European Union Referendum Bill

Alan Mak Excerpts

Tuesday 8th December 2015 Commons Chamber

[Mr Jenkin]

I agree with my hon. Friend, and will add that, where the Electoral Commission clearly has a duty, its decision can be judiciously reviewed. In respect of the designation of only one campaign, I have absolutely no doubt that there would instantly be a judicial review, and I speak with knowledge aforethought.

In the absence of the duties on the Electoral Commission —for example, to provide for impartial and objective information from the Government—it is a moral imperative on Ministers to ensure that they undertake their obligations in the spirit of a fair referendum, and not to abuse the trust that this legislation places on them with regard to the publication of that information.

[Mr Alan Mak (Havant) (Con)]

On 9 June, I began my parliamentary career with a maiden speech on this very Bill. I am incredibly grateful to be given the opportunity to speak again on this matter as the Bill makes its way through this House.

Deciding on whether we should continue to be a member of the European Union is one of the most important issues of our generation. We should be thankful about some elements of our relationship, particularly our access to the single market, and our non-involvement in Schengen and in the euro. There are other areas in which we are not getting a good deal, and the Prime Minister is right to renegotiate our relationship to request a better deal. He and the Secretary of State for Business, Innovation and Skills, along with other Members, have said that we should not be afraid to leave if we find that the deal is not good enough for our country and our future.

As the country makes its decision, and as the referendum period begins, I am mindful that the public will need information about the offer on the table. They will need factual and speculative information about what “in” and “out” mean, and about what our future might be under a different arrangement. The public will also need legal, political, financial and economic information. Above all, they will need a well-run and well-administered referendum, and therein lies a key role for the Electoral Commission. The public will also need information on what the Swiss and Norwegian models look like to see which would be a good fit for this country, and whether we are better off staying in a reformed European Union.

[Mr Andrew Turner]

Does my hon. Friend agree that there are not just two alternatives—Switzerland and Norway—but lots and lots and lots of alternatives?

[Mr Mak]

My hon. Friend makes a fantastic point. I certainly agree that there are a number of alternatives. I look forward to referendum debates in the media, in this House and in many other forums.

I wish to return now to the central role of the Electoral Commission. My view is that the Electoral Commission should not be drawn into playing any sort of quasi-judicial or quasi-campaigning role. It should play a central role in the good functioning and administration of the referendum. We should always be mindful of the commission’s own views, which have been set out in a letter that has been distributed to Members across the House, and to which we should pay heed.

I am also heartened about the vibrancy of our democracy. Even though we are still in the early stages of our debate, it has already produced a number of campaigning groups. I am very pleased to see some senior Members from across the House participating in today’s debate. The campaign groups that have been set up include: Vote Leave, Take Control; Leave.EU; and Conservatives for Britain, which has been skilfully organised by my hon. Friend the Member for Wycombe (Mr Baker). I can see my hon. Friend the Member for Harwich and North Essex (Mr Jenkin) and my right hon. Friend the Member for Wokingham (John Redwood) who have played leading roles in the campaign. On the Opposition benches, we have Labour in for Britain, which is led by the right hon. Member for Kingston upon Hull West and Hessle (Alan Johnson); and Britain Stronger in Europe, for which my right hon. Friend the Member for Ashford (Damian Green) plays a leading role. Even before the referendum gets under way, there is a vibrancy of debate across the House and also in the country, which is very positive.

[Simon Hoare]

My hon. Friend is right to set out the span of organisations. I do not know whether my inbox in my constituency of North Dorset is at odds with those of the rest of the House. I get lots of emails about lots of things—hundreds about bees over the weekend—but I cannot think of the last time I received an email about the EU. We in the House are inclined to obsess about it, and we forget that outside, people are trying to live their lives and all they want to know is that the Government are on their side. We should not focus down to what is happening here.

[Mr Mak]

I thank my hon. Friend for his characteristically cogent intervention. He is right that, beyond the walls of this place, men and women, families and businesses and community organisations play their day-to-day role, focus on other priorities and are not necessarily concentrating on the EU referendum or those issues on which this House concentrates.

[Sir William Cash]

I refer vicariously to the most recent opinion poll, which showed that 52% of the United Kingdom electorate thought that they should leave and only 48% thought that they should stay in; 60% of those in the south-west said that they wanted to leave.

[Mr Mak]

I thank my hon. Friend for his intervention. I was just finishing my response to my hon. Friend the Member for North Dorset (Simon Hoare). I hope that through debates in this House we shall be able to take a lead on the issues. I welcome emails from people on all sides of the argument.

[John Redwood]

Surely the point that the British people fully understand, which is why they now wish to leave the EU, is that concerns about migration, jobs, taxation, the £10 billion that we have to pay to the rest of the EU, which we cannot have as tax cuts or extra spending, and our inability to form our own welfare laws are vital concerns, and they are all European issues.

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[Mr Mak]

I thank my right hon. Friend for his characteristically passionate intervention. As I said to my hon. Friend the Member for North Dorset, those issues are certainly important, and I welcome more emails over the next year or so—maybe that is not necessarily the best message for my constituents in Havant! I know that hon. Members across the House will be receiving representations from their constituents arguing on all sides of the debate, whether in letters, emails or petitions. That is an important part of our increasingly vibrant democracy.

