Oral Answers to Questions
Debate between Suella Braverman and Harriett Baldwin(7 years, 1 month ago)
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Suella Fernandes (Fareham) (Con)
The Parliamentary Under-Secretary of State for Defence (Harriett Baldwin)
HMS Queen Elizabeth sailed from Rosyth in June to commence her sea trials. She made her first entry into Portsmouth in August for a scheduled engineering period. Her second set of sea trials should begin this week, weather permitting. She remains on track to be accepted into the Royal Navy this year.
Suella Fernandes
Will my hon. Friend confirm that, as well as projecting global Britain’s power for the next 50 years, HMS Queen Elizabeth and HMS Prince of Wales will provide long-term skilled job opportunities and training for people in Portsmouth and its neighbouring constituencies such as mine?
Harriett Baldwin
My hon. Friend is absolutely right to point out that this is not only about the 10,000 people who have worked on getting the ship to the point where she is now, but about long-term sustainment over the next 50 years. May I take this opportunity, Mr Speaker, to put on record my appreciation to the Fareham company Boskalis Westminster Ltd, which did a lot of the dredging of Portsmouth harbour?
The Economy
Debate between Suella Braverman and Harriett Baldwin(9 years ago)
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Harriett Baldwin
I will give way to the hon. Gentleman when he starts to welcome some of the positive economic facts that I was mentioning, but if he does not know whether he is coming or going, I have a hunch that he is in the right party.
The Government absolutely reject the Opposition’s accusation that we are failing to deliver for working people. Not only have we brought greater economic security, we have also delivered more growth, more jobs, and higher wages. That is what people working across this country asked us to deliver, and that is what we are doing.
Suella Fernandes
I echo and salute the track record and results that the Minister is outlining. A former Prime Minister, who is credited with reviving a failing economy, once said:
“The problem with socialism is that you eventually run out of other people’s money.”
Does my hon. Friend agree that what we are hearing from the Opposition Benches is a reheating of simple 1980s socialism where the results are only failure?
Harriett Baldwin
My hon. Friend is right to remind us of two important facts. First, no Labour Government have ever left office with the public finances in a better state than when they came to power, and secondly, no Labour Government have left office without leaving more people unemployed than there were when they came to office.
Do we agree with the other points made by the Labour party?
Finance Bill
Debate between Suella Braverman and Harriett Baldwin(9 years, 2 months ago)
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Harriett Baldwin
The hon. Lady and I can duel with statistics all afternoon, but I wanted to point out that it was the 17 and 18-year-olds who pay a substantial amount more than those in their 20s. I think she is probably quoting statistics relating to 17 to 25-year-olds. Nevertheless, the changes need to be seen in the context of the amount that young drivers are saving and the opportunities they may have from using a telematic device to measure their driving performance.
Finally, I want to say a word about implementation. We recognise that the insurance industry needs notice to effect the changes. We have tried to ensure a smooth implementation of the new rate by following the approach agreed by industry representatives and HMRC back in 1995. That sets out transitional arrangements required by the insurance industry to account for the tax at the new rate. The rate, as we said, comes into effect on 1 November, which provides a period of nearly four months from the date the measure was announced. There is a further four-month statutory concessionary period for insurers who have elected to account for the tax using a special accounting scheme. In simple terms, the concessionary period ensures that premiums for policies beginning before 1 November will be taxed at the current rate effectively until 1 March 2016.
That leads me to the Opposition’s amendment, which proposes that a report be produced on the impact of the change in the standard rate of insurance premium tax as soon as three months from the enactment of the Finance Bill. It calls for the report to be undertaken very soon at a time when the impact of the rate will have hardly begun. That is why we will not agree to the amendment this afternoon and encourage the hon. Lady to withdraw it.
The impact of any increase in the rate of insurance premium tax will depend on whether insurers change their prices to pass on the increase. As I have said, it is a tax on insurers, not customers, and we are aware of at least one insurer—we heard earlier of another example—that has pledged to absorb the cost of the increase for at least one year. We think this is partly because insurers have benefited, and will continue to benefit, from the reductions in corporation tax announced in the Budget. Any such benefit might encourage more of them not to pass on this additional cost.
We have investigated what the overall distributional impact would be if all insurers passed on the entire rate rise. If the entire rate rise of 3.5 percentage points were passed on, households in the top income decile would pay just over £1 a week more for their insurance, while the additional costs for those in the bottom income decile would be less than 40p a week. We calculate that almost two thirds of the overall distributional impact will fall in the top half of the income distribution.
Suella Fernandes (Fareham) (Con)
Does my hon. Friend agree that this slim and modest tax rise should be viewed in the context of the falling cost of home insurance and comprehensive car insurance and our commitment not to increase VAT, national insurance or income tax? Overall, will not these policies benefit householders and families?
Harriett Baldwin
My hon. Friend is right to point out the overall context; this measure should not be seen in isolation. The cost to businesses was mentioned earlier. I am sure that Members will welcome the fact that, according to the British Insurance Brokers’ Association, the overall cost of insuring a commercial vehicle has fallen by more than 13% in the past 12 months alone.
I hope that I have answered hon. Members’ questions, particularly those about young drivers and household flood insurance. In particular, I want to support the points my hon. Friend the Member for Croydon South made about personal injury claims management.
In drawing my remarks to a close, I must stress that most households will see very little impact from the increase in the standard rate of insurance premium tax. It will remain at a low rate compared with many other countries and will certainly not make the UK a less attractive place to do business. I therefore ask that clause 43 stand part of the Bill and request that amendment 1, tabled by Opposition Members, be withdrawn.
Barbara Keeley
I do not propose to withdraw the amendment. The reason for it is the lack of a full analysis of where the impact of the increase will be felt and the groups that will be most affected. I have been quite disturbed by the complacent attitude of some Government Members, including the Minister. I have quoted many senior industry figures on the impact on their business and industry and the strength of their feelings about this tax, which they have called a stealth tax. I will quote some additional comments. Janet Connor, managing director of AA Insurance, said:
“That premiums have been falling seems to be the Chancellor’s justification for the tax increase but he is wrong. His timing couldn’t have been worse; not only are premiums starting to rise but the tax can only lead to even greater premium increases than could otherwise be expected over coming months.”
She continued:
“There is no justification for this underhand and unfair tax increase.”
I have quoted various insurance organisations, but the ABI said:
“UK drivers benefit from one of the most competitive motor insurance markets in the world. But with pressure on claims costs”,
which some Government Members have recognised,
“and an increase in insurance premium tax adding an additional £12.80 to the cost of the average policy…other factors are starting to put up costs.”
The key thing is that a range of factors are in play, despite our having had a successful couple of years, which has reduced premiums and rates. I hope Ministers will not continue to be complacent about the cost of premiums for young drivers and the danger of under-insurance or no insurance.
Graeme Trudgill, the executive director of the British Insurance Brokers Association, has said:
“Insurance has been seen as a special case in terms of taxation as it is a social good”.
Ministers seem to be ignoring the fact that it is a special case, in that it is a social good. We must take that into account.