Budget Resolutions and Economic Situation

Mike Wood Excerpts

Wednesday 16th March 2016 Commons Chamber

[Mr Adrian Bailey (West Bromwich West) (Lab/Co-op)]

We have got used to missed targets and U-turns in the Chancellor’s Budgets. I fear that this may be the quickest U-turn ever. This could well be known as the lame duck Budget. The Chancellor let the cat out of the bag when he was expressing his support for the EU, which I thoroughly share. All the predictions on which the Budget is based assume our continued membership of the EU. I marvel at the Government’s sheer lack of leadership in projecting their long-term economic plan and basing successive Budgets on it, then subjecting the core of their future economic strategy to a political process that puts it in jeopardy and exists only to satisfy the internal politics of the Conservative Government.

I support what the Chancellor said, but what he referred to has not just occurred over the past month or so. It has been the case for years. Had there been the necessary leadership from the Government, the issue would not be the subject of debate now and we would not risk the damage that the outcome could do to our economy and our future economic projections, and we would not potentially be facing another Budget in a far more pessimistic economic scenario in a few months.

Many speakers have pointed out the Chancellor’s missed targets and the failure to deliver on his early promises. The march of the makers has been talked about at great length. Sometimes when I look at Government policies and manufacturing production, I think it should have been called the ides of the march of the makers. This is the source of all the Government’s current difficulties. Our failure to invest in manufacturing has resulted in the current very low levels of productivity, which are undermining our economic growth and our export performance. Until we have Budgets which put this at the centre of Government policy, the problems outlined in every Budget, and re-addressed because of the failure to deal with them in previous Budgets, will continue.

I would like to have seen in this Budget measures on business rates. We have the most incoherent business rate regime imaginable. The Chancellor spoke today about reducing corporation tax. That may be an element that business favours, and it may help business. On the other hand, what happens under the business rate regime to a manufacturing company that invests in new machinery so that it can increase productivity and export? The business rate goes up, and the company gets penalised. In the context of business policy, it is no good looking at one element of the taxation regime without looking at the others. The Government need to look at the whole package if businesses are to have a basis on which they can invest without being penalised, producing all the economic benefits that will play such an important part in the future growth of our economy. The Government have signally failed to do that, and we might say that some of their measures amount to just trying to mend the roof while the rain is pouring.

I would briefly mention two other elements of productivity the Government have failed to address: skills and construction infrastructure. We have had boasts of millions of pounds being invested in apprenticeships and the academisation of schools, but the outcome is that there are still acute skills shortages in science, technology, engineering and maths-based subjects, which are central to the capability of our manufacturing industry to develop, grow and export. Something is going wrong somewhere, and I saw nothing in the Budget that would address that.

The other issue is infrastructure. I welcome the proposed infrastructure projects, but I would have more faith in their ability to impact on our productivity if infrastructure investment had not dropped by nearly half over the last five years. The Government have started to deliver on only 9% of the projects they have in the pipeline, and those projects that there are are heavily concentrated in London and the south-east. I am not knocking any particular programme there, but the fact is that London and the south-east have had higher economic growth, than the rest of the country.

[Mike Wood (Dudley South) (Con)]

Will the hon. Gentleman give way?

[Mr Bailey]

No, I will not give way, because I respect the ability of others to have time to make their points as well.

The Government have simply moved from a short-term, politically expedient solution, subjected it to political window dressing and then had to explain its failure in a subsequent Budget. This is a Government of missed targets, U-turns, incoherence and, quite frankly, incompetence.

Tax Avoidance and Multinational Companies

Mike Wood Excerpts

Wednesday 3rd February 2016 Commons Chamber

[John McDonnell]

Let me come on to that point.

It did not take long for independent analysis to show what a derisory sum the Google tax payment was. The word “derisory” is not just my description, but the word used by the hon. Member for Uxbridge and South Ruislip (Boris Johnson), the Mayor of London, as well as many others. Google had a UK turnover of approximately £4 billion in 2014-15. If profits here were similar to those across the whole group, about a 25% return, that implies £1 billion-worth of profits. If the standard 20% corporation tax is levied, that implies a £200 million tax bill for the one year, not the £200 million paid by Google for the decade. As my hon. Friend the Member for Denton and Reddish (Andrew Gwynne) said, independent assessors have estimated that the Google tax rate for the past decade was 3%.

