Infrastructure (Financial Assistance) Bill

Kate Green Excerpts

Monday 15th October 2012 Commons Chamber

[Chris Leslie]

I think that the right hon. Gentleman is technically correct. The wording of the Bill is very loosely framed. We know that accounting officers in the Treasury had put a big question mark over exactly what Ministers were proposing. They wanted one line to cover them in circumstances in which things might go wrong, and they would be challenged and hauled before the Public Accounts Committee. That dates back to the 1932 concordat on public accounts, and it is being radically changed by the Bill. We do not necessarily think that that is the wrong thing to do, but it is noticeable that legislation has been presented to the House of Commons by Ministers who cannot say what it will be used for. We need information on the specifics of the schemes and the dates on which they will be supported. That is the level of detail that we require.

Amendment 9 relates to the definition of “infrastructure” in clause 1. I am sorry that the amendment tabled by my hon. Friend the Member for York Central (Hugh Bayley) was not selected; he noticed that flood defence schemes were not included in the list of items covered by infrastructure expenditure.

Our amendment seeks to insert the word “childcare”. Education is included in the set of infrastructure projects that might benefit from the scheme, but child care is quite different. We consider that to be an obvious anomaly which the Government should correct. We know that the costs of child care are afflicting many families throughout the country, a number of whom are not necessarily choosing to enter employment because the child care options are too limited or too expensive. One of the reasons why child care is so expensive is that the facilities are expensive. We do not have enough of them, and we need more investment in them.

[Kate Green (Stretford and Urmston) (Lab)]

rose—

[Chris Leslie]

I am happy to give way to my hon. Friend, who I know has campaigned strongly on these matters.

[Kate Green]

Does my hon. Friend agree that many of the infrastructure projects the Government have talked about have been in typically masculine industries? Does he also agree that one of the huge advantages of investment in child care is that it also helps to redress the high level of female unemployment—it is the highest in a quarter of a century—because it offers the opportunity for more mothers to go out to work and because that sector remains largely dominated by female employees?

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[Mr Redwood]

I am not trying to say anything that contentious. I am trying to unpack what is going on in this clause, because we are in Committee. I was not going to presume to give my views on total public spending, because that is a matter for another day and another debate. I am trying to get the Committee to understand that we are dealing with three different types of project, and the health one is closer to the pure public sector project. Even if it is carried out in a private sector facility with some so-called “private sector risk”, all the patients will be paid for by the NHS if it is for the NHS and so it is a flow of public revenue. We have to account for it in the proper way and be realistic about that.

[Kate Green]

The right hon. Gentleman is making an interesting argument. Does he not also accept that one of the difficulties with long-term infrastructure projects is that they have different phases, some of which may be susceptible to public intervention and some of which, later on, will require private investment. Let me give the example of a large site in my constituency that is currently in private ownership and has large redevelopment potential. The initial investment will have to be public investment to decontaminate the land and prepare the planning requirements, but down the line one would hope to see private investment. Does that not create a further accounting conundrum?

[Mr Redwood]

Yes, indeed. My point, which is not hostile to the Minister and is merely an attempt to inform the debate, is that we are discussing a set of very different projects and we are not sure what we are talking about because the Bill is very generic and general. We can probably all come to the conclusion that for this to work we will need precise control over what is being proposed—of how much of it is public, how much is private, how much involves a direct charge on the taxpayer and how much involves a guarantee or indemnity.

If a guarantee or indemnity is involved, I am sure that the Minister, with his forensic financial backgrounds and skills, will be able to keep control of it and to reassure the Committee that it is unlikely to be called on unless it was absolutely essential and a very important project would not go ahead without it, which would mean that it was a reasonable risk to run. I am happy at that end of the spectrum, as we will have to trust the Minister’s judgment and this is a good Minister with the skills and ability to do such things. We need to probe when such projects are proposed, however, as we are the custodians of public money and do not want to end up with white elephant projects with huge guarantees and indemnities that will in due course have to be met by some Government.

I am also concerned about the projects in which there is more of a mixture or a muddle, because they must be fitted in to the public expenditure plans. That does not prejudge whether the expenditure should be higher or lower, and there will be different views on that in the Committee, but they will need to be fitted into the plans. A large sum is involved—£50 billion—and we do not know the time scale. The Government might want to come back and ask for more money, and a provision allows them to do so by order, so I want a little more information from the Minister about how such projects will fit into the public expenditure plans and how Ministers collectively will evaluate the mixed projects that receive a big flow of public subsidy and, more particularly, those that really are public sector projects. They might be dressed up as private sector projects, but as far as I am concerned if all the money for the provision on behalf of customers or users of the service comes from the state, that is a public sector project and the private sector is merely a franchisee or agent of the state. If all the money comes from the state, I expect the state to have a grip of the project and to satisfy us that it represents value for money that is being organised in the best way.

I am not ideologically driven as regards the provision of state services. I think that should be done in the cheapest possible way, provided that they offer good quality, and that always causes problems, but I hope that the Minister will give us some guidance about how he will differentiate and seek reassurances about the granting of those indemnities and guarantees and about what proportion of the projects will involve pure public spending, as the Bill entitles him to spend as well as offer guarantees.

Oral Answers to Questions

Kate Green Excerpts

Tuesday 26th June 2012 Commons Chamber

[Miss Smith]

I certainly do. The important point is how we help people to get out of poverty and stay out. I note that there are problems with the current measure of poverty. Because median incomes fall, children are considered to have moved out of poverty when there will have been no real change to their lives. That cannot be a fully accurate measure.

[Kate Green (Stretford and Urmston) (Lab)]

What will the Government do to address the still very high levels of in-work poverty, and how can freezing working tax credit and reducing help with child care costs possibly help?

[Miss Smith]

Let me name a number of things the Government are doing to support families and let me note our plans to move toward universal credit, which will help with work incentives. Let me note our plans to have doubled the number of disadvantaged two-year-olds receiving free hours of child care each week. On tax credits, let me note that we have had to fix the previous Government’s unsustainable budgeting in that area and that six out of 10 families with children are still eligible.

Homelessness

Kate Green Excerpts

Tuesday 12th June 2012 Westminster Hall

[Jack Dromey (Birmingham, Erdington) (Lab)]

It is a privilege to serve under your chairmanship, Mr Havard.

I pay tribute to my hon. Friend the Member for Westminster North (Ms Buck), who has been a remarkable and outstanding champion of homeless people for many years. In a most dramatic and vivid way, she has brought home the sheer scale of human misery felt by hundreds of thousands of those we represent. The voice of homeless people has been heard in Parliament today.

Like my hon. Friend, I see the ever-lengthening queues of the desperate in my constituency: families trying to get a decent home at a price that they can afford who are being evicted; and those whose lives have come apart, who have spiralled down and ended up homeless on the streets. They are good men and women who deserve better in 21st-century England.

Homelessness and rough sleeping in 21st-century Britain, the seventh-richest nation on earth, are a disgrace and a scar on our society. Those were the sentiments of the Prime Minister when he was in opposition in 2009. Indeed, in August 2011, the Housing Minister said:

“Tackling homelessness and rough sleeping is what first got me into politics”.

No one doubts the Minister’s desire to bring an end to homelessness and rough sleeping. In opposition, he set up the Conservative homelessness foundation. In government, he has set up a cross-Government working group on homelessness and introduced a “no second night out” policy. However, with sadness I have to say that as we have seen all too often with the Minister and the Government, the rhetoric and the reality are very different indeed.

On the Minister’s watch, the consequences of the Government’s economic, housing and benefits policies have been devastating. We now have the biggest housing crisis in a generation, and, at its heart, the depressing statistics of homelessness up by 14% and rough sleeping up by 23%. The truth is that homelessness is rising precisely because their economic and housing policies are failing.

I have some questions for the Housing Minister. Does he accept that the Government were warned that the 60% cut in investment in the 2010 comprehensive spending review would have catastrophic consequences and that they have led, as today’s figures from the Homes and Communities Agency have demonstrated, to a 68% collapse in the building of affordable houses? Does he accept that the Government were warned that the toxic combination of increasing rents in the private sector, collapsing affordable house building and ill-thought-through changes to the benefits system would mean thousands of families being uprooted, particularly in London? The private secretary to the Secretary of State for Communities and Local Government wrote last year that the cap and other housing benefit reforms could result in 40,000 people being made homeless and that the policy could cost more than it saved. Does the Minister accept that the Government were warned about the consequences of the biggest cuts to local government expenditure in history and the cuts to Supporting People?

