Future Government Spending

Simon Kirby Excerpts

Wednesday 4th March 2015 Commons Chamber

[Chris Leslie]

I appreciate that, Madam Deputy Speaker.

[Simon Kirby (Brighton, Kemptown) (Con)]

Will the hon. Gentleman give way?

[Chris Leslie]

I may give way to the hon. Gentleman in a moment, but not just yet.

I want to pause for a moment and reflect on the implications of taking UK public expenditure on vital public services down to the 35% level that was announced in the autumn statement. These plans would mean that we are only halfway through the cuts. These are plans for the biggest cuts to public services since the second world war. The Office for Budget Responsibility says on page 148 of its report that

“the closest equivalent in the National Accounts implies that by 2019-20 day-to-day spending on public services would be at its lowest level … since the late-1930s as a share of GDP.”

The OBR goes on to say—Government Members may not have heard this—that

“total public spending is now projected to fall to 35.2 per cent of GDP in 2019-20, taking it below the previous post-war lows reached in 1957-58 and 1999-00 to what would probably be its lowest level in 80 years.”

That recalls a time before we had an NHS, when children left school at 14, and when life expectancy was just 60. That is why Paul Johnson of the Institute for Fiscal Studies said on 4 December that we can expect

“Spending cuts on a colossal scale…taking total government spending to its lowest level as a proportion of national income since before the last war.”

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[Mr Gauke]

That is the key to the matter. The truth is that there will be either a tax bombshell or a borrowing bombshell if the Labour party is in office. It fought the last general election campaigning for an increase in the jobs tax. I have a strong suspicion that a future Labour Government will look at precisely that to fill the gap.

[Simon Kirby]

Perhaps I can help Labour Members. Has not the shadow Chancellor outlined £3.3 billion of cuts to local councils up and down the country? Today there is total chaos, contradiction and confusion. Where is their policy? What is their plan?

[Mr Gauke]

As per usual, there is no plan; it is just chaos. We cannot get a consistent position from the Labour party. First it says that it will not borrow more, then it says that it will borrow more. There is simply no consistency.

Oral Answers to Questions

Simon Kirby Excerpts

Tuesday 2nd September 2014 Commons Chamber

[Mr Gauke]

I entirely agree that business start-ups are very important. I certainly was aware of the event at the national rail centre in Milton Keynes between 4 o’clock and 7 o’clock on Friday afternoon. I also note that unemployment in my hon. Friend’s constituency has gone down by 42% since the last election, which suggests that start-ups are thriving in Milton Keynes.

[Simon Kirby (Brighton, Kemptown) (Con)]

rose—

[Mr Dennis Skinner (Bolsover) (Lab)]

rose—

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[Andrea Leadsom]

No. The hon. Gentleman is completely wrong. The funding for lending scheme has undoubtedly made more credit available than would otherwise have been the case. As I have said, gross lending to businesses has improved and the Federation of Small Businesses has said that the outlook for small and medium-sized enterprises is now better than it has been before. I remind the hon. Gentleman that the peak-to-trough drop in GDP between 2008 and 2009 was 7.2%. That is the cause of the disastrous drop in the availability of bank funding to businesses in this country.

[Simon Kirby (Brighton, Kemptown) (Con)]

Bank lending is particularly important for new businesses. Will my hon. Friend join me in congratulating the record number of business start-ups—a staggering 1,965—in Brighton and Hove last year?

[Andrea Leadsom]

I am grateful to my hon. Friend for his announcement of what is going on in his constituency. It is fantastic news that so many new businesses are starting up. As we know, that is creating millions of new private sector jobs, and that, of course, is the way for our economy to recover.

Finance Bill

Simon Kirby Excerpts

Wednesday 2nd July 2014 Commons Chamber

[Helen Goodman]

I am, because I know that my hon. Friend has a keen interest in that, as do people up and down this country.

So we have had big cuts to the Arts Council. The Government have also imposed big cuts on local government, and from answers that I have received to freedom of information requests, we now know that on average local authorities are cutting their arts provision by even more—some 14%. So, given the estimates in the Red Book of the value of this tax relief rising from £5 million to £20 million per year, we can immediately see that it does not compensate for the reductions that have been experienced in public support.

My hon. Friend is right: there is a big issue about what is going on in the regions. The “Rebalancing our Cultural Capital” report suggested that the Government were supporting cultural institutions to the tune of 14 times as much per person in London as elsewhere, and that is not conscionable in the long term for this country. It is clearly because of that concern about regional imbalance that the Minister has decided to provide a slightly more generous relief for touring.

