Danny Alexander
Main Page: Danny Alexander (Liberal Democrat - Inverness, Nairn, Badenoch and Strathspey)Department Debates - View all Danny Alexander's debates with the HM Treasury
(9 years, 6 months ago)
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Ian Murray (Edinburgh South) (Lab)
3. What assessment he has made of the effect of tax receipts on the deficit in the last 12 months.
The Chief Secretary to the Treasury (Danny Alexander)
Progress has been made on reducing the deficit; it is down by more than a third from its peak and borrowing in 2013-14 was under £100 billion for the first time in six years. The latest public finance release shows that the impact of the great recession is still being felt in our economy and the public finances. The Office for Budget Responsibility expects real earnings to rise faster than inflation, and receipts are expected to perform more strongly in the second half of the year. It is therefore important to stick to the plan, which is building a more resilient UK economy.
Ian Murray
The Chief Secretary to the Treasury will be aware that although unemployment has been falling, income tax receipts to the Treasury have stayed flat, despite the Government predicting a significant increase. Does that not show that this Government are presiding over an explosion of underemployment, zero-hours contracts and low pay, and until they deal with that, they will never bring the deficit down?
Danny Alexander
First, I would think that the hon. Gentleman would welcome the substantial increase in employment we have seen in the past two or three years—after all, it was his Front-Bench team who predicted that that would not happen under this Government. In fact, 80% of the jobs created in the past 12 months have been in full-time employment, not the part-time employment he is talking about, which is greater than the level in the economy as a whole.
Steve Baker (Wycombe) (Con)
Tax receipts and deficit closure are contingent on a strong economy, so does the Minister welcome the fact that the Legatum Institute’s prosperity index shows that the UK is now the most prosperous economy in all the major EU countries?
Danny Alexander
I agree with my hon. Friend that strong tax receipts require a strong economy, and the focus of this Government’s economic policy since the coalition was formed has been to rebuild the UK economy and clear up the mess left to us by the Labour party. We now have the strongest growth in the major world economies, and Government Members should be very proud of that.
Mr John Spellar (Warley) (Lab)
Revenue officials have always been slow to catch up with the latest tax-avoidance scams in the construction industry, the latest of which is the umbrella company. Such companies are costing the Revenue huge sums and are exploiting workers. This is spreading rapidly to other sectors, including supply teaching. What is the Minister going to do about the scandal of umbrella companies?
Danny Alexander
We introduced measures precisely to deal with intermediary companies, which are often vehicles for tax avoidance or for minimising tax. We take that very seriously. If the right hon. Gentleman has evidence that he wishes to bring to my attention of specific issues that have come to his attention, I would gladly look at it.
Mark Pawsey (Rugby) (Con)
Does the Chief Secretary agree that the best way to increase tax receipts is to create the conditions for business confidence and growth? That is happening in my constituency, with the recruitment firm eResponse choosing to set up in Rugby because it has assessed that between 1,500 and 2,000 new jobs will become available.
Danny Alexander
I welcome that sort of investment, and I very much agree with what my hon. Friend says. Businesses like that one, in every constituency up and down the country, are creating jobs because they have confidence in the economic policies of this Government.
Heidi Alexander (Lewisham East) (Lab)
4. What estimate Her Majesty’s Revenue and Customs has made of the amount of uncollected tax in the last year for which figures are available.
Stephen Hammond (Wimbledon) (Con)
5. What progress he has made on his fiscal consolidation plans.
The Chief Secretary to the Treasury (Danny Alexander)
The Government inherited the largest deficit since the second world war. Since then, we have made substantial progress in reducing the deficit. By the end of last year, borrowing had fallen by more than a third. The Government’s consolidation plans have been central to the reduction in the deficit. Indeed, by the end of last year, we had implemented 70% of the £126 billion of fiscal consolidation planned for the end of 2015-16.
Stephen Hammond
Does the Chief Secretary to the Treasury agree that if we have a credible plan to reduce the deficit, we can credibly plan to protect spending on the NHS and cut taxes? As the Labour party’s announced fiscal rules would allow for an extra £166 billion-worth of borrowing over the next Parliament, there can be no credibility in its deficit plan and in its plan for this country’s economy.
Danny Alexander
I agree with my hon. Friend that Labour’s plans would put at serious risk the jobs and stability that this coalition Government have secured. There is a lesson in what he says for all parties in this House, because economic credibility is hard to win and easy to throw away. Any party that does not put forward a plan to sort out the economy or offers unfunded tax cuts to the British people will put its credibility at serious risk.
Alison McGovern (Wirral South) (Lab)
On the deficit, the Chancellor and the Chief Secretary to the Treasury have failed the test they set themselves, which is to close the deficit by the end of this Parliament. Worse than that, they have failed the test that my constituents set for them, which is to put money back in their pockets. That was said to me this week by a grandmother who is desperately worried about her grandson, as he is on a five-hour contract and unable to afford to take a day off work. What will the Chief Secretary do about that?
Danny Alexander
The first thing that we are doing is delivering on what we promised to do when we created this Government in the first place, which is to repair the deep damage that the hon. Lady has to admit was done to the economy under her party’s stewardship. We have now got the United Kingdom into a position in which we are creating more jobs than in the whole of the rest of the European Union combined, and we have the strongest growth rates in the developed world. She should welcome that as something that creates opportunities for young people.