[Mike Wood (Dudley South) (Con)]

Companies such as Simworx in my constituency are extremely successful at selling products around the world that are based on their intellectual property developed in the UK. Does the shadow Chancellor think the profits from that intellectual property should be taxed in the country where those products are sold, or here in Britain?

[John McDonnell]

The economic activity definition has to be examined when profits are assessed. I will come on to that point because it is valid and reasonable.

Bank of England and Financial Services Bill [Lords]

Mike Wood Excerpts

Monday 1st February 2016 Commons Chamber

[Mike Wood (Dudley South) (Con)]

Thank you, Madam Deputy Speaker. I shall try to compensate for some of the earlier speeches that went a little beyond your guidance.

It is seven years since the most devastating financial crash of our lifetime. Since the crash, regulations have rightly been updated by the Chancellor and Treasury Ministers. They have put responsibility and accountability at the heart of the UK’s financial system. Because of the Government’s long-term economic plan, banking in the UK is now far more robust, but it is clearly not invincible. I shall support the Bill this evening so that we can build on that progress, continuing all the valuable work that the Treasury has done so far and improving on the status quo, strengthening the way the Bank of England is governed, increasing accountability in the financial services sector, and extending the role of the Pension Wise advice service, which I know is used and valued by many of my constituents.

The Bank of England has been a cornerstone of global finance since 1694. Its structures and governance must adapt to the needs of the 21st century so that it can continue as such. Some of the Bank’s historic practices have not been in line with current international standards, but the Bill helps to redress the balance. Strengthening the role of the Bank of England’s court of directors will enable the Bank to function with an effective and modern unitary board, a more effective structure to allow the Bank to deliver on its vital regulatory and policy roles.

To most of our constituents, the key role of the Bank of England, other than issuing bank notes in England, is to set interest rates. The Monetary Policy Committee currently meets 12 times a year but, as we have heard, a single month is rarely long enough to properly review, consider and change a macro-economic assessment, so moving the MPC to eight meetings a year would have many desirable outcomes. Most obviously, policy making at that level requires time for reflection, which a longer period between meetings would allow. Such a sensible change will merely bring the Bank of England into line with other central banks, such as the Federal Reserve and the European Central Bank. Allowing the results of votes and the reasoning behind them to be published alongside decisions over interest rates will open up that opaque process, granting access to the MPC’s thinking.

The crash of 2007-08 highlighted the irresponsible behaviour of some individuals working in the financial services industry. Thankfully, the days to which my hon. Friend the Member for Havant (Mr Mak) referred, when the Labour party allowed people such as Fred Goodwin to take huge bonuses while allowing their banks to freefall, are behind us.

The senior managers and certification regime legislated for by the coalition will come into force in March. However, although the existing legislation will apply to banks, building societies, credit unions and PRA-regulated investment firms, it will not extend to other authorised financial services firms. Expanding the regime’s scope will help to create a fairer, more consistent, more effective and more rigorous regime for all authorised financial services firms.

The Government have already made revolutionary changes to improve and support the pensions system. Allowing our constituents to access their pension pots—their annuities—without being penalised for doing so has given people more flexibility and more choice over how they spend their own money. As a result of those changes, the Pension Wise scheme was introduced following the 2014 Budget. Expanding the service’s scope will mean that more people receive impartial, high-quality financial advice and guidance, which will allow them to discuss their new options.

I encourage all hon. Members to join me this evening in voting in support of a Bill that will bring the Bank of England and financial services into the 21st century—a Bill to allow transparency and accountability to reign in the financial sector.

HMRC Office Closures

Mike Wood Excerpts

Tuesday 24th November 2015 Commons Chamber

[Mike Wood (Dudley South) (Con)]

Moving more of HMRC’s work out of central London, which has some of the world’s most expensive office space, will enable it to make substantial savings. It is right that HMRC makes whatever savings it can on its property costs so that the money that it does have can be used to improve customer service and maximise tax revenues. It cannot be sustainable for its 58,000 full-time employees to be spread across 170 offices around the country, many of which, as has been, said are little more than a legacy of the 1960s and 1970s. That is highly inefficient.

