Oral Answers to Questions

Siobhain McDonagh Excerpts

Tuesday 19th July 2016 Commons Chamber

[Mr Hammond]

I am afraid that I shall not be tempted by my hon. Friend to speculate on the content, or even the date, of the autumn statement. What I can say is that the Bank of England is well equipped with the tools necessary to deal with the short-term needs of the economy following the shock of the referendum, and the autumn statement is well placed, after the batch of economic data that will be published this autumn, to provide a longer-term response.

[Siobhain McDonagh (Mitcham and Morden) (Lab)]

I welcome the right hon. Gentleman to his new position. He may recall that his predecessor cut corporation tax for business to allow the living wage to be introduced. As we speak, Marks and Spencer is consulting on cutting overtime payments and Sunday and bank holiday pay, in order to do just that. What will the Chancellor do to ensure that my constituent, Mrs M, does not lose £2,000 a year because of the introduction of the living wage?

[Mr Hammond]

Very clearly, the intention of the introduction of the living wage was not to make people worse off; it was precisely to support the living standards of those on the lowest wages. I will look carefully at the case that the hon. Lady has drawn to my attention.

Automatic Registration: UK Elections

Siobhain McDonagh Excerpts

Wednesday 29th June 2016 Westminster Hall

[Siobhain McDonagh (Mitcham and Morden) (Lab)]

I congratulate the hon. Member for Midlothian (Owen Thompson) on securing this important debate. I apologise to you, Mr Howarth, and to other Members in the Chamber for having to leave early to get to a constituency event, but I wanted to make a contribution to this debate.

It is our job in this House to ensure that the citizens we represent can truly exercise their democratic rights, but British citizens in this country are being marginalised and excluded from the democratic process. The problem of electoral registration is less getting people to sign up to individual elections and more maintaining their registration. I have spoken in the House before about the 100,000 Londoners who disappeared off the electoral register just months before the mayoral election. Boroughs with the biggest falls included Redbridge, which witnessed a staggering 9% drop; Kensington and Chelsea, with an 8% drop; and Hackney, which recorded a 7% drop.

The national picture is just as stark. The parliamentary register that was used in the EU referendum has seen the loss of 1.4 million names since December 2013. To put that figure into context, just 1.3 million more voters voted for Brexit than remain. In other words, those who fell off the register in the past two and a half years could have swayed the decision on the EU referendum.

There is a stark variance in who is signed up on our register. Pensioners in the shires who own their own home have a 90% chance of being on the electoral register, but a young man from an ethnic minority background in private rented accommodation in a city has a less than 10% chance of being on the register. The fact that people from ethnic minorities are far less likely to be registered to exercise their democratic rights undermines the Government’s commitment.

When it comes to electoral registration, the picture is bleak across the country. Liverpool has seen a drop in its electoral register of 14,000. Birmingham has seen a drop of 17,000, and the drop in the London Borough of Lewisham was 6,000. Those are all areas that have had an increase in population. The situation is even worse in areas where the population is transient, such as university towns. Canterbury has seen a huge 13% drop in those registered to vote. Cambridge has seen a drop of 11%, meaning its electorate is now smaller than it was in 2011.

Let us look at the outcome of the EU referendum. We know that young people overwhelmingly voted to remain. Remain voters made up 73% of 18 to 24-year-old voters and 62% of 25 to 34-year-old voters. It is clear that in areas with a high proportion of younger residents, turnout tended to be lower. We do not have any cast-iron figures, but we know that turnout among the youngest voters was around 40%. Among the over-65s, turnout was well over 80%. That all amounts to the effective disfranchisement of that younger group of voters. If the Government are serious about combating social exclusion, they urgently need to review that dire situation.

Being on the electoral register is the closest thing to having a civic contract. If someone is not on it, they cannot participate in the democratic process. Automatic electoral registration provides the opportunity to both reduce costs and improve administration, cutting down on bureaucracy and enabling everyone to exercise their right to enfranchisement. It is simple common sense, proposing a cheaper, simpler and more effective model. It places a responsibility on the state to do everything in its power to ensure that the electoral database is full and complete. It imposes a duty on the Government and public bodies to work together.

