Future Government Spending

David Rutley Excerpts

Wednesday 4th March 2015 Commons Chamber

[Mr Gauke]

Let me give way to my hon. Friend.

[David Rutley (Macclesfield) (Con)]

One of the reasons the Opposition are focusing on the gun licence is that they have got it wrong on just about everything else. Will my hon. Friend remind us who said it was not possible to cut spending and create jobs?

[Mr Gauke]

I think the Leader of the Opposition might be the person in my hon. Friend’s mind. I think he was making predictions of 1 million more unemployed as a consequence of our policy.

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[Tom Greatrex]

No, I am going to make some progress, and I have a relatively short time.

The Office for Budget Responsibility has said that borrowing for 2015-16 is set to be £75 billion and that the Government are borrowing over £200 billion more than they planned in 2010—hardly an exemplar of a functioning economic policy.

The last five years, then, have indeed seemed long term—and they felt long term to many of my constituents, who have suffered from declining incomes and struggling to find work. During that long-term five years, they have certainly suffered real economic pain. Such economic pain might well not be appreciated by the Government Members who have chosen to turn up this afternoon, but it is real and long-term economic pain to my constituents. If Government Members were to pay some attention to the entirety of their constituencies, they would find that it is exactly the same for them.

I believe that the Government have failed their own test on the economy because they have failed the test set for them by people’s expectations. Over the last five years, they have failed to create an economy that works for the majority of people. Working people are, on average, £1,600 a year worse off than they were at the start of the Parliament. Wages are stagnant for many people, and I know that all too many of my constituents who have been able to get back into work are in low-paid, insecure work. They are regularly on contracts that make them wait for a text message at the start of the week to be told how many hours’ work they are going to get for that week. [Interruption.]

I note the hon. Member for Macclesfield (David Rutley) shaking his head in disdain, so I invite him to come to my constituency to meet people in my surgeries each week who are suffering as a result of what has been allowed to happen and because of the failure of his party to take action to tackle these types of exploitative contracts. If he thinks that that is a fair basis for our economic growth, I suggest that he is not speaking even for his own constituents, let alone the majority of people in this country.

[David Rutley]

The hon. Gentleman argues with passion; I argue with similar passion. If he looks at the statistics, he will find that it is clear that the vast majority—more than 70%—of the jobs created are for full-time, permanent work. That benefits his constituents as well as mine. It is working.

[Tom Greatrex]

Many people in my constituency who were out of work and are now in work are employed on zero-hours contracts—as I said, contracts that make them wait for a text message at the start of the week to find out whether they will get any hours that week. They have variable levels of hours from week to week. It does not involve simply doing a top-up job or an additional job. In many cases, this provides these people’s main source of income, and these contracts have increased over the last five years. That is the reality, and the hon. Gentleman should be ashamed that his Government have failed to tackle it. It is a disgrace that this is where we are in the 21st century—and that is exactly where we are at present.

Tax Avoidance (HSBC)

David Rutley Excerpts

Monday 9th February 2015 Commons Chamber

[Mr Gauke]

I have to say to the hon. Gentleman that that is pretty desperate. He says we have not dealt with tax avoidance and tax evasion. Look at the record. Look at the way the yield has increased. Look at the rules that have been changed. Look at HMRC’s additional powers. Look at the culture change we are seeing in this country, in terms of tax evasion and tax avoidance. I just regret that 10 years ago there was such a lax attitude to these things. The Government of the time have to accept some responsibility for that.

[David Rutley (Macclesfield) (Con)]

Does my hon. Friend agree that the failure of the previous Government to act on this matter fits with a pattern of inactivity on the deficit, on banking regulation and, again, on tax avoidance?

[Mr Gauke]

I think that is right. I suspect that the reason why the previous Government had a lack of grip and focus on tax evasion and tax avoidance was that there was simply the view that the public finances were going to be fine whatever, and that they did not really need the money and did not need to strain in this area. That is why there was a lack of progress. I am pleased that we are making that progress now.

Charter for Budget Responsibility

David Rutley Excerpts

Tuesday 13th January 2015 Commons Chamber

[David Rutley (Macclesfield) (Con)]

I am grateful for the opportunity to participate in this debate, which is vital. It goes to the heart of the views of this Government and the next Government on fiscal policy. It is about much more, however. It is about the job prospects of people in Macclesfield and the north-west, and millions of people across the country. It is about the prospects of young people getting on to the property ladder. It is about the financial future and how we secure it for people who are planning for retirement or are already in retirement. It also deals with the issue, which many Members have touched on, of who will be tackling the mountain of debt we have faced since the recession. Are we going to pass the buck to the next generation, or is this generation going to do the right thing and tackle the debt burden in the years ahead?

We want to see action now and continue to see public finances getting back under control. The charter for budget responsibility will help the country to achieve that ambition. I support the Government’s aims to see debt fall as a share of GDP by 2016-17, and to return the cyclically adjusted current budget to balance by 2017-18. Those objectives do not, I admit, roll off the tongue, but the impact of turning the deficit into surplus and reducing the burden of debt is vital to bringing our country’s public finances back under control. That is where they need to be. Furthermore, the charter will help people decide which party is serious about getting our public finances under control. There will be a clear choice for voters on 7 May. There is only one party serious about tackling the deficit, getting our house in order and delivering the sustainable economic growth that is so important, and that is the Conservative party.

[Mr Redwood]

Did my hon. Friend hear the shadow Chancellor make it clear that not only does Labour not think that the current debt is excessive, but it would carry on increasing the debt every year of the next Parliament if it was leading it?

[David Rutley]

It always does. It is as if there is a drug that Labour is addicted to called “debt”; they cannot get away from it.

I was fortunate to serve on the Treasury Committee in 2010 when the OBR and the charter for budget responsibility were established, and I spoke in a debate in May 2011 that brought greater insight into Government policy, greater transparency and more trust. I was pleased to participate in it and highlight how the OBR had very quickly become—it still is—an important reference point. Since those early days of the Parliament, which seem a long time ago now, the Government have made clear progress on their long-term economic plan: on economic growth; job creation—1.8 million jobs over this Parliament; unemployment; deficit reduction—down by 50%; and reducing the rate at which the debt is growing. Their ambition and achievement are unprecedented.

Those were important tasks, but the progress has not been without challenges. The OBR, which has been much referenced by Members on both sides of the House, has highlighted how deep the recession was—much deeper than originally anticipated—and how the challenges in the eurozone contributed to the challenges faced by the Government. However, positive progress has been made, and it is vital that the charter be renewed, because further consolidation is required. We need to finish the job of getting public spending firmly under control, as was spelled out by my right hon. and learned Friend the Member for Rushcliffe (Mr Clarke) and my hon. Friend the Member for Bury St Edmunds (Mr Ruffley). I support that view. Lower spending will lower the deficit and enable us to lower taxes for working people, which is something that Conservative Members feel passionate about.

Paul Johnson, the director of the Institute for Fiscal Studies, who has been broadly quoted, highlighted in The Times today something that has not been pointed out, which is that this approach is also vital to get the country’s finances better prepared for any future economic crises or recessions. We have to learn the lessons of the economic crisis we are emerging from. This Government have, but the Labour party clearly has not. I will be supporting the charter today because it is critical that we get our finances under control. The Government have found a way forward, and the long-term economic plan is delivering. The charter will take us a step closer to achieving our important ambitions for businesses and the public of this great country, and I will be supporting it.