However, while recognising the need to modernise and reform, we have a responsibility to make sure that HMRC’s staff are treated fairly. I therefore hope that everything possible will be done to retain skills and expertise within HMRC by making sure that as many of the workforce as possible are redeployed. In particular, I emphasise the need for support for the local workers in Brierley Hill in my constituency who choose to transfer to the Birmingham regional centre, and for support and retraining for those who do not transfer to the new centre. I hope that in implementing the changes, HMRC’s management will work closely with colleagues to see how many Brierley Hill and Merry Hill staff might be taken on by the Department for Work and Pensions when the Merry Hill office is transferred to the DWP.

My constituents in Dudley South expect the same high standards from HMRC as they expect from banks and retailers. This programme will help meet those expectations. People in my constituency will welcome the creation of a regional centre in the west midlands, with the high-quality jobs and skills such a centre brings. I am pleased that as part of the modernisation programme, HMRC plans to work with universities and local colleges to attract the best and brightest talent. Although I recognise the importance of Birmingham as Britain’s second city, I urge HMRC not to rule out the black country as a suitable location for the west midlands regional centre.

Quite rightly, Members and residents expect HMRC to increase tax revenues, while cutting running costs, as it has done over the last five years. An additional £11.9 billion was collected last year and an additional £57 billion has been collected over the past decade. Total tax revenue has increased in each of the past five years, during which time HMRC has reduced its running costs from £3.4 billion to £3.1 billion, including £210 million in sustainable cost savings last year alone. However, HMRC cannot rest on its laurels; it must continue to build on these significant achievements. We expect a lot from HMRC.

The changing demands on the organisation mean that ways of operating that might have been appropriate in the past might not be appropriate for the future. Like all organisations, HMRC must continue to adapt if it is to be as effective and responsive as we all want, while operating as efficiently as we must all surely demand. We owe it to HMRC’s leadership to allow them the independence they need to make the changes that they have decided are necessary to meet the challenges. That is why I will support the Government and oppose the motion this evening.

The Economy

Mike Wood Excerpts

Wednesday 18th November 2015 Commons Chamber

[Mike Wood (Dudley South) (Con)]

As a fan of “Yes, Minister”, I shall start by congratulating the Opposition on their brave decision to choose this subject; given the Labour party’s abysmal record in this area, that is perhaps courage verging on chutzpah.

In May, voters in a majority of constituencies around the country endorsed the difficult decisions taken by the previous coalition Government to get the economy back on track, and placed their faith in the Conservative party to secure the economy and to take the further difficult decisions in a fair way to secure that recovery.

It is disappointing that the Opposition motion omits the real progress that has been made over the past five years in improving people’s opportunities and giving a brighter outlook for working people in Britain. We have 2 million more people now in work; that is many, many more families with the security of a job and a steady income. We have secured 2 million more apprenticeships since 2010, with 3 million planned for this Parliament, meaning that ever more young people will have the skills that they need for future work. The Government are also doubling free childcare to 30 hours a week and introducing the national living wage.

[David Rutley (Macclesfield) (Con)]

Earlier in the debate, the hon. Member for Hayes and Harlington (John McDonnell) was quick to say that the £9 national living wage was inadequate, but did not point out that the Labour manifesto set a target of only £8. Did my hon. Friend find that outrageous?

[Mike Wood]

I certainly did not find it surprising. As we knew at the time of the election, the £8 that the Opposition were proposing was probably lower than the minimum wage was scheduled to be by 2020 anyway, but the additional national living wage will mean a real increase in the incomes of the lowest paid families in Britain.

I am sure many of us remember the times when those on the Opposition Front Bench were making funny hand gestures to indicate that somehow the economy was flatlining. They are not doing that so much any longer, because the only thing that is now flat is inflation. With inflation at close—

[Several hon. Members rose—]

[Mike Wood]

I had better continue, as a number of Members wish to speak.