Automatic electoral registration proposes to make the system truly convenient for the citizen by integrating both national and local data sets, meaning that an individual’s address details would be automatically updated according to trusted data sets. The trusted data sets would collate information at each point that a citizen interacts with the state, whether that is when they pay a tax, receive a benefit, use the NHS, claim a pension or apply for a driving licence. The walls between those data sets used to be sacrosanct, but they are falling away more and more as the Government emphasise security and anti-fraud measures.

These reforms would vastly improve registration and have been tested elsewhere. A very similar model operates in Australia with huge success. For instance, the state of Victoria has a population of 3.5 million and has 95% accuracy in its registration process. It does that at extremely low cost, employing just five members of staff who maintain the rolling register.

Rolling out this reform in the UK is timely for so many reasons. Greater Manchester has already submitted to the Cabinet Office its plans to pioneer the system of automatic electoral registration. It also has proposals for a pilot scheme. I sincerely hope that the Government support the plans and will introduce the primary legislation on data sharing necessary to ensure that the pilot can go ahead.

Voter registration should not be the responsibility of charities or NGOs, such as Bite the Ballot, despite their excellent work. It should be down to the state to do all it can and to ensure that everyone, especially the most marginalised, can access their democratic rights. The issue should be non-partisan. It is in all our interests to get more people signed up. Then we can all get on with our job, as representatives of political parties, to enthuse voters and to persuade them that we are worthy of their vote.

Budget Resolutions and Economic Situation

Siobhain McDonagh Excerpts

Wednesday 16th March 2016 Commons Chamber

[David Rutley]

I completely agree. The hon. Gentleman and I have been involved in numerous debates about promoting outdoor recreation and physical activity—for older people as well as young people—and the levy is a positive step further forward. I pay tribute to the Government for taking forward its sport strategy and to the Under-Secretary of State for Health, my hon. Friend the Member for Battersea (Jane Ellison), for her work in taking forward a very proactive public health agenda.

On other areas of the Budget, I felt that the Chancellor set out a clear, strong package of measures to help go on delivering the long-term economic plan and to make Britain the best place in the world to start up and grow a business. I have long talked about the importance of an enterprise economy. To achieve one, we need to focus on some key groups of people who make that happen: the entrepreneurs, the exporters, the employers and, of course, the employees who help put the pieces of that jigsaw together to create the enterprising economy that we want to see in Macclesfield, Cheshire and right across the country.

In recent years, I have also been campaigning hard on behalf of the self-employed. It is fascinating to see how self-employment is moving forward. I have been working with Demos and the RSA on various policy initiatives in this area, and it is clear that there is a long-term trend towards more self-employment—4.6 million, up from about 4 million in 2010. It is clear from the RSA’s own work that the pull factor is bringing more people into self-employment; there is not just a push factor. On the back of that, it is important that we welcome the Chancellor’s announcement on abolishing class 2 national insurance completely, to simplify the tax system for the self-employed.

The Chancellor also talked a lot about productivity, which the Government are absolutely committed to improving. For decades, the UK’s productivity has lagged behind that of other major economies. We need to address that. As a result of the drag from the financial crisis, the OBR has forecast lower productivity in the UK, as the OECD has done in the vast the majority of countries. That is why the Chancellor is absolutely right to keep an unrelenting focus on productivity and to take the strong action we need to take to bolster our economy now and for the next generation.

Colleagues should turn to page 61 in the Red Book to see the vast array of activity being taken forward to encourage more investment: lower taxes to boost enterprise, investment in infrastructure, as called for by Opposition Members, and a strong focus on science and innovation, which I believe is vital for the country and certainly for Cheshire.

I join the long list of colleagues on the Government side—and, I hope, Opposition Members, too—who welcome the fact that the Chancellor has set out that business rates will be reduced, which will have a huge impact on many small businesses. Capital gains tax has been cut; corporation tax has been further reduced to 17%. Stamp duty is to be reformed, not just in the residential sector, but in the commercial sector. These are vital steps in ensuring that we improve opportunities for investment. When we drive productivity further forward, it means more jobs and more skilled employment, which, when combined with the national living wage, will lead to higher wages, too.