[Simon Kirby (Brighton, Kemptown) (Con)]

Will the hon. Lady be very clear: is she opposed to the cuts in the DCMS, and if so, would Labour reverse them?

[Helen Goodman]

I think it must be a matter of regret to everybody in the House that DCMS has taken 36% cuts. Of course, the question whether they can be restored is, as the hon. Gentleman knows, a completely separate one. I am just pointing out that the tax relief, if the legislation is properly drafted, will not cancel out the effect of those cuts. I am hoping that no one on the Government side is trying, through some sleight of hand, to give such an impression.

To return to the point that my hon. Friend the Member for Darlington (Jenny Chapman) raised, it is my understanding that in Darlington, the theatre is what is called a receiving house. That means that new plays are not being made in Darlington. Companies come on tour to Darlington and their productions are shown for several days. There are many very good producing houses in the regions as well; one good example would be the Nottingham Playhouse, where they make plays and tour them, and sometimes they tour them to London—they have just had something on at the Almeida.

A receiving house will not get the benefit of this tax relief; it is the producing company that gets the benefit. Of course, it may be that if they get the tax relief or the tax credit, they could offer the production to the receiving house for slightly less money, which might ease the situation in a place like Darlington, but there will not be a direct benefit, as I understand it.

My next question is whether the definition of touring is the right one and whether the measure will address the regional imbalance. As my hon. Friend the Member for Newcastle upon Tyne North pointed out, it is completely sensible to say that the extra relief is given if the play is taken to more than six places, but we must question whether 14 productions in two places is an appropriate definition of touring. Some of those who responded to the Government’s consultation said it would be a good idea to have a geographical definition of touring, and I do not understand why the Minister has not done that. I think he is risking some revenue leakage on this point. To give a concrete example, a play could be on on one side of Shaftesbury avenue for 14 nights, then move to the other side of Shaftesbury avenue for 15 or 25 nights and it would benefit, but the Government would not have achieved their policy objective of ensuring that the theatrical experience took in a new, wider audience.

I think there is a problem and I am disappointed by the way the Minister has drafted the provision; it is a weak spot. On the other hand, he might be being too restrictive in the number of production companies that can benefit, although we do not yet know how the guidelines will operate. In principle, of course it is a good idea to support British theatre. It is a great industry, we are very good at it and we have some of the best actors and theatre companies in the world, so in principle, it is a good idea to have a theatre tax relief, but I do have those two questions about those two parts of the new clause and the schedule.

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A number of questions were asked about theatre tax relief. Let me seek to answer them. Members raised concerns that the relief could be abused and asked whether we will review the measure in future. We consider that effective anti-avoidance rules are critical to the long-term success and stability of theatre tax relief, a view that I think has been expressed on both sides of the House. The Government will include rules similar to those applied under film tax relief to prevent artificial inflation of claims. In addition, there will be a general anti-avoidance rule, based on the general anti-abuse rule, denying relief where there are tax-avoidance arrangements relating to the production. Of course, HMRC will monitor for abuse once the regime has been introduced.

[Simon Kirby]

Is the Exchequer Secretary any clearer than I am about whether the Labour party will reverse the cuts to the Department for Media, Culture and Sport, because I am still not sure whether it intends to or not?

[Mr Gauke]

I am grateful to my hon. Friend for another example of Labour opposing yet another measure that this Government have taken to try to reduce the deficit. At least Labour Members did not make another spending pledge on this occasion, but we will, of course, continue to monitor their remarks very closely because they frequently do make spending pledges. [Interruption.] Perhaps the presence of the shadow Chief Secretary, the hon. Member for Nottingham East (Chris Leslie), has instilled some uncharacteristic discipline in Labour Front Benchers.

Let me turn to the question of why some circuses are excluded and some points of definition. With the exception of the named exclusions, other types of performing arts can benefit, provided that those giving the performance can demonstrate that they are wholly or mainly playing a role and that each performance is live and that the presentation of live performance is the main object, or one of the main objects, of the theatre production company’s activities. The Government believe that using that definition, which considers the nature of the performance, is more appropriate than listing types of performing arts. In cases where further clarity may be required, companies should seek professional advice or contact HMRC. On the subject of HMRC, I was asked about its resources. The House may be pleased to know that a specialist unit has been provided to assist businesses with making claims under this relief.