With inflation close to, or even under, 0%, the household budgets of families in my constituency and elsewhere in the country are going further, meaning further security. This benefits the whole country, including my constituents in Dudley South.

I represent a west midlands constituency and I have in the past heard many people in Dudley South say that it has seemed that the midlands has been ignored. It certainly felt like that under the last Labour Government. For every 10 private sector jobs created in London and the south, only one was created in the midlands and the north. There was no hope for millions left languishing on benefits; in fact, many people on certain benefits were, sadly, more likely to stop claiming those benefits because they had died than because they had found a job that meant they no longer qualified for them. That was unacceptable, and the action taken by this Government has meant that has been turned around, so people can have more hope and better opportunities.

The Economic Secretary rightly said that the country has faced low productivity for many years. I hope we would all agree that the key to tackling the productivity gap is rebalancing the economy so that it is not over-reliant on any one region. The Government’s devolution and cities agenda is essential to unlocking the full potential of the whole country and closing that productivity gap.

I was delighted that only yesterday the Chancellor and the Business Secretary were in the west midlands announcing a new £1 billion devolution deal—a devolution revolution that will mean the west midlands has the budgets and powers to make a real difference for people in the county and can tackle the productivity challenge and the skills gap that has held it back for many decades. That should be commended, rather than prompting the condemnatory motion tabled by the Opposition. This is not just about creating jobs; it is about hopes and opportunity, and that is why I will be opposing this motion.

Tax Credits

Mike Wood Excerpts

Thursday 29th October 2015 Commons Chamber

[Stephen McPartland (Stevenage) (Con)]

It is a great pleasure to follow the right hon. Member for Birkenhead (Frank Field), who spoke a lot of sense. I join him in thanking the Backbench Business Committee for allowing us a full-day debate.

I fully support the motion and was delighted to put my name to it. I voted against the statutory instrument because I could not support the Government. That was not an easy thing to do. I am proud to be the Conservative Member of Parliament for Stevenage, but I could not support the Government on the statutory instrument.

I support the idea of a high wage, low tax and low welfare society, and I believe that tax credits need to be reformed. They cost more than £30 billion a year and have completely snowballed. Families visit my surgeries all the time and they are very upset about the fact that no two families are treated the same. There are huge overpayments and there are underpayments. It is an incredibly complicated system. Some £1 billion a year is lost in fraud. There are huge issues with the tax credit system, but the problem is the impact the proposed changes would have had on those families with the lowest incomes.

I accept that the Conservative party manifesto said we would reduce the welfare bill by £12 billion. We need to look at that and I will come on to it later. Much of the debate about unemployment benefits is about how they contribute to the welfare bill, but actually they make up a very small proportion of it. For example, the reduction of the benefit cap from £26,000 to £23,000 a year was incredibly popular on the doorsteps during the election campaign, but it will save less than £100 million, because it affects fewer than 100,000 families in the whole of the UK. That is an indication of how small a proportion unemployment benefits are of the overall welfare bill.

I stood up for those families whom I believe Labour has left behind. They occupy the centre ground and I want to occupy it, too. The Prime Minister and the Chancellor said in their conference speeches that they also want to occupy the centre ground. Those families get up and go to work. They are trying to do the right thing and to support their families and work themselves out of poverty. They are the families I support and I am happy to fight for them. It is on behalf of those families in my constituency and across the United Kingdom that I voted against the statutory instrument.

Why have I been so vocal on this issue? I cannot believe that the impact of the changes was fully understood. The right hon. Member for Birkenhead made a very good critique of them. I want to focus on the reduction in the threshold that enables people to apply for and receive tax credits. The reduction from £6,420 to £3,850 is an instant £1,200 cut, so anybody earning more than £6,420 would be hit by a £1,200 cut right away. That is far too much of a blunt instrument.