As we have heard my hon. Friend the Member for Rochdale (Simon Danczuk) and the hon. Member for Upper Bann (David Simpson) say eloquently, the consequences have been serious. The city of Birmingham, which I am proud to represent, has had the biggest cuts in local government history in the past two years: £312 million, including £15 million in cuts to the big society through cuts to the charitable and voluntary sectors.

In Birmingham, and throughout Britain, there have been cutbacks in services to homeless people. Again, the statistics are depressing; 58% of projects have received reduced funding, leading to a reduction of one in 10 staff— 1,400 people—caring for the homeless. The number of clients using day centres for the homeless has risen by nearly a third and there are 22% fewer empty beds on an average night. The research report, “SNAP 2012”, produced by Homeless Link, shows that there are 1,544 fewer bed spaces in 2012, compared to the previous year.

As a result of the Government’s actions—their failed economic policies—there is higher unemployment and the greatest squeeze on living standards in a generation, with families and individuals struggling to stay in their homes, whether owned or rented. Increasing numbers of people are presenting as homeless or are out on the street, not to mention the cuts to services that provide the safety net. There has been a catastrophic fall in construction, which is at the heart of the double-dip recession made in Downing street.

The Government’s failed housing policies are contributing to the growing housing crisis and the collapse in affordable house building. The private rented sector is defined by ever-increasing rents and, all too often, poor standards, with one in two homes in the sector not meeting the decent homes standard. Social housing providers are increasingly unsupported and their tenants shamefully demonised by Government.

My hon. Friend the Member for Westminster North used powerful case studies to demonstrate eloquently that the combination of the Government’s failing housing and economic policies and their benefit changes is leading, as the Housing Minister was warned, to misery on a grand scale. Tenants are forced out of their private rented homes because of the housing benefit changes and councils cannot find anywhere to put them. Many landlords are increasingly leaving the housing benefit tenant market. Councils are told by the Government that tenants should not be sent elsewhere in the country, but councils cannot keep them locally, so tenants end up in hotels paid for by the taxpayer, costing the taxpayer more and leading to more misery for the tenants. That is the economics of the madhouse.

We Labour Members learnt in government that homelessness can only be tackled by addressing all the factors contributing to it. Above all, more homes are needed. In government, Labour delivered 2 million new homes—500,000 affordable homes—and introduced Supporting People, bringing together seven income streams from across central Government to give the necessary housing and related support, particularly for vulnerable people.

My hon. Friend the Member for Rochdale is right to say that as a consequence of Labour’s determination to tackle the scandal of homelessness and bad housing, there was, progressively, a 70% reduction in homelessness. That reduction has gone dramatically into reverse under this Government.

[Kate Green (Stretford and Urmston) (Lab)]

Does my hon. Friend agree that there is an incomprehensible lack of logic in the Government’s now telling local authorities that they cannot transfer people to other local authorities, when that is the inevitable conclusion of the Government’s policies? Indeed, Ministers highlighted that conclusion in respect of the welfare reform and housing benefit changes of the past two years.

[Jack Dromey]

My hon. Friend is right. I have seen at first hand some utterly tragic cases resulting from those policies. For example, a young woman, who understandably chose to remain anonymous, appeared on the “Today” programme. She lived in Waltham Forest, was married to a professional man and they had a nine-year-old. The couple broke up and stayed close, but sadly he died. She then lost her home and ended up in temporary accommodation and was told that because there was no available alternative accommodation that the council could provide for her, she would have to go from Waltham Forest to Walsall. She said, “I can’t do it. My nine-year-old is distraught because of her dad’s death. She hasn’t gone to school for the last three months, with the agreement of the school, as she recovers. I go every day to my mum, who looks after her granddaughter while I train to get back into the world of work.” I do not mind admitting that after she told me that story, with its consequences and the pain that she felt, I was in tears. It is about time that Ministers faced up to the consequences experienced by the victims of their policies.

It appears that there is consensus in this Government that housing does not matter and should not be centre stage. Labour believes strongly—we know—that it does matter. Does the Housing Minister accept how important housing is to the economy? Construction accounts for 3% of gross domestic product, £91 billion of economic output and 1.5 million jobs. Does the Minister accept that it matters to health? The annual costs to the national health service of poor housing and homelessness have been assessed at £2.5 billion. Another depressing statistic shows that, on average, the homeless on the streets die 30 years younger.

Does the Minister accept that homelessness matters with regard to educational attainment? Again, the depressing evidence shows the impact on a generation of young people brought up in poor housing or temporary accommodation.

Child Benefit

Kate Green Excerpts

Tuesday 22nd May 2012 Westminster Hall

[Roberta Blackman-Woods]

My hon. Friend has made an excellent intervention. The unfairness of the changes goes to the heart of the debate. I suspect that as more and more people wake up to what will happen to their child benefit next January, we will see an even greater public outcry.

The changes disadvantage single parents, and partnerships where one person has decided to stay at home. With changed family circumstances, it may be very difficult to claw back payments or decide who should pay them. Taxpayers could be penalised for failing to submit information that they have no access to, particularly if the relationship breaks down. The extra administration involved could place huge burdens on HMRC at a time of budget restraint, and particularly at a time of cuts in staffing levels. We are therefore left with a number of questions.

[Kate Green (Stretford and Urmston) (Lab)]

Does my hon. Friend agree that one problem is that it will be very difficult for HMRC and families to manage this process, given that family circumstances may change in the course of a year? What a person may believe at the beginning of the year is their child benefit entitlement or their tax liability could turn out to be different, leading to problems such as lump sums having to be paid back and the amount of time required by HMRC for administration.

[Roberta Blackman-Woods]

My hon. Friend makes an excellent point. The workability of the proposals will have to be reconsidered. We seem to be building into the system a number of problems for families. The Government could have learned from previous practice and not gone down this road.

We are left with a number of questions about the workability of the changes and the need for them, as well as questions about fairness. As late as 2009, the Chancellor was promising not to scrap child benefit. No doubt we will hear today that it has not been scrapped, but changed massively. More significantly, it has already been cut massively because of the lack of uprating with inflation. Therefore, child benefit and families with children have already been targeted for cuts, even without the cuts that have been made to tax credits.

--- Later in debate ---

[Helen Goodman (Bishop Auckland) (Lab)]

It is a pleasure to see you in the Chair, Mr Streeter. I congratulate my hon. Friend the Member for City of Durham (Roberta Blackman-Woods) on securing this extremely important debate. The more I listen to speeches from both sides of the Chamber, the more problems I see. I want to focus on the independent taxation of women.

Clause 8 of the Finance Bill introduces a tax charge on a child benefit recipient if they or their partner’s income is above £50,000. That is wholly objectionable from the perspective of equality for women. One person is being given a tax bill because another person has a high income. Nothing could be more unjust than that. The Government have said that they want to be family-friendly, but there is nothing family-friendly about this provision. Furthermore, the information-sharing requirements to make the system work will cut across the privacy that is intrinsic to independent taxation for men and women.

Treasury Ministers seem to have taken no account of the fact that people’s family circumstances may change during a year. Incomes may go up or down and, more seriously from the point of view of the independent taxation of men and women, partnerships may come together or, unfortunately, collapse. That will provide something else to argue about, and will be the cause of yet more disputes between partnerships particularly, as my hon. Friends have said, when the tax bill arrives months after the income has been secured by the other person in the partnership.

[Kate Green]

Does my hon. Friend agree that it is surprising that the “most family-friendly Government ever” might want to disincentivise couples from forming households and relationships? If someone is considering moving in with a new partner and realises that his income is a bit higher so the child benefit will be taxed away, he might be discouraged from forming that new relationship.

[Helen Goodman]

My hon. Friend is absolutely right. The permutations and problems are too numerous to mention.

We raised our questions with the Minister during the debate in Committee on clause 8 on 19 April. I asked him specifically whether independent taxation for men and women could be maintained. He responded:

“Independent taxation will still apply, each partner will still have their own personal allowance and tax rate bands, and the amount of child benefit, even if it is received by the taxpayer’s partner, will not increase the amount of income liable to tax.”