Oral Answers to Questions

David Rutley Excerpts

Tuesday 9th December 2014 Commons Chamber

[Andrea Leadsom]

The point is that we believe in the aspiration to buy your own home. We have seen house prices recover but they are still in real terms lower than they were at the peak under the last Government. This Government have delivered housing starts at their highest since 2007 and our Help to Buy scheme, which has helped 77,000 people to get on to the property ladder, is a very important measure.

[David Rutley (Macclesfield) (Con)]

I am pleased that the Government’s stamp duty reforms are already helping more first-time buyers in Macclesfield. What assessment has my hon. Friend made of the effect the stamp duty reform plus the Help to Buy scheme will have on helping more people to get established on the housing ladder?

[Andrea Leadsom]

My hon. Friend is quite right. Our stamp duty changes have meant that 98% of the people who pay stamp duty will receive a cut, which will enable more people to get on to the housing ladder. Our Help to Buy scheme will also encourage more aspirational young people to buy their first home.

The Economy

David Rutley Excerpts

Wednesday 26th November 2014 Commons Chamber

[Mr Syms]

I am sorry, Mr Deputy Speaker. I have not been in the Chamber for a while, as I have been on a Bill Committee.

We have a coalition that has set out a firm framework for managing the economy and a long-term economic plan. The result is that we have pretty good employment figures, but we all know that many of those jobs are low paid. That is the start of a recovery. The main benefit of people getting jobs is that they are afforded the opportunity to upskill and move into better-paid jobs as the recovery takes hold.

The economy is healing, but it is a long-term project and it will take a while before we get back to what most of us would consider normal economics. Indeed, interest rates will have to go up at some point so that my retired constituents can also get some benefit from the economic recovery. Good progress has been made and the Government have taken a sensible point of view.

The reality is that it is difficult to export if one’s main export markets in the eurozone have trashed their economies by running stupid economic policies, and if the far east is going into recession as well. If we compare Britain and the United States with most of the world, we can see that we are doing better. We have created more jobs in the past four and a half years than the rest of the 27 European Union states combined. Clearly, there is more to do, but Britain has proved that it has an open and resilient economy. We still have some excellent companies. The car industry is reviving and we still have extremely good educational establishments. Ours is an open economy and the City of London is one of the major financial centres. So long as we provide the framework for a decent economy, I am sure the British public will rise to the challenge by producing jobs, wealth and prosperity.

We have all seen an improvement, but there is more to do. We appreciate that many people are struggling on low pay and having a difficult time of it. We do not deny that, but we must set out that we need to stick with the economic policy, and people’s living standards will start to rise. Wage increases are picking up over and above inflation, which is the start of a slow march towards improving living standards.

We should stick to what we are doing, have confidence in our economic policy—

[David Rutley (Macclesfield) (Con)]

Will my hon. Friend give way?

[Mr Syms]

I had better not, because time is limited.

The British economy will benefit from that confidence. I look forward to hearing the Minister’s reply. There is a good story to tell, but we are only part of the way there. There is more to do, and certainly more to do for the many of our constituents who have been hurting over recent years. That is the consequence of a pretty big downturn and a big adjustment. The British people have gone through the period of adjustment pretty well and have accepted the realities. Now, they are looking forward to a sunny upland, and I hope the Government can provide that as the economy strengthens over the next year or two.

EU Budget (Surcharge)

David Rutley Excerpts

Monday 10th November 2014 Commons Chamber

[Mr Osborne]

As I have already explained, the negotiation and discussion on the rebate are had with the European Commission. The full amount, which was universally discussed in this House beforehand and by the shadow Chancellor in The Guardian, was £1.7 billion. As a result of our negotiation and intensive discussion, we will be paying £850 million.

[David Rutley (Macclesfield) (Con)]

I am pleased that my right hon. Friend has secured a change in the way that the surcharge formulas are calculated. Can he confirm that the UK will never be penalised in this way again for a strong economic performance?

[Mr Osborne]

We will never face such a large payment or such an unexpected period of time in which to pay, which is why we are getting permanent changes to the budget rules. That requires the consent of all member states, and we have that.

Finance Bill

David Rutley Excerpts

Tuesday 1st July 2014 Commons Chamber

[Michael Connarty]

I understand that the advice given to my constituent, who is a business person, came from one of the best financial advisers in Scotland. In fact, it was the financial adviser who wrote to Equitable Life long before anyone realised that it was defrauding people by enhancing assets falsely, and who was the first person called to give evidence to the Treasury Committee. They have advised my constituent that the problem is, in fact, in this Bill and the performance under its terms. It might be based on a previous ability to do so, but the concept of follower notices and accelerated payment notices are, in fact, in this Bill and did not exist before.

The question is whether the provision is retrospective, because I believe that the Minister is on record—I think that it might be in writing—as saying that he does not agree with retrospective tax powers. I also understand that the Treasury Committee confirmed in a recent report that this is indeed retrospective and the Government are yet to explain what is wholly exceptional about the performance they have put in this Bill—the follower notices and the accelerated payment notices—that will justify the use of retrospective claims for taxation.

It seems to me that when someone is doing their tax planning, particularly when coming to that later period in life—quite a few Members of this House are in that age group—they look at the law at the time, take tax advice from advisers, make arrangements and do their tax planning accordingly, and that is what they think will be their future income. Those people tend not to be receiving a pension paid by someone else; they are earning their pension by their own efforts and enterprises. If that advice is taken and their tax planning goes ahead, I want the Government to assure me that they will not then be told after this Bill is passed, “You made that arrangement in 2000, but we have decided that from 2004 that that tax planning, although legal then, is not legal, so we want you to pay a substantial amount of tax back that was not in the tax arrangements then.” I think that it is only just that the Government give people an assurance that they will not come seeking to turn what was a legal tax arrangement into an illegal one and cost them a substantial amount of money.

[David Rutley (Macclesfield) (Con)]

The hon. Gentleman is making a powerful argument. However, he should consider whether his model of an individual looking at tax approaches is the right one; many businesses look to tax advisers for advice. It is those tax advisers, who have given what is at least imperfect advice to businesses, who need to be examined more carefully.

[Michael Connarty]

I hope that the hon. Gentleman thinks I am a bit smarter than his question implies. If someone does something that is tax-efficient but not legal or justifiable, it is clear that the Government can say that it is illegal and they want the money back. People pay financial advisers quite a bit for good, legal, tax-efficient plans—to find ways not of cheating the system, but using it efficiently.

I might think it wrong for people to avoid tax and I might say that they should put it all in the bucket, like those in the PAYE system. The reality is, however, that tax efficiency is about people seeking to minimise their tax; that advantages people employed by their enterprise or seeking a just reward for their efforts throughout their life as an entrepreneur. I am not against that. If we want to close an avoidance loophole, we should close it. If the loophole is open and used, the Government should not be able to come back 10 years later and say, “We’ve changed our mind. Yes, it was efficient and legal, but we want money from you.”