[Siobhain McDonagh (Mitcham and Morden) (Lab)]

Is the hon. Gentleman aware that, as a result of the introduction of the living wage, most high street chains and supermarkets will cut their long-term staff salaries?

--- Later in debate ---

[Siobhain McDonagh (Mitcham and Morden) (Lab)]

In last year’s summer Budget, the Chancellor said that he was committed to a higher wage economy:

“It cannot be right that we go on asking taxpayers to subsidise…the businesses who pay the lowest wages.”

When he introduced the national living wage, he said that

“Britain deserves a pay rise and Britain is getting a pay rise.”—[Official Report, 8 July 2015; Vol. 598, c. 337.]

He promised that the change would have only a fractional effect on jobs. He said the cost to business would be just 1% of corporate profits, a cost which he offset with a cut to corporation tax.

Today, the Chancellor said that he wants to help low-paid workers to save with a savings bonus, but how exactly does the Chancellor think low-paid workers can afford to save anything when thousands nationwide will be taking home less money after the national living wage is introduced next month? National employers are using the introduction of a higher minimum wage to reform their reward structures, which is a euphemism for cutting staff pay. The new £7.20 hourly rate should be boosting people’s pay packets but, as the Chancellor knows, the opposite is happening in practice. B&Q has cut staff pay by changing all staff members’ contracts, forcing them either to accept the unfavourable new terms and conditions by the end of this month or lose their jobs. The new B&Q contracts are designed to offset the cost of the new national living wage and save the specialist retailer money without touching shareholder pay. The contracts strip low-paid staff of extra pay for Sunday and bank holiday working; eliminate summer and winter bonuses; and cut London weighting right down.

These workers are non-unionised, represented only by B&Q’s “national people’s forum”, which sounds like something that might have existed in the USSR. The so-called “people’s forum” had a very brief “consultation” on the proposed changes—there was no real negotiation whatsoever. Subsequently, these workers have no one to speak up for them—I say to this House that it is our job to speak up for them. Worse still, they have been told by B&Q management that they will be sacked if they come forward with their story to the press. B&Q staff will be worse off after the national living wage is introduced, as the specialist retailer saves money. The impact on low-paid workers, particularly loyal, long-standing staff who have worked at B&Q for decades, is devastating. Many cases have been reported to me and I have to be careful not to identify the people involved, because they could be sacked. However, let me give the example of just one of them.

Mr Jones, as we shall call him, works at a B&Q store in the south-east, where he has been employed for more than 15 years. He has a family—two children—and is the sole wage earner in his household. He works hard, but works part-time because he is disabled. He works every Sunday he can, as well as all the unsociable hours on offer. But from April, under the new contract he has been coerced into signing, he is going to earn £1,000 less—and he is not alone. If I had the time, I would tell the House about workers—

[The Minister for Small Business, Industry and Enterprise (Anna Soubry)]

Will the hon. Lady agree to meet me, in confidence, in relation to all these people? As the Minister responsible for retail, I undertake to take this up directly with B&Q. May I ask that she also speaks to the right hon. Member for Doncaster Central (Ms Winterton) about this, because I think that between us we could do something about it?

[Siobhain McDonagh]

I would be delighted to accept that offer, and I will show my right hon. Friend all the emails I have received about people in desperate situations. These people are the ones who political parties say they are there for: the hard workers—the people who believe it is their job to support their families and who just get on with it. But they are not able to get on with the living wage because their pay is going to be cut.

I was going to come here and say today, “Look it doesn’t have to be this way. Some of these companies just need to pass on a hit to their shareholders. Some of them need to improve productivity and staff training.” But I did not know then that what the Chancellor was going to announce was a further cut in corporation tax. He has given these companies the opportunity to get out of these appalling contracts and give people £7.20 an hour, on top of the benefits they already get. I ask the Chancellor and his Government to make it unquestionably clear that they expect, and we expect, that the honour of the national living wage will be a reality. We are not talking about small companies living on the margins; these are some of the most famous names on our high street. They are currently getting away with murder, and they can because these people have nobody to speak for them.

