Business and the Economy
Esther McVey Excerpts(13 years, 10 months ago)
Commons ChamberRead Full debate Read Hansard Text Read Debate Ministerial Extracts
Esther McVey (Wirral West) (Con)
I shall focus on executive pay, an issue that has come to dominate news headlines and political debate. The public are asking questions about what is fair, necessary and acceptable, and how we are going to address this issue.
The High Pay Commission has revealed that over the past decade executive remuneration in the largest listed companies has increased substantially. The median total remuneration of FTSE 100 chief executive officers has risen from £1 million to £4.2 million, and the annual bonuses of directors of the FTSE 350 companies rose by 187%, while their average total earnings rose by 108%. There has been a 253.5% increase in long-term bonuses, while at the same time pre-tax profits rose by only 50.5% and share prices fell by 5.4%. That trend continued through the economic crisis. Meanwhile, the pay gap between the salaries of the senior executives of the largest UK companies doubled to over 80 times their worker’s average wage.
These pay increases are not aligned to increases in the growth of the businesses concerned, or their profits or share price. That points to a failure of the market and a failure to uphold fair standards. As Conservatives, we believe innately in fairness and the power of market forces to do good in society. It is therefore imperative that we Conservatives correct this failing system that has been allowed to grow and go unchecked—particularly since 1998, under a decade of Labour rule. It is vital that we do that, for business and for the public, and if we want growth, jobs and a conducive environment for businesses to prosper in the UK.
There is no doubt that we have reached a tipping point on executive pay and that such high pay rewards seem excessive, particularly when set against: a global downturn; a European sovereign debt crisis; a banking crisis, with a Government who failed to reform the banking system when they acted in 2008; staff lay-offs and redundancies; anti-capitalist protests; social mobility issues; and youth unemployment.
Earlier this year, I met more than 200 people to discuss executive pay, and we observed various things. It is worth noting that the random cross-section of people I interviewed wanted to draw a clear distinction between those they saw as true entrepreneurs—the likes of Richard Branson, Steve Jobs and James Dyson, who had prospered because they took risks, created products and employed people—and executives of the banking system. The people I interviewed did not even have too much of a problem with footballers and their eye-watering salaries, but they perceived that banking executives were there to look after and manage companies but had failed.
Some of the following answers therefore relate specifically to banking executives. When I asked what people’s feelings were about the pay awarded, they told me that it was “greedy” and “excessive”; they thought that the people receiving the payments were “greedy”, “removed from reality”, “distant” and “remote”. They described their emotions as “anger”, “bitterness” and “resentment”; and they felt “powerless” and that they had been “taken advantage of”.
However, I strike a cautionary note when I talk about the banking system, because although it would appear that it was showing the worst of the excesses, the industry employs 1.1 million people in the UK and delivers 11% of UK tax receipts. So we need a system that will allow one of the UK’s greatest business successes to survive and prosper, and not a form of change that will deride and wither the industry, and make it move offshore.
Interestingly, people were upset about not only the payments, but a combination of things that the banks had done. The banks had failed in a business relationship, in a stakeholder relationship and in a customer relationship. Gradually, over time, they had become remote and had moved away from the customers they were serving. They were no longer found on the high street, they were not supporting local businesses and they had become faceless entities; people were always faced with a computer decision. The banks should listen to this and alter their own business banking model without needing regulation; they should realise that they must engage, once again, with their customers.
This is now about more than just the banks’ customers, as banks need to engage with the tax paying public. So what we have seen over the past few months, with the “shareholder spring”, is a coming of age of shareholders, where they have flexed their muscles and proved their way, bringing people such as Bob Diamond to account. We have to enforce that and pursue it, and I delivered a document to business on what I agreed that the Government were doing but on how they could go further.
I shall end on the words of Doyle, who said that although competitive capitalism is the best way forward, it is “Darwinian in nature”, and to survive and have profitability it must adapt and change with the calls of the public.
Amendment of the Law
Esther McVey Excerpts(14 years ago)
Commons ChamberRead Full debate Read Hansard Text Read Debate Ministerial Extracts
Esther McVey (Wirral West) (Con)
I would like to use my time in this debate to talk about how Wirral and the wider Liverpool city region can benefit from the Budget and how the rest of the UK in turn can benefit from Wirral’s advances and successes.
The Budget is a Budget of growth. It is concerned with repositioning the UK as a place to do business, to set up in business and to relocate big business. It sets out policies offering help to new start-ups, with the simplification of regulations and taxes, a Government loan guarantee scheme and the promotion of self-employment opportunities for all. It offers guidance and support to those businesses going through the new enterprise allowance.
The Budget also set about reducing corporation tax, going further and faster to make it the lowest in the G7. Members do not need to listen to me on this; they can just look at the actions of industry. GlaxoSmithKline has announced 1,000 new jobs for Cumbria, Nissan is creating 2,000 new jobs in Sunderland, and Jaguar, with 1,000 new jobs in Halewood on Merseyside, has increased its number of jobs to 4,500, trebling the number of employees in the past three years. That is because it is a good place for business. We have the “Open for business” sign up, as my hon. Friend the Member for Dudley South (Chris Kelly) said.
Esther McVey
I am sorry, but I will not.
