Commercial Financial Dispute Resolution Platform

Anna Turley Excerpts

Thursday 15th December 2016 Commons Chamber

[Anna Turley (Redcar) (Lab/Co-op)]

It is a pleasure to follow the hon. Member for Ceredigion (Mr Williams), who not only made a very articulate case on behalf of his constituents, but exposed the vacuum at the heart of the regulatory framework to support small businesses. I appreciated everything he had to say. I also congratulate all hon. Members who secured this important and timely debate, which, as we have heard, has real resonance in the life experiences of our constituents. That is why I am very happy to support the motion, and I wish to say something on behalf of one of my constituents who has been affected by this. I also give credit to the work that the Treasury Committee and the all-party group on fair business banking have done to give this issue the prominence it deserves.

I do not rise to speak on the minutiae of financial regulation, as I am sure you will be delighted to hear, Madam Deputy Speaker. Instead, I ask the House to consider the human stories of those denied fair outcomes in their financial disputes and those who have had to accept the current lacklustre compensatory measures. This debate is about the consumer and the customer and their right to meaningful redress when things go wrong. It is right that this House takes an interest in these matters, just as it is right that the FCA was established by an Act of Parliament. This House has an obligation to monitor the regulatory environment to ensure that our constituents are adequately protected when they bank, save, borrow and spend.

My constituent, Stephen Lilley, who runs his own business knows the devastating personal and economic effect that bad financial regulation can have. He was mis-sold an interest rate hedging product, which has left his business in considerable financial difficulty. The product was sold to him deceptively by HSBC, and included a base rate swap that was put in place to protect his business from rising interest rates, but without any explanation that should rates fall—and they certainly did—his business would not benefit. The result has left his business in a perilous state. He was let down by HSBC, which mis-sold him the product. He was initially let down by the Financial Ombudsman Service, which rejected his complaint twice until it decided that the swap product had indeed been mis-sold. He was also let down by the FCA and the flawed redress scheme for mis-sold IRHPs, which did not deliver the sort of financial compensation that would get his business back on track.

Mr Lilley and his family have endured sleepless nights and stress. Both he and his wife have had heart attacks in recent years, and have been wracked with worry over the future of their business. They feel powerless and that the bank has a hold over their lives. When HSBC admitted that it had mis-sold a product to Mr Lilley, it said that it had made a mistake in the length of the interest rate cap it had in place. It should have been five years, but instead it was 10. The bank said that Mr Lilley could have the difference returned to him if he accepted a cap at five years. It is very difficult for me to see how that can be right. How is it that, after clear negligence, the bank can continue to hold all the cards, and the customer none? Mr Lilley put it in stronger words to me: he said that the proposal amounted to theft.

This story is repeated all over the country, and we have heard some examples in the debate. Everyone in this House today will have constituents who have suffered similar circumstances—people who want to do the right thing, who have poured every spare penny they have into their businesses, and who have looked to their bank to secure a financial plan for that business. When things went wrong, the bank, the regulator and the ombudsman let them down. The best way that we can serve our constituents and ensure that cases such as Mr Lilley’s do not happen again is to support the motion, which I welcome.

The people who need a proper platform for the resolution of disputes of this nature are ordinary individuals and small and medium-sized businesses—exactly those whom the Government say they are determined to support. This House also has a proud history of acting to protect the wellbeing of citizens of this country, of which the Health and Safety at Work etc. Act 1974 is a case in point. That Act outlines the duties of employers to take measures, where reasonable, to ensure that persons not in their employment who may be affected by their activities are not exposed to risks to their health and safety.

I do not need to outline the devastating physical and mental health effects that are brought about by chronic worry and anxiety about a business that someone has spent their life building up. The impact on the health and wellbeing of my constituent and his family are clear. Our financial regulatory system has a moral duty to regulate as much as an economic one, and it is the lives of our constituents, and the worry that they bear, which is the test against which it should be measured. That is why I am proud today to support the creation of a proper authority to solve these disputes and why I am happy to support this motion.

Small Charitable Donations and Childcare Payments Bill

Anna Turley Excerpts

Committee Debate: House of Commons
Tuesday 18th October 2016 Public Bill Committees

[Jane Ellison]

I thank colleagues for that debate; some points were made by veterans of the previous Bill Committee and I will try to respond to them.

