Oral Answers to Questions

Julian Knight Excerpts

Tuesday 25th October 2016 Commons Chamber

[Mr Speaker]

I wish the hon. Member for Solihull (Julian Knight) a speedy recovery. He may ask his question from his seat.

[Julian Knight (Solihull) (Con)]

Thank you, Mr Speaker. The Chancellor will be well aware that the west midlands has a trade surplus with China, thanks to Jaguar Land Rover in Solihull and wider manufacturing. On their visits to BRIC nations, previous Chancellors have been keen to trumpet business in the northern powerhouse. Will this Chancellor help the cogs of the midlands engine to turn by taking west midlands businesses with him on future visits?

[Mr Hammond]

Indeed I will. It is an important part of the role of a Chancellor to act as a champion for businesses in the north and the midlands, and to draw the attention of inward investors such as the Chinese and the Indians, who are already heavily invested in the west midlands, to the opportunities that exist in the UK beyond London and the south-east. Such opportunities are not always as obvious to foreign investors as those that exist in London.

Centenary of the Battle of the Somme

Julian Knight Excerpts

Wednesday 29th June 2016 Commons Chamber

[Dr Murrison]

The hon. Gentleman is absolutely right, and I suspect he will have closely followed the programme over the past two years and will continue to monitor it closely over the next two years, leading up to armistice in 2018.

As I was gazing over Scapa Flow a few weeks ago, I wondered how many seamen in Jellicoe’s grand fleet, or in Scheer’s high seas fleet, would have guessed that their countrymen would be spending most of the ensuing 100 years as the closest of allies, united in the most powerful alliance that the world has ever seen. On Friday, we will be standing shoulder to shoulder with another friend and ally at a very special Anglo-French place, the Thiepval monument on the Somme, in the lee of which there are 300 French and 300 British graves. It is a special place; a haunting place. It was Lutyens’s great triumph—a monument to the missing, but more than that: an enduring monument to the unity, I think, of Europeans, and particularly our unity with our closest continental neighbours.

At this time of historic opportunity and risk, let us make the centenary’s legacy one of amity and concord in our European neighbourhood. Here at home, too, we are desperately in need of a coming-together moment. The Somme vigil on Thursday night, and the silence at 7.30 on Friday morning, will, I hope, facilitate such moments of quiet reflection.

[Julian Knight (Solihull) (Con)]

My hon. Friend is making a powerful speech, which is worthy of this occasion. Does he agree that one of the most encouraging developments of the last few years is the greater respect that is shown to our armed forces, and, in particular, the armed forces covenant? Is our country not coming together to a greater extent than ever to mark the dedication and service of our armed forces?

[Dr Murrison]

I agree with my hon. Friend. One of the things that has struck me while I have been doing this work is how much added value there is in the presence of a serviceman from today’s Army on the battlefield tours that we have been running, and in seeing the faces of the young people for whom the tours were principally designed. One understands that they get it—in that moment, they get it—and there is a bridge between today’s servicemen and those who served 100 years ago. That is very powerful.

I am very pleased to see that so many colleagues from Northern Ireland are present. As I was preparing my speech, I asked myself, “Who can I reasonably expect to see in the House during this debate?” I am not surprised, and I am not disappointed. May I pre-empt some of the remarks of Northern Ireland Members by saying that there is nowhere in these islands where the force of the Great War is more keenly felt, or, indeed, where I have felt that more value has been extracted as a result of this centenary commemoration? The way in which communities have been pulled together by sharing history that is so often complex and nuanced has been a joy to behold.

When prominent republicans feel comfortable telling us about their relatives’ wartime service in the British Army, when members of the nationalist community—as guests of the Somme Association at the Somme Museum in County Down—proudly show us their grandfathers’ Great War medals, when the Irish Ambassador lays a wreath at the Cenotaph for the first time, and when the Commonwealth War Graves Commission unveils a Cross of Sacrifice in Glasnevin cemetery in the shadow of Daniel O’Connell’s tomb, we know that something good is afoot. If this is a centenary looking for a legacy, it need look no further. We should remember that a Somme that saw the Ulstermen’s heroic storming of the Schwaben Redoubt also saw the 16th (Irish) Division’s Guillemont and Ginchy. The Somme narrative, once heavily partisan, is now becoming a shared history. On Friday, President Higgins will occupy a place of honour before the Thiepval monument, which carries the names of so many from what were, by the time it was built, two separate polities on the island of Ireland.

Remembrance is hard-wired into the four-year centenary, but what does remembrance of the Somme actually mean now, today, given that its participants would have been long since deceased in any event? I look forward to hearing the views of young people the length and breadth of the country who will be taking part in the series of Great War school debates that were successfully opened last night in Manchester.