That is absurd, because it is not what independent taxation means. He continued:

“Where there are two high earners in a household and they do not want to tell each other their incomes, there will be a mechanism whereby they can find out whether they have a higher or lower income but without the full details.”––[Official Report, Finance Public Bill Committee, 19 April 2012; c. 617.]

He then said, “my time is up”; he could not explain in any more detail, and we were dismissed. Since then, tax experts at the Chartered Institute of Taxation and the Institute of Chartered Accountants have examined the matter and identified exactly the same problem. The Minister should take account of what hon. Members say. Now that tax experts are saying the same thing, I hope that he has asked his officials to re-examine the matter and can tell us today that he has changed his mind.

When I was first elected in 2005, I had the great pleasure of serving on the Finance Bill Committee with the Minister. He was always telling us what Mrs Gauke thought about things; she is an accountant.

--- Later in debate ---

[Kate Green (Stretford and Urmston) (Lab)]

I am pleased to participate in this debate, and I congratulate all hon. Members who have spoken, particularly my hon. Friend the Member for City of Durham (Roberta Blackman-Woods) on securing it, and the hon. Member for Christchurch (Mr Chope), who has been a vocal and powerful advocate for families in the context of the Government’s proposals. I am pleased to see him here today.

I am sad—I suspect that the hon. Gentleman shares that sadness—to see a Conservative Government introducing this proposal. There have been threats to child benefit in past decades, but there has always been an alliance with strong Conservative voices that has stood up to protect against those threats and attacks. Conservative women have been particularly strong in their understanding of why the benefit matters so much to families—[Interruption.] As my hon. Friend the Member for Bishop Auckland (Helen Goodman) pointed out, it is disappointing to see so few of them in the Chamber.

[Mr Chope]

I am grateful for the hon. Lady’s generous remarks. It was not only Conservative women who campaigned. She will recall that John Major made the matter a cause célèbre. He said that it was wrong to take away child benefit, and that it should remain as a universal benefit.

[Kate Green]

The hon. Gentleman is right. I hope to come on to the situation when John Major was Prime Minister, and some of the arguments then.

For the benefit of many hon. Members who do not seem to appreciate the underlying principles of universal child benefit, I want to put them on the record this morning. I am sorry that they are not in the Chamber to have the benefit of my exposition, but they can read it in the Official Report. As hon. Members have said, this benefit, which is important for families, is a mechanism that is redistributive horizontally and vertically, as my hon. Friend the Member for City of Durham said. As other hon. Members have said, in practice that means that families with children receive extra help to meet the cost of raising their children because, as a society, we all share the benefit of those children making a future contribution to our communal well-being. It is right to provide that support universally, and to recognise that we all share in the social obligation to maintain those families.

Over its life, the benefit is redistributive, and it enables all families to manage the additional costs that they face when raising young children, and to plan their finances across their whole lifetime. Importantly, in practice—this has been alluded to—it is a benefit that has been paid mostly to mothers. The vast majority of child benefit is paid to mothers. Even in the richest families, it is the only source of independent income for many women, and it is essential that they have access to it to provide for and to meet the needs of their children.

As hon. Members have said, we know that that money is spent for the benefit of children, either directly on toys, books, activities, clothes, shoes and so on, or indirectly by paying down family debt, ensuring that basic household bills are covered. Things that are essential for children’s well-being are prioritised in all families, and one reason is the label it bears. There is good research evidence showing that because it is called “child benefit”, it is understood that it must be spent for the benefit of children, and that is what happens.

[Fiona O'Donnell]

Does my hon. Friend agree that we are talking not only about the income received, mostly by women, but also about national insurance credits that build up to a pension? People may not be in the same relationship when they retire, but the risk is that women will make a credit-only claim and that they will lose out in the long term.

[Kate Green]

My hon. Friend makes an important point. If women come under pressure to forgo child benefit, rather than their partner seeing an increase in their tax bill—I believe that that will happen in some families—they will lose the benefit of their national insurance credits. That will have a lifetime impact on those women and their pension entitlement. We cannot wish to pursue a policy that risks making women poorer throughout their life.

This benefit is directed towards children and has been designed to follow a child and stay with them even if their family circumstances change. That is particularly important if a relationship breaks down, because a woman may have no other source of income at that point. It may be an acrimonious dispute in which she is struggling to extract money from her former partner, and child benefit is often the only source of income on which she can rely to get through that family breakdown and make the transition to single parenthood. When I was director of the National Council for One Parent Families, even women in relationships that were financially well off described to me how important child benefit had been at that moment of family change. If women start to forgo that benefit under pressure from a partner who later decides to leave the household altogether, I worry that we will disadvantage those women and their children, which is something that we will regret.

I am surprised by the Government’s approach because it introduces a policy that will act as a disincentive to work. Universal child benefit does not disadvantage those who move into paid employment, because the benefit remains. The incentive to increase income through more working hours or going for a promotion will be removed for some families, and I cannot understand why Ministers, who are often concerned to incentivise people to maximise their income from employment, wish to go down such a route. The Government have the right objective, but this policy seems particularly perverse.

As my hon. Friends and the hon. Member for Christchurch have highlighted, the complexity that is being introduced into the system is completely at odds with the Government’s stated intention to simplify the tax system. Simplicity is not just an advantage in itself, but it means that payment is more reliable, and more likely to be accurate and more predictable. There is also much less stigma attached to the receipt of a simple universal flat-rate payment for all families.

One criticism is often levelled against the payment of child benefit to richer people, and it would probably have been made this morning had more hon. Members attended the debate—today there are mostly proponents of child benefit in the Chamber, which is perhaps why the point has not been raised. I want to put on record my response to those who ask why we are giving child benefit to people on higher incomes and asking those on lower incomes to help pay for that. The fact is that we do not—and should not—make the same argument when it comes to the national health service or our children’s education, and we do not make it for the tax system or say that higher earners should not receive the benefit of the recent increase in the tax threshold. As I am sure the hon. Member for Christchurch will remember, the higher rate of child benefit for the first child was intended to replace what had previously been the married couple’s tax allowance. It seems particularly perverse that we are now effectively seeking to tax a tax allowance, instead of understanding that in every other part of the tax system, such allowances stretch across the income spectrum. Now, we have decided to treat child benefit differently.

[Roberta Blackman-Woods]

My hon. Friend is making an excellent speech and she has touched on the heart of the problem caused by the proposed changes. The Government are destroying the principle of universality that has underpinned this benefit for years. We should think of all children as being important to our community, and we all share in the benefits that children bring to society. To denigrate the principle of universality says something about the values of this Government. What will be next?

[Kate Green]

I am grateful to my hon. Friend. Her point about universality is fundamentally about the social glue, integration and the sense of communal interest in our children that universal benefits bring.

As others have said, these proposals are unjustifiable as a matter of principle, and unworkable in practice. Hon. Members have alluded to the difficulties of coping, both for families and for the Revenue, when family circumstances change. It may be complicated to pick out who has been a member of a household over the course of a year, or to state at what point they became one, so it may be difficult to assess at what point that should result in a tax liability.

[Barbara Keeley]

Does my hon. Friend intend to refer to the breach of confidentiality in an individual’s tax affairs? That is a serious issue with couples. Years ago, my first piece of casework as a councillor involved a constituent who was being chased by bailiffs for his wife’s community charge. At the time, there were rules on joint liability for the community charge, and that caused huge problems between couples. It seems to me that we are back in the same territory.

[Kate Green]

I have no doubt that if one member of a household is liable for another household member’s income—which is what will happen—that will distort the balance of power, and in some cases compromise the safety of women in that relationship and lead to something that feels fundamentally irrational and unjust. Why is one member of the household being taxed for a benefit that is paid to another member of the household for the benefit of the children? If Ministers want a fairer and more justifiable taxation system, I suggest that they look at having a more progressive system overall. If they want to take more from the rich and have a more progressive system, they should not have begun by reducing the top rate of income tax, which seems to be the Chancellor’s preferred route.

I will conclude with a couple of questions for the Minister. Has he made an assessment of whether couples are likely to continue receiving child benefit and sweep it up at the end of the year in their tax return, or whether they are they more likely to forgo child benefit at the point of payment? In the latter case, what assessment has he made of the impact that that will have on children’s well-being and on family stability? May we see that impact assessment before any further steps are taken to introduce the proposed policy?