[Mrs Main]

The hon. Member for North Dorset (Simon Hoare) mentioned bees, but the issue relates to the EU directive on the neonicotinoid ban, so his emails are about Europe. It is just that his constituents are not mentioning the word “Europe”. The emails are about EU regulation.

[Mr Mak]

My hon. Friend makes a good point. We debate many issues in this Chamber, Westminster Hall and other forums on the parliamentary estate, and Europe makes an important intervention in those issues, which we should be mindful of.

I want to talk about the role of the referendum and Lords amendments 5, 6 and 13. I want to remind the House of the text and intention of Lords amendment 5, which introduces a new clause that will create a duty for the Secretary of State to publish a report setting out what has been agreed by the member states following the renegotiation of the UK’s membership of the EU that has been requested by the UK Government. The report, as my hon. Friend the Member for Harwich and North Essex said, will also require the UK Government to set out an opinion about what has been agreed, and it will have to be published at least 10 weeks before the date of the referendum. The Secretary of State would also be required to place a copy before Parliament.

Lords amendment 6 introduces a new clause that creates a duty on the Secretary of State—probably the Foreign Secretary—to publish a report setting out information about the rights and obligations that arise under EU law as a result of the UK’s membership of the EU. The rights in this case refer to the rights that the UK has as a member state and rights that are granted to individuals and organisations under EU law. Those could include rights of access to the single market. The obligations arise under EU law and apply to the UK as a member state and to organisations or individuals. Those could include the obligation on the UK as a member state to amend national law to bring it in line with EU law in a particular area.

The duty in Lords amendment 6 would also require the Secretary of State to include a report about examples of arrangements that other countries have with the EU, whether that is Switzerland or Norway or other countries that have a relationship with but are not members of the EU. Again, the report would have to be published at least 10 weeks before the referendum date and the Secretary of State would be required to lay a copy before Parliament.

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[Kevin Foster]

My hon. Friend is going over the impact of making the Electoral Commission quasi-judicial, but Secretaries of State and Ministers are answerable to this Parliament and in particular to this House. It would put the commission in the role of partly taking on the job of Parliament.

[Mr Mak]

My hon. Friend makes an outstanding point. To give the Electoral Commission a role beyond its current role would be to tread on the feet of hon. Members and encroach on the democratic freedoms and roles of this Parliament. My hon. Friend is right that the Electoral Commission does not agree with the intention of my hon. Friend the Member for Stone. As my hon. Friend the Member for Torbay (Kevin Foster) says, there are better sources of information—such as literature from the various campaign groups that I mentioned and information from public bodies such as the Office for Budget Responsibility or the Bank of England. I would encourage members of the public to read Hansard, where the speeches of many distinguished hon. Members can be found, including from this very debate.

[Sir William Cash]

It would be useful, if people really wanted to hear how the debate was progressing, for them to follow the transcripts of European Scrutiny Committee, Treasury Committee and Foreign Affairs Committee proceedings. That will tell them an enormous amount about what is going on and what questions are being asked of Ministers.

[Mr Mak]

My hon. Friend makes a cogent point. The proceedings in this Chamber are available not only in Hansard but on parliamentlive.tv as well as BBC Parliament. I encourage all members of the public and all those who are interested in the proceedings of the House to tune in, particularly to my hon. Friend’s Committee, the European Scrutiny Committee, which he has led with distinction for many years, and other Select Committees, including my own, the Procedure Committee, which has been involved in numerous deliberations. I am delighted to see two of my distinguished Committee colleagues in the Chamber today.

The Electoral Commission undertook research as part of its statutory assessment of the type of information that the public would want to know as the referendum process began. As my hon. Friend the Member for Torbay and the hon. Member for Glenrothes (Peter Grant) said, it found that members of the public were not necessarily clear about what the consequences of the referendum would be. There was no real understanding among large sections of the public about what leaving would entail. There was not enough information about what staying in would entail. There was certainly some confusion about the very many campaign groups that have sprung up, which I mentioned as I opened my speech.

What the Electoral Commission did say, which I found heartening, was that there was a strong appetite for more information about the implications of leaving, as well as an appetite for information about the implications of remaining and, as my right hon. Friend the Member for Wokingham said, information about other models of engagement, including Switzerland, Norway, other members of the European economic area and, indeed, countries in Asia, Africa, Latin and South America. He is absolutely right: there are a number of models that can be invoked and, according to the Electoral Commission, the public are keen to have more information. As the hon. Member for Glenrothes said, there is an appetite for more information.

The Electoral Commission found that the public do not simply want dry facts. They would like contextual information, including worked examples, explanations and case studies, giving the views of right hon. and hon. Members. The Electoral Commission recommended that campaign groups, which I mentioned at the beginning of my speech, include on their websites and in their literature worked examples and real-life case studies, along with testimonies from Members of Parliament, Members of the other place and members of the public who wish to share their experience. That would help a great deal to educate the public about the choices to be made.

The Electoral Commission said in its letter that it would be reluctant to adopt the extra powers that some hon. Members believe that it should have, as it has no powers to police information that is put into the public domain alongside Government reports. It has no legislative powers to regulate such information. Finally, the Electoral Commission made a good, cogent point with which I agree. It does not have the capabilities to undertake an extension of its role, which some Members of the House of Lords and of the House of Commons have proposed that it should have. It said in its letter, referring to the extension of its powers regarding the referendum and the Government report, that

“it is also the case that we would not have the capabilities to do so”.