The definition of “touring” has been raised and whether more should be done in terms of relating it to geographical location. A production can qualify as “touring” if there is an intention to perform at six or more separate premises or to present 14 performances in two or more premises. The hon. Member for Bishop Auckland (Helen Goodman) is right to say that we considered alternative definitions of “touring,” including the use of geographical restrictions, but we believe that our definition provides a simple and effective way to support the range of types and sizes of tours that take place. That is why we have gone with that definition.

On the question whether this will cause a significant administrative burden for charities or not-for-profit theatre companies, minimising complexity and ensuring straightforward compliance was one of the central considerations in designing the relief. That is why we are basing it on the film tax relief model, which is also used successfully for other creative industry tax reliefs. We have worked closely with industry in determining the design of the relief, to ensure that it works for the industry, particularly the not-for-profit sector. Officials continue to engage with industry, including by attending events to help and advise in the run-up to companies starting to make claims in September. Ultimately, detailed guidance will be published on the HMRC website to ensure that companies and charities get the support they need.

Finance Bill

Simon Kirby Excerpts

Tuesday 1st July 2014 Commons Chamber

[Cathy Jamieson]

I am going to come on to the issue of who benefits, but I noticed that, once again, the Minister was not able to say how this particular tax cut proposed by the Government is going to benefit our constituents.

Let me deal with the Government’s tax impact note, which provides some information, saying that the chief beneficiaries of this particular initiative will be the 100 UK fund managers who control 2,500 investment schemes. Hon. Members would doubtless be very concerned if they thought that the overall health of the UK’s investment industry was somehow at risk, which is why the initiative was brought forward. One might think that it was somewhat ailing if it was deserving of a tax cut amounting to, as my hon. Friend the Member for Inverclyde said, £160 million a year. However, if we look at the reality of the industry, we could readily say that it is in pretty good health, raising the question of whether the industry really needs the Government’s help, which could more usefully be put to assisting those hard-working families feeling the squeeze as a result of Government policy.

According to the Investment Management Association, as of January 2014, its members managed over £4.8 billion in the UK on the basis of OEIC funds alone and around £4.5 trillion overall. The association also tells us:

“UK assets under management and funds under management are at record levels, and the UK retains its position as the second largest asset management centre in the world after the US.”

It could well be argued, therefore, that the UK’s investment industry is doing okay— without the intervention or assistance of the Government.

[Simon Kirby (Brighton, Kemptown) (Con)]

rose—

[Cathy Jamieson]

I will give way to the hon. Gentleman if he will tell me how this particular tax cut benefits my constituents and those of my hon. Friend the Member for Inverclyde.

[Simon Kirby]

I have been listening carefully to the points the hon. Lady is attempting to make. I still do not understand, however, whether hedge fund managers will benefit from this change; it seems quite clear that they will not.

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[Mr Gauke]

The hon. Lady is nodding her head. I will take that as an acceptance, even though, as we have heard, this is a policy that her colleagues and those higher up in her party appear to misunderstand.

[Simon Kirby]

Does the Minister agree that it seems incredibly naive to give away these jobs and reduce these pensions for nothing? Surely the Opposition should better understand the proposed legislation.

[Mr Gauke]

It is striking that time and again senior figures in the Labour party went around describing this as a tax cut for hedge funds. It is to the credit of the hon. Member for Kilmarnock and Loudoun that she refused to repeat that accusation. Although she did not quite go as far as she might have done towards putting the record straight, at least she did not repeat the accusation despite being given multiple opportunities to do so. I do worry about the understanding of some issues within the Labour party. Just today, we have seen the example of the confusion about how many jobs have been created inside and outside London. I understand that the Leader of the Opposition is standing by his position this morning, although he did not quote that in his speech—but there we go. I am afraid that this is an example of somewhat shoddy thinking from the Opposition.

Office for Budget Responsibility (Manifesto Audits)

Simon Kirby Excerpts

Wednesday 25th June 2014 Commons Chamber

[Debbie Abrahams]

Certainly not the last bit. Last month’s elections were a wake-up call for all of us, and if we do not heed it, the future of politics will not look good. Far too many people feel completely disfranchised from politics and do not trust politicians. Too many people either stayed at home or cast their vote for a protest party. That is why I fully support the motion for the OBR to independently audit the spending and tax commitments of the main political parties in next year’s general election.

