submitted planning application as at 18 June that had not yet achieved consent. Either of those actions would have a significant impact on the number of projects that would be eligible for the approved development criteria set out in new clause 2 and therefore on overall deployment figures. I am afraid that to respond adequately to the proposals, and specifically the point on changing the grace period eligibility start date or consent criteria, I must first return to the core principles behind the early closure and the grace period conditions.
As I have said, if one considers those onshore wind projects that already have formal planning consent, there is enough to contribute to what is needed to meet our ambition of 30% electricity from renewables by 2020. The Government have made a commitment to manage costs under the levy control framework, and specifically in relation to this well-established technology. The policy intent is to close the renewables obligation to onshore wind, and the clause, as drafted, sets out clearly that the renewables obligation is closed to new onshore wind farms in Great Britain from 31 March 2016, which is necessary to manage the risk of over-deployment. Furthermore, the grace period set out in new clause 2, called the “approved development condition”, was drawn up specifically to protect investor confidence.
Even in its most early design, as set out in the announcement by my right hon. Friend the Secretary of State for Energy and Climate Change on 18 June, the grace period drew a clear bright line for developers while protecting investor confidence and that of the wider onshore wind industry. That approach has underpinned our engagement with industry and wider onshore wind stakeholders. We have been told that the industry ultimately supports our approach. We have also heard anecdotally that some projects that did not meet the grace period criteria have already fallen away, so to change the goalposts at such a late point would be fundamentally unfair to developers who may have chosen not to continue their projects in the light of our original announcement.
European Union Referendum Bill
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Mr Jenkin
That is a good question. We all expect that, before long, there will be agreement among Ministers that some will not be toeing the Government line on this question. It is too big a question for it to be otherwise. The reason that we have referendums is that the questions split parties. We could not have a general election on a question that split the parties on both sides of the House. It would be impossible to decide on the issue in that way.
It would be absurd to have a referendum and then try to corral all the Ministers into one point of view. The precedent in 1975 was that collective responsibility was abandoned, although that does not mean there is not still a Government view—there is a Government view and a dissenting view. That is how it will work in this case, assuming that a vast number of Ministers do not leave the Government’s view too isolated to be any longer credible as being that of a Government.
Simon Hoare (North Dorset) (Con)
Does my hon. Friend not agree that the country at large still has trust in “the Government”—in the governance of this country— whether or not we think it is right to hold that view? Our electorate would therefore find it strange if, during a referendum campaign, they could not point to what the Government’s view was. The Government of the day would continue after the referendum, and people will want to know what the Government, whether collective or otherwise, think about the issue.
Mr Jenkin
I am grateful to my hon. Friend for his intervention. I have already said that the first publication is perfectly justified, as the Government are entitled to explain what they have negotiated and to give their opinion on that. If he would like to do so, he might explain how they are going to give
“information about rights, and obligations, that arise under European Union law as a result of the United Kingdom’s membership of the European Union”
in a concise and simple fashion which is not loaded. Perhaps he could tell us which countries should be used as
“examples of countries that do not have membership of the European Union”
in order to explain the consequences of leaving the European Union. We are talking about very subjective judgments, and of course that is what the debate between the yes and the no campaigns will be about.
My hon. Friend is right to say that people trust what the Government say, which is exactly why what they say should be curtailed and limited: it has a disproportionate effect on the voters. There is absolutely no doubt about that. If a leader of a party says something, that has less of an effect than if the Prime Minister says something. That is why we have a purdah period, and the House has forced the Government to accept that there will be a proper purdah period. Otherwise, if we have what we had in 1975, whereby the Government can carry on regardless, being the Government and yet expressing partisan views on one side of the argument and not the other, an unfair referendum would be created. That is why all referendums throughout the world have systems to try to contain what Governments do during the final phases of the referendum, in order to try to create some fairness.
Mr Mak
My hon. Friend makes a fantastic point. I certainly agree that there are a number of alternatives. I look forward to referendum debates in the media, in this House and in many other forums.
I wish to return now to the central role of the Electoral Commission. My view is that the Electoral Commission should not be drawn into playing any sort of quasi-judicial or quasi-campaigning role. It should play a central role in the good functioning and administration of the referendum. We should always be mindful of the commission’s own views, which have been set out in a letter that has been distributed to Members across the House, and to which we should pay heed.
I am also heartened about the vibrancy of our democracy. Even though we are still in the early stages of our debate, it has already produced a number of campaigning groups. I am very pleased to see some senior Members from across the House participating in today’s debate. The campaign groups that have been set up include: Vote Leave, Take Control; Leave.EU; and Conservatives for Britain, which has been skilfully organised by my hon. Friend the Member for Wycombe (Mr Baker). I can see my hon. Friend the Member for Harwich and North Essex (Mr Jenkin) and my right hon. Friend the Member for Wokingham (John Redwood) who have played leading roles in the campaign. On the Opposition benches, we have Labour in for Britain, which is led by the right hon. Member for Kingston upon Hull West and Hessle (Alan Johnson); and Britain Stronger in Europe, for which my right hon. Friend the Member for Ashford (Damian Green) plays a leading role. Even before the referendum gets under way, there is a vibrancy of debate across the House and also in the country, which is very positive.
