amendment of the law

Gregory Campbell Excerpts

Monday 25th March 2013 Commons Chamber

[Andrew George (St Ives) (LD)]

It is, of course, a pleasure to follow the hon. Member for Bradford West (George Galloway). His speech was an oratorical interlude that demonstrated his perspective on the world and suited his style: blacks, whites and no greys. Although he denies practising yah-boo politics, I am afraid to say that that was pretty much what we heard.

Today, we are concentrating primarily on housing, and I want to make a constructive contribution on the narrow issue of developing the construction industry, trying to kick-start the economy in the process and meeting desperate housing need. I welcome any intervention by the Government, including the Budget announcement on the promotion of home ownership for those seeking, in many cases in desperate circumstances, to get their first toe-hold on the housing ladder. In particular, I want to look at the special circumstances faced by many people living in rural areas.

My own part of the world is, of course, west Cornwall and the Isles of Scilly. Cornwall as a whole has seen the number of houses double in the past 40 years, yet housing problems for local people have become significantly worse. What we have learned in Cornwall applies to many other parts of the country that are attractive to wealthy people—we have many such places in Cornwall—who can afford second homes. On its own, building houses is not the problem. In places that are highly desirable to those with large wallets, something more sophisticated is required than merely heaving in a load more houses and turning the place into a developers’ paradise. There is a big mismatch between earnings levels and house prices in our area.

[Mr Gregory Campbell (East Londonderry) (DUP)]

The hon. Gentleman’s area, like mine, has a number of second homes on coastal development routes. Does he agree that we need the Government to plug this massive loophole, so that people do not take advantage of what appears to be there at the moment and build large buy-to-let properties with a significant subsidy from the public purse?

[Andrew George]

I entirely agree. As the Government introduce their proposals, I hope that they will discount any chance of the loan guarantee being used to support the purchase of second homes, and that it will go only to families that otherwise would not be able to buy a first home of their own. After I was first elected in 1997, I campaigned against the policy that had been introduced by the Conservative Government of providing a 50% council tax discount for second homes. In that case, hundreds of millions of pounds were being used every year to subsidise the wealthy buying second homes, when thousands of local families could not afford their first. This Government are finishing off the job. I persuaded the previous Labour Government to remove as much as they possibly could of the second home council tax discount, and that was the right step forward.

Before I was elected to this House, I worked with housing associations and others to find a way of constructing a new lower rung on the housing ladder through shared equity and shared ownership schemes. The rural exceptions policy allowed exceptions to be made on the edges of villages and towns, where planning permission would not normally be granted, to meet local housing need. It allowed the schemes to go ahead and meant that the development price of land was significantly lower than would have been the case if they had been given unfettered permission to develop the land and build properties at prices that local people could not afford. The exceptions approach and shared ownership were clearly the way forward. The problem was that in rural areas only two lenders, Nationwide and Halifax, were prepared to put money into shared ownership developments.

A lot of lenders question whether they are prepared to put their money in and support local families who are trying to get on to the housing ladder. Such properties do not result in the level of default—the amount is 0.45% in shared ownership as a whole, which is significantly less than that for rural housing stock—that a lot of lenders pretend. If the Government are looking at ways to tighten the definition and develop their loan guarantee scheme so that it will apply to families who desperately need help, I urge them to look at the shared ownership sector. They should find ways to enable the situation to come to life, but not just on the first, initial purchase; they should try to ensure that on the second and subsequent purchase they can facilitate and work with housing associations so that these families can move on. The lack of confidence that this market can have a life of its own is holding it back.

I hope the Government will look at ways of having, in effect, a rural housing investment bank through this measure, and I hope that they will see this as a constructive contribution to the debate.

--- Later in debate ---

[Dr McCrea]

I thank the hon. Lady for her remarks. I think that if we really went out into the community, we would still find a lack of confidence. If confidence were out there, those who have the money—and some certainly do—would be investing. We need to get those people to spend that money within our economy. On the other side, there is not only a lack of confidence, but a lack of finance. Small and medium-sized businesses are being starved and crippled by denial of finance.

I do not believe that we should talk down our economy, but we must be realistic about the economic situation in our United Kingdom. We want inward investment and we need to kick-start the economy. I would certainly like to see the Chancellor giving more encouragement. Many businesses are crying out for finance. They go along to the banks, but no matter how many times the Chancellor and even the Prime Minister have assured us that they are encouraging the banks to give them the money, that needed money is not getting into the coffers of SMEs. We have got to do more about that.

My constituents welcome the cancellation of the 3p increase in fuel duty, which would have been an additional tax burden not only on businesses, but on virtually every other person and family in our community.

[Mr Gregory Campbell]

Does my hon. Friend agree that if the Chancellor were in the business of freezing one duty and reducing another, it might have been more cost-effective and beneficial to the economy if he had frozen the beer duty and reduced the fuel duty?