The Budget also offers clear support and incentives for firms taking on apprentices and young employees as well as support for key infrastructure projects, including roads, rail, ports and broadband. It is also supporting the construction industry, with housing development getting Britain building. As the debate was opened by the Under-Secretary of State for Culture, Olympics, Media and Sport, my hon. Friend the Member for Wantage (Mr Vaizey), I would like to quote from the Liverpool Daily Post, which this week carried the following headline: “Merseyside video game companies welcome Budget tax credits”. That was Sony, Evolution Studios, Rebel Play and Lucid Games referring to not only the tax credits, but the research and development tax credits and changes to enterprise investment schemes. The Budget is the beginning of a shift from the downward slide in enterprise, manufacturing and exports to an expansive vision and the aspirational upward mobility of UK plc, from which everybody in the UK should benefit. It is a seismic shift saying that we are open for business, and now we have the tools, infrastructure and tax system to enable it.
On Wirral specifically, Wirral Waters is one of the biggest and most visionary regeneration projects in the UK, and it has been enabled only because it became an enterprise zone at the last Budget. The scheme will create over 20,000 permanent new jobs in Wirral, help to create skills and apprenticeships for young people, giving them a future on their doorstep, and help to encourage new housing projects and international trade and investment. Last week I was with some of the Chinese developers hoping to come to the UK, including Stella Shiu, chair of the Sam Wa group, which will produce a 50% investment on the site, starting with the £175 million investment. None of that would have been possible had we not had an enterprise zone, the reduction in corporation tax or the new enhanced UK Trade and Investment—my hon. Friend the Member for Stourbridge (Margot James) is helping with its rejuvenation—and the localism agenda and planning, because had this been called in to the Secretary of State, the private company, Peel Holdings, would not have been able to pursue it. All in all, this was a catalyst for regeneration and jobs on the Wirral.
There is much to applaud in what has gone on, because we know that we have to strive, to move forward and to reposition the UK as a place to do business. We are starting here, we are starting now, and with further support from Ministers we hope we will be starting in Wirral, too.
Jim Dowd (Lewisham West and Penge) (Lab)
I congratulate the hon. Member for Wirral West (Esther McVey) on reading out her speech. I am not sure whether she got it from the Whips or those on the Government Front Bench, but it is patently obvious that it was completely—
Esther McVey
I appreciate the hon. Gentleman giving way. As the Wirral is somewhere I have lived all my life, and as this is something I have given great thought to and know inside out, and it comes from the heart, I know that it is a part of the country where we need to succeed, and these are the sorts of tax incentives and the sort of Budget that we need in order to be able to do that.
Jim Dowd
Yes, indeed, and as for the next bit, I do not know. None the less, I will go on to make a few points.
All Budget statements are a spectacle. When I first came to the House, people used to dress up for the Budget and it used to be more of a spectacle. Some used to put on national dress and dress in top hat and tails and all the rest of it. They do not do that any more, and perhaps it is just as well, but what has replaced it is an altogether more depressing sight, because the Budget statement has become something of a pantomime—this does not just apply to this Government and this Budget, because it has become like this over time—with the Chancellor and his acolytes sitting on the Front Bench and making a few statements and the simpletons behind them simply responding, cheering and making completely idiotic noises, whether or not they know what the Front Benchers are saying. As I said, I do not limit my criticisms to this Government because it has happened over a number of years, although I think they are the worst example of it. I do not exempt Members on the Opposition side of the Chamber, because when our Front Benchers get up there are Pavlovian responses from this side as well.
What we really need to do is look at what the Budget means today, tomorrow and, more particularly, for the next few years. All Budgets are a mixture of imperative and choice, and this Budget is no different, but what is most striking about it is the choices it makes. The Tory party has never been an egalitarian party; it has always been an elitist party. It is not just that the Government are a Government of the rich, by the rich and for the rich; what is more telling is just how right wing the Liberal Democrats are, given the opportunity—I exempt the right hon. Member for Bath (Mr Foster) because he is a decent sort of chap living in a world of his own creation. None the less we cannot get away from the fact that, were it not for the support of the Liberal Democrats, the Government would not get this Budget through tonight, they would not have got their reforms—or deforms—to the national health service through and they could not get through their reforms in the Legal Aid, Sentencing and Punishment of Offenders Bill. They would not be able to do anything.
Opposition Front Benchers—I criticise them for this—are a bit addicted to terminology and cliché. We are apparently told to refer to the “Tory-led Government”, but I will not do so because I do not think that that shares the responsibility anywhere near widely enough. This is a Tory-Liberal Government, and were it not for the support of the Liberal party they could not carry through the sort of distortion they have made with this Budget. The Tories are trying to pretend that they are leopards who have changed their spots. Not only that, but they are pretending that they have traded in their spots for presentable and attractive stripes and become vegetarian. I do not believe a bloody word of it. They are what they always have been, which is a party of the privileged with a role to demonstrate to those beneath it that they know their place.
The idea that the Tories are going to simplify the tax system by taking from pensioners has resonance only if we believe that they are taking equally from everybody. To the Liberals who talk about a Robin Hood Budget, I say, “Wake up. Get real.” Robin Hood, incidentally, was a myth, remains a myth and—although I do not wish to upset any colleagues and friends from Nottingham who are here this evening—originally came from Wakefield. The idea of his taking from the rich to give to the poor is, rather like this Government, complete and utter baloney.