The perspective of youth on the causes, conduct and consequences of conflict is so important to our future, but for me remembrance means reflecting on loss and missed opportunity. Our society now is the poorer for the fallen not having enriched the last century through arts, science, medicine, business, even politics. We lost the famous men honoured in their generation, the glory of their time, cited in “Ecclesiasticus”, which many of us will have read out on Remembrance Sunday. Society is the poorer also for the loss of men who would otherwise have lived out their lives in relative obscurity. “Ecclesiasticus” mentions them too. It is the poorer because of the children who were never born to all those great uncles, children whose names were never etched in stone and whose number was never counted among the casualties. In all that hopeful, bright, missed opportunity, how bitterly ironic that one participant in the battle survived—the very distillation of evil, a corporal in the Bavarian army who would march the world to an even greater war of misery two decades later, a war that history will judge to be inseparable from the first.

Steinbrecher was right. The Somme has become a byword for tragedy, pointlessness and waste, but we should never lose sight of the achievements of our predecessors. Be proud of them. Be proud of Britain’s first citizen army. The butcher’s bill may have turned out to be impossibly high, but they were doing the right thing in a just cause. That they were acting against Europe’s then general disturber of the peace was nobly and magnanimously acknowledged at the start of the centenary by the President of Germany, a modern, forward-looking country still tortured by its past.

What was going on in the heads of Kitchener’s young men? In 1916, many of them would not have had the vote. Their families would not have enjoyed the equity in a rich country or public goods that today we assume as our birthright. What then motivated them? If the rallying cry in 1916 was “King and Country” or “Gott, Kaiser und Vaterland”, the glue was loyalty to your mates. If love for country was the headline, the text was written in pride—pride for town, for village, for neighbourhood and for family. But above all it was the ultimate team spirit, the instinct to do the right thing by fellow creatures united in adversity and a common cause. That is why men went over the top in July 1916. That is why they endured unspeakable horrors. That is why they fought and died on the Somme on a truly industrial scale. But ask those who have served in the wars of the 21st century, the sort of conflict that we will be debating, again and at last, next week. They will say the same. A gentler age would have called it love for your oppo. In today’s terms, it is loyalty to your mates.

Nowhere is that better shown than in the Pals battalions of Kitchener’s volunteer army, a phenomenon that is a byword for the pathos of the Somme. That magisterial work, “The First World War” by my late constituent and near neighbour Sir John Keegan, ends with this:

“Men whom the trenches cast into intimacy entered into bonds of mutual dependency and sacrifice of self stronger than any of the friendships made in peace and better times. That is the ultimate mystery of the First World War. If we could understand its loves, as well as its hates, we would be nearer understanding the mystery of human life.”

Steinbrecher survived the Somme, but was killed in action the following year. By then, with the Americans entering the war, the tide had turned. Another German officer, Captain von Hentig, described the Somme as

“the muddy grave of the German field army”

and so it was. But peace came, and Europe’s politicians failed, a betrayal of the fallen and a reminder of our heavy responsibility.

--- Later in debate ---

[Julian Knight (Solihull) (Con)]

It is a great privilege to follow the hon. Member for Strangford (Jim Shannon). July 1 1916 was the bloodiest day for the British Army and the start of our bloodiest battle. As nations applied the lessons of the industrial revolution to the battlefield, there were casualty rates of 20,000 a day—60,000 casualties on the first day—and nearly 1 million men were killed over the course of the several months of the battle. Those rates are slightly numbing. How do you put faces to close on 1 million men? How can you prevent so many tragedies from becoming, as the saying has it, mere statistics?

In my constituency of Solihull, we have a strong connection with our history—many Members have reflected on the history of their own constituencies. On 1 July, the mayor will be hosting our borough’s own commemoration of this pivotal battle, next to a replica trench in the grounds of Kingshurst academy. That will bring history to life for a new generation. I always find with younger people that they have a real, deep respect when faced with the sacrifices of our forebears and have real empathy for what they went through.

I would like to pay tribute to the men and women from my community who paid the ultimate price during the Battle of the Somme and during the Great War. There is not time enough to list them all: 24 Solihull men—Silhillians—died on the first day of the battle, and 127 would die before it concluded in November. Solihull was a very small place then in comparison with now, so we can imagine the impact on the community. Many hon. Members have mentioned that in relation to their own communities. These were people everyone knew. I remember the names I have seen and taken note of on the local war memorial: William Bolton, Charles Frost, Charles Haynes, David Jelfs, Clive Latch and Claud Wilks. Also listed are three members of the same family: Albert, Henry and Sidney Britt, all of whom served and died during the Great War. We are very lucky to live in a country where it is difficult to imagine any family suffering so terribly in a war. However, perhaps these days such things are becoming all too more frequent in our civilian lives.

For every man who died, another came home with life-changing injuries to a society ill prepared for them. This centenary offers us an important opportunity, amidst the sadness and respect, to recognise how far we have come in our treatment of veterans. This is not just about medical science, although that has come an astonishing distance since the Somme, as society has applied the same innovative genius to healing men as it once did to killing them. It is also about our much greater understanding of the mental and spiritual traumas that war inflicts on those who serve.

I am pleased that our country is making great strides towards improved mental health support for our servicemen and women, but we still have a long way to go and for many years our progress was too slow in that regard. I always think it is a great shame in our society that many of those who are homeless are former armed services personnel. I will do my best to support those efforts in my role as a Member of Parliament.