Under this legislation, once the decision has been made, there is no appeal; someone would have to go to private litigation to fight the taxman. That is the problem. The system will not be fair, but completely and utterly repressive—designed to give all power to HMRC and the Government and none to the private individual. My constituent is 65. He has worked for a long time and employed lots of people in my constituency. He has done things legally, but on retirement he could face the prospect of being chased by HMRC under this law, the only way to fight it being to have enough money in the bank to bring private litigation.

The proposals give all power to the taxman, and that is not a correct, just or moral way to run the country. I hope the Minister will assure us that the law will not be used in such a way and that, if required, amendments will be tabled to ensure that.

Office for Budget Responsibility (Manifesto Audits)

David Rutley Excerpts

Wednesday 25th June 2014 Commons Chamber

[Ed Balls]

No—once was enough. That was an encouraging thing for the Chancellor to say.

I have raised the matter in the House a number of times over the past nine months and each time I have urged us, in the spirit set out by the Chancellor, the Chair of the Select Committee and Mr Chote, to try to put politics aside and do the right thing. I am pleased to say that the Chief Secretary told the House, at Treasury questions a few months ago:

“The idea is well worth further consideration.”—[Official Report, 11 March 2014; Vol. 577, c. 173.]

We have not yet managed to achieve that cross-party consensus, but we still have a couple of hours.

[David Rutley (Macclesfield) (Con)]

All Members on both sides of the House regard Robert Chote as an outstanding head of the OBR. Has the shadow Chancellor not seen his comments that it is better to consider the issue at the beginning of the next Parliament, rather than rush into it for 2015 and risk undermining support for the idea, which we all think is important, in the longer term?

[Ed Balls]

Either we find reasons not to proceed or we proceed. I spoke to Mr Chote last Friday. I will come to our conversation in a moment. It deals directly with that matter.

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[Ed Balls]

That is why I wrote to the Chancellor last October seeking to begin discussions and putting the draft clauses on the table. I have had a number of discussions with the head of the OBR, who has made exactly those points. He wants to know that the resources will be there and what the rules of engagement will be. He wants to know that this will be done properly. He wants to know, in particular, that the Government and the Treasury will engage in good faith with the process. Of course it is difficult, because so far the Chancellor has not been willing to engage with these discussions. I understand the hon. Gentleman’s concerns. However, I spoke to Mr Chote last Friday, and if we can reach agreement this week—by the end of June—he is content to proceed this year. If we are all in favour of the proposal in principle and enter into it in good faith, it can be done. Of course, if either side puts up impossible barriers in the discussions with the OBR, it will not happen. But I am up for it, and if the Chancellor was here, we could ask him whether he was too.

[David Rutley]

I understand what the shadow Chancellor is trying to say, but there are clear timing issues and a clear implementation risk. The OBR is an embryonic, independent body whose credibility we must maintain. We need to focus on the implementation risk.

[Ed Balls]

All I can say, once again, is that the head of the OBR is content to proceed. If the hon. Gentleman supports this reform, I shall share his frustration about the many months that have been wasted. I could have made this an issue of party political combat or criticism seven, eight or nine months ago, but I have said repeatedly at Treasury questions that I hope the Government will change their mind and engage. He is right that we will be timed out if we cannot make those agreements. If we can agree in the next week, we will have a full two months to work out the details. From my experience, I think that two months would be sufficient to agree on that if there is good faith on both sides.

[David Rutley]

If the shadow Chancellor is so enthusiastic, why has it taken him three and a half years to bring this proposal to the House in the first place?

[Ed Balls]

There are moments when the hon. Gentleman engages seriously in these issues, but then he reverts to the Whips’ brief and the kind of behaviour that we expect from others. The truth is that we have been trying to engage on this for nine months. We have been serious, but the Chancellor has been absent. That is the problem.

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[Nicky Morgan]

I prefer to take notice of comments that are on the record, such as the following from Robert Chote. On 4 April 2014—[Interruption.] The shadow Chancellor should listen. This is what the head of the OBR said:

“The Chancellor perfectly reasonably has said he doesn’t think this is the right time to do this… The reasons he has cited are it’s the first general election we’ve existed…you don’t want to throw the OBR as a relatively young body into a politically contested territory now.”

[David Rutley]

Having recruited teams—very sizeable teams—in the past, I know it takes time to recruit talent. These are not unskilled people—[Interruption.] No.

[Madam Deputy Speaker]

Order.

[David Rutley]

May I ask the question, Madam Deputy Speaker?

[Madam Deputy Speaker]

The hon. Gentleman should make his intervention and ignore anything else, rather than trying to answer it all. A brief intervention will do, Mr Rutley.

[David Rutley]

Thank you, Madam Deputy Speaker, for your guidance.

I was making the point that it takes time to recruit skilled individuals, particularly in economic forecasting.

[Nicky Morgan]

My hon. Friend is entirely right; it will take time to recruit skilled members of staff to carry out the project that the Opposition say the OBR should be able to do within a matter of months.

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[Mr Robinson]

The most useful thing I can do for the hon. Gentleman and the House is to read out in full, to get it on the record, what the head of the OBR has said. In March, just a couple of months ago, he said:

“I think the key thing that you would need to do would be to ensure that by, say, the early summer”—

exactly where we are now—

“you were in a position”—

he is speaking to Members who are involved in the decision—

“where even if you did not have the full legislative framework for this sort of thing in place”—

I think we have that, largely—

“you would need to have, first, agreement in principle across the parties”,

which we are striving for, and it is only because the Government perceive it to be against their electoral interests that they are resisting it. It is the most blatant, obvious Government ploy that I have seen since—well, I will not say since when. He said

“that it was a good idea to do it and, secondly, fairly detailed agreement on what you might think of as the rules of the game: which parties should be involved”—

my right hon. Friend dealt with that—

“what scope of policies should you look at; what is the timetable; what would be the involvement of civil servants, and so on.”

The quotation continues:

“I think you would need to get that sort of thing in place in the early summer in order for us, for example, to be able to set out and recruit the necessary people over the course of the summer and have all that in place ready to be welcoming customers, so to speak, maybe after the party conferences in the autumn.”

There is the timetable, therefore, but Government Back Benchers are trying to deny it, and they are not playing their role at all. Why are they doing it? There is only one reason, and I shall come back to it in a moment.

[David Rutley]

rose—

[Mr Robinson]

I am not giving way.

I was quoting comments made by Robert Chote on 12 March this year. It is quite clear that this can be done. There is only one obstacle standing in the way: the Government do not want it to happen. It is not that they want it to happen but find it difficult; it is that they do not want it to happen.

Why do the Government not want it to happen? Let me read what the Chancellor said a couple of years ago when he first set out on this path:

“I propose to have discussions with Opposition party leaders about whether that is the appropriate thing to do”—

to have the parties’ election proposals vetted by the OBR—

“and it would be a legitimate matter for the House to debate”,

which we are doing today,

“and decide.”—[Official Report, 12 October 2010; Vol. 516, c. 142.]

I say, with no disrespect to the two distinguished Ministers on the Treasury Bench, the Exchequer Secretary and the Financial Secretary, that it is a matter of great regret that the Chancellor and the Chief Secretary are absent because, having promised that, the Chancellor has refused to engage with my right hon. Friend the shadow Chancellor. He has refused to come to the House and debate this with us on the one occasion when we can decide on it, and decide on doing it in the run-up to the election, which is the appropriate time, as Robert Chote himself said: I am reciting his words not in the quotation that I read out, but in another one.