Undertaking that analysis would be a major step forward to help increase openness and transparency in politics. It would enable proper scrutiny and debate on the spending plans of all political parties, and enhance the democratic process. Ultimately, it would contribute to informed decision making, which is surely what we should all want. We are here as public servants to reflect issues in our constituencies and to develop policies that respond to those issues. Communicating our policies is part of our job. That is certainly the form of politics that Opposition Members want to develop.

This proposal is part of a process of addressing the major power imbalances and associated inequalities in our country, and we are absolutely determined to tackle it. We will continue to stand up to powerful vested interests, from media barons to the big energy companies. Information is power, and having information about how the Government or political parties intend to spend public money is very powerful.

[Simon Kirby (Brighton, Kemptown) (Con)]

Will the hon. Lady give way?

[Debbie Abrahams]

I am sorry, but I do not have time.

To deny information to the public is absolutely shameful, and that is where the problem lies. Other parties do not want to change; they want the status quo. They want to preside over a country where there is growing inequality. The average person will have £1,600 a year less in their pocket next year compared with 2010, and the average family has lost £974 since 2010 because of the tax and benefit changes, but bank bonuses have soared and the top-to-bottom pay ratio for FTSE 100 companies stands at 300:1. The Government are presiding over such inequalities.

[Debbie Abrahams]

Absolutely. That is my major argument. I cannot understand any party not wanting to provide information to enable people to make informed decisions.

[Simon Kirby]

Will the hon. Lady give way?

[Debbie Abrahams]

Go on then. The hon. Gentleman has enticed me to give way.

[Simon Kirby]

Why does the hon. Lady suppose that we did not have an office for budget responsibility during the 13 years of the previous Government to provide the very transparency and credibility that she is now so keen on?

[Debbie Abrahams]

I am very grateful that we have an OBR now, but we should focus on how we use it.

To return to the current and growing inequalities under this Government, recent research on life expectancy has shown that people in Manchester are twice as likely as people in Wokingham to die early, and the figures are getting worse. My right hon. Friend the Member for Holborn and St Pancras (Frank Dobson) famously said:

“Inequality in health is the worst inequality of all. There is no more serious inequality than knowing that you’ll die sooner because you’re badly off”.

That is what is happening under this Government.

This Government are grossly unfair and unjust: they protect their own self-interest, they are out of touch and they are out of time. Should we be elected in 2015, we have said that we will not borrow more for day-to-day spending. In stark contrast to this Government, our decisions on how we spend resources will be based on fairness, justice and evidence.

We want our spending plans to be independently verified to make sure that they are robust. After all, that is what happens not just in the US, but in Canada, Australia and the Netherlands. I invite those who wish to enhance the democratic process and not to stifle it, as well as those who want a Britain for the many and not for the few, to join us in the Aye Lobby.

Wales Bill

Simon Kirby Excerpts

Tuesday 6th May 2014 Commons Chamber

[Owen Smith]

Indeed. That should come as no surprise to anyone. The Exchequer Secretary, in his rather tortuous remarks, is attempting to put words into my mouth. I said in my speech in Llandudno—I say it again today—that in the event of a Labour Government in Westminster, we would afford the Welsh people the ability to put up the top rate of tax and reinstate the 50p rate in Wales. That is very simple.

[Simon Kirby (Brighton, Kemptown) (Con)]

rose—

[Owen Smith]

I will give way in a moment. We are not talking about increasing the basic rate or the top rate; we are talking about increasing the additional rate of tax. [Interruption.] No, it is called the additional rate.

Finance (No.2) Bill

Simon Kirby Excerpts

Tuesday 8th April 2014 Commons Chamber

[Shabana Mahmood]

Our amendment would require the Chancellor to publish a review of the impact of an additional cut of 1% to the main rate of corporation tax for 2015-16 with reference to the impact on businesses with fewer than 50 employees, their levels of investment and the impact of alternative tax measures such as a reduction in non-domestic rates—business rates—which we believe would have a greater impact on small and medium-sized enterprises, which tend to be businesses that have fewer employees and in the main occupy premises with a rateable value of less than £50,000.

Our amendment and our approach highlight the difference between us and the Government when it comes to business taxation. The Government have made a number of significant cuts to corporation tax. The main rate has been cut a number of times, and is due to be cut again from 21% to 20% next year. The main rate is paid by companies with profits of more than £1.5 million—about 40,000 or so businesses. The small profits rate is paid by companies with profits of under £300,000, and there is a marginal rate, which applies to companies with profits between £300,000 and £1.5 million.

