Oral Answers to Questions

Debate between Andrew Gwynne and David Hanson

Tuesday 26th January 2016 Commons Chamber

[Mr David Hanson (Delyn) (Lab)]

12. What representations he has received from (a) international bodies, (b) the Council of Europe and (c) the UN on the UK’s membership of the European Convention on Human Rights.

[Andrew Gwynne (Denton and Reddish) (Lab)]

16. What representations he has received from (a) international bodies, (b) the Council of Europe and (c) the UN on the UK’s membership of the European Convention on Human Rights.

Police

Debate between Andrew Gwynne and David Hanson

Wednesday 13th February 2013 Commons Chamber

[Mr Hanson]

I am grateful to my right hon. Friend, and the Committee explored in some detail the differences between the budgets for the Serious Organised Crime Agency, the National Policing Improvement Agency and the new National Crime Agency. We shed light on the fact that there is a major gap in the funding, but we could not get answers on where that funding has disappeared. I am sure that my right hon. Friend, who so ably leads the Home Affairs Committee, will explore that in some detail over the next few weeks.

The Minister and I will not have a meeting of minds on this matter, but perhaps he will listen to a few voices from out in the community. For example, an individual who shall remain nameless for the moment said:

“I just want the public to understand how tight things really are because I think there’s a feeling out there that it’s OK.”

That was the Conservative police and crime commissioner, John Dwyer in Cheshire, complaining about the fact that he has to bring forward a budget axing 38 police officers and 25 back-office staff.

In a statement this week, Nick Alston, the Conservative police and crime commissioner for Essex, said that the force’s financial position is

“even more challenging than I suspected when taking office just over two months ago.”

The police and crime commissioner for Cornwall, Tony Hogg, again a Conservative party member, said that the Government’s offer of freezing council tax in exchange for a 1% increase in grant would leave the force facing a “fiscal cliff” in two year’s time and an annual shortfall of £1.8 million. He added:

“There would be a critical reduction in pro-active crime reduction, there would be a critical reduction in partnership, community and early intervention…and a critical reduction in police visibility and hence reassurance to the public.”

I look forward to the hon. Member for North Cornwall (Dan Rogerson), among others, voting for the budget today. The local police and crime commissioner thinks it will cause great difficulties in Cornwall.

In Gloucestershire, the police and crime commissioner—not Labour—said that

“we won’t be able to absorb the cuts the Government expects us to make next year and in subsequent years which could affect frontline services and our ability to reduce crime. If we use our reserves, which has also been suggested…we would have no money to replace…equipment or improve our infrastructure.”

The police and crime commissioner in Cumbria—again, not a Labour member—said:

“It is without question a challenging position with the financial forecasts indicating that £10.2 million of savings will have to be delivered between 2013/14 and 2016/17…in addition to the £12.1 million of savings already achieved.”

Those are police and crime commissioners, not Labour members, and they are all expressing concerns and having to raise money.

[Andrew Gwynne]

Is it not the case that we cannot take this debate in isolation from the next debate on the local government settlement and that a great deal of good work and progress was made by the various crime and disorder reduction partnerships, with local government, housing associations and police forces working in partnership? Is the real danger that all that will be unpicked?

[Mr Hanson]

That is absolutely right. The Minister asked how we would reduce crime, and I remind him that crime fell in every year of the Labour Government, as it did in the last two years of the Major Government, and as it has fallen now. Let me put on the record that I welcome that fall in crime and think it is a good thing. I do not want people in our constituencies to face criminal actions—a victim is 100% a victim. The key issue for the Minister to reflect on is that there are crimes that are starting to rise, including acquisitive crime, street crime, burglary, robbery and car theft. Areas of violent crime are starting to rise, and the Minister must recognise that policing is not just about discovering crime but about community reassurance, being visible and accessible, and carrying out many tasks such as football ground management that involve not solving crime but providing a presence and a community resource.

Policing

Debate between Andrew Gwynne and David Hanson

Wednesday 24th October 2012 Commons Chamber

[Mr Hanson]

I thank my hon. Friend for that intervention, which shows what a shambles this is—a shambles that is costing money and that could have been avoided by choosing a different election date.