I have two points to make in the odd few seconds that I have left. One is on child benefit, and the other is on stamp duty. If the Government had been serious about reforming stamp duty, they would have reformed the whole thing. I am not against people on £2 million paying 7%, and I am not against companies that use their machinery for purchases paying 15%, but the measure is very unfair on those at the bottom of the scale, who have to pay 1% or 3% on the whole cost of valuation. If the Government had been serious about reforming stamp duty, they would have addressed that.
On child benefit, the Government have introduced means testing. They can means-test universal benefits, that is right, but what is next? Winter fuel allowance? Freedom passes? If they undermine universal benefit, they undermine many things that benefit millions of people throughout the country. This Budget, like this Government, is a complete and utter fraud.
Jam Jar Bank Accounts
Esther McVey Excerpts(14 years, 1 month ago)
Westminster HallRead Full debate Read Hansard Text Read Debate Ministerial Extracts
Westminster Hall is an alternative Chamber for MPs to hold debates, named after the adjoining Westminster Hall.
Each debate is chaired by an MP from the Panel of Chairs, rather than the Speaker or Deputy Speaker. A Government Minister will give the final speech, and no votes may be called on the debate topic.
This information is provided by Parallel Parliament and does not comprise part of the offical record
Damian Hinds
My hon. Friend goes right to the heart of the matter. There can also be a feeling of being rather flush on payday and a danger of people not making provision for unexpected, or sometimes even expected and known, subsequent liabilities.
Although most of us enjoy free in-credit banking, nothing in life is free; there is a cost to operating bank accounts. The point made by my hon. Friend the Member for North Swindon (Justin Tomlinson) also goes to the heart of that issue. The provision of free banking relies on people making mistakes and incurring penalty charges. Research for the financial inclusion taskforce has shown that low-income families that move to have a bank account in order to save money through direct debits and so on found that those savings were entirely wiped out by penalty charges, which averaged £140 in the first year. That combination of factors, as my hon. Friend says, can lead to people tripping into debt, which can then spiral. I mentioned people who do not have a transactional bank account, but many choose to manage in cash even if they have a bank account.
Esther McVey (Wirral West) (Con)
My hon. Friend talked about people tripping into debt. He will also find that people trip into ill health, particularly mental ill health. I work with Advocacy in Wirral, and one of the main issues that it deals with is the sheer practicalities of life and not being able to pay bills, leading to a deterioration of mental health.
Damian Hinds
My hon. Friend’s point is, as ever, apt and to the point. She could also have mentioned the stress that debt and trying to manage one’s finances can bring to families, which is one of the key factors in family breakdown.
To address those points—at least in part—and a few other points, we have jam jar accounts. They mimic the jam jars on the windowsill; that is the whole point of such accounts. Louise Savell of Social Finance has identified three core features. First, when someone’s wages come in, the money is automatically distributed among different pots within the bank account—for rent, household bills, spending money, savings and so on. Secondly, the person would receive a low balance alert by text, if there is a danger of that person failing to meet one of their bills from the bills account. Thirdly, if the person does not act on that for whatever reason, there would be an auto-sweep from savings into the bill-paying account in order to avoid penalty charges or failing to make the payment.
There are a number of questions about product design, which can be done in different ways. One big debate is about budgeting support, which could accompany the accounts. Comprehensive budgeting support—helping people to decide how much goes into each pot and how and when to redistribute—would be a great bonus, but that is quite costly. The issue should have a separate debate, because we can have a lot of the benefits from jam jar accounts without fully comprehensive budgeting support, and we can have a lot of great benefits from fully comprehensive budgeting support without jam jar accounts.
A second question about product design is how easy we make it to raid a savings account. Jam jar accounts are in many ways a method for one to impose discipline on oneself. A customer might decide that it would be good to impose further discipline and say, “If I want to move money out of the savings account into the spending account, I should have to do something actively. Ultimately, it is my choice because it is my money, but I will make myself ask for it in writing or by e-mail.”
Damian Hinds
My hon. Friend makes a fine point, and I commend him on his leadership in the local banking movement. I will say a few things about credit unions, which I think share some characteristics.
I have talked about the “Why?” of jam jar accounts, and it is also fair to ask, “Why now?” There are three good reasons why the issue is particularly relevant at the moment. First, the Government and Members on both sides of the House are focusing, rightly, on the cost of living. We discussed heating bills in the preceding debate, and there are active debates about rail fares and petrol and diesel costs. Bank charges are also a significant part of the cost of living. The second reason why the debate is particularly timely is because of the introduction of universal credit, the move from fortnightly to monthly payments, and the move away from direct payments to landlords. The third reason is the sector modernisation fund of £73 million for credit unions that the Government are supporting. That presents new opportunities for development in that sector.
Esther McVey
Of course I greatly welcome—as all of us here do—the universal credit, but does my hon. Friend agree that what is being offered protects not only those receiving the credit, but potentially the landlords and other people who are the recipients of bill payments? Those people also need protection.
Damian Hinds
My hon. Friend is right. Of course, there is a potential benefit for landlords and other service providers. There is a line of argument that goes: why not just keep the two-weekly payments and the direct payments to landlords? However, a key objective of universal credit is to make the receipt of benefit feel more like being in work, which usually means having to cope with monthly payments, not having money paid direct to a landlord and so on. The use of such accounts is a good way of helping people through that, which is a perfectly legitimate aim, while keeping the key features of universal credit.