Crispin Blunt (Reigate) (Con)
This fiscal consolidation plan will be heavily influenced by the dramatic liberalisation of pensions announced in the Budget, which will be significantly influenced by the success or otherwise of the guidance guarantee that is now being legislated for. Does the Chief Secretary agree with Ros Altmann that the Financial Conduct Authority should ensure that people who do not receive or take the guidance in this new environment are at least asked proper questions about their circumstances, such as about their partner and their health?
Mr Speaker
Order. A question can be wide, at a stretch, but it should not also be over-long.
Danny Alexander
I agree with my hon. Friend that the pensions reforms are a great liberalisation of the pensions system. We will give people, rightly, the opportunity to make use of the money that they have saved for their retirement as and when they choose. The guidance guarantee is enormously important. We have been working closely with organisations such as Citizens Advice to make sure that people have access to the guidance in the way that my hon. Friend has set out, and we need to deliver on that.
Ms Margaret Ritchie (South Down) (SDLP)
Has the Chief Secretary to the Treasury factored into his fiscal consolidation arithmetic the extra £1.7 billion contribution demanded by the EU? Does he accept that that payment is properly due under the formula agreed by the UK Government? When will it be paid, contrary to the answer given by the Chancellor?
Danny Alexander
The Office for Budget Responsibility takes into account forecasts for EU payments in its own forecasts. It did so at the time of the Budget and will do so again at the time of the autumn statement. A demand of this size in this manner is simply not acceptable, and we are absolutely right to do everything that we can to deal with the issue. That is what we in the coalition will ensure happens.
Mark Hunter (Cheadle) (LD)
7. What recent steps he has taken to reduce tax avoidance.
Bob Blackman (Harrow East) (Con)
14. What estimate he has made of the rate of growth in the economy.
The Chief Secretary to the Treasury (Danny Alexander)
In the year to the third quarter of 2014, GDP grew by 3%; it is now 3.4% above the pre-crisis peak. The International Monetary Fund expects the UK economy to be the fastest growing in the G7 in 2014.
Bob Blackman
Clearly the fact that we are leading our European partners in economic growth shows that the long-term economic plan is working. Does my right hon. Friend agree that, with the eurozone in crisis and external factors uncertain, the last thing we want to do is return the keys to those who crashed the car in the first place?
Danny Alexander
I am sorry that my hon. Friend has brought up the shadow Chancellor’s recent driving incidents, but I agree with the point that the Labour party made the economic mess that we—Liberal Democrats and Conservatives—came together in a coalition to sort out. We have made strong progress in this Parliament, including achieving the strongest growth in the G7. The last thing that the country needs is to hand the keys back to a majority Labour Government.
Mr Andrew Love (Edmonton) (Lab/Co-op)
The long-term economic plan is not working in terms of the living standards of people up and down the country. What has been the rate of growth of wages over the past year?
Danny Alexander
The rate of growth of real wages has been low, and that needs continued attention in the months and years to come. However, I hope that the hon. Gentleman would join me in welcoming the fact that millions of our fellow citizens are now in work as opposed to being unemployed, as they were under the Labour Government. We now need to work to make sure that we increase business investment, enhance productivity, and make sure that the benefits of the economic growth we are seeing are shared as widely as possible. I think that he and I would agree about that.
Derek Twigg (Halton) (Lab)
15. What recent comparative assessment he has made of growth in average earnings and the rate of inflation since May 2010.
Mr William Bain (Glasgow North East) (Lab)
T6. The Institute for Fiscal Studies has forecast that under the Chancellor’s current policies 900,000 more children will be in relative poverty by 2020 compared with 2011. Is his real attitude towards the working poor in this country too much stick and too little carrot?
The Chief Secretary to the Treasury (Danny Alexander)
The hon. Gentleman raises an important point about child poverty, which under this Government is down. That does not in any way reduce the need for us to continue taking steps to reduce child poverty, the most important of which is having an economy that creates jobs. In the end, for most people the best route out of poverty is to get back into employment.
Guy Opperman (Hexham) (Con)
May I urge the Chancellor to meet me and my hon. Friend the Member for Carlisle (John Stevenson) so that we can make the case for including the dualling of the A69 in the autumn statement? Hopefully such a meeting could be before the autumn statement takes place.
Greg Mulholland (Leeds North West) (LD)
The last Labour Government cancelled the Supertram scheme in Leeds and then told the city that it could only have a bus-based solution. Does my right hon. Friend agree that as well as devo-max and “devo Manc”, we also need “devo Yorks”?
Danny Alexander
I could not agree more with my hon. Friend, and the Deputy Prime Minister has been championing that agenda in government for the last four and a half years. If the leaders of Leeds wish to come forward with proposals for further devolution and more power over the things he has been talking about, to ensure that we get the right economic developments in the Leeds area, we would be delighted to have those discussions in an active way, to try to settle a deal there as well.
Douglas Carswell (Clacton) (UKIP)
The Chancellor has rightly said that Europe is in danger of pricing itself out of the world economy, and one way in which it is making itself uncompetitive is through its costly renewable energy agenda. Will he try to persuade his neighbour in Downing street to abandon that dogma and liberalise the UK energy market?