It is quite clear that this can be done, therefore; Robert Chote has said that it can be done. It is quite clear that the only art left to the Government is sophistry to try to create problems that just do not exist. If they can answer any one of the charges—any of the points made by Robert Chote or my right hon. Friend—then let us hear them, because I say, with great respect to the Financial Secretary who opened the debate, that she did not tackle any of that. She said, “Let me put on the record what we inherited.” This is not about that at all, and it is not about the fact we were not satisfied with the OBR in the early years. I was the Member who was most critical of its ability in those years.

The fact is that the OBR is established now, however, and it is clear from Robert Chote’s comments that he wants to do this. He believes he can do it and he thinks it would be good. It would be good for public debate, for transparency and for politics in this country, yet the Government are denying the public that right and that opportunity to submit parties’ proposals, which are always in the centre of the election debate, for scrutiny. They are denying the public that, and the public will ask why the Government are doing that and they will read between the lines and see that it is a blatant, deliberate attempt to hide from the public the fact that the Labour party’s proposals are coherent, costed and convincing.

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[Clive Efford]

No, I am trying to be disciplined because I have been in here too many times when people have taken loads of interventions and others have not had a chance to speak.

The Government have had plenty of time to have meetings about this issue over a long period of time. We have challenged Ministers about this, asking whether they have discussed it during any meetings. They have said in the past that they are committed to audits, so it is extraordinary that the Government cannot refer to any meeting where they have discussed this issue with the chairman of the OBR. That is an absolute disgrace; this is about having a better informed debate at a general election and they should be ashamed of themselves. Clearly, they have completely ignored this issue because they do not want to go through the process. As for the arguments about specialist skills, the chairman of the OBR is saying that he can deliver on this if we can get an agreement in principle now and if we can start to go through the details by the end of the summer. He is the first person we would go to if we were trying to set this up, so if he is saying—

[David Rutley]

rose—

[Clive Efford]

I will not give way, and I have explained why. If the chair of the OBR is saying, “I can do this if you make this decision now”, who is to question that? It should not be the Government, who have an ulterior motive in not having their economic policies and, more importantly, the misinformation they put out about their opponents scrutinised. If the Opposition’s budgets were examined, the Government would no longer be able to misinform people about those budgets. That is the truth of why the Government are ducking out of this. It is incredible for the Minister to stand there as an elected Member in this House and question the veracity of evidence that has been given to the Select Committee. The chairman of the OBR has been before the Select Committee and clearly indicated that he is favour of the proposal, and that has been questioned in this House. I find that absolutely incredible. It just shows us how much the Tory Government are wriggling on a hook to try to weasel out of this proposal.

The public will make up their own minds from a better informed position if we were to take this proposal forward. Only a Government who are up to no good could oppose the proposal. The time has come for this proposal to be taken forward, the OBR should be given the legal power to audit our plans, and the Government should get out of the way and allow it to happen.

Finance (No. 2) Bill

David Rutley Excerpts

Wednesday 9th April 2014 Commons Chamber

[Henry Smith (Crawley) (Con)]

It is a pleasure to serve under your chairmanship, Mr Bone. I have the privilege and honour of being the Member of Parliament representing Gatwick airport, so aviation is important to my constituents. Aviation is extremely important to the whole of the United Kingdom, as an island trading nation. Many companies located in my constituency are aviation companies, such as Virgin Atlantic, easyJet and TUI Travel, or international companies that have chosen to base themselves close to a major international airport. Therefore, the issue of taxation on aviation concerns not only Wales, Scotland and England, but my constituency in particular.

I would prefer to see us abolishing air passenger duty altogether. We have one of the highest rates of air passenger duty anywhere in the world. I believe that only Chad charges more. Compared with our European competitors, the amount we charge is considerably more. One of our nearby competitors, the Netherlands, used to charge a form of APD but abolished it because of the cost to its economy. Just over a year ago a PricewaterhouseCoopers report concluded that although air passenger duty brings in about £3 billion to the Exchequer, it is estimated to cost the British economy some £16 billion.

I congratulate the Government on their move to reduce the burden of APD, as announced by my right hon. Friend the Chancellor of the Exchequer in his Budget a few weeks ago. It is a great step on the way to reforming and, I hope, one day abolishing this duty. It is a tax that we, as an island trading nation, can ill afford. Reducing bands C and D into band B for flights to capitals more than 4,000 miles from the UK will help many people who want to take well deserved, well earned long-haul holidays. It will also help the diaspora communities, particularly those travelling to the West Indies, India, Pakistan, Australia and New Zealand. Perhaps most importantly for us as an exporting and trading nation, it will help reduce the cost to business of trading with emerging economies such as China.

[David Rutley (Macclesfield) (Con)]

My hon. Friend is making a characteristically powerful speech. I agree that exporters are vitally important. Lord Livingston recently pointed out that mid-sized businesses in particular in the UK are underperforming, as are small businesses, compared to other European businesses. Does my hon. Friend think the changes to APD will help those small and medium-sized enterprises that want to get out and do more exporting?

[Henry Smith]

Indeed. The simplification of the upper bands of APD, as announced in the Budget, will help small and medium-sized companies in particular to export. I pay tribute to UK Trade & Investment under this Government, which has been making a fantastic effort to give SMEs the tools to maximise exports. The simplification of APD is of great help to small and medium-sized companies not only in England, but in Wales and Scotland.

My remarks are brief this evening. I congratulate the Government on a Budget that is good for business and good for individuals, with the income tax threshold being raised, corporation tax being lowered, fuel duty being frozen and the simplification of APD. I put in a bid once again for the abolition of APD in the future, but I recognise that it is only this Government who are tackling our economic problems in a fiscally responsible way. Charging APD on a Great Britain-wide basis is the most appropriate approach; I would not support the regionalisation of APD. Let us focus on getting APD ultimately abolished, but welcome the simplification that is good for individuals and for business in this country as a whole.

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I say to Treasury Ministers that, given a UK net gain of £13 billion, perhaps the Treasury is thrawn or uninterested in what is happening in Scotland. I appeal to them to get out a calculator and to act in their own self-interest, because if they do, they will see the wisdom of what Ireland, the Netherlands and many other countries have done and the wisdom of what every voice in the industry is saying. Only intransigence and a thrawn, thrawn Westminster attitude has left us in a situation where, year after year, we have to use poetry or any other device to try to get it into the minds of bods at the Treasury that here is something to be listened to and noted for the prosperity of many people, and for those who would fill the 60,000 new jobs.

[David Rutley]

It is a pleasure to serve under your chairmanship, Mr Bone, as we debate the Bill on the Floor of the House. One thing we have learned is that if Scotland made the mistake of voting yes, at least those wanting to leave could do so at a lower cost, given the benefits coming through from the proposal on APD.

[Mr MacNeil]

In the light of the events of the past few days, does the hon. Gentleman think that Irish independence is a good idea?

[David Rutley]

I have no idea what that matter has to do with APD.