Simon Hoare
My hon. Friend is right to set out the span of organisations. I do not know whether my inbox in my constituency of North Dorset is at odds with those of the rest of the House. I get lots of emails about lots of things—hundreds about bees over the weekend—but I cannot think of the last time I received an email about the EU. We in the House are inclined to obsess about it, and we forget that outside, people are trying to live their lives and all they want to know is that the Government are on their side. We should not focus down to what is happening here.
Mr Mak
I thank my hon. Friend for his characteristically cogent intervention. He is right that, beyond the walls of this place, men and women, families and businesses and community organisations play their day-to-day role, focus on other priorities and are not necessarily concentrating on the EU referendum or those issues on which this House concentrates.
HMRC Office Closures
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Hannah Bardell
I am going to make some progress.
An office is also going to shut in Inverness, and offices in Irvine and Glenrothes are also in the process of closing. Those closures are distressing news for the employees, their families and the communities affected, including in my constituency of Livingston. We must remember that behind every closed office and every job lost are individual folk, some of whom I and my colleagues have met in recent weeks following the announced closures. Many of them have proudly worked for HMRC for 10, 20 or more than 30 years. Many have spent their whole careers in their local HMRC offices and are fiercely proud of the work they do.
Hannah Bardell
I am going to make some progress. Three of the Scottish centres announced for closure—those in East Kilbride, Cumbernauld and my constituency of Livingston—employ staff who issue specific guidance to the public on access to and eligibility for tax credits. With the prospect on the horizon of the Chancellor returning with his tax credit cuts, it is unthinkable that that support will be withdrawn from our communities.
The budgets of Government Departments and public bodies will suffer as a result of the austerity measures. They will be reduced by the Chancellor, who continues to cut despite the advice of many academics. Indeed, only yesterday, a report by City University said:
“George Osborne could be forced to borrow billions of pounds more than forecast by 2020 if he sticks with spending cuts that will hit economic growth”.
Two academics from City University projected that by 2020 the Government will be forced to report a £40 billion deficit instead of the planned surplus, undermining the Chancellor’s fiscal charter, which dictates that the Government borrow only in times of distress.
Hannah Bardell
New jobs in the hon. Gentleman’s constituency will, of course, be good news for his constituents, but I want to know what the Chancellor has to say to people in Scotland and other parts of the UK who are going to suffer and lose their local tax offices.
Hannah Bardell
Let me make some progress. The City University report is proof that this Chancellor’s attempt to run an absolute surplus is not working and is not credible.
SNP Members were elected on a manifesto that offered an alternative, fiscally credible plan for a modest 0.5% increase in public spending, which would have injected £140 billion into the economy. The proposed closure of HMRC offices will have a disproportionate effect on Scotland, because the vast majority of the UK Government’s ring-fenced Departments lie outside Scotland.
Hannah Bardell
I have just got to my feet again, so let me continue. John Allan, the national chairman of the Federation of Small Businesses said:
“Our members have repeatedly told us about difficulties getting practical help from HMRC when complying with their tax requirements. The current online offering is limited, often hampered by poor broadband connectivity, and the phone help line is hard to navigate, with long waiting times.
Over the long-term, this modernisation programme must bring substantial benefits and efficiency savings. In the short-term however, members will be concerned that the closure of these tax offices will simply compound existing problems.
The Government need to reassure businesses that disruption is kept to a minimum. This should be used by HMRC as an opportunity to deliver services that are easy to access, provide clear and consistent help tailored for smaller businesses and provide the certainty they need for their tax affairs.”
If the Chancellor will not listen to the SNP, perhaps he will listen to the Federation of Small Businesses.
These closures have been happening for some time. In March 2013, the UK Government announced that they were to close all of their 281 inquiry centres by June 2015, and it was reported that closures would result in the loss of 1,300 jobs. A consultation on plans to streamline HMRC inquiry and support services through the use of telephone consultations occurred in 2012, and HMRC piloted the new service in the north-east of England from June to December 2013. In October 2014, HMRC announced plans to close 14 offices across the UK by December 2015. It was reported that that would affect 453 civil servants, and a further 690 administrative employees had been offered voluntary redundancy.
The Public Accounts Committee said in the first half of 2015, following the closures, that only 50% of calls from the public were answered by HMRC, down from 73% in the last financial year. Tam Dolan, the PCS branch chairman in Dundee, said:
“This decision is baffling. HMRC have trained staff doing an excellent job, receiving more calls than they can handle. For PCS members in Dundee, making these staff redundant while recruiting elsewhere sends a message that Dundee doesn’t feature in HMRC’s long-term plans.”
Simon Hoare
The hon. Lady is being typically generous with her time. In the sunny uplands of Scottish independence, what detailed analysis would her party, as a Government, have undertaken as to the quantum of HMRC staff and offices it would have in a newly independent Scotland?
Hannah Bardell
The hon. Gentleman is getting a little ahead of himself; I will come to that.
Ironically, during the referendum many argued that independence for Scotland would result in job losses in public services. It was lauded as the Union dividend, and we in Scotland were told by the then Chief Secretary to the Treasury, Danny Alexander, who sadly is no longer in his place:
“That dividend is our share of a more prosperous future. It is the money that will pay for better public services and a fairer society.”
In July and August 2014, the Scottish Labour party tweeted that 3,200 jobs at HMRC were
“just one of the reasons that being part of the UK is best for Scottish jobs…and 1,400 jobs at HMRC in Cumbernauld are dependent on us staying in the UK.”
