Business Lending

Baroness Morgan of Cotes Excerpts

Tuesday 8th April 2014 Westminster Hall

[The Economic Secretary to the Treasury (Nicky Morgan)]

It is a pleasure to serve under your chairmanship this afternoon, Mrs Riordan. I thank the hon. Member for St Ives (Andrew George) for securing this debate. I am grateful for the opportunity to discuss this important issue. I know from previous debates that it is of great concern to hon. Members of all parties.

Towards the end of his speech, the hon. Gentleman mentioned the wider issue of the relationship between banks and customers. I hope he will understand that, if I do not tackle that broader subject, it is because I have only 12 minutes to deal with the matters he has raised. I am sure he will be able to apply for a further debate in this Chamber to explore those themes, but I have taken note of what he said.

The hon. Gentleman made a strong case on behalf of all the businesses in his constituency and others that have suffered from mis-selling. He referred to 7,000 small enterprises in his constituency, and I would like to start by assuring him that from the very beginning this Government have been clear that the mis-selling of financial products is unacceptable. We take extremely seriously the abuse that has taken place, and we are determined that any wrongs that have been inflicted on businesses should be righted.

Hon. Members will know that the Financial Conduct Authority’s review process was the subject of a Back-Bench debate on 24 October 2013 and focused on the speed of the review. The hon. Gentleman mentioned that in relation to a particular company in his constituency. My colleague, the Financial Secretary, noted that although the Government shared the disappointment at the progress that had been made then, we were confident that the review process would provide the correct level of redress for affected businesses.

I am pleased to say that considerable progress has been made during the intervening five months. All cases are now under review and almost half a billion pounds has now been paid to more than 3,400 small and medium-sized enterprises. I hope hon. Members agree that that is positive news and shows that the review is working.

It is worth noting that the majority of banks in the review will also now make an initial redress payment to businesses and then discuss consequential losses separately. I will return to consequential loss, which the hon. Gentleman mentioned. That will help those small businesses that have been at the wrong end of mis-selling to get back the money they badly need. I know from companies in my constituency that have approached me that cash and cash flow are tremendously important.

The FCA has published each bank’s projections for when it expects to finish the review process. All banks are expected to finish the review by June 2014, which is the month after next, with a number likely to finish before that date. I can assure the hon. Gentleman that Treasury Ministers and officials will continue to track progress closely against those projections.

The hon. Gentleman voiced concerns about the large number of businesses that have been assessed as “sophisticated” and therefore fall outside the scheme. The Government have been absolutely clear that businesses that lacked the necessary skills and knowledge to fully understand the risks of these products should receive appropriate redress. However, as the Financial Secretary made clear last year, we do not agree that all businesses should have access to the review. There needs to be a defined cut-off point where more sophisticated businesses take responsibility for understanding the products they purchase. There will have been organisations that took one of these products with a full understanding of the risks involved if interest rates fell. It is not for the Government to perform due diligence for such large sophisticated businesses. Any such action would weaken incentives for businesses to act sensibly when purchasing financial instruments, and I would be concerned that we could open the floodgates to any businesses that lost out from a financial transaction.

[Andrew George]

I am grateful for the Minister’s comments on that, but will there be an opportunity for appeal for those businesses? There will be circumstances in which businesses can show that this unregulated financial product was mis-sold and that they were misled through how the banks sold the product to them.

[Nicky Morgan]

As I understand it, the FCA has amended the sophistication test in the past few months. It started off with a broad test under the Companies Acts, and that has been refined. From a constituency case, I know that it is possible to ask the FCA to reconsider whether a business should be deemed to be “sophisticated”, but the FCA will ultimately make the judgment. Some push-back is possible, and there needs to be a defined cut-off point so that the right businesses are within the scope of the review.

I reiterate that the Government take extremely seriously the abuse that has taken place in many cases, and we are determined that any wrongs inflicted on businesses should be put right. I want a quick solution to the mis-selling of interest rate hedging products to allow the businesses to continue to operate and to contribute to the ongoing recovery of the UK economy.

The hon. Gentleman asked some specific questions. If I do not get to the end of them, the Financial Secretary or I will write to him on them. The hon. Gentleman asked about consequential loss and some banks, as he mentioned, seeking to reinterpret the law on it. Banks are required, where there is mis-selling, to provide fair and reasonable redress, and that means putting the customer back in the position they would have been in had the regulatory failings not occurred. That includes any consequential loss. The FCA has published guidance on consequential loss.

The hon. Gentleman asked what happens to businesses that are effectively forced into administration or liquidation by mis-selling. My understanding is that the FCA has confirmed that in those cases the administrator will take part in the review on behalf of the business. The business directors will be given plenty of opportunity to put their case on the sale of the hedging product. He asked about ongoing facilities, and I will have to write to him on that matter, because we have to check. I will return at the end to the self-certification regime, because it is slightly outside the scope of the debate.

[Andrew George]

I am grateful to the Minister for giving way once again. With those companies that go into administration, the administrator is in many cases acting on behalf of the creditors, including the bank. I cannot see how the administrator can in any sense represent the interests of the company seeking redress.

[Nicky Morgan]

The hon. Gentleman has raised an interesting point. At the end of the day, the administrator is there to get a fair deal for everybody. The directors of the business are given an opportunity to put their case on the sale of the hedging product to the FCA. The directors of the business, even if the business has gone into administration, will be able to put their case. In my business experience, in most cases, the administrator acts to get as much back for the business and the creditors as they can.

I turn briefly to embedded loans and hidden swaps, which the hon. Gentleman and the hon. Member for Ceredigion (Mr Williams) raised. The hon. Member for St Ives mentioned the difficulty faced by his constituent Mr Phillips and the Coasters company in relation to a fixed-rate loan, and I am sorry to hear about the problems that that caused. As the hon. Member for Ceredigion said, the FCA does not have regulatory powers over business loans, so its supervised review can cover only interest rate hedging products that were agreed separately from a business loan. The Treasury has secured a voluntary agreement through the British Bankers Association that banks will provide the same level of disclosure for features of fixed-rate loans, such as break costs, as for regulated interest rate hedging products. Most importantly, the banks will now ensure that break costs are fully explained and that worked examples are provided.

On self-certification, the hon. Member for St Ives asked about assistance for entrepreneurs who are trying to secure a mortgage. The Financial Services Authority conducted a wholesale review of mortgage regulation in the UK, the “Mortgage Market Review”, which was published in October 2012. The rules are to be implemented by the FCA before the end of this month, and as a result, lenders will not be able to offer self-certified or fast-track mortgages from 26 April. However, the FCA recognises that lenders should have flexibility to decide what evidence of income they can accept from self-employed customers, so it will be for individual lenders to decide what evidence they require as proof of income. I am sure that the hon. Gentleman appreciates that the new rules are being introduced in the context of wanting to ensure that we have stronger mortgage lending practices to avoid the problems that we have encountered in the past, which were caused by people borrowing more than perhaps they should have done.