Clause 2 is about amending the meaning of “small charitable donation”. Amendment 1 would extend the gift aid small donations scheme to include donations made by cheque, online or by SMS. Amendments 2 and 3 would extend the scheme to include SMS donations.

The scheme was introduced to address a specific problem. That is at the heart of the debate. It is intended to allow charities and community amateur sports clubs to claim a gift aid-style top-up payment when it is not practical or feasible to collect a gift aid declaration, such as with street collections. It is not simply a lighter-touch alternative to gift aid. I think this is probably at the heart of our debate. The scheme exists to provide a similar outcome in situations where charities cannot realistically obtain a gift aid declaration, but the Government are clear that, if a charity can get a gift aid declaration and claim gift aid, it should do so. There are obvious reasons for that, as colleagues will appreciate. For example, there is no cap on gift aid, whereas there is on this scheme. For that reason, the Small Charitable Donations Act 2012 restricted the scope of the gift aid small donations scheme to small donations in cash—coins and notes. Although I understand entirely the motivation behind the amendments, they are actually contrary to the stated policy intention of the scheme.

[Anna Turley (Redcar) (Lab/Co-op)]

I am struggling to understand why the way in which money is donated matters, given that there is a cap on the amount that can be donated anyway. I do not understand why whether a donation is made in cash or by contactless affects the integrity of the purpose of what we are trying to do.

[Jane Ellison]

We are keen to extend the scheme to cover contactless as well as cash payments, but as those who were here in 2012 will know, the scheme augments what we expect charities to raise through gift aid donations and covers means such as bucket collections that it is just not feasible to do gift aid on. The scheme is capped. We actually want charities to claim as much as possible under gift aid, which is not capped and allows them to form a long-term relationship with donors, as many of us probably know from charities that we give to. From the simple point of view of a charity, a wholesale switch to claiming through this scheme rather than gift aid would move it away from such long-term relationships and limit what it could claim. The scheme is meant to be a complement to gift aid, not an alternative or a lighter-touch version of it, and it would be to many charities’ disbenefit if that were the case.

As I explained on Second Reading, the small donations scheme was never intended to cover methods of donations for which well-established and well-used processes for claiming gift aid already exist, such as donations made by SMS or online. It may help if I explain in a bit more detail the processes for claiming gift aid on electronic donations. As the Minister for Civil Society, the Under-Secretary of State for Culture, Media and Sport, my hon. Friend the Member for Reading East (Mr Wilson), outlined on Second Reading, there is a simple and well-established process that allows charities to solicit gift aid declarations from donors who make SMS donations. I take the point that the hon. Member for Aberdeen North made about the way people respond to that, but it is a pretty straightforward and well-established process none the less. The donor sends a short code word to a six-digit number—for example, “Dog” to 606060—to donate a set amount through their phone bill. A reply is then sent to the donor thanking them for their donation and asking them for their name, house number and postcode and confirmation that they are a UK taxpayer. Once the donor provides that information, the charity can claim gift aid.

I think that is a straightforward process, and I hope that hon. Members would agree that, in circumstances such as that, where a donor provides a charity with a ready means of making direct contact—their mobile phone number—it is feasible for the charity to solicit a gift aid declaration, and indeed many charities regularly do so.

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[Jane Ellison]

I understand the point, but I am not entirely clear how adding cheques to the scheme would help. I want to stress that, if we make changes that encourage charities to switch to claiming under this scheme, essentially moving away from trying to claim under gift aid, that will severely limit—cap—the amount they can claim and it will also prevent them from forging a relationship with the donor. I accept that there might be circumstances, like that one, in which claiming under gift aid might be more difficult, but the answer is not to include cheques in the scheme. The scheme has always been about trying to replicate the instantaneous cash-collection type of situation.

[Anna Turley]

I am still a bit confused. I appreciate the point about trying to keep people focused on gift aid as the preferred means of donation, but the whole purpose of the Bill—its raison d’être—is to ensure that the scheme

“operates effectively and flexibly for the greatest number of charities and Community Amateur Sports Clubs”,

and we have heard that only a quarter of the charities that could use the scheme are doing so at the moment. Surely, therefore, we should be encouraging more charities to use it, rather than pushing them towards gift aid only. This scheme is much more accessible and more suited to small and locally based charities.