A teaching assistant who earns £11,000 a year has restrictions on the number of hours they can work. They do a valuable job educating the next generation of society, including future business leaders. I make no bones about the fact that I am very proud of the work they do. My wife is a primary school teacher and I am proud of her. My sister is a secondary school teacher and a large number of my family work in education and do a great job. How can they be expected to go out there and make up a £1,400 cut to their income? It is not possible. That is too much to cut all in one go. Increasing the taper from 41% to 48% would result in cuts of only £200 or £300, but reducing the original threshold would result in a £1,200 cut. I cannot support that, which is why I had to vote against the statutory instrument and why I have not since then been able to support the Government in the Lobby on this issue.

[Mike Wood (Dudley South) (Con)]

Does my hon. Friend agree that a basic test of the fairness of this package would be for its painful parts, such as the threshold reduction, not to be introduced quicker than its more positive elements, including the living wage, personal allowance increases and other benefits?

[Stephen McPartland]

As Members can imagine, I wholeheartedly agree with my hon. Friend. People such as teaching assistants and cleaners do a great job in society and we need to be reaching out to them.

Charter for Budget Responsibility

Mike Wood Excerpts

Wednesday 14th October 2015 Commons Chamber

[Mike Wood (Dudley South) (Con)]

It is sometimes said that the definition of insanity is doing something over and over again and expecting a different result. On 7 May, the voters decided that it would be insane to let another Labour Government repeat the mistakes that the previous Labour Government made, which, at the very least, seriously worsened the recession. They borrowed too much in order to spend too much.

The public recognise what Labour Front Benchers seek to deny: that we cannot safeguard people’s jobs and mortgages without a secure and stable economy; that we cannot go on spending far more than we earn for long without getting into a lot of trouble; and that there is absolutely nothing progressive about saddling our children and grandchildren with enormous debts over which they have no say.

That is why this evening’s vote is a basic test of Labour’s economic credibility. It is not a test of the shadow Chancellor—those results are already in and they do not look good. It is a test for the remaining moderate Members on the Labour Benches: those Members who say that they have listened to what the voters said so clearly in May and learned from it; those Members who agree with the reported comments of my friend and constituent, the hon. Member for Dudley North (Ian Austin), who is not in his place, that it is time that the hon. Member for Islington North (Jeremy Corbyn) started acting like the Leader of the Opposition, rather than a student union president; and even those Members—perhaps there are some—who remember why Tony Blair is still the only Labour leader in my lifetime to win a general election. If they fail that test, they will be failing to support this self-evidently sensible and moderate measure.

[Jonathan Reynolds]

The hon. Gentleman will be aware from his research for his speech that no Conservative Government in history have ever hit the target being presented to Parliament tonight. None of those historical Conservative Governments ran surpluses according to this fiscal charter. Were the Governments of Harold Macmillan and Margaret Thatcher not economically credible?

[Mike Wood]

I am not sure that even needs dignifying with a response. We fought the election on having a balanced budget by 2019-20, as announced in the Budget, and a system with a fiscal mandate that puts us in line with many of the most successful economies around the world.

[Simon Hoare]

Will my hon. Friend give way?

[Mike Wood]

I am sorry but I must conclude.

If Labour Members fail this test, it will be clearer than ever that it would be absolute insanity to let them anywhere near the control of our economy.

Tax Credits

Mike Wood Excerpts

Tuesday 15th September 2015 Commons Chamber

[Ms Karen Buck (Westminster North) (Lab)]

Before the election, the Prime Minister promised to maintain the value of tax credits. He has broken that promise. He also said on 22 April that the Government were

“using all the tools at our disposal”,

including the “tax and benefit system”, to “make work pay”. Today, we are debating the betrayal of that pre-election commitment.

As we have heard, 3 million working households will lose up to £1,000 each and a single-parent earner on £19,000—a modest income—will lose £2,000. Many extrapolations that are set out in the House of Commons briefing paper and elsewhere show the scale of the losses.

Today, we have heard from Government Members the argument that tax credits are a subsidy for bad employers. In some instances, that is true, but there is scant evidence for the assertion across the board. What is absolutely clear is that the tax credit system is an incentive, particularly for lone parents, to go into the workplace and stay in work. The positive employment incentive of the tax credit system has been almost entirely ignored by the Conservative party.