[Dr McCrea]

I thank my hon. Friend for that suggestion. In fact, that suggestion would have been profitable for the economy, especially bearing in mind that we in Northern Ireland already pay higher fuel prices than any other region of the United Kingdom. We also welcome the low cost of borrowing from the banks over a sustained period, but I have to say that there is another side to that because we should have some sympathy for many pensioners and other savers who depend on savings to supplement their income. They are suffering greatly from the very low interest rates.

I acknowledge the reduction of corporation tax to 20%, ensuring a single rate for businesses in April 2015. In welcoming this step, however, I would ask the Chancellor when corporation tax is going to be devolved to the Northern Ireland Assembly, particularly bearing in mind the fact that we compete with the Irish Republic, which has a 12.5% rate. We want to be able to compete on a level playing field, or better, to bring inward investment into our Province. Northern Ireland’s population has a strong work ethic, but we need policies that will build confidence, bring that inward investment and help industries in the local community to invest in the future.

Air passenger duty is another issue. I believe it is detrimental to our economy. I acknowledge that APD exists for transatlantic flights from Northern Ireland, but we need to challenge this, so I call on the Chancellor to reconsider his position. There is anger, too, over the millionaires’ tax cuts, while at the same time there is the hurt over the bedroom tax. Where will our constituents find the houses for the downsizing? It is easy to talk about these imaginary houses, but that offers no relief to families that face turmoil in getting a roof over their heads.

Oral Answers to Questions

Gregory Campbell Excerpts

Tuesday 29th January 2013 Commons Chamber

[Greg Clark]

My hon. Friend is right. It is important that we make sure that our young people have the skills available, and the expansion of the apprenticeship programme is a key feature of that. It is important to send the right message to young people, which is that there is a 90% chance that a young person who joins the jobseeker’s allowance scheme will have a job within a year, and a 60% chance that they will have a job within three months. It is very important that that message gets out and that young people should not be demoralised by the Labour party.

[Mr Gregory Campbell (East Londonderry) (DUP)]

In parts of the United Kingdom that are highly dependent on the public sector, such as Northern Ireland, does the Minister agree that we need to maximise the private sector to ensure that the hard core of young people who are unemployed get into skills and training programmes so that when jobs become available they are best placed to get them?

[Greg Clark]

The hon. Gentleman is absolutely right. What he says for Northern Ireland applies to the rest of the country as well, and that is what we are pursuing with our policies.

Fuel Duty

Gregory Campbell Excerpts

Monday 12th November 2012 Commons Chamber

[Mr Iain McKenzie (Inverclyde) (Lab)]

It is a pleasure to follow the hon. Member for Ipswich (Ben Gummer). He will be glad to know that I intend not to lecture, but to plead for hard-pressed motorists up and down the country, who are seeing fuel prices devastating both the private motorist and businesses.

In Inverclyde, my constituents are forced into choosing between paying more for fuel and doing without other essentials, or digging into their savings to meet the ever-increasing cost of motoring. A car is an absolute necessity for many of my constituents. I have a varied constituency. Many people live in outlaying areas some distance from the main bus and train links, so they are required to use their cars daily, with the increase in rail and bus fares giving them little consolation.

The weekly cost of filling up the fuel tank is for ever growing. The additional financial outlay to bring that fuel gauge to where it once used to reach means people digging deep into their resources. That is on top of road tax and insurance costs, not to mention maintenance against wear and tear, all of which adds to the joys of motoring. In Inverclyde, the price of a litre of fuel averages around £1.39 a litre. The two large supermarket petrol stations in my constituency kindly keep close to each other’s price, thus making it relatively easy to work out the average, although I do one supermarket an injustice. Morrisons in Inverclyde has decided to offer 15p off a litre for those spending £60 or more in the shop—and yes, Mr Deputy Speaker, it’s beginning to look a lot like Christmas.

This House has been united before on fuel prices, calling on the Government to drop the intended fuel escalator rise planned for earlier this year. I pay tribute to the hon. Member for Harlow (Robert Halfon) for securing that earlier debate. We on the Opposition Benches believe that a freeze in fuel duty will stimulate growth and create jobs. Fuel duty is having a huge effect on the UK’s road freight industry. The 3p increase in fuel duty planned for January will add £15 a week to the running cost of a vehicle. A fleet of 50 vehicles will have to recover £37,000 a year. The recovery of such costs simply drives up inflation in the supply chain and makes our haulage industry uncompetitive compared with its foreign rivals, who pay much less for their fuel. Indeed, foreign trucks enter the UK full of cheaper fuel—they have enough to work in the UK for a full week. Because they pay no fuel duty here, they can easily undercut our UK hauliers, thereby driving them out of business and creating unemployment in the UK.