On lending to small businesses, as the hon. Gentleman mentioned, the Government are determined to support small businesses and improve access to finance. The funding for lending scheme has provided incentives to banks and building societies to boost their lending to the real economy. Since the introduction of that scheme, bank funding costs have fallen to historic lows. As the hon. Gentleman said, there has to be confidence between businesses and their banks. That is why the major high street banks have put in place an independent appeals process that allows any business with a turnover of up to £25 million that is declined any form of lending to appeal against that decision, for any reason, to the participating bank concerned. Results show that, in the two years for which the appeals process has been running, in 40% of cases in which a decline was appealed against, a lending agreement with which both parties were satisfied was subsequently reached.

The Government announced in the Budget that the first results of a major new survey into how banks perform for small businesses will be published by the Federation of Small Businesses and the British Chambers of Commerce next month. Banks will be able to use the results to measure their progress towards becoming better banks for small businesses everywhere. The Government are very focused on that. We welcome that review, because we want to provide UK small businesses with a clear and credible way to judge how their bank compares with its competitors. We want Britain’s banks to do more to put Britain’s small businesses at the top of their priority list.

Hon. Members may know that the Government announced a package of measures designed to improve competition in the SME lending market, which included consultation on proposals to require banks to share more information on their SME customers with other lenders through credit reference agencies, levelling the playing field for challenger and non-bank lenders. Finally, the Government announced in the Budget that we would consult on whether to legislate to require SME lenders to release details of businesses that they reject for loans, so that alternative providers can discuss other options with them.

I am aware of the time, so I will conclude. I thank the hon. Member for St Ives for bringing this important issue to the House. I assure him that the matter continues to receive the highest level of attention from the Treasury and from Ministers more widely.

Question put and agreed to.

Finance (No.2) Bill

Baroness Morgan of Cotes Excerpts

Tuesday 8th April 2014 Commons Chamber

[Bridget Phillipson]

I will make a brief contribution and put on record just how much progress was made under the previous Labour Government. Child care was previously regarded as something for families to deal with on their own. When Labour came to power in 1997, there was no guarantee that children had access to a nursery place. In many areas, nursery school provision was such that there simply were not the places available even when children wanted them. We should also remember the Sure Start children centres and all the work that went into them. It is important to acknowledge that a major transition was made. The fact that we are debating child care here today shows just how much progress we have made.

I recognise that Government Members want to deal with this issue. It is just unfortunate that the measures they are talking about will not come into force until after the general election, if they were to be re-elected. That is disappointing because families in my constituency need help now.

Families across the country are facing a reduction in the number of places at the same time as costs are rising. Those of us with children know just how difficult it can be to find child care that meets the needs of families now. As has been pointed out, we in this House are very fortunate in having the luxury of being in well-paid jobs that allow us to make choices, but for many of my constituents who work shifts or who are on zero-hours contracts or have insecure employment those choices simply are not available.

We have had an interesting discussion about the role of informal child care, with some useful points being made on both sides. Many families, mine included, rely on grandparents and other friends and family to help out, and they provide invaluable support and play a very useful role. I do not in any way denigrate that support, but children from the most disadvantaged backgrounds benefit the most from having access to high-quality formal child care.

When I visit nurseries and primary schools in my constituency, it becomes clear just how important for their development it is that children are given the best start in life and have access to early years child care. That enables their vocabulary to develop and gives them access to a whole range of different experiences that sometimes are not available in the home for one reason or another, whether it be poverty, domestic violence or mental health.

We have a long way to go on this issue. Labour’s policies are on the right lines. This is a sensible new clause, and I hope the Government will take action now to help families, rather than waiting until later. Families need action now.

[The Economic Secretary to the Treasury (Nicky Morgan)]

It is a pleasure to serve under your chairmanship, Mr Amess, and I thank all Members who have spoken in this debate. After a rather partisan opening speech, the debate improved and we had a genuine discussion of views, which will no doubt carry on throughout the Committee stage of the Finance Bill. We will also be able to discuss child care measures in greater detail later in the year.

I take on board the comment of the hon. Member for Hackney South and Shoreditch (Meg Hillier) that there is a certain irony in the fact that all of us in the Chamber debating this matter today have children yet we are discussing this rather than spending time with them. If my son were here at the Dispatch Box, he would be very opinionated and have plenty to say on the subject of what I get up to, and I suspect that applies to the children of other Members.

New clause 1 asks the Government to conduct a review of the affordability of child care, but while Opposition Members are proposing yet another review, this Government are taking action, and have taken action, to address the rising costs of child care faced by families.

Before I address the Opposition new clause, let me briefly set out this Government’s approach to supporting parents with their child care costs. As the hon. Member for Hackney South and Shoreditch said, we on this side of the House believe in the importance of flexibility. We do not want to prescribe any further the number of hours that families should have. We want there to be full flexibility, and that is one of the advantages of the tax-free child care provisions this Government are suggesting. Parents and families will be able to build up credits in accounts and will then be able to spend them in the way that suits them best.

[Meg Hillier]

The flexibility of provision is as important as the flexibility of payment. It is no good talking about flexibility if the child care provider does not provide it or does not provide the number of hours and length of day needed, whether long or short. What are the Government planning to do about that?

[Nicky Morgan]

I take that point on board. I shall come on to talk about the number of child care places, but the hon. Lady is right: flexibility in all sorts of different ways is what is important. Having the money in an account that the family can decide how to spend is an important part of the policies we have introduced.

My hon. Friend the Member for Enfield, Southgate (Mr Burrowes) was absolutely right to say that this was all about choice. The hon. Member for Houghton and Sunderland South (Bridget Phillipson) talked about maternal employment. That is a debate that we need to have in this country. We know from various surveys conducted by the Department for Education that some mothers want to work, and some need to work. Many of those who need to work find child care costs a barrier to going to work. That is why it is so important to have this discussion.

Child care costs are a major part of most working families’ budgets. Figures from the Family and Childcare Trust show that, between 2002 and 2010, child care costs increased by around 50%. The Government have therefore taken action to tackle those rising costs. We have funded 15 hours a week of free child care for all three and four-year-olds, and extended that offer to the 20% most disadvantaged two-year-olds. We are now extending it further so that, from September 2014, about 40% of two-year-olds will be eligible. As my hon. Friend the Member for South Northamptonshire (Andrea Leadsom) pointed out, the Government have also increased child tax credit to £3,265 a year, which is £420 a year more than it was at the last election, representing a rise significantly above inflation. We have also introduced shared parental leave.