We know that Ministers are interested in this area. Most recently, in answer to a written parliamentary question tabled by my hon. Friend the Member for North Swindon, which was published after I applied for the debate, the Minister of State, Department for Work and Pensions, my hon. Friend the Member for Thornbury and Yate (Steve Webb), confirmed that the Government are actively looking at the potential for low-cost budgeting accounts.
So why do they not exist already? Well they sort of do, just not on a particularly big scale. Last year, there were four providers of jam jar accounts, although three of them are not the household names that most of us would recognise. Until now, a key driver for the development and roll out of such accounts has been debt management companies wanting to have greater security of payment schedule, rather than consumer advertising. So although they exist, they do not exist at scale. Social Finance estimates that there are only about 150,000 such accounts in the UK. They do not exist through big brand institutions—by the way, the exception to that is the Royal Bank of Scotland. I know that it is not very fashionable these days to say nice things about RBS, but I commend it for having such an account, which it uses for its most challenging customers. However, that also means that the account is not actively marketed to the general public. Someone would struggle to walk into an RBS branch and open such an account, unless they are referred on to it.
Youth Unemployment and Bank Bonuses
Esther McVey Excerpts(14 years, 2 months ago)
Commons ChamberRead Full debate Read Hansard Text Read Debate Ministerial Extracts
Mr Mudie
No, because I am short of time.
The people who caused the difficulty earn huge salaries because of gambling in the investment market, which has brought country after country and bank after bank to their knees, and which is now imperilling people’s standard of living—their homes, jobs and future. I find that unacceptable.
The shadow Minister has called for leadership, but real leadership would not involve avoiding questions about whether there is going to be a limit of £2,000 on bank bonuses. The senior director of RBS will be disappointed if he is not allowed to take his £4 million and the chief executive is expecting £2.5 million, but this is in a bank that the Government own. If we want leadership, it should come from the Chancellor and the Government, who should take the steps that are needed.
Mr Mudie
No, I am sorry because I will be stopped quite soon.
The last point I want to make concerns the irresponsibility of the banks in refusing to operate Project Merlin, which would have brought jobs for younger and older people. The cynical and shoddy way that they got out of that agreement is totally unacceptable, as is the way they are refusing to fund small and medium-sized businesses. If we are going to rebalance the economy, that is the area that will provide the jobs. We need the Government to show some leadership because the banks must be forced to fund and put resources into that sector.
Jake Berry (Rossendale and Darwen) (Con)
It is clear to everybody in the House, regardless which side they sit on, that we are facing exceptionally difficult economic times in this country. I calculated that by the end of this speech, with a six-minute time limit in force and with no interventions, we will have spent in excess of £500,000 just on debt interest. Our national debt is like a credit card, and the sooner we get to grips with it, the better. I do not want to have to look the next generation of young people in the eye and say, “We were the Government, we were the group of MPs, who shoved our heads in the sand and refused to tackle our national debt,” so that we could pass it on to them.
We have seen a hugely unwelcome increase in unemployment, and an exacerbation of the existing problem of youth unemployment. The Leader of the Opposition admitted in November last year that youth unemployment was not invented by this Government, but was a problem under the previous Government. The motion seeks to link the problem of youth unemployment simplistically to a failed tax on bankers’ bonuses.
This truly is the tax that keeps on giving. So far, there have been proposals to use it to tackle unemployment among older people, to tackle unemployment among younger people, to fund capital projects, to reverse VAT increases, to cut taxes on fuel, to cut VAT on home improvements, to build 25,000 more houses, and today to create 100,000 new jobs. That clearly shows that the Labour party has no new ideas. It cannot be only today’s ICM/Guardian poll that is depressing them. It is also the fact that a party that claims to represent the workers has come to represent the something-for-nothing culture, a party that claims to fight inequality increased inequality in 13 years in government, and at the end of the largest economic boom that we have ever witnessed, Labour left 270,000 more young people out of work than when it came to office. That is an appalling legacy. The solution is not more of the same, not to pile debt on debt, not to try and spend ourselves rich.
The motion sounds like the Opposition are being advised by Charles Ponzi and has about as much credence as the claim by the captain of the Costa Concordia that he slipped and fell into the lifeboat. The Government, however, must take true steps to tackle youth unemployment, and there is no panacea.
One thing we must do is tackle the skills gap. The hon. Member for Leeds West (Rachel Reeves), who is no longer in her place, said that she hoped MPs would today bring forward positive solutions on the question of what they can do. A little-known fact about the junction 4 retail park in Darwen—unless one is the MP for the area—is that it is the country’s specialist area for the creation of computer games. When I ask those businesses how many young people from the area they employ, they say none, because young people in Darwen are leaving our schools without the menu of skills that the businesses want when they recruit. That is why it is vital that we continue to increase the links between schools and local employers.
Esther McVey
It is not just computer games and electronics companies that say that. The Institute for Manufacturing, the Institute of Physics and the chemicals industry say that we have not produced enough people in science to be the technicians and engineers, that we have a dearth of those skills and that they have had to bring in people from outside the country to do those jobs, which is a crying shame.