[Mr Gregory Campbell (East Londonderry) (DUP)]

May I take up the hon. Gentleman’s point about drivers from other jurisdictions? Does he agree that the Treasury is actually losing money because of the duty increase? Drivers in Northern Ireland, particularly haulage drivers, cross the border to the Irish Republic to avail themselves of cheaper fuel. Tens of thousands of litres of fuel per day have been purchased in the Republic rather than in Northern Ireland, and duty has been lost to the Treasury as a result.

[Mr McKenzie]

I entirely agree with the hon. Gentleman. Moreover, I can tell the House that 30% of lorries carrying goods across the border from Scotland to the south-east of the UK are not from this country.

I hope that Members on both sides of the House will be able to unite again in calling on the Government not to apply the 3p increase in January and to give the hard-pressed motorist a better start to the new year. If the Government really want to enter into the festive spirit, the Chancellor may wish to drop the VAT increase on fuel, thus taking yet another 3p off the price at the pump.

Scottish Football (Tax Liabilities)

Gregory Campbell Excerpts

Wednesday 29th February 2012 Westminster Hall

[Thomas Docherty]

The right hon. Gentleman is correct. What is appalling about the Rangers situation, and has come to light in recent weeks, is that Mr Whyte did not have the money to service the debt. It has now transpired that in what I would regard as a most disgraceful act, Mr Whyte and cohorts borrowed money from Ticketus on the future sale of season tickets. In effect, Rangers fans paid for Mr Whyte’s ill-fated takeover; they are the losers, and I am sure that disgraceful situation will be recognised across the House.

[Mr Gregory Campbell (East Londonderry) (DUP)]

I, too, congratulate the hon. Gentleman on securing the debate. He has raised an important issue about Craig Whyte and the apparently underhand way in which he acquired a controlling influence at Rangers football club. Does he agree that if football clubs could allow fans a greater degree of controlling influence, à la the Barcelona model or perhaps in the way alluded to earlier in respect of Cowdenbeath, it might move us away from the insidious controlling influences of multi-billionaires who appear to use football clubs as playthings?

[Thomas Docherty]

The hon. Gentleman is absolutely right. I see that the hon. Member for Portsmouth North (Penny Mordaunt) is in the Chamber. She has championed that model for Portsmouth FC, so perhaps she will be tempted to contribute to the debate. There are some good examples of that model in Scotland. I referred earlier to Brechin City which, as hon. Members may know, had on its board Mr David Will, the FIFA vice-president for the British Isles, and a local lawyer, steeped in Brechin City. There are successful models of clubs, both large and small, where the shareholders are the fans. I hope that the Treasury will look at ways of trying to ensure that a fit and proper person test means not only that liars such as Mr Whyte are not put in charge of clubs, but that we can all have comfort in club finances for the future.

Regional Pay (Public Sector)

Gregory Campbell Excerpts

Tuesday 10th January 2012 Westminster Hall

[Jonathan Edwards]

My hon. Friend makes an excellent argument. Indeed, following the autumn statement, he tabled an early-day motion on the topic, which I think has been supported by about 18 Members to date. I urge those Members who support the campaign on this issue to sign that early-day motion at the very least.

Public sector workers are facing real-term cuts and that is before we consider the impact on the private sector. In many places, the private sector is reliant on the trade generated by the public sector and the money circulated through public sector employees. In constituencies such as mine, where more than 30% of people work in the public sector, there is a direct correlation between their wages and the cash circulating in the local economy.

[Mr Gregory Campbell (East Londonderry) (DUP)]

I congratulate the hon. Gentleman on securing the debate. Surely, his point about the direct correlation between socio-economic difficulties in geographical areas—particularly those that are some distance from the south-east such as Wales, Northern Ireland, Scotland and the north of England—and the high dependency on public sector employment is key. Many of those areas have only managed to get through the recession at the moment because of their high dependency on the public sector. If we were to go down this route now, we would find that the problem would be multiplied even more.

[Jonathan Edwards]

The hon. Gentleman makes an excellent point. We should be considering not depressing the public sector in those areas where the economy is weakest, but improving the private sector.

Since the general election, we have heard a lot about the UK Government’s ambition to geographically rebalance the economy. They have the full support of my party, including the national insurance holiday proposals for small businesses, which I think shows the Treasury’s intent, despite the evidence showing a lack of success. The policy indicates that the Treasury, at long last, realises that countervailing measures are required to address the so-called north-south economic divide. We will, however, need a far more comprehensive approach than we have seen to date. My fear is that this policy on regional pay goes in a completely different economic direction.

One of our major criticisms of UK Governments of whatever colour in the past 30 years has been that the emphasis has been far too concentrated on one small geographical part of the state. Successive Governments have been guilty of allowing regional and individual wealth polarisation at an incredible rate. The average gross value added per person in inner London is 10 times that of workers in the Gwent valley. Inner London is the richest part of the European Union, whereas the communities that I represent—only a few hours down the M4; longer on the train—qualify for the highest form of European convergence aid. Such are the imbalances in the British state that it is now by far the most unequal of all EU member states. Considering the unification legacy in Germany, that is a damning indictment of all successive Governments.