It also said:

“We will have no insider knowledge of the negotiations, nor the required expertise to judge a report to Parliament about the UK’s membership of the EU.”

[Suella Fernandes (Fareham) (Con)]

I thank my hon. Friend for highlighting the Electoral Commission’s extensive assessment of the amendment. Does he agree that the fatal blow for the amendment is the fact that the commission has opined that it does not have the capabilities or insider knowledge to carry out the duty that it would impose on it?

[Mr Mak]

I thank my hon. Friend and near neighbour. As a barrister, she is learned in these matters. I entirely agree that that is a persuasive argument in the commission’s letter to Members of Parliament.

[Sir William Cash]

My hon. Friend will have heard that the Electoral Commission has had duties imposed on it by Parliament, but what the amendment is driving at above all else, with respect to him and to my hon. Friend the Member for Fareham (Suella Fernandes), is that there should be proper impartiality and accuracy in the information. If the commission cannot do that, the Government can. If they do not do it, the courts will ensure that they do.

[Mr Mak]

I thank my hon. Friend for his explanation. My interpretation of the letter is that the commission did not want to take on more powers, as it already has core duties, including the good administration of elections and of the referendum. It conceded that it was not an expert in constitutional law, politics or negotiations about the UK’s continued membership of the EU; it was merely a good administrator, and that is the role that Parliament centrally wants it to fulfil. It is certainly the role that I want it to fulfil as the referendum process continues. The commission was saying, frankly and openly, that it lacked the expertise to make any determination about the Government report.

Next year, as many right hon. and hon. Members will know, we will have local, county and mayoral elections, as well as police and crime commissioner elections, which will increase the workload of the commission in its current guise, whether it is arbitrating on voter rolls, interpreting various aspects of election law or undertaking other statutory duties, which are all a drain on its resources. The Electoral Commission lacks the necessary expertise, as my hon. Friend the Member for Fareham (Suella Fernandes) said, and will be burdened with a heavy workload next year, given the frequency and geographic spread of elections in which it will be involved, particularly from an administrative perspective. There is therefore no role for the commission as proposed by the amendment, so the Government’s view should prevail.

May I turn briefly to Lords amendment 13, which was tabled by Baroness Anelay of St Johns and has some support in this House? I should like to elucidate what it does and to share my views on its place in this House. As hon. Members will know, section 108 of the Political Parties, Elections and Referendums Act 2000 allows the Electoral Commission to designate permitted participants—that is likely to be the campaign groups that I mentioned earlier—as organisations to which assistance is available under section 110 of that Act. Such assistance could be logistical or financial, and in some cases there would be media opportunities. Where a referendum has only two outcomes, which is the case for the EU referendum, as my right hon. Friend the Member for Wokingham and others have said, under section 108, the Electoral Commission can exercise the power to designate one organisation for each of the outcomes or not designate any at all.

Lords amendment 13 would enable the Electoral Commission to designate a lead campaigner for one side of the argument, whether that is to remain in the EU or to leave it, at the referendum without designating a lead campaigner for the other side. That would apply only where for a particular outcome, whether to leave or to remain, there were no applications on the other side or the Electoral Commission was not satisfied that there was an applicant who adequately represented those campaigning for that outcome. For example, vexatious or clearly inadequate groups would be disregarded by the commission.

In the event that only one campaigner was designated, that campaigner would be entitled to a higher spending limit, a free mail-out to voters and access to meeting rooms—for example, in council or other municipal buildings—which is a positive. However, it is important for the House to note that that campaigner would not be entitled to a grant from the Electoral Commission of up to £600,000 under section 110 of the 2000 Act, nor would they be allowed to make a referendum broadcast to the people of this country under section 127 of that Act.

Having reviewed the amendments in this place and the other place, and having read representations from the Electoral Commission and from broadcasters, my view is that that is a fair compromise. The amendment implements recommendations that the Electoral Commission made following the 2011 referendum on the voting system. As I said at the start of my remarks, we must pay heed to what the Electoral Commission says, while also taking into account hon. Members’ views. Based on the experiences of 2011, the Electoral Commission recommended that steps should be taken to reduce the potential advantages under the 2000 Act designation model for a prospective lead campaigner to decide against applying for the designation. The Electoral Commission had identified an example where a campaigner might have a tactical advantage in not seeking designation with a view to frustrating the other side’s access to additional benefits. I find that a cogent observation on the part of the Electoral Commission.

I said that I would touch briefly on Lords amendment 13. The Government’s position on all the amendments deserves the support of the House.

Oral Answers to Questions

Alan Mak Excerpts

Tuesday 1st December 2015 Commons Chamber

[Mr Speaker]

The hon. Member for Havant (Mr Mak) looks animated and contented. Let’s hear from the fellow.

[Mr Alan Mak (Havant) (Con)]

Thank you, Mr Speaker. Household debt will be kept low, thanks to the Government’s support for savers, including the Help to Buy ISA that was launched today. Will the Minister join me in encouraging first-time buyers and young savers to take advantage of this new Government support, which is part of the Government’s long-term economic plan?

[Harriett Baldwin]

I am delighted that, on behalf of his constituents in Havant, my hon. Friend has noticed that the Help to Buy ISA scheme launches today. Fourteen financial institutions are already offering this exciting new opportunity to save for a home, and I hope that many of his constituents will take advantage of it.