Jake Berry
I agree. Of particular joy to me is the fact that my constituency has a new academy school, which has entrepreneurship and technology at its heart. We are starting to have those conversations with business in order to equip our young people for the jobs market.
I want to talk about what hon. Members can do positively in their constituencies to tackle youth unemployment. As we have heard, much of it is about leadership. At the start of next month I will launch the “100 in 100” campaign in my constituency, which is my pledge to get 100 people into 100 apprenticeships in 100 days. Building up to this, I have visited as many local companies as I can to talk with them about what we hope to do, and I have found that there is a huge appetite for giving young people a chance.
Mr Meacher
My hon. Friend makes a very important point. As I am sure everyone in the House realises, there is far too much short-term instinct, particularly in the City. What we need, and have not had, is the relational banking that exists in the mittelstand in Germany. Banks there spend a lot of time, effort and money producing a long-term relationship with manufacturing units that they can support. That is the type of model that we need in this country, but it is not what we have got.
The banks continue to put their money overwhelmingly into property, mortgages, offshore speculation and tax havens, all for their own enrichment, and stuff the rest of the economy and jobs for young people. I am putting it strongly, but there is huge bitterness outside, as one can see from the August riots, from the Occupy movement and from many other instances of anger beginning to bubble up.
Mr Meacher
No, I will not give way now.
Bankers’ bonuses have already nearly proved the ruination of this country. What we need is a smaller banking sector that serves the real needs of this country, and particularly of its young people, if we are to avoid a lost generation. Saying no to bonuses, or at least taxing them, is certainly the right way to start.
Stephen Timms
We do support the benefit cap. The version that the Minister is pressing through is, as the House of Lords has rightly pointed out, going to cause huge costs for the Exchequer. I hope that even now the Secretary of State will think again before returning to the House with the measure next week.
The Work programme was rushed, and badly prepared. As we pointed out at the time, there should have been a plan for transition to the new programme. There was no plan. We can glimpse how the Work programme has been going by looking at the number of people coming off benefit each month. The number plummeted last May, when the flexible new deal stopped, and it stayed low as the Work programme got going. I invite the Minister to compare the months after May with the same period the previous year, because he will see that poor Work programme performance resulted in 86,000 people not getting into work who should have done. That is probably a permanent unemployment rise. The damage will be with us for years.
The Government told us that the Work programme would enlist an army of voluntary organisations to give specialist help to jobseekers. To begin with, we were told that 508 voluntary sector organisations would be involved. By August, that number had fallen to 423. Next week the Government will count once again. Last week, apparently, at a crunch meeting, voluntary sector organisations told the Minister that they were being used as “bid candy” to win contracts. Some of them still have not had a single referral since the Work programme began last summer.
The “Open Public Services White Paper” promised, as I quoted to the Minister earlier:
“Providers of public services from all sectors will need to publish information on performance and user satisfaction.”
I welcome the Minister’s U-turn on performance. What about user satisfaction? Let me tell him about the satisfaction of one user, the father of a constituent of mine, who came to me to complain about his daughter’s experience on the Work programme. She received a letter referring her to mandatory work activity. It was completely incomprehensible; I will send the Minister a copy. She lives in my constituency in east London. The letter appeared to require her to report on an unspecified date to an address with a postcode in Sheffield, and the telephone number was given as 000. It was a shambles. It is no wonder the Work programme is not delivering and youth unemployment is rocketing.
Esther McVey
When I read the title of today’s Opposition day debate, which mentioned youth unemployment and bank bonuses, I thought it was a list of Labour’s worst failings—youth unemployment up by 40% and a banks bonus culture developed under Labour and signed, sealed and delivered with a knighthood under Labour—so will not the right hon. Gentleman concede that where Labour messed up, the coalition is cleaning up?
Stephen Timms
We had some discussion in the debate about the future jobs fund. The Minister has awarded a contract for the evaluation of the Work programme. I welcome the fact that he has done that. He should read the evaluation of the future jobs fund carried out by the same organisation that he has commissioned to evaluate the Work programme. It points out just how effective the future jobs fund was and the crucial value for young people of
“a real job with a real wage”.
We need a new approach. We should repeat the tax on bankers’ bonuses to bring in £2 billion, funding 100,000 real jobs for young people. We need, once again, a temporary cut in VAT to rebuild momentum in the economy, as the VAT cut did before the general election. A further VAT cut on home improvements would give the construction industry, which is in a desperate state, the chance that it needs. We should bring forward investment in schools, roads and transport, and we should listen to the Federation of Small Businesses and give small firms hiring new staff a break from paying national insurance—five points that would give us, at last, a chance.
Communities and Local Government
Esther McVey Excerpts(14 years, 3 months ago)
Commons ChamberRead Full debate Read Hansard Text Read Debate Ministerial Extracts
Esther McVey (Wirral West) (Con)
When the coalition came into government, its focus had to be on reducing the UK’s debt and putting the UK economy on a sustainable footing. For too long, the UK had overspent and under-delivered. The Chancellor made it clear that the Government’s economic policy objective is to achieve strong, sustainable and balanced growth that is more evenly shared across the country and between industries, rebalancing the economy by moving from unsustainable public spending and towards exports and investment. This should support the UK’s long-term economic potential and help to create new jobs. In addition, the Government have introduced the Localism Act 2011, which recognises the need to develop sustainable communities, allowing them greater freedom to develop while focusing on the planning needs of the local area, with a strong emphasis on regeneration.