Far from addressing that record of shame, these proposals will further depress those economies that are in desperate need of investment. It is no surprise to anyone that the fiscal consolidation pursued by the UK Government will hit the poorest parts of the state most. The statement by the Prime Minister that we are all in this together is rivalled in its degree of preposterousness only by the previous Prime Minister’s assertion, when Chancellor, that he would abolish boom and bust. My country has the lowest average gross weekly wages in the whole UK. On average, workers in Wales earn approximately £519.40, compared with £629.10 in the south-east of England and £826.40 in London. Take away the consistency of public sector pay—a point made by many hon. Members in interventions to date—and those discrepancies will be far worse.

Arch Cru Compensation Scheme

Gregory Campbell Excerpts

Wednesday 19th October 2011 Westminster Hall

[Tristram Hunt]

The hon. Gentleman is absolutely right that what we are seeing this morning is the decimation of the reputation of Capita. That decimation will only grow unless Capita steps up to the plate, works with the Government and accepts that it is in its own long-term interest, as well as its moral obligation, to ensure that those who invested in this fund on the basis of Capita’s reputation see their payments returned.

I will not go through all the intricacies of my investigation into the awarding of contracts to Capita. Suffice to say that the Government have a whip hand on this issue and should be thinking about using it.

The point is that with financial products and investment opportunities becoming ever more complex, it is vital that investors have confidence in the regulatory framework that upholds their investment. It has been said that

“A badly designed product or a product that is widely mis-sold can have a negative effect on consumer outcomes and actually, over the long term, a negative effect on the industry. It doesn’t just affect the particular product or firm involved. It also erodes people’s confidence in financial services.”

As the Minister will know, those are not my words but his words.

[Mr Gregory Campbell (East Londonderry) (DUP)]

The hon. Gentleman is making a crucial point about confidence. Although it is important that people have confidence in the independent financial adviser that they go to, and that they have confidence in whatever companies are operating under the different structures, surely the supreme amount of confidence must be placed in the regulatory authority that has to oversee all those things. That is the crucial point that the Minister must respond to.

[Tristram Hunt]

The hon. Gentleman is absolutely right. What we have seen with the Financial Services Authority is a lack of confidence in its capacity to deal with this inquiry and the regulation of it. That is why I join my hon. Friend the Member for Rutherglen and Hamilton West in urging the Minister to take advantage of section 14 of the Financial Services and Markets Act 2000 to launch an inquiry, because the FSA has been silent on this matter for too long and as a result investors have little confidence in it. The FSA is part of the regulatory framework that initially failed our constituents.

I will wrap up now as I know that other hon. Members want to speak. I agree with my hon. Friend the Member for Rutherglen and Hamilton West that we are only at the beginning of this process. As I have said, we need the sort of inquiry allowed under section 14 of the 2000 Act. We also need a proper compensation deal and package, and I am struck by the 1996 Investment Management Regulatory Organisation model as a way of moving forward.

However, the Government have a role in this process. They are pouring money down the neck of Capita and for the Government to say that this issue is nothing to do with them strikes me and my constituents as remarkably detached and arrogant. Actually, the Government have a role to play in bringing people to the table, making Capita see sense and delivering justice for our constituents.

European Union Fiscal Union

Gregory Campbell Excerpts

Wednesday 14th September 2011 Westminster Hall

[Mr Cash]

I am grateful for that intervention. Indeed, when the Chancellor of the Exchequer made his statement—which he slipped in, as it were, in the middle of the emergency debate on the riots—he said that he was going to promote the idea, and that the Prime Minister had already spoken to Mrs Angela Merkel and Mr Sarkozy and had encouraged them to go ahead with fiscal union.

In addition, he said that he, as Chancellor, had already made overtures to other Chancellors in other member states advocating the idea of fiscal union. When he said that, he was ignoring the fact that the consequences of going down that route would, as I said at the time, have been such that even Edward Heath would not have proposed it back in 1971-2. Indeed, if hon. Members look at the White Paper produced at that time, they will see that it says that we would retain the veto in our national interest and that to fail to do so would not only be immensely damaging to the United Kingdom, but would even endanger

“the fabric of the European community itself.”

Since then, we have had an accumulation and aggregation of policies in defiance of the democratic issues and principles to which the hon. Member for Blackley and Broughton (Graham Stringer) referred—and, indeed, in defiance of the wishes of the people of this country and, as the hon. Member for Luton North (Kelvin Hopkins) said, of other member states such as Ireland, Denmark, Holland and France. Every single time a referendum, which shows the democratic wishes of the people in question, has been overriden, we are being taken down a route that, above all else, does not work. That is the problem.