[Andrew Gwynne (Denton and Reddish) (Lab)]

My right hon. Friend will remember from his time campaigning for Tony Lloyd in Denton and Reddish over the summer my constituents’ concern about the 3,000 police jobs that will be lost in Greater Manchester. Would not the money have been better spent securing those jobs?

[Mr Hanson]

Indeed it would. The former Policing Minister, the right hon. Member for Arundel and South Downs (Nick Herbert), writing in The Daily Telegraph only yesterday, made it clear that the Liberal Democrats tried to sabotage the poll, which is why it is now to be held in November. I think we should send the bill to the constituency office of the Minister of State, Home Department, the hon. Member for Taunton Deane, and ask him to pay the £100 million cost on behalf of the Liberal Democrats who, I remind the House, are standing in only 24 of the 41 areas.

The Electoral Commission has also said that the central website provided by the Government will not be sufficient because it requires people to access the internet. It is estimated that 7 million adults outside London have not used the internet in the past 12 months, but how do the Government decide to promote their campaign? By putting it only on the website. Which groups are least able to access the internet? People who live in the north, people on low incomes, people over 65, and women. There is disproportionality built in to these elections which the Government should be careful of.

Finance Bill

Debate between Andrew Gwynne and David Hanson

Tuesday 28th June 2011 Commons Chamber

[Andrew Gwynne]

My right hon. Friend is absolutely right to draw the House’s attention to new clause 10. All it asks for is an impact assessment of the rate of VAT on UK economic growth. Is it not the case that, since the VAT rate was increased, consumer confidence has flatlined and retail sales have fallen?

[Mr Hanson]

It is very interesting that my hon. Friend makes that point about the VAT increase, because following that reckless gamble, inflation, which was 3.1% in September, was 4.5% in April and May, hitting savings, pensions, incomes, jobs and people’s livelihoods. He will know that confidence is important and that consumer confidence is now at minus 31%. Overall confidence was three points lower in April than in March, and lower than at any time since spring 2009.

Finance (No. 3) Bill

Debate between Andrew Gwynne and David Hanson

Wednesday 4th May 2011 Commons Chamber

[Andrew Gwynne (Denton and Reddish) (Lab)]

My right hon. Friend is making an important point that is indeed linked with the previous clause. Clause 4 deals with the corporation tax cut, which is one side of the coin, but the other side is obviously investment. Constituencies such as mine are still heavily dependent on manufacturing industries—indeed, almost disproportionately so. Although local businesses that have spoken to me about the Budget measures have welcomed the corporation tax cut, they are incredibly concerned about the changes to capital allowances, which they think will serve as a disincentive for them to invest in the long term.

[Mr Hanson]

My hon. Friend makes some valid points. I know that he defends his constituency and the whole of the north-west region strongly when it comes to the importance of manufacturing industries. One issue that I want to explore with the Minister is the very question of whether the capital allowance reductions proposed in clause 10—as well as other in clauses, which we will consider in due course upstairs in Committee—will have an impact on the job creation and investment proposals that we are considering today. Unemployment in my hon. Friend’s region in the north-west will be very high, at around 9%, which again indicates the importance of generating and regenerating manufacturing industries in those areas.

Capital allowances allow businesses to write off the cost of certain capital assets, including plant and machinery, to arrive at their business profits. Capital allowances take the place of commercial depreciation, which is not allowed for tax. There are certain first-year capital allowances that allow 100% of a business’s expenditure on specific, environmentally-beneficial plant or machinery to be written off in the year that the expenditure is incurred. There is also the annual investment allowance, which allows businesses to write off the whole of their expenditure on most plant and machinery, up to a limit in the year in which it is incurred. Expenditure on plant and machinery not covered by the allowances also attracts writing-down allowances, at either the main rate or a special rate.