Will this measure be reversible? The Opposition are committed to universal child benefit, and I hope that the Government will consider this change as temporary. Will the changes to IT and the taxation system be reversible? What is the IT plan for this development? Could this policy be unwound, or are we stepping towards a major change in attitude to universal benefits from which it will be impossible to retreat? What advice has the Minister received—this is the point touched on by my hon. Friend the Member for Worsley and Eccles South (Barbara Keeley)—on individual confidentiality in relation to tax affairs? How will one member of the household be advised about tax liability on a confidential basis without understanding the income of another member of the household, and can that be reconciled with the principle of tax confidentiality? Ministers seem confident that it can be reconciled, but Opposition Members have their doubts.

--- Later in debate ---

[Kate Green]

I understand, although I do not agree with, the point that the Minister makes, but why is he singling out to bear the burden those families in higher-rate tax brackets who have children, rather than equivalent-income families with no children?

[Mr Gauke]

My hon. Friend the Member for Christchurch (Mr Chope) made that point. The reason is that child benefit is essentially the only item of welfare spending that goes to households with individuals who earn more than £60,000 a year. I understand the argument that the hon. Lady and my hon. Friend are making: let us keep on spending and raise taxes. That is a tax and spend approach. I do not know whether the hon. Member for Stretford and Urmston (Kate Green) speaks for her party on that; I know that my hon. Friend the Member for Christchurch does not for ours.

[Kate Green]

I am confident of speaking for my party when I assert our absolute commitment to the universal payment of child benefit.

[Mr Gauke]

I think the corollary of that is being in favour of increasing the rate of tax on higher earners, but the hon. Lady did not quite make that explicit.

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[Mr Gauke]

If memory serves, the ONS will make that assessment after the policy has come into effect, in January 2013.

As I said, we face a large deficit and seek to reduce it in a way that is both fair and reasonable. It is only right and proper to ask those with the broadest shoulders to bear the greatest burden; because of this measure and others announced by my right hon. Friend the Chancellor in the Budget, that will be the case. Considering the universality of child benefit was never our first choice, but that is the position in which we have been left.

I recognise that many are concerned about the change. Some argue that child benefit must be sacrosanct. However, it is not fair that an individual who earns £15,000, £20,000 or £30,000 should be paying for benefits for those earning £80,000, £90,000 or £100,000. When Government need to raise revenue, it makes sense for them to turn to a measure with a broad base because significant numbers of recipients will not be reliant on the additional payment they receive. Child benefit is just that sort of payment.

The steps that we are taking will raise £1.8 billion for the Exchequer by 2014-15. That is why my right hon. Friend the Chancellor announced in 2010 that we would seek to withdraw child benefit from higher-rate taxpayers. We have always said that we would consider the ways in which to implement the measure, but we made it clear that a new complicated means test is not a sensible way forward. Instead, we should look to the existing systems and processes to ensure that we can achieve our goal.

Let me turn to the changes that we are introducing.

[Kate Green]

rose—

[Mr Gauke]

I will give way, but I am keen to answer some of the points that were raised in the debate.

[Kate Green]

The Minister thinks that we do not have a new complicated means test, but does he not accept that we have a new complicated tax test—and that from a Government who want to simplify the tax system?

[Mr Gauke]

The alternative method, which would have been to do this on household income, would mean applying the tax credit system to all 8 million child benefit recipients. That would widely expand the tax credit system and impose a burden on a far greater number of people.

We propose to withdraw the financial gain from child benefit from those families where one partner has income of more than £60,000, and reduce the gains where one partner has income of more than £50,000. By applying a tax charge on those on high incomes using existing processes, we are doing it in the most efficient and pragmatic way. The charge will apply to an individual in receipt of child benefit, or their partner, where they are married or in a civil partnership, or living as if they are married or in a civil partnership. I hope that that answers the point about what a household is. It uses the current definitions of partners within social security legislation, and means that other adults living within the household do not affect the liability.

It will remain the case that two earners just below the threshold will not have their child benefit withdrawn. To introduce a new means test for family income would be complicated, costly and confusing—the very things that we wish to avoid. We would need to assess all of the 8 million households receiving child benefit, and we would need to do so each year.

Let me turn to the mechanics behind the changes that we are introducing. First, the changes will not affect those receiving child benefit who have income under £50,000, or whose partner does. That will mean that 85% of families receiving child benefit need not be troubled by the changes—85% means more than 7 million families. Where an individual or their partner has income of more than £50,000, the charge will be tapered depending on their income. The equivalent of 1% of the child benefit award will be charged for every £100 increase over £50,000 in adjusted net income. That means that child benefit is fully withdrawn at an income of £60,000. Furthermore, the thresholds between which the taper operates are not dependent on the number of children.

Those affected—around 1.2 million taxpayers—will declare their liability through the income tax self-assessment process, though just over half are already within the SA system. Although we recognise that the charge will bring some taxpayers into self-assessment for the first time, using self-assessment means that the tax can be calculated on the basis of the amount of child benefit received, and the taxpayer’s actual income. That is preferable to including an estimate in a taxpayer’s PAYE code, only to discover an underpayment or overpayment of tax at the year end as actual income proves to be different from estimated income. Even as small a change as £100 will change the amount of tax due for an individual on the taper. As a third of taxpayers affected will benefit from a reduced liability as they are on the taper, using PAYE rather than self-assessment would generate large numbers of under and overpayments.

The changes will take effect from 7 January 2013, with individuals affected including information relating to the charge for the first time in their self-assessment returns for the tax year 2012-13. The first payments of the charge will be due by 31 January 2014 if a taxpayer chooses to pay in a lump sum. Otherwise, the amount due for 2012-13 will be collected through the tax code in 2014-15.

Jobs and Growth

Kate Green Excerpts

Thursday 17th May 2012 Commons Chamber

[Mr Binley]

I welcome that important point, because I was about to turn to that very area. More can be done, and we do indeed need to reduce the regulatory burden and to strengthen the business environment.

I welcome in the Queen’s Speech the proposed measures to deal with executive pay and employment tribunals, but I still do not understand why the Government are obsessing about maternity and paternity leave, especially for very small businesses. I simply point out that many people meet in the workplace and set up a family life together, and, if a small business employing 10 people loses 20% of its work force for six months, temporary labour cannot be used as a replacement. That simply does not happen.

[Kate Green (Stretford and Urmston) (Lab)]

One trend in the employment figures over recent months has been that female unemployment has risen faster than male unemployment, and that it is decreasing less quickly. Detaching women from the labour market, as the hon. Gentleman seems to suggest we do by weakening maternity rights, will surely make the situation worse.

[Mr Binley]

I do not suggest that at all. What I suggest is that we understand the real needs of small businesses. If we want them to grow and create jobs for both men and women, we need to ensure that they are released from much of the burden that they face at the moment. I ask the hon. Lady to consider that burden, because it is a considerable one for small businesses—I have worked in the sector pretty much all my life and founded two such businesses. We need to release small businesses from that burden, so I would particularly welcome their being excluded from the sort of burdens that paternity leave suggests. The Opposition need to get real in that respect.

I turn to the attitude of the banks and financial services.

--- Later in debate ---

[Margaret Hodge]

I have two points on that. First, it is not good value if people do not get into work, which is the whole purpose of the programme, and, secondly, one in four of those who get into work would have done so anyway without any intervention at all. Given the black box nature of the programme, we will not know whether people have actually been given support. All the indications I have seen suggest that that is highly unlikely. We are beginning to get evidence to show that the more difficult cases are being parked, simply because all the money is focused on those most likely to get into work.

[Kate Green]

Does my right hon. Friend share my concern that Work programme providers are reporting that when they do succeed in getting people into work, it is usually short term and temporary? If people are cycling round and round the programme, that is certainly not good value for money.

[Margaret Hodge]

We have been looking into the issue of whether short-term or part-time work is being provided. When I tried to meet prime providers locally, they would not tell me how many people had been referred to them, how many people they had got into work or how long those people had been in work. The Government claim to be committed to transparency, but any decent assessment of the Work programme is greatly inhibited by such lack of transparency.