Apart from the matters of principle, the real problem is that such an approach does not work and is now causing immense damage. For example, there are incredibly high levels of youth unemployment in places such as Spain, where 47% of young people are unemployed. There are similar levels of unemployment in Greece and Italy, although the figures are not quite as high as 47%.

I do not need to read all the figures out, but the official statistics for unemployment among youths under 25 are 46.2% for Spain, over 23% for eight countries and 32% for one country. This is not a working system; this is a system that is destroying people’s aspirations and prosperity.

[Mr Gregory Campbell (East Londonderry) (DUP)]

I commend the hon. Gentleman for securing the debate. I agree with what he is saying, particularly his comments about the system simply not working. However, does he agree that part of the problem that the United Kingdom is faced with is that we need to have a cohesive alternative to the total integration policy that he is outlining, which I am sure is completely different from the approach that he will discuss shortly? A practical coherent alternative needs to be laid out by our Government to try to lead ourselves out of the mess into which we have got over the past 20 years.

[Mr Cash]

I am extremely grateful to the hon. Gentleman. He may recall that I raised the matter in Prime Minister’s questions, when I asked when the Prime Minister would lead us out of the mess that had been created by the existing treaties. This morning on the “Today” programme, we heard Lord Lawson of Blaby echoing that call and saying that he had always had grave reservations about the political union. I can only say that when the Maastricht treaty came and went, a lot of those arguments developed at the same time. The hon. Gentleman is completely right in saying that we must have a constructive alternative.

I have always advocated the idea of our working effectively with a European system capable of producing the right results. In fact, I hope that no one will mind my holding up a copy of a book that I wrote in 1990 called “Against a Federal Europe: the Battle for Britain.” I think I can confidently say that there is not very much in there that I would change and that most of it appears to have come true. To answer the question asked by the hon. Member for East Londonderry (Mr Campbell), I should say that it is very alarming to note that the first chapter is entitled “Britain for Europe”; it is not only a case of “Britain for Britain” but of “Britain for Europe,” because it is certainly true that we are affected by what goes on in the other member states.

As I have said many times before, the answer to the question is to go down the route of having an association of nation states, whereby we would return the right and proper power to this Parliament to make judgments on behalf of the people who have chosen us in a ballot box, to follow through policies, and to try to work in a form of understanding made on the basis of trade and political co-operation.

That was the situation anticipated by the 1975 debate when we had the referendum, which people understood. However since then, there has been onward and continuous progress towards ever further integration in an ever more undemocratic and ever more dictatorial manner. The time has come when we have to draw a line. It should have been drawn a long time ago. We drew it as a party over Lisbon. We said that we would not accept that treaty, but now here we are implementing it like there was no tomorrow.

A rather intriguing article by Camilla Cavendish was published on 8 September—only a few days ago—in The Times, which also had rather a good leader, either on the same day or the day before. It is rather amusing that she says:

“It’s no longer cuckoo to take the Swiss road; Britain and the EU are no longer going in the same direction. We should grab the chance for an amicable divorce”.

She then explains how that would be done. Essentially, she is arguing for an association of nation states, as many of us have. We are at a dangerous crossroads. A particular reason for this debate is the fact that the idea of fiscal union is being promoted. In our opinion—or in my opinion, anyway—that is entirely the wrong direction to take in the context of the broad landscape that I have been seeking to identify.

Finance (No. 3) Bill

Gregory Campbell Excerpts

Tuesday 3rd May 2011 Commons Chamber

[Mr Jones]

My hon. Friend makes a clear point. I do not know which wag in the Treasury came up with the nickname Merlin for this project. Having dealt with the Treasury and Treasury Ministers I have never thought of them as having a sense of humour, but whoever came up with that name clearly had one. Again, my hon. Friend makes a good point. There is no explanation for the figure of £20 billion other than the yield that it is intended to produce. The Minister needs to provide the evidential basis for the £2.6 billion yield. If we levy, for example, £2.7 billion, £2.8 billion or £2.93 billion, at what point do the Barclays bankers pack their bags and move to Zurich? Would the entire system of bankers' bonuses fall apart if the figure were more than £2.6 billion?

I have raised the issue already, and I accept that international finance is a global business and can move, but in terms of bonuses, bankers are clearly not bothered about the £2.6 billion figure. May we see the evidential basis on which the figure was arrived at? What would be the effect if it were a little higher or lower than £2.6 billion? It is important that we know that.

[Mr Gregory Campbell (East Londonderry) (DUP)]

The hon. Gentleman makes an interesting point. The Government would be helpful to us if they clarified the figure that they think would be the tipping point. Would it be £3 billion, £4 billion or £5 billion? We want the banks to be profitable and to lend money to our constituents, but at what point would they move overseas? The Government have so far failed to tell us.

