Mr Mark Spencer (Sherwood) (Con)
12. What fiscal steps he is taking to encourage investment in infrastructure.
The Chief Secretary to the Treasury (Danny Alexander)
Mr Speaker, the Chancellor of the Exchequer is at an ECOFIN council meeting today.
The Government have made huge progress in delivering the infrastructure that the UK needs, establishing the first ever national infrastructure plan, which now shows that more than 2,500 projects have been completed since 2010. West Yorkshire continues to benefit as part of this plan, which includes the M62 smart motorway westward extension—the first new trans-Pennine road capacity since 1971. As part of the city deal, a combined west Yorkshire authority is taking forward a package of investments in transport worth up to £1.6 billion over 15 years.
Jason McCartney
I very much look forward to the northern powerhouse coming over the Pennines to west Yorkshire. Will my right hon. Friend confirm that the new bidders for the Northern Rail and TransPennine Express rail franchises will commit themselves to getting rid of the antiquated Pacer trains that plague commuters in my constituency on their daily commute?
Danny Alexander
My hon. Friend is right to raise this issue, which is raised by Members of Parliament and constituents from across the Northern Rail and TransPennine Express franchise areas. I can confirm that in the autumn statement we set out some changes that we would make to those two franchises. The packages for the new franchises will include a substantial package of upgrades, including new services and modern trains in order to phase out the outdated Pacer trains, which have also been raised with us under the Deputy Prime Minister’s Northern Futures programme.
Mr Spencer
If north Nottinghamshire’s coalfields are to feel the success of HS2, connectivity will be key. Will the Chief Secretary assure the House that once we have pulled together a bid for the Robin Hood extension to the villages of Ollerton and Edwinstowe, capital will be made available?
Danny Alexander
I am well aware of the importance of this connection to my hon. Friend and to other Members of Parliament in the area. As he will be aware, the east midlands has already benefited from investment of approximately £70 million to improve line speeds on the midland main line up to 125 miles per hour. Further electrification is due to be extended to Nottingham by 2019. A decision on the Robin Hood line is a matter for the local authority, but we would certainly look on the idea favourably.
Sheila Gilmore (Edinburgh East) (Lab)
The importance of infrastructure is surely a sign of the importance of Government investment as a way of growing our economy. Does the Chief Secretary therefore agree that one further way that we could move forward on this is to build at least 200,000 new houses a year to help to build our economy?
Danny Alexander
I totally agree with the hon. Lady. It is incredibly important to improve the rate of house building. I would set the figure at closer to 300,000 houses a year across the UK, rather than the 200,000 that she mentioned. She will know that in the autumn statement we extended the affordable house building programme for a further two years in order to build 275,000 affordable homes in the next Parliament. We are taking forward the idea of Government commissioning of housing, which would be a radical departure for this country, at Northstowe, and looking at it as a solution for the whole country.
Greg Mulholland (Leeds North West) (LD)
I warmly welcome the infrastructure announcement, but does my right hon. Friend agree that we also need further devolution to allow the much-needed rail link to Leeds Bradford airport and the electrification of the Leeds-Harrogate-York line? Will he meet me and other interested colleagues who represent the area to discuss how we can take this forward?
Danny Alexander
My hon. Friend is absolutely right to say that devolution, city deals and the growth plans we have put in place for every local enterprise partnership area are an incredibly important part of delivering infrastructure. He refers to two projects that are very important in the city he represents and I would, of course, be delighted to meet him and any other interested colleagues to discuss them.
Mr Andrew Love (Edmonton) (Lab/Co-op)
One hears the pious words of the Chief Secretary regarding house building, but has he not presided over the lowest level of house building since the 1920s?
Danny Alexander
In case the hon. Gentleman does not remember, he was present in the last Parliament when his party was in government and caused the most severe economic crash that this country had experienced for very many decades. The housing market, of course, gets affected by the economic cycle, which is precisely why this Government have presided over the highest level of affordable house building in this country for 20 years. Under the hon. Gentleman’s party, the number of affordable houses in this country fell by 421,000; under this Government, it has risen by hundreds of thousands.
Andrew Percy (Brigg and Goole) (Con)
2. What steps the Government are taking to support economic growth in the Humber.
The Chief Secretary to the Treasury (Danny Alexander)
The Government have taken many steps to rebalance the economy and strengthen every part of the United Kingdom. In the case of the Humber, the growth deal was announced in July, building on the success of the city deal, which was announced in 2013. We have also just announced £80 million for flood defences for the Humber estuary. I am pleased to see that our investment in that part of the country is working. Employment in Yorkshire and the Humber is now at the highest level on record at 2.51 million.
Andrew Percy
Key to economic development in east Yorkshire and north Lincolnshire are, of course, our tidal flood defences, which are so important. Last week the Government announced that the Environment Agency would undertake a review of the package proposed by myself, other local MPs and local authorities. Will the Chief Secretary ensure that Treasury and, if possible, Cabinet officials will also be involved in that process? It needs to be Treasury-led, rather than EA-led, to give us the result we require.
Danny Alexander
My hon. Friend makes a good point. The proposal by the local enterprise partnership is incredibly important and it needs to be assessed in detail by experts at the EA. The National Audit Office recently commended the EA on the way in which it carries out such appraisals. None the less, given the significance of the issue and the fact that it was announced as part of the national infrastructure plan, I shall make sure that Treasury officials are also involved in the process.
Martin Vickers (Cleethorpes) (Con)
23. Although I welcome the announcements in the autumn statement and the northern powerhouse initiative, too often in northern Lincolnshire in the Humber region we feel somewhat remote from the northern powerhouse. Will my right hon. Friend assure me that further initiatives will link the north-western part of the northern powerhouse to the Yorkshire and the Humber region?