Finally, I shall speak about Barking and Dagenham as an excellent example of where opportunities exist for the Government to stimulate jobs and growth. We might have lost many Ford jobs over time, but we have massive potential for expansion, with Barking Riverside, Dagenham dock and Barking town centre. The lack of public sector investment in infrastructure and services, however, is the major barrier to achieving growth and jobs. There is potential in Barking Riverside, with planning permission granted by the local council for 11,000 new homes, but at the current rate of building it will take 50 to 60 years before the scheme is completed. If those homes were built, it would stimulate jobs and help to tackle housing need.

We cannot get the school that we need in order to assure families who move into the area that their children will have a school place; we cannot get the transport infrastructure we need through the docklands light railway extension, because there is no money there; and we cannot get the Mayor to do anything to stimulate private sector house building. What we need is action, not words. Not a penny of the regional growth fund moneys has come to an area like ours, which needs a huge amount of resources.

I am conscious that many Members want to speak, so let me briefly say in conclusion that although the hon. Member for Redcar (Ian Swales) devoted about half his speech to the previous Government, we are now two years into this Government—and things have got only worse. During the two years on their watch, living standards for hard-working families in Barking and Dagenham have declined. Since they came into office, people’s hopes for a better future—with jobs for their children, homes for their families, and economic growth for their children and grandchildren—have been smashed.

The Queen’s Speech has nothing to say to the people of Barking and Dagenham. It does nothing for a community where needs are great. It fails the hard-working families of my constituents, it fails the businesses in my borough, and it fails to meet the aspirations and needs of future generations who will make Barking and Dagenham their home.

--- Later in debate ---

[Kate Green (Stretford and Urmston) (Lab)]

I want to make a few remarks about unemployment. Despite the modest fall in unemployment yesterday, we still have the highest rate of long-term unemployment since 1996, with 650,000 people in part-time work because they cannot get full-time work and 2.625 million people unemployed.

I want to highlight two groups of losers in the labour market for whom there were absolutely no policies in the Queen’s Speech. The first group are women. Whereas male joblessness increased by 5.4% over the past year, the increase in female joblessness was nearly double that, at 9%. The second group are people from ethnic minorities. White British women and men are more likely to be employed than those from any ethnic minority. A report by Elevation Networks in March revealed that more than half of young black men are unemployed and that the youth unemployment rate for black people has increased at nearly twice the rate among white 16 to 24-year-olds. There was nothing in the Queen’s Speech to deal with those inequalities.

When I asked the Minister of State, Department for Work and Pensions, the right hon. Member for Epsom and Ewell (Chris Grayling) in February what steps were being taken to address black youth unemployment, he answered that “Get Britain Working measures” operated “irrespective of ethnicity”. There was nothing in the Queen’s Speech to address the structural drivers of black youth unemployment; no attention paid to, for example, guaranteed jobs for long-term unemployed young people, as recommended by the Riots Communities and Victims Panel; no ethnic monitoring of the Work programme or apprenticeships; no targets for black unemployment; and no mentoring of young black people. Indeed, despite the Prime Minister promising before the general election that there would be a massive programme of mentoring, nothing has materialised.

As for women, the Government have, I am pleased to say, recognised the importance of affordable and reliable child care, although I am alarmed by reports in the Daily Mail this week that Ministers think that the way to boost child care supply is to strip back regulation. Reducing bureaucracy is all very well, but deregulation that dilutes quality and compromises children’s well-being is simply unacceptable. The Netherlands saw a steady deterioration in the quality of child care as a result of introducing measures similar to those that we understand the Government might be contemplating. Indeed, the Dutch Government have now decided to reverse their deregulation policy.

Finally, let me talk about something that actually was mentioned in the Queen’s Speech, albeit only cursorily: the Government’s proposal to introduce measures to promote flexible parental leave. We have yet to see the details of exactly what will be on offer, but I warn Ministers to be cautious. An alliance of organisations, including Maternity Action, the Royal College of Midwives, the Royal College of Obstetricians and Gynaecologists, the National Childbirth Trust, Bliss, the Child Poverty Action Group and Citizens Advice, have warned of the need to protect adequate leave for women to secure the health and well-being of new mothers and their babies, and to select measures that actually ensure that a share of parental leave is taken up by fathers. Policies that have been shown to be effective in doing that include the meaningful replacement of a father’s lost income, and protecting leave for fathers, rather than eating into mothers’ leave. We need to ensure that the modern workplaces consultation proposals, which seem not to address those kinds of concerns, are carefully re-thought.

I am grateful for the opportunity to contribute to this debate. There is much more that I would like to say, but I will pass on to colleagues.

Finance (No. 4) Bill

Kate Green Excerpts

Thursday 19th April 2012 Commons Chamber

[Graham Evans]

Absolutely; I am most grateful to my hon. Friend for that contribution. At the end of the day, the Budget tells the world that this country is open for business because private sector investment and wealth creation through businesses such as those that my hon. Friend mentioned are critical to the success of the whole nation, not just young people and hard-working families, but pensioners.

Thanks to measures such as the clamp-down on tax loopholes, the very rich will pay more. There is an ideological divide: the Labour party wants the rich to pay symbolically higher rates of tax; the Budget ensures that the rich actually pay more tax. Her Majesty’s Revenue and Customs and the independent Office for Budget Responsibility agree that the 50% rate raises next to nothing. Indeed, having a higher income tax rate than communist China indirectly reduces tax revenues as it fundamentally undermines the competitiveness of the UK economy, discouraging inward investment and risking a brain drain of our brightest talent.

[Kate Green (Stretford and Urmston) (Lab)]

The hon. Gentleman’s comparison with communist China is completely spurious when we look at what remains of a western capitalist economy, but does he accept that it is widely agreed, including by the OBR, that the calculations on the amount raised by the reduction of the 50p rate to 45p are highly speculative?

[Graham Evans]

The hon. Lady makes a valuable point. I have huge respect for her and for everything she has done on child poverty, but if the 50% tax rate was so important to right hon. and hon. Members of the Opposition, why did the Labour Government introduce it only a month before a general election? Why did they not introduce it in 1997, 1998, 1999 or any of those 13 years? They left it until their last month.

--- Later in debate ---

[Nigel Mills]

I certainly did say to my constituents that we would be a fair Government. I support fair tax measures. My hon. Friend the Member for Bristol West (Stephen Williams) quoted the IFS saying the granny tax was a

“a relatively modest tax increase on a group hitherto well sheltered from tax and benefit changes.”

While Opposition Members may not wish to believe the Government’s pronouncements, or even those of the Office for Budget Responsibility or the Office of Tax Simplification, perhaps they will believe those of the IFS.

We are not in a happy situation. I do not think any of us are happy about the types of Budget we are going to need to have throughout this Parliament and even perhaps most of the next one. There will have to be a series of measures on both taxation and spending that are going to hurt large parts of the population, while we try to tackle the deficit, which still amounted to £126 billion last year.

[Kate Green]

Something interesting and important was said a few moments ago: it is important that we design a system that encourages people to save and to look after themselves to a degree in retirement, and which rewards them for doing so. Does the hon. Gentleman agree that one of the problems with the granny tax is that people who have been able to make modest savings into small pension pots for their retirement, and who therefore perhaps now have an income of £12,000 or £13,000 a year, are seeing the effort they made to save completely wiped away? Is that not an injustice that is of particular concern if the Government want to incentivise saving for retirement?

[Nigel Mills]

I accept that that is an issue in respect of the granny tax proposal, but I suspect that the £5 billion tax raid which has been referred to and a whole series of other measures that have discouraged saving will have far more serious impacts. I am sure the hon. Lady would join me in welcoming the Government’s proposal to introduce the flat-rate individual state pension of, I think, £140 per individual, as that will help address the problem she mentioned.

--- Later in debate ---

[Kate Green]

I congratulate the hon. Gentleman on his amendment and on his arguments in support of it. Does he agree that because of the failure to consult, we do not know the answer to the question of how this policy will play out between women and men? Currently, child benefit is paid to the mother as the maintainer of children, but she may now come under pressure from her partner to forgo that child benefit so that his tax bill is not affected. That means an injustice between women and men; and, more importantly, it affects the amount of money spent on children.

[Mr Chope]

The hon. Lady is absolutely right: that is another of the behavioural consequences, the full implications of which are not yet apparent.

