Oral Answers to Questions

David Gauke Excerpts

Tuesday 5th November 2013 Commons Chamber

[The Exchequer Secretary to the Treasury (Mr David Gauke)]

Disposable income increased last year at the fastest pace since 2009. In March, the Office for Budget Responsibility forecast that real household disposable income growth would accelerate each year from 2014 to 2017, reaching 2.3% in 2017. The best way to raise living standards is to stick to the Government’s economic plan and deliver a recovery that works for all. Britain is back on the path to prosperity, the economy is growing, the deficit is falling and jobs are being created.

[Julie Hilling]

I do not understand how the Minister and the Chancellor can think that their economic policies are a success. After three wasted and damaging years of flatlining, working people are on average £1,500 a year worse off. Is it not clear that his plan has failed hard-working families?

[Mr Gauke]

It has not failed the people of Bolton West, where unemployment has fallen by 1,800 in the past year.

[Andrea Leadsom (South Northamptonshire) (Con)]

On the subject of the cost of living, does my hon. Friend think it astonishing that Opposition Members do not understand that this Government have done so much to keep council taxes down? If we were still subject to their policies, the average council tax cost would be £210 a year higher.

[Mr Gauke]

My hon. Friend is absolutely right. It was not this Government who doubled the rate of council tax, it was not this Government who doubled the rate of income tax for the lowest earners and it was not this Government who increased fuel duty 12 times.

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

Why does the Minister think that April 2013 was the only month on this Chancellor’s watch in which pay rose faster than prices? Does he agree with the ONS that it is because people deferred their bonus payments to make the best use of the Chancellor’s millionaires’ tax cut?

[Mr Gauke]

Of course, under the previous Labour Government bonuses were four times the rate they were this year. I would also ask the hon. Gentleman whether Labour believes in reversing the 45p rate of income tax, because I am not sure what the answer is.

[Stephen Metcalfe (South Basildon and East Thurrock) (Con)]

Does my hon. Friend agree that one way of tackling rising prices is to leave people with more of their own money in their pocket? Will he confirm that the 50% tax cut we have given to those on the minimum wage has done exactly that and shows that we are on the side of hard-working people?

[Mr Gauke]

My hon. Friend is absolutely right. If we want to help living standards, we want to be able to cut taxes in a sustainable way. That is what we are managing to do.

[Alec Shelbrooke (Elmet and Rothwell) (Con)]

7. What recent fiscal steps he has taken to help people who want to buy their own home.

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[John Howell (Henley) (Con)]

9. What recent fiscal steps he has taken to support small businesses.

[The Exchequer Secretary to the Treasury (Mr David Gauke)]

The Government are very supportive of small businesses. We demonstrated this support again at Budget 2013 through the introduction of the new £2,000 employment allowance for small businesses and charities from April 2014.We have extended the small business rate relief from April 2013. We have increased the small business research and development tax credit to 225% and the lifetime limit on entrepreneurs relief to £10 million. In addition, we have launched a £1 billion British business bank to improve access to finance for small and medium-sized enterprises in the UK.

[John Howell]

I congratulate my hon. Friend on the fact that the new employment allowance will mean that 450,000 small businesses pay no national insurance contributions at all. Is this not a positive help to small businesses such as those in my constituency as they seek to take on more employees?

[Mr Gauke]

I entirely agree. That £2,000 for every business will feed through by helping businesses take on new staff, invest in their business or pay higher wages. It is a positive contribution, which contrasts with the proposals that we inherited for an increase in employer’s national insurance contributions.

[Tom Blenkinsop (Middlesbrough South and East Cleveland) (Lab)]

Why since 2011 has SME investment and lending to SMEs fallen by £30 billion?

[Mr Gauke]

We have had to deal with the aftermath of a banking crisis that occurred, in part, because of failed regulation set up by the previous Government.

[David Morris (Morecambe and Lunesdale) (Con)]

Does my hon. Friend agree that it is good news that, due to the investment in small businesses, unemployment in Morecambe has fallen by 10% in the past three months?

[Mr Gauke]

That is very good news. As we are hearing from various constituencies, unemployment is falling. It is going in the right direction and it is important that we stick to the economic path.

[Sheila Gilmore (Edinburgh East) (Lab)]

Why should we believe from the Minister that the present scheme for dealing with national insurance contributions will be any more successful than his previous scheme, where take-up was extremely poor and did nothing to increase jobs?

[Mr Gauke]

I do not know whether Labour is opposing the scheme. That was not the impression I got. This is a very simple scheme. It does not require applications or involve any of the complexities that we saw with two of the Labour national insurance contribution schemes. We are confident that the current scheme will work. It has been widely supported by business groups and I think it will make a big difference to small businesses.

[Mr Dave Watts (St Helens North) (Lab)]

10. What assessment he has made of the effect of his spending plans on the cost of in-work benefits.

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[Mrs Mary Glindon (North Tyneside) (Lab)]

T10. Will the Chancellor make a statement on why the decision has been taken to extend HMRC’s pilot of the new customer service model in the north-east by two months until the end of December?

[The Exchequer Secretary to the Treasury (Mr David Gauke)]

We want to look at the evidence further, so that seems to be a sensible approach; we want to see whether the model is working. The final decision has not been taken on whether to extend it. This is about improving the service for the people who need it most. We believe that that is an important objective.

[Sir Edward Leigh (Gainsborough) (Con)]

T8. As you know, Mr Speaker, I am of a nervous disposition. I was therefore alarmed this year—not three years ago—to hear predictions that 1 million jobs would be lost, there would be a decade of lost growth and the recovery would be choked off as a result of the Government’s plans. Will the Chancellor allay my fears and explain what has happened in the real world?