The Government are also taking action to drive up the supply of high-quality child care provision—for example, by legislating for childminder agencies, which will make it easier to set up a childminding business; making it easier for schools to change their school day and encouraging primary schools to open for longer; and reducing bureaucracy and red tape for providers. Encouragingly, the most recent information shows that costs in England have stabilised. The National Day Nurseries Association has reported that the average fee increase across all nurseries was 1.5%, which was well below inflation. The latest survey from the Family and Childcare Trust shows that the cost of after-school clubs in 2013 was £49.71 per week, and that in 2014 it is £48.40. Also, the cost of childminders’ after-school pick-up was £72.79 in 2013 and it is now £64.75—a 12.8% reduction in real terms. Opposition Members have talked about the availability of child care places, but it is worth noting that the number of child care settings rose from 87,900 in 2010 to 90,000 in 2011. This equates to 2 million early-years places, or a 5% increase on 2009.

My hon. Friend the Member for Enfield, Southgate talked about informal child care, and he was right to suggest that that is an important subject. A number of families rely on grandparents and other family members to provide child care, and it is important that we recognise that. However, I also have sympathy with the view that formal child care settings are important. We need to know that our young children are ready and able to go to school. I am not saying that that cannot happen in an informal child care setting, however. As I have said, it is a question of choice and flexibility.

Let me now turn to new clause 1, which asks the Chancellor to publish a review of the affordability of child care costs. We believe that such a review is unnecessary, because in addition to the actions I have already outlined, the Government announced a new scheme in Budget 2013 to help working parents with their child care costs. I do not know whether the hon. Member for Hackney South and Shoreditch really meant it, but she said that the review would “not tie anyone to anything much”. Actually, that is part of the problem with the proposal. We want to get on and bring in our provisions as soon as possible.

[Meg Hillier]

What I meant was that the review would not require the Government to act on its findings. However, it would give us all a basis on which to argue about what was best for local people and, I hope, reach consensus. It would not stop the Government doing what they were already doing, but it could open up other opportunities.

[Nicky Morgan]

I believe that some of those policy issues will come out in the debates that we are going to have on tax-free child care. Rather than postponing our activities while we have yet another review, I want to get on and make progress. I want families to know that we are serious about listening and helping them with child care costs and the availability of places.

We have consulted widely on the detail of the scheme. More than 35,000 responses were received to last year’s consultation, and we have listened to that feedback. On 18 March this year, we published our response to the consultation on tax-free child care. This was welcomed by families and child care providers around the country, and as a result of the consultation, we are rolling out tax-free child care more quickly than had previously been announced. It will be launched in autumn 2015 and rolled out to all eligible families with children under 12 within the first year of the scheme’s operation. That is significantly faster than previously announced, as children under 12 would have gradually qualified for the scheme over a seven-year period.

The Government will also now provide 20% support on child care costs up to £10,000 per year for each child via a new simple online system. The cap had previously been set at £6,000. That means that families could receive up to £2,000 child care support per child—two-thirds more than originally planned.

We expect that tax-free child care will be open to at least twice as many families as the current employer-supported child care scheme. At the same time, we announced that all families eligible for universal credit will benefit from additional support at 85%, rather than just taxpayers as previously consulted on. We have also announced £50 million for an early-years pupil premium to help improve outcomes for the most disadvantaged three and four-year-olds in Government-funded early education. Taken together, the Government’s child care offer will provide flexible support for all eligible working families while maintaining free, universal early education support.

The Government are also taking wider steps to support hard-working families. The income tax personal allowance will rise to £10,000 in 2014-15, and in the Budget we announced a further increase to £10,500 in 2015-16. That is a tax cut for 25 million people. Since 2010, this Government will have taken 3.2 million people on low incomes out of paying income tax altogether. It is worth noting that of that 3.2 million, 56% are women, which is something to be recognised and welcomed.

The Government have also helped local authorities freeze council tax in every year of this Parliament, and we have taken action on fuel duty, saving a typical motorist £680 by 2015-16. The shadow Chief Secretary to the Treasury talked about the fuel duty cut being a theoretical cut. Perhaps he would like to chat to the shadow Economic Secretary who quoted from the Asda Index, which showed that families now have slightly more discretionary income to spend per week, and it attributed that to a fall in motoring costs—[Interruption.] I suggest that the hon. Member for Newcastle upon Tyne North (Catherine McKinnell) read the press release, as it made encouraging reading.

The changes suggested in new clause 1 are unnecessary and would not help hard-working families with the cost of child care. The Government have already reviewed how best to improve child care through the Childcare Commission, which was launched in June 2012. We do not need another review. We need to take action now to support hard-working families, which is why we are supporting parents through tax-free child care and universal credit. More people than ever before will be eligible for that support. We have consulted widely on these changes, and our proposals have been welcomed by families and providers around the country. I therefore request that new clause 1, which was tabled by Opposition Members, be withdrawn.

[Catherine McKinnell]

This has been a well-considered and well-argued debate, but the essential facts remain. This Government have presided over soaring child care costs and have cut tax credits for thousands of families, meaning that even when their proposed long-grass support is eventually introduced, most families will still be worse off than they were in 2010. Parents and working families need help now, not in 18 months’ time, so I urge hon. Members on both sides of the Committee to back new clause 1, which would secure a review of action that the Government can take to provide the support that hard-pressed families up and down the country so desperately need today.

Question put, That the clause be read a Second time.

Convergence Programme (UK)

Baroness Morgan of Cotes Excerpts

Thursday 3rd April 2014 Written Statements

[The Economic Secretary to the Treasury (Nicky Morgan)]

Article 121 of the treaty on the functioning of the European Union (TFEU) requires the UK to send an annual convergence programme to the European Commission reporting upon its fiscal situation and policies. The UK’s convergence programme will be sent to the European Commission by 30 April. This deadline was set in accordance with the European semester timetable for both convergence and national reform programmes. The Government support the European semester which plays an important role in EU surveillance of economic and fiscal policy.

Section 5 of the European Communities (Amendment) Act 1993 requires that the content of the convergence programme must be drawn from an assessment of the UK’s economic and budgetary position which has been presented to Parliament by the Government for their approval. This assessment is based on the Budget 2014 report and the most recent Office for Budget Responsibility’s economic and fiscal outlook and it is this content, not the convergence programme itself, which requires the approval of the House for the purposes of the Act.