[Jane Ellison]

We want the charities to use both methods, and there is evidence that many do. The scheme was always envisaged as a complement to gift aid, so it is not an either/or.

I totally accept that there is always more to be done in getting charities to claim gift aid. In the Second Reading debate, the Minister for Civil Society talked about the charities day that is coming up and I mentioned that HMRC has an outreach team, which has already delivered more than 600 sessions with charities, talking about how they can make the most of what is on offer. Of course we want to see donations maximised. It is true, as my hon. Friend the Member for Amber Valley said, that we have not yet reached the point we wanted to, but the Bill takes us a good way in the right direction.

We do not want to incentivise a switch to this scheme from gift aid. In any case, there is a matching requirement, so any charity would have to do gift aid to access this scheme. We will perhaps debate that matching requirement later. It is important. We mentioned it briefly in terms of the assurance process.

The Government’s position has always been clear. The scheme was introduced to provide a payment similar to gift aid when charities cannot obtain a gift aid declaration. If a charity can claim gift aid, it should do so, because that is more beneficial to them in the long term, for the reasons I have touched on. Robust processes exist to allow charities to claim gift aid on electronic donations and the Government will shortly introduce legislation to make doing that even easier. I hope, therefore, that Members will not press their amendments to a vote.

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[Jane Ellison]

As the hon. Member for Aberdeen North said, new clause 1 would require the Chancellor to lay before the House an assessment of the impact of removing the gift aid matching requirement within six months of the passing of this Act. New clause 2 would require the Chancellor to publish an assessment of the efficacy of the scheme’s anti-fraud provisions in the same period.

I should start by saying that I welcome the cross-party consensus on the importance of protecting the gift aid small donations scheme, and charitable tax reliefs more generally, from abuse. Indeed, I completely agree with the shadow Minister, the hon. Member for Salford and Eccles, who said on Second Reading:

“We must make sure that any loosening of the rules for access to Government grants or tax reliefs does not provide a further incentive for tax avoiders, albeit a small minority, to set up a charity.”—[Official Report, 11 October 2016; Vol. 615, c. 220.]

She was exactly right to draw our attention to that. The Government also agree with the hon. Member for Bootle (Peter Dowd), who said during his closing remarks on Second Reading that

“it is vital that sufficient safeguards are in place to prevent fraud when Government funding or tax breaks are provided, as in this case, to the charity sector. I think that sentiment would get cross-party support.”––[Official Report, 11 October 2016; Vol. 615, c. 247.]

Indeed, I think that sentiment does have cross-party support.

Let me say a little about fraud in the charity sector, which is relevant to the new clause. None of us likes to contemplate it or talk about it, but sadly it exists. As the Under-Secretary of State for Culture, Media and Sport, my hon. Friend the Member for Reading East (Mr Wilson), said on Second Reading,

“it is an unfortunate fact that unscrupulous individuals seek to exploit charitable status for criminal purposes.”––[Official Report, 11 October 2016; Vol. 615, c. 250.]

It might shock colleagues to hear that the “Annual Fraud Indictor 2016” document produced by Experian, PKF Littlejohn and the University of Portsmouth’s Centre for Counter Fraud Studies estimates that fraud costs the charity sector about £1.9 billion each year. The report also states:

“Fraudsters are fast, inventive, adaptable and willing to quickly exploit new opportunities.”

I am sure hon. Members will therefore agree that it is vital the Government make sure that any initiatives, no matter how well intentioned, have suitable safeguards in place to limit opportunities for abuse, particularly when those initiatives involve spending public money. Indeed, both the hon. Member for Salford and Eccles and the hon. Member for Bootle made exactly that point on Second Reading.