Combining both those aspects is the starting point of my speech, which is about the regeneration and expansion of the Liverpool city region’s ports and waterways. How important are the ports to the city region? The ports and maritime industry have played a vital role in the history of Liverpool. In fact, so prosperous was the port that for periods during the 19th century, Liverpool’s custom house was the single largest contributor to the British Exchequer. Disraeli described Liverpool as the second city of the empire as the port became the gateway to the world, with 40% of the world’s trade passing through it. Liverpool built the world’s first enclosed commercial dock in 1715. Further docks were added in later years, all interconnected by lock gates and extending 7.5 miles along the Mersey. This interconnected dock system was the most advanced port system in the world. These magnificent docks, extensive dock systems and waterways still exist today and are ripe for regeneration.
However, the course of life does not run smoothly, and during the 20th century the port began to decline owing to a combination of the UK’s lack of a manufacturing base and the shift away from the Commonwealth to the Common Market. The southern ports of Southampton and Felixstowe, and eastern ports such as Hull, benefited from this move. In the 1900s, Liverpool’s population was about 850,000, but it began to decline in the 1950s, and rapidly so in the ’70s. Today, the population is about 450,000—and yet the city was designed to hold double. A city with such a large infrastructure to sustain—from a tube system, to parks, listed buildings, art galleries and museums, and even two cathedrals—is expensive to run and much in need of an increased population. Added to that, Liverpool, without the full use of its port and waterways, is only half a city; having water down only one side and an inability to make use of it makes it thus. I therefore propose that any impediments to the use of its waterways, or unfair restrictions placed upon the city so as not to enable it to use them, would harm not only Liverpool and the Liverpool economy but the whole of the city region.
As times change, situations do too, and in 2012 the port of Liverpool is again ripe to come to the fore, for several key reasons. First, there is the growth of the new emerging markets such as those in the far east and Brazil; that does not only affect imports, as the UK is looking to double exports to Brazil by 2015. Secondly, there is the decision to widen the Panama canal to accommodate the world’s largest vessels. That is due for completion in 2015 and promises to change the structure of world trade flows. When completed, larger ships will emerge from the Pacific, prompting expansion of the US eastern seaboard ports such as New York. As Liverpool is already the primary western facing port into the Atlantic, it will be favoured as a primary port for all these extra-large vessels. Thirdly, there is the domestic consideration of costs to business and ultimately to the consumer. Liverpool is geographically well placed and very central, with a population of 8.2 million within 70 miles of it and easy connections to Ireland and Scotland; and a four-hour heavy goods vehicle journey from the port of Liverpool can reach a population catchment of 34 million. Fundamentally, Liverpool remains a great place for doing the things that supported its early growth—notably, handling the UK’s trade with the USA and the Americas and emerging markets, and maintaining its links with Ireland.
The city region has the ability to create a port hub—a super-port, if you will, Mr Deputy Speaker. To achieve this, it will need to continue the development of the 3MG inter-modal hub in Halton, the rail freight scheme at Parkside, the world cargo centre at Liverpool airport, and the post-Panamax facility, which is a new £300 million container terminal capable of simultaneously handling two of the new-generation post-Panamax size containers, and is privately funded by Peel Holdings. Although the existing maritime and logistics sectors support approximately 34,000 jobs, development of the super-port projects could transform the Liverpool city region economy, creating 21,000 jobs by 2020 and nearly 30,000 jobs by 2030 with the extension of the cruise liner terminal. At present, liners are permitted to berth only for port-of-call visits, but a turn-around facility would generate approximately £1 million for the city region economy for each liner. There is also the development of the—
Fuel Prices
Esther McVey Excerpts(14 years, 4 months ago)
Commons ChamberRead Full debate Read Hansard Text Read Debate Ministerial Extracts
Caroline Nokes
I am not convinced that that would be legal.
This morning I met representatives of the Freight Transport Association. They told me that high fuel prices have had a crippling effect on the logistics industry, whose business viability is determined by the price of fuel. Even the smallest rise makes a massive difference to them. A 5p increase in fuel duty adds another £2,350 to the annual price of running an articulated lorry, and the 3p increase that is planned for January would mean that a fleet of 50 vehicles would have to recover £37,000 more per year.
Caroline Nokes
I am sorry, but I do not think I have time to do so.
Profit margins for hauliers are incredibly tight, which makes haulage a very vulnerable business. In particular, fuel companies are not willing to extend credit terms, with the result that some payments are shrinking to as little as three days’ worth. As haulage firms are often not paid for work for up to 60 days, this is very much a hand-to-mouth industry, and companies can afford to think only as far as January. That hinders growth, investment and further recruitment.
There are about 100 Freight Transport Association members in my constituency, which is, of course, close to a deep-sea port. Fuel duty is lower on the continent, and £1,000-worth of diesel purchased on the continent can give over 200 extra miles to the driver. That has led to European businesses becoming more competitive than their UK counterparts, further heightening the pressure on domestic hauliers.
I acknowledge that we are facing a very difficult economic situation, and that we need to take robust steps to tackle the deficit, and I also know that the planned rises are less than the previous Government had intended. It is a relief to constituents that the Government delayed the scheduled tax rises and have introduced a fuel stabiliser but, like others supporting this motion, I want us to have a stabilisation mechanism under which duty rises and falls in response to fluctuations in the underlying price of oil.