Of course, the age of total war meant that the wounds and risks were not borne by soldiers alone. A huge number of courageous men and women on all sides served in medical and technical positions, which were essential to the war effort. My right hon. Friend the Member for Broadland (Mr Simpson) mentioned that many of the shells fired at the Somme were dud. It was very much a testament to the women of this country working in the munitions factories that they made such a difference in improving the quality of the armaments, thereby helping to deliver victory. So let me pay tribute to them now, especially to the extraordinary women who overcame great prejudice to play their vital part. Even before the sheer scale of the slaughter, the authorities had invited them to serve in a wide range of important roles.

Events like this centenary remind us not only how lucky we are to live in an age when mass mechanised warfare is seemingly not imminent but of the incalculable debt all of us owe to the men and women of our armed forces today.

The Economy and Work

Julian Knight Excerpts

Thursday 26th May 2016 Commons Chamber

[John McDonnell]

I will press on, Mr Deputy Speaker, as I know we are under time pressure.

All this is the direct result of a failure to invest. Too many businesses have substituted cheap labour for expensive investment. To be frank, they cannot be blamed for that, as the Government have set the lead, cutting their own investment spending. Low investment and weak productivity have real-world consequences. They mean talent wasted and opportunities lost. Some people are stretched to breaking point, working long hours just to make ends meet. Others are left to languish, desperately searching for extra hours. Even the Government’s own forecasters do not expect wages to recover before 2020.

[Julian Knight (Solihull) (Con)]

Will the hon. Gentleman give way?

[John McDonnell]

I will in a second. Millions of people are now self-employed, but their average earnings have fallen by 22% since the right hon. Member for Tatton (Mr Osborne) became Chancellor. The Queen’s Speech tells us that the Government plan to create an economy

“where work is rewarded.”

Nothing could be further from the truth. Those who work hardest are being punished with cuts to tax credits, but tax dodgers and the super-rich are rewarded with tax cuts.

--- Later in debate ---

[Mr Osborne]

We worked together to bring welfare bills down and to make work pay. I am working with the new Secretary of State for Work and Pensions, my right hon. Friend the Member for Preseli Pembrokeshire (Stephen Crabb) to carry on that record in government. We will go on building that strong economy and the sound public finances that underpin a fair society.

[Julian Knight]

I thank the Chancellor for giving way. He is being most generous. I note that the Chancellor has been reading from the “Labour’s Future” report. I wonder whether he has seen the executive summary, which states:

“Labour lost because voters didn’t believe it would cut the deficit. The Tories didn’t win despite their commitment to cut spending and the deficit: they won because of it. The Tories were trusted to manage the country’s finances, Labour was not.”

[Mr Osborne]

My hon. Friend is absolutely right. If the verdict of this report is that Labour is on life support, the policies of the shadow Chancellor are “do not resuscitate”. That is what he is condemning the Labour party to.

Real-time Credit Scoring

Julian Knight Excerpts

Tuesday 2nd February 2016 Commons Chamber

[Chris Evans (Islwyn) (Lab/Co-op)]

Thank you for calling me to speak, Madam Deputy Speaker; it is a pleasure. I have been in this House for six years in May, and this is the first time I have ever been granted an end-of-day Adjournment debate.

I am delighted to have the opportunity to debate the topic of real-time credit scoring. For me, this is a very important issue, especially in the wake of several financial scandals over the years. The financial crash of 2008 proved one thing—that banking needs reform.

Whenever I think of banking, I think of the need for reform. Most people who use banks will want to borrow money and, unfortunately, personal lending and personal loans are the last area to be considered for reform by the Government.

Real-time credit scoring makes complete sense. The term describes the sharing of data from the credit reference agencies in real time or as close to real time as possible. This requires sufficiently up-to-date and complete relevant data from all the banks and financial institutions. People expect choice in any walk of life. It is what our system is based on. In the market for personal loans, the choice is too narrow and too clearly focused on the banks. Real-time credit scoring would shake up the market and bring about real change for consumers and banks.

The Financial Conduct Authority is looking at the issue. The case for regulation to enable data sharing to happen safely and effectively is compelling. If consumers could ask their banks to share real-time data about their account with a prospective lender, lenders could assess affordability more accurately, meaning that they could make more capital available to consumers with lower risk, thereby driving down cost.

[Julian Knight (Solihull) (Con)]

I congratulate the hon. Gentleman on securing this debate on a very important topic. I support his call for real-time credit scoring, which needs to be explored further. In my previous occupation as a financial journalist, I dealt with a lady who got into £107,000 of debt in three days, following a relationship breakdown. If real-time credit scoring had been in place on the high street, she would not have got into such enormous debt, which caused further mental health issues. Perhaps the hon. Gentleman will reflect on that.

[Chris Evans]

I will develop that argument further. The hon. Gentleman identifies the nub of the problem—the delay in credit scoring needs to be addressed. That is common sense and I hope the Government will grasp the nettle.

