Budget Resolutions

Priti Patel Excerpts

Wednesday 22nd November 2017 Commons Chamber

[Priti Patel (Witham) (Con)]

It is a real pleasure to follow the hon. Member for East Dunbartonshire (Jo Swinson); this is the first time in a while that we have debated in the Chamber together.

I commend my right hon. Friend the Chancellor of the Exchequer for the Budget. From my ministerial apprenticeship at the Treasury three years ago, I recall the great efforts that the then Chancellor and the entire team made to put the Budget together, particularly as Ministers were lobbied constantly by a whole range of interests. It is, of course, a challenge to balance the needs with the responsibility to keep the public finances in good, sound, solid order. The Treasury should be commended for navigating those pressures and for continuing to put stability at the core of the Budget. Economic stability should rightly stand at the core of every Budget.

It is worth reminding Members, especially those on the Opposition Benches, of the progress that has been made in putting the public finances back in order after the appalling situation in 2010. Back then, the budget deficit exceeded £150 billion—more than our spending on health, education, policing and the armed forces. The level of public spending was financed by borrowing that was totally unsustainable. We know that the Opposition, who are chuntering away, never want to take responsibility for how they mishandled the public finances and love to point the finger of blame elsewhere, but it is a fact that before the financial crisis, the Labour Government racked up an eye-watering level of debt.

[Ian C. Lucas]

In 2010, the Conservative Government said they would eliminate the deficit by 2015. They were aware of the deficit at that stage, so why did they fail?

[Priti Patel]

The obvious answer is the scale of Labour’s economic mismanagement. The hon. Gentleman will recall that his party’s 2008 Budget planned for a £43 billion deficit, which is more than all the revenues raised in excise duty. That says everything we need to know about Labour’s financial economic management.

[Mr Mitchell]

Does my right hon. Friend not think that the Opposition have a brass neck to intervene on her in that way? They criticise the Government for not cutting the deficit faster, yet on every single occasion when they have been invited to support the deficit-cutting strategy they have voted against it.

[Priti Patel]

My right hon. Friend is absolutely right. On many occasions since 2010, the Labour party has not only not supported the Government’s approach on deficit reduction, but failed to vote to support policies to reduce the deficit and bring sound financial economic management back into our public finances. We have come a long way on bringing the deficit down and understanding the reasons why sound financial management matters. We need money to be available to invest in our public services. We need an economy that embraces enterprise, which brings in the tax receipts to pay for hospitals, schools, police and the armed forces. Today’s Budget absolutely recognises that fundamental point.

We have heard criticism in the debate about the NHS. Our NHS is a great institution. It is right that the Chancellor has today committed more public funds— billions—to the NHS. As an Essex Member of Parliament, I am delighted to see new support and capital investment in the NHS. Frankly, for 13 years under Labour, health services in Essex went backwards and suffered from underfunding. My right hon. Friend the Member for Sutton Coldfield (Mr Mitchell) is right to say that Labour Members have a brass neck criticising the work we have been doing and the investment we have made.

One great success since 2010 is the record level of job creation in our economy. Like many of my right hon. and hon. Friends, I recall sitting through these debates from 2010 onwards hearing doom and gloom and scaremongering from the Labour party, with outlandish claims about unemployment and recession. As we know, those predictions proved to be completely wrong. In today’s Budget, we heard about greater investment in key sectors going forward. We know we have to think about the future of the labour market. Automation will be coming in, and we need to consider how we can invest in construction and key services.

[Geraint Davies]

Does the right hon. Lady not recognise that under the Labour Government the economy grew by 40% in the 10 years to 2008? The Conservative Government have doubled debt from 45% to 90% of the economy and we have the lowest growth in the G7. Surely that is not a success.

[Priti Patel]

In my constituency, the claimant count has fallen by 70% from its peak under Gordon Brown, and there has been a 17% growth in small enterprises. That means more jobs for my constituents and the county of Essex. We should welcome that, rather than talk it down.

[Charlie Elphicke]

Can my right hon. Friend recall an occasion when the Labour party talked up the economy, or is it always about more spending, more borrowing, more debt and more benefits and taking the country back to the brink?

[Priti Patel]

My hon. Friend is absolutely right. We have 32 million people in work and unemployment at a record low, and Opposition Members talk our country and our economy down. They seem to have a pathological hatred of enterprise, aspiration and free markets. They call for higher taxes on businesses, which only serve their agenda to tighten controls on the free market, stifle innovation and stop businesses succeeding. As we know, that is exactly what would harm the economy in the long run.

As we have seen in the Budget today, great Conservative Budgets support aspiration, opportunity and freedom. That is why the Conservative party has always been on the side of people who work hard and want to get on in life and own their own home. The Budget makes welcome changes to stamp duty to help people get on the property ladder: 95% of first-time buyers will now benefit and 80% will pay no stamp duty at all. That is the right action to support home ownership and increase supply through the investment announced in the Budget.

I stress to my right hon. and hon. Friends on the Front Bench the importance of ensuring investment in infrastructure around new housing from private as well as public sources. In Essex, we have been working assiduously to secure investment from the Government in a passing rail loop north of Witham and the upgrading of the A120—critical investments that will promote and support house building in that part of Essex—and also to ensure greater private funding, including from innovative