One has to ask why we are going down this road. The justification for it—the avowed policy objective—is this:

“In order to address the fiscal deficit, the Government believes that it is right to ask those on higher incomes to contribute more.”

The Government’s proposal, however, asks those on higher incomes with families and children to contribute more, while those on higher incomes without children are not asked to contribute more. I do not see how that can be fair.

In case anyone thinks this is an issue discussed only among academics, let me say that it certainly goes very close to the heart of many of my constituents. I shall quote briefly from a letter that I received since the Budget from a constituent living in Christchurch. He starts off:

“I am writing to express my utter disgust and outrage at your party’s stance on child allowance announced in the budget last week.”

He explains that he and his wife choose to work hard, believing that they have a responsibility

“to look after ourselves and to help to generate wealth for the wider community”

by contributing their utmost to industry. He says that he has an income of £60,000 and that his wife earns £12,000, providing a combined income of £72,000. As he puts it:

“under your disgusting new Tax rules we will lose the child benefit for our two children. However, in a household with two working parents earning £40,000 each, combined income of significantly more…that family gets to keep their benefit.”

--- Later in debate ---

[Kate Green]

Does my hon. Friend agree that if the Government do not even know that simple fact, they are even less likely to know how many people have incomes that vary and fluctuate between £50,000 and £60,000, and that that is going to introduce yet further complexity for those families in the course of the year?

[Cathy Jamieson]

Again, my hon. Friend makes an extremely important point, which I hope to discuss in relation to how the clawback will operate. Will the Minister commit to provide that breakdown by parliamentary constituency and make it available, as a matter of urgency, in the House of Commons Library?

It has appeared at various times during the debate that the announcement of the changes was designed more to appeal to the Tory party conference than as a plan to be actually implemented. Suggestions have been made that the Chancellor perhaps did not even believe that he would have to implement it. I do not know whether that is true, but this appears to be yet another part of what the Leader of the Opposition described as an “omnishambles”. In Scotland, we would say that the Government’s plan is a bit of a boorach, which translates as a mess or a muddle.

This boorach is, once again, entirely of the Government’s own making. On the clawback, those with incomes above £50,000 will have their child benefit withdrawn at 1% for each £100 of income from January 2013. There is to be no child benefit entitlement for families where any earner has an income of more than £60,000. Some of the changes being proposed might be small steps forward, but they do not change the fundamental unfairness. To return to the point made by my hon. Friend the Member for Birmingham, Selly Oak (Steve McCabe) about his constituent Mrs Morris, a couple with children where one earner is on £60,000 and another is on £10,000 will lose all their benefit, whereas a dual-earner couple on £50,000 each will potentially keep it all.

As the hon. Member for Christchurch (Mr Chope) said, the implementation of this approach will be complex. New computer systems and new staffing will be required. The Government have estimated costs of between £8 million and £13 million for the computer systems’ development and running costs alone, plus £100 million for staff resources. Interestingly, they have estimated that £5 million will be spent on customer information. I do not know exactly what customer information they intend to provide, but I hope that it will be explained in plain English. Over the years I have grown to mistrust Bills that have one-line clauses and multi-page schedules.

Schedule 1 is certainly not set out in customer-friendly wording. An MP sitting in an advice surgery trying to look through it to check out whether or not their constituents have an entitlement would have to go through seven pages. After several lines defining person “P”, person “Q” and whether or not “Q” is the partner of “P” throughout the week, they would find new section 681C, which provides an equation to work out whether someone would be entitled or not. That is not very customer friendly. There is a serious point as to whether the clawback mechanism is fair and workable.

Amendment of the Law

Kate Green Excerpts

Thursday 22nd March 2012 Commons Chamber

[Vince Cable]

I am sorry; I do not follow the logic of the question. The Budget is of course fiscally neutral. I have just quoted figures, which the Office for Budget Responsibility has validated, which show that pensioners as a whole will gain five times as much from the increase in the pension and from pension tax credits as from the change in allowances.

[Kate Green (Stretford and Urmston) (Lab)]

What will the Secretary of State say to people who have saved into a pension all their working lives and who have only modest additional pension provision to rely on, but who will now, completely unexpectedly, see the reward for making that effort to save wiped away?

[Vince Cable]

There is a genuine issue about pensioners with limited income, much of it savings income, which has been progressively ignored over the years. I have fought very hard in Parliament on the issue of annuities reform, as have many colleagues, particularly on the Government Benches. Many of the people the hon. Lady describes are annuitants who have been severely squeezed by the very low interest rates. Despite numerous appeals to the previous Government, absolutely nothing was done about annuity reform. We have made an absolute commitment to end compulsory annuitisation, which will offer far more practical help than any of the things that she and her colleagues are describing.

Let me turn to these millionaires. I agree with the Chancellor that the decision to cut the top rate of tax from 50p to 45p was economically the rational thing to do. I want to focus the debate not on symbols but on substance. I share the emotional reaction of the many people who are disgusted to hear pampered financiers whinging about their taxes. On an emotional level, nobody can sympathise with that. However, we have to deal with the practical realities that were burned on my consciousness as a result of sitting in my place on the Opposition Benches for 13 years, exchanging views on the top rate of tax with successive Labour Ministers from Blair to Brown to Balls. Year after year, they would tell the Liberal Democrats that it was economically stupid to raise the top rate of tax above 40%. That was their message, year after year. Then, a few weeks before the end of their Government—I think it was 57 days—they introduced the 50p rate in order to create a political dividing line. That decision had nothing whatever to do with economics. The point that they had been making over all those years was that raising the top rate in that way would raise relatively little revenue.

Despite the casuistry of the shadow Chancellor’s intervention a few moments ago, in trying to argue that vast sums of money had been sacrificed, line 3 of the scorecard makes it absolutely clear that we are talking about a revenue loss of £100 million a year. That figure has been endorsed by the Office for Budget Responsibility. The changes that have been introduced in the Budget, including increased taxation of high-value property, plugging loopholes and much tougher anti-avoidance rules, will bring in at least five times that amount.

--- Later in debate ---

[Mr Evennett]

I am grateful for my hon. Friend’s support. As the Mayor of London has said, a new crossing at Silvertown is essential. It will enable commuters and business traffic to get to their destinations quicker, and it will relieve the pressures on the Blackwell tunnel. In order to ensure the regeneration of south-east London, such public sector projects and investment are essential, and I welcome the Government’s commitment to look further into this crossing and to support other investment to improve our infrastructure.

I commend my right hon. Friend the Chancellor on his measures on taxation and families. Conservatives instinctively believe in lower taxation, not only because it allows people to keep more of their own money, but because they then have more choice in how their money is spent. Government do not always know best. They have a role to play, but people will spend their own money more effectively; it is not for Government to tell people what to do. Unlike the Labour party, which always believes in increasing taxation, we believe that people who have worked hard should have the opportunities to get on with their lives and careers, and to spend their money as they want. I therefore welcome the Chancellor’s aspiration to raise the personal tax allowance to £10,000 as soon as possible. That is good news for all working families on low incomes.

In government, Labour professed sympathy for working families on low incomes but did little to help them—in fact, Labour hindered. We did not hear anything in the shadow Chancellor’s speech about the failings of his Government. They allowed families to get worse off, and the increase in poverty was greater under Labour. This Government do not believe that people should be allowed to remain on benefits for ever because benefits are more attractive than working and earning. That is unacceptable. We are, therefore, grateful that we are changing the benefits regime and helping people with the tax regime, so that work does pay. That is fundamental.

Under this Government, great progress has been made in the past two years, with personal allowances going up by 25%. This year there is to be another rise and next year, in April 2013, there will be an additional rise in the personal allowance of £1,100. That is a real, positive advance for people on low incomes, allowing them to keep more of their money. I particularly welcome the fact that some 2 million people will no longer pay any income tax; they are on low incomes and they should not be paying income tax. It is the Conservative-led Government—a coalition Government—who are doing this, and I welcome the Business Secretary’s speech, which highlighted what the Government are doing and the logic behind it.

[Kate Green]

I note the hon. Gentleman’s welcome for families being lifted out of income tax. How does he react to the fact that 230,000 pensioners are being brought into the ambit of taxation for the first time by this Budget?