That was clearly not the case. I hope that those on the Labour Benches, who will also no doubt have constituencies affected by these closures, will reflect on those comments and think carefully about who can be trusted when it comes to jobs in Scotland.
The tax gap in 2013-14 was estimated to be £34 billion, which amounts to 6.4% of total theoretical tax liabilities. Small and medium-sized enterprises account for the largest portion of the overall tax gap—some £16.5 billion ––followed by large businesses with some £9.5 billion. We in the SNP take the view that the vast majority of SMEs actively want to contribute to society by paying tax and that a high proportion of the SME tax gap will have been lost through errors and miscommunications.
Welfare Reform and Work Bill
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Damian Hinds
I can only guess that the hon. Lady is making a strange reference to the Conservative manifesto. We were very clear in our manifesto that we are still only halfway through the job of getting the deficit down to zero. It stands at £3,300 for every household in the United Kingdom and we said very clearly during the election campaign that, as part of that, we needed to make £12 billion of welfare savings. What was not in our manifesto was the national living wage.
The Chancellor has said that he has listened to concerns from colleagues in this House and will come forward with proposals in the autumn statement to achieve the goal of reforming tax credits, saving the money needed to secure our economy while helping with the transition through the changes. I do not believe that the new clauses are therefore appropriate for inclusion in the Bill.
I now turn to amendments 49 to 52, which intend to prevent the freeze for four years of working age benefits, child benefit and tax credits. The freeze of the main rates of the majority of working age benefits, child benefit and tax credits will, in total, contribute some £3.5 billion of savings by 2019-20, and will help us to achieve our objective of deficit elimination. It will put welfare on a fairer and more sustainable footing so that we can continue our investment in our national health service and our schools, even as we get the national finances back into balance.
As my hon. Friend the Member for Fareham (Suella Fernandes) pointed out, there is an imbalance in a system that has seen a rise in average earnings of 12% since 2008, and in working age benefits, such as jobseekers’ allowance, of 21%. The individual element of child tax credit has risen by 33%. The freeze will help reverse that trend, helping earnings to grow faster than benefits, which will strengthen the incentives to work, and deliver the savings necessary to bring down the overall welfare bill. None the less, the Government will continue to offer protections to the most vulnerable. We know the best way to support people is to help them move closer to the labour market, but of course we realise that that is not possible for everyone. That is why we have made many important exemptions to the four-year freeze. We have exempted pensioner-related benefits, personal independence payment, disability allowance and attendance allowance relating to the additional cost of disability as well as statutory payments, carers’ allowance, the support group component of the employment and support allowance and disability elements in tax credits.
Simon Hoare (North Dorset) (Con)
The list that the Minister has just given to the House underscores entirely the compassionate, one nation Conservative approach that we are taking to these issues in sharp contradistinction to the Opposition parties, which seek to lecture but which have no remedy.
Damian Hinds
My hon. Friend is right, and it is right that those exemptions are made.
Debbie Abrahams
My hon. Friend makes an entirely valid point. Disabled people will find it more and more difficult to live fulfilling lives that enable them to make contact and fulfil their potential, which everyone should have the right to do, so it will be a disincentive.
Simon Hoare
I am chairman of the all-party group on multiple sclerosis. I entirely understand the hon. Lady’s concern and, indeed, the sort of representations made by the hon. Member for Blaydon (Mr Anderson). However, does she take heart, as I do, from the fact that Ministers are part of a party that brought forward pioneering legislation on disability rights, which should provide comfort that Ministers on the Treasury Bench will make sure that no policy will leave people behind?
Debbie Abrahams
Yes, it is right to acknowledge the Government’s role in bringing in the Disability Discrimination Act 1995, but this Bill flies in the face of that legacy. I really hope that by the end of today, the Government will be able to provide some reassurance, because to date there has simply been none for disabled people.
In Committee, the Minister said that these cuts would not affect people currently on the ESA WRAG, but does that mean that people diagnosed with progressive conditions, but assessed after the Bill is enacted, will be deemed to have a different form of the progressive condition? Will they require less support, or do the Government finally accept that, apart from being dehumanising and exacerbating people’s health conditions, the work capability assessment is not fit for purpose and needs a complete overhaul so that people with progressive conditions are not placed in the ESA WRAG? I would really appreciate some clarity on that point.
Surely if the Government were serious about supporting disabled people into work, there would be measures in place to support into work those disabled people who are able to work. How many employers will be engaged? Although the Disability Confident scheme is a good first step, only 68 employers are currently active in it, and they will certainly not be able to support the 1.3 million disabled people who are able to and want to work. Do the Government intend to extend Access to Work beyond the 35,000 disabled people it helped stay in work or into a new job last year? What is going to happen about the appalling ratio of one disability employment adviser for 600 disabled people? [Interruption.] What estimates are there of the impact on the employment of disabled people of this measure and the reduction of the 30% disability employment gap?
Simon Hoare
Hitherto, the hon. Lady has been making a very thoughtful and considered speech. It may not be up to me, as a new Member, to say this, but the sentence that she has just uttered has fundamentally undermined the cause of her argument, and I invite her to reconsider it.