[Mr MacNeil]

The hon. Gentleman may have heard me say in my speech a few moments ago that the Irish have reduced APD to zero. The President of Ireland has been here on a state visit this week, showing how warm relations are, and we are looking for such warm relations. We are looking to control our APD, and to have very friendly and very warm relations, especially with the people of Macclesfield.

[David Rutley]

I am a regular visitor to Scotland—I normally drive—but I think we should move on to wider issues.

As they stand, the changes to air passenger duty from April 2015 will save business-class, long-haul passengers more than £100. It makes sense to abolish the very high bands of APD. They have caused understandable concerns, with the widespread perception that they were just another example of the unfair tax changes that we inherited from the Labour party. It is right that, as a result of the Government’s decisions, all long-haul flights will carry the same lower band-B tax rate that is paid to travel to the United States, for example. A family of four flying economy to visit relatives or communities in the Caribbean or south Asia will pay £56 less in APD. It is also right and fair that the Government have brought private jets into the scope of APD and that the share of the burden is more easily spread across air passengers.

Government Members believe in tax fairness, and we believe in reducing the burden of tax wherever possible. As my hon. Friend the Member for Crawley (Henry Smith) pointed out, however, it must be a fiscally responsible approach, although that seems to have been completely ignored in the comments of some Opposition Members.

By cutting APD, the Chancellor is again helping to support British exporters, not least first-time exporters looking to make their first steps into high-growth export markets, perhaps by attending international trade fairs or visiting prospective clients and customers abroad. Virgin Atlantic says:

“The Government has rightly recognised the damage APD is having on exporters and the travelling public alike.”

There is a real need to encourage more exports and exporters. As I indicated in my earlier intervention, Lord Livingston recently pointed out that

“only 17% of UK mid-sized businesses generate revenues outside of the EU compared to 25% in Germany and 30% in Italy.”

I am delighted that action is being taken across Government to meet that challenge. Our small and medium-sized businesses have the potential to be economic powerhouses for our economy and to create more wealth and more jobs across all regions of the UK, including Wales and Scotland. To realise that potential, we need to rediscover our great trading heritage and embrace the global opportunities for Great British services and manufactured goods. By cutting APD, we are underlining the commitment of the Department for Business, Innovation and Skills, the Foreign Office and UK Trade & Investment to provide support. Those are positive steps.

International aviation links are not merely important for exporting goods and services from the UK to other countries, or to make more sales missions feasible; lower APD will support UK tourism and help to improve our competitive position in the market for inbound tourists, be they leisure tourists or business travellers in the meetings, incentives, conferences and events sector.

According to Kurt Janson, the Tourism Alliance’s policy director, the Bill’s proposed savings

“will be a benefit for attracting visitors from the growth markets of China, India and Brazil as well as the traditional market of New Zealand and Australia.”

Indeed, PricewaterhouseCoopers suggests that the studies it reviewed for its research

“all point to a link between whole economy productivity and airline sector output.”

By encouraging greater connectivity between the UK and the global economy, reductions in APD can add to the mix of supply-side measures introduced by this Government since 2010. APD is another barrier to productive growth that the Government seek to remove.

This Government believe in long-term thinking. Difficult decisions have had to be made to save us from the appalling legacy that we inherited from the previous Government, but we are now seeing the results of that approach. It has become affordable and fiscally responsible to cut APD and other taxes that have been holding back this country’s businesses and people from realising their ambitions. The Government are helping people to realise their ambitions and objectives in life by working progressively to de-risk entrepreneurialism and support the export industry. For that reason, the measures have my full support.

[Catherine McKinnell]

It is a pleasure to serve under your chairmanship, Mr Bone. It is clear from the contributions and amendments tabled by the hon. Members for Carmarthen East and Dinefwr (Jonathan Edwards) and for Na h-Eileanan an Iar (Mr MacNeil) that APD remains an important issue for many hon. and right hon. Members. Indeed, we have debated APD on the Floor of the House on many occasions, so it is worth briefly reflecting on the coalition Government’s record on APD since they came to power in 2010— a record, as I am sure many hon. Members will agree, of prevarication, indecision and lack of direction.

Before the election, the Conservatives made a commitment to look at a per-plane duty. The report that resulted almost a year later, contrary to the manifesto commitments of the Conservatives and the Liberal Democrats and the coalition agreement, was not taken forward, and for very good reasons. The industry certainly did not support it. Although right hon. and hon. Members on both sides of the Committee will be all too conscious of the need not to take a Liberal Democrat promise at face value, we had certain expectations concerning the coalition agreement.

The Government promised a further review of APD. The consultation covered several areas including private jets, different tax bands, premium economy flights, flights from regional airports and the possible devolution of APD. The consultation paper raised the concern that the existing four-band structure was damaging the UK’s competitiveness and contained several anomalies, such as a higher rate for Caribbean flights than for other destinations in the USA. That was a source of concern for many hon. Members, which, given the announcement in this year’s Budget, the Government seem to have taken on board. The consultation lasted the best part of a year and numerous interested parties took considerable time and effort to respond constructively and in good faith.

What was the result of that long and arduous process, which, including the first consultation, spanned the best part of two years? It was next to nothing. Aside from the extension of APD to cover business flights, we have seen no changes to APD across the UK. That period of time has been described by industry players as

“a sham and a waste of taxpayers’ money.”

There were three full years of promises, yet the Government delivered next to nothing. Three wasted years—a phrase that is synonymous with the coalition Government, whether in respect of APD or, more broadly, the flatlining economy that we have seen for most of the Chancellor’s time in office.

In this year’s Budget, choices were made that, notwithstanding the years of delay and the further year of delay ahead, have been cautiously welcomed by much of the industry. The third coalition U-turn in this area in as many years means that there will be some relief for long-haul flights in the form of lower rates of APD. Let us not forget that APD on all flights of more than 2,000 miles will be uprated by RPI this month. That comes on top of the large increases over the past few years, including the 8% rise that the Chancellor announced in Budget 2012, which was double the rate of inflation.

Budget 2014 saw the announcement or re-announcement—I am not entirely sure which, as Ministers will not give me a straight answer—that the Government will provide funding to aid start-up routes at smaller airports. The regional air connectivity fund, as it will be known, will help new routes from regional airports according to the Red Book, but Ministers do not seem to know which airports or new routes will be eligible or what the fund may be spent on. Although any new support for new air routes is clearly welcome, the proposal seems to bring yet more uncertainty for the aviation industry, the like of which it has already endured for years.

Clearly, that support could be of most value to the constituents of the Members who have tabled the new clauses and the new schedule. Perhaps the Minister will enlighten the Committee and reassure hon. Members about what support their regional airports can expect to receive from the fund.

Finance (No. 2) Bill

David Rutley Excerpts

Tuesday 1st April 2014 Commons Chamber

[Chris Leslie]

For all the Government’s talk of a balanced, sustainable recovery, we see no action. Most of our constituents and most businesses would recognise that supply and demand have to be part of the picture. Everybody recognises that except, it seems, for the Chancellor and Chief Secretary, who do not recognise the fundamental problem in their approach.

There needed to be tough decisions, such as the 50p rate, in the Bill to make sure that there was fairness in dealing with the deficit and that we tackled the Government’s failure to keep their promise about balancing the books. That has not come to fruition. We need to help with business rates; we should be cutting them rather than simply focusing help on 2% of companies.