[Mr Evennett]

The whole aspect of what we are looking at is increasing pensions and helping pensioners. This Government have done a lot more than the Government whom the hon. Lady supported—they gave a miserable 75p increase in the pension a few years back. Our Government are putting up the pension this year by more than 5%, which is a record and an achievement for this Government. We will take no lectures from the hon. Lady, because her Government let pensioners down.

Nationally, a total of 24 million people will receive a tax cut thanks to this Budget. That is good news for individuals, for families and for the economy. This Conservative-led coalition is proceeding to help working people, and the Opposition do not give us credit. I was disappointed with the shadow Chancellor’s speech. I usually listen to him with great interest, but he did not allude to anything that Labour would do if it were in government or to Labour’s failures when it was in government.

The family is the backbone of our society, and the issue of child benefit is always difficult. Fairness remains the key, and the original changes proposed caused considerable difficulty. I am pleased that the Chancellor listened to our concerns, and those of constituents, that the proposed changes were not really acceptable. By amending the proposals and tapering the benefit from an annual income of £50,000, some 90% of families will continue to benefit from financial support during these difficult financial and economic times. This Government are listening and changing policies after representations have been made, and that is to the credit of the Chancellor and the Treasury team.

Red tape, bureaucracy and taxation all adversely affect businesses. I welcome the news that more is being done to support small businesses and manufacturing. The investment in apprenticeships, lower corporation tax and extra support for start-ups will make a real difference. In addition, we heard the innovative idea of a student-style loan for young people to allow them to start up their own businesses, and I welcome the fact that the Chancellor is examining it. It would allow 18 to 24-year-olds who are keen on a business career to be helped. We all know that university is not for everybody; people may not want to go there and may want to go into business instead. So we need to provide the same sort of help for young entrepreneurs, whom we desperately need in this country, to enable them to go forward to make their name and their fortune. I welcome the fact that the Government are willing to examine that.

My constituency contains a number of innovative manufacturers, such as Texcel Technology in Thames road, Crayford, which I visited last month. I was really impressed with the dynamism of its leadership and its focus on high-tech products. I recently nominated it for the Made by Britain project. The NEPTUNE project, for which the company has provided power and switching solutions, will help to develop our understanding of the ocean and of many biological, chemical, physical and geological events that take place. I am pleased that such a successful firm in my constituency has designed and manufactured such innovative components for this international project. People at the firm were looking to the Government for some action and will be delighted with what the Government have proposed in the Budget to enable small firms like theirs to prosper and develop.

I know that the firm is concerned about regulations, bureaucracy and, of course, tax, so it will welcome the parts of the Budget dealing with business. Business is vital to our society; it makes the money and creates the wealth that allows us to invest in education, hospitals, all the other public services, pensions and all the rest that we want to invest in. If we do not allow business to flourish, we cannot make that wealth and we cannot have the taxes that come with it. This Government are focusing on those issues, to make sure that we are getting the wealth creation and the taxes from innovative small firms such as the one I mentioned.

We need to consider the whole of this Budget, as it works together as a rounded Budget, looking to the future. That is the great thing about what we saw yesterday from the Chancellor and the team; the Budget is looking to the future to make Britain better. It seeks to make Britain great again, as that will not come from the Opposition, after their 13 years. We remember how they “ended” boom and bust, and we remember all the things they had—the result was a disaster and it left us with the mess to clear up.

In conclusion, the Chancellor has been effective in looking to policies to solve our economic and financial situation. The Budget demonstrates that this Government are firmly on the side of those who aspire to do the right thing for themselves, their families, their businesses and this country, and I strongly back it.

--- Later in debate ---

[Pauline Latham]

I do apologise, Mr Speaker.

The change to child benefit is also something that we should welcome, as it shows that the Chancellor has listened to what people out there have been saying. There will not be a cliff edge, as people have suggested, and no one earning £50,000 or less will lose anything. Only when people earn more than £60,000, which is quite a lot of money, will they lose their child benefit.

[Kate Green]

None the less, would the hon. Lady acknowledge that the Chancellor has been unable to resolve the anomaly whereby a couple earning £98,000 between them might be able to keep their child benefit, while a single parent on an income of £49,500 would not?

[Pauline Latham]

What the Chancellor has done is prevented us from having to go through a huge amount of paperwork that would have cost the country an awful lot of money. People might say, “Oh, but we don’t live together. We used to, but we are no longer together.” There will be so many loopholes, but he has done a good thing by going up to £60,000. I think that the majority of people in this country would agree with that, although of course Labour Members will not.

--- Later in debate ---

[Kate Green (Stretford and Urmston) (Lab)]

All Budgets have a tendency to create both winners and losers, but this Budget, unlike others, appears to create winners and losers in an inconsistent and illogical manner and without any clarity of guiding values or objectives.

[Mr Bain]

My hon. Friend is showing her customary generosity in giving way. I anticipate that she might make the point that 70% of the cuts in tax credits will affect people in the lower half of the income scale, but the Resolution Foundation determined yesterday that 70% of the gain from the change in the personal allowance will go to people in the top half of the income scale.

[Kate Green]

My hon. Friend does indeed anticipate my first point. Although there is of course an attraction in lifting more people at the bottom of the wage spectrum out of tax, it makes little sense to introduce a measure that still favours more men than women when women have already lost out under previous Budgets and spending announcements.

[Mr Tom Clarke]

On that point, which I dealt with briefly in my speech, is it not a great worry that female unemployment has risen by 22,000 in the past year, adding to the problems that were already there?

[Kate Green]

It is of deep concern to me, as I am sure it is to you, Madam Deputy Speaker, that female unemployment is now the highest it has been in a quarter of a century and that it was female unemployment that rose most rapidly in the last quarter, considerably outstripping what is happening to men.

I find it difficult to understand the fairness or logic of introducing a higher tax threshold that lifts some low-paid workers out of tax while at the same time disincentivising many other low-paid workers who are seeing their tax credits frozen or lost altogether if they cannot reach sufficient hours, to the extent that work will become hardly worthwhile for them at all. I cannot see the logic of the Government telling pensioners that on the one hand they will give to them through the triple lock, which I welcome, but with the other hand they will take away from them by raising the threshold and bringing 230,000 of them into tax, while at the same time trying to take people in low-paid work out of tax.

I am struggling to understand how a Government who said that they wanted to be fair and to operate a system that was simple can have arrived at the decision they reached on child benefit, according to which a couple with an income just short of £100,000 will be able to keep all their child benefit but another couple where only one member of the household has an income, but it is in excess of £50,000, will not. How can that be fair? How can a system be simple when it starts to claw back at the rate of 1% for every £100? How will people know where they stand in relation to their child benefit entitlement, and where is the incentive to work more and earn more in such a context?

I am struggling to understand why a Government who want to be progressive, who say that that is their reason for moving away from universal child benefit, which I hugely regret—I want to put on record that I absolutely stand by universal child benefit—and who say that they think there needs to be more progressivity, as they see it, in the way they administer child benefit, then introduce less progressivity in income tax by cutting the top rate from 50p to 45p when, as the OBR has said, there is considerable uncertainty that such a measure will deliver the tax receipts that the Government seem to believe will be brought into the Exchequer. With respect, I think that the Chancellor was a little over-optimistic in his analysis of the OBR’s comments on the likely efficacy of that measure, and it is also unclear to business commentators that the measure will be good for our economy.

Let us be clear that our corporation tax, even before this Government took office, was by no means among the highest in the developed world. I am interested in how a Government who make great play of seeing small businesses as the future of increasing employment, who want to reduce corporation tax, who are on a downward trajectory in relation to it and who want to enable small businesses to employ more workers have failed to notice that the very smallest businesses are completely unaffected by the cut in corporation tax because they already have a tax rate of only 20%. What are the Government doing to support those businesses when what they would really like is effective measures on employers’ national insurance contributions, something that again the Government have managed to address only in a most limited way?

[Lorely Burt]

What we are doing for small businesses, which will alleviate many administrative difficulties, is introducing measures such as cash accounting on cash flow, so we are working hard to help them in every way we can. We are also amalgamating national insurance with the other forms of tax paid so that only one lot of tax is collected.

[Kate Green]

It is not that everything the Government are doing is necessarily bad, but overall it is woefully insufficient in relation to business and not what the smallest businesses have been talking to me—or I suspect to the hon. Lady in her constituency—about. They have been talking about employers’ national insurance contributions, business rates and their concerns about the rise in VAT, which means that there is pressure on their turnover, but in the Chancellor’s statement yesterday the Government had nothing to say about any of those issues.

