Low Pay

William Bain Excerpts

Wednesday 30th October 2013 Westminster Hall

[Mr William Bain (Glasgow North East) (Lab)]

It is a pleasure to serve under your chairmanship, Mr Hood.

Growth may be making an overdue return to the UK economy, but the continuing slump in real wages is forecast by the Office for Budget Responsibility to extend into 2014, and the UK currently has the highest inflation rate in the European Union, both of which contribute to the cost of living crisis. The Office for National Statistics confirmed this morning in its November economic brief that real disposable household incomes have not risen in a sustained way under the Government’s policies.

Despite employees working more hours than before the economic crisis began, the recovery is not making its way into the pockets of ordinary workers. Workers in the lower half of the income scale, particularly low-paid workers, are falling even further behind the top 1% of earners in our society. There has never been a more important time for this House to discuss the issue of low pay and how together, as a Parliament and a society, we can tackle what is now a crisis.

As the report of the Social Mobility and Child Poverty Commission recently made clear, poverty pay blights the outcomes in life of millions of men, women and children across our country. Every week, those of us with the honour of representing our great cities such as Glasgow meet those who suffer the effects of being trapped in low pay for long periods. According to the Poverty Alliance, 870,000, or 17%, of the population in Scotland live in poverty. A fifth of all children in Scotland are below the breadline.

This afternoon I will show that low pay is a problem not only in urban parts of the UK; there are pockets of truly shocking poverty in rural parts of Britain, too. If we are to come up with the right answers on low pay, we must first acknowledge how serious and widespread a social evil this now is across our country.

[Guy Opperman (Hexham) (Con)]

I congratulate the hon. Gentleman on securing this debate, and I endorse his comment that low pay affects rural areas such as mine as much as urban Glasgow. However, does he accept that the decision to raise tax thresholds provides the best possible support to low-paid workers?

[Mr Bain]

I am grateful for that intervention; I will be considering that point later in my speech. However, I must point out to the hon. Gentleman that those on the lowest earnings will not gain a penny from further increases in the personal allowance. I can direct him to the research that the Resolution Foundation has produced on the subject. It has looked at the matter in detail.

There are also issues—I shall also come to this point later—about the effects that universal credit will have, particularly in relation to any future increases in the personal allowance. Sadly, given how the Government are designing the credit, what they give with one hand, they may be taking away with another, and that is an important consideration.

The hon. Gentleman has a good record on the subject. I am sure that is borne out of his own experience in his constituency, where 47% of part-time workers are earning less than a living wage. He is absolutely right to campaign on the subject—more power to him for doing so from the Conservative Benches.

As I grew up in Glasgow, the real life experiences of people paid less than £1 an hour for security work were a scar on my conscience and a powerful spur to action on poverty pay. The success of the minimum wage in raising pay rates for the most disadvantaged working poor households is shown by the fact that the Conservatives who opposed it, and the Liberal Democrats and members of the Scottish National party who did not vote for the legislation, now would not dare abolish it.

Indeed, several Ministers in the Department for Business, Innovation and Skills, including the Secretary of State and the Minister for Skills and Enterprise, who I am pleased to see in his place, claim that they want to build on the success of the national minimum wage. It is important that today we see precisely how the Government anticipate changing the remit of the Low Pay Commission to that end.

According to the latest data from the Office for National Statistics in response to a parliamentary question I recently submitted, the average gross median wage in Britain in 2012 was £405 a week, which is almost 7% down in real terms from 2010. For the low paid, the situation is even more desperate, given that higher energy, housing and food costs affect them with even greater severity.

More worryingly, the argument that having a job is enough on its own to lift a family out of poverty has lost much of its potency, because two thirds of the 3 million children living in poverty in this country today live in households in which at least one adult is in work. October’s rise in the main rate of the national minimum wage to £6.31 an hour was the fourth successive uprating below the rise in prices. The minimum wage has lost a fifth of its value in real terms over the past decade, and we must begin to reverse that.

Under-employment and the low-skilled, low-paid work that has been created in an increasingly hourglass-shaped labour market in the past few years have made the cost of living crisis worse for millions of the working poor. The Resolution Foundation has established that 4.8 million people, or one in five across the UK, earn less than the living wage rate set by the Joseph Rowntree Foundation. That figure is up by 1.4 million in the past four years alone.