Danny Alexander
Under this Government, there have been a number of initiatives in the Humber area that have helped to grow the economy, not the least of which is the enormous effort that Ministers in several Departments made in attracting the Siemens investment to Hull, which is an incredibly important part both of creating jobs in that area and of delivering our ambitions for renewable energy.
Mr Iain McKenzie (Inverclyde) (Lab)
3. What recent estimate he has made of how much the reduction in the additional rate of income tax to 45% is worth for a person earning £1 million a year.
The Financial Secretary to the Treasury (Mr David Gauke)
The cost of reducing the additional rate of income tax to 45% is estimated at about £100 million a year. That is set out in table 2.2 of Budget 2013. We have not broken down the impact by income ranges, because there is a significant behavioural response associated with the additional rate of income tax. That behavioural response is estimated in aggregate and reflected in the costing.
Mr McKenzie
Christmas is coming and it is a time for giving, but the truth is that this Government have been giving to millionaires for some time. The average tax cut to millionaires is worth £100,000 a year. Will the Financial Secretary confirm that that figure for the Government’s tax giveaway to millionaires is correct? How many of my constituents in Inverclyde have benefited from that reduction in tax?
Mr Gauke
What is a fact is that the proportion of income tax paid by the top 1% for the years since the 50p rate was cut has in every year been higher than in any of the years in which the 50p rate was in operation. It is this Government who have made changes to stamp duty land tax—that was just last week—and to capital gains tax, and who have dealt with reliefs and exemptions, to ensure that the wealthiest play a greater share than they have in the past.
Steve Baker (Wycombe) (Con)
Is it not the truth that people are able to change their behaviours to reduce their tax liabilities, and is it not the case that if the Government want to raise more from the wealthiest, it is necessary to lower the rate to a point where it encourages them to earn and to pay?
Mr Gauke
As I said a moment or so ago, in the two years since the 50p rate was reduced to 45p, a greater share has come from the top 1% than in the previous three years. There is a lesson to be learned there. It is probably the reason why the previous Labour Government had a 50p rate for only 35 days out of their 4,758 days in office.
Shabana Mahmood (Birmingham, Ladywood) (Lab)
Will the Minister rule out a further cut to the additional rate of income tax for the top 1% of earners? Will he rule out another tax cut for millionaires?
Mr Gauke
The priority of the next Conservative Government will be increasing the personal allowance to £12,500, and the rate at which higher-rate taxpayers pay the 40p rate to £50,000 a year. The truth is that our focus is on ensuring that we can lift people out of income tax, which is not a record of which the previous Government can boast.
Shabana Mahmood
I will take that as a no. The Minister has failed to rule out another tax cut for the richest 1% of earners in our country. As he signalled in his answer, the Prime Minister has made £7 billion-worth of unfunded tax promises for the next Parliament. We did not find out in the autumn statement where the money is coming from to pay for these promises, so unless the Minister can stand at the Dispatch and categorically rule out raising VAT again, will not people just conclude that the only way the Chancellor can pay for his unfunded tax promises is with another Tory VAT rise?
Mr Gauke
Our plans do not require us to raise taxes. [Interruption.] The shadow Chief Secretary, the hon. Member for Nottingham East (Chris Leslie), is heckling, but I have to say that when he was asked that question on television last week, he refused to rule out raising VAT. Our plans do not require taxes to rise, unlike—I have to say—those of the Labour party.
Sir Tony Baldry (Banbury) (Con)
Does my hon. Friend agree that a fair tax system should see everyone contributing to reduce the deficit, with those with the largest earnings making the largest contribution? Am I correct that the top 1% of taxpayers actually pay nearly 30% of all income tax receipts at present?
Charlie Elphicke (Dover) (Con)
5. What estimate he has made of corporation tax receipts in each year since 2010; and if he will make a statement.
The Financial Secretary to the Treasury (Mr David Gauke)
Her Majesty’s Revenue and Customs publishes annual corporation tax statistics every August. They show that revenues from corporation tax, excluding the ring-fenced oil and gas regime, were £35 billion in 2010-11, £33 billion in 2011-12, £35 billion in 2012-13 and £36 billion in 2013-14. The Government have delivered major cuts to corporation tax, but increased growth and investment in the UK mean that revenues from the main regime were higher last year than in 2010.
Charlie Elphicke
Is my hon. Friend aware that non-oil corporation tax receipts have risen 16% over the course of this Parliament so far, compared with a rise of just 8% over the entirety of the previous 13 years? Does that not show that if you cut the rate, you up the take? [Interruption.] How will the diverted profits tax work?
Mr Speaker
Order. The question was simply too long. The hon. Gentleman should have cut it off when he was winning, instead of going on for too long, which is what he then continued to do.
Mr Gauke
It is right that we have reduced the corporation tax rate. Next year, it will give us the lowest rate in the G20. That is resulting in greater investment in the UK. It would certainly be a mistake to reverse that policy, as the Labour party intends. In terms of the diverted profits tax, I would point out that it will help to deal with aggressive tax avoidance. We will publish the draft legislation on that tomorrow, setting out the full details of how it will operate.
Mr Barry Sheerman (Huddersfield) (Lab/Co-op)
The House knows that I am an avid listener of the “Today” programme. Did the Minister hear the interview this morning, which showed how ineffective it is to have this great gap between the rich and the poor in our country? The tax system is increasing that gap, not helping it. What is he going to do about it, because it makes our economy less efficient?
Mr Gauke
As it happens, the distributional analysis shows that our policies have narrowed the gap. The point is that we have made changes to our tax system to ensure a greater contribution from the wealthiest in terms of stamp duty land tax and capital gains tax. We have reduced some of the reliefs and exemptions that meant some high earners did not pay taxes. I am afraid that the idea that a 50p rate was effective in achieving such objectives—including raising revenue—is simply wrong.