The Government are not ensuring a sustainable and balanced recovery. Consumers are having to dip into their savings at an alarming and increasing rate. The OBR even predicts that growth may well slow in future, when those savings run out. Exports are not predicted to contribute a thing to the economy for the next five years and nothing in the Budget tackles the country’s productivity crisis that has emerged in recent years.

Instead, the Exchequer Secretary and Chief Secretary have convinced themselves that cutting public services and raising taxes have helped economic growth. They believe their own propaganda about expansionary fiscal contraction, which was the philosophy of the right in British politics. It used to be the opposite of the Liberal Democrats’ view, but of course they have now bought into the concept.

[David Rutley (Macclesfield) (Con)]

The hon. Gentleman does not want to take this point from Government Front Benchers, but I have just been to the annual conference of the British Chambers of Commerce and it is absolutely delighted by the Bill and the Budget, which will help its businesses across the country. Will the hon. Gentleman join it in welcoming the Bill?

[Chris Leslie]

No, because the Bill could be significantly improved. I have given a number of ways in which it should be doing more for small businesses, for fairness in society and for the hon. Gentleman’s constituents. I think he will pay the price when the election arrives. He is under the impression that fiscal contraction is how growth materialises, but he needs to realise that growth is coming despite, not because of, the Government. I am afraid that they have still not learned that lesson.

The Conservatives and Liberal Democrats are desperate for people not to spot their broken promise on borrowing and the deficit. Three years of economic stagnation will leave the next Government with a budget deficit of £75 billion. It is astonishing that in his Budget speech, the Chancellor had the nerve to stand there and say:

“as a nation we are getting on top of our debts”—[Official Report, 19 March 2014; Vol. 577, c. 781.]

The Government have added a third to the national debt, which now stands at £1.2 trillion. What a nerve the Chancellor showed! He promised to stop adding to the national debt, but has borrowed more in the past four years than the last Government did in 13 years.

The Bill is bereft of the measures that we need to make sure that the recovery is sustained and shared by all. It has nothing new to tackle long-term youth unemployment, nothing to secure an energy price freeze and nothing to bring forward real help now for working parents who need extended child care. It has nothing new on infrastructure investment, which is still lagging behind, and nothing to address the wages crisis that leaves the typical person £1,600 worse off than in 2010. The Bill is not just a missed opportunity; it is so wide of the mark that it misses the point altogether. It is designed to help Ministers limp from here to election day. It falls short and is not good enough.

We would urge Ministers to go back to the drawing board, but it is increasingly clear that they do not even have a drawing board. I urge my hon. Friends to support the reasoned amendment. We will try our hardest to secure improvements to the Bill in Committee. This is a minor Finance Bill from a Government out of ideas. They delayed the Queen’s Speech because they do not have enough to put in it. The Bill should address the cost of living pressures faced by the majority and it should set a long-term ambition for a recovery built to last and felt by all. The country deserves a better Finance Bill than this.

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[Julie Hilling]

I assure you, Mr Deputy Speaker, that I will not collapse. I might just get a little excited.

I find speeches such as that just made by the hon. Member for Redcar (Ian Swales) exceedingly frustrating. The Government say that they want to build a fairer society, but fairer for who? Their actions certainly are not fair for the 2.5 million people seeking work and the nearly 1 million young people still being left on the scrapheap. The Chancellor says that this is a Budget for makers, doers and savers, but it does nothing for those who are making do and who, far from saving, find themselves deeper and deeper in debt.

The worst thing is the continual ridiculous comment that the global financial crash was caused by my right hon. Friend the Member for Kirkcaldy and Cowdenbeath (Mr Brown). Powerful though he is, he did not bring down the world economy. Labour’s public investment did not cause the global credit crunch. Building new hospitals and schools and recruiting tens of thousands of extra nurses, doctors, teachers and police officers in Britain did not cause the sub-prime mortgage defaults in the USA that started the collapse of financial institutions throughout the world. It was not Labour’s public spending that triggered the world’s economic crisis but the global interdependency of reckless banking that triggered an economic meltdown in Britain and across the globe.

[David Rutley]

Was not a record structural deficit a major contributing factor as well? The hon. Lady seems to airbrush that out of the equation.

[Julie Hilling]

The hon. Gentleman should continue to listen to what I have to say, because before the crash we did not have the structural deficit that he is talking about.

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[Charlie Elphicke]

I have given way quite a lot. I think we have heard enough from the hon. Gentleman for a minute. Will he allow me to develop my points?

The Labour party, having learned nothing and forgotten nothing, has the gall to say that when we woke up in spring 2010, with a new Government, everything should immediately have been fine. Recessions are not like that; they continue for some time. It takes time to fix the car after it has been driven into the ditch. The absence of any sense of responsibility from the Labour party for the difficulties that it left and the toxic legacy that the Government inherited is, frankly, extraordinary. Government Ministers have done great work to turn things around and fix things. We cannot hand back the keys to the people who crashed the car when they remain in denial as the Labour party does today.

[David Rutley]

Was not the real crime of the previous Government that they became completely absorbed in what Lord Turnbull—not Conservative central office—said was complete wishful thinking? Through successive periods of economic growth, the Labour Government lost sight of the fact that there would inevitably be a bust after a boom, and that they would have to prepare for it. They missed that obvious challenge, and we are having to clean up the mess.

[Charlie Elphicke]

The Labour Government were delusional. I recall them saying for a long time that they had abolished boom and bust. It is great shame that the right hon. Member for Kirkcaldy and Cowdenbeath (Mr Brown), the former Prime Minister, is seen so rarely in these parts these days; it would be interesting to hear his take.

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[David Rutley (Macclesfield) (Con)]

It is an honour to follow the speech of the hon. Member for Glasgow North East (Mr Bain). I anticipate hearing the words of my hon. Friend the Member for North East Somerset (Jacob Rees-Mogg) and I, as the Member for Macclesfield, represent north-east Cheshire.

It is good to see you smiling in your place, Mr Deputy Speaker, because the sea of gloom on the Opposition Benches reminds me of one of Eeyore’s greatest quotes:

“‘It is snowing still,’ said Eeyore gloomily…‘And freezing …However,’ he said, brightening up a little, ‘we haven’t had an earthquake lately.’”

That is the spirit on the Opposition Benches: gloom and despondency. This morning I went to the annual conference of the British Chambers of Commerce. Opposition Members are out of touch with the mood of the business community and the progress that is being made in the real economy. I ask Opposition Members to get out of the Chamber from time to time, speak to local businesses and get a sense of what is going on and the opportunities out in the real marketplace.

[Julie Hilling]

I do go and talk to businesses, but I wonder whether the hon. Gentleman talks to his ordinary constituents: the people seeking work or who are in low-paid work, and those using food banks or those who cannot afford to heat their houses. The Budget is not just about business, but about stopping people living a dreadful life.

[David Rutley]

That is a good question and I thank the hon. Lady for giving me the opportunity to respond. Of course I speak to members of the public in Macclesfield and outside my constituency, too.

[Bob Stewart (Beckenham) (Con)]

It’s a great place.