I may just be a lowly Opposition Back Bencher, but if I can help any of those staff get a decent result on what should rightfully be theirs—this is not because they do not try; it is because of their direct effort—I will be doing my job. I ask everybody in the House to join me in standing up to these companies and saying, “Put the money you’ve got in today’s Budget in the hands of those people who have worked longest and hardest for you.”

Oral Answers to Questions

Siobhain McDonagh Excerpts

Tuesday 1st December 2015 Commons Chamber

[Mr Osborne]

There is general agreement across the House that there should be a level playing field, so that people trying to buy their first home are not disadvantaged by people trying to buy a second home or a buy-to-let property. The changes that we have introduced help to do that. Alongside that, we have made the ISA more generous and have created new pension flexibility, so that people can get the most out of their pension savings. The low interest rates, decided independently by our central bank, are part of the vital support for our economy going forward.

[Siobhain McDonagh (Mitcham and Morden) (Lab)]

20. I acknowledge the work that the Chancellor has done on tackling the bias towards buy-to-let in the housing market, but would he consider extending that by cutting further the tax relief on buy-to-let properties? We simply have to widen the space for first-time buyers so that they can get into the market, particularly in London.

[Mr Osborne]

I welcome the support that the hon. Lady gives; of course, the problems of getting on to the housing ladder are particularly acute for first-time buyers in London. In the summer Budget, we announced changes to mortgage tax relief for the buy-to-let market so that those on higher rates of tax, with larger incomes, will see that relief scaled back over the coming years. What we have set out now, with the extra stamp duty and the changes in the summer Budget, represents a fair and balanced package for homeowners—those buying a buy-to-let property, but above all those buying their first home.

Tax Credits

Siobhain McDonagh Excerpts

Tuesday 20th October 2015 Commons Chamber

[Siobhain McDonagh (Mitcham and Morden) (Lab)]

I shall speak on behalf of more than half the population who have not yet been mentioned specifically. The cuts that we are discussing today will have a gendered impact, significantly affecting women much more than men. Capital and wealth continue to be concentrated in the hands of men, who tend to earn more. By contrast, women are most adversely affected by cuts to social security as they have to rely on it more. For instance, women are far more likely to be single parents, and 42% of single parents in the UK live in relative poverty after housing costs. Of those, 90% are women. Women also work as mothers and carers for elderly relatives, and when in work they are more likely to work part-time in the most underpaid, undervalued but important sectors—catering, cleaning and social care.

The Fawcett Society has shown that 62% of workers paid below the living wage are women. The considerable gender pay gap of 19% stubbornly continues. Tax credits are therefore a lifeline for women in low paid work and the women’s budget group has demonstrated that these cuts will undermine advances in gender equality. Although the majority of people gaining from tax credit cuts will be men, who will benefit by £1.5 billion a year by 2020, most of those losing out from tax credits will be women, who will lose £5.8 billion a year by 2020.

The advances made in helping those on low pay are about to be rolled back by a party that claims to represent the interests of working people, but in practice does no such thing. The cuts are not inevitable. They are made off the back of tax cuts for multinational businesses and others, which overwhelmingly benefit the most affluent. May I suggest, from the party of Siobhain McDonagh, that if the Government are looking for a compensating saving for ameliorating the situation of the poorest families, they should look at the mortgage tax relief given to buy-to-let landlords. In the Budget the Chancellor cut it back to the basic tax rate. If the Government want £2 billion more, they should cut it a bit more, help the housing market in London and make sure that poor families and poor women do not lose out.

Air Passenger Duty

Siobhain McDonagh Excerpts

Wednesday 23rd October 2013 Commons Chamber

[Nicky Morgan]

ONS statistics show that lower-income households spend a lower proportion of their disposable income on APD than higher-income households. We are looking at what people actually spend.

[Siobhain McDonagh (Mitcham and Morden) (Lab)]

How would the Minister explain that to my Caribbean constituents, many of whom come from Jamaica or other Caribbean islands and have lived here for 40 or 50 years on low incomes? They now find themselves being excessively taxed in order to stay in contact with their family and friends in their home countries.