Ian Swales (Redcar) (LD)
Further to the Minister’s answer on the diverted profits tax, will he confirm whether it will cover businesses that run substantial operations in the UK, but that invoice from Ireland or Luxembourg to avoid tax?
Stephen Timms (East Ham) (Lab)
The current corporation tax rate is the lowest in the G7 and there are good reasons why that is the case. However, on small business Saturday last weekend, many of us were reminded of the heavy burden of business rates. Would it not be better, instead of reducing the corporation tax rate further, to use the same money to reduce business rates?
Mr Gauke
I remind the right hon. Gentleman, who performed the role of Financial Secretary with great distinction, that in his time in office there were no measures to reduce business rates in the way that we have done in the last two autumn statements by putting in place a cap of 2%, bringing in a rebate for retailers and extending small business rate relief. This Government have an excellent record on business rates—a message that I am sure many hon. Members heard on small business Saturday at the weekend.
Jim McGovern (Dundee West) (Lab)
6. What estimate HM Revenue and Customs has made of the amount of uncollected tax in the UK.
Sarah Champion (Rotherham) (Lab)
14. What estimate HM Revenue and Customs has made of the amount of uncollected tax in the UK.
The Financial Secretary to the Treasury (Mr David Gauke)
HMRC published its latest tax gap estimates on 16 October 2014. The tax gap in 2012-13 was estimated to be £34 billion, which was 6.8% of the total tax due.
Jim McGovern
Last week in the autumn statement, the Chancellor announced plans to address tax avoidance. If he and the Treasury are serious about that, why did they vote down an amendment that said that the quoted eurobond—I am sorry, but I cannot quite remember the words. They did not support that amendment, costing this country £500 million per year.
Mr Gauke
The reason we have not pursued that policy is that, having looked at it carefully, we do not believe that it would raise anything like the revenue that has been suggested, nor that it would do anything for the UK’s competitiveness. The Government have consistently taken action on tax avoidance, tax evasion and aggressive tax planning. I would happily list the measures, Mr Speaker, but I suspect that you would not allow me the time to do so. By 2015-16, we believe that those measures will be bringing in £7.6 billion a year.
Sarah Champion
I thank the Minister for his answers to Question 5 and to these questions. Will he explain why I am fighting against funding cuts for families in crisis in Rotherham because the council does not have enough Government funding to support them, while some big companies are getting away with not paying a penny in corporation tax?
Mr Gauke
Very difficult decisions have had to be made to deal with the deficit that we inherited. On the contribution from larger companies, as we have heard, the tax take from large companies through corporation tax has continued to rise and we have continued to take measures to deal with tax avoidance. As I have said, just last week, we announced that we would operate the diverted profits tax, the details of which will be set out tomorrow. That is an example of where the Government are taking tough, practical action to ensure that everybody pays what is required under the law.
Stephen Mosley (City of Chester) (Con)
Will my hon. Friend confirm that, as a result of the investment and effort that have been put into tackling tax avoidance and evasion since the general election, a record number of people are being prosecuted, with 2,600 people having been prosecuted in this Parliament alone?
Mr Gauke
Yes, my hon. Friend is correct—we have substantially increased the number of prosecutions in that area. The yield brought in by HMRC as a consequence of its enforcement action has also increased substantially, and in the autumn statement it was announced that that yield is anticipated to be £26 billion in 2014-15—around £9 billion more than when we came to office.
Cathy Jamieson (Kilmarnock and Loudoun) (Lab/Co-op)
The Minister has made much of what the Government are doing on tax avoidance, but will he tell the House by how much tax receipts were revised down in the autumn statement?
Mr Gauke
It is the case that tax receipts were revised down, but so was expenditure on debt interest payments. This country continues to face the major challenge of living within our means, and it is important to have a Government who stick to the long-term economic plan that delivers that.
Cathy Jamieson
The Minister gave a very partial answer because he did not mention the fact that the Institute for Fiscal Studies has said that tax receipts have been revised down by £25 billion by 2018-19. Is one key reason for that the fact that wage growth has been revised down again, and that the Government’s failure to raise living standards for working people is why they have also failed to meet their promise to balance the books by next year?
Mr Gauke
The answer to increasing wage growth is not just to observe that it would be nice if wages went up but to have no policies to do that. If we want wage growth, we need investment in the UK, which we are getting. We want more people in jobs, and a record number of people are in jobs. We want to improve our training and education system, and record numbers of people are taking up apprenticeships. We want to improve our transport infrastructure, and the Government have committed to the biggest road building programme since the 1970s. If we want wage growth, we must stick to the long-term economic plan.
Jackie Doyle-Price (Thurrock) (Con)
7. What recent estimate he has made of the level of employment.
The Chief Secretary to the Treasury (Danny Alexander)
I am pleased to tell the House that employment is at its highest-ever level in this country with 30.8 million people in work. Since the coalition came to power, employment has increased by more than 1.7 million, meaning that on average an extra person has become employed every 80 seconds since the Government were formed in 2010. Last week the Office for Budget Responsibility published its latest forecast, estimating that an extra million people will be in work by 2019.
Jackie Doyle-Price
The Government can be proud of creating on average 1,000 jobs a day. That is not just a number; it is more people with the security of a job and a regular pay packet. Will my right hon. Friend reassure my constituents in Thurrock that we will stick to the policies that are creating record numbers of people in work?
Danny Alexander
My hon. Friend is right. It is incredibly important that we create jobs in this country as that is providing opportunities and incomes for people who did not have one previously. The Government should be proud of that. Today the 2 millionth apprentice has been recruited under this Government, and the young lady, Paige McConville of Oxford, will meet the Business Secretary to highlight that achievement.
Meg Hillier (Hackney South and Shoreditch) (Lab/Co-op)
Many people in my constituency who are in work are trapped in low-paid minimum wage jobs. Often they are not able to add to the hours that they work in order to earn more, and they rely on the state for prop-ups with housing benefit and tax credits. When will the Chief Secretary to the Treasury understand the cost of living crisis in the country, and what will the Government do about it?