The Government have announced cuts to the corporation tax rate in almost every fiscal event that we have had since 2010, with the rate falling from 28% in 2010 to 20% in 2015-16. This has brought the UK rate lower than most developed economies. As I said, the Government are planning another cut for April 2015 from 21% to 20%, at a cost of £400 million in 2015-16, rising to £785 million the following year, and £865 million the year after that. The cumulative corporation tax cut over this Parliament has been in the region of £10 billion. The Government’s central argument for cutting corporation tax is that a lower rate makes the UK more attractive as a destination for businesses to locate. They claim that a reduction in the main rate of corporation tax will reduce capital costs for businesses and promote higher levels of business investment.

[Simon Kirby (Brighton, Kemptown) (Con)]

Can the Opposition really be interested in business when not a single Back Bencher is present to listen to the hon. Lady speak to her amendment?

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[Shabana Mahmood]

I hear the hon. Gentleman’s point, which I will come to later in my remarks. On the action that the Government have taken in the round, he will not be surprised to hear that my criticism is that it does not go far enough. By comparison, our alternative proposal, which is a Labour manifesto commitment, goes much further and would result in a cut in business rates and a freeze the following year.

The only choice for many shops, workshops, start-up businesses and others who pay business rates is to pass the increases on to their customers, primarily through higher prices, which of course makes things difficult for those customers. They also face a continuing squeeze, which many of them complain means that they can no longer afford to stay in business. This is having a real impact, as I know from my casework in my constituency surgery. I have met many constituents with family-owned businesses whose stories are not dissimilar to the story of my own family, whose elder relatives came to this country in the ’60s and ’70s and set up businesses that they have passed on to their children and, in some cases, grandchildren. They are now terrified that the squeeze from the exponential growth in business rates might put their family-owned businesses out of business. I have seen constituents break down because every time the business rates bill comes they fear that many years of hard work, which is tied absolutely to their conception of what it is to be British and to enjoy the freedoms offered by this country, might be going down the drain.



Given how much businesses are struggling and given the collection of issues that SMEs are facing, we have said that the next Labour Government would cut business rates in 2015 and then freeze them in 2016. In 2015, we would cut business rates on properties with an annual rental value of less than £50,000, taking the rates back to the level of the previous year, and then freeze them for such properties in 2016. As we have said, we would pay for that by reversing the additional cut in the main rate of corporation tax due to go ahead next year, when it will fall from 21% to 20%. The main rate is paid by companies with profits of over £1.5 million, while companies with profits between £300,000 and £1.5 million pay the rate on a sliding scale, and companies with profits of less than £300,000, which pay the lower rate, will be unaffected by the cut.

All the money raised from the corporation tax increase that we envisage—that is, a rise from 20% back up to 21%—would be spent solely and exclusively on paying for our policy on business rates. That is an important point given some of the debate that has taken place in the House in the past week or two, when we have been speaking about the Budget and attitudes towards business taxation. Even at 21%, our corporation tax rate would remain competitive, being second lowest in the G8 and second lowest in the G20. Government Members often say that any corporation tax rise will have a negative impact on our country’s capacity to do business, but I disagree, because, as I said, even at 21% it will be the second lowest in the G8 and the G20. The headline rate of corporation tax is not the sole reason that businesses choose to come to this country to invest and create jobs. It is an important factor—no one can deny that—but it is part of a picture of support for business that those wishing to come to this country look at, or are advised on, before they make their decisions. I do not believe that putting corporation tax back up from 20% to 21% would have too great an impact on our capacity to attract businesses to this country.

[Simon Kirby]

Is not the problem that a proposed tax increase sends a message that it is the thin end of the wedge—the tip of the iceberg—and that under a Labour Government, God forbid, we might see considerably more tax rises?

[Shabana Mahmood]

I do not think it does send that message. Business people are much more sophisticated than that: they do not simply look at announcements about the headline rate. They will receive advice from their advisers—their accountants and lawyers—when they are making their decisions about where to base themselves and where to go to invest and grow their companies. It will be explained to them, and known to them, that this policy is designed to support a different type of business that benefits all of us who are interested in the business landscape.

We have been very clear that this is the only change to corporation tax that we envisage during the next Parliament and that we are doing this not because we want to put people off coming to this country, or prevent them from doing so, but because we want to use all the money to pay for a cut and then a freeze in business rates. We have also said very clearly that any choices we make that differ from what the Government are doing will be fully costed and fully funded. As I said, we are happy for the OBR to look at our figures and audit our manifesto, and to do so for all political parties ahead of the next general election to make sure that the public are as well informed as possible about the different choices being made by parties that want to be in government.