Article 121, along with article 126 of the TFEU, is the legal basis for the stability and growth pact, which is the co-ordination mechanism for EU fiscal policies and requires member states to avoid excessive Government deficits. Although the UK is bound by the stability and growth pact, by virtue of its protocol to the treaty opting out of the euro, it is only required to “endeavour to avoid” excessive deficits. Unlike the euro area member states, the UK is not subject to sanctions at any stage of the European semester process.

Subject to the progress of parliamentary business, debates will be held on 9 April for the House of Lords and on 30 April for the House of Commons in order for both Houses to approve this assessment before the convergence programme is sent to the Commission. While the convergence programme itself is not subject to parliamentary approval or amendment, I will deposit advanced copies of the document in the Libraries of both Houses on 3 April and copies will be available through the Vote Office and Printed Paper Office.

The UK’s convergence programme will be available electronically via HM Treasury’s website after it is sent to the European Commission.

Royal Mint Advisory Committee

Baroness Morgan of Cotes Excerpts

Thursday 27th March 2014 Written Statements

[The Economic Secretary to the Treasury (Nicky Morgan)]

On 27 March 2012, my hon. Friend the Member for Norwich North (Chloe Smith), the then Economic Secretary, announced to Parliament, through a written ministerial statement, Official Report, column 107WS, the commencement of a triennial review for the Royal Mint advisory committee on the design of coins, medals, seals and decorations.

I am now pleased to announce the completion of the review.

The advisory committee was established in 1922 with the personal approval of King George V. It exists to raise the standard of numismatic and medallic art in Britain and is expected to ensure that designs meet high standards of art, decency and good taste. Its purpose is to advise Government Departments, and ultimately the Queen, on matters of design with respect to coins, medals, seals and decorations. The eight members and the chair of the committee receive no payment for serving, but may claim reasonable expenses incurred in attending meetings, which are funded by the Royal Mint Museum. Expenses, if claimed, are paid by the Royal Mint.

The triennial review was conducted in accordance with Government guidance for reviewing NDPBs.

The review concluded that there continues to be a Government demand for heraldic, typographic, numismatic, technical and design advice. Having considered the delivery option alternatives, the review recognises the services delivered by the committee remain necessary to the business of the Department and ensures the quality of the themes and designs of UK coinage and official medals. Any alternative delivery route would incur a greater cost in both resource and financial terms. As such, the recommendation is to retain the advisory committee in its current form. However, while considering the governance of the committee the review recommends that the committee should make minor adjustments to current control and governance practices to improve the transparency of this small but important function.

Copies of the report of the review will be placed today in the Libraries of both Houses.

Balance of Competences: Economic and Monetary Policy

Baroness Morgan of Cotes Excerpts

Thursday 27th March 2014 Written Statements

[The Economic Secretary to the Treasury (Nicky Morgan)]

HM Treasury today publishes a call for evidence as part of the fourth semester of the Government’s review of the balance of competences, which is looking at what the EU does and how it affects the UK.

The call for evidence looks at the balance of competence between the EU and the UK on economic and monetary policy. The document explains the historical development and legal background to the EU’s competence in this area and asks a number of questions about how the EU’s competence works in practice.

HM Treasury is seeking evidence from a range of stakeholders who have an interest or experience in these areas, including individuals, think-tanks, Parliament, academia and institutions.

The public call for evidence for this report will run from 27 March 2014 until 4 July 2014. The final report on the current balance of competence for economic and monetary policy and what this means for the national interest will be published by the end of 2014.

Copies of the document have been deposited in the Libraries of both Houses and it is available online on the gov.uk website.

Environmental Taxes

Baroness Morgan of Cotes Excerpts

Wednesday 26th March 2014 Written Statements

[The Economic Secretary to the Treasury (Nicky Morgan)]

In May 2010, this Government committed to increasing the proportion of tax revenue accounted for by environmental taxes.

In 2012, the Government published their definition of environmental taxes which set the baseline for achieving that commitment. This statement provides an annual update of the Government’s progress against that commitment, using the independent Office for Budget Responsibility’s (OBR) forecasts published alongside the Budget.

The Government classifie environmental taxes as those that meet all of the following three principles:

The tax is explicitly linked to the Government’s environmental objectives; and

The primary objective of the tax is to encourage environmentally positive behaviour change; and

The tax is structured in relation to environmental objectives (for example: the more polluting the behaviour, the greater the tax levied).

The Government have defined the following as environmental taxes based on these principles:

Climate Change Levy;

Aggregates Levy;

Landfill Tax;

EU emissions trading system (EU ETS);

Carbon reduction commitment energy efficiency scheme;

Carbon price floor.

For Budget 2014, the OBR has changed the accounting methodology it uses for particular taxes, so that the revenue is scored at a later stage. The forecasts, using either the original or the new OBR scoring methodologies, both demonstrate that the coalition remain on track to achieve their commitment to increase the proportion of revenue accounted for by environmental taxes over the Parliament. Table 1 provides figures using the OBRs original methodology for ease of comparison with the figures released at Budget 2013. Table 2 provides an update using the OBRs new accounting methodology.

Revenue Raising Taxes and Fiscal Instruments with Environmental Benefits

These are taxes and fiscal instruments which are primarily designed to raise revenue or to achieve other objectives, and therefore do not qualify as environmental taxes on the basis of the Government’s three principles.

Differentiating environmental taxes from taxes which are designed to achieve other objectives provides greater clarity and transparency to the Government’s overall tax strategy. The Government also recognise that other taxes not included within its definition can deliver environmental benefits.

On that basis, the Government believe that it is important to make reference to transport taxes, levies and exemptions/reliefs in their overall assessment of environmental taxation.

Budget 2014 made several announcements that will act to sharpen the environmental signals of non-environmental taxes, including:

Ultra-low emissions vehicles—Budget 2014 announced that the Government are increasing the company car tax rate differential between ultra-low emissions vehicles (ULEVs) and non-ULEVs from 3 and 2 percentage points in 2017-18 and 2018-19 to 4 and 3 percentage points respectively.

Van benefit charge (VBC) exemption for electric vans—Budget 2014 announced that the Government will extend VBC support for zero emission vans to 5 April 2020 on a tapered basis. Zero emission vans will pay only 20% of the rate paid by conventionally fuelled vans in 2015-16, followed by 40% in 2016-17, 60% in 2017-18, 80% in 2018-19 and 90% in 2019-20, with the rates equalised in 2020-21.