Danny Alexander
I recognise that some people find themselves in the situation the hon. Lady describes, and that is precisely why we need a growing economy that creates more jobs, as it does in her constituency. The economy is creating more employment opportunities and allowing people to progress in work. The most recent figures showed that people who have been in full-time work for more than a year—85% of the jobs created in the past year are full time—have seen their wages increase by 4%.
Chloe Smith (Norwich North) (Con)
The UK has seen more net employment growth in the past four years than the rest of the EU put together. Has the Chief Secretary also noted that, according to the same figures, more of our young people are in work than in Germany, Ireland and France, and the position is far better than in Greece, where only one in four young people are in work? Does that not show that we need to stay the course and help more of our young people into work?
Danny Alexander
My hon. Friend is right. It is a fact that the United Kingdom has created more jobs than all the other countries in the European Union put together. That shows the success we have had in delivering economic growth by working through the balanced careful plan that we put in place at the start of this Parliament. She could also have mentioned the fact that female employment, at 73%, is at its highest-ever level.
Geraint Davies (Swansea West) (Lab/Co-op)
A couple with two children who are both working—the woman in part-time work on £10,000 and the man on £25,000—will have lost £9,417 in withdrawn tax credits in the autumn statement. The Chief Secretary talks about putting up the threshold, but he gets much more back from the poorest. When will he pursue a progressive policy that makes work pay for the poorest?
Danny Alexander
I beg to differ with the hon. Gentleman. The policy of increasing the income tax threshold to £10,600, which was put on the table by my party the Liberal Democrats back in 2010, is putting £825 back into the pockets of 26 million working people on low and middle incomes. Improving work incentives and earnings for people in work is something he should celebrate and everyone in the House should welcome.
Guy Opperman (Hexham) (Con)
Is the Chief Secretary aware that in the north-east of England we have the fastest rate of growth in private sector businesses in the autumn quarter and the most tech start-ups outside of London? Does that not show that the long-term economic plan is beginning to work?
Danny Alexander
Actually, I was not aware of either of those facts, but they do not surprise me because of the entrepreneurial spirit and the brilliant businesses we have in the north-east of England. I believe it is the only region of this country that is a net exporter to the rest of the world. Through the measures we are putting in place, including the investment in infrastructure, we need to continue to support that part of the country.
Rushanara Ali (Bethnal Green and Bow) (Lab)
Does the Chief Secretary agree that we need to redouble our efforts to reduce the unemployment level for young people from 730,000, and that some 1 million young people are still not in training or education? Does he think that his Government could do much more to get them back to work?
Danny Alexander
I agree with the hon. Lady that we need to do more to reduce the level of unemployment among our young people, but I point out to her, and it would have been fair for her to point it out, that we have seen a very sharp fall in the level of youth unemployment and a very sharp increase in the level of employment of young people in the past 12 months. That suggests to me that the policy mix the coalition has put in place is precisely the right one to achieve those objectives.
Mr Henry Bellingham (North West Norfolk) (Con)
8. When he next plans to meet representatives of high street retailers to discuss levels of tax; and if he will make a statement.
The Chief Secretary to the Treasury (Danny Alexander)
I met small business representatives in Inverness on Saturday as part of small business Saturday. In response to concerns expressed by small businesses, the Government have taken decisive action that has reduced employment and property taxes paid by high street retailers. As of April this year, businesses can claim a deduction of up to £2,000 in their national insurance contributions, and next year 300,000 shops, pubs and cafes will receive a business rates discount of up to £1,500.
Mr Bellingham
The Minister is probably not aware—there is no reason why he should be—that I have recently been visiting shops in the high streets of both King’s Lynn and Hunstanton. Is he aware that they are delighted—absolutely thrilled—with the business rate discount that is now being raised to £1,500? Can he give me an estimate of how many shops in my constituency will benefit from that?
Danny Alexander
I was not aware of my hon. Friend’s shopping habits, but I am very glad to hear that he has been spending time with small businesses in his constituency.I can tell him that in the King’s Lynn and west Norfolk area there are 1,280 small businesses that will benefit from the £1,500 discount. That is something worth celebrating in his constituency, as it is across the country.
Ian Lucas (Wrexham) (Lab)
Does the Chief Secretary agree that a further rise in VAT would be a hammer blow to small businesses in Wrexham and across the country? Does he also know that a Labour Government have never increased VAT?
Danny Alexander
I am not sure that last fact is absolutely correct. The level of VAT we have at the moment I think is the right one for the country and I certainly would not advocate any further increases. The right measures for small businesses are the reductions in business rates that we have put in place, which I would hope the hon. Gentleman would welcome. The fundamental review of business rates that we are now undertaking is an opportunity for every Member of this House, and small business across the country, to make the argument on how they want this outdated and outmoded system to be reformed.
Stephen McPartland (Stevenage) (Con)
9. What recent steps he has taken to reduce tax avoidance.
The Financial Secretary to the Treasury (Mr David Gauke)
We set out the next set of steps in our plan to tackle tax avoidance in the autumn statement last week. We are introducing a new diverted profits tax from 1 April 2015 using a 25% rate to counter the use of aggressive tax planning techniques used by multinational enterprises to divert profits from the UK. We are also strengthening the disclosure of tax avoidance schemes—DOTAS—regime, coupled with a further suite of measures that build on the work we have already done to tackle marketed tax avoidance such as accelerated payments of disputed tax in avoidance cases.
Stephen McPartland
My constituents work hard and pay their taxes and rightly expect other people and businesses to do the same. Does the Minister agree that the autumn statement last week showed that it is Government Members who are serious about delivering fairer taxes for all?
Mr Frank Roy (Motherwell and Wishaw) (Lab)
If the Government are serious on tax avoidance, why has the much-heralded Swiss tax deal brought in only a third of the projected income?
