Finance (No. 2) Bill

Debate between Thérèse Coffey and Danny Alexander

Tuesday 1st April 2014 Commons Chamber

[Danny Alexander]

I will not give way, because I want to make progress. The increase in the personal allowance will mean that a typical basic rate taxpayer will pay more than £800 less income tax per year than in 2010-11. That is real action to support the millions of people on low and middle incomes. It helps them to keep more of what they earn and rewards those who want to work hard. This Government and this Bill also recognise that people who rely on their savings income have been hit particularly hard by low returns in recent years. It is for that reason that we are cutting tax on savings for the lowest earners. From April 2015, the 10p starting rate of tax on savings will be abolished and a 0% rate will be extended to the first £5,000 of savings income above the personal allowance. That will benefit 1.5 million people with low earnings from some savings, and more than 1 million people will no longer pay any tax on their savings income at all.

It is no exaggeration to say that this Government have achieved sweeping reforms on pensions. Under the excellent leadership of my Liberal Democrat colleague, the Minister of State, Department for Work and Pensions, my hon. Friend the Member for Thornbury and Yate (Steve Webb), our simplifications and reforms of the pensions sector will be one of this Government’s most enduring legacies. Automatic enrolment will see nearly 6 million people enrolled in workplace pension schemes by the end of this Parliament. The single-tier pension will provide millions of individuals with a firm foundation to support their saving, and it will particularly benefit those groups that, under the current system, have tended to build up low amounts of savings. I am talking about women with broken work records, the low paid and the self-employed. The triple lock has helped to protect the most vulnerable members of our society, and the recent Budget announcements provide us with the final thread of this coalition’s web of pension reforms.

From April 2015 we will allow individuals much greater choice about how they access their defined contribution pension savings. Individuals will be able to access their defined contribution as they wish, subject to their marginal tax rate, and no one will be forced to take out an annuity if they do not want to. We are well aware that this is the biggest shake-up of pensions in almost a century—since Lloyd George was the Liberal Minister in the Treasury. As such, we recognise that it is absolutely crucial that we get it right. We are consulting on the detail before making further announcements later this year.

In the meantime, the Finance Bill will make some initial changes to deliver greater flexibility with immediate effect. We are reducing the minimum income requirement for accessing pension savings flexibly from £20,000 to £12,000. We are increasing the annual withdrawal limit for individuals in a capped drawdown arrangement from 120% to 150% of an equivalent annuity. We are increasing the total pension wealth that can be taken as a lump sum from £18,000 to £30,000, and we are increasing the size of a pension pot that can be taken as a lump sum—regardless of other pension wealth—from £2,000 to £10,000. Taken together, these changes mean that more than 400,000 people will be able to access their pension more flexibly in the financial year 2014-15.

[Dr Thérèse Coffey (Suffolk Coastal) (Con)]

My right hon. Friend is being very liberal with his praise for various coalition colleagues. This has been a tremendous Second Reading so far in that we are liberating pensioners to make the best decisions for them. That, combined with the single-tier pension, means that we are putting people back in charge of their future.

[Danny Alexander]

I am grateful to my hon. Friend for her contribution on these matters and for those specific comments. She is right that these are very liberal reforms. They are something of which we as a coalition can be proud. We have swept away the morass of means-testing of pensioners that built up under the previous Government and have ensured that every pensioner has a firm foundation from the state. They have a better basic state pension paid at the level of the single-tier pension. There is much greater flexibility for people to choose how to use additional savings in defined contribution schemes; after all, it is their money. I would go even further and say that this Government and this Finance Bill are about not only freeing up pensioners but providing additional freedom both for working people to keep more of the money that they have earned for themselves and for businesses that wish to invest.

Oral Answers to Questions

Debate between Thérèse Coffey and Danny Alexander

Tuesday 11th March 2014 Commons Chamber

[Dr Thérèse Coffey (Suffolk Coastal) (Con)]

1. What fiscal measures he plans to introduce to support young people into work.

[The Chief Secretary to the Treasury (Danny Alexander)]

The Chancellor of the Exchequer is at ECOFIN and I have been asked to reply.

Youth unemployment is falling and the number of young people on jobseeker’s allowance is 120,000 lower than in May 2010. No young person should be left behind in the recovery. That is why we have delivered 1.6 million apprenticeship starts so far this Parliament. We will abolish national insurance contributions for under-21s, which will help to support jobs for almost 1.5 million young people, and we are supporting up to half a million young people into education and employment through the Youth Contract.

[Dr Coffey]

I welcome the announcement in the autumn statement on the employers’ national insurance holiday for under-21s, which will be a big boost for many businesses in coastal towns such as those in Suffolk Coastal, and for pubs across the country, which regularly employ young people. Has my right hon. Friend estimated what impact the measure will have on youth unemployment?