[Mr Jones]

The hon. Gentleman makes a good point. That is the acid test. The Government must explain why they set that figure. I am happy to listen to the evidence—even the evidence that the hon. Member for Bradford East could come up with. I do not think we are anywhere near the tipping point at which the entire banking system crashes, especially as Barclays and others are paying large bonuses. If we had a review and analysis, we could see how the figure was arrived at. Unfortunately, we are in the dark about that.

A further point is the progress that the Chancellor has made on tax activities. If we are to remain competitive internationally, is there an international tipping point across Europe in respect of bank levies and caps on bonuses?

The hon. Member for Bradford East seems to be dreaming if he thinks he will ever find himself in the Front-Bench team of the Liberal party or the coalition, but it is nice to see him sitting on the Government Front Bench.

Is work being done internationally to look at what other countries are doing? We need to study that in detail to see whether £3.5 billion would be too much. We need to achieve agreement across Europe.

The subject of Project Merlin has been raised. What leverage does the Treasury have over lending to SMEs? To what extent will the cost of the levy be passed on to customers of the commercial or private sector—in other words, to all of us who use banks? Will it become more difficult for SMEs to borrow money if bank charges are passed on? To explain Project Merlin, much more needs to be put forward. A review would enable us to look in detail not just at the bank levy, because we must remember that the amendment also relates to other areas of banking tax. That would also lead to the public having a lot more confidence in politicians actually following through on their rhetoric about being tough on bankers.

Finance (No. 3) Bill

Gregory Campbell Excerpts

Tuesday 26th April 2011 Commons Chamber

[Malcolm Wicks (Croydon North) (Lab)]

This is a very useful debate. I particularly enjoyed the three well-informed and well-evidenced speeches on energy policy and the implications of the proposed tax changes for the North sea. A bit of my past tempts me to follow the theme of energy, but instead, I shall talk about the impact of the Budget decisions and statements, and of the Bill, on aspects of social security.

Welfare states across the world, not least in Europe, are in many respects on the defensive and under political attack. They are in difficulties because of demography—the ageing of our populations—and the impact of the economic situation on public finances, but also because of a loss of confidence in parts of public opinion in the foundation stones underlying our welfare states.

I shall ask two questions of the Budget. The first is on the future of our national insurance system and the crucial contributory principle, and secondly, I want to address whether we are wholly right to pursue the policy, which we are now doing quite rapidly, of raising the age at which our people can claim old age pensions in the light of increasing life expectancy.

On the contributory principle, I would welcome Ministers’ comments on paragraph 1.77 of the Red Book, which states:

“The Government believes that integrating the operation of income tax and National Insurance Contributions…can remove distortions, reduce burdens on business and improve fairness.”

However, what are the likely impacts of that on the contributory principle? To be fair—I want to be fair, because I do not think that I am making a partisan point—the Government say that they

“will maintain the contributory principle”,

which I welcome, but how can we bring about that administrative change, which presumably affects people of different age groups and income levels differently, while maintaining the contributory principle? That is a genuine question to which I am seeking an answer.

[Mr Gregory Campbell (East Londonderry) (DUP)]

The right hon. Gentleman touches on the important point of the contributory principle, but does he agree that the longer-term project of amalgamating national insurance and Inland Revenue contributions would at least do away with the nonsense of reducing the amount that people pay in income tax while increasing the amount that they pay in national insurance contributions, and of selling that as a policy of reducing the amount that they pay?

[Malcolm Wicks]

Such policies have regressive implications and I understand why the hon. Gentleman asks that question—a not dissimilar one could be asked of VAT contributions. Deeply regressive changes to how we gather money in from the wider community are taking place.

Although the contributory principle has for many years, and arguably for several decades, been withering away—it certainly looks tired and rusty—we need it in the 21st century. One reason why is that if we are to maintain our broader welfare state and social security system as an instrument for redistribution and for tackling the emerging needs of this century, not least those associated with long-term care and the ageing of our population, we need an ethical foundation to underlie social security, rather than bits-and-pieces mechanisms that can be hard to communicate to a wider public.

One basic concept in that respect is that of citizenship. What is it to be a citizen in the 21st century? What are our rights as citizens? Equally importantly, what are our duties and responsibilities? For me, in moving from that simple piece of social philosophy into policy mechanisms that work, we would do away with or neglect the social insurance contributory principle at our peril. That principle says that when people are able to work and to contribute to that community chest, they should do so. That is a duty. However, as of right as citizens, people should be able, at certain times in their life cycles or at times of social need, to draw out not means-tested benefits, but benefits that they have earned through their contributions.

Of course, that was the principle underlying the Beveridge report—that great Liberal—and the one that the 1945 Attlee Government sought to introduce after the war. I am arguing that we should today try to bring about a renaissance of belief in that principle, and to make it an underlying concept of our social security system.