Enhanced capital allowance (ECA) for zero emissions goods vehicles—Budget 2014 announced that the Government will extend the ECA for zero emission goods vehicles to 31 March 2018. To comply with EU state-aid rules the availability of the ECA will be limited to businesses that do not claim the Government’s plug-in van grant.

Enhanced capital allowances: energy-saving and water-efficient technologies—The list of designated energy-saving and water-efficient technologies qualifying for enhanced capital allowances will be updated during summer 2014, ensuring the most efficient technologies continue to be targeted.

Fuel duty incentives for methanol—From April 2015, the Government will apply a reduced rate of fuel duty to methanol. The size of the duty differential between the main rate and methanol will be maintained until March 2024. Like the road fuel gases already benefiting from a duty differential, methanol provides environmental benefits compared to conventional fuels. The Government will review the impact of this incentive alongside the duty incentives for road fuel gases at Budget 2018.

amendment of the law

Baroness Morgan of Cotes Excerpts

Monday 24th March 2014 Commons Chamber

[The Economic Secretary to the Treasury (Nicky Morgan)]

Let me begin by thanking hon. Members on both sides of the Chamber for their contributions this evening. I will do my best to respond to as many of the points raised as I can.

I will start by saying this: of course the Government, and everyone in the Chamber, want to see our economy growing and our living standards rising. The best way to achieve that is by ensuring that more people are going to work every morning and that those people are keeping more of the money they earn. That is exactly what last week’s Budget will help everyone to achieve.

Let me turn to the comments made in this wide-ranging debate. My right hon. Friend the Member for Mid Sussex (Nicholas Soames), in setting out his support for the Budget, mentioned the fact that we need more productivity. He also mentioned the need for investment in skills, as did other hon. Members. The right hon. Member for Ross, Skye and Lochaber (Mr Kennedy) talked about a sense of opportunity for the youth of this country and a sense of security for older people. He welcomed the freezing of whisky duty. My hon. Friend the Member for Henley (John Howell) set out his support for the development at Ebbsfleet and mentioned neighbourhood plans, which he said were key, explaining that it was Thame in his constituency that launched the neighbourhood plan.

My hon. Friend the Member for Wolverhampton South West (Paul Uppal) talked about Labour always raising taxes—how very observant he is—and set out the help for businesses that the Chancellor announced last week and the successes in his constituency.

My hon. Friend the Member for Brentford and Isleworth (Mary Macleod) talked about the support that the Government are giving air ambulances, as well as the support for tax-free child care, for which 1.9 million families will be eligible. She also mentioned the record numbers of people in work, including women.

My hon. Friend the Member for Cardiff North (Jonathan Evans) talked, as other Members did, about the support that the Government are giving energy-intensive industries, and my hon. Friend the Member for Milton Keynes South (Iain Stewart) made a bid for the Alan Turing institute to be based in Milton Keynes. I am sure that my right hon. Friend the Minister for Universities and Science will have noted that plea. My hon. and learned Friend the Member for Harborough (Sir Edward Garnier) said that he was in favour of freedom for those with pensions to make decisions that are right for them, which was a key cornerstone of last week’s budget.

My hon. Friend the Member for City of Chester (Stephen Mosley) made a terrific speech about falling unemployment in his constituency and the great work that he has done on jobs fairs. My hon. Friend the Member for Dartford (Gareth Johnson) welcomed the Chancellor’s announcements about Ebbsfleet, of which I know he will be a great champion.

My hon. Friend the Member for North Herefordshire (Bill Wiggin) talked about the cuts in cider and beer duty, which he rightly said were good news for pubs and brewers. He also mentioned that the mother-in-law of my hon. Friend the Exchequer Secretary to the Treasury lives in his constituency. I am not sure whether there is any connection with cider and beer, but perhaps that is how those in Herefordshire like to spend their time.

My hon. Friend the Member for Romsey and Southampton North (Caroline Nokes) mentioned funding for flood defences and the repairing of potholes. The Government have introduced a £6.5 million severe weather recovery scheme to support local authorities, including for highway infrastructure repairs. The scheme is now paying 100% of local authority costs above the threshold, rather than the usual 85%, and the threshold has been reduced for all county councils and unitary authorities to make it easier for them to claim support. Of course, we have also provided a further £140 million to help repair roads hit by weather damage and, in the Budget, £200 million for repairing potholes.

My hon. Friend the Member for Rugby (Mark Pawsey) talked about the importance of new homes and, like other Members, rightly pointed out that the rise in house prices is not universal across the United Kingdom. There is a particular impact in London and the south-east. My hon. Friend the Member for Mid Dorset and North Poole (Annette Brooke) mentioned the rise in the personal allowance, which the Government are proud to have delivered, and financial support for exporters.

My hon. Friend the Member for Braintree (Mr Newmark), the founder of the Million Jobs campaign, talked about the work that he has done, including on the Braintree jobs fair, and said that more growth needs more jobs. My hon. Friend the Member for Elmet and Rothwell (Alec Shelbrooke) mentioned the Labour newsletter put out in his constituency about Labour’s economic policy. I wonder whether he would like to share it with Opposition Members, particularly the shadow Treasury team, because we did not hear much about that today.

My hon. Friend the Member for Spelthorne (Kwasi Kwarteng) mentioned the recovery, as the hon. Member for Newcastle upon Tyne North (Catherine McKinnell) just has. He reminded us that a year ago the Opposition said that there was no recovery. Now, of course, it is the wrong kind of recovery. To say that it is hard to please them would be an understatement. My hon. Friend the Member for Macclesfield (David Rutley) talked about the important reductions in corporation tax and employment allowances.

I turn to the speeches that Opposition Members made. I must congratulate them on one thing—at least most of them talked about the Budget. That is remarkable given last week’s Budget response speech by the Leader of the Opposition, in which I think he failed to mention a single Budget measure. I have to say that listening to Opposition Members is like watching arsonists making a call after they have started a fire and saying, “Please, the fire’s not being put out quick enough.”

The right hon. Member for Leeds Central (Hilary Benn) asked various questions. I probably do not have time to go through all of them, but it is interesting to note that Tower Hamlets, one of the poorest boroughs in London, has received £49 million from the new homes bonus, compared with £6 million for Wokingham, so he is not entirely right to say that money has been taken from the poorest authorities in the country. He also asked about the Financial Policy Committee’s remit on monitoring the housing market. The latest remit was published last week, on 19 March, and, as the FPC has said, it will monitor in particular developments in house prices,

“relative to indicators of affordability and sustainability.”

The right hon. Member for Southampton, Itchen (Mr Denham) talked about student loans and debt. I do not think he is in his place now, but—[Hon. Members: “Yes, he is.”] I am sorry, I missed him. I ask him just what Labour’s policy is on student loans. I represent a large university in Loughborough, and the vice-chancellor would like to know.