As I am a member of the Environmental Audit Committee, it would be wrong of me not to mention the impact motorists and hauliers have on our nation’s carbon footprint, but fuel taxation is a blunt instrument and the reality is that people in rural areas are having to bear the additional cost as they often have to make the same essential journeys as before.
There are alternatives to petrol and diesel that are more environmentally friendly. One of them is biodiesel, produced from used cooking oil. Over the last year, 99 million litres of used cooking oil was collected from restaurants, food manufacturers and caterers. It is an entirely sustainable fuel derived from a waste product and devoid of some of the negative impacts traditionally associated with biofuels. Therefore, if taxation on fuel is partly about encouraging behavioural change, rather than just being about revenue raising, the Government should encourage the use of this fuel, rather than see it as another target for increasing duty. The removal of the 20p per litre duty differential on this type of fuel, which is an excellent source of green energy, sends entirely the wrong message.
Fiona Bruce
I entirely agree. Small businesses are being forced into an impossible predicament. Do they transfer the increased costs to their customers, do they lose their customers, or do they sacrifice the making of any profit just to keep going, which is not sustainable in the long term?
Esther McVey
We are talking about small businesses, which I too represent here today. In the Wirral there is the double whammy of not only increasing fuel prices but increasing toll prices. Marginal profit is completely wiped away when both of those are taken into account.
Fiona Bruce
My hon. Friend makes a very good point.
Let me give the House some specific examples of small businesses in my constituency that are suffering in that way. Smallwood Storage Ltd is a transport and storage business in Sandbach employing nine people. This week it told me:
“We need a level playing field, the price of fuel has become too high as a percentage of our overheads and is out of proportion with the rates we charge. As a small business, we do not have the power of larger companies and are being squeezed from all sides.”
Another local company, B Lakin Transport, a haulage businesses in Somerford employing 10 people, said:
“Increased fuel costs have knock-on effects on everything…as the price continues to creep up, customers will go elsewhere and even look to foreign drivers who can use cheaper fuel from the continent; avoiding the extortionate prices in Britain.”
It continued:
“A driver from Luxembourg can fill up their petrol tank in Luxembourg at a fraction of the cost here. In October 2011, 1000 litres of unleaded fuel would cost £1130 in Luxembourg compared to £1350 in the United Kingdom—that’s a saving of £220 each time the tank is filled.”
Let us remember that haulage competitors from Luxembourg can fill their tanks there, drive to the UK and then return to Luxembourg without having to fill up here at all. B Lakin Transport tells me:
“Combine this with the exemption from road tax for foreign drivers, and we are clearly at a significant disadvantage to these foreign drivers from the outset.”
Oral Answers to Questions
Esther McVey Excerpts(14 years, 10 months ago)
Commons ChamberRead Full debate Read Hansard Text Read Debate Ministerial Extracts
Mr Hoban
It is rather churlish of the hon. Gentleman to be critical of Project Merlin. When his party was in office it was able to secure lending commitments from only two banks. We have achieved a comprehensive package with all banks, including Santander, to increase the amount of money that they will lend to businesses, including small businesses. The business growth fund, which he also raised, is an opportunity for businesses to seek equity finance in a way that is currently not available and that meets the equity gap, which the previous Government did little to resolve.
Esther McVey (Wirral West) (Con)
3. What fiscal measures he is taking to reduce the costs faced by businesses.
The Chancellor of the Exchequer (Mr George Osborne)
As well as dealing with the deficit, this Government are helping business. To support a private sector recovery, we have cut corporation tax by 2% this year, with 3% to come. We have cut small companies’ tax and extended the small business rate holiday for another year. We have stopped Labour’s jobs tax, expanded enterprise and research tax breaks, announced new enterprise zones and, crucially for millions of businesses and families, we have abolished the fuel duty escalator and cut the duty.
Esther McVey
As Merseyside seeks to expand its private sector, it is looking towards its knowledge economy so that it can build on its substantial science base. Predictions show that, by 2022, it could have growth of 15%, which would mean 58,000 jobs. What are the Government doing to incentivise such growth to ensure that those predictions for Wirral and Merseyside become a reality?
Independent Financial Advisers
Esther McVey Excerpts(15 years, 5 months ago)
Westminster HallRead Full debate Read Hansard Text Read Debate Ministerial Extracts
Westminster Hall is an alternative Chamber for MPs to hold debates, named after the adjoining Westminster Hall.
Each debate is chaired by an MP from the Panel of Chairs, rather than the Speaker or Deputy Speaker. A Government Minister will give the final speech, and no votes may be called on the debate topic.
This information is provided by Parallel Parliament and does not comprise part of the offical record
Harriett Baldwin
My hon. Friend raises an interesting point that I had not even thought of.
The experienced IFAs, who are often sole practitioners, will find it hardest to pass the exams. However, someone who has just graduated from university with a bachelor’s degree in financial markets—and I am not knocking that—will be immediately accredited by certain institutions. In the full file that I have received in the past few days are stories from experienced IFAs with unblemished regulatory track records, years of experience, happy clients and no complaints. Yet as a result of the rules, if they do not pass the exams they will not be able to ply their trade on 1 January 2013.