Debbie Abrahams
I appreciate that it is strong language, but I can only provide the hon. Gentleman with the evidence. In 2010, the use of the term “scrounger” by the mainstream press had increased by more than 330%, and it has remained at that level. We should always be mindful of the language that we use as leaders, and of how it is perpetuated.
Debbie Abrahams
I used that language to draw attention to the issue in the House, and more widely. I did so partly because I am sure I am not the only one to remember the autumn statement two or three years ago in which the Chancellor, at the Dispatch Box, referred to “closed curtains” when people were going out to work. It was quite clear what that implied. I use such language very carefully, and I repeat that its use in the media has increased by 330%. We all have a responsibility in this regard, including the country’s leaders.
The innuendo is that people with a disability or illness might be faking it or feckless. That is grotesque. As a former public health consultant, I speak with some knowledge. It is recognised that incapacity benefit and ESA are good population health indicators, and the release of the Government’s own data has proved the point. Disabled people in the ESA WRAG are a vulnerable group who need our care and support, and not our humiliation.
Charter for Budget Responsibility
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John Mann (Bassetlaw) (Lab)
There is a saying in literature that normal is as narrow as the street that you live in. The Chancellor lives in a little gated community—a cul-de-sac with perhaps a problem neighbour next door. The constraint on his economic plans is the backdrop to the decision tonight on whether to have this charter. Yet he cannot cite anyone supporting the charter other than those who are sitting behind him. Our friends in the CBI are not supporting his charter. The City of London is not supporting his charter. The Governor of the Bank of England was not prepared, in the Treasury Committee, to support his charter. Indeed, all the economic experts who came before the Treasury Committee when we looked at this in some depth in July did not at any stage choose to support his charter.
Helen Goodman (Bishop Auckland) (Lab)
I am pleased to follow the hon. Member for Boston and Skegness (Matt Warman). He has clearly not read the columns of his former colleague Martin Wolf, who agrees with the arguments made by Labour Members. If anybody wanted to know whether this was a political gimmick, they only needed to look at the 90 minutes provided on the Order Paper for this debate—a pitiful 90 minutes to discuss something that is meant to be an important economic policy.
As my hon. Friend the Member for Bassetlaw (John Mann) said, we took evidence on this—
Helen Goodman
No, I will show the hon. Gentleman the same courtesy the Chancellor showed me.
We took evidence on this matter in the Treasury Committee in July. We found nobody who was prepared to endorse the Chancellor’s proposals. Even the Governor of the Bank of England, when pressed by the Chair of the Select Committee, said that he was
“declining to opine on specific legislation”.
He stated that
“the UK Government have had the announced intention in Budgets in place for a sustained fiscal consolidation. That is one of the headwinds against the economy”.
It was not just left-wing economists who criticised the Chancellor. The head of the Thatcherite Institute of Economic Affairs, Professor Philip Booth, said that the fact that
“these very damaging things have been done to child tax credit systems…is my biggest concern.”
He continued:
“I think in the handbook of possible fiscal rules the Government is choosing a very, very, very bad one.”
One of the most pernicious things about the rule that the Chancellor has chosen is that it treats capital and current spending the same. He is ignoring the fact that investing in housing, science, broadband, transport and the university system is a way of strengthening economic productivity and increasing growth in the British economy. Nobody thinks that it is right to max out the credit card to pay the weekly grocery bill—of course not—but families up and down this country take out mortgages to buy their homes. There is a precise parallel here.
Opposition Members are not deficit deniers. We want to bring down the debt-to-GDP ratio, as the shadow Chancellor said. In that task, the Chancellor has failed spectacularly. The debt has gone up by £500 billion under his stewardship. To get the debt-to-GDP ratio down, we must do two things. We must run the public finances in a sensible way. That means making sensible savings, for example by tackling fraud in the housing benefit system and not going ahead with the ludicrous cuts to inheritance tax, which will benefit the richest in our country. At the same time, we must get sustainable growth into the economy. That means investment.
Mike Wood
I am not sure that even needs dignifying with a response. We fought the election on having a balanced budget by 2019-20, as announced in the Budget, and a system with a fiscal mandate that puts us in line with many of the most successful economies around the world.
Finance Bill (Third sitting)
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Mr Gauke
I do not know if the hon. Gentleman is advocating reversal of the changes made in the previous Parliament to pensions for councillors. I would argue that there is a degree of consistency with those changes. Councillors do not perform a job in the normal sense of most people in employment, so we argued in the previous Parliament that for them to have the same pension provision as most employees would not be appropriate. It is right to have a special regime that is not the same as that applied to people in employment with regard to travel expenses, and that is why we have brought in this measure.
Simon Hoare (North Dorset) (Con)
Following on from the intervention by the hon. Member for Ilford North, I spent 11 years as a district councillor and several of those in cabinet. There always seemed an anomaly to me. I never joined the local government pension scheme and I always thought it was rather incorrect for councillors to be allowed to do so, because it equated their position with that of local government staff, rather than elected volunteers. The Government are to be congratulated. There were many in local government—possibly the silent majority—who welcomed that decision and had been rather embarrassed by being allowed to be members of that pension fund.
Mr Gauke
My hon. Friend makes a good point. It is not my purpose to reopen the debate on pensions and local councillors, however tempting that might be, but I am grateful for my hon. Friend’s intervention.
The clause will support councillors in the vital constitutional role they perform by exempting travel expenses paid by their local authorities from liability to income tax, and I hope it will stand part of the Bill.