Oral Answers to Questions

Julian Knight Excerpts

Tuesday 19th January 2016 Commons Chamber

[Mr Osborne]

It is right to set and to try to meet a stretching target, even if that will be challenging. The hon. Gentleman talks about realistic and credible numbers. If Scotland had listened to the Scottish nationalists, it would be separating from the United Kingdom in two months’ time. The Scottish Government based their claim for independence on an oil price of $115. Scotland would now be heading for economic catastrophe if it had listened to the hon. Gentleman and Scottish National party members. Before they talk about credible and realistic economic policies anywhere else in the United Kingdom, they should get one themselves.

[Julian Knight (Solihull) (Con)]

Motor manufacturing is crucial to our long-term economic plan and to exporting. The Land Rover Defender will soon stop production in Solihull. Will the Chancellor praise the workers of Solihull for producing that iconic brand and driving exports for the past 60 years?

[Mr Osborne]

My hon. Friend is right to pay tribute to workers at the Jaguar Land Rover plant in Solihull. The iconic Defender that they have produced over all those decades has been seen around the world and used in peacetime as well as during war. It is good news for Solihull, the west midlands and the whole country that Jaguar Land Rover will continue to produce brand-new models of great cars. It is one of the real success stories of the British economy. In general, while Conservatives have been in the Treasury and in Downing Street, car production in this country is up by 50%.

Guaranteed Income for Retirees

Julian Knight Excerpts

Tuesday 17th November 2015 Westminster Hall

[Harriett Baldwin]

The hon. Gentleman wears it well.

The debate is timely, because we are just over six months into the pension freedoms, and are beginning to get data on what pensioners or retirees have been doing with those freedoms, and about use of the free and impartial guidance from Pension Wise, which was set up by the Government. As we speak, life expectancy is growing by about five hours a day in this country, which makes it all the more important that we have this debate and agree on the aspiration to ensure that hard-working people are in a position to fund a comfortable and, we hope, increasingly lengthy retirement.

Against the background that I have set out, the Government introduced radical reforms giving people freedom and choice in how they access their own hard-earned retirement savings, replacing an effective obligation on pensioners to purchase an annuity—a product that often they did not shop around for and that may not have been right for their circumstances.

[Julian Knight (Solihull) (Con)]

The hon. Member for Ross, Skye and Lochaber (Ian Blackford), whom I congratulate on securing this important debate, mentioned at one point reinstating the requirement to annuitise. The old open market system failed many vulnerable consumers, as my hon. Friend the Minister mentioned, and many with impaired life expectancy were shunted by providers into poorly paying and inappropriate annuity contracts. Will she comment on that?

[Harriett Baldwin]

My hon. Friend is right; the world where we obliged people to buy an annuity income with their retirement savings was not perfect. Often they did not shop around—the data from the Financial Conduct Authority suggest that about eight out of 10 consumers could have got a better deal by shopping around—so I cannot agree with what I believe was SNP policy. That seems to be to end the current situation where there is more flexibility, and once again to require people to buy an annuity. However, I recognise that Members across the House have concerns about customers and how they are supported as they make perhaps their most important long-term financial decision, other than purchasing a home.

Air Passenger Duty: Regional Airports

Julian Knight Excerpts

Tuesday 20th October 2015 Westminster Hall

[Julian Knight (Solihull) (Con)]

I beg to move,

That this House has considered air passenger duty and regional airports.

It is always a pleasure to serve under your chairmanship, Sir David. I am delighted to have secured this important debate, and I put on record my thanks to my hon. Friend the Member for North West Leicestershire (Andrew Bridgen), who has been a champion of regional aviation and has campaigned on many of the issues that I hope to touch on in the debate.

Along with many hon. Members present, I have a regional airport on the edge of my constituency—in my case, Birmingham airport. I will set out the importance of my regional airport to the west midlands and to the wider UK economy, before moving on to the specifics of air passenger duty.

Birmingham airport is the second largest regional airport in England and the third largest regional airport in the UK. York Aviation has calculated that in 2014 the airport’s total economic impact in the west midlands was worth about £1.1 billion. The airport supports about 25,000 jobs.

[Karen Lumley (Redditch) (Con)]

I congratulate my hon. Friend on securing the debate. Does he agree with me that Birmingham international airport is a fantastic airport and, when High Speed 2 is built, some people in London will be able to get to Birmingham quicker than they would be able to get to Gatwick or Heathrow?

[Julian Knight]

My hon. Friend is a strong champion of regional aviation, and many of her constituents in Redditch not only use Birmingham airport and enjoy its facilities but work there.

As I was saying, York Aviation calculated that some 25,000 jobs rely on the airport, which puts it in a similar bracket to developments such as HS2 in driving the regional economy. Passenger numbers at Birmingham airport have grown by 13% over the past five years and in 2014 alone it handled more than 9.7 million passengers, including a 7.2% growth in long haul. Nevertheless, the airport is running well below capacity. It could conceivably accommodate up to 36 million passengers, rather than just under 10 million.

The potential for Birmingham airport, and I am sure for many other hon. Members’ airports, to impact positively on the UK economy is considerable. Genuinely, we have only scratched the surface of what we can achieve. While we take seemingly forever to debate a new runway at Heathrow, jobs and direct investment in the regions are going begging.