HMRC Office Closures

Alan Mak Excerpts

Tuesday 24th November 2015 Commons Chamber

[Hannah Bardell]

The hon. Gentleman is getting a little ahead of himself; I will come to that.

Ironically, during the referendum many argued that independence for Scotland would result in job losses in public services. It was lauded as the Union dividend, and we in Scotland were told by the then Chief Secretary to the Treasury, Danny Alexander, who sadly is no longer in his place:

“That dividend is our share of a more prosperous future. It is the money that will pay for better public services and a fairer society.”

In July and August 2014, the Scottish Labour party tweeted that 3,200 jobs at HMRC were

“just one of the reasons that being part of the UK is best for Scottish jobs…and 1,400 jobs at HMRC in Cumbernauld are dependent on us staying in the UK.”

That was clearly not the case. I hope that those on the Labour Benches, who will also no doubt have constituencies affected by these closures, will reflect on those comments and think carefully about who can be trusted when it comes to jobs in Scotland.

The tax gap in 2013-14 was estimated to be £34 billion, which amounts to 6.4% of total theoretical tax liabilities. Small and medium-sized enterprises account for the largest portion of the overall tax gap—some £16.5 billion ––followed by large businesses with some £9.5 billion. We in the SNP take the view that the vast majority of SMEs actively want to contribute to society by paying tax and that a high proportion of the SME tax gap will have been lost through errors and miscommunications.

[Mr Alan Mak (Havant) (Con)]

Will the hon. Lady give way?

[Hannah Bardell]

I shall continue. The UK Government’s plan to slash 137 local HMRC offices across the UK will inevitably have a knock-on impact on the ability of SMEs to access information and advice on tax.

I would like to give my personal thanks to Gary Stein and his PCS colleagues who met me, my hon. Friend the Member for Linlithgow and East Falkirk (Martyn Day) and MSP Angela Constance immediately after the closure announcement. I know that other PCS colleagues held similar meetings across Scotland and the UK. Gary and his PCS colleagues are working hard to engage staff and management in offices in West Lothian and have made clear their concerns about morale and the range of issues that I have highlighted. It cannot remain unsaid how valuable our local unions are in this process, and I am sure that it is not without sinister intention that the Government have marched ahead with their undemocratic Trade Union Bill, which would mean that the important work that our unions do in such situations would be made ever more difficult. Never has it been more vital that we have good engagement with the workforces who deliver essential public services.

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[Mr Gauke]

HMRC’s “needs enhanced support” service was brought in as a partial replacement of the inquiry centres. My hon. Friend raises an interesting point about HMRC’s presence. However, it has a strong record in dealing with avoidance and evasion, there has been a substantial increase in prosecutions and it is hard to open a newspaper without reading reports of the wealthy facing significant tax bills because HMRC is successfully closing down tax avoidance schemes. That shows that HMRC is reducing this behaviour.

[Mr Mak]

I am heartened by the Minister’s confirmation that reducing the tax gap and protecting tax revenues remains a key priority. Will he confirm that the progress in that area has been strong since the Government took office, resulting in more than £57 billion extra tax revenue being collected compared with 2005-06?

[Mr Gauke]

My hon. Friend is right to say that our record is strong, and we remain absolutely committed to that priority.

Tax Credits

Alan Mak Excerpts

Tuesday 20th October 2015 Commons Chamber

[Seema Malhotra]

My hon. Friend is absolutely right. The Conservative party claims to be there for the workers, but it is going against everything that hard-working families are doing to make ends meet. It is time for the Government to rethink what they are doing and stand up for those they pretended to stand up for at the time of the election.

[Mr Alan Mak (Havant) (Con)]

rose—

[Graham Evans (Weaver Vale) (Con)]

rose—

--- Later in debate ---

[Seema Malhotra]

My hon. Friend is absolutely right. I hope that Government Members will make that decision today.

The IFS has found that, as a result of all the tax and benefit changes in the summer Budget, by 2020, households with incomes in the second, third and fourth deciles will be worse off by £1,250, £860 and £530 respectively. Indeed, the Resolution Foundation’s recent report showed that the changes are likely to result in 200,000 more children being pushed into poverty at a time when the Welfare and Work Bill is effectively erasing Labour’s Child Poverty Act 2010, the duty in it to eradicate child poverty by 2020 and the measures to monitor child poverty. Perhaps a Government Member would like to ask their own Front Benchers a question about that.

[Mr Mak]

rose—

[Seema Malhotra]

I give way to the hon. Gentleman. He has been very patient.

[Mr Mak]

The hon. Lady will know that when the tax credit system was created it cost £4.4 billion to administer, whereas this year it will cost £30 billion. Will she admit that the only credible welfare system is an affordable welfare system?

[Seema Malhotra]

Perhaps the hon. Gentleman should ask what will happen to the 4,500 working families in his constituency who are set to see an average cut in their household income of more than £1,300. What impact will that have on whether they can keep their home, put food on the table or afford clothes for their children? I suspect that he will have a lot to answer for in his constituency.

A million single parents who are in work are set to be £1,000 a year worse off and 1.5 million married women will be £600 poorer.