That masks a success story over the past 10 to 15 years, which has seen a dramatic increase in the number of parents, particularly lone parents, going into the workplace. We should celebrate that fact and support those working parents who have gone into work. A recent piece of research by the New Policy Institute, “Trends in parental employment in London”, demonstrates that success story in employment. Associated with that, there has been a

“large shift away from out of work claims towards in-work claims”.

A rise in the national minimum wage is welcome—indeed, employers should share with the state the responsibility for ensuring that working people enjoy a decent basic income—but it will not offset the huge hit on tax credits. As the analysis by the Institute for Fiscal Studies has shown, the new national living wage offers

“little compensation because the boost to gross wages is smaller than the announced fiscal tightening and almost one-third of the increase in gross wages goes to the Treasury in higher tax receipts and lower benefits and tax-credit entitlements.”

The IFS calculates that across the entire population that receives in-work benefits and tax credits, just 20% of the losses that will accrue from the benefit cuts will be returned to those people through the rise in the minimum wage.

[Mike Wood (Dudley South) (Con)]

Will the hon. Lady give way?

[Ms Buck]

I will not give way because many people want to speak.

My particular concern is that London has the highest level of child poverty of any region in the country and, with 356,000 families receiving tax credits, almost 750,000 children will be losers as a result of this policy. A study by the Trust for London on the higher costs that are faced by working people and parents in London, which has just come out, shows that even before the tax credit cuts, such families are £54 a week worse off than equivalent families outside London. These cuts will hit the working poor right across the country, but they will hit them harder in London than anywhere else.

As we look towards the election that we will fight next May, I absolutely guarantee that my colleagues will draw attention to those losses for families, and those families will not forgive this Government for betraying their commitment to protect the working poor.

Finance Bill

Mike Wood Excerpts

Tuesday 21st July 2015 Commons Chamber

[Mike Wood (Dudley South) (Con)]

It seems slightly rude to intrude on the private squabbles between the Labour and SNP Front Benches, but I am delighted to speak in support of the Finance Bill, which implements many of the measures in the summer Budget.

Last week’s black country day celebrated our region’s industrial heritage, and the measures announced in the Budget will do much to develop the framework for businesses in my constituency and across the country. In Dudley South, many of the businesses that I visit are thriving, whether we are talking about Pressvess, which exports to south America and the middle east, or Mechatherm, which designs and exports foundries all the way to Taiwan. Those small and medium-sized businesses are the lifeblood of our local economy and the driving force behind securing economic recovery, increases in employment and greater prosperity for our constituents. Those businesses and others like them account for 60% of employment and almost half of turnover. The measures announced by the Chancellor a few weeks ago will ensure that such businesses can go from strength to strength and create the new jobs that our communities need—for example, the increase in the employment allowance from £2,000 to £3,000, cutting non-wage costs and making it cheaper to create new jobs and to invest in local people.

One of the first companies I visited as the local Conservative party candidate ahead of the general election makes tools and components for the aerospace and automotive industries. Among the frustrations it voiced to me was that, while it invests large amounts of money, effort, staff time and good will in apprenticeships and in training all its staff from apprentice to the boardroom, other companies seem to want a free ride on the backs of those who invest in that way. I therefore welcome the apprenticeship levy on large firms that the Chancellor announced in the Budget, because it will reward businesses that invest in their workforce and penalise those that attempt to get a free ride.

I am proud that the Government have demonstrated their recognition of people’s natural aspirations. They are on the side of people who want to succeed and make the most of their lives. It is vital that we press ahead with the economic reform we put to the country in the general election in May to ensure we secure the financial stability that safeguards people’s jobs and mortgages.

In the past few years, we have seen spending on out-of-work benefits fall to its lowest level since before the recession. The number of people in work in my constituency, and elsewhere across the country, has shot up. For far too long during the boom years before the recession, welfare spending spiralled. We know that many measures were introduced with the very best of intentions. I do not think anybody would argue with those intentions, but unfortunately it sometimes seemed as though too little thought was given to the consequences of the complexity of the systems being built.