The west midlands is in receipt of over a quarter of all foreign direct investment entering the UK and leads the UK in terms of export growth. It is the only part of our country with a positive visible trade balance with the European Union, seeing overall growth of 100% between 2009 and 2014. Birmingham airport is central to that—but more growth and jobs could be had. A major stumbling block is the air passenger duty regime.

Regional airports are at a disadvantage, as rates of APD are calculated on the destination of the flight and the class of travel that a passenger is in. This fee is the same whether someone flies from Heathrow, Birmingham or any other English or Welsh airport: for flights within the European open skies area, the fee is £13 in standard or £26 in a higher class, but jumps dramatically for flights outside that area, to £71 in standard class or £142 in a higher class. APD in the UK is considerably higher than in our neighbouring competitor economies: in Germany, it is £5.70 in the European open skies area and £32 for the rest of the world in standard class; and in France it is cheaper still, at £3.90 in the European open skies area and £8.90 for the rest of the world in standard.

An Airport Operators Association survey found that the APD has had a direct effect on passenger numbers and routes. Bristol airport reportedly said that several domestic services were scrapped as a result. Routes between Southampton, Leeds-Bradford, Glasgow, Edinburgh and Brussels airports had been “adversely affected” by the tax.

[Mr Nigel Dodds (Belfast North) (DUP)]

I congratulate the hon. Gentleman on securing this important debate. What he is alluding to is all the more pertinent in relation to Belfast City airport and the international airport in Northern Ireland because we share a land border with the Irish Republic, so a few miles down the road Dublin airport does not apply such taxes. We have severe taxes—air passenger duty—in Northern Ireland, so there is a double whammy for us. I support what he is saying and I urge the Government to take seriously the impact of this iniquitous tax on small, regional airports and peripheral areas of the United Kingdom.

[Julian Knight]

The right hon. Gentleman highlights an issue to do not only with his own airport but the wider UK aviation industry. Both Derry airport—also in Northern Ireland—and Cambridge airport in England claim that they are being prevented from expanding their services by APD. My argument is that the hub status of the major London airports, in particular Heathrow, allows them more easily to absorb the shock of air passenger duty, but that is not the case for some of the regional airports.

There have of course been successes in attracting new long-haul routes to Birmingham, for example. We have Air India now flying its routes to Delhi and Amritsar daily; American Airlines has begun daily flights to JFK, alongside the daily flight to Newark—that is not Nottinghamshire; Emirates has launched a third daily flight to Dubai; and this summer Hainan Airlines operated 34 twice-weekly flights between Birmingham and Beijing.

As was made clear to me in my recent meetings with the Ontario Teachers Pension Plan, which owns Birmingham airport and is a responsible trustee, my local airport would love to have a regular direct flight between the UK and China week in, week out, rather than only for the summer, and it is a real failing that in the week in which the Chinese President is visiting we do not have a regular scheduled flight between the UK’s second city and Beijing. We cannot separate the issue of APD and devolution, which is a central plank of the Government’s approach to reforming and reinvigorating the UK economy.

It is hugely important that the fruits of growth that come from devolution extend to our connectivity as well. That must include greater use of our regional airports for short and long-haul flights.

[Jonathan Edwards (Carmarthen East and Dinefwr) (PC)]

I, too, congratulate the hon. Gentleman on securing this important debate. We have a strange situation in Wales. The Welsh Government own our own national airport, but the UK Government will not devolve APD to them so that they may utilise their asset. Does he agree that that is a slightly strange situation?

[Julian Knight]

I thank the hon. Gentleman for his contribution. I am about to turn to those particular points.

[Mrs Caroline Spelman (Meriden) (Con)]

Before my hon. Friend continues, and on the very day that the Chinese President visits our Parliament, may I follow his train of thought about the importance of connectivity with China? My hon. Friend might recall that the President’s predecessor stopped first at Stratford-upon-Avon before coming to London, so the appetite for tourism to the west midlands is real and strong, and greater connectivity through Birmingham would enhance it.

[Julian Knight]

Greater connectivity throughout the United Kingdom—in all the regions and devolved Administrations—would enhance not only tourism, but business and trade. I will come on to those points shortly.

Powers over APD are being considered for Wales, and that might have a knock-on effect for English airports such as Bristol and Liverpool. More seriously for my local airport, Birmingham, the new Manchester devolution deal might see that city gain the power to cut APD for its own airport, which could lure scheduled and package-holiday flights away from Birmingham. Clearly, if we are not to be placed at a disadvantage by rival areas, we need Birmingham airport to be able to compete fairly. However, I do not want my speech or this debate to be exercises in grievances or fiscal wishful thinking.

Despite the best efforts of this Government, we face a difficult fiscal environment. While we are still trying to clamber back from the recession and endemic overspending by Labour, any suggestions should at least be revenue neutral for the medium term.

[Henry Smith (Crawley) (Con)]

I congratulate my hon. Friend on securing the debate. In his few months in Parliament he has become a worthy campaigner on behalf of Solihull and the west midlands. Might the answer to the question of APD be a UK-wide reduction or abolition of the tax, the highest such charged in the world, apart from in Chad? A recent PricewaterhouseCoopers report suggested that the amount of economic growth that Birmingham and other places, such as London and the south-east, would generate from the abolition of the tax is greater than the amount brought into the Exchequer.