[Danny Alexander]

We think the policy will have a significant impact. That is also the view of business organisations, which have warmly welcomed it. With the abolition of employer NICs for under-21s, it will become more than £500 cheaper to employ an under 21-year-old earning £12,000 a year, and more than £1,000 cheaper to employ an under 21-year-old earning £16,000 a year. Of course, employment is driven by a range of factors, but the wide welcome the measure has had suggests it will have a significant impact on employment.

--- Later in debate ---

[Danny Alexander]

I warmly welcome what the hon. Gentleman is doing to encourage employers in his constituency to offer work experience. The evidence of this Government’s work experience programme is that work experience is more effective than the future jobs fund and a great deal cheaper to deliver, so it is more cost-effective. He is on the right track in what he is doing in his constituency; his Front Benchers are on the wrong track.

[Dr Thérèse Coffey (Suffolk Coastal) (Con)]

T7. A few weeks ago, I joined my hon. Friends the Members for Harlow (Robert Halfon), for Northampton South (Mr Binley) and for Waveney (Peter Aldous) in presenting to the Chancellor a Boost Bingo petition with over 300,000 signatures, calling for a cut in bingo duty. [Hon. Members: “House!”] Will the Minister give to those who, day in, day out, enjoy bingo—including those who like to shout “House!”—comfort from this House that their concerns are being addressed in the forthcoming Budget?

Oral Answers to Questions

Debate between Thérèse Coffey and Danny Alexander

Tuesday 10th December 2013 Commons Chamber

[Danny Alexander]

We have made a commitment to one-for-one replacement. Housing starts, under the planning system, cannot be started instantly, which is surely a lesson that the hon. Gentleman should have learned during his many years in this House. The commitment is there and every one of those homes sold will be replaced by a newly built home.

[Dr Thérèse Coffey (Suffolk Coastal) (Con)]

10. What assessment he has made of the current level of the national deficit.

National Infrastructure Plan

Debate between Thérèse Coffey and Danny Alexander

Wednesday 4th December 2013 Commons Chamber

[Danny Alexander]

Some things are beyond the ken of most of us in this world and the editorial decisions of the Financial Times are one such matter. There has been a very strong welcome from industry for this plan and its previous iterations, including, as we have heard, from constituencies where projects are being taken forward. That is precisely because this Government are the first to have a long-term plan for infrastructure with a clear pipeline of projects that are being delivered up and down the country. The hon. Gentleman should welcome that.

[Dr Thérèse Coffey (Suffolk Coastal) (Con)]

There is so much to welcome in the updated national infrastructure plan, including the announcements about nuclear power stations and offshore wind. In particular, I want to thank my right hon. Friend for listening to the public consultation and the voice of business from Suffolk and cancelling the A14 toll. Like my hon. Friend the Member for Ipswich (Ben Gummer), I am very keen to get on with the project. Is there any chance of bringing it forward a few months?

Investing in Britain’s Future

Debate between Thérèse Coffey and Danny Alexander

Thursday 27th June 2013 Commons Chamber

[Danny Alexander]

The Barnett consequentials of the 2015-16 public spending round were set out in the Chancellor’s statement yesterday. On the resource side, the Welsh Assembly Government will see a small reduction in their budget and, on the capital side, a small increase. I am sure that they will work with him to ensure that the money is used wisely for the benefit of the people of Wales.

[Dr Thérèse Coffey (Suffolk Coastal) (Con)]

I welcome the A14 construction phase starting two years earlier, but I am particularly pleased by the publication of the draft strike prices. That should encourage SSE and ScottishPower to go ahead with their investment decisions in Galloper and the East Anglia Array, making Suffolk truly the green coast of the country.

[Danny Alexander]

The hon. Lady and I share a passionate commitment to green energy, and I hope that the strike prices now complete the picture for energy companies looking to invest. My message to the energy companies is, “You have the certainty you need, now bring forth the investment that the country needs.”

Oral Answers to Questions

Debate between Thérèse Coffey and Danny Alexander

Tuesday 24th April 2012 Commons Chamber

[Danny Alexander]

The eight core cities are a well-established group that have a proven role in driving economic growth in England. As I said, the main tax increment financing scheme will be available to all local authorities in England, including that of the hon. Gentleman, from 2013. We will set out the details of that shortly as part of the business rates retention scheme. Other pools of funding, such as the Growing Places fund, may be able to help with the scheme that he mentioned. The local enterprise partnership allocates those funds.

[Dr Thérèse Coffey (Suffolk Coastal) (Con)]

I thank my right hon. Friend for that answer. If the city pilots are successful, will he consider extending this method of financing to all county authorities?