The gift aid matching requirement provides a deterrent for those who would seek to exploit the small donations scheme. A number of hon. Members have raised concerns about the matching requirement; we have heard them again today. A few hon. Members, including the shadow Minister and the hon. Member for Clwyd South, cited a survey by the National Council for Voluntary Organisations and others that suggested that the matching rule acts as a barrier to claiming from the gift aid small donations scheme, with 50% of respondents with an income under £10,000 wanting the matching rule to be removed or reduced. However, it is worth drawing the Committee’s attention to the fact that the same survey also found that only 5% of respondents claimed no gift aid at all, and just 10% felt that they did not claim enough gift aid to make claiming top-up payments worthwhile. Similarly, the Government’s own assessment found that 92% of charities claiming gift aid for the tax year 2014-15 claimed on donations of £500 or more, entitling them to the maximum small donations allowance, which at that time was £5,000. That is interesting evidence that for the vast bulk of charities, the matching rule is not a barrier.

[Anna Turley]

I would put the burden of evidence and proof back on the Minister. This provision has existed for three years now. Does she have any evidence of its benefit or usefulness, either in promoting the use of gift aid or in reducing fraud? If there is none, then given the clear objection from the sector, I really do not see any benefit to it whatever.

[Jane Ellison]

First, I would argue that the matching rule has become more relevant because of the provisions in the Bill to simplify the scheme, for example the end of the two-in-four rule. Secondly, I have been sat here musing as I have listened to Members making their points about the need for me to prove that the rules are necessary. I cannot see how that can be done without first relaxing them and then having to report to the House that there had been large amounts of fraud, public money had been wasted and so on. In other words, the only way to prove it is to prove a negative.

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“among the many small, local civil society groups, the scouts and guides, the air and sea cadets and other local uniformed groups, in particular, will benefit significantly from this change and will be able to receive the support they deserve for the vital work they carry out in our communities”.—[Official Report, Small Charitable Donations and Childcare Payments Bill Committee, 11 October 2016; c. 217.]

[Anna Turley]

I think this is a really important provision that deserves greater explanation from the Government. It goes much more widely, as my hon. Friend the Member for Salford and Eccles said. It should seek to include organisations, such as Age UK or Mind, which have much more devolved operational structures. For example, on the back of the loss of the steelworks in Redcar and Cleveland, the number of referrals to Redcar and Cleveland Mind went up by 93%. That charity relies almost entirely on its own local fundraising. That is an exact example of where the charity ought to be able to have a lot more freedom to raise money and keep its gift aid donations locally, rather than having to be part of a national structure. I implore the Minister to take this away and explore it much more widely.

Budget Resolutions and Economic Situation

Anna Turley Excerpts

Tuesday 22nd March 2016 Commons Chamber

[John McDonnell]

The role of the Opposition is to hold the Government to account. We are holding this Chancellor to account for a potential attack on disabled people that I believe would have devastated their lives.

What I find most disgraceful through all of this is that there has been no word of apology from the Chancellor or any Conservative Member. Apologise, I say. I say apologise for the pain and anguish he has caused disabled people and their families in the past two weeks. We all make mistakes. I understand that. But when you make a mistake and correct it, you should at least apologise.

[Anna Turley (Redcar) (Lab/Co-op)]

Does my hon. Friend share my view that the most distressing thing the former Secretary of State said this weekend was the point he made about

“it doesn’t matter because they don’t vote for us”?

Is there not a constant thread running through everything—from the bedroom tax to local government cuts to this Budget—that this is a deeply political Government who do not care unless people vote Tory?

[John McDonnell]

I find a form of electoral politics, where you target a vulnerable group in society just because they do not vote for you, unacceptable. Not a word of apology! One nation Conservativism? It is a contradiction in terms.

Tax Avoidance and Multinational Companies

Anna Turley Excerpts

Wednesday 3rd February 2016 Commons Chamber

[Mike Kane (Wythenshawe and Sale East) (Lab)]

The Google tax debacle demonstrates that attempts to patch up the current international tax system are woefully inadequate. Despite the efforts of the OECD and its base erosion and profit shifting overhaul, it appears highly likely that corporate tax will continue to be an optional extra for most multinational companies.

The UK’s tax treaties—this is to do with Ireland as well in terms of Google—with developing countries allow UK firms to limit their tax payments, often in countries where the money is most needed to fund hard-pressed public services. The hon. Member for Kirkcaldy and Cowdenbeath (Roger Mullin) rightly mentioned Malawi earlier and I praise him for that.