--- Later in debate ---

[Julian Knight]

My hon. Friend makes some valid points. I had no idea that we were second only to Chad when it came to air passenger duty; that is certainly new to me. I hope to address some of the issues he raised.

At a time when we are trying to clamber back from financial difficulty, revenue neutrality is something that we need to put, as much as we can, in our proposals. There is justifiable concern in the west midlands and other regions about their airports’ ability to compete with devolved areas. While devolution is a bottom-up process, the Treasury could heavily encourage the devolution of APD to combined authorities or devolved areas as soon as practicable.

What practical things can be done by the Government right now? I would suggest an APD holiday on new routes. Birmingham airport is in discussions with Hainan Airlines for a regular, scheduled service, following two summers of charter services. An APD holiday could aid that. That would provide a direct link for the UK’s second city to the powerhouse of China and further assist the west midlands’ current trade surplus with China. It would also help foreign direct investment just as with the new Gentling resort close to Birmingham airport.

Regional airports, the wider economy and future tax take would benefit from an APD holiday. While Birmingham airport and others want a general cut in APD, which is unlikely in the short term given the financial circumstances, it would accept any measures to reduce that tax. It estimates that a cut in APD on non-congested airports would boost passenger numbers by about 2.9 million in just a decade. All increases in passengers will bring goods, services and jobs.

[David Simpson (Upper Bann) (DUP)]

I congratulate the hon. Gentleman on obtaining the debate. I am sure he agrees with the findings of the Select Committee on Transport, which said earlier this year that small, regional airports had been held back because of air passenger duty, which was affecting jobs and the skills base coming in. As the likes of Belfast City airport and the international airport in Northern Ireland are confident that passenger numbers would grow substantially if APD were removed, that should be an incentive to bring more people in.

[Julian Knight]

I thank the hon. Gentleman for that contribution. I note that the Transport Committee wanted to attach a report to the debate, which I was happy to agree to.

The hon. Gentleman made it clear that all increases in passengers will bring goods, services and jobs to an area, all of which will return money to the Exchequer through other taxes. These measures will go some way towards reversing the scandal under Labour that the UK did more trade with Ireland than with Brazil, Russia, India and China combined. The Prime Minister, through trade missions, and the Government, more generally assisting in trade with the emerging and fast-growing markets, are tackling that problem. However, there is still the issue of connecting our regions, and the country more generally, with the large and frankly now emerged, rather than emerging, economies of the world.

--- Later in debate ---

[Julian Knight]

The Minister has just mentioned that an operator might switch from, for example, Liverpool to Frankfurt to take advantage of an APD holiday. Surely, they could do that already, because the APD rates are far higher in this country than they are in our competitor economies.

[Mr Gauke]

If there was a dramatically different regime for new routes to and from the UK versus existing ones, there is a risk that there could be a certain gaming of the system. In order to qualify for a lower rate of APD, an operator might attempt to make a relatively minor change to a route, such as flying to a different German airport close to the original one, and thereby replace an existing route with a new one. That would do little to improve the use of, say, Birmingham International airport, as my hon. Friend seeks to do—given the remarks of my right hon. Friend the Member for Meriden, it might be unwise to try to increase the number of users to 36 million—and we would merely see a lot of churn, rather than the increase that my hon. Friend would like. On that and related ideas, we are considering all responses from interested parties to our consultation, and we will respond in due course.

--- Later in debate ---

[Julian Knight]

Thank you for your chairmanship of this debate, Sir David. I thank all right hon. and hon. Members for their contributions and the Minister for his reply. I was particularly impressed, not for the first time, by the contribution of the hon. Member for Central Ayrshire (Dr Whitford). I looked wistfully out of the window when she mentioned golf on this beautiful sunny day, and I look forward to having a round in her constituency at some point. When she mentioned Prestwick airport and Elvis, I was reminded of the famous story about Elvis creating perhaps the biggest PR gaffe of the century when he was interviewed by reporters on his one and only trip to the UK. Having landed at Prestwick airport, he came out of the plane and said that it was absolutely delightful to be in England. That, obviously, did not go down very well.

The hon. Lady spoke passionately about Prestwick and the problems that it has encountered in recent years. The Scottish Government have plans to reduce APD by 50%, and I watch with real interest to see what the economic effects will be; I imagine that they will be more considerable than our Treasury takes account of. In many other hon. Members’ constituencies, there is not the same opportunity for devolution. My hon. Friend the Member for Fylde (Mark Menzies) said that his airport was hanging by a thread and faced the potential of greater competition from Scotland post the 50% cut in APD.

Some of the most telling contributions were made by the hon. Member for Strangford (Jim Shannon), the right hon. Member for Belfast North (Mr Dodds) and the hon. Member for South Antrim (Danny Kinahan). They said that the disparity in APD rates in Northern Ireland and the Republic is creating further social and economic divides when it comes to travel, and that, frankly, they feel as though the system is broken and it is time to fix it. I believe that many hon. Members would agree with that theme.