Finance Bill (Second sitting)
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Simon Hoare (North Dorset) (Con)
I wonder whether my hon. Friend shares my view that those who usually call for higher rates of corporation tax have never themselves ever been involved in the running of a business.
Mr Gauke
My hon. Friend makes a very important point. Another point about corporation tax that can be lost in the debate is that, ultimately, the burden of all taxes falls on people. There is a lively debate on corporation tax about how much should it fall upon shareholders, in which case we are often talking about pension funds that pay pensions to ordinary people. Sometimes it could fall upon employees as a consequence of the fact that there is a reduction in investment as a consequence of corporation tax, which in turn means that productivity does not improve, and as productivity tends to drive salaries and wages, employees often suffer; or it could indeed be consumers who suffer from higher prices as a consequence of corporation tax.
Let us be clear that all taxes that we debate in this Committee are ultimately paid by people. They might not be writing the cheque or transferring the funds from their account, but ultimately all taxes are paid by people, and if one has an economically inefficient tax, the price that people pay for the benefit to the public finances becomes all the greater.
Barbara Keeley
I was not in anything like my current role at the time; I am afraid that I cannot explain the thinking of the former Chancellor.
To bring us back to policy priorities, there is much to be said about the technical detail of this legislation. Inheritance tax is already a complex tax to navigate, and the Bill creates a new level of complexity. The tax faculty of the Institute of Chartered Accountants in England and Wales has set out 10 tenets for a better tax system, one of which states that
“the tax rules should…be simple, understandable and clear in their objectives.”
This tax has never been that. The institute says of the clause:
“The measure is excessively complex; it would be simpler to just increase the nil rate band to £500,000.”
Why has the Minister chosen to implement the policy in its current form? There seems to be a simpler way of administering the tax.
Chris Williams of the Chartered Institute of Taxation said:
“The proposals add further complexity to an already complex system. The government has recognised that the problem of downsizing”—
to which the Minister referred—
“must be addressed but proposes only to allow for downsizing that takes place on or after 8 July 2015. Other problem areas include the need to define a main residence consistently throughout the tax system, and to recognise the diverse patterns of the modern family when attempting to restrict the benefit to children and descendants.”
I will come on to that, because there is an important point about what a modern family consists of.
The Mirrlees review, led by the IFS and funded by the Nuffield Foundation and the Economic and Social Research Council, noted that inheritance tax was a
“somewhat half-hearted tax, with many loopholes and opportunities for avoidance through careful organization of affairs.”
That is well known. It went on to say:
“This leads to charges of unfairness and makes a principled defence of the current inheritance tax difficult.”
I grant it that the Minister tried. With such a generous increase in the nil-rate band and such low estimated returns to the Exchequer, the question now is whether we should start revising this to a quarter-hearted, rather than half-hearted, tax. Is this policy a priority at a time when families and first-time buyers are struggling to get a home of their own? The average house price outside London is just over £183,000. The current nil-rate band is £325,000. That would be enough to cover the average value and include a buffer. Why has the Chancellor decided to introduce that additional residence nil rate band?
Simon Hoare
Why does the hon. Lady’s narrative automatically presume that because an estate is asset-rich, descendants are cash-rich? She referred to people trying to get on the property ladder—to pay the deposit, stamp duty, and so on. Take the widow who has stayed for years in the family home, which she bought reasonably cheaply in a part of London where property values have risen. It is the disposal of that asset on her death, and her descendants’ inheritance of it, as free of tax as possible, that allows those descendants, who may be in low or middle-paid jobs, to get on the property ladder. Why do the hon. Lady and the Labour party automatically exclude them from their thinking?
Barbara Keeley
I will come on to a very good reason why. I will answer the hon. Gentleman’s points. I ask the Minister why—I hope he does not lose this question—given the average house price outside London, the Chancellor has decided to introduce this additional band. There are wider questions, which I said I would come to, about the scope of who will benefit from the nil rate band.
The new tax exemption applies to lineal descendants. We welcome the clarification of who will benefit outlined in the Government amendment, and the apparent extension of the nil rate band to a lineal descendant’s spouse or civil partner in the event of the lineal descendant’s death. However, the Institute of Chartered Accountants has pointed out that it could be seen as discriminatory to allow the relief only to lineal descendants; many godparents, aunts and uncles are as close to, and their lives are as intertwined with those of, godchildren, nieces and nephews as are those children’s parents. That is the kind of family structure that we have these days.
Barbara Keeley
My hon. Friend puts that in an excellent way. Will the Minister clarify the Government’s position on why the policy will apply only to lineal descendants? It has the potential to raise house prices by making property an even more attractive investment for the wealthiest, which would make it even more difficult for ordinary working people to get on to the property ladder.
Paul Johnson, the director of the IFS, has said that it is
“rather odd to give this special treatment to housing given that owner-occupied housing is already extremely tax privileged”.
He said:
“This will only increase the bias we have towards putting your money in a house, to inflating potentially the value of housing, without dealing with the lack of housing, which is driving up the value of private residences.”
Many of the policy’s features are similar to those analysed in a Treasury document that was leaked to, and published by, The Guardian. According to the estimates in the document, based on Budget 2014 forecasts, the policy would reduce the proportion of estates liable for inheritance tax from 8% in 2015-16 to just over 6% by the end of the Parliament, rather than increasing it to slightly more than 10%, as the current policy would have done. The document contains the argument that
“there are not strong economic arguments for introducing an inheritance tax exemption specifically related to main residences”.
