Taxation (Living Wage)

Martin Vickers Excerpts

Tuesday 22nd January 2013 Westminster Hall

[Martin Vickers (Cleethorpes) (Con)]

I hope not to be as challenging for the Hansard reporters as my Welsh colleague, my hon. Friend the Member for Aberconwy (Guto Bebb).

It is a pleasure to serve under your chairmanship, Mr Robertson. I congratulate my hon. Friend the Member for Harlow (Robert Halfon) on securing the debate. He is a worthy champion of such issues and I hope to give him my support.

Although my Cleethorpes constituency is best known as the premier resort of the east coast, it is a highly industrial area that takes in a large section of the Humber bank. Although there are highly skilled and well-paid jobs in some of the factories, my constituency, and indeed the region, is an area in which pay is considerably below the national average.

Seaside resorts are heavily reliant on part-time, often seasonal work. In some cases, that is not necessarily what people would like, but it is what is available. For other people, the work fits perfectly with their family responsibilities and is a useful supplement to the family income. The Conservative party has traditionally been the low-tax party, and so it should and must remain, but it must be low tax for all, with the emphasis on the low-paid. The coalition Government have done an awful lot in that respect, most notably through the massive increase in personal allowances. However, as my hon. Friend the Member for Harlow pointed out, we risk jeopardising much of the political benefit if we allow our opponents to paint us wrongly as the party of the rich and privileged.

[Mr Andrew Smith]

The hon. Gentleman refers—rightly, I am sure—to the importance of part-time, often low-paid workers in his constituency, but does he accept that the coalition’s withdrawal of working tax credit from part-time workers has hit those workers very hard and represented a disincentive to work, which is contrary to his argument?

--- Later in debate ---

[Martin Vickers]

I acknowledge that that has not been welcomed by many of my constituents, but what is important is the balance the Government have achieved to support and supplement the incomes of the lower-paid.

My hon. Friend the Member for Harlow is to be congratulated on keeping this issue high on the political agenda. Indeed, it has been a theme of Conservative thinking for decades and, in recent years, it was taken up by my noble Friend Lord Forsyth, who argued strongly in favour of simplification in the tax reform commission’s report. Paragraph 6.1 of that report states:

“The personal tax system should be characterised by low tax rates and simplicity. Allowances, reliefs and loopholes should be cut where possible and compliance costs reduced. The least well-off in society should be taken out of tax altogether. Many of the lowest paid pay tax while receiving benefits and tax credits. This recycling of money is a waste of resources. It is a waste of time for the individuals and the government. It should be reduced and eliminated where possible. Personal tax rates are also too high.”

The abolition of the 10p tax rate by the previous Government in 2008 represented a tax rise of £232 for working people. For someone earning today’s minimum wage, the reintroduction of that rate would be the equivalent of a tax cut of some £250 a year.

Reducing the rate of tax is the most effective way in which the Government could contribute to achieving the living wage without forcing employers to pay more or creating further barriers to employment. It would also ensure that working people would keep more of their money in their pockets. When considered alongside the universal credit, a 10p tax rate would enable more people to escape their reliance on benefits. Of course, I recognise that achieving the 10p tax rate would have a significant cost—£6 billion, I understand—and I appreciate that Treasury Ministers must balance that cost against the potential boost to the economy derived from any tax cut, but a commitment to movement in that direction would be most welcome.

Today, in an excellent article on the “ConservativeHome” website—I am sure that Opposition Members have read it—my right hon. Friend the Financial Secretary to the Treasury, who, like many Government Members, has impeccable working-class credentials, says:

“We must be the party of ordinary working people. The party of people who want a decent job to support themselves and their families; the security of a home of their own where they can be stable and settled; reliable back-up from well-run, caring public services; and enough money left in their pay packets to afford a car, a holiday, savings for a rainy day and a reasonable pension in retirement.

These are not the demands of those who think the world owes them a living. It is an attitude to life distinguished by quiet responsibility, mutual reliance and family loyalties. That which is asked of government is…to provide a shield from risk and turbulence—instead of adding to life’s uncertainties.”

I would say that they are very Tory views, and I echo them 100%.

My parents were proud to describe themselves as working-class Tories. They came from the generation that had seen the war and the post-war years of austerity. It was a generation of self-reliance, and my parents took great pride in the fact that they were self-reliant. Whatever label we use—working-class Tories, blue-collar Conservatives or whatever—the policy advocated by my hon. Friend the Member for Harlow is a rallying cry that we can all welcome.

A commitment to a 10p tax rate would send the clear message that we are indeed all in it together. It would further cement in the minds of voters that Conservatives now, as always, represent all members of our communities, and it would also emphasise the damage done—if I may misquote Harold Wilson—by 13 years of Labour misrule. Such a commitment would send a clear message to my constituents in Cleethorpes and people elsewhere that in the future, as in the past, it is the Conservatives who can best help working people.