[Nicky Morgan]

I do not know whether the hon. Lady has just arrived in this debate, but we have already discussed Caribbean issues [Interruption.] Well, I think I have dealt with that issue. [Interruption.] I am sorry—I had not appreciated that the hon. Lady was present, but there were questions on this matter from the hon. Member for Hackney North and Stoke Newington and the right hon. Member for Tottenham, and I have addressed the issue of the Caribbean. ONS statistics show that lower-income households spend a lower proportion of their disposable income on APD than higher-income households. In relation to the Caribbean, APD must adhere to international rules on aviation tax, specifically the Chicago convention. The capital city convention on APD ensures that our APD complies with those rules.

The hon. Member for East Antrim spoke of the impact of APD on Northern Ireland in the context of recently announced changes to the rate of air travel tax in the Republic of Ireland. I thank him for saying that this is a listening Government and for his recognition of the moves we have made in that regard. We recognise the position of Northern Ireland as the only part of the UK that shares a land border with another EU member state with a different rate of aviation tax, which is why we have devolved to the Northern Ireland Assembly the power to set APD rates for direct long-haul flights. The Government and the Northern Ireland Executive recognise that decisions on further fiscal devolution of any taxes require careful consideration. We expect recommendations on further devolution to be put to the Government and Northern Ireland Executive by autumn 2014.

The debate highlights some of the most important issues facing Britain today, including repairing the public finances and bringing debt under control, thus ensuring the stability on which economic recovery depends. APD makes a vital contribution to the Government’s fiscal strategy—it would be irresponsible of us to abandon it—and forms part of the wider tax system that we are making into one of the most competitive in the world. I thank the hon. Gentleman for giving us the opportunity to debate those important issues, but I cannot agree with his proposal that the tax should be abolished.

--- Later in debate ---

[Siobhain McDonagh (Mitcham and Morden) (Lab)]

I shall address the issue on behalf of my Caribbean constituents, and report how angered and disappointed they are about the banding of Caribbean countries. Not only are my Caribbean constituents angry and disappointed, but so are their original home Governments at the way in which the banding impacts upon them and the development of their industries and tourism industries.

The Caribbean community in my constituency came to Mitcham and Morden in the 1960s, the 1970s and the 1980s. They did the jobs that nobody else wanted to do. They drove the buses, built the schools, dug the roads and worked in the hospitals, just as my own family who came from Ireland in the 1940s did. They never earned much but they worked hard. They looked after their families at home and in the Caribbean, and they contributed hugely to our community through youth facilities, churches and clubs for the elderly. They feel they have earned, and they have earned, their right to be here. They are proud of being British, they are proud of being Londoners, but they are also proud of the country that they came from.

Members of the Caribbean community work hard, and they save hard to go home every so often to see how their towns and cities are getting on and how their family and their friends are. Air passenger duty is a tax on their ability to do that. Whatever accounting company came up with whatever report, nobody can argue that for a Caribbean lady or gentleman in my constituency who lives on a pension and an occupational pension, APD does not disproportionately affect them in their efforts to stay close to their ageing families. It clearly does.

I am not arguing that APD should be scrapped; I am asking the Treasury to look at the banding. Nothing is set in stone; these are conversations that I and other Labour Members have had with Ministers of this Government and the previous Government. We are where we are because of the Chicago convention and the ticketing rules that exist for the airline industry. But it does not make sense to people in the Caribbean, or to me, that to go to Kingston, which is closer than Los Angeles, 25% more tax has to be paid. There is a way to look at the banding and to alter it, to recognise the contribution of those people, their families and communities, and to accept and respect the deep and long-standing connection that we have with those individual Caribbean countries and their Governments. They, like us, are going through hard times. They wish to develop their tourism industries in a price-sensitive market. Anything that we can do to help them out of respect for their communities’ work in our country and in our capital city would be gratefully received. It is not beyond the wit of the Government to do precisely that.