The principle is well understood historically. Long before the advent of the modern welfare state in the 20th century, there were friendly societies, building societies and co-ops, and trade unions emerged. It was well understood that members had rights, but also that they had duties and responsibilities. People paid contributions to trade unions and building societies—interestingly, that was in the early days, when building societies actually built houses—and to friendly societies. As of right, they could then draw benefits when eligible.

It is no coincidence that when we wander through Members Lobby, we see great statues of pioneers of the national insurance system. We could even argue which party has done most for social insurance, as it used to be called, or national insurance. Churchill can lay claim to have done much of the work in the pre-war years, and Lloyd George had more than a hand in it, as did Clement Attlee and his 1945 Government. Our entitlements to claim social security, and our rights and duties, are not simply technical matters that should be detailed somewhat obscurely in social security manuals, but a social philosophy foundation stone that folk in this country can understand as fair.

Of course, the national insurance system as devised in the modern era by the Beveridge report and the Attlee Government was not perfect. Rightly, it was subjected to critique by women’s organisations and feminists, who said that it had more to say about a typical man’s life cycle than a woman’s. Past Governments have done their best to rectify the inadequacies of the system when a mother leaves her career, which happened for quite a long period in the past, to care for her children, and to deal with what happens to the insurance contributions of family carers, who are usually but not always women, who have had to leave the labour market. Labour Governments and others have done their best to modernise the national insurance system, but not with total success. I am therefore saying, not that the principle of national insurance has worked perfectly historically, but that it is a basis on which we should build.

One of the biggest difficulties with national insurance over recent years has been that increasingly our friends in the Treasury—both Ministers and officials—have regarded national insurance as just another form of taxation. To be blunt I would point my finger at Labour Governments as well as Conservative Governments. The Treasury has lost sight of the Beveridge report and the philosophy of citizenship. When considering how to raise revenue, it tends to ask, “What share should come from income tax, corporation tax or VAT, and what share should come from the national insurance system?” That is illustrated by the fact that when, a while ago, the two major parties were having that ding-dong—that argument—about whether extra revenue should be raised by VAT or national insurance, that is how it was viewed. There was very little in that debate about what national insurance should be about and how it should relate to a modern social security system. One reason why the contributory principle has grown rather tired-looking is a failure of communication and presentation. Governments have not gone out there to argue, as I hope to do—albeit inadequately—that social insurance and the contributory principle remain valid foundation stones for this aspect of our social policy.

The other aspect of the contributory principle I want to raise concerns the plans set out by the Department for Work and Pensions and, in particular, the Minister of State, Department for Work and Pensions, the hon. Member for Thornbury and Yate (Steve Webb), to move towards a far simpler state pension system in which everyone would be guaranteed a certain state pension. On paper, that looks like an interesting concept. I understand that, in theory, everyone is in favour of greater simplicity, but let us consider the matter in relation to the social insurance principle. I am alarmed by bits in the DWP document, “A State Pension Age for the 21st Century”, which was mentioned in the Budget. Although it states that in the future people should get the new simple pension after 30 years of qualifying, which addresses the issue about women—so far so good—it seems to imply, unless I have seriously misunderstood it, that no one would get more than a pension to which they had contributed for 30 years.

The Government are at pains to tell us that more and more people will have long life expectancies and will work longer in the labour market. What happens, therefore, to those who work 40 or 50 years? I might have misunderstood, but I was alarmed by paragraph 96 of the document, which reads under the heading, “Impact on individuals”:

“Groups who would expect to build up more significant amounts of State Second Pension, such as those with longer working lives and higher earners, would not be able to do so under this option.”

Well, why not? Is there not a danger of being so besotted with the idea of simplicity that we undermine the idea that if someone contributes more through their working life because they are working harder, they should be able to get more out of it at the end through a decent state pension scheme? I have serious concerns about that. Although there are many doubting Thomases in respect of social insurance, we must bear in mind the principles underlying it, such as citizenship and its common-sense nature: people can understand that they should make a contribution when they can and draw out of a community pot when they need to. If we sacrifice those things, we sacrifice a lot in our social security system.

I want to touch briefly on a matter that relates to a paper I published on my website last week. I question whether we are in the right place when it comes to raising the state pension age in the light of increasing life expectancy. May I say first and foremost that I am signed up—not least as a former pensions Ministers—to the reality of increasing life expectancy for most people. It cannot be right that we stick to state pension ages and occupational pension ages devised 40 or 50 years ago, given that more and more of us—hopefully—will live into our 80s and 90s.