The hon. Member for Stoke-on-Trent South (Robert Flello) spoke about fuel price cuts. Average pump prices under this Government’s policies will be 16p per litre lower than under the plans of the previous Government. The hon. Member for Blyth Valley (Mr Campbell), who sadly is not in his place, blamed the entire financial crash on Lehman Brothers, but I point out to him that Northern Rock collapsed before Lehman Brothers.

The hon. Members for Glasgow North (Ann McKechin), for Edinburgh North and Leith (Mark Lazarowicz), and for Sedgefield (Phil Wilson), talked about protecting pensioners from themselves, which I think is deeply patronising.

[Mr McFadden]

Will the Minister give way?

[Nicky Morgan]

No, I will make some progress. The right hon. Member for Neath (Mr Hain) talked about exports. Exports to countries outside the EU continue to grow, rising by 23% since 2010. The right hon. Member for Wolverhampton South East (Mr McFadden) talked about the referendum on the EU damaging investment. That is a common theme on the Labour Benches, but the Government believe it is time to trust the people and ask them about important issues. Labour Members clearly do not.

The hon. Member for Penistone and Stocksbridge (Angela Smith) talked about support for energy-intensive industries, which she and I have discussed before. She encouraged us to make strong representations to the European Commission for the extension of compensation, and I take those points on board. The hon. Member for Southampton, Test (Dr Whitehead) spoke about the carbon price floor, and the hon. Member for City of Durham (Roberta Blackman-Woods) talked about the north-east needing more support. The right hon. Member for Holborn and St Pancras (Frank Dobson) talked about Euston station.

The hon. Member for Barrow and Furness (John Woodcock) talked about Olympic-scale investment under this Government, and the hon. Member for Hartlepool (Mr Wright) mentioned productivity. He is right; the job is not yet done. That is why we do not think that anyone should entrust the keys to those who crashed the car. The hon. Member for Washington and Sunderland West (Mrs Hodgson) missed the fact that this Government are already spending £5 billion on child care, before we get to tax free child care.

I welcome the hon. Member for Wythenshawe and Sale East (Mike Kane) to the House. I know this was not his maiden speech, but if he can raise a laugh after five hours of a Budget debate he is a welcome addition to the House. He mentioned reform of air passenger duty. That is what I was discussing with his predecessor just before Christmas, and I look forward to continued discussions on that.

My hon. Friends the Members for Wolverhampton South West and for Brentford and Isleworth said that we need greater business investment, and they are right. Investment has been too low for too long, and it has held back growth. Had business investment increased by just 10% in 2012, the level of GDP would be £12 billion higher. We must create an environment that encourages business to invest.

[Barry Gardiner]

Will the Minister answer the question that I put to her in my speech about whether local authorities will be able to insist that pension pots are converted into cash to put people over the threshold for care costs?

[Nicky Morgan]

I am sure we do not want to see that, but we will look at it in more detail as we go through the scheme. The Government have set out a clear intention to help people with their care costs, and nothing in last week’s announcement should diminish the fact that we want people to have affordable care costs, and not to be worried about getting older and being able to afford their care.

The most important point about business investment was the extension and expansion of the annual investment allowance, which means that from next month 99.8% of businesses will get a 100% investment allowance. Almost every business in Britain will pay no upfront tax when it invests. We have already mentioned the policies on pensions and savings, and the Government believe that we will give people the opportunity to save now, and to control their finances better in the future. The Government believe that responsible people who have worked hard and saved sensibly all their lives should have the freedom to decide how to use their own savings. The changes we announced last week recognise that, and act on it.

My right hon. Friend the Secretary for Communities and Local Government spoke earlier about some of the other Budget measures that will boost our communities. He spoke about Ebbsfleet, the enterprise zone in Coleraine, and the Cambridge city deal. I wish to put on record how pleased I was to be at the launch of the Leicester and Leicestershire city deal this morning. Many hon. Members will already have seen the difference those schemes can make in their areas, and I pay tribute to all those in Leicester and Leicestershire who worked so hard to secure that deal. It will boost the economy of our city and county.

This Budget will ensure that more people have jobs to go to at the start of the day and can return to their own homes at the end of the day. It will give people a greater amount of their earnings at the end of the month, and greater access to their savings at the end of their careers. Of course there is more work to do, but this Budget represents another sensible step to get our country back on its feet, and I commend it wholeheartedly to the House.

Ordered, That the debate be now adjourned.—(Harriett Baldwin.)

Debate to be resumed tomorrow.

Budget Resolutions and Economic Situation

Baroness Morgan of Cotes Excerpts

Wednesday 19th March 2014 Commons Chamber

[Diana Johnson]

My hon. Friend makes his point very well. If the Government are serious about rebalancing the economy, they need to invest in northern rail.

It is interesting to note that, because of recent events, the coalition has now realised that flooding is a major economic problem. Perhaps that had something to do with the fact that the Thames valley was affected and the playing fields of Eton were flooded. I am pleased that the Chancellor announced additional money for flood defence work, but of course that should be seen in the context of the Government’s slashing the flood defence budget in previous years. As those in any area that has been flooded know, spending £1 on flood defences saves £8 in the cost of clearing up after a flood, so such investment makes sense.

On flood insurance, I note that the Chancellor is extending the Help to Buy scheme. Advertisements encouraging people to buy are plastered everywhere in places like Kingswood, in Hull North. However, it is a shame that other parts of the Government do not seem to think that houses should be built in areas like Kingswood, because they will not be able to participate in the flood insurance scheme that the Government have negotiated with the insurance industry. I should also point out that the new garden city at Ebbsfleet will be in a flood-risk area, and the owners of the houses built there will not get flood insurance under the Government’s scheme. It seems that one part of the Government does not know what the other part is doing. Small businesses are guaranteed access to flood insurance under the Government’s current scheme, but they will be excluded from the new scheme. The Government need to look at that problem.

On the cost of living crisis, which many people in my constituency face, there has been much fanfare about raising the personal allowance, but we know that 5 million of the poorest workers gain nothing from that increase. Many of those will be women. We know that the Government wanted to give the 8,000 millionaires their £40,000 windfall from the cut in the 50p rate of tax, but it is interesting to note who is bearing the brunt of the coalition’s austerity. The majority of those now falling into poverty and ending up at food banks are actually in work. That shows that the Government are not making work pay: being in work is no longer a guarantee of escaping poverty. FareShare in Hull said this week that demand for its help is up 53%, and the Trussell Trust reported a trebling of food bank use in a year.