[David Rutley]

My hon. Friend says, from a sedentary position, that it is a great place.

These are, of course, challenging times, but things are improving. The reason for having a Budget that is useful and important for business is that it is through business and the private sector that we create jobs to enable people to take care of their needs and those of their families. The hon. Lady will know—as will, no doubt, Mr Deputy Speaker, although he cannot comment—that under the Labour Government 100,000 public sector jobs were created in the north-west over a period when net new jobs in the private sector came to approximately 18,000. Surely, that is completely unsustainable.

[Mr Kevan Jones]

The neo-cons of the Conservative party think that public service jobs—nurses or cleaners in hospitals—are somehow worth less than private sector jobs. I do not subscribe to that. I put it to the hon. Gentleman that the growth in jobs he refers to was achieved through spending that his party agreed to throughout all that time.

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[David Rutley]

Public sector jobs are vital, but I am talking about the need to get the balance right between private sector jobs and the size of the state. That is what we are seeking to balance. On the comment that he has made repeatedly throughout the course of the debate, I was not in this Chamber prior to the general election.

[Mr Jones]

The Chancellor was.

[David Rutley]

That is true, and so were the Prime Minister and others, but I was not. I was working in the world of commerce and had severe reservations, like other Members no doubt, about the policies of the Labour Government. Let us look at the results: the bust that was created after the boom. We are clearing up that mess.

It is a pleasure to speak about the Bill, and a pleasure to speak about the way in which it builds on the Budget. Not only does it make Britain more competitive on the world stage, but, crucially, it reduces the barriers to competition and consumer choice here at home. It is vital to our residents as well as to our businesses. It is a sensible, responsible Bill from a sensible and very responsive Government. It is a Bill for enterprise, intended to rebuild trust in our economy and in our public finances, and also to rebuild the trust that this Government are on the side of the consumer, taxpayer, the saver and, of course, the entrepreneur. That is necessary, because confidence in the economy and in the free-market system can be regained only by increasing the power of choice and market knowledge among consumers. The crisis of confidence—the trauma of trust—that we inherited was a natural reaction to the failures of the Labour Government, and threatened to damage wider belief in prospects throughout the market economy itself.

It was not just a market problem that we faced; it was the problems of yet another Labour Government that we were having to clean up. A great deal of good has already come from the reversal of Labour’s policies on tax, and their disposition to micro-manage and, of course, to mis-spend. This Government have been opening up the economy to transparency and to competition—not least in banking—and putting the consumer and opportunities for new entrants to markets first. It has been a long, hard road, and there is more to follow. The global race is a marathon, not a sprint. We inherited the extraordinary deficit that many Labour Members want to deny, which amounted to 11% of GDP between 2009 and 2010, but will be halved to 5.5% of GDP next year.

[Mr Kevan Jones]

Will the hon. Gentleman give way?

[David Rutley]

Of course, if the hon. Gentleman will agree that it is a good thing that we have been able to reduce the deficit to 5.5% of GDP.

[Mr Jones]

If the hon. Gentleman reads the OBR report published in, I think, March 2012, he will see that the figure was 7.7%, not 11%. I think that he should get his facts right rather than constantly regurgitating figures as if they were fact when they are clearly not.

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[Mr Deputy Speaker (Mr Lindsay Hoyle)]

Order. The hon. Member for Macclesfield (David Rutley) should answer the first intervention before we start on the next. I am sure that we can allow the hon. Member for North East Somerset (Jacob Rees-Mogg) to intervene after that.

[David Rutley]

Thank you, Mr Deputy Speaker, but I hear a noise coming from North East Somerset, so I will give way at this point.

[Mr Deputy Speaker]

Order. The problem is this. I think that the hon. Member for Macclesfield rather than his hon. Friend the Member for North East Somerset is meant to answer the intervention from the hon. Member for North Durham (Mr Jones).

[David Rutley]

I will gladly do that. Throughout the debate, the hon. Member for North Durham has persistently made points that have been answered by Government Members, and many of them have been incorrect. He needs to focus on the work that we have done to reduce the deficit, which he clearly has not welcomed.

[Jacob Rees-Mogg]

I am grateful to my hon. Friend for giving way, and grateful, as always, for your splendid ruling, Mr Deputy Speaker. I think that the hon. Member for North Durham (Mr Jones) is confusing the structural deficit with the actual deficit. The actual deficit was 11%, although the structural deficit may well have been 7%.

[David Rutley]

I thank my hon. Friend for that clarification.

[Mr Kevan Jones]

You said “the deficit”.

[David Rutley]

I did: absolutely. In fact, as Hansard will record, I referred to “the extraordinary deficit” that had been created by the Labour Government.

A budget surplus is now in our sights. We are likely to see it in 2018-19. According to the International Monetary Fund—which is often quoted by Labour Members—the UK is achieving a larger reduction in both the headline and the structural deficits than any other major advanced economy in the world. Unemployment is falling, growth is up, and we have a record number of businesses and a strengthening culture of entrepreneurialism and self-employment. Those are clear results from a Government with a clear sense of direction.

This Bill will doubtless be remembered for years to come for the great work that it is doing to help to promote the interests of savers and pensioners through the reforms that it introduces in clauses 39 to 43, which we will debate in Committee.

[Bob Stewart]

I think my hon. Friend will agree with me that the Bill will also be remembered because, apparently, it gives £700 more to everyone in the country.

[David Rutley]

Certainly, very important steps are being taken, such as raising personal allowances, which will help all our constituents who are facing challenging times. However, there are also measures in the Bill that will help businesses to create more work and more wealth, and help us to achieve greater growth and prosperity.

Returning to clauses 39 to 43, the Chancellor has championed the consumer’s right to take decisions in accordance with their own life circumstances, over and above the procrustean desires of the state. Much has been said about these reforms, and no doubt plenty more will be said in the days and years ahead, but I want to focus today on how other clauses in the Bill are equally supportive of consumers by bolstering competition and lowering barriers to entry for British enterprise—clause 10, on capital allowances, clause 6, on corporation tax, and clause 73, on air passenger duty, to name but a few. Encouraging new entrants—those first-time entrepreneurs, employers and exporters—is vital in increasing choice for consumers and in keeping established businesses on their toes and responsive to their customers. This Government have slashed barriers to entry through deregulation initiatives—an ongoing process that I have been involved with on the Deregulation Bill Committee—and there is also the red tape challenge and the one-in, two-out regulatory arrangements. These are important steps in creating much-needed supply-side reforms.

I hope to contribute further on the Finance Bill Committee—if I can catch the Whip’s eye—because the barriers to small new businesses, new employers and new exporters have been kept far too high in the previous decade or more. We need to get on and finish the job and create a real enterprise pathway. There is little point in trying to address the problem of firms that are too big to fail if we do not also seek to address that of new businesses that are too small to succeed against barriers to entry that have been in place for far too long. This Bill helps us to take significant strides forward. In the words of the British Chambers of Commerce:

“By making a better business environment his top priority, the Chancellor has recognised that successful and confident companies are the key to transforming Britain’s growing economic recovery into one that is felt in homes and on high streets.”

It is the economics of strong, long-term measures for long-term growth.