Air Passenger Duty

Siobhain McDonagh Excerpts

Thursday 1st November 2012 Commons Chamber

[Siobhain McDonagh (Mitcham and Morden) (Lab)]

I have a large Caribbean community in Mitcham and Morden, many of whom moved to Britain 20, 30 or 40 years ago. For them, air travel is not a leisure choice, but something they save up for over many years, often from low incomes, scraping together every spare penny to visit their friends and families. For most of us in the Chamber, the people we treasure live close by—my mum lives round the corner. We are not charged £81 in tax to see our friends and families, but to my constituents that is what air passenger duty really is: a tax on friends and family. Let us not forget that those constituents are also a lot less well off than we are. Many are pensioners; others are in low-wage jobs, having come to this country to do the kind of work that the rest of us did not want to do.

Earlier this autumn, I hosted a party here in Parliament to celebrate 50 years of Jamaican independence. Mitcham and Morden has a large Jamaican community, and I wanted to celebrate the role that people from that country and the rest of the West Indies play there. Most had never been invited here before, and I am pleased to say that hundreds of people came along. It struck me that this was a community that had had it hard, yet despite often encountering prejudice and discrimination, they had never stopped. They had worked hard to put food on their children’s plates, yet they also found time to help the community, whether through the church or by setting up local youth groups.

Most of all, it struck me that those people were not only proud to be British but determined never to forget where they had come from. They were proud of their culture, proud of the country that they were born in and proud of the country that they now live in. And they have every right to be proud, because they have improved this country, and Mitcham and Morden in particular. However, I am not proud of the effect that this tax has on them and their families.

I appreciate that when air passenger duty was introduced by the Major Government, it was done with the best of intentions. There are problems with emissions, and the aviation industry has an obligation to reduce them, just as every industry does, but I do not think that imposing a duty on every passenger is the best way to encourage airlines to make their planes produce fewer emissions. It is too crude, and regulating emissions achieves better results, as we are now discovering thanks to the efforts of the European Union—not a body that is often praised. At the time, however, APD seemed a modest way of tackling the problem and, right up until 2007, economy class passengers paid only £5 for flights to Europe, and £20 for flights beyond. Sadly, since then, under this Prime Minister and the previous one, air passenger duty seems to have become more about raising revenues than reducing emissions. In the past two years, APD on flights to the Caribbean has risen nearly two thirds, to £81.

What makes the tax so unfair is that it disproportionately targets poorer, ethnic minority communities. Because of the anomaly that says the capital of Jamaica is more than 4,000 miles from London, while the capital of the USA is not, passengers flying to Kingston have to pay more than people going to airports in the States that are further away. In 2010, that anomaly cost passengers to the Caribbean £5 more than passengers to the US. Now the difference has more than trebled, to £16.

What my constituents want to know is: how can it be fair that those travelling to Kingston should have to pay 25% more duty than much better-off passengers flying to Los Angeles, which is about 20% further away? If anyone were to look at this from an equalities point of view, they would be appalled. The impact falls disproportionately on the lower paid and on the black community. Like many Members, I have been petitioned by hundreds of people about this unfair tax, and the unfair anomaly that I have just mentioned is a major concern.

It was disappointing that the Government’s consultation did not respond to those legitimate concerns. It is already difficult and expensive to fly to Jamaica. I had a quick look on Expedia before coming here, and in the week starting 17 November there are only three days on which it is possible to get a direct flight to Kingston, although there are direct flights to Los Angeles every day. As a result, the cheapest return to Kingston costs more than £900, while a return to LA is just £564. Clearly, that is not all because of air passenger duty. It is because there is not enough capacity at London’s airports, which is why I support an extra runway at Heathrow, to bring in extra jobs and cut travel costs for my constituents.

However, those differences show that the cost of travel for our low-income, ethnic minority constituents is already disproportionately high. Air passenger duty is a regressive tax that only makes that situation worse. If it is about cutting carbon, it should be based on real emissions, and it should not favour wealthy passengers travelling to developed countries such as Canada and the US over people travelling to developing countries in the Caribbean. This Government have failed to take advantage of the opportunity offered by their consultation to introduce a fair alternative, or to tackle emissions meaningfully. That is a source of considerable disappointment.