Mr Gauke
That particular measure has not brought in as much as was forecast, but I can point to others that have brought in more than was forecast. One example is disguised remuneration, which the Office for Budget Responsibility highlighted last week and has brought in more than was anticipated. We anticipated that it would bring in £750 million a year; it will bring in more than that. By the way, that measure was opposed by the Labour party.
Mark Lazarowicz (Edinburgh North and Leith) (Lab/Co-op)
10. What recent assessment he has made of the effect of the housing market on the economy.
The Economic Secretary to the Treasury (Andrea Leadsom)
The Government are committed to making the aspiration of home ownership a reality for as many households as possible. The Government’s Help to Buy scheme and last week’s stamp duty reforms will continue to support housing market activity and new housing supply is already responding with housing starts growing by 16% in the year to 2014 in quarter three.
Mark Lazarowicz
The recent measures are no doubt welcome, but would the Minister care to confirm that annual house completions have been lower in every year under her Government than in every year of the last Labour Government?
Andrea Leadsom
The point is that we believe in the aspiration to buy your own home. We have seen house prices recover but they are still in real terms lower than they were at the peak under the last Government. This Government have delivered housing starts at their highest since 2007 and our Help to Buy scheme, which has helped 77,000 people to get on to the property ladder, is a very important measure.
David Rutley (Macclesfield) (Con)
I am pleased that the Government’s stamp duty reforms are already helping more first-time buyers in Macclesfield. What assessment has my hon. Friend made of the effect the stamp duty reform plus the Help to Buy scheme will have on helping more people to get established on the housing ladder?
Andrea Leadsom
My hon. Friend is quite right. Our stamp duty changes have meant that 98% of the people who pay stamp duty will receive a cut, which will enable more people to get on to the housing ladder. Our Help to Buy scheme will also encourage more aspirational young people to buy their first home.
Chris Ruane (Vale of Clwyd) (Lab)
11. What proportion of recipients of tax credits are in employment.
Yasmin Qureshi (Bolton South East) (Lab)
13. How many employed people are in receipt of tax credits.
The Exchequer Secretary to the Treasury (Priti Patel)
Tax credits provide financial support to low-income households. In April 2014 there were 3.3 million families in work receiving tax credits. That had fallen from 4.8 million in April 2010. In total there are 4.7 million families receiving tax credits, 71% of whom are in work.
Chris Ruane
Thousands of hard-working families in my constituency have been bit by tax credit cuts, a £300 increase in their energy bills, the bedroom tax and the increase in VAT. This Government offer tax cuts to millionaires and porridge and food banks to low-paid workers. When will the Government allow British workers to share in the wealth of this country?
Priti Patel
It is fair to say that this Government ensure that people are better off in work, in stark contrast to the failed dependency policies of the Labour party. We are the party in government that has taken action to support people on low incomes by increasing the personal allowance, taking 3.2 million people on low incomes out of tax altogether and increasing the national minimum wage. We should all remember which party was responsible for the cost of living crisis; it was Labour’s great recession. We are the Government who have frozen fuel duty and council tax and it is our policies that are now leading to growth in the economy.
Andrew Bridgen (North West Leicestershire) (Con)
The latest figures show that the number of individuals classed as being in in-work poverty has fallen by 300,000 since this Government came to office, at the same time as an extra 2 million people are in work. What Government measures does my hon. Friend think have contributed to this rise in people’s income?
Priti Patel
I thank my hon. Friend for his question. It is fair to say that this Government are not returning to the failed policies of the past as seen under the Labour party. The key measure explaining why we have had so much growth in our economy is our focus on our long-term economic plan, which is securing a better future for our economy, for the country and, of course, for hard-working taxpayers.
Yasmin Qureshi
Thank you, Mr Speaker. Will the Minister confirm that 10 million households will be affected by the two-year freeze on tax credits and benefits and that the average household will be £974 worse off? This will hit working people the most, and women in particular, so will the Government reconsider their position?
Priti Patel
I come back to my earlier point about employment increasing and more women being in work than ever before. When it comes to tax credits, universal credit will go on to replace the current complex and broken system of means-tested benefits—introduced by the Labour party, by the way—and we are the party that has supported people to get into work and reduce dependency rather than confining them to dependency and welfare.
Henry Smith (Crawley) (Con)
15. What steps he has taken to support people with savings and pensioners.
The Economic Secretary to the Treasury (Andrea Leadsom)
This Government are determined to support savers and pensioners—unlike the last Government who gave them miserly increases in state pensions. Since 2010, we have delivered the biggest-ever increase in the individual savings account allowance and for pensioners the triple lock means that they will receive about £560 more in 2015-16 than under the last Government’s policy. We have also given pensioners the freedom to choose how and when to access their own pension.
Henry Smith
My hon. Friend is right that the previous Administration caused the great recession, which has meant that savers in Crawley have suffered considerably. Last week’s autumn statement proved that this Government stand up for the aspiration of passing on savings to our children.
Andrea Leadsom
My hon. Friend is quite right. He will be as delighted as we are that we are now allowing people to pass on their unused ISAs to their spouse or civil partner free of tax, and their defined contribution pension schemes are also to be free of tax to their successors. This was a great move, allowing people to decide what they do with the money they have saved during their lifetimes.
Helen Jones (Warrington North) (Lab)
Most pensioners in my constituency do not have enough savings to put money in an ISA, but can the Minister confirm that owing to recent measures announced by the Government, those who receive the savings element of pension credit will, because of its interaction with pensions, receive only an 87p rise?
Andrea Leadsom
The hon. Lady should welcome the fact that this Government introduced the triple lock for pensioners to ensure that, instead of under the last Government when they received only the increase in average earnings, pensioners under this Government will receive an element for inflation, average earnings or 2%, whichever is the higher.