[Nia Griffith (Llanelli) (Lab)]

Will my hon. Friend ask the Minister whether, to help all those on the national minimum wage across the UK—including 7% of the Welsh population, some 95,000 people, which is higher than the UK average of 5%—he will seriously consider why the cost of living has eroded the rises in the national minimum wage so quickly in the past two or three years and what he can do about that?

[Mr Bain]

My hon. Friend is right, and she speaks with great passion on behalf of her constituents. Some 57% of her constituents in part-time work earn less than the living wage, so she will be seeing on a weekly basis the real effects of poverty on the living standards of people in Llanelli.

Other analysis that I recently received from the ONS shows that in parts of the north-east of England between a half and two thirds of part-time workers are earning less than the living wage. In parts of Northern Ireland and the south and south-west of England, poverty pay among part-time employees is equally endemic. Even in the constituency of the Secretary of State for Work and Pensions, more than two in every five part-time workers take home less than the living wage. With women more likely to be in part-time work than men, extreme low pay, particularly in the social care sector, represents not only economic injustice but gender inequality.

[Guy Opperman]

I am grateful to the hon. Gentleman for giving way to me for a second time. I know he is a passionate advocate of the living wage in Glasgow, where there has been some success. Does he agree that, for the living wage to gain greater traction and to have the take-up that we all want without the statutory empowerment that nobody wants, the key issue is trying to find ways to incentivise businesses, particularly in low-wage economies—the hospitality sector being an obvious example? Does he accept that, and does he have any ideas about how that should be done?

[Mr Bain]

That is a very good idea. We should be considering what is available in fiscal terms and what we can do through procurement. As I will describe, local authorities and other parts of the public and voluntary sectors have a good record of addressing low pay, but that needs to be extended to the private sector. Procurement is one means by which we can do that.

My hon. Friend the Member for Glasgow Central (Anas Sarwar) is here today. He will know that the Procurement Reform (Scotland) Bill, presented by the Scottish Government, is particularly disappointing and simply does not meet the test of ending low pay in Scotland.

As many as 220,000 direct care workers may be paid less than their legal entitlement to the national minimum wage. That is a national scandal, and the Government must act to end it. Worse, poverty pay is creating an even larger burden on the state because it is one of the biggest drivers of the increasing costs of housing benefit and tax credits. The recent report of the Social Mobility and Child Poverty Commission found that 84% of the public agree that employers should do more to pay wages that better reflect the cost of living.

It is becoming increasingly clear that, if there is to be a wage-led recovery that reaches all the people of the United Kingdom, further action on the national minimum wage is needed now. According to the 2012 labour force survey, low pay is more prevalent in the private sector, with sole traders, partnerships and companies reporting rates of low pay at 47%, 35%, and 26% respectively. That compares with a low pay rate of only 15% in local government.

Although the tax credit system cushioned living standards between 2003 and 2008, and remains an important means of improving work incentives now, the case for building on the success of the national minimum wage has never been stronger. We should support councils and other parts of the public sector that pay or use procurement rules with the voluntary and private sectors to extend a living wage to more and more people. The Government should at last support the recognised living wage accreditation scheme, which would be a splendid way to mark national living wage week next week, but we also need to understand that a rise in the national minimum wage will help substantially more workers than even a voluntary expansion of the living wage by employers.

We also need better enforcement of the minimum wage to stop the exploitation of unpaid interns for months on end and should back the superb campaign led by Intern Aware. Equity highlights the ongoing issue with performers and arts organisations in relation to the exemption in section 44 of the National Minimum Wage Act 1998.

It is particularly shameful that the maximum penalty for fly-tipping is 10 times the penalty for not paying a worker the legal minimum rate for an hour’s work and that the average fine per breach of the minimum wage rules was just over £1,000 in the last financial year. There were just two successful prosecutions of employers last year for failing to pay the minimum wage rate, according to information provided to me by the Treasury. The Government can do a great deal more on enforcement, and I hope the Minister will outline the next steps.

As I said to the hon. Member for Hexham (Guy Opperman), increasing the personal tax allowance does not in itself end the crisis of low pay. Many low-paid workers do not earn enough to pay income tax and so would not benefit from further rises in the personal allowance. For lone or couple households with children, the interaction between a rising minimum wage and the help provided by the tax credit system will do the most to raise living standards.

We also need to be mindful that the introduction of universal credit will mean that what low-income taxpayers may gain from a higher personal allowance will be lost through the new tax credit system, which is assessed on after-tax income. New research by Gingerbread published this morning shows that the Government’s current plans for universal credit will make it far harder for low-income lone parents to make work pay beyond 20 hours a week, as the incentives rapidly taper away.