According to the IMF, recent calculations have shown that developing countries are losing around $200 billion a year through tax avoidance by companies. The OECD has estimated that tax havens could be costing those developing countries three times the current global aid budget.

The value flowing out of countries from companies not paying their tax is huge: an estimated $l trillion a year. To put that into context, Africa is now a net creditor to the world in terms of the tax it loses from multinational companies operating in African countries’ jurisdictions. According to Oxfam, corporate tax avoidance in the form of trade mispricing by G7-based companies and investors cost Africa $6 billion in 2010—more than enough to improve the healthcare systems of the Ebola-affected countries of Sierra Leone, Liberia and Guinea.

Then there are the sins of omission. Anonymous shell companies in the British Virgin Islands were used to acquire mining concessions in the Democratic Republic of Congo for $275 million. They were then sold for $1.63 billion, costing the state $1.36 billion, or twice the combined health and education budget.

What is to be done? The Prime Minister is hosting an anti-corruption summit in May, and is inviting Heads of State from all over the world to London, but how can the UK lecture other countries on what they should be doing to tackle tax avoidance and tax corruption when the Crown dependencies and overseas territories in our own constitutional backyard are such notorious purveyors of secrecy? I put that case to the Minister on BBC Radio 5 Live just before the election.

We need to insist that multinationals publish their basic accounts in every country. We need to insist that they clean up their backyards, and ensure that British-linked tax havens—the Crown protectorates—cannot continue to act as conduits for tax dodging. We need to stop applying sticking plasters to broken OECD tax rules, and mandate the UN to develop a set of rules that ensure that big businesses pay their fair share of tax in every country in which they do business.

[Anna Turley (Redcar) (Lab/Co-op)]

Will my hon. Friend give way?

[Mike Kane]

I will.

[Anna Turley]

I appreciate—

[Mr Deputy Speaker (Mr Lindsay Hoyle)]

Order. The clock is on zero. I think it would be unfair to allow the hon. Gentleman to give way.

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[Caroline Flint (Don Valley) (Lab)]

The hon. Member for Spelthorne (Kwasi Kwarteng) might have commanded a little more respect if he had listened with respect to the views of my right hon. Friend the Member for Barking (Dame Margaret Hodge). This debate is about Google, but it is also about so much more. We know that Google is currently valued at $524 billion, and that its profits in 2015 alone were £11 billion, an increase of £1 billion in a year, based on revenues of more than £52 billion. The Daily Mail has reported that Google has more than 5,000 UK-based employees, which is about a 10th of its total worldwide workforce. That figure includes 279 of its European, middle eastern and African directors, compared with Dublin, where it has 79 such directors. As colleagues have said, Google is constructing a new headquarters worth £1 billion near King’s Cross, in addition to its five other offices in the UK.

I do not want to get into a blame game. I want us to get the way we recover tax in this country right, but I believe that certain factors did not help to ensure focus on this growing problem. The public finances were healthy up to 2008. In the year before the crash, the Treasury netted nearly 30% of its corporate tax receipts just from financial services. That figure had fallen to about 17% by 2009. Also, at that time, the online giants of today were largely below the radar. Many floated before they had made a penny profit. Let us look at the corporate giants of today. Twitter, which floated in 2013, was valued at $18 billion on the day of its flotation yet it had never made a profit up to that point and did not do so for another year or more. Likewise, when Google first floated in 2004, its valuation was $23 billion but it was not turning the kind of profits that we are talking about today. Google’s circumstances are somewhat different today, yet after six years and with all the benefits of hindsight, this Government have achieved a payment of only £130 million, and we do not know how much of that is interest or penalties. We have to do more on this.

We can add other household names to the list of companies that paid no corporation tax in 2014: Shell, Lloyds Banking Group, AstraZeneca, SAB Miller, Vodafone and British American Tobacco. Those six companies made a combined profit of £30 billion in 2014, yet they are notionally making no money in the UK.

[Anna Turley]

Does my right hon. Friend agree that initiatives such as the Fair Tax Mark, which is a bit like the fair trade stamp, should encourage more companies to demonstrate publicly their tax liabilities and responsibilities, and that they should consider it a badge of pride that they are paying their full tax?