Mr David Ruffley (Bury St Edmunds) (Con)
16. What recent representations he has received on the introduction of new fiscal rules to limit government borrowing.
The Economic Secretary to the Treasury (Andrea Leadsom)
The Government will shortly publish the revised charter for budget responsibility, which will set out new fiscal rules in detail. As the Chancellor said last week, there is more to do, but our long-term economic plan is working. The deficit is forecast to fall this year, down from what the Office for Budget Responsibility described as the post-war record deficit of 10.2% of gross domestic product in 2009-10 to 5% this year—cutting it in half.
Mr Ruffley
I thank the Minister for that reply. I commend the autumn statement, in particular chart 1.9 therein, which makes it clear that any Government who wish to reduce debts as a share of GDP to under 40% in the next 20 years will not merely have to balance the budget, but to run a surplus of 1% of GDP on the budget. Does my hon. Friend agree with me that it is essential that new fiscal rules are created and voted on frequently to achieve this massively important debt reduction?
Andrea Leadsom
My hon. Friend is right. The Opposition talk about balancing the books, but in fact what they are talking about is borrowing more once their current budget is in surplus, and that is a complete fabrication, because what the Opposition need to recognise is that the only way to return this country to prosperity is not just to deal with the massive debt left by Labour but also to get our economy back into long-term growth and long-term surpluses. [Interruption.]
Mr Speaker
Order. It is very disorderly for Members to yell at the Minister from a sedentary position, and I remind you, Mr Lucas, that you have still got to complete your apprenticeship to become a statesman. I keep updating the House on progress, but there is still a little distance to travel.
Bill Esterson (Sefton Central) (Lab)
Many people in work are relying on benefits just to survive, and they are not paying tax, all of which contributes to the reason why the deficit has gone up more than the Minister, and her Government when they came in, promised. Today’s OECD report says countries that promote equality will grow and prosper. Will she accept that her Government have got it disastrously wrong for so many people and adopt the policies suggested by the OECD, including a higher rate of top tax?
Andrea Leadsom
I find it absolutely extraordinary that the hon. Gentleman can talk about the under- achievement of this Government. It is not by chance that our economy is the fastest growing in the G7; it is not by chance that there are 2 million more people in work in the private sector; and it is not by chance that there are now 2 million apprentices, as of today. It is extraordinary that the Opposition do not see that it is all about economic recovery, not interfering and borrowing more.
Mr Speaker
As usual we are pressed for time, but I cannot allow excessively long early questions and answers to deny Members who have been waiting patiently, so we will now hear, I hope, from Mr Philip Hollobone.
Mr Philip Hollobone (Kettering) (Con)
17. What the basic rate personal tax allowance was in May 2010; what that rate would have been in May 2015 if indexed to inflation; and what that rate will be in May 2015.
The Financial Secretary to the Treasury (Mr David Gauke)
The tax-free personal allowance was £6,475 in May 2010. It would have risen to just £7,485 by May 2015 through inflation, but the Government announced at autumn statement 2014 that the personal allowance would be increased to £10,600 from April 2015, and this is being legislated for in the Finance Bill 2015.
Mr Hollobone
By next May how many people does my hon. Friend estimate will have been taken out of paying income tax altogether in (a) Kettering, (b) Northamptonshire, and (c) the country as a whole?
Mr Gauke
By April this year the Government’s measures, including increases in the personal allowance for those born after 5 April 1948, are estimated to have taken about 3.4 million individuals out of the income tax system altogether. Some 248,000 of these individuals live in the east midlands region, which of course includes the constituency of Kettering in Northamptonshire.
Fiona O'Donnell (East Lothian) (Lab)
T1. If he will make a statement on his departmental responsibilities.
The Chief Secretary to the Treasury (Danny Alexander)
The core purpose of the Treasury is to ensure economic stability, promote growth and employment, reform the banking system and restore sanity to the public finances.
Fiona O'Donnell
On Wednesday I asked the Chancellor about public registers of beneficial ownership in the Crown dependencies and overseas territories. He replied that
“they are all consulting, right now, on the creation of these registries.”—[Official Report, 3 December 2014; Vol. 589, c. 328.]
The fact is that two are not consulting and the others have all finished their consultations, although none has published its submissions or its policies. Will the Chief Secretary now set the record straight?
Danny Alexander
I will set the record straight. The record shows that under the previous Labour Government the Crown dependencies and these bodies did not make any progress on registers of beneficial ownership. Progress is being substantially made now because of the lead this Government showed at the G8. By the way, these same places have also now agreed to the automatic exchange of tax information, to make sure that for the first time—this is something the Government of the hon. Lady’s party never did—we can get tax from people who are trying to hide it in these jurisdictions.
Mr Stewart Jackson (Peterborough) (Con)
T2. My constituents in Peterborough who work at Thomas Cook and many families with young children will have been delighted by the announcement on children’s air passenger duty in last week’s autumn statement. Will the Exchequer Secretary give an undertaking that she will continue to monitor the impact of air passenger duty on tourism and the family budget and not rule out further cuts in the near future?
The Exchequer Secretary to the Treasury (Priti Patel)
I thank my hon. Friend for his question. The reductions in air passenger duty announced last week are to be welcomed not just by his constituents and by Thomas Cook but by hard-working families across the country. As with all other taxes, air passenger duty will be kept under review, taking into account our commitment to creating sustainable public finances alongside helping households and, of course, the tourism industry.
Chris Leslie (Nottingham East) (Lab/Co-op)
Will the Chief Secretary confirm that table 2.3 on page 67 of the autumn statement shows that total managed expenditure will fall to 35% of GDP by 2020? According to the Office for Budget Responsibility, that is a level not seen since the late 1930s. Does he stand by the autumn statement or not?