[Anas Sarwar (Glasgow Central) (Lab)]

I congratulate my hon. Friend on securing this important debate. He rightly says that having a job is not an automatic route out of poverty. For example, 50% of people who use a food bank in my constituency are in work. Does that not demonstrate that we need to create not only employment but a quality level of income so that people can lift themselves out of poverty and give opportunities to their children?

[Mr Bain]

My hon. Friend is entirely correct. He represents a constituency in which nearly half—44%—of male part-time workers are earning less than the living wage and in which nearly a third of all part-time workers are in the same predicament. We both see, therefore, the costs that that has on society, with people unable to make their salary or wages last the week or the month, so that they are forced in increasing numbers into using food banks, just to feed their families. That is wrong and shameful, and we can collectively do something about it.

The Resolution Foundation has shown recently that once workers, women in particular, are trapped in jobs paying the minimum wage, they find it hard to progress out of them. The Government need to do a lot more on skills in the workplace, to help progression and allow people to advance within a job and have the potential to earn a larger salary as a result. The truth is that the low rate of the national minimum wage is acting as a ceiling, rather than as a springboard, to higher living standards. The Government must do more on workplace skills to ensure that people can progress in their jobs.

I have some specific points, which I hope the Minister can deal with. In what ways might the Government change the remit of the Low Pay Commission? Are they looking to what Gavin Kelly of the Resolution Foundation has termed “forward guidance” on future rises in the national minimum wage as the economy, we hope, continues to grow?

What particular issues has the Minister asked the Low Pay Commission to examine in looking at how, sector by sector, national minimum pay rates might be increased? In sectors such as finance and banking, it has been established that higher pay rates might be affordable now, at no or relatively little cost to those employers, whereas for hotels and restaurants a more phased approach to raising wage rates might work best, to maximise employment.

The prize for employers is real: higher productivity, higher job satisfaction and reduced staff turnover. For workers, the Government and society, tackling chronic low wages could restore the principles that work will pay and that low-income Britain should share more fairly in the wealth that it generates for this country. Such a policy should commend itself not only to Opposition Members, but to every shade of political opinion in the House. It is time for this Government to do the right thing for once, and to support giving low-wage Britain a much-needed pay rise.

[The Minister for Skills and Enterprise (Matthew Hancock)]

It is a pleasure to serve under your chairmanship, Mr Hood. I thank the hon. Member for Glasgow North East (Mr Bain) for securing the debate and giving us the opportunity for discussion. I have listened carefully to his arguments, which were passionately put. As he said, there is a strong cross-party consensus behind the minimum wage and the institution of the Low Pay Commission, which advises the Government on the appropriate rate. Interestingly, more Government Members than Opposition Members are in the Chamber, which demonstrates the cross-party support for the minimum wage and a commitment not only to it, but to its effective enforcement. We are absolutely clear that anyone entitled to be paid the minimum wage should receive it.

Before I answer some of the points made and set out what the Government are planning to do, I want to give some statistics in response to the hon. Gentleman. Times are undoubtedly tough following the great recession of 2008 to 2009, but since then the bottom quintile or fifth of the population have become around 6% better off, in part because of measures taken by the Government. Overall, household disposable incomes have risen in the past year and in the past quarter.

Specific actions taken by the coalition Government include freezing council tax; freezing and then cutting fuel duty; introducing the apprenticeship minimum wage, which did not exist before, in 2010; cutting beer duty; and of course raising the tax threshold, which was mentioned by my hon. Friend the Member for Hexham (Guy Opperman). The tax bill of people working full time on the minimum wage has been cut in half.

Government Members would argue that the best route out of poverty is work, with benefit and education reform and, as the hon. Member for Glasgow North East mentioned, an enhancement of skills. That is vital in the long term, but we have been able to take some shorter-term fiscal measures to support people’s disposable incomes—after tax—even in difficult times.

The hon. Gentleman also discussed universal credit and tax credits. Tax credits have the disadvantage of the withdrawal rate and the increase in marginal effective taxes. However, universal credit will ensure that work always pays, so it and a consistent withdrawal rate will be part of the solution to poverty. We want to ensure that incentives are right to support people who get on and work hard.

[Mr Bain]

How do the Government respond to the research produced today by Gingerbread? Given the new way in which universal credit will work—assessed on after-tax income—what lone parents get through the tax system they will in effect lose through universal credit. Frankly, will that not make it difficult for the Government to make good the pledge of the Secretary of State for Work and Pensions, that work will pay for every hour that people work?