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[Shabana Mahmood]

Our policy is fully costed. We do not envisage any loss of revenue for local government. Our key priority is to give practical assistance to businesses as soon as possible, so that people such as those who visit my constituency surgery to say that they are fearful that they will have to close their business get some relief from what is becoming a very real business burden.

Last week the Secretary of State for Education suggested to the British Chambers of Commerce that our policy on corporation tax and business rates pits businesses against each other, which is complete nonsense. The idea is not to tell one business that it is going to suffer while another business does really well; it is to get a better balance with regard to the landscape of business taxation.

As I have set out in detail, corporation tax cuts over the life of this Parliament amount to some £10 billion and 2% of businesses in this country have done very well with their tax bill. It is fair and right to consider what is happening to the other 98%, understand the struggles they face and make choices that the 2% might not like, but that will offer support to smaller businesses and that will go some way to ensuring that they can remain in business and continue to grow and do good for the economy.

Even if the headline rate of corporation tax increases from 20% to 21%, it is important to remember that it will remain competitive. I do not believe that the change would be destructive or damaging to UK plc. In fact, I think that it and the moneys that will go to businesses as a result of a cut and then a freeze in business rates could do real good, not just for SMEs but for the economy as a whole.

[Simon Kirby]

It is all very well for Labour to bash big businesses, but does the hon. Lady not understand that many of their customers and suppliers are small businesses? The issue is not quite as simple as she would have us believe.

[Shabana Mahmood]

I am really disappointed that the hon. Gentleman has not been listening to my speech. At what point did I bash big businesses? It was not something I said, and nor was it suggested by my tone. I have made it very clear that we supported the cuts to corporation tax in this Parliament. We are simply suggesting a switch spend—it will be in our manifesto for the next general election—which amounts to making a different choice on corporation tax in order to get practical and immediate help to smaller businesses that will make a real difference to them.

Given that the 2% of businesses that are larger have benefited by about £10 billion over the life of this Parliament as a result of a number of changes to their taxation, it is fair to switch our attention to a part of the business market that has been rather ignored. Although the Government have a number of schemes to help smaller businesses, those schemes are not going far enough or achieving the Government’s aims.

Our suggested switch spend is fair. It is not about pitting one business against another or valuing one above another. It is a simple recognition of the fact that 98% of businesses in this country have not received the practical help they need. They are desperate for change on their business rates and we will deliver it. The policy will be in our next manifesto.

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[Kelvin Hopkins]

The problem with charity is that only nice people give to it. The great thing about tax is that it applies to everyone equally, which is the way things should be.

[Simon Kirby]

The hon. Gentleman’s argument, interesting though at first it may appear, is totally busted when we look at France. Hordes of rich French people are coming to pay tax in this country rather than in France. The net effect is worse than if the taxes had been lower in the first place.

[Kelvin Hopkins]

I am one of those who would like to see a little more insulation between countries on financial matters, rather than a free flow of finances across borders, but I am a traditional leftist and Keynesian. I am not of the same mind as those who believe in breaking barriers and people having complete freedom to do exactly what they like with their money anywhere in the world. I hope that one day we will return to a more sensible approach.

The problem with tax is not the tax rates but the collection. For a long time we have seen vast amounts of tax not just avoided but evaded. The thick end of avoidance is the thin end of evasion. The precise line between avoidance and evasion is ill-defined, and I would like stricter rules so that a lot of what is now called tax avoidance is defined as tax evasion. If we sent one or two of the big tax avoiders and tax evaders to prison, it might concentrate a few minds and bring in more tax. The research on behalf of the TUC by Richard Murphy shows that, in his view, the tax gap is in the order of £120 billion a year. If we collected a fraction of that sum, we could solve all our problems, including the famous deficit. I am very much in favour of reviewing the effect of tax changes.

Finance (No. 2) Bill

Simon Kirby Excerpts

Tuesday 1st April 2014 Commons Chamber

[Charlie Elphicke]

I apologise to the hon. Lady if I have raised her blood pressure. In England, the NHS will look after her very well; it has an increasingly good record.