I should like to say a little about welfare and pensions. On welfare, I share with many of my right hon. and hon. Friends the deep concern that, after £18 billion of social security and tax credit cuts already from this Government, the lowest-income households in this country now face a further £10 billion of cuts. That will mean a hit on disability benefits and on the benefits that enable people to reach basic living standards. When the Government publish on people’s tax statements, as they say they will, a breakdown of where their spending has gone, I hope that they show in great detail who the losers are from that welfare spending. A broad-brush statement, “This is what is spent on welfare,” will not tell people that carers, the disabled and people raising children are actually the losers, so I hope that such information appears on the tax statements that the Government produce.

Finally, the Government propose to keep the state pension age under review in line with rising longevity. That, too, is a measure that will deliver greater inequality, because it will penalise most of all the poorest, who already have poorer health outcomes and poorer life expectancy, and those doing manual and hard, physical jobs. So buried in the detail there is considerable injustice, unfairness and inconsistency, and I shall vote against the Budget on Monday.

Living Standards

Kate Green Excerpts

Monday 5th March 2012 Commons Chamber

[Rachel Reeves]

The changes come into effect next month, but the Budget is in 16 days. [Interruption.] The hon. Member for Taunton Deane (Mr Browne), who is a Liberal Democrat, says that he was going to vote for the motion. Perhaps he was thinking of before the election, when he agreed with progressive policies.

Every day, families are struggling, while the Government demand more from them, and there is no end in sight, no light at the end of the tunnel, just the fear that one day, sooner or later, they will not be able to pay the mortgage, rent or gas bill. We have called this debate because the Government seem unaware of what is happening, unable to understand what people are going through, unwilling to do what it takes to get our economy growing and unemployment falling, and uninterested in taking the trouble to find out what impact their decisions are having.

The choices that the Government are making are hurting but not working. [Interruption.] The hon. Member for Taunton Deane says that we are wrong. It is the Government who are wrong because they are hitting hard-working families harder than anyone else, and giving the banks a tax cut while penalising families and young children trying to do the right thing and stay afloat. The choices that the Government are making are hurting but not working. They are penalising those trying to do the right thing. In response to the crisis in living standards hitting families, the Government are piling on the pressure with badly designed and badly targeted cuts to benefits and tax credits.

[Kate Green (Stretford and Urmston) (Lab)]

Although, of course, it is desirable to lift more people on low wages out of tax, is it not the case that this is not a particularly well-targeted measure in difficult times because it applies exactly the same tax advantage to higher paid people?

[Rachel Reeves]

My hon. Friend speaks with great knowledge, having formerly worked for the Child Poverty Action Group, and what she says should hold great sway with the House.

Oral Answers to Questions

Kate Green Excerpts

Tuesday 24th January 2012 Commons Chamber

[Sheila Gilmore (Edinburgh East) (Lab)]

6. What estimate he has made of the likely effect on the level of child poverty of the fiscal measures in his autumn statement.

[Kate Green (Stretford and Urmston) (Lab)]

8. What estimate he has made of the likely effect on the level of child poverty of the fiscal measures in his autumn statement.

[The Economic Secretary to the Treasury (Miss Chloe Smith)]

When measured against previously announced policies, there will be an estimated increase of 100,00 in children living in households with less than 60% of median income in 2012-13.

[Miss Smith]

The reason for that decision was to prioritise the resources we have available on those perhaps least able to deal with the difficulties of the cost of living.

[Kate Green]

The Chancellor announced in the autumn statement an increase in the number of child care places for disadvantaged two-year-olds, but at the same time we are hearing of cuts to local authority funding for child care, and places are closing. How will the Government guarantee that these new places for disadvantaged children will be additional places and not simply a matter of money being moved out of one pot to pay for another?

[Miss Smith]

We expect that that policy will be additional in the sense that it is extending it to disadvantaged two-year-olds. We expect 130,000 disadvantaged two-year-olds to be assisted by the 15 hours of free child care, and we certainly expect local authorities to take sensible decisions with the limited resources that they also have.

Business, Innovation and Skills

Kate Green Excerpts

Tuesday 20th December 2011 Commons Chamber

[Kate Green (Stretford and Urmston) (Lab)]

I am grateful for the opportunity to raise concerns about the collection and recycling of hazardous mercury-bearing waste from lamps, and waste electrical and electronic equipment, known unpromisingly as WEEE.

WEEE is one of the fastest-growing waste streams in the UK. Following the adoption of a European directive in 2003, UK regulations were introduced. They took effect in 2007, and were aimed at recovering more of that waste and ensuring its treatment in an environmentally sound manner, with less going to landfill. The regulations require any business that sells and imports WEEE, including hazardous WEEE, to join an approved compliance scheme, pay a registration fee to the scheme, and supply data on the amount of electrical equipment placed on the market each year.

Under the regulations, companies are required to finance the costs associated with the treatment, recovery and disposal of WEEE, but it appears that some unscrupulous organisations have been charging disproportionately for that. That may explain why the big four lamp manufacturers and importers—Sylvania, Philips, OSRAM and GE—have established their own not-for-profit organisation, Recolight, which offers free lamp-recycling, paid for by the imposition of an up-front fee, unique to the lighting industry, on the sale of hundreds of millions of lamps purchased by households and commercial and public organisations since the introduction of the WEEE regulations. That may seem an understandable response, but I am concerned that it may have led to Recolight enjoying a dominant position in the market for the recycling of WEEE lamps.

The ability of the big four to apply a common up-front fee to every lamp certainly gives the appearance of the existence of a cartel. I understand that decisions about the application of the Competition Act 1998 fall outside Ministers’ remits, but the result appears to have been a suppression of competition in the market, which—this is the crucial point—limits the ability of the market to reduce the adverse environmental impact of hazardous mercury-bearing WEEE lamps. It is of concern that since the formation of Recolight, lamp recycling rates have actually fallen, whereas previously there was 25% year-on-year growth, and there has been growth in all other WEEE sectors. Research and development investment is also falling as a result, and jobs are being lost.

Negotiations on the European Commission’s proposals for a recast WEEE directive are drawing to a conclusion. I understand that the Government expect to launch a consultation on the amendment of the UK WEEE regulations shortly, and I urge Ministers to consider how best those regulations could be recast so as to prevent any manipulation of the market in a manner that reduces the effective management and disposal of hazardous mercury-bearing electrical waste. It is vital that the market works fairly to achieve that outcome, and clearly the lamp-recycling industry requires stability if it is to operate effectively.

I have a number of questions relating to the structure of the market, the impact on recycling rates, and the opportunities that will arise from recasting the WEEE directive and making consequential amendments to the regulations in the UK. First, in the light of an apparent fall-off in rates of lamp recycling, can Ministers say what monitoring there is of levels of recycling of WEEE, and what action is being taken to promote increased recycling volumes in order to protect the environment and WEEE operators—those are the main priorities of the WEEE directive—and ensure that consumer revenues are used appropriately? Will Ministers ensure that standards for the collection, transport and recycling of hazardous mercury-bearing lamps are improved, and ensure that full health and safety data on product recycling are made available to the UK lamp-recycling industry? Will they take the opportunity of the recasting of the WEEE regulations to look at whether the roles of the Environment Agency and the Health and Safety Executive could be strengthened? Will Ministers consider requiring the value of evidence to be set by an independent third party, particularly where producers’ compliance schemes compete, from a dominant position, with those of recyclers?

Do Ministers think that collection and compliance functions should be separated, and will they consider that during the exercise amending the WEEE regulations? Overall, will Ministers ensure that the overarching priority of the WEEE regulations is to increase recycling rates and improve environmental protection? It is clearly unacceptable for any behaviour by manufacturers to impact adversely on those objectives; that must be looked at carefully. It is important that Ministers take all possible steps, now and in the future, through the introduction of the amended WEEE regulations, to prevent such practices. I hope that Ministers will confirm that there will be strict regulation of the compliance schemes that have driven the kind of protective actions that are now threatening the survival of a once thriving independent market, so that we can ensure that recycling rates, rather than profit margins, are maximised. I am sure that Ministers will appreciate the public policy significance of these issues, and I very much look forward to the Government’s response.