[Matthew Hancock]

Absolutely; it is vital that work always pays for every hour, and that is why having a consistent withdrawal rate in universal credit matters. It is valuable that this debate is not particularly partisan, but I draw the hon. Gentleman’s attention to the fact that, with tax credits as they were, withdrawal rates were sometimes more than 100%, so in some cases—not in large numbers—people were taking home less when they worked harder. Universal credit will put an end to that, which should be welcomed in all parts of the House.

EU-US Trade and Investment Agreement

William Bain Excerpts

Thursday 18th July 2013 Commons Chamber

[Mr William Bain (Glasgow North East) (Lab)]

This debate is very timely because of the discussion about where the UK’s future economic growth is going to come from: away from an overreliance on domestic consumption, which is now creeping back into the economy, and shifting once again, we hope, towards exports and manufacturing. Although the value of the pound is a fifth lower than it was at the onset of the economic crisis, unlike in previous downturns exports from this country have not risen but fallen. Completing a trade and investment area between the US and the EU will create more opportunities in this country for businesses and investors to grow out of the crisis. That will add to the 36 other countries with whom the EU already has a trade agreement in place.

The EU exports more in goods and services than it imports from the US, and 30% of the EU’s foreign direct investment is in the US, too. The estimated benefits to Europe of successfully negotiating a free trade area with the US would boost growth across the Union by 0.9% a year, and, according to an assessment by the Department for Business, Innovation and Skills, would provide £10 billion in direct economic boost to the UK.

The effect of a successful agreement would align technical standards; harmonise labelling and product specification standards; protect intellectual property; improve access to Government procurement schemes; cut agricultural tariffs; and, most important, help our largest manufacturing industry in this country—the food and drink sector. But to extract the full benefit from such an agreement, if it is successfully completed, the UK has still to be a full member state of the European Union. If we want to shape the terms of this trade and investment partnership, we can do so only from inside, not from the margins or, even worse, by excluding ourselves completely.

The Prime Minister was happy to accept President Obama’s hospitality on a recent visit to the United States, but it might help British business even more if he accepted some of President Obama’s friendly advice, too. The President, in his press conference on 13 May, said:

“We discussed with the Prime Minister the importance of moving ahead with the EU towards negotiations on the Transatlantic Trade and Investment Partnership. Our extensive trade with the EU is central to our broader economic transatlantic relationship which supports more than 13 million jobs… I believe we’ve got a real opportunity to cut tariffs, open markets, create jobs and make all of our economies even more competitive.”

According to The Guardian, a senior US official commenting after the Washington visit of the Prime Minister said:

“having Britain in the EU will strengthen the possibility that we succeed in a very difficult negotiation, as it involves so many different interests and having Britain as a key player and pushing for this will be important. We have expressed our views of Britain’s role in the EU and they haven’t changed.”

The indications are that it will take between 18 months and two years to reach an agreement but perhaps as long as 10 to 15 years for the full effects of a successfully agreed accord to come into force. But perhaps before the end of the arbitrary time scale that, unfortunately, many Government Members wish the House to follow on an in/out EU referendum, the UK would already be seeing some of the gradual benefits accumulating from that transatlantic free trade area, only potentially to be forced out of it shortly afterwards as a result of such a referendum. The House of Commons Library has confirmed that all EU trade agreements would have to be renegotiated by the UK if it left the EU, so by leaving the EU and leaving the advantages of this agreement that we hope to see very soon, the UK would lose access to over 130 free trade agreements, which would not only have a negative impact on the economy but imply huge costs in individual renegotiation.

As my hon. Friend the Member for Ochil and South Perthshire (Gordon Banks) said, the same logic applies to the plans to see Scotland leaving the UK, thereby harming our Scotch whisky and food exporters and seeing them lose the enormous potential benefits of the free trade agreement with the United States.

I hope that these negotiations will be completed speedily and effectively. I hope that they will equip our manufacturing sector with access to a larger free trade area. This debate has been important in emphasising the responsibility that the UK Government and the devolved Governments have in these islands to ensure that this future source of sustainable economic growth and high-skilled employment for all our constituencies is not put at risk by ambitions to erect constitutional barriers in a world in which they are increasingly irrelevant.