The changes in clause 10 are part of the package of corporate tax reforms announced in the Government’s 2010 Budget, as the Minister will undoubtedly explain later. The amendment calls for a review of the impact of the Government’s abolition of capital allowances for smaller businesses in 15 to 16 months—that is, October next year—when these allowances will have been operational and we can see what the growth potential in the economy has been over that period thanks to the corporation tax measures in the Budget, as well as the impact of stringent public spending cuts and rising unemployment across the UK.

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[Mr Hanson]

I am grateful to my hon. Friend for making that valid point. I know that he is committed to bringing jobs and investment to his part of east London, as indeed my hon. Friend the Member for Denton and Reddish (Andrew Gwynne) is to the north-west and elsewhere.

I am not saying that we will not approve the cuts in capital allowances in due course. I am simply asking the Minister to monitor their impact, and if they are becoming detrimental, given the corporation tax cut to which they are inextricably linked, we shall need to look at how the process will continue.

[Andrew Gwynne]

My right hon. Friend is right to say that we shall need a regular assessment, because the regional economies do not stand alone. The decisions taken in one region might have an impact on another. An example is Mono Pumps, a manufacturing company in the Tameside area, part of which my constituency covers. It was one of just 50 schemes announced in the regional growth fund, and it is to relocate to a new facility on the Ashton Moss regional employment site in my constituency. That move is now being jeopardised because of supply chain issues with a manufacturing company based in Gloucestershire and south Wales. We need to ensure that manufacturing as a whole is supported across the United Kingdom, and only the kind of assessment that we are proposing will ensure that such regional disparities are properly looked into.

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[Mr Hanson]

I could speculate on those points for my hon. Friend, but the Minister might be in a better position to comment on them. I will give my hon. Friend one thought, however. Perhaps the Chancellor realised that unemployment is rising because of the squeeze on public spending over the year; that growth is slowing because people feel uncertain in their jobs and businesses are not willing to invest; and that the level, depth and speed of public spending cuts over the next two years will lead to growing unemployment—not just in the public sector, but in the private sector, as people in private businesses depend on public investment. For those reasons, I suggest, the Chancellor has had to make additional changes to do what I believe is the right thing: to try to stimulate private sector growth.

If last-minute thought has been given to the impact of corporation tax changes and if full assessments have not been made of the impact of VAT on public spending cuts, we need to be aware that capital allowance reductions are coming into effect in April next year. The amendment simply says:

“The Chancellor shall publish, by 31 October 2012, an assessment of the impact of the changes to capital allowances on the UK economy.”

I find it difficult to think of anybody who would object to that. I am sure that the Treasury would make such an assessment as a matter of course in any case. Any good business—and the Treasury is a good business—would look at its outputs, outcomes and impacts and reflect on how they will affect the customer base, which in this case is manufacturing industry.

I have real concerns about the decision to reduce the rate of writing-down allowances for new and unrelieved expenditure, as I believe it could impact adversely on smaller businesses and on businesses that are more likely to invest, such as manufacturers. I say this because the Government regularly claim that small businesses are the key to future growth in the economy. Who depends on a capital allowance more—a very large or a smaller business? The argument I put to the Minister is that small businesses would be more affected.

Nobody disagrees with the fact that the UK should have a competitive tax regime, and the corporation tax cut should help with that in principle. The Government are paying for it by the measures in clauses 10, 11 and 12—slashing investment allowances by £2.6 billion. The package will penalise companies that invest, particularly manufacturing companies, in order to offer tax cuts that will disproportionately benefit the banks and the financial sector. At a time when the Government claim they are rebalancing the economy by trying to encourage manufacturing, this package could—I say could—do the reverse.

The Institute for Fiscal Studies has said:

“The largest beneficiaries from the package of measures”—

including corporation tax and capital allowances—

“will be high-profit, low investment firms”,

such as financial services, while the cuts to allowances under clauses 10, 11 and 12 will

“have the largest impact on those firms with capital-intensive operations”,

such as manufacturers. That is a direct quote—from page 229, for the Minister’s reference—from the IFS Green Budget 2011. The IFS also agrees:

“The losers would be firms that invested heavily but made little profit—notably in the manufacturing and transport sectors but also some capital-intensive service-sector firms. The winners will be less capital-intensive but more profitable firms, historically typified by the financial sector.”