Danny Alexander
The way in which the autumn statement is constructed is that the OBR is given an assumption about the path of the public finances over the course of the whole of the next Parliament. As I explained yesterday to readers of The Daily Telegraph—perhaps the hon. Gentleman does not count himself as one of them—a neutral assumption is built into the public finances post 2017-18 which assumes that spending will stay flat in real terms. That enables the OBR to construct its forecast. In my view, when we have finished dealing with the structural deficit post 2017-18, public expenditure will be able to grow faster than that.
Chris Leslie
It does not sound as though the right hon. Gentleman stands by the autumn statement much, Mr Speaker. On Wednesday, the chairman of the Office for Budget Responsibility wrote to the Business Secretary confirming that the autumn statement and all the policy assumptions leading to this figure of 35% were
“signed off by the ‘quad’”.
Is the Chief Secretary still a member of the “quad”, and is that actually true? Why is he now pretending to distance himself from his consistent record of Tory collaboration when he has been as thick as thieves with them in vote after vote, year after year, time and time again?
Danny Alexander
I guess it is a tough job being shadow Chief Secretary: he has to deal with the shadow Chancellor. I saw a quote from the previous Chancellor just this weekend, in Alan Cochrane’s diaries. It said, “I don’t think Miliband gets much of a look-in on the economy now. He’s a difficult man, is Balls.” I guess that is what they mean by a zero-zero economy: one Ed has zero influence; the other has zero credibility. Let me say this to the Labour party and to the Conservative party: both of them, in different ways, are advocating relentless austerity for the whole of the next Parliament, and it is only the Liberal Democrats turning around the public finances after 2017-18 who offer any hope of a change in the future.
John Glen (Salisbury) (Con)
T3. Public Health England at Porton Down in my constituency is at the centre of the global life sciences industry and works with 250 partnerships across the globe. The outline business case is currently before a number of Government Departments. Will the Minister assure me that the fullest range of options will be considered, including a proposal to set up a UK centre for a global response to infectious diseases, which I believe would reduce the call on the British taxpayer?
Danny Alexander
I can assure the hon. Gentleman that this is an important and, I understand, sensitive decision, which Public Health England is considering in all its aspects. The outline business case is currently with Treasury officials for scrutiny. I know that this work is incredibly important, not least given the recent Ebola outbreak in west Africa, but it would be inappropriate for me to give any further details on the business case until the review has been completed.
Jim McGovern (Dundee West) (Lab)
T4. I am sure that those on the Government Front Bench will be aware of just how important the video games industry is to Dundee and to my constituency. The Chancellor said last week that he would support exports. Businesses in the video games industry are often started by university graduates with little or no financial support, yet they end up employing people. What will the autumn statement mean for the video games businesses in Dundee?
Danny Alexander
I absolutely recognise the importance of the video games industry to Dundee and other parts of the country, and indeed to many hon. Members. I do not know whether Candy Crush was developed in the hon. Gentleman’s constituency, but it is clearly very popular in the House. The package of measures in the autumn statement to support exporters will benefit the video games industry, as will the improvements to tax relief for research and development, which will particularly benefit small and medium-sized enterprises. If he has further ideas for measures that might benefit that industry in his area, I would be glad to hear them.
Mr Speaker
I know that the Chief Secretary to the Treasury will not want to talk out opportunities for his own hon. and right hon. Friends. I call Mr Roger Williams.
Roger Williams (Brecon and Radnorshire) (LD)
T6. On small business Saturday I visited retail businesses in Brecon, Llanwrtydwells and Talgarth. They told me how pleased they were with the employment allowance, which gave them a reduction of up to £2,000 in their employer national insurance contributions. More than 1,000 businesses benefit from that in my constituency, but up to 500 that are eligible have not applied. What can we do to encourage them to take up this important measure?
Danny Alexander
I am grateful to my hon. Friend for giving me the opportunity to highlight the importance of these changes. As a local Member of Parliament, he has a particularly important role to play in promoting them, as he has done for the businesses already taking them up. I encourage him to continue to do that and to talk to the Department for Business, Innovation and Skills about whether there is more we can do to get that message across.
Chi Onwurah (Newcastle upon Tyne Central) (Lab)
T5. Last week, the Chancellor said: “What I reject is the totally hyperbolic BBC coverage on spending cuts. I had all that…four years ago and has the world fallen in? No”.At my surgeries, I meet mothers dependent on food banks to feed their families, fathers desperate at lost Sure Start services, and disabled pensioners choosing between heating and eating. They tell me that their world has fallen in. Does the Chief Secretary agree with the Chancellor that they are being “hyperbolic”?
Danny Alexander
I am sure the hon. Lady explained to those constituents that the severe economic problems this country is experiencing and recovering from were caused on her party’s watch when it was in office. Although I share the view that these are difficult issues, I hope she would also highlight the fact that her constituency has seen 5,200 jobs created in the past 12 months.
Maria Miller (Basingstoke) (Con)
The confidence to create a new business is a true barometer of the progress this Government are making on the long-term economic plan. Will the Chief Secretary join me in welcoming the 1,000 new businesses that have been created in my constituency in the past 12 months? What is he doing to encourage more people to find their entrepreneurial spirit?
Danny Alexander
The right hon. Lady is right about that, and I join her in congratulating all 1,000 of those businesses in her constituency and millions more nationwide. We are talking about people who have set up their own businesses and are working hard to create wealth, jobs and growth for this country. That is why a range of the tax and regulatory changes we have put in place have been designed precisely to make the UK the best place in the world to start and grow a business.
Mr Jim Cunningham (Coventry South) (Lab)
T7. A few weeks ago, the Chancellor rushed off to Europe to try to get the cap on bankers’ pay lifted. Will he do the same for public sector workers, and, in particular, nurses?
Danny Alexander
I am not sure that that is a matter for discussion at a European Union level.