A number of problems with the policy are set out in the document, such as the fact that it would encourage investment in owner-occupied housing rather than other more productive investments and that it would discourage downsizing late in life when that might otherwise be appropriate. Although the Government have made some provisions to prevent the downsizing problem, industry experts have said that the changes could lead to more people choosing to upsize later in life, which would have consequences for the availability of housing stock for other buyers.
I want to talk about the balance of the Government’s tax cuts, including changes to inheritance tax. Those changes will cost £24.6 billion over the Parliament, and they will be financed by five main sources, according to the Office for Budget Responsibility. Tax increases will raise £47.2 billion over the Parliament; we have talked about things such as insurance premium tax. Welfare cuts, including cuts to tax credit and many freezes, will raise nearly £35 billion. Other spending decisions will cut £8.1 billion. Cuts to departmental spending and to the BBC have been proposed. Various tax and spending decisions have indirect effects that will raise a further £14.2 billion.
The Budget decisions, interestingly, imply £3.5 billion of extra borrowing over the Parliament, on top of the £14.6 billion increase indicated by the OBR pre-measures forecast. Inheritance tax raised an estimated £3.8 billion in 2014-15, but house price inflation had been expected to drive the tax take up to £6.4 billion by 2019-20. Instead of the Exchequer receiving more revenue from inheritance tax, however, the policy is expected to cost it £940 million a year by 2020-21, when the additional family home allowance—like the existing allowance, it will be transferable between spouses—reaches £175,000 per person.
When they talk about borrowing, Conservative Members should bear in mind that if the Government had kept the existing allowance, they would have more than halved expected additional borrowing over the lifetime of the Parliament. In contrast, their position appears to mean more borrowing, when one of the Government’s specified aims is to do the opposite. It seems strange that in the debates we have had so far the Conservative party seems to be convinced that it is okay to increase taxes such as insurance premium tax and to make increases that hit very large numbers of people the main way to raise finances, while implementing changes to inheritance tax that will cost the Exchequer considerable sums of money.
Surely, keeping inheritance tax as it was would be better than increasing the insurance premium tax and making hefty welfare cuts. Those are the decisions that are weighed against each other. The Government are cutting a tax for the wealthier families in the country, while cutting tax credits for millions of those who are in need. That is what we are going to see over the coming years. We could say that this is a rather warped interpretation of Robin Hood: taking money from the poorest to pay for a tax cut for the richest.
To answer the point made by the hon. Member for North Dorset, this tax cut comes at the same time as the Government have decided to abandon a manifesto pledge to implement a £72,000 cap on care costs. In a written statement to the House of Lords on 25 July 2015, the cap on costs was described as an expensive new commitment. The cap—a pledge made by the Conservative party—was designed to prevent older people and younger people with disabilities from having to sell their homes when they went into care.
Here is the answer for the hon. Gentleman: why is it okay for people with care needs to have to sell their homes and have nothing to pass on, while the very wealthiest—the top 10%—are allowed to keep house values of £1 million? The Government have decided to abandon a cap, for which they had made legislation, on the grounds that it is too expensive, while they are opting to go with the introduction of the nil rate band for inheritance tax on properties, which will cost £1 billion by 2020. That £1 billion a year could have been an incredible investment in social care; instead, we are going the opposite way. We are talking about hundreds of thousands of pounds, if not millions. People who have to pay their own care costs will be under a huge burden and will have to give up their homes.
Simon Hoare
I would simply say to the hon. Lady that it is just about how an individual uses the asset. If someone needs to use their asset to pay for their care, that is what they must do. Greedy children will be hanging at the gate preventing them from putting up the “For sale” sign or whatever, but we just have to get used to using our residential assets better, as needs require.
Barbara Keeley
We were committed to a better way of funding social care, and in future we will be committed to even better ways.
I want to finish by questioning the Government’s priorities. It is a question not only of priorities, but of the unintended impacts of the policy. We talked about downsizing and the effect on the housing market. The clause may have a significant impact, which is why we tabled amendment 7, which would require a report on the effect of the inheritance tax changes on different UK regions and on housing prices. The Minister seemed to signal that he will not look at or accept our amendment, but it is very reasonable, asking only for a report. If he will not accept our proposal now, we will bring it back on Report.
Finance Bill (First sitting)
Simon Hoare Excerpts(10 years, 6 months ago)
Public Bill CommitteesRead Full debate Read Hansard Text Read Debate Ministerial Extracts
Barbara Keeley
Clauses 1 and 2 enact the promise that the Government made during the general election not to increase the rate of income tax or VAT in the next Parliament. Clause 1 states that the basic, higher and additional rates of income tax will not increase above 20%, 40% and 45% for the duration of this Parliament.
We support the Government’s pledges on tax locks for this Parliament. In fact, it would be surprising if we did not, because we made them first. The Labour party made the same pledge on 25 March, and our 2015 manifesto contained a commitment not to increase the basic or higher rates of income tax, or to raise VAT or national insurance. We are glad the Conservative party adopted our pledge during the election.