Child-care Ratios

William Bain Excerpts

Thursday 9th May 2013 Commons Chamber

[Elizabeth Truss]

I thank my hon. Friend for his question; he makes the very good point that at the moment there is no flexibility for nurseries if staff are absent. Either they must not take a particular child or they have to find additional staff at a cost, and we know that many nurseries are struggling to be sustainable. The ratios offer flexibility for different situations: for example, at the time of day when children might be sleeping, when less supervision is required, or when parents come to pick up their children. Our proposals are about allowing nurseries to exercise professional judgment and flexibility in how they staff them.

[Mr William Bain (Glasgow North East) (Lab)]

Does the shambles in this Government’s child-care policy not also extend to what they are doing with the tax and benefits system? Is the Minister aware that her colleague, the Economic Secretary, gave me information in a written answer last month that shows that more than half of all families will not benefit at all from the tax break or universal credit plans?

[Mr Speaker]

Order. The disadvantage of that question is that it does not relate to the terms of the urgent question, so we will leave it there.

Apprenticeships

William Bain Excerpts

Thursday 14th March 2013 Commons Chamber

[Matthew Hancock]

We are making it as simple as possible. I studied at West Cheshire college in my hon. Friend’s constituency. Colleges and other providers can help small businesses to bust some of the bureaucracy, but I want to bust some of the bureaucracy myself to make it easier.

[Mr William Bain (Glasgow North East) (Lab)]

Increasing skill levels will be among the critical long-term policies for turning around the slump in living standards, which is worsening under this Government. Will the Minister learn more from the German approach, in which larger companies receive stronger encouragement and have greater obligations to take on apprentices than is the case in the UK?

[Matthew Hancock]

I certainly agree that ensuring that everyone reaches their potential through apprenticeships and increased skills is vital. An apprenticeship involves learning and doing a job, and encouraging companies to come to the table is vital if we are to make this happen. Through the reforms and the principles set out in the Richard report, to which we have responded today, that is exactly the direction we want to take.

Oral Answers to Questions

William Bain Excerpts

Thursday 7th February 2013 Commons Chamber

[Mr Willetts]

My hon. Friend is absolutely right. These reforms increase resources for universities. They are not putting off students from less affluent backgrounds and it is graduates, not students, who pay. That is a very fair and progressive way of financing higher education.

[Mr William Bain (Glasgow North East) (Lab)]

Does the Secretary of State agree that, if the United Kingdom stayed in the European Union and completed the single European market, our growth could increase by 7% within a decade, but that if we left the EU and had a relationship with it such as that of Norway or Switzerland, our exports could be as much as 14 times lower over the same period?

[Vince Cable]

I certainly agree that it is desirable, for reasons of economic growth, that we remain part of the European Union and single market. The hon. Gentleman may not be aware, however, that both Norway and Switzerland observe the rules of the single market as well.

Oral Answers to Questions

William Bain Excerpts

Thursday 6th September 2012 Commons Chamber

[Mr Willetts]

We estimate that overseas students in higher education bring £8 billion to the British economy, which shows what a major export industry it is. We can be very proud of the success of our higher education sector, and that is why Britain has no limit on the number of suitably qualified overseas students who can come here to study.

[Mr William Bain (Glasgow North East) (Lab)]

T3. This morning the OECD predicted that the British economy will shrink by 0.7% this year. When will the Secretary of State get on and set up a proper British investment bank, and follow the example of institutions in Germany and Brazil that between them invested nearly £100 billion last year?

[Vince Cable]

The hon. Gentleman is being a little churlish in not even acknowledging that on Sunday, the Chancellor made it clear that we wished to proceed with a business bank. We are discussing the range of its activities and the resources that will be available. The hon. Gentleman knows well that growth prospects in all European countries are extremely depressed at the moment, not only in the UK.

Oral Answers to Questions

William Bain Excerpts

Thursday 2nd February 2012 Commons Chamber

[Mr Hayes]

John Clare, who is greatly admired by my hon. Friend, said:

“The best way to avoid doing a bad action is by doing a good one”.

Of course, he ended his life near Norfolk. My hon. Friend understated his own involvement in the project that he mentioned; he launched it, but he was too modest to say so. It says here that the project is “determined to nurture the ambition of enterprising young people and to encourage a can-do attitude.” I cannot do better than that.

[Mr William Bain (Glasgow North East) (Lab)]

T6. The Government have been sending out mixed messages recently about the extent of their financial commitment to the proposed green investment bank. Will the Secretary of State confirm that the proposed public contribution will be £3 billion as promised and not up to £3 billion, and that the bank will assume its borrowing powers in 2015?