National Insurance Contributions Bill

Gregory Campbell Excerpts

Tuesday 23rd November 2010 Commons Chamber

[Jim Shannon (Strangford) (DUP)]

I have always been a very practical person. I ran my own successful business for some 25 years before handing the work over to my son. I am the first to acknowledge that in order to spend money one must have money coming in as well, because if one does not have that, one does not have a business. I live in the real world in the area that I represent, with unemployment and bills, and with families struggling and businesses barely surviving. I fully grasp the very tenuous financial position that we find ourselves in as we try to claw our way out of the deficit. I accept that Government, the coalition, and all of us together have to be involved in that and make a contribution towards it.

I welcome the range of packages that the coalition has brought forward through the Bill, which will directly help the lower paid. That is positive, and I am glad to see it. The national insurance contribution holiday is also a positive move. However, I feel that I have to comment on behalf of people who may not always see the benefit of these measures—those to whom I have spoken over the past week in anticipation of this debate, who have concerns and have asked me to convey them in the House tonight. I understand that this further tax hike is a blow to some of the people I represent—the middle classes and the self-employed. They see it as such, and I have to say so. The rise in national insurance for employers and employees will dissuade some employers from offering additional hours.

A perhaps forgotten and ignored issue is the impact on the morale of people in such businesses who do not see the benefit in the proposals before us. There is no better way of illustrating a case than taking an example from my own constituency. Just in the past few days, I had the opportunity to speak to a young married couple who have two children. They are both working. They are not entitled to housing benefit, so some years ago they bought their own house, and they have a fairly large mortgage. For them, the cost of living has increased dramatically. The husband is self-employed, and he cannot raise his prices in line with the prices coming in, because then he would not have any business. Indirect taxation has risen, and risen again. His business has suffered because people simply do not have the money to decorate their homes, which is what he does. The wife received a rise, with the additional pressure and workload that came with it, yet they find that being on the borderline of the new tax threshold means that they are scarcely better off. They are just on the wrong side of that tax threshold. The frustration they expressed to me demonstrated the sobering reality of how some people see the future of their business.

[Mr Gregory Campbell (East Londonderry) (DUP)]

People such as my hon. Friend’s constituents are looking forward to the increase in personal allowances to which the Government are now committed, which is a good thing. However, given the increase in national insurance contributions, the anomaly is that such people will find it even more difficult to move out of recession.

[Jim Shannon]

I thank my hon. Friend for his comments, which are very positive. I think that if everyone sat down for a moment and looked at their own constituency, we could all replicate this situation everywhere across the whole United Kingdom.

The couple who came to see me did not have any help when their boiler broke, their car broke down, or the heating bills came in: they had to manage all that themselves. That puts things into perspective. They did not ask for a handout, or believe that they were entitled to one. They simply asked me whether I could do something, as the Member for Strangford, to represent their viewpoint in this Chamber, and that is what I intend to do. This is an example of the low morale of a hard-working family who feel that they are swimming against the current. I would always caution that we should ensure at all times that people feel that it is better to work, and these people have that work ethic, which is good news.

I know that Government Members will say that this is “only” a 1% increase in national insurance contributions, and that is true. Let us remember, though, that it is to be coupled with an increase in university fees. It must also be coupled with an increase in tax on oil, which results in higher petrol and diesel costs across the whole United Kingdom, particularly in Northern Ireland. We have the highest price for diesel and petrol in the whole UK, and the VAT increase in January will add to the price hikes and the pressure on families.

As a balanced individual who can see the good element in the Bill, I point out that the fact that new businesses will get help with their first 10 employees’ contributions is good news. However, I have to ask: what about the small and medium-sized businesses that are currently struggling, such as the one run by the couple I mentioned? To them, a £2,000 bonus would be the incentive to keep pouring their energy into their business. Many other businesses in my area would love to have that opportunity as well. I ask the Economic Secretary whether there is any scope for businesses that have opened in the past few years to avail themselves of help that could save businesses and jobs, and subsequently ensure that their revenue continues to go into the contributions pot.

The hon. Member for Newton Abbot (Anne Marie Morris) hit upon an issue that other Members have also mentioned, and I agree with her comments. I believe that small and medium-sized businesses need help. I do not believe that that can be done through the Bill, but I would like them to receive some contribution and help as a next stage. Perhaps the Economic Secretary will indicate whether and how that can be done, and on what time scale. It is imperative that we in this House have a full grasp of what is intended in the next period, so that we can go back to our constituents and let them know.

It is not in my nature to oppose anything simply for the sake of it. That is not how I work. However, I honestly believe that many people are on the brink, and I have to say so. Consideration must be given to small and medium-sized businesses and those with a small number of workers. I know that money has to be raised and that someone has to provide it. That is the purpose of the debate. What I do not know is why it has to be the same people who provide it all the time. That is what has happened. The self-employed, the middle class, and small and medium-sized enterprises that exist today must all be part of the equation. On behalf of the people of Northern Ireland, and of my constituency in particular, I ask the Economic Secretary to consider those matters fully.