[Caroline Flint]

Absolutely. I think that there is cross-party support for more transparency.

Given that Google, HMRC and the Chancellor were quick to publicise the outcome of their negotiations, surely they should be open about how they arrived at the figure of £130 million. We need to know what sort of benchmark this is setting not only for Google but for other companies as well. The Government make the rules and HMRC enforces them, and it is about time that we had more openness. To be honest, if I worked for Google and I were advising it, I would say, “Volunteer to give the information, because this situation is not doing your company any good whatsoever.” This is important not only to reassure public opinion but to restore the confidence of those UK-based businesses that have much lower revenues than these giant corporations yet pay considerably more tax, including 20% corporation tax.

We cannot content ourselves with companies appearing to decide whether or not to pay any tax, as though it were discretionary or some kind of charitable payment to the UK. If the broadest shoulders are to bear their share of the burden for funding public services and our pension system, I am afraid that the Government will have to raise their game. We will support the Government on that. Our Labour motion might not receive a majority in the vote today, but this problem will not go away. I, for one, am looking forward to next week when, as a member of the Public Accounts Committee, I shall hear directly from Google and HMRC about what they have to say.

Financial Conduct Authority

Anna Turley Excerpts

Monday 1st February 2016 Commons Chamber

[Mark Garnier (Wyre Forest) (Con)]

It is always a great pleasure to follow the hon. Member for Bassetlaw (John Mann). Some of my most entertaining afternoons on the Treasury Committee have been following him when he has been quizzing the Chancellor. Who can possibly forget that wonderful moment when he asked the Chancellor whether he had ever visited a Greggs bakery, starting off what then became known as the “omnishambles Budget”? He works very hard.

It is a great pleasure to speak in yet another debate secured by my hon. Friend the Member for Aberconwy (Guto Bebb). He has been a truly extraordinary campaigner in this particular area. Without a shadow of a doubt, he certainly deserved the honour he received in Wales for being the Welsh MP of the year in 2013. He has devoted a huge amount of forensic energy to looking into this subject. I have certainly enjoyed very much the privilege of working with him on the huge area of interest rate hedging products and Connaught, and trying to hold the regulator to account. Without his forensic help, we would have had very dull Treasury Committee meetings. It was he who managed to get hold of the smoking gun about how the regulator has turned its focus possibly to being more supportive of banks than the consumer.

When we consider the content of the speeches in this debate, it is fair to say that the evidence presented to us illustrates that the regulator is not necessarily always entirely fair to the consumer. The evidence supports the perception that the regulator has a pro-bank stance. We heard about the GRG report. If one wants to know what a long-delayed report looks like, look at the HBOS report. We see the guillotine of the PPI claims coming through in the not-too-distant future. We have seen the reverse of the reverse burden of proof for senior managers—we spent a lot of time debating that in the previous debate—and we have seen a change in the terms of the thematic review. I argued that this was a wasted opportunity to change the banking culture.

I completely agree that this is all good evidence for how the regulator is not necessarily standing up for the consumer, but when we look at the motion of no confidence in the regulator, it is fair that we need to take a slightly more rounded view. Have we perhaps, on occasion, been guilty of what sports commentators do when a poor goalkeeper successfully saves many, many shots, but, when he lets through one crucial goal, is criticised by everybody for not being up to the job?

[Anna Turley (Redcar) (Lab/Co-op)]

I share the hon. Gentleman’s concern about honing in only on the bad news, but that is cold comfort to the many constituents of ours facing these difficult problems. My constituent Mr Lilley and his family own a small glass and DIY business in the village Marske. They were mis-sold an interest rate hedging product by HSBC and are still owed thousands of pounds because of the difference in the premium. Is that not a perfect example of how the FCA is failing to investigate? This issue is of huge personal significance to our constituents—

[Mr Deputy Speaker (Mr Lindsay Hoyle)]

Order.

Oral Answers to Questions

Anna Turley Excerpts

Wednesday 9th December 2015 Commons Chamber

[Mr Letwin]

I very much agree with my hon. Friend, who has been a passionate advocate, as I and others have been, of social impact bonds. This is a huge change in the way our country is organised. We can get to the point where we are actually paying for outcomes, not inputs. We lever up the amount the Government put in on behalf of the taxpayer, with huge contributions from the private sector and from those double bottom line investors. We can see a huge transformation in public services.