[The Economic Secretary to the Treasury (Nicky Morgan)]

Does the hon. Lady accept that with the increase in the personal allowance announced today, particularly from next April, 3.2 million people will be taken out of income tax completely, 56% of whom will be women?

[Diana Johnson]

I do not think the Minister was listening to what I said: 5 million workers earn much less than the personal allowance, so they are not affected by the increase. The analysis that has been done shows that the better off benefit far more from that increase. It is not a way of targeting the poorest in our society.

We are seeing the shocking growth of charity dependency in 21st-century Britain, which, as many hon. Members have said, is the seventh-richest nation. That is Dickensian in a digital age. It is tragic for the life chances of millions of people that after the coalition inherited an economy that had returned to growth in 2010, we have had three years of flatlining. Places such as Hull and the north have suffered the most from, for example, the savage cuts to council funding, despite the coalition Government’s rhetoric about rebalancing the economy.

“Delivering Tax-Free Childcare”

Baroness Morgan of Cotes Excerpts

Tuesday 18th March 2014 Written Statements

[The Economic Secretary to the Treasury (Nicky Morgan)]

The Government have today published “Delivering Tax-Free Childcare: the Government’s response to the consultation on design and operation”—a response to the August 2013 consultation on tax-free childcare. The document is available at: www.gov.uk/government/consultations/tax-free-childcare and copies have been deposited in the Libraries of both Houses.

Tax-free childcare is designed to provide support directly to working parents for their childcare costs. The Government will pay 20p for every 80p working parents pay towards their childcare costs up to a maximum of £10,000 per year.

“Delivering Tax-Free Childcare” announces that all working families with children under 12 will be able to access the scheme within the first year of its opening, as opposed to a gradual expansion over a seven-year period.

“Delivering Tax-Free Childcare” also announces an increase in the cost cap from £6,000 a year to £10,000 per year, which will mean the Government contribution could be worth up to £2,000 per child each year. This means that around 100,000 parents with higher childcare costs can benefit from greater support.

Delivered by HM Revenue and Customs (HMRC) with its delivery partner National Savings & Investments (NS&I), the scheme will be will be simple, flexible and straightforward for parents and childcare providers; parents’ money will be secure; and they will face no fees or charges.

Employers’ workplace nurseries will not be affected by the introduction of TFC and parents who currently receive employer-supported childcare (ESC) can continue to benefit from this scheme with their current employer should they wish to do so. Self-employed parents and those working for employers who do not offer the existing scheme, employer-supported childcare (ESC), will have access to childcare support for the first time.

The Government announced at Budget 2013 that they are allocating a further £200 million per year to increase the childcare support available under universal credit for families where both parents, or a single parent, pay income tax. The Government are now going further and today announce they will raise the proportion to 85% for everyone in universal credit. In line with the principles of the welfare cap, offsetting savings to fund this expansion will be found from within the universal credit programme. Further details will be set out at autumn statement.

Oral Answers to Questions

Baroness Morgan of Cotes Excerpts

Tuesday 11th March 2014 Commons Chamber

[Chris Heaton-Harris (Daventry) (Con)]

4. What fiscal steps he is taking to limit welfare spending.

[The Economic Secretary to the Treasury (Nicky Morgan)]

The Government have announced their intention to bring social security spending within firm spending controls through the introduction of a welfare cap. The level of the cap will be announced at Budget 2014. The Government have taken significant action to bring welfare costs under control since 2010. The welfare cap will ensure that welfare spending remains on a sustainable footing and that significant deteriorations in the forecast do not go uncorrected.

[Chris Heaton-Harris]

I welcome that answer. Does my hon. Friend believe that the tough decisions the Government have taken to control public spending on welfare have enabled them to protect public spending on schools and the national health service, and that this policy is a vital part of the Government’s long-term economic plan to reduce the deficit and safeguard the British economy?

[Nicky Morgan]

My hon. Friend is entirely right. The Government have taken difficult decisions to place the public finances on a sustainable footing, while protecting important areas of expenditure such as the NHS. The Government’s long-term economic plan to return the public finances to a sustainable path has restored fiscal credibility. It is notable that the Labour party has no plan, long-term or otherwise, other than to borrow more, spend more and tax more.

[Mr Ian Davidson (Glasgow South West) (Lab/Co-op)]

Does the Minister accept that the cuts to the welfare budget will lead to an increase in poverty, particularly child poverty? Does she believe that that is a price worth paying?

[Nicky Morgan]

The number of children in poverty has fallen and the number of children in workless households has gone down by 100,000.

[Nick de Bois (Enfield North) (Con)]

5. What steps he plans to take to reduce youth unemployment.

--- Later in debate ---

[Stephen Metcalfe (South Basildon and East Thurrock) (Con)]

9. What assessment he has made of the effect of freezing fuel duty on the price of petrol.

[The Economic Secretary to the Treasury (Nicky Morgan)]

The autumn statement confirmed that fuel duty would be frozen for the remainder of this Parliament. As a result of this Government’s actions, average pump prices are now 13p a litre lower than they would have been if we had implemented the previous Government’s fuel duty escalator, and they will be 20p a litre lower by the end of this Parliament.

[Stephen Metcalfe]

Does my hon. Friend agree that this Government’s changes to fuel duty and the scrapping of next months’ increase proposed by the previous Government provide more proof that it is this Government who are helping hard-working families to tackle the cost of living and supporting our long-term economic plan?

[Nicky Morgan]

I thank my hon. Friend for that question. He is entirely right. In total, the Government will have eased the burden on motorists by £22.5 billion over this Parliament, to 2015-16. By the end of this Parliament, it will cost the typical motorist £11 less to fill their car.

[Helen Goodman (Bishop Auckland) (Lab)]

Will the Minister explain to my constituents in rural west Durham why, of the 10 areas that the Treasury wants to have a special rural fuel duty discount, eight are in Liberal Democrat constituencies, with two in the constituency of the Chief Secretary?

[Nicky Morgan]

There are strict criteria that towns have to meet in order to be included in the list. If other towns want to be considered, they need to supply the relevant evidence. The criteria include the pump price threshold, the cost of transporting fuel and the population density. If the hon. Lady’s constituents would like to submit evidence to the European Commission, they are welcome to do so.

[Duncan Hames (Chippenham) (LD)]

Motorists in my constituency are relieved to have had fuel duty frozen, but they want the Government to go further. Now that pump prices have fallen from their peak levels, how does what the Government have achieved with fuel duty rates compare with a policy of a fair fuel stabiliser?