[Ian Swales]

The hon. Gentleman is making a very good speech. As somebody who represents the north-east corner of north Yorkshire, which is part of the north-east region, I am sure I can join in the north-east theme this afternoon. He talks about the drive to improve businesses. Does he agree that it is only through successful wealth creation that we can provide the public services that Opposition Members—and all of us—want to see?

[David Rutley]

Absolutely. Real growth and true wealth creation have to come from the private sector: that is how we generate the wealth needed to provide the public services that Members on both sides of the House welcome and want to help our constituents.

The Institute of Directors has described the Budget measures in the Bill as “responsible and imaginative” ones that will

“promote growth, exports and investment”.

It says that

“doubling the annual investment allowance…will bring forward a significant amount of investment…with knock-on effects across the economy”,

while

“increasing the cash value of Research and Development credits…will benefit many new businesses immediately”.

That will create the jobs we want to see and tackle the challenges of youth unemployment that Opposition Members have mentioned. Yes, we have had to consolidate the nation’s finances, but we have also signposted clearly the future direction of lower taxes. Although cutting air passenger duty, for example, has not been affordable in recent years, the Bill will very generously cut the two highest rates from 2015. This Government do not shirk from the difficult decisions that need to be taken to restore order to the national balance sheet. It is precisely this approach of taking long-term decisions that has allowed us to double investment allowances to £500,000 and to cut APD, which we have been able to do responsibly and affordably. I hope that business will respond by investing in export potential and taking advantage of lower flight taxes to get out and sell to the world. The barriers are down, and the pathways to achieving export potential are getting clearer. That is a clear priority of Members on this side of the House.

We are moving forward with corporation tax, too. Cutting it to the lowest level in the G20, the Bill will further improve our competitiveness in the international market. The new employment allowance will slash the cost of taking on a first-time employee. These are pro-enterprise, pro-competition measures that will create long-lasting benefits for the economy, for jobseekers and for our consumers. By making it easier and less expensive to deal with the state and to pay its taxes, the Bill also makes it easier for first-time entrepreneurs to become first-time employers and first-time exporters.

The Chancellor has promised to do all he can to boost our export performance. The CBI has noted that the increasing export finance stream announced in the Budget should “strengthen our armoury”, although it also agreed with something that Lord Young and Lord Green have already acknowledged, when it stated:

“The Government must now work much harder to promote these schemes, since many fast-growing firms are unaware of the support available.”

I know that the Government are acutely aware of that fact, but it is critical, now that we have the plans in place, that we do a better job of communicating with SMEs and telling them what support is available.

When customers are free to choose, businesses are required to innovate, to offer better service and to control their prices. When the state stands in the way of that market competition, prices are skewed and, in the longer term, the economy deteriorates. We have only to look across the channel to see where that path could lead—to plan B, as we might say—and to see what that strategy has delivered for France: rising unemployment and a budget deficit higher than had been predicted. We do not need to look across the channel to learn who would bring similar economic woes to Britain; we need only to look across to the other side of the House. Thank goodness that we on this side of the House chose to stick with the right plan. We now want to finish the job.

I was fortunate to attend the British Chambers of Commerce annual conference this morning. It was a positive start to what I am sure has been an excellent day for chambers of commerce across the country. The theme was “State of the nation—good to great”, highlighting the need for what was called “great growth”— growth that is sustainable and for the long term. It was a timely reminder of the most pressing economic priority facing the country. I am proud that this Government are firmly committed to meeting that challenge head on. The Budget and the Finance Bill are both further evidence of that commitment, and that is why I will support the Bill tonight.

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[Mr Jones]

The hon. Gentleman has not broken my flow, but I thank him for the little breather to give my larynx a rest.

If one follows the logic of the hon. Member for Macclesfield, business should not get any subsidies whatever. But we all know that that is complete nonsense. The Government are now increasing investment allowances, but they cut them in 2012. We are now told that this is a great achievement of the Budget, but we are only back to where we were in 2012.

I am seriously concerned that we have a two-speed Britain. We have a housing market that has clearly been stoked in London and the south-east, and we have a stagnant north. The hon. Member for Hexham (Guy Opperman) described Hexham, which is a nice constituency, and in the north-east, but he is living in some type of parallel universe if he thinks that the north-east economy is booming. Well-paid jobs in the public and private sectors have been replaced by low-paid zero-hours contracts. Four out of five of the new jobs that have been created are low paid and in the service sector, not in the long-term sectors. Added to that—as a north-east Member the hon. Member for Redcar is voting for this—is a movement of the limited public finance that there is from the north-east and other areas to the south. For example, we have already seen the record level of cuts in public expenditure for councils in the north-east. Durham county council has lost 40% of its budget. Contrary to what the Secretary of State for Communities and Local Government says about 40% of a budget somehow being saved by cutting down on pot plants or the fripperies, that is not possible. It has to be done by cutting back on services and people.

As if that was not bad enough, there is more to come. In the Budget and as part of the process, Durham county council will now lose another £13 million. Gateshead council will lose nearly £8 million. Newcastle city council will lose a further £14 million. South Tyneside will lose £7 million and Northumberland nearly £4.2 million. That will take money out of the economy and redistribute it to those in the south. The cut per dwelling in South Tyneside is £101.50. In Sunderland, it is £90.45. Meanwhile, Wokingham—people will think I have a thing about Wokingham—has an increase of £55, and Surrey an increase of £51. The hon. Member for Redcar, the great champion of the north-east, is voting for these things, redistributing money from the north and north-east to the south of England. That is having an effect on jobs.

The hon. Member for Macclesfield might think that public sector jobs are not important, but I tend to think that they are. When one needs the NHS, people must be there. When home care is needed from a local authority, people must be there. If there is no money and deprivation indices have been removed, not only are those services being removed, but money is being taken from the local economy. That will have an impact on exactly the businesses that the hon. Gentleman argued earlier we should be supporting and growing.

[David Rutley]

The record will show that I did not say that public servants do not do a useful job, because I think that they do. Where do the interests of the taxpayer fit into the hon. Gentleman’s world, because I have not heard that mentioned in anything he has said? He seems to think that money grows on trees, rather than coming from taxpayers.

[Mr Jones]

The hon. Gentleman’s naive and simplistic approach is that the only way to grow the country’s economy is to sit back and wait for the great entrepreneurial spirits he talks about to grow up, as if by magic, and rescue the economy. Governments have a role to play in generating economies and delivering good, local public services. The idea that Durham county council, or any council, sits on that money is ridiculous; it spends the money in the local community, as do the people who work for it. It should come as no surprise to anyone—it might to him—that taking money out of an area, including the spending power of local authorities, public services and local people, will have an effect on private businesses, whether shops or services, because people do not sit on their money at home; they spend it in their local communities.

[David Rutley]

Whose money is it? It is not the state’s or the council’s. It is the taxpayers’ money, and there is a responsibility to spend it wisely.

[Mr Jones]

I totally agree. The hon. Gentleman should look at my record on Newcastle city council, because I always ensured that we got value for money. But there is a big difference between getting good value for money for the taxpayer and his suggestion that local authorities and public services spending money will somehow not have an effect on local economies. It should come as no surprise to anyone that taking money out of people’s pay packets, whether in local councils or public services, will have an impact on private sector jobs in local communities.