I do not know whether it will pan out like that in real life, but my point is that if it does, clauses 4 and 10 together will mean giving a corporation tax cut that benefits the financial services sector most and a capital allowance cut that damages the private sector of small and medium-sized manufacturing industries most. That cannot be a good recipe for growth in the economy.

[Andrew Gwynne]

One of my concerns is that as we try desperately to rebalance the economy, we need to invest in some of the new high-tech and emerging industries, particularly in the renewable energy sector, which is incredibly capital-investment intensive. Does my right hon. Friend worry, like me, that these changes could put off growth in that emerging technology?

[Mr Hanson]

My hon. Friend makes a valid point, as it is exactly those companies that require capital investment support. The move will penalise companies that invest in manufacturing—for example, the car industry, advanced manufacturing, wind turbine manufacturing, and research and development across the board. These big manufacturing concerns are going to create the jobs of the future as well as protect current manufacturing jobs at a time when consumer demand might well be fragile because of high levels of unemployment, high levels of public spending cuts and general concerns about the squeeze on the economy and on people’s living standards and incomes generally.

PricewaterhouseCoopers has said:

“Many clients will balance the modest reduction in the capital allowances rates with the staggered reduction of the rate of Corporation Tax…Whilst the declining rates of capital allowances, in isolation, do not produce any winners, some businesses will benefit when the CT rate change is also taken into consideration. Capital intensive businesses”—

this is the key point—

“are likely to feel the reductions more, since they will have larger capital allowances pools.”

Deloitte has said:

“For some businesses the reduction in writing-down allowances for plant and machinery will be offset by the reduction in the main rate of corporation tax from April 2012.”

We accept that.

“However”—

and this is the key point—

“capital intensive companies…may not benefit to the same extent.”

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[Mr Hanson]

Actually, Ministers answer the questions and the Opposition ask them. I have been clear with the Exchequer Secretary about the proposal that we outlined in government, and that will be our view. We are potentially four years from government.

I am simply pressing the Exchequer Secretary to explain what the impact is of clause 35, and why there has been a significant change—unless he wishes to clarify that further—to the proposals announced by the previous Government on extending child care for two-year-olds. It is important that we know not just what the clause means, because it will restrict child care support for higher rate families. The purpose of our proposal in government was to expand child care arrangements for poorer and lower-income families. The Government are now squeezing the middle while—unless the Exchequer Secretary clarifies that the contrary is the case—not providing the same level of child care places that were originally proposed by the Labour Government.

This measure is coupled with a range of other measures, which are not before the Committee in clause 35, but which I hope you will give me the scope to touch on, Mr Evans. There are real-terms cuts to child benefit, which is frozen at £75.40 this year for families; the baby element of child tax credits, which is worth £545 a year, has been scrapped; benefits have been set on a permanently lower path of inflation; the basic and 30-hour elements of working tax credit have been frozen; and the second income threshold for the family element of child tax credit has been cut. Those measures all add to the pressures on child care responsibilities and on families.

[Andrew Gwynne]

My right hon. Friend has set out a series of measures that the Government are implementing in the Budget. Does he find it ironic that those measures come from the Conservative party, given that the Prime Minister claimed before the general election that he would lead the most family friendly Government in history? Those measures are penalising hard-working families, and women more than men.

[Mr Hanson]

Indeed. It is a fact of life that child care often remains the prime responsibility of the woman. Child benefit is paid to the woman for that purpose. Clause 35 does not deal with child benefit—I do not wish to test your patience, Mr Evans—but, in principle, the purpose of the Labour Government’s original policy proposals was to expand free child care for people who could not afford it otherwise, to help to support women to get back into work and to help individuals to support their children.