[Nicky Morgan]

The point made by the hon. Gentleman, which his constituents will appreciate, is that freezing fuel duty has enabled people to spend more money on themselves and their families in other ways. He needs to understand that fuel duty cuts and freezes since Budget 2011 have had to be fully funded through tax rises or spending cuts elsewhere. Any further action needs to be considered in the context of the wider public finances.

[Sammy Wilson (East Antrim) (DUP)]

Tomorrow, the FairFuelUK campaign will be handing in a petition calling for a reduction in fuel duty. Given that the National Institute of Economic and Social Research has indicated that a 3p reduction would increase jobs by 70,000 and GDP by 0.2%, does the Minister agree that such a measure should be given priority in the forthcoming Budget in order to help the economy on its way and to promote growth?

[Nicky Morgan]

That is a matter for the Chancellor. The hon. Gentleman will appreciate that the Government regularly receive a range of representations on fuel duty. We hear what he and many other campaigners, not only on fuel duty but on many other issues, have been asking for.

[Guy Opperman (Hexham) (Con)]

20. I want to address the point about the rural fuel duty cut. We have been beneficiaries in Northumberland, as one of the two constituencies not necessarily in Scotland. I can state the reason simply: merely look at a map and identify the fact that the least amount of people are there.

[Nicky Morgan]

I thank my hon. Friend for his question. I am delighted that his constituents will benefit from the rural fuel rebate scheme, which means that, as I said, his constituents will have more money to spend on themselves and their families in other ways.

[Sheila Gilmore (Edinburgh East) (Lab)]

10. What steps he plans to take to assist people who earn below the income tax threshold.

--- Later in debate ---

[Jessica Morden (Newport East) (Lab)]

13. What discussions he has had with energy-intensive industries on measures to be included in the 2014 Budget.

[The Economic Secretary to the Treasury (Nicky Morgan)]

I meet a range of companies and industry bodies to discuss energy issues and their impact on business. The Government take the competitiveness of energy-intensive industries very seriously. We have made a package of £400 million available until 2015-16, and we continue to explore ways to ensure that our energy-intensive industries remain competitive.

[Jessica Morden]

Last week, job losses were announced at Orb steelworks—a subsidiary of Tata—in my constituency. The combination of high energy prices, the carbon floor price and the renewables obligation has hit the UK steel industry much harder than its competitors. Will the Minister acknowledge that there needs to be a package of measures in the forthcoming Budget, because unfortunately what the Government have done so far has just not been enough?

[Nicky Morgan]

First, may I express my sympathy for anybody whose job has been either lost or put at risk? I know that Wales Office Ministers have been in close contact with energy-intensive industries in Wales and have had discussions with both the Department for Business, Innovation and Skills and me about these issues. The Government recognise that the rise in energy costs is a key issue for many businesses, especially given the lower than expected European carbon price, and we will of course listen to all concerns expressed in relation to these issues.

[Andrew Griffiths (Burton) (Con)]

14. How much beer duty was paid by people in each income quintile in each year from 2008 to 2013.

[The Economic Secretary to the Treasury (Nicky Morgan)]

Budget 2013 ended the beer duty escalator and reduced the tax on beer by 1p a pint to help support pubs. The Office for National Statistics publication “The effects of taxes and benefits on household income” provides estimates of the amount of beer and cider duties paid by households in each quintile, and in 2011-12 households in the bottom quintile paid £87 while households in the top income quintile paid £208.

[Andrew Griffiths]

Given that we have seen revenue to the Treasury increase, £400 million-worth of investment by the industry in jobs and growth, and brewers and businesses benefiting from the cut in beer duty, does the Minister agree that the Chancellor was right to scrap Labour’s hated beer duty escalator? Given that a trip to the pub is one of our few pleasures in life, does she accept that it would be folly to increase beer duty in the Budget?

[Nicky Morgan]

Of course I agree with the actions that my right hon. Friend the Chancellor of the Exchequer took at the last Budget, and I congratulate my hon. Friend on the campaign he ran on behalf of pubs, both in his constituency and across the country. I have seen the confidence that the reduction in beer duty has given to Britain’s pubs. The public finances already assume that beer duty will rise by less than other alcohol duties this year, after we ended that beer duty escalator. As my hon. Friend will know, we keep all taxes and duties under review.

[Kevin Brennan (Cardiff West) (Lab)]

In the interests of balance, will the Minister acknowledge that although a penny off a pint through beer duty is welcome, the Chancellor’s VAT changes added 5p to the price of a pint? Will she simply acknowledge that fact, as VAT does not get mentioned by Ministers at all?

[Nicky Morgan]

I understand the point the hon. Gentleman is making, but the fact is that, given the changes introduced in last year’s Budget, the cost of a typical pint has come down. We should all be very grateful for that.

[Greg Mulholland (Leeds North West) (LD)]

I warmly welcome the Treasury decision to scrap the beer duty escalator, give a cut in beer duty and support a freeze this year, but although that has been hugely helpful to brewing, it has not helped many pubco pubs, which face a pubco price escalator. The price of an 11 gallon keg of Fosters for a pubco pub has gone up four and a half times more than it has for a free-of-tie pub, with the same inflation and the same duty. Will the Government stop this scandal with a fair deal for our local?

[Nicky Morgan]

The hon. Gentleman knows well that the Department for Business, Innovation and Skills has been reviewing that whole matter. It has had many thousands of responses to its consultation, and we await the response, which will be published in due course.

[John Howell (Henley) (Con)]

15. What recent steps he has taken to reform the banking sector.

--- Later in debate ---

[Penny Mordaunt (Portsmouth North) (Con)]

T8. The maritime taskforce will report shortly, setting out the opportunities and actions to make Portsmouth and the Solent area the heart of the maritime industry in the UK. Will the Economic Secretary work with me to ensure that we can capitalise on the report’s findings to make that vision a reality?

[The Economic Secretary to the Treasury (Nicky Morgan)]

I know that my hon. Friend has worked extremely hard on this. I congratulate her and Admiral Stephens on the excellent work that the taskforce has been doing. It is producing more than a vision for Portsmouth; it is producing a set of clear actions that will enable the Solent area to achieve its ambitions in maritime, marine and manufacturing. Considerable sums will be invested in those sectors. Portsmouth has a Minister and a cross-Government team to help it to secure what it needs, and the Treasury will do all it can to enable the taskforce’s remit to be realised.

[Bill Esterson (Sefton Central) (Lab)]

The Government’s own figures show that net lending to small and medium-sized enterprises has fallen since the funding for lending scheme was introduced, as confirmed by businesses in my constituency. Does the Minister accept that the scheme has totally failed Britain’s small businesses?