My neighbour and right hon. Friend the Member for Meriden (Mrs Spelman) spoke about the necessity of approaching transport in a joined-up fashion and the potential that HS2 will bring. The problem is that currently, we feel as though airport duty, the idea of which is effectively to price people out of planes—

[Sir David Amess (in the Chair)]

Order.

Motion lapsed (Standing Order No. 10(6)).

Tax Credits (Working Families)

Julian Knight Excerpts

Tuesday 7th July 2015 Commons Chamber

[Julian Knight (Solihull) (Con)]

It is a particular pleasure to follow the right hon. Member for Manchester, Gorton (Sir Gerald Kaufman), the Father of the House.

Tax credit payments play an important role in the finances of many of my constituents, helping them to provide for childcare, meet ongoing expenditure and, crucially, join the workforce. My constituency is the prosperous town of Solihull, but there is still a legion of very hard-working people on not particularly high salaries who are helped by tax credits. I remember one door I knocked on in Shirley about a year or so before the general election. I met a young couple who told me that they both worked full time, brought up two children and earned something like about £20,000 a year between them. They had to drive around in a 15-year-old car. Their lives were difficult financially and tax credits really helped them to get over a hump in the road. It would therefore be wrong to lose tax credits overnight without proper recompense through the tax system and other means of helping individuals. Incidentally, the couple also commented on how the state provided for people local to them who did not work, but had a much higher standard of living—a strong argument for a sensible cap on benefits, with which it seems that the shadow Chancellor now agrees.

We should not pretend, however, that tax credits are perfect. When they were launched, there was a massive problem with over and underpayments—2 million instances in the first year alone—and this has not stopped. Okay, they are better managed by Her Majesty’s Revenue and Customs, but there is still a great deal of confusion in the tax credits system. If we were designing a system now to help people into work and to support families, would we really design tax credits with the inbuilt pitfall of overpayments that must then be clawed back, often to the great personal distress of the claimant?

There are also long-standing issues of fraud in the tax credits system. The online portal was closed in 2005 when tens of millions of pounds was defrauded, much of it by organised gangs from overseas. I remember reporting on the story in my capacity as BBC News personal finance correspondent and being told by officials that although it was unfortunate, the fraud was seen as a price worth paying to deliver the project. The phrase used was “spray and pay”.

In addition, there is an issue, touched on by hon. Members, about how tax credits effectively top up low pay in the economy. They are effectively a subsidy for big business. I note that the hon. Member for Birmingham, Ladywood (Shabana Mahmood) disputed this fact, but that august publication, The Guardian, carried a story on 20 April saying that £11 billion was being used to top up low pay through the tax credits system.

There is also a strong cultural issue. Does it not damage society and individual entrepreneurialism to have so many people effectively in receipt of welfare and beholden to the state, as my hon. Friend the Member for South Suffolk (James Cartlidge) asked earlier? As we have seen in Greece and elsewhere, over-reliance on the state damages society and leaves individuals incredibly vulnerable to global financial shocks, as well as domestic economic shocks. He made an interesting point about whether many loans that are now active are predicated on tax credits. Surely that needs to be investigated further by the Financial Conduct Authority.

Also, it is possible that some governing parties have used tax credits as a means by which—heaven forbid—to curry favour with the electorate. We should not forget that the biggest rises in tax credits came just before the 2005 and 2010 general elections. Is it not significant as well that tax credit spend rose by 340% between 1997 and 2010, whereas average salaries rose by only 30%? Tax credits have increased by 10 times the level of average salaries, drawing more and more people into dependence on the state. There is also the wrongheaded situation of people on salaries far in excess of the national average being dragged into tax credits. In particular, single people often do not get any help whatsoever, yet the pattern in this country is of more single households being formed.

No Government Member has so far suggested that tax credits should be done away with overnight. They should, however, be replaced slowly over time by a different, cleaner system less open to fraud and miscalculation. For me, increasing the personal allowance, from £10,000 to £12,500 and potentially beyond, is key. We should cut out the middle man. There is no need to claw cash back. It is also essential to raise the 40p personal allowance. There are many people paying tax at 40p in the pound who should not be; the system should not have been so designed that they have to pay it.

We are doubling the amount of free childcare from 15 hours to 30 hours—a key means by which to enable people to get back into the workforce—while fuel duty is now 18p cheaper than it would have been under Labour’s plans, which has made a massive difference to family finances. In addition, ending the green levies on energy, including home energy supplies, should press down on home energy costs. In Solihull, we have just managed to freeze council tax for the fifth year on the trot—another means of delivering tax cuts, in effect, when compared to inflation, for working people. This has happened while unemployment in my constituency has fallen by 67% since 2010.

[Peter Dowd (Bootle) (Lab)]

Does the hon. Gentleman agree that the Chancellor was very specific about how he intends to cut tax credits for poorer working families, but very woolly about how, as part of the so-called long-term economic plan, he would encourage employers to pay decent wages?

[Julian Knight]

rose—

[Mr Deputy Speaker (Mr Lindsay Hoyle)]

Before the hon. Gentleman continues, he has spoken for quite a while now, so I am sure that he is right at the end of his speech and wants to let others in.