[Andrew Percy]

I agree with everything my hon. Friend says about the complexity of the system. Does he agree that in making changes and trying to get away from the laudable aim of reducing in-work benefits, we have to be incredibly careful and ensure that the changes coming in next April do not go too far? I hope that—I am glad Ministers on the Government Front Bench will hear this—as we scrutinise the proposed reductions further, we will perhaps think a little more about the impact some of them could have on some of our working constituents.

[Mike Wood]

I am not sure that that intervention was necessarily directed at me. I agree with much of the sentiment behind it, but we have to be firm in the need to continue with reform while, as my hon. Friend says, being aware of the impact it will have. I am sure, like other hon. Members, he will have his attention drawn to that impact very regularly through his mailbox.

The consequences of the complexity of that welfare system did not help the millions who were trapped within the system, with little hope or opportunity to escape and to progress. It is important that the Government’s reforms continue to support people into work, but it is just as important to make sure that it pays to be in work. The Finance Bill moves the Government another step closer to achieving that goal. Securing our finances and ensuring welfare reform are essential to our long-term economic plan. Enormous progress has been made in the past year and in the past five years. We can see the evidence in our communities and in the employment statistics. There are more than 250,000 more people in work in the past year alone and nearly 2 million more in work over the past five years. The economy is continuing to recover and job creation is booming, which is why the measures in the Bill to secure that recovery are so important.

In my constituency of Dudley South, the claimant count has fallen by 29% in the past year, with 584 fewer people out of work and claiming benefits. Across the west midlands overall, the unemployment rate has fallen more than in any other UK region. This is not just a recovery for London and the south-east. The Government’s long-term economic plan offers the best strategy to ensure that that continues. They have shown that they have the courage to take the difficult decisions needed, and to put the measures in place to support working people. The measures we have already discussed go hand in hand with tax cuts for working people: the increases in the personal allowances rising even further than announced in the April Budget, alongside the new national living wage. A new, higher guaranteed wage will mean an immediate pay rise for 2.5 million people.

[Alison Thewliss (Glasgow Central) (SNP)]

Does the hon. Gentleman consider it fair that people under 25 will not see the benefit of that pay rise? The differential between those earning this wage at the 16 and 17-year-old rate and at the 25-year-old rate has now expanded significantly and could have a detrimental effect on their ability to live their lives.

[Mike Wood]

The hon. Lady raises a good point, but she should recognise that while the national living wage will be mandatory only for the over-25s, that does not mean that businesses should not pay young—[Interruption.] When the national minimum wage was introduced, there was a lot of controversy regarding the under-21 rates. The evidence, however, did not back up the idea that employers who were paying the national minimum wage rate for the over-21s were necessarily paying the under-21 rate for 18 to 20-year-olds. I would certainly hope that responsible employers invest in and value their workforce, and pay them accordingly.

The introduction of the national living wage will mean that a full-time person in Dudley South will earn an additional £5,000 in wages during this Parliament alone. The living wage will provide my constituents with the financial security of being able to enjoy higher earnings and a bigger wage packet. The message is loud and clear: the Government want people and businesses to succeed, but while we want the regulation of business to be as low as possible, there is a responsibility on employers, as part of that social contract, not to expect taxpayers to subsidise low wages.

The Government were elected in May because of the prospectus we presented to the electorate, which focused on the future. The Bill continues the strategy that will deliver a more prosperous and more successful future. Only by continuing to focus on our businesses, our apprentices, our jobs and our industries can we deliver for Britain. That is what the Budget set out and what the Bill will achieve. The summer Budget and the Finance Bill build on the success of the past five years to secure a better future for Britain and for our constituents.

Greece

Mike Wood Excerpts

Monday 29th June 2015 Commons Chamber

[Mr Osborne]

To be fair to the Greeks, they have been quite preoccupied, but they have certainly not, to my knowledge, expressed any great opposition.

[Mike Wood (Dudley South) (Con)]

Would it not be devastating to the credibility of the eurozone if European institutions were seen to favour political considerations in relation to keeping Greece within the single currency ahead of basic economics?

[Mr Osborne]

I have always felt that good politics flows from good economics. Ultimately, what we all want to see are more jobs and investment in Greece and an economic policy that allows that to happen.