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[Mr Alan Mak (Havant) (Con)]

This is a Government on the side of hard-working people, elected with a mandate and a majority to transform our country from a high-welfare, high-tax, low-wage economy to a low-welfare, low-tax, high-wage economy. The reforms brought in and passed through this House must be viewed in the wider context of the summer Budget and the broader package of help for working people. Conservative Members believe the best route for working people is to let them keep more of the money they earn. All Members should welcome our new national living wage—a pay rise for 2.5 million people—while income tax, national insurance and VAT have been frozen.

[Stephen Timms]

The national living wage is being phased in over five years. Surely the tax credit cuts should be phased in over the same period, rather than taking huge ill effect next April.

[Mr Mak]

This is a national minimum wage that gives 2.5 million hard-working people a salary rise, which is the right approach. We have also increased the tax-free personal allowance and doubled free childcare for working people, while the fuel duty has been cut and council tax has been frozen as well. These reforms are all linked: they go hand in hand; they should not be seen or analysed in isolation. As many hon. Members have said, these are all part of a coherent, long-term economic plan, and it is simply not acceptable to deliver higher wages through the national living wage while at the same time leaving tax credits unreformed when they are such an important part of our reform package.

[Mr Angus Brendan MacNeil (Na h-Eileanan an Iar) (SNP)]

Will the hon. Gentleman give way?

[Mr Mak]

No.

The hard truth is that our tax credit system is unaffordable and unsustainable. It required deep reform to make it fair to the working people who pay for it. As I said to the shadow Chief Secretary, the original tax credit cost the Government £1.1 billion; today, it costs £30 billion. We spend more on family benefits than France, Germany and Sweden. Our reforms focus tax credits on the people they were meant to help—the very poorest and those in the lowest possible income brackets. In 2010, tax credits intended to support the lowest income brackets were instead available to nine out of 10 families; under our reformed and properly focused system, it is still available to five out of 10 families—a fairer and much more sustainable approach. These changes to tax credits are not necessarily easy, but they are fair and right. They return real-terms spending on the tax credit system to the level we had in 2007-08.

We must also consider these reforms in the wider economic context in which they sit. The deficit was halved over the last Parliament, but there is still more work to do. We need further savings in spending to make sure that Britain can live within its means. These tax credits go towards 50% of the total savings we are aiming for in this Parliament. They are substantial and important, and deserve our support. As many hon. Members have said, we must not leave our children and grandchildren with ever more debt. The only welfare system that is credible is a welfare system that is sustainable and affordable as part of our long-term plan to save our economy.

This Government can be proud of the fact that we have gone further than any other Government in introducing a living wage of £9 an hour. Some 2.5 million people will have a direct pay rise in their pay packets. At the same time, business has been incentivised to pay workers more. We have heard from the Exchequer Secretary how more than 200 businesses are already making these reforms.

Opposition Members opposed our welfare cap, and they opposed our fiscal charter—eventually. The only welfare system that is sustainable and credible is one that is affordable. We were elected on a mandate to transform our economy, and our reforms put that mantra into practice. I urge all Members to reject the Opposition motion.

Finance Bill (First sitting)

Alan Mak Excerpts

Thursday 17th September 2015 Public Bill Committees

[Barbara Keeley]

Absolutely. In talking more broadly, I have been trying to paint a picture of the impact of the set of policies in the Budget, not all of which are in the Bill.

We feel that the tax lock is a short-term measure. As I said earlier, we need to think about long-term reform to ensure an equitable and efficient tax system that provides good value for the taxpayer. There is also a need for long-term tax system planning. We welcome the consultations announced by the Government, but action is also needed on, for example, the alignment of national insurance contributions and income tax. That has been discussed many times, over and over again, but never acted upon, and I will be talking about that later in the debate.

[Mr Alan Mak (Havant) (Con)]

May I associate myself with hon. Members from both sides of the Committee in saying that it is a pleasure to serve under your chairmanship, Sir Roger? I look forward to profiting from your experience. Does the hon. Lady—

[Barbara Keeley]

I had concluded my speech.

Tax Credits

Alan Mak Excerpts

Tuesday 15th September 2015 Commons Chamber

[Damian Hinds]

For people in receipt of housing benefit, the change in the marginal withdrawal rate will be 2p in the pound. The changes do not reduce the incentive to work, and, as the hon. Gentleman knows, equally important are the incentive, ability and support to work more hours once in work and the fact that there are now more jobs offering more hours. Our reforms to childcare are another key part of our support for people who want to increase their hours.

The context to these changes is that, despite making great progress towards balancing the budget, we still ran a deficit of 4.9% last year and are expected to have the second-highest deficit in the G7 in 2015. We need to eliminate the deficit and start cutting the national debt in order to build up our resilience to global economic shocks.

[Mr Alan Mak (Havant) (Con)]

Will the Minister confirm that when tax credits were introduced, they cost the Government £1.1 billion a year and this year will cost £30 billion, which is unsustainable, and that these reforms are necessary to balance the country’s books?

[Damian Hinds]

My hon. Friend is right about the rapid escalation in the cost of tax credits—it trebled in real terms up to 2010—and that we are in the business of getting the country back into balance, because when we lose control of the economy, the people who lose out the most are those on the lowest incomes and in the toughest circumstances.

The burden of eliminating the deficit has meant a bigger tax contribution from those on higher incomes and now calls for further reductions in departmental spending while protecting our national health service. A further £5 billion comes from addressing tax imbalances and £12 billion from the welfare budget. That is the mandate on which we were elected. With near record employment, rising wages and stronger business confidence, now is the time to put the welfare system on a more sustainable, long-term footing, moving our country to a higher wage, lower tax, less welfare-reliant economy.