However, as my hon. Friend the Member for Torfaen said, and as was discussed in the Budget debates, legislating for that pledge represents a U-turn. As my hon. Friend rightly said, in 2009 the current Chancellor said he was very critical of Chancellors passing laws to ensure they fulfil their promises. The current Chancellor stated then:
“No other Chancellor in the long history of the office has felt the need to pass a law in order to convince people that he has the political will to implement his own Budget…As one commentator observed this week, there are only two conclusions. Either the Chancellor has lost confidence in himself to stick to his resolution, and is, so to speak, asking the police to help him, or he fears that everyone else has lost confidence in his ability to keep his word, but hopes that they might believe in the statute book if not in him. Neither is much of a recommendation for the Chancellor of the day.”—[Official Report, 26 November 2009; Vol. 501, c. 708.]
Simon Hoare (North Dorset) (Con)
On Tuesday the hon. Lady advised us on the Floor of the House that she would not seek to defend or reference remarks made on previous occasions by the new leader of her party. Surely what is sauce for the goose is sauce for the gander.
Barbara Keeley
I think comments that somebody made when they were a Back-Bench MP are different. Once somebody has taken on a role, either in opposition or in government, what they say carries a certain weight. There is a freedom to the Back Benches that I and others here have experienced. Many Members of the Conservative party say things that their Front-Bench team would not agree with. That is my distinction, and I am sticking to it.
It appears that the Chancellor had a change of heart, and now feels the need to pass a law to convince people that he has the political will to implement his own Budget. During the debate on the National Insurance Contributions (Rate Ceilings) Bill earlier this week we discussed the view that measures such as this are in fact gimmicks. We questioned why Ministers feel the need for this additional legislation when the promises that the Prime Minister and the Conservative party made during the election should be good enough. To people outside Westminster, it could appear that Treasury Ministers have lost confidence in their ability to stick to their resolutions, or perhaps they fear that everyone else has lost confidence in their ability to keep their word. The Minister may want to tell us which he thinks it is.
Although Labour supports the pledge to make no increase to VAT, income tax and national insurance contributions during this Parliament, I still question whether introducing legislation to ensure those locks is the best course of action. Rather than gimmicks, we need long-term tax reform and sensible policies to ensure that the taxpayer gets a good deal.
We have some concerns about the durability of the income tax lock in clause 1. As it stands, it appears that rates could be raised by repealing the Bill in a future Budget. Can the Minister assure the Committee that it is not simply a gimmick? Will he outline how he intends to show that the lock will remain in place? In our deliberations, we should consider the impact of that tax change and the other changes to the tax system announced in the Budget. As many tax experts have pointed out, only then will we be able to see the real impact of Government measures on particular groups of people.
In Committee of the whole House, I raised the issue of the insurance premium tax. Although the clause protects workers against an income tax rate rise, I note that they will not be protected from the other tax increases in the Bill.
Simon Hoare
The hon. Lady is being generous in giving way, as always. Under the moderate and reforming Labour leadership of the right hon. Member for Doncaster North (Edward Miliband), Labour Front-Bench Members for the whole of the previous Parliament were never able to say what they would actually do. They were very good at saying what they would not do and at opposing everything that my right hon. Friends in the Treasury sought to do to reduce spending and bring it back under control. We await—with bated breath, it has to be said—what the reforming instincts of the new Labour leader will bring forward, but can the shadow Minister say what she would do? She has spoken about her long-term plans for house building, and so on, but, in the shorter to medium term, what would the Labour party do today, or what would it have done recently, to balance the nation’s finances better?
Barbara Keeley
That is a very easy question to answer. We heard earlier about the former shadow Chancellor, my hon. Friend the Member for Nottingham East, who put in a great deal of work this year on zero-based budgeting spending reviews. He came up with a list of savings that amounted to £12 billion. We talked about that a great deal during the election—
Barbara Keeley
I think it would be better, Sir Roger, if we could move away from things to do with the Labour party and concentrate on the Bill. It is not helping progress.
Simon Hoare
The hon. Gentleman might wish to have cognisance of the note that his colleague passed to him.
Roger Mullin
That is one of the most helpful interventions of my entire parliamentary career. I hope I do not require any similar interventions in the future—[Laughter.] I am so glad that I can bring some levity—it was not deliberate. Where was I?
National Insurance Contributions (Rate Ceilings) Bill
Simon Hoare Excerpts(10 years, 6 months ago)
Commons ChamberRead Full debate Read Hansard Text Read Debate Ministerial Extracts
Harriett Baldwin
That gives me a welcome opportunity to state that every Labour Government in history has left office with more people out of work than when they came into office. This is the party of working people and we created many jobs during the last Parliament, which no one expected, and we continue to back businesses and their growth through this Bill.
Simon Hoare (North Dorset) (Con)
My hon. Friend may be ruing her invitation to Members to intervene. In a constituency such as mine, where the main focus of economic activity is on micro and small businesses, one of the first questions that a potential employer asks is how much it will cost to take on an additional person. That is the engine that will grow the economy, and the Bill is extremely welcome.
Harriett Baldwin
My hon. Friend’s point is well made, because in North Dorset and around the country it is the small and micro businesses that are the engines of job creation. That is why the employment allowance is so important—it will mean that a small business taking on its first employee will not have to pay employers national insurance at all under this Government. Indeed, if every small business took on just one extra employee, we would have full employment. That is why the Government back small businesses.
