Oral Answers to Questions

Danny Alexander Excerpts

Tuesday 2nd September 2014 Commons Chamber

[Steve Brine (Winchester) (Con)]

7. What measures he has introduced to reduce the level of tax paid by households.

[The Chief Secretary to the Treasury (Danny Alexander)]

The Government have done a vast amount to reduce the tax burden on working people. By the end of this Parliament, without the Government’s changes to the tax system, 3.2 million low-paid individuals whom we have lifted out of income tax would still have been paying income tax, it would have cost the typical motorist £10 more to fill up their petrol tank following the rise that the previous Government planned would take place yesterday, and the council tax bill for a family in a band D property could have been up to £1,100 more. This is all part of our long-term plan to build a stronger economy in a fairer society.

[Steve Brine]

Around 40,000 people in my constituency will benefit from the Government’s decision to raise the tax limit. That helps those on low and middle incomes to keep more of the money they earn in their pocket each month, which shows the Government’s good values in action. Will my right hon. Friend confirm how much more someone in my constituency on the minimum wage will save as a result of our actions?

[Danny Alexander]

My hon. Friend is absolutely right to stress the importance of lifting the income tax personal allowance, which was a Liberal Democrat manifesto commitment for working people in this country. A full-time worker on the minimum wage will pay three quarters less income tax than they would have done in 2010. A typical basic rate taxpayer will save £800 in cash terms in the next financial year.

[Helen Jones (Warrington North) (Lab)]

If the Chief Secretary believes in reducing taxation on working families, will he explain why those on universal credit will be subject to a 76% marginal deduction rate on extra earnings? Why do the Government believe that wealthy people have to be incentivised by a tax cut, but the poorest people need to be incentivised by a huge tax rate?

[Danny Alexander]

The hon. Lady deliberately ignores the fact that many people faced marginal deduction rates of more than 100% under the previous Labour Government. It is precisely because we want every single person in this country to know that they will be better off in work than on benefits that we are introducing universal credit, and she should support it as strongly as I do.

[Philip Davies (Shipley) (Con)]

The National Institute of Economic and Social Research has shown that a 3p cut in fuel duty would generate 70,000 new jobs, stimulate GDP by 0.2% and help to reduce inflation. The Centre for Economics and Business Research says that a cut would be even more beneficial to the economy and would be self-financing. Do the Government accept that a cut in fuel duty would be self-financing and provide a boost to the economy?

[Danny Alexander]

I am grateful to my hon. Friend for drawing attention to that study, which I have discussed with the FairFuelUK campaign, although I was slightly discomforted when it said it thought that the only two politicians it had met who understood the issue were myself and Nigel Farage—that was probably a surprise to both of us. The Treasury has published its own analysis on fuel duty reductions, which shows the economic benefits that they can bring.

[Shabana Mahmood (Birmingham, Ladywood) (Lab)]

Given the importance of accurately calculating the tax yield from households and businesses, and that of ensuring that both pay their fair share of tax, will the Chief Secretary tell us when, following the letter from the head of the UK Statistics Authority, the Chancellor will correct the record and apologise for giving the House incorrect figures that inflated the success of his tax avoidance programme?

[Danny Alexander]

The hon. Lady should celebrate our tax avoidance programme because it ensures that people who avoided paying tax under the previous Labour Government now pay tax under this coalition Government. She should welcome the fact that the programme is bringing in £7 billion more than was the case under the previous Government, not criticise it.

[Angie Bray (Ealing Central and Acton) (Con)]

8. What fiscal steps he is taking to help businesses to invest and export.

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[Annette Brooke (Mid Dorset and North Poole) (LD)]

12. What fiscal steps he has taken to reduce the cost of living for those on the lowest incomes.

[The Chief Secretary to the Treasury (Danny Alexander)]

As I said earlier, the coalition Government have taken decisive action to support families on low incomes, particularly by increasing the personal allowance next year to £10,500—a key Liberal Democrat manifesto commitment. I also mention the hugely successful introduction today of universal free school meals for infant school pupils, which, as well as enhancing educational performance, is worth £400 per child in terms of the costs of paying for those meals.

[Annette Brooke]

I thank the Chief Secretary for his answer. Does he agree that the Liberal Democrats have been a driving force in this Government for helping people on low incomes through the increase in personal tax allowance, and that the implementation of the universal free school meals for infant schools this week is further evidence of the Liberal Democrats really helping hard-working people on low incomes?

[Danny Alexander]

It will come as no surprise to the House that I wholeheartedly agree with my right hon. Friend. She is absolutely right to say that certain measures would not have happened without the role played by the Liberal Democrats in this Government. The lifting of the income tax personal allowance and the introduction of free school meals for infant pupils are just two of many ways in which our party has contributed to this Government to ensure that we are helping and that this country has a stronger economy and a fairer society where everyone can get on in life. That must be the right objective.

[Mr Dennis Skinner (Bolsover) (Lab)]

In the last 10 minutes we have heard that jobs are very good—part-time, no doubt—and business start-ups are supposed to be very good. If all this is true, why are all these Tory MPs jumping ship?