I turn to where the Labour party has managed to get to. We have set out a clear economic plan, through which we have successfully cut the deficit by a third and cut taxes on average by £705 for hard-working people. We have managed to support business and cut business taxes, which the anti-business Labour party has taken to opposing of late. It says it supports the welfare cap, but in media interviews it wants to exempt this and that benefit from it. We have managed to take firm action to control immigration and we have plans for better skills for our young people, to give them a better future.

[Simon Kirby (Brighton, Kemptown) (Con)]

Is it not true that we have not only a plan but a long-term plan that is credible and believable and is beginning to show some success? If Labour Members have a plan, perhaps they might tell us about it.

[Charlie Elphicke]

I completely agree. It is a major problem for Labour Members that they are unable to welcome any positive move. They look around and must surely see that a recovery has been building and the situation is improving, but all they can do is stick their heads in the sand and issue a cry of complete and utter denial.

Some years ago, the Leader of the Opposition said that the Conservative plans would mean the loss of 1 million jobs. Far from that, 30.19 million people are in employment, up by 1.3 million since the election. There are 1.7 million new jobs in business. We have an employment rate that is up since the election and an unemployment rate that is down since the election.

Then Labour Members moved on and sought other ground on which to go around stirring up negativity and spreading apathy, as they do, up and down the land. They thought they might find a more profitable situation in drawing a distinction between full-time and part-time jobs. For a while, as we repaired their damage, that rather seemed to work for them, and they thought there was some profit in it. They glossed over the fact that during the previous Parliament the number of full-time jobs fell by 320,000, because they found that inconvenient and wanted to seize on the problems of people in full-time jobs as the economy recovered. Unfortunately for them, the number of people in full-time employment has been rising. In the past year it increased by 430,000, and there are now more people in full-time employment than there were at the time of the general election. Then, there were 21 million people in full-time employment; today, there are 22.1 million people in full-time employment. This Government have done well not only on jobs but on full-time jobs.

Seeing that that line of attack did not render profit to them, Labour Members then thought they would start talking about long-term unemployment and seize on the long-term unemployment figures for young people, which the hon. Member for Bolton West, who would have made a very good cornet at the charge of the Light Brigade, said were going up. Unfortunately for her, that is not the case. During the previous Parliament they did go up, across the country, by 311%, but in the past year they have gone down by 30%. Their whole theory about long-term unemployment does not work.

I congratulate the hard-working people of Birmingham, Ladywood, who saw their long-term unemployment among young people rise by 103% under the previous Labour Government but have seen it fall by 4% since this Government were elected and by 31% in the past year. In my constituency of Dover, the figure went up by 700% under the previous Labour Government. That was a very sad, despairing thing. So much hope was taken away from so many of the young people I represent. I welcome the fact that the figure has fallen by 22% in the past year.

Bit by bit, the Opposition’s case disintegrates—nowhere more so, hon. Members may be interested to learn, than in the constituency of the Leader of the Opposition, who gave such a fascinating response to the Budget the other day. In his constituency, long-term unemployment among young people rose by 1,600%—not under this Government but under the previous Government in which he served as a Cabinet Minister. Since the general election, that figure has fallen by 9%, and it is down by 31% in the past year alone.

The Opposition have no long-term economic plan, just pure negativity. In each negative case they raise, every figure or statistic they snatch at seems to disintegrate in their hands. They would have better spent their time putting forward a true alternative economic vision for this country than seeking to attack a Government who have been trying to fix the problems that this country has had and repair the toxic legacy that they inherited.

I turn now to the cost of living—after all, that is the latest part of the Opposition’s case. They are keen to point out that wage inflation has not kept up with real prices. That has been the case after every single recession, which is why I made the point that in 2010 we were not simply going to get an immediate, overnight repair after Labour’s crash—it was going to take some time. We now stand on the threshold, as the time is fast approaching when wages are likely to outstrip inflation. We have seen the latest figures: inflation is now at 1.7%, down from 2.8% a year ago. Wages have grown 1.4% in the three months to January when compared with a year ago. The moment is therefore approaching when the cost of living argument will face a challenge of its own. What will the Labour party say then? What case will it take to the country, as people see that the Conservatives’ work to repair the country’s finances and the value of work is taking hold?

Of course, Labour has also latched on to the issue of energy prices, but we have seen the Government’s action to undo the hard work done by the Leader of the Opposition when he was Secretary of State for Energy and Climate Change in putting green levies on to our electricity bills. Those have been rolled back and we have seen a positive impact and a positive announcement from SSE, which has pledged a freeze until 2016. Again, that is positive action from the Government, who understand the challenges that people have faced because of the legacy we were left.