Barbara Keeley
I will come on to my party’s manifesto commitments in a very short while. I do not think it is helpful, and I am not going to respond, to any interventions or points made by Government Members that refer to things the current Leader of the Opposition said before he was Leader of the Opposition. [Interruption.] That is a different situation. What I have just said is that when the Prime Minister was elected in 2010, he raised VAT when he had said that he would not do so.
Beyond the broken pledge on VAT, which is a serious matter—[Interruption.] Government Members can sit giggling, but these are very serious matters that hit the country hard. It is worth remembering that the Prime Minister appeared to rule out cuts to tax credits when appearing in front of a special “Question Time” audience during the recent election campaign. Yet, we are due to vote later today on that measure, and the Government’s cuts to tax credits will leave some 8 million families on average over £1,000 a year worse off. That is a shocking broken pledge.
Simon Hoare
Unlike the hon. Lady, not all Government Members are obsessed with the new leader of the Labour party. Surely she has to accept that on broken promises, the greatest albatross around her party’s neck is the previous Prime Minister, Mr Brown, who promised the end of boom and bust? That was signally incorrect and is the biggest albatross from which the Labour party can never be freed.
Barbara Keeley
Government Members should stop going back in time. I have just referred to the fact that the Prime Minister promised before the 2010 election not to raise VAT. [Interruption.] Look at your record. You’re in government. You’re defending your Bills.
Kelvin Hopkins
I thank the hon. Gentleman for that intervention, but the fact is that successive Governments have failed to ensure that the rich pay their taxes properly. We have a tax gap of £120 billion a year. The fact that fewer people might fiddle their finances is not an argument for reducing the top rate of tax. We ought to have a proper regime for enforcing tax payment by those who get away with it: the corporates and the billionaires who manage to avoid and evade tax on a massive scale. If we collected only a third of what is fiddled every year, we would have another £40 billion a year to spend. I think that we have failed on that because all Governments have opted for a light touch on the rich. That is the truth.
Simon Hoare
The hon. Gentleman obviously has the inside track on the voice of the City—he has referenced lunches he has had in the square mile—so could he illume the House on what the City’s view is on the new policies of his right hon. Friends who now occupy the Opposition Front Bench?
Kelvin Hopkins
I must say that I have not had lunch in the City recently. Indeed, my contacts with City people have not been of the highest order since 1998. I once had lunch with the Governor of the Bank of England, shortly after being elected, and very enjoyable it was too. That was when “steady Eddie” was in charge—he was a splendid Governor and I am sorry that he is no longer with us.
I believe that there are ways of ensuring that we collect the taxes that are due from the rich. Personally, I believe that I should pay more income tax, along with everyone else on my kind of salary—I earn £74,000 a year. Indeed, the majority of the population have said that they would be happy to pay a little more tax in order to help our health service, which is still seriously underfunded.
I believe that national insurance contributions set at a modest level are an important part of our tax and revenue-colleting system. It gives us all a sense of collectivity, which I think is right. We call that the contributory principle. It means that we have a sense of duty in paying taxes as well as a sense of entitlement in receiving what they pay for. I agree with my hon. Friend the Member for Bishop Auckland, who is no longer in her place, on the upper earnings limits.
VAT is a regressive tax. It was noticeable that Gordon Brown, when Prime Minister, cut VAT from 17.5% to 15%, which boosted demand at the moment that was needed and, together with a substantial depreciation of sterling, helped to keep the economy relatively stronger than some other economies. We have since survived, but I think that we are now making a mistake in allowing sterling to appreciate. It has moderated a bit in recent weeks, but it is still far too high, and manufacturing is suffering as a result.
I understand that the Opposition are going to acquiesce in what the Government are proposing today, but I agree entirely with the view put forward by my hon. Friend the Member for Bishop Auckland. I look forward to my party coming into government next time around with our new leader committed to ensuring that the rich, the corporates and those who have been getting away with it for years pay their taxes so that we can build a decent society on the revenues that they should provide.
Simon Hoare (North Dorset) (Con)
I am delighted to speak in support of the Bill. A number of colleagues have spoken of the need for certainty, and my hon. Friend the Member for North West Hampshire (Kit Malthouse) has spoken about the need for signals. This Bill is not a gimmick, but a very good piece of proposed legislation. It sends a very clear signal to the country, employees, employers and the investment world that such is the Government’s confidence in their wider economic policies that they will not have to increase national insurance contributions or other taxes.
The Bill also sends a very clear message to both the employer and a potential employee. In rural constituencies such as mine in North Dorset, which is predominantly made up of agricultural micro and small businesses, the decision to recruit is often made on a knife edge. It is drilled down to almost the last shilling to work out whether or not it is financially viable.
The certainty provided by the Bill sends two clarion calls from this Government. The first is that the sensible employer can have the confidence to invest in their business and grow it. Secondly, it tells the new employee that returning to work or entering it for the first time pays. Those things are mother’s milk to Conservative Members, but they are an utterly alien substance to the Labour party.
I felt sorry for the shadow Minister, the hon. Member for Worsley and Eccles South (Barbara Keeley). She tried to defend abstention while desperately trying to show that, when the great purge comes in some Labour reshuffle or other, she will be able to say, “I decided to oppose it and please the purists on my side.”
We will get on with taking the difficult and sensible decisions of governing the country, to make sure that the economy continues to grow.