[Julian Knight]

Thank you, Mr Deputy Speaker.

My answer to the hon. Member for Bootle (Peter Dowd) is that we will find out a lot more about the future direction of tax credits and other welfare measures from the Chancellor’s Budget statement tomorrow, so we should wait on that announcement.

I am running out of time, so let me say that I completely understand why tax credits were invented. They have done a lot of good in our society. There have, however, been unintended consequences. Worst of all, they are making millions of healthy, working-age adults reliant on cash from the state. We must preserve elements of the system for those trying to get into work, but we should augment it by active programmes of raising personal allowances and enhancing childcare provision.

Greece

Julian Knight Excerpts

Monday 6th July 2015 Commons Chamber

[Mr Osborne]

As I have said, Britain is not immune to the problems in the European economy. Some 50% of our exports go to the European Union, even if only a very small proportion of that goes to Greece, and we are a very large financial centre, so there would be an impact on our economy if the Greek crisis continued to deteriorate. That is why it is absolutely in our interests that there is a solution.

[Julian Knight (Solihull) (Con)]

On a humanitarian point, considering that some international drug companies are currently holding off shipping to Greece as a result of the crisis, are there any early contingency plans in place, or discussions in the UK and the EU, for moving in medical aid should our friends suffer a social and economic collapse, the likes of which were seen when Argentina defaulted in 2000?

[Mr Osborne]

My hon. Friend is right to remind us that, although we are talking about a financial crisis, there is real human suffering in Greece, because the banking system has effectively shut down for many Greek citizens and businesses. There are reports of a shortage of medicines, which is why I drew attention in my statement to the Foreign Office’s advice—I was reiterating advice that has been in place—to take adequate supplies of prescription medicines, in particular. On his specific point, we have been talking with the British pharmaceutical companies, which have continued to supply the Greek market, and of course we stay in touch with them regularly.

Productivity

Julian Knight Excerpts

Wednesday 17th June 2015 Commons Chamber

[Julian Knight (Solihull) (Con)]

Thank you, Madam Deputy Speaker. I am particularly delighted that I may not be taking an intervention on this, my second speech to this place. I congratulate my hon. Friend the Member for Hertsmere (Oliver Dowden) and the hon. Member for Sheffield, Brightside and Hillsborough (Harry Harpham) on their very fine maiden speeches.

Productivity is an excellent subject to debate, because raising this nation’s productivity has been the economic elephant in the room for a generation or more. Why is it that we beat many of our larger continental rivals on measures of economic performance and, crucially, employment, and enjoy the benefits of a flexible and vibrant labour market, yet our productivity per worker is lower than that of both France and Germany?

It is good to hear the Opposition mentioning business, although seemingly only in soundbite form. I think we often lose sight of the simple fact that every penny we earn as a country—every job and every sum spent by the public sector on schools and hospitals—comes from business ultimately. It seems, however, that the language used by the shadow Chancellor in particular and in the more left-leaning press has the air of productivity being the latest economic criticism cab off the rank, this week’s crisis of choice. The Opposition have talked of numerous supposed crises in recent years: we were apparently cutting too far, too fast; then we had the double-dip recession that now, it seems, never took place; then the domestic energy crisis; and finally we had the cost-of-living crisis, whereas, as we know, real incomes are now moving ahead, while inflation is at a generational low. All the time, the UK economy has been beating expectations.

It is good that the Labour party has now settled on productivity, because it is a far longer-term challenge that we must meet, but it has chosen the wrong path to meet this challenge, if the policies of the past few years are anything to go by. More big state; taxing entrepreneurs and wealth creators—this is not a passport to productivity. It is quite the opposite. In addition, Government borrowing matters hugely to productivity. If we have runaway borrowing, eventually we will have higher interest rates for businesses and individuals, while the debt interest repayments will mount up for the Government and in turn damage public investment.

The Government’s first job is to get their finances in order and create certainty for business to invest and individuals to strike out on their own. Where the Government can play a key role is through the education system. Young people need many different options when they leave education, and in my constituency the biggest employer, Jaguar Land Rover, is very involved in local schools, offering apprenticeships. Universities should be among a suite of options for young people, so I am delighted that the Government are moving ahead with their apprenticeship agenda.

Another area where the UK can draw a lesson from Jaguar Land Rover is in exporting to the right countries. It was a travesty that when the coalition Government came to power in 2010 we traded more with Ireland than with the BRIC nations, and I applaud the Prime Minister’s efforts in this area. The truth is that we must look to trade with everyone, as this will bring in the necessary outside investment, skills and different perspectives.

We have allowed people to live in a state of dependency. For far too many, welfare has become a handout rather than a hand-up. Welfare reforms are a crucial means to get people economically active and contributing rather than receiving from the state. This raises productivity. And please, let us never again hear, “It’s the wrong type of job”—a regular refrain from Opposition Members. A job is a job, and from humble starts superb careers can be built. There is a cultural snobbery factor when it comes to work, which this country needs to address. All sides need not only to talk the language of business, but genuinely to understand that it is a transformative bringer of social good—more so than the state.