We have seen council tax frozen. We have seen the fuel duty rises planned by the previous Government held back. In this Finance Bill we have seen particular help for the least well-off, with the increased personal allowance. I have long been an advocate for increasing the personal allowance, to take the least well-off out of tax all together. The allowance is rising to £10,500, which is welcome.

It is not just about hard-working people, however. We also need to be concerned about people who are retiring. The work we are seeing on pensions—with a higher flat-rate pension and a move to get people out of the annuity requirement, to give them greater choices about what to do with their hard-earned, hard-saved money—is really attractive as well.

This Finance Bill does a great job in extending the Government’s work on recovery and ensuring that we are set fair for the future. Thankfully, it was not a give away Budget and it is not a give away Finance Bill. It should be, and is, steady as she goes: the work is not yet done. This Government recognise that much has been done but there is much yet to do. This Bill is a key part of the way back for Britain and of the kind of future that we can build, for people who work and for businesses that are growing today, and also for our young people tomorrow.

Cost of Living

Simon Kirby Excerpts

Wednesday 27th November 2013 Commons Chamber

[Sajid Javid]

The hon. Gentleman will know that SME lending was hit from 2010 to 2011 because of Labour’s banking crisis. We had the deepest banking crisis and the largest bank bail-out the world has ever seen. What did he think the impact was going to be? He should welcome the Government’s action to help SME lending, including the funding for lending scheme, which has helped thousands of companies.

The Opposition claim that economic growth is not felt by people across the UK and that living standards are falling. The truth is that the previous Labour Government left the country a lot poorer and, as a result, many hard-working families are finding it difficult. Our long-term plan for the economy, the plan that has put our country on a path to prosperity, will help those families. What better way to increase standards of living than by making sure that as many Britons as possible can take home a steady wage at the end of each month? With more than 1.4 million private sector jobs created in the past three years—more private sector jobs created in three years of this Government than in 13 years of the previous Labour Government—we now have more people employed than at any time in our history.

We are also taking measures that help to keep more cash in the pockets of hard-working people up and down the country, while economic confidence has helped to keep mortgage bills low. If mortgage rates rose by just 1%, the average mortgage bill would increase by about £1,000 a year. We are also letting people keep more of their hard-earned income. Our increases in the personal allowance are worth £700 each year to every average taxpayer—a tax cut for more than 25 million people—while 2.7 million people on low incomes have been taken out of income tax altogether.

[Simon Kirby (Brighton, Kemptown) (Con)]

Does the Minister realise that from next April 36,000 people in my constituency will be better off because of this policy?

[Sajid Javid]

My hon. Friend is right to make that point. I think every MP in this illustrious House could share similar numbers. Indeed, in the shadow Chief Secretary to the Treasury’s constituency, 4,000 people have been taken out of income tax altogether and more than 38,000 have had an income tax cut.

Our changes to the personal allowance mean that someone working full time on the minimum wage has seen their income tax bill more than halved under this Government. It also means that for any income on which people would pay Labour’s 10p tax rate, which it previously abolished, they pay a 0% tax rate under this Government.

Oral Answers to Questions

Simon Kirby Excerpts

Tuesday 10th September 2013 Commons Chamber

[Mr Osborne]

That is a good question from the hon. Gentleman. The repair of the financial system perhaps remains one of our biggest domestic economic challenges. We are conducting a review of the future structure of the Royal Bank of Scotland and I will report back to Parliament this autumn on that specifically. More generally on the banking system, the funding for lending scheme, as a monetary intervention, has helped to support lending. Account switching, which will be possible from next Monday as the result of Government pressure, will help small firms to change their bank account much more easily and, as a result, get a better service.

[Simon Kirby (Brighton, Kemptown) (Con)]

20. Unemployment in Brighton Kemptown is falling, although there is still much to do. Does my right hon. Friend agree that the £2,000 cut in jobs tax will help small businesses in Brighton take on more staff and get even more people into work?

[Mr Osborne]

My hon. Friend is absolutely right. It is not just jobs that are being created in Brighton; there has been an increase in the number of businesses being created, too. Employment allowance is coming in and people will see that as a real way of helping small businesses with the cost of labour. That should help them employ more people and help the people who are already employed. That is just one example of what we are doing to ensure that this is a balanced private sector recovery, and that we do not repeat the mistakes of the past.