Esther McVey (Wirral West) (Con)
I thank my hon. Friend for securing the debate. I have had many letters from concerned constituents about it. Independent financial advisers feel that they will be put at a substantial commercial disadvantage by the new rules.
Harriett Baldwin
There is an important point to be made about how some of the larger organisations, and indeed some banks and bancassurers, will most readily be able to have their staff trained for the exams. However, that raises the question whether the exams will really test the skills needed by a good financial adviser. In the investment world, experience is valued and the FSA is imposing on the market a one-size-fits-all, prescriptive approach to education, at great cost to consumers, in return for a modest benefit.
I have written to the chief executive of the FSA and to date have received a letter, beginning, “Dear Mr Baldwin”, simply reiterating the FSA’s consultation paper conclusions. I would like to ask the Minister to answer a few questions. The FSA is the independent statutory regulator. However, it is answerable ultimately to the Treasury. Does the Minister believe that it is proportionate in the present case to impose a regulatory burden of £1.7 billion on consumers? Is the Minister concerned that up to 25% of smaller advisers are likely to leave the industry, handing a competitive advantage to banks and bancassurers? Is he convinced that the banks will not be able to find a way to reward employees for pushing certain products? Does he share my concern that the FSA’s own impact assessment suggests that those who get reduced access to advice are likely to be the smaller, poorer consumers in more remote areas?
Does the Minister think that there might be a more proportionate way for the FSA to achieve its objectives? For example, IFAs who have passed exams could add the letters of qualification to their business cards. Consumers could then be educated and could choose an unqualified adviser if they preferred, but would come to know over time that there was a brand to the qualification.
Equitable Life (Payments) Bill
Esther McVey Excerpts(15 years, 6 months ago)
Commons ChamberRead Full debate Read Hansard Text Read Debate Ministerial Extracts
Mr Hoban
I would be delighted to appear in front of the Committee to give the Government’s view. It is important that there should be scrutiny through the Public Administration Committee. My hon. Friend was right to highlight the work done by the previous Committee; I particularly commend the former Chair, Dr Tony Wright, who did a great deal, with other Committee members, to keep the issue in the public debate. They published two reports that were very critical of the previous Government. I am happy to take part in that process.
Esther McVey (Wirral West) (Con)
The fact that this matter has not been resolved for so long is an absolute disgrace, and I congratulate the coalition on the fact that it will deal with it so swiftly. It is vital that the compensation given should be suitable and satisfactory to all the victims of Equitable Life. Going forward and looking at the bigger picture, we need to consider pensions as a whole. What does this issue say about how far the general public can have faith in any pension scheme?
Mr Hoban
Indeed; my hon. Friend makes an important point. I would like to say two things in response to her. First, any compensation has to be fair to both the policyholders and the taxpayers who will foot the bill. No one else will foot the bill—no one involved, such as the previous management of Equitable Life, will pick up the tab. The taxpayer will foot the bill. We need to make sure that compensation is fair for the taxpayer and policyholders.
Secondly, my hon. Friend is right to highlight the issue of how we ensure that there is confidence for investors and savers in insurance and long-term saving in the future. That is one of the reasons why my right hon. Friend the Chancellor announced in June that we are going to reform financial regulation and set up a new consumer protection markets authority. That will strengthen the regulatory regime in this country.
We also need to make sure that we help improve financial capability for savers, so that they can understand some of the issues around the products that they take out. That is why we have proposed an annual financial health check, which will help savers understand some of those issues.
Oral Answers to Questions
Esther McVey Excerpts(15 years, 8 months ago)
Commons ChamberRead Full debate Read Hansard Text Read Debate Ministerial Extracts
Mr Hoban
By tackling budget deficits, we will be in a better position to keep interest rates lower. Serious concerns were expressed before the Budget about the ability of the previous Government to tackle the deficit. The tough action we have taken has been welcomed across the world and by rating agencies. It lays the right foundation for future growth. This Government are prepared to take the difficult decisions that the hon. Gentleman’s Government ducked before the election.
Esther McVey (Wirral West) (Con)
13. What recent discussions he has had with the Secretary of State for Health on funding for mental health services.
The Chief Secretary to the Treasury (Danny Alexander)
I am grateful to the hon. Lady for her question. I know that she takes a great interest in these issues. We want to offer long-term solutions to people with mental health problems and provide psychological therapies to do that. Our coalition programme set out our intention to ensure greater access to talking therapies. That is why, on 23 June, the Secretary of State for Health pledged £70 million to continue the roll-out of psychological therapies across the NHS this year.
Esther McVey
Given the dire financial situation the last Government have left us in, and the very real impact it will have on each and every one of our lives, will the Minister go further to explain the £70 million that he plans to spend on psychological therapies in the current financial year? That is particularly important when one in four of us will in the course of our lifetimes suffer from problems in our mental well-being—including finance-related stress, reminding us of our inheritance from the previous Government.
Danny Alexander
The hon. Lady is quite right to spell out the importance of tackling mental health problems, which, as she says, many people experience during the course of their lives, so it should be taken very seriously. That is why we have continued to roll out funding for the expansion of talking therapies, which in many cases are the most effective. I also note that, unlike the Labour party, we have pledged to increase health spending in real terms during every year of this Parliament to enable these sorts of problems to continue to be tackled—even in very tight financial circumstances.