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[Mr Alan Mak (Havant) (Con)]

The tax credit reforms before the House must be viewed in the wider context of the measures in the summer Budget and other Budgets to help working people: the £9 living wage, giving 2.5 million people a direct pay rise; the income tax, national insurance and VAT freeze for the next five years; the rise in the personal allowance; the doubling of the amount of free childcare; the council tax freeze; and the cut in fuel duty.

The hard truth is that our tax credit system is unaffordable, unsustainable and requires reform to help those working people who pay for it. The statutory instrument, which I am pleased to support, will do that. The system cost £1.1 billion in its first year. This year, it will cost taxpayers £30 billion. We spend more on family benefits than France, Germany and Sweden. Even the right hon. Member for Birkenhead (Frank Field) said it was unsustainable. The statutory instrument focuses tax credits on the lowest income groups to help them in their lives.

The only welfare system that is sustainable and credible is a welfare system that is affordable. We can support those most in need only if we protect the system by reforming the system, rather than allowing it to implode under its own weight. Britain is home to 1% of the world’s population and generates 4% of the world’s income, yet it pays out 7% of the world’s welfare. This is a drag on our competitiveness in the world and our economy at home. I support the statutory instrument and urge other Members to do the same.

Finance Bill

Alan Mak Excerpts

Tuesday 8th September 2015 Commons Chamber

[Barbara Keeley]

The change in the level of insurance premium tax from 6% to 9.5% will have an impact on insurance premiums, and it will mean increased costs for families. Treasury figures show that the increase will have one of the biggest impacts on Government finances of any policy revealed in the summer Budget. By 2021 Ministers will have brought in an extra £8 billion from the measure, a cost that is likely to be passed on by insurance companies to consumers, so as we debate clause 43 and Labour’s amendment I want to ask the Minister to explain the reasons behind the level of this tax rise and to ask whether Ministers have fully considered where the impact of this rise will be felt and which groups will be most affected.

In 2010 the coalition Government announced a similar but much smaller rise in insurance premium tax from 5% to 6%, but this most recent change increases the tax by 58%. I want to ask the Minister for the reasoning behind that scale of change.

A colleague of the Minister in the Lords, Lord Northbrook, has described the insurance premium tax increase as an easy target. Taxes should not be increased just because they are easy targets. Indeed, any decision to increase Government revenue should be undertaken after a robust analysis of the impact the changes will have on individuals and businesses. There are still many questions to be answered about the impacts of this measure on family finances and on the take-up of insurance. So in addition to other questions later, I want to start by asking why the Government have chosen to make such a marked increase in insurance premium tax from 6% to 9.5%, an increase of 58%.

[Mr Alan Mak (Havant) (Con)]

Does the hon. Lady agree that the proposed new level of tax will still be substantially lower than the 19% rate levied in Germany, and that the proposals strike the right balance between raising revenue and making sure premiums are competitive?

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[Diana Johnson]

Yes. There are many welcome things in the Flood Re scheme, but, if I recall my reading on it correctly, it does not cover small businesses operated by people from home. I do not want to go too far down the road of Flood Re, because clause 43 relates to insurance tax.

I welcome the Labour Front Benchers’ proposal and I hope the Minister will be willing to consider a review. I do not agree with everything the right hon. Member for Wokingham (John Redwood) said. The properties I am talking about are small starter homes. These people do not earn a lot of money. They do not have big properties or an income that would allow them to pay sizeable premiums for a property. They are struggling and are often on the minimum wage. They have bought their properties, but every penny counts and I am worried that they will not be able to afford to pay not only a hike in premiums because they are not in the Flood Re scheme, but an additional increase in tax.

[Mr Mak]

The cost of home contents insurance has fallen across the country by about 8% since last year. Does the hon. Lady agree that, as a result, clause 43 will have a limited effect on those sorts of costs and that it strikes a fair balance between raising revenue and maintaining a competitive insurance market?

[Diana Johnson]

Unfortunately that is not the experience of many of my constituents in Hull. Every year lots of people contact me when their premiums are up for renewal, because they have such difficulty in getting affordable insurance. I stress that that is particularly the case for those who are not in the Flood Re scheme, which offers some protection at premium levels. I am concerned about those who are not part of the scheme and are in small properties and do not earn very much—as I have said, every penny counts. There should be a review so that those people, who generally will do the right thing and pay for insurance, do not find themselves unable to afford to do the right thing in the future. I hope the Minister will take on board what my hon. Friend the Member for Worsley and Eccles South has said.

Budget Resolutions and Economic Situation

Alan Mak Excerpts

Monday 13th July 2015 Commons Chamber

[Mr Alan Mak (Havant) (Con)]

My hon. Friend will no doubt be aware of the recent World Economic Forum report on global competitiveness which places Britain one place above its ranking of last year, praises the Chancellor’s deficit reduction and cites our stronger regional growth. Does my hon. Friend agree that the stronger regional growth and sustained investment in our cities, regions and counties is important for the years ahead?

[Mark Pawsey]

Absolutely, and I am pleased that the urban conurbations are coming together in combined authorities across the country.