[Danny Alexander]

Tax increment financing has great potential in helping local areas to develop infrastructure projects and supporting economic growth across the country. As I said to the hon. Member for Coventry South (Mr Cunningham), the main tax increment financing scheme will be available to all local authorities in England from April 2013. That will apply to the kind of local authorities that my hon. Friend described.

Amendment of the Law

Debate between Thérèse Coffey and Danny Alexander

Monday 26th March 2012 Commons Chamber

[The Chief Secretary to the Treasury (Danny Alexander)]

This has been a fascinating debate and some excellent contributions have been made by Members from both sides. I refer, in particular, to the right hon. Member for Edinburgh South West (Mr Darling), the former Chancellor of the Exchequer, who made a typically thoughtful contribution, and to my right hon. Friend the Member for Bath (Mr Foster), who, along with a number of other Members, including the hon. Member for Birmingham, Northfield (Richard Burden), warmly welcomed the package of measures for the creative industries in this Budget. Indeed, a number of other Labour Members welcomed that point, too. The hon. Member for Blyth Valley (Mr Campbell) referred to, among other things, broadband funding in his constituency, which he welcomes. My hon. Friend the Member for Brentford and Isleworth (Mary Macleod) rightly made the point that we should be highlighting the positive news for business in this country, and she highlighted some of the positive news in her constituency.

[Dr Thérèse Coffey (Suffolk Coastal) (Con)]

Will my right hon. Friend confirm what corporation tax rate companies will be paying in this country? Will it be the lowest in the G20?

[Danny Alexander]

I can certainly confirm that, as a result of the measures in this Budget and the measures that we announced in earlier Budgets, we will have not only the lowest corporation tax rate in the G7, but one of the lowest rates of tax in the G20. That will make a fundamental difference to this country’s attractiveness to investment from overseas.

Public Service Pensions

Debate between Thérèse Coffey and Danny Alexander

Tuesday 20th December 2011 Commons Chamber

[Danny Alexander]

Opposition Members seem to be making increasingly desperate attempts to find new ways of saying that they do not agree with what we have offered. It would be simpler for them to say that they welcome the agreements that we have reached in many areas.

I said in my statement, but will happily repeat for the hon. Lady’s benefit, that the contribution made to the country by public service workers such as teachers, civil servants, nurses, local government workers, firefighters and prison officers is enormously important. That is why one of the Government’s objectives has been to ensure that they continue to receive better pension provision than any other work force in the country, which is absolutely right. I hope that, on reflection, she will choose to welcome that.

[Dr Thérèse Coffey (Suffolk Coastal) (Con)]

Does my right hon. Friend agree that following these reforms, lower-paid nurses, teachers and civil servants will no longer subsidise the pensions of chief executives, permanent secretaries and the like?

[Danny Alexander]

I entirely agree. That is one of the abiding reasons why both the hon. Lady’s party and mine have sought to reform public service pensions for many years. As a result of the inequities in the current system, the contributions of hard-pressed low-income workers subsidise the pensions of the wealthiest public service workers. The new deals will mean that that will no longer happen.

Oral Answers to Questions

Debate between Thérèse Coffey and Danny Alexander

Tuesday 21st December 2010 Commons Chamber

[Danny Alexander]

That has a striking comment, coming from a Minister who was in the Department responsible for those things, and it reflects the general attitude towards public money that was prevalent under the previous Administration. There is a great deal of work that we can do as a Government to ensure that in future PFI is used only where it is absolutely necessary, and that we get best value for public money. That is how we should approach these things.

[Dr Coffey]

One of my constituents thinks that the PFI contracts that have been negotiated are one of the greatest scandals ever, if only because one of his relatives has made millions out of one. Apart from the potential £875 cost of a Christmas tree, which PFIs have caused the Minister the most angst?

[Danny Alexander]

I am not sure that it would be appropriate for me at this stage to pick out individual examples. The important thing to say is that, in common with the work that we are doing to ensure that we get better value from our suppliers across Government and that those suppliers are making a contribution to reducing the deficit, we are working on examining the future costs of PFI, so that where we can we reduce those costs. That is very important for ensuring that we reduce the deficit effectively and have the maximum amount of money left for front-line services.

Oral Answers to Questions

Debate between Thérèse Coffey and Danny Alexander

Tuesday 13th July 2010 Commons Chamber

[Danny Alexander]

That pay rise will be pro rata, but people will benefit from the changes to tax credits, for example, and the significant increase in the child tax credit for those with children. That will help to ensure that many of the people with children in the hon. Lady’s constituency whom she is describing will not be driven into poverty, as they were in many instances were under the previous Government.

[Dr Thérèse Coffey (Suffolk Coastal) (Con)]

T7. I and I am sure many other Members have received many representations from Equitable Life policyholders who felt very shabbily treated by the last Government. Can the Minister give me some assurance that under the new coalition Government, they will treated a little more equitably?