[Anna Turley (Redcar) (Lab/Co-op)]

Last week, the Minister said that the Government were committed to a flourishing civil society, but in the recent spending review it was exposed that the Office for Civil Society is to be hollowed out to just a handful of civil servants, and is now described by the sector as just a “name on a door.” Does the Minister agree that this is a clear admission that the big society agenda is now dead, was never anything but a cover for cuts to public services, has served its purpose, and is now to be wound down?

[Mr Letwin]

I am sorry that the hon. Lady did not take in what I said in my earlier answer. The funding for the voluntary and community sector increased significantly in the autumn statement. I pay tribute to officials in the Office for Civil Society, which answers to my hon. Friend the Minister for Civil Society. In my experience, those officials are among the finest in Whitehall. They will continue their work, and with that increased budget, they will be able to do more, not less.

Tax Credits (Working Families)

Anna Turley Excerpts

Tuesday 7th July 2015 Commons Chamber

[Chris Philp (Croydon South) (Con)]

I warmly congratulate the hon. Member for Blackburn (Kate Hollern) on an excellent maiden speech. It is clear that she is deeply rooted in her community, and I have no doubt whatsoever that, when people talk about Members of Parliament for Blackburn, her name will trip off the tongue very naturally behind those of Barbara Castle and Jack Straw, and that she will be a distinguished successor to them.

This debate has been based on a great deal on speculation about what may be in tomorrow’s Budget. Before turning to the specific topic of tax credits, perhaps I should focus briefly on some facts. I am talking about the performance of the coalition Government over the past five years. If we examine the facts, rather than the speculation, we will see very clearly that the Conservatives in the coalition Government did a good job in standing up for working people and ensuring that work paid.

Let us spend a moment rehearsing those facts. During the previous Parliament, 2 million more jobs were created, of which 75% were full time. More jobs were created in this country than in all of the countries in the European Union put together. Indeed, more jobs were created in the county of Yorkshire, in which the constituency of my hon. Friend the Member for Thirsk and Malton (Kevin Hollinrake) is located, than in all of France put together. That is a record of which to be proud.

In my own constituency, in the borough of Croydon, the number of jobseeker’s allowance claimants halved over the previous Parliament.

[Anna Turley (Redcar) (Lab/Co-op)]

Can the hon. Gentleman tell me the number of food banks in Yorkshire that have emerged over the past five years? Perhaps that would also give us a helpful factual correction.

[Chris Philp]

Unfortunately, I do not have that figure at my fingertips. What I do know is that, thanks to the tax cut for people on low incomes, £800 a year was put directly into their pockets. One Opposition Member made the point that many people on tax credits do not pay income tax. Well, that is precisely because the coalition Government raised the income tax threshold so high.

We have also heard a great deal about the cost of living, to which the hon. Member for Redcar (Anna Turley) alluded a moment ago. The fact is that wages in this country are now growing at around 3% a year, at a time when inflation is at zero. Yes, it did take time to get there, but that was because it took some time to fix the mess that had been left behind for us. The cost of living problem to which the hon. Lady referred is being alleviated with every month that passes, and that trend will continue.

I also welcome the planned increase in the minimum wage from £6.50 an hour to £6.70. That is the first real-term increase since 2008, and it will help. When we pause and consider the facts rather than the speculation, we will see that the record of the coalition Government was extremely strong in helping people on low incomes. Speaking of poverty, there are now 800,000 fewer people and 300,000 fewer children in relative poverty than there were five years ago, and that is fantastic progress. Those are the facts, so let us now consider the topic before us—[Interruption.] They are the facts.

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[Anna Turley (Redcar) (Lab/Co-op)]

There are 4,200 working families with children who are claiming tax credits in my constituency. That is 4,200 families with parents who are working hard, doing the right thing, trying to stay off welfare, proud to be in work with the dignity that that brings, and trying desperately hard to get through the month, keep afloat and provide for their families. They rely on tax credits to survive. Tax credits are not a luxury.