Gordon Birtwistle (Burnley) (LD)
Rebalancing the economy has been crucial in delivering the coalition Government’s economic plan. Delivering skills for the future is vital. Does my right hon. Friend agree that the funding of professional careers advice must be part of the plan, to ensure that the growth in manufacturing is secured for the future?
Danny Alexander
I wholeheartedly agree with my hon. Friend on that. He has done more than most Members of this House to promote apprenticeships, the creation of skills and the manufacturing industry, and I pay tribute to him for his work. I ask him to look at what we have said about this in the autumn statement, which contains particular measures to promote the provision of better careers advice in schools.
Kelvin Hopkins (Luton North) (Lab)
T8. This week, growth forecasts for the eurozone economies have again been downgraded, but the European Central Bank is refusing to adopt counteracting measures of quantitative easing. What plans do the Government have for protecting Britain’s economy in the event of a full-blown euro crisis?
Danny Alexander
The best protection for the UK is to stick to the economic plan that is creating jobs and growth up and down this country. That is what the coalition has done and will continue to do. The OBR’s forecast, published last week, showed that it expects the UK, despite the difficulties to which the hon. Gentleman refers, to continue to have economic momentum over the next few years.
Miss Anne McIntosh (Thirsk and Malton) (Con)
Rural communities are clearly not part of the city regions and possibly will not form part of the northern powerhouse. What assurances can the Chief Secretary give us that rural communities will benefit from the increased prosperity from the long-term economic plan?
Danny Alexander
My hon. Friend makes an important point, although I would say to her that rural communities are part of local enterprise partnership areas that benefit from the growth deals announced last year. The city deals and the devolution process we are engaged in benefit all parts of the UK. I highlight to her the investment this Government are making in transport and in broadband as particularly important in driving growth in rural communities.
Yvonne Fovargue (Makerfield) (Lab)
T9. The Office for Budget Responsibility has forecast that individual unsecured debt will rise over the next five years by a staggering £360 billion, which is a record 55% of total household income. More people will be thrust into poverty and forced to go to food banks, and that will not be because more of them know about them or that poor people cannot cook. Does the Chief Secretary agree with the Chancellor that the best way to reduce his borrowing is to increase everyone else’s debts?
Danny Alexander
That same economic forecast suggests that an extra 1 million people will be in work from the record levels that we have at the moment; that there will be a consistent rise in real incomes over the next five years; and that the United Kingdom has the strongest economic growth of any developed country in the world and the strongest job creation. Those are the facts about the United Kingdom and the hon. Lady should welcome them.
Mark Menzies (Fylde) (Con)
May I put it on the record that I support the Government’s drive to create a northern powerhouse? What assurances can the Chief Secretary give me that constituencies such as my own in Fylde will benefit from such a move?
Danny Alexander
I can honestly say to my hon. Friend that his constituency will benefit. It has already benefited from the growth deals, and it is benefiting from investment in energy infrastructure, which is a particular interest there. It is also benefiting from the transport investment, and as we take forward this agenda to improve the economy in the north of England, we will ensure that every part of the north of England, including his constituency, benefits from that process.
Ian Paisley (North Antrim) (DUP)
Was the Chief Secretary as alarmed as I was by this morning’s comments by the Northern Ireland Attorney-General that the Royal Bank of Scotland has been involved in “criminal fraud” with regard to its banking treatment of those who fell behind in their mortgages? If that is the case, will he make a statement to the House, telling us how he intends to deal with the matter so that we can bring back certainty to customers?
The Economic Secretary to the Treasury (Andrea Leadsom)
This Government take very seriously any accusations of wrongdoing by the banks. We will be looking at this case. As the hon. Gentleman knows, those comments have been strongly denied by RBS, and we will certainly be taking advice on the matter and looking into it carefully and taking appropriate action.
Jenny Willott (Cardiff Central) (LD)
Thank you, Mr Speaker, and my apologies. I wanted to ask about tax avoidance. At a time of falling incomes when many people are finding it difficult to make ends meet, does the Minister agree that those on high incomes should avoid using expensive lawyers—if they can afford to use them—to assist with tax avoidance? Does he share my hope that tax avoidance, like drink-driving, will become a moral taboo?
Danny Alexander
I agree with my hon. Friend. This Government have taken consistent action to tackle tax avoidance and to reduce tax evasion, raising billions of pounds to help avoid some of the pressures to which she refers. Dodging taxes is as morally reprehensible as claiming the wrong benefits or doing what she described. Those are all things that we, as a society, want to see stopped, and the Government are taking action to see that they are.
Huw Irranca-Davies (Ogmore) (Lab)
On infrastructure spending, the Government’s claims earlier this year that flood defence spending had increased were rubbished not by insignificant people but by Sir Andrew Dilnot, chair of the UK Statistics Authority, the Channel 4 “FactCheck” programme and many others. On that basis, what confidence can we have that spending on flood defence will increase, when it went down £200 million in the first four years of this Government?
Danny Alexander
This Government’s investment in flood-risk management has increased in real terms by 5% compared with spending in the previous five years. We will be spending more than £5.2 billion over the course of this Parliament on flood and erosion risk management compared with £2.7 billion in the previous five years. That is a record of which I am proud.
Stuart Andrew (Pudsey) (Con)
As my right hon. Friend heard earlier, there is currently a connectivity study on Leeds Bradford International airport. As someone who has been campaigning for that rail link, because the road network is always so congested, may I urge him to look at that study in great detail, as it will help us to contribute to that great economic powerhouse in the north?
Danny Alexander
The hon. Gentleman is right to highlight the importance of the study. We noted it in the national infrastructure plan as something that has produced some new arguments about that link. Clearly, the case must be developed locally, given the more devolved framework in which we are now operating. If he wants to join my hon. Friend the Member for Leeds North West (Greg Mulholland) in the meeting that my hon. Friend suggested, I would be delighted to talk to him about how we can take this important project forward.