I am also pleased that the Government have received combined authority proposals from two local authority groups in the east midlands. The Derbyshire consortium has 10 councils including the county council and city council, and the same process is under way in Nottinghamshire.

As part of that process, the Government are right to insist on a directly elected mayor for each combined authority so that there is a figurehead for the body being created. I have tried to put myself in the position of an overseas investor who arrives in Manchester or Birmingham wishing to invest in the region. I would want to understand who is the titular head of the body and who is ultimately responsible. A directly elected mayor goes some way to addressing that.

--- Later in debate ---

[Mr Alan Mak (Havant) (Con)]

It is a great pleasure to follow the speeches by my hon. Friends the Members for Rugby (Mark Pawsey) and for Cleethorpes (Martin Vickers). It is also a great pleasure to welcome my fellow Hampshire Member of Parliament, my hon. Friend the Member for East Hampshire (Damian Hinds), as Exchequer Secretary. I congratulate my hon. Friends the Members for Chippenham (Michelle Donelan), for Somerton and Frome (David Warburton) and for Southampton, Itchen (Royston Smith) on their outstanding maiden speeches.

I am grateful for the opportunity to speak in this debate on the summer Budget. It is a Budget that rewards hard work and aspiration, not just in London but across every region of our great United Kingdom; backs working people by cutting their taxes, boosting their wages, and clamping down on the abuse of the welfare system that they help to pay for; and strengthens our public services while backing our armed forces. I am proud to speak in support of this Budget not just because of those positive attributes but because it is a Budget that builds Britain’s opportunity society.

Although bolstering Britain’s economic growth and giving working people financial security is rightly this Government’s most pressing priority, building the opportunity society must and will be their most distinct legacy. Alongside our long-term plan for a stronger economy, for me this Budget signals our renewed commitment to a long-term plan for a stronger society. That society should be one in which everyone can fulfil their potential, no matter what their starting point in life, because what counts towards their success and prosperity in the opportunity society is how hard they work, the talents they have and the ambitions they hold, not who their parents were, where they grew up or what sort of school they went to.

This Budget gives fair chances to everyone across the entire spectrum of society, young and old, and across every region of our great country, north and south. That is vital, because building an opportunity society gives us not only a stronger, fairer, more prosperous economy at home, but a more competitive economy abroad.

[George Kerevan]

Will the hon. Gentleman explain why, if we are exporting, the OBR has downgraded its forecast for the current account deficit for the next five years?

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[Mr Mak]

I shall come to that point later in my speech.

This Budget builds the opportunity society, which is important because in the global race for success, Britain cannot afford to waste the talents of anyone in this country. Last year, the Sutton Trust estimated that improving social mobility, including by getting people back to work, could add up to £140 billion to our GDP by 2050.

This Budget helps to build on the Government’s track record during the past five years, when 1,000 jobs were created every day, the deficit was cut by half as a share of GDP, 2 million apprenticeships were created and we enjoyed the highest growth of any developed country—higher than France, Germany or America. It is therefore no surprise that the latest World Economic Forum global competitiveness index report places Britain ninth in the world, which is up from our position last year and ahead of competitors such as France, Canada, Australia and Ireland. The Budget builds on and locks in the growth that we have sustained during the past five years. It helps Britain to move from a high-tax, low-wage and high-welfare economy to a higher-wage, lower-tax and lower-welfare country. It delivers a stronger society at home, and it gives us a more competitive economy abroad. Conservative Members share an abiding faith that individuals and businesses flourish when they have control over their lives, so I welcome this Budget.

[John Mc Nally]

I rise to make the same point again. Does the hon. Gentleman think that legislation will stop the farcical situation of big businesses delaying payments to small businesses? A small company wanting to grow ends up having to chase bigger companies to get the money they owe, which frustrates its wish to employ apprentices. Does he agree that we need to tighten up the legislation on that?

[Mr Mak]

The hon. Gentleman will know that the Government are taking decisive action to ensure that small firms are not punished and penalised when larger firms delay their payments. I come from a small business background, so I fully understand the challenges that that poses. What the Budget does for businesses is to lock in the growth and success that we have had during the past five years. I have talked about apprenticeships, and I will come on to the cut in corporation tax later.

I welcome the Budget because, ultimately, it keeps working people in work and allows them to keep more of the money they earn. The rise in the tax-free personal allowance to £11,000 from April next year means lower taxes for about 45,000 working people in my Havant constituency, and an estimated 750 people will be taken out of income tax altogether. That is what the opportunity society Budget looks like on the ground, and it is one that I am proud to support.

At the same time, lowering the welfare cap sends out the clear, distinct and unambiguous message that a life dependent on welfare and benefits, funded by those who work hard and do the right thing, is no longer an option. Our welfare reforms also send a strong signal that modern Britain will be a lean, nimble and productive economy that not only pays its way in the world, but asks each and every one of us to contribute where we can.

Although no one must be held back in our society, it is equally right that the Government do not allow anyone to be left behind as we run the global race for success. In other words, we want everyone who can contribute to be on the field of play, not watching from the sidelines. In particular, our Budget gives 18 to 21-year-olds a clear path from welfare and into work. I welcome the new earn or learn youth obligation and the ending of the automatic right to claim housing benefit. At the same time, the new apprenticeship levy for larger employers will ensure that our ambitious and successful apprenticeship programme gets the funding it deserves.