Tax credits were introduced by the Labour Government because we cared about in-work poverty. We cared about making work pay, particularly for single parents who were struggling in and out of a working life. That is why we introduced the historic minimum wage—despite fierce opposition from those on the Conservative Benches—and why we brought in Sure Start to give kids the best start in life. That is also why we introduced tax credits, which have been a lifeline for so many people and contributed to the huge fall in child poverty on our watch.

Tax credits are vital to help people get through the month. As my hon. Friend the Member for Greenwich and Woolwich (Matthew Pennycook) said, we have received a lot of correspondence in the past few days about this issue. Let me quote from one of my constituents who wrote to me this week about her fear of losing tax credits. She stated:

“I am literally terrified at the idea of losing my tax credits. I am a 29 year old single mother of an eight-month old baby. I have been in full-time employment since the age of 17 and even worked as a weekend pot washer when I was at school. Both my parents worked and I have been brought up with a good work ethic and to understand the value of money. I am currently on maternity leave but start back at work in a week. However, after 12 years of working full time I am going back part time for two years so I can also focus on the upbringing of my son…I am anything but a ‘scrounger’ and have never had to rely on the benefit system, but for the next couple of years tax credits will be essential to help me survive financially. I do not drive a fancy car, I don’t have Sky\cable TV, I live in a tiny terraced house and I NEVER go on holiday, so I live anything but a luxurious lifestyle that these idiots in power seem to think”—

forgive me, Mr Speaker, those are not my words, however much I may agree with the sentiment.

My constituent continues:

“I could quite easily go on income support and be a stay at home mum, but I choose to work to distil into my son from a young age that it is important to have a good work ethic (as my parents did with me). I am very good with money but have no idea how I will survive if my tax credits are cut. I have worked for 11 years, paid into the system and for the sake of a couple of years getting something back to help me just make ends meet, I don’t think this is me being a drain on society or a lazy scrounger the Tories seem to think anyone who claims a penny is. I lay awake at night worrying about all this, the Tories say ‘they are the party for working people’ but they make me sick. I have never heard such a bunch of”—

I will leave the rest of it there as it is probably not appropriate.

Obviously, my constituent does not agree with the hubris and self-congratulation that I have witnessed from those on the Government Benches who seem so delighted with their long-term economic plan, and I will say more about that in debates over the next few days. I would love to say that I am looking forward to the Budget tomorrow, but I am afraid that I will do so with fear and trepidation on behalf of many of my constituents.

Oral Answers to Questions

Anna Turley Excerpts

Tuesday 16th June 2015 Commons Chamber

[Mr Osborne]

The north-west has seen a huge increase in employment—it has had the fastest rate of employment growth in the entire United Kingdom. I would have thought the hon. Lady would welcome that.

The northern powerhouse initiative was instigated by me and the Labour and Conservative council leaders of Greater Manchester. It has been done on a cross-party basis. I would like to think that, at the beginning of this Parliament, we can work across the party divide, including in this Chamber, to bring about that major rebalancing of the British economy, which has eluded Governments for many generations.

[Anna Turley (Redcar) (Lab/Co-op)]

Major employers in the north-east such as Nissan and Hitachi, which are the key drivers of the northern powerhouse, are clear that membership of the EU is vital to their investment in our region, and that they would reconsider their involvement in the UK should we leave the EU. Given that the Under-Secretary of State for Communities and Local Government, the hon. Member for Stockton South (James Wharton), the Minister responsible for the northern powerhouse—I cannot see him in the Chamber—told the “Sunday Politics” show last weekend that he would vote to come out, will the Chancellor tell the House what assessment he has made of the impact of the EU on the north-east economy and his northern powerhouse plans?

[Mr Osborne]

I commend the work that Nissan and other employers do in the north-east. The north-east is currently producing more cars than the whole of Italy, which is a remarkable achievement and a tribute to the workforce there. I am glad the hon. Lady mentions the Under-Secretary of State for Communities and Local Government. He was not only returned with an increased majority, but is now playing a central role as the Minister helping to deliver the northern powerhouse in DCLG. The debates are about the future of our relationship with the European Union and the reform we need so that major Japanese car manufacturers continue to see Europe and the UK as a place to come, create jobs and invest. We will not do that if our continent prices itself out of the world economy.