[Vince Cable]

I can confirm the first part of the hon. Gentleman’s question: the £3 billion is fully committed to and there are no mixed messages. On borrowing, it is not merely a question of the date, but of the fiscal position of the country.

Oral Answers to Questions

William Bain Excerpts

Thursday 27th October 2011 Commons Chamber

[Mr Davey]

I again pay tribute to my hon. Friend, because he has been a stalwart campaigner for that change. I am delighted that we were able to publish the draft Groceries Code Adjudicator Bill on 24 May, and that the Business, Innovation and Skills Committee’s report on it has welcomed our proposals. He will know that the proposal is unique, because it allows anonymous claims to be made to the adjudicator and for reports, of which the adjudicator will be able to take note, to be put into the public domain.

[Mr William Bain (Glasgow North East) (Lab)]

The Bank of England’s own data released last week indicate that lending by banks to small businesses fell by £2.5 billion in the three months to August. Was not the Secretary of State right to admit at last that the economy is in a far weaker state under this Government than it ever was in the last year under Labour?

[Vince Cable]

That certainly is not the case, but the hon. Gentleman has a perfectly valid point in relation to bank lending. That is absolutely the case, and, as a result of the agreement that we have reached with the banks, they have—certainly in the first two quarters—achieved the gross lending objectives that we set them, but there is a lot more to do. Surveys show that a shortage of credit is a serious problem, and we have to continue to work with the banks and, where necessary, to require them to make credit available to the economy.

Oral Answers to Questions

William Bain Excerpts

Monday 20th December 2010 Commons Chamber

[Mr Hayes]

I was pleased to visit the college with my hon. Friend and I am delighted that it recognises the progress that we are making in giving colleges additional freedom, so that they can innovate and excel. I understand from looking at the figures before today that the college has among its learners a number of disadvantaged students. We will look closely at these matters to ensure that those students get every opportunity to fulfil their potential, for my party is the party of Wilberforce, Shaftesbury and Disraeli, and the elevation of the people is in our hearts.

[Mr William Bain (Glasgow North East) (Lab)]

T2. On the education maintenance allowance, will the Secretary of State comment on two findings of the Institute for Fiscal Studies? The first is that the A-level results of recipients are, on average, four grades higher on the UCAS tariff than those of people who do not receive EMA. The second is that the so-called dead-weight costs of the EMA are less than those of initiatives that the Government are introducing, such as the relief on employers’ national insurance contributions. Does that not show that the Government are making less a policy based on evidence and more a cut based on ideology?

[The Secretary of State for Education (Michael Gove)]

That is a very good question, actually—much better than any of those from the Labour Front Bench. Unfortunately, the evidence does not stack up. The IFS actually pointed out that there had been no increase in participation and only a modest increase in attainment, and the National Foundation for Educational Research pointed out that the dead-weight cost was roughly 88%, so only 12% of students were participating who would not otherwise have participated. Clearly we can have more effective targeting. Just because many policies carry a dead weight, that does not mean that all policies should. Neither, indeed, should all Front Benches carry dead weight.

Oral Answers to Questions

William Bain Excerpts

Thursday 8th July 2010 Commons Chamber

[Mr William Bain (Glasgow North East) (Lab)]

4. What recent assessment he has made of trends in levels of investment by manufacturing industry; and if he will make a statement.

[The Minister of State, Department for Business, Innovation and Skills (Mr Mark Prisk)]

In 2009, the volume of manufacturing investment in the UK declined by 21%, the largest annual fall on record, and it declined in 10 of the last 11 years. This Government believe that that trend can be reversed. In developing our plans to rebalance the economy, we are keen to ensure that we provide the best long-term environment in which manufacturing can grow.

[Mr Bain]

I am grateful to the Minister for that reply, but will he reflect on the comments from the Institute for Fiscal Studies and the manufacturers’ organisation the Engineering Employers Federation that the biggest beneficiaries of the Government’s changes to capital and investment allowances and corporation tax are low-investment and high-profit firms—

“Banks and supermarkets rather than manufacturers”,

as the IFS put it? What practical help can the Minister offer to manufacturing industry today?

[Mr Prisk]

I must correct the hon. Gentleman and give him the facts. We have had to reduce capital allowances to enable us to fund the corporate tax cuts, but the net result of the changes is that manufacturing—and not the industries to which he referred—will still be better off. Indeed, by 2014-15, it will be better off by £250 million per annum. I think that that is a very good policy, although I detect that the Labour party may now be opposed to it.