In addition to those structural policy reforms, Britain’s place in the world economic order and our ongoing national prosperity are dependent on our regions, cities and counties doing just as well as our capital city. In my Havant constituency and the wider Solent region, we are heartened that the Government are committed to rebalancing the economy and bringing local growth to every part of the UK, whether by building a northern powerhouse or supporting important regional economies in the midlands, the south west or the south coast, where my constituency is based.

The summer Budget confirms that the Government are working towards further devolution deals, for example with metro areas such as Sheffield, Leeds and Liverpool, to boost local growth. I can confirm to my right hon. and hon. Friends on the Treasury Bench that in the Solent region all our councils support more devolution of powers to our county of Hampshire. I am personally committed to working with them to use any new powers to boost local economic growth and raise living standards.

I am very pleased to be working with my hon. Friend the Member for North East Hampshire (Mr Jayawardena) to create a new all-party group to champion Hampshire’s economic growth, and I look forward to working with other Members, particularly my hon. Friends the Members for Portsmouth South (Mrs Drummond) and for Fareham (Suella Fernandes), whom I can see in the Chamber. We are all committed to regional growth in our county for the greater prosperity of our citizens. That will help Havant to build on an already impressive record of growth, with exciting plans for local economic development being implemented. For example, at the Dunsbury Hill Farm development, a 50-acre stretch of farmland is being redeveloped with support from the Solent local enterprise partnership to become a new modern business park, driving local growth. We anticipate up to 3,500 new local jobs as well as investment in infrastructure such as local roads. The Solent LEP has been awarded £125 million in vital funding from the local growth fund for exactly that purpose.

Elsewhere in Havant, Langstone Technology Park and the Solent Retail Park are both booming. Business is coming to Havant. Businesses that relocate to Havant—and I urge them to do so—will benefit from a range of measures in the Budget designed to help businesses and our local economy. Corporation tax, already the lowest in the G20, will be cut to 18% over the course of the Parliament and the annual investment allowance has been put at £200,000 on a permanent basis.

The Government’s continued commitment to hard-working people and supporting local growth also means that unemployment in my constituency fell by 48% between May 2010 and May 2015. Those are people who have moved from welfare into work. They are playing a key role in Britain’s economy and our opportunity society.

The Government rightly put security at the heart of our manifesto and of this summer Budget. That means economic security, financial security and national security. The most important thing for me is the social security not of a life on welfare but of giving opportunities to people to work hard and make a better life for themselves.

Tax Credits (Working Families)

Alan Mak Excerpts

Tuesday 7th July 2015 Commons Chamber

[Richard Fuller (Bedford) (Con)]

rose—

[Alan Mak (Havant) (Con)]

rose—

[Chris Philp]

rose—

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[Shabana Mahmood]

The hon. Gentleman has made some interesting and important observations about the way in which we can encourage employers to pay the living wage, and I hope that Ministers take up his suggestions. Ours was a clear, straightforward policy to incentivise the paying of the living wage by sharing with employers the benefit that the Government obtain because people are earning more money.

[Alan Mak]

rose—

[Chris Philp]

rose—

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[Mr Gauke]

Thank you, Madam Deputy Speaker. I will try to make a little progress. In response to that intervention, I will not speculate about announcements that might or might not be made tomorrow, but I will say that universal credit is a sensible reform that comes alongside a whole raft of other measures by which the Government are helping hard-working people.

[Alan Mak]

Will the Minister give way?

[Mr Gauke]

I will give way for a short intervention.

[Alan Mak]

I know that the Minister cannot comment on future Budgets, but does he share my recollection of previous Budgets in which, instead of managing the nation’s finances, Labour cynically increased tax credits as a pre-election sweetener?

[Mr Gauke]

My hon. Friend makes a reasonable point. There was a certain correlation between the previous Government’s generosity and election years.

The Government are bringing in a raft of measures to help working people. We are giving this nation’s children the best start in life. We have increased our spending on childcare and early-years education by £1 billion. We have given 15 hours of free childcare entitlement to all three and four-year-olds, as well as to the poorest 40% of two-year-olds, and we are doubling that for families in which both parents work. We are extending the right to request flexible working to all. Through tax-free childcare we are giving 20% support on childcare costs, up to £10,000 per child. Universal credit will increase the childcare support for low-income families to 85%. Our pupil premium and early-years pupil premium are giving schools, nurseries and childminders additional money to ensure that children from the most disadvantaged backgrounds do not fall behind. Through our childcare business grant scheme we have 4,500 new childminders and over 30,000 new childcare places.

Greece

Alan Mak Excerpts

Monday 6th July 2015 Commons Chamber

[Mr Osborne]

It is fair to say that the travel companies have been behaving very well and co-operating with us very closely. At any one point in the month of July, there are 150,000 British citizens on holiday in Greece. The companies are therefore used to communicating on a large scale, and they are one of our main points of contact with holidaymakers. I say again that people travelling to Greece should check out the Foreign Office travel advice.

[Alan Mak (Havant) (Con)]

While the Greek people gave a clear answer in Sunday’s referendum, there is still a huge amount of concern across Europe that is worrying to working families in this country. Can my right hon. Friend assure me and my constituents that he is taking all necessary steps to protect their economic security?

[Mr Osborne]

I can assure my hon. Friend that we will go on delivering economic security for the working people of Britain. I will come back to the House on Wednesday to deliver a Budget that does just that.