[Danny Alexander]

I could not possibly comment. They have to make their own career choices. In terms of the hon. Gentleman’s own constituents, in the past four years the claimant count is down by 40.7%, which means that there are more job opportunities in his constituency than there have been for very many years.

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

13. What recent assessment he has made of the level of bank lending to businesses since May 2010.

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[Meg Hillier (Hackney South and Shoreditch) (Lab/Co-op)]

T4. The Chief Secretary has been keen to trumpet free school meals for six, seven and eight-year-olds. However, this week in Hackney, many of the 47% of children who are living in poverty will turn up at school not having had a square meal for six weeks. They will be fed by the free breakfast clubs that are supported by head teachers and charities. Is it not time that the Government woke up to the reality of poverty? The parents of those children can get only low-paid, part-time work if they are lucky. Is it not time that the Government took action to tackle child poverty?

[The Chief Secretary to the Treasury (Danny Alexander)]

The hon. Lady is right to highlight the seriousness of these issues. However, as has been said in this question session, the statistics show that child poverty in this country has come down and is coming down under the coalition Government. It is precisely because of these issues that we are introducing the policy of universal free school meals. The evidence shows that it increases take-up among low-income families, who do not always take up free school meals, and ensures that children get a square meal at school each day. I hope that she will join me in welcoming that.

[Nicola Blackwood (Oxford West and Abingdon) (Con)]

T3. The appalling congestion in Abingdon makes life miserable for families and commuters and inhibits local economic growth. With 600 new and needed houses planned on Dunmore road, will the Chancellor meet met to discuss why investing in a diamond junction on Lodge hill on the A34 is the answer not only to making that development sustainable, but to unlocking growth in the wider region?

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[Iain Stewart (Milton Keynes South) (Con)]

T5. Will my right hon. Friend comment on the astonishing claim by the Scottish Government that they would default on their share of the UK’s debt if they did not achieve a currency union with the rest of the United Kingdom if—heaven forbid—independence was to happen?

[Danny Alexander]

The Scottish Government’s plan to renege on Scotland’s share of the debt in the event of independence is simply not credible because of the catastrophic effect it would have on the people of Scotland. Mortgage rates would go up, credit cards and bills would go up, and the Scottish Government would have to resort to the bond market’s equivalent of Wonga to raise money to pay for public services in Scotland. To default on the debt would be to punish every Scot for Alex Salmond’s failure to think through his currency plan B properly.

[Mrs Emma Lewell-Buck (South Shields) (Lab)]

T8. Since the Government updated the law in April, thousands of construction workers such as my constituent, Ron Boyle, are facing a new form of exploitation. Forced to register with sham umbrella payroll companies, they lose hundreds of pounds a month in bogus fees, and pay national insurance contributions that ought to be the responsibility of their employers. Will the Minister assure me that that loophole will be closed quickly, so that workers such as Mr Boyle are not continually conned out of a fair wage?

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[Mr Jim Cunningham (Coventry South) (Lab)]

Many local authorities are struggling to implement the Government’s policy on free school meals—for example, Coventry has to find something like an additional £1 million. What are the Government going to do about that?

[Danny Alexander]

The Government have made available funding to pay for the implementation of free school meals for infants and to enable additional capital investment in kitchens and the like in schools. The reports from around the country are that implementation is going successfully and that this policy will benefit thousands of children and their families.

[Ian Swales (Redcar) (LD)]

Does the Chief Secretary share my surprise that the yes campaign in Scotland says that its economy would be stronger alone, yet it does not want the freedom to have its own currency and set its own interest rates?

[Danny Alexander]

I do share my hon. Friend’s concerns. As he knows, a currency union is not going to happen because it would expose the rest of the UK to economic risks that it could not control and leave Scotland unable to control its economy in the face of huge risks and uncertainty. An effective currency union needs a fiscal union and a political union, yet that is what the nationalist campaign wants to dissolve. The only way for Scotland to keep the pound as it is now is to remain part of the UK, and that is what I believe my fellow countrymen will vote for on 18 September.

[Kelvin Hopkins (Luton North) (Lab)]

Britain has an enormous trade deficit, especially with the EU, which is clear evidence of a misaligned exchange rate, and UK manufacturing is again suffering as the euro has depreciated relative to sterling. When is the Chancellor going to take the exchange rate seriously?

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[Duncan Hames (Chippenham) (LD)]

The Treasury’s infrastructure fund is paying for increased transport capacity in enterprise zones, through roads and rail services, unlocking large new housing developments. Is the Chief Secretary prepared to use the fund also to pay for the internet and communications infrastructure that those homes and businesses will desperately need?

[Danny Alexander]

The support we are offering to enterprise zones includes access to high-speed broadband, and my hon. Friend will also know that a significant part of our infrastructure plan is precisely to invest in and ensure that high-speed broadband is available in the vast majority of homes in this country. That is certainly something we will turn our minds to again in the autumn statement.