As I understand it—I am willing to be contradicted and to hear clarification from the Minister—the impact of the proposals is that fewer child care places will be available than the previous Labour Government proposed. That must be a matter of some concern. Indeed, in our original amendment, we proposed a review of child care provision to consider the impact of all these measures. Clause 35 proposes changing higher-rate relief to basic-rate relief for higher-rate taxpayers, but we should not consider it in isolation; it is only one change among many on child benefit and the other issues that I have mentioned that raise concern among the official Opposition.

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[Mr Hanson]

My hon. Friend raises an interesting point. That is another issue that we wish to explore not just today, but when we debate schedule 8 upstairs in Committee at a later date. The element of complexity and randomness in the application of the clause has been raised with me by the Low Incomes Tax Reform Group. It is incumbent on the Exchequer Secretary to answer those criticisms before we consent to the clause.

There are choices to be made in tackling the deficit and we must look at the options. The then Labour Government made the same choice, but would have ensured that more child care places were available.

[Andrew Gwynne]

My right hon. Friend makes his case on clause 35 and says that the previous Labour Government considered the possibility of targeting. However, they did so in the context of a wider range of measures available to families to support them in the upbringing of children. Does he share my dismay that clause 35 is being introduced against a backdrop of absolutely clobbering families hard and removing benefits that have made a huge difference to them in my constituency, and no doubt in his?

[Mr Hanson]

If I may, Mr Evans, I shall try to touch briefly on the wider policies to which my hon. Friend refers. I am conscious that clause 35 is specific to higher-rate tax relief—

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[Andrew Gwynne]

Absolutely. The funding of these measures needs to fit within the wider context, as set out perfectly eloquently by my right hon. Friend the Member for Delyn (Mr Hanson). He was given a certain degree of leeway by the Chairman to put all this in the context of the wider changes that this Government have introduced on family policy.

Clause 35 goes some way towards dealing with the issues raised about tackling child poverty. The clause intends to ensure that extra resource is released for early years provision, and we support that. As I said, we proposed to do that when we were in government and, as my right hon. Friend mentioned, it highlights the real progress that was made on tackling child poverty during the Labour years, as was highlighted in the OECD report. I do not know whether the clause will have any impact on the Government’s ambitions to tackle child poverty, because that remains to be seen, but some of these changes could well start to have an impact. The explanatory notes state:

“Approximately 450,000 parents currently qualify for the relief.”

I am sure that the Treasury stands by that figure, as it produced the explanatory notes. Those 450,000 people will be concerned by these changes and the Government will have to answer the question that they will be asking: what do they get out of the system? If they are to miss out on this relief as a result of the Government’s changes and the extra child care places are targeted, the Government will have to deal with the points that my hon. Friend the Member for Easington was answering on the general principle of universality.

Having said that, it is important that this Government maintain a commitment to early years education. There is a degree of consensus across the House on the benefits of ensuring that children can start their education as young as possible, whether or not that is education through play in the context of early years provision—I think that we probably all agree on that. I note that the Under-Secretary of State for Education, the hon. Member for East Worthing and Shoreham (Tim Loughton), who has responsibility for children, is in his place. During the last general election campaign he visited a Sure Start centre in Horton Green, in my constituency, with the Conservative candidate. He also had his photograph taken outside my house as part of that campaign, and I was pleased that the then Opposition had visited a Sure Start children’s centre in my constituency. That underlined the background motive of the clause, which is to ensure that more resource is put into the early years.

However, as my right hon. Friend the Member for Delyn made clear, people have concerns that this Government are not family-friendly, because what they are giving with one hand, they are taking with another. Many of the measures that they have introduced in this Budget, of which clause 35 is part, are deeply damaging to families.

[Mr Hanson]

As I mentioned in my speech—it is further confirmed by the Institute of Chartered Accountants in England and Wales—the provision in clause 35 is based on an estimate of whether the employer will have earnings that exceed the higher rate limit on a particular payday. That causes some difficulties with fairness because there will be people who work part time, who change circumstances or who are on maternity leave for part of the year and the implementation of this is as potentially worrying as the policy—

[The First Deputy Chairman of Ways and Means (Mr Nigel Evans)]

Order. The shadow Minister is talking about the schedule, which, as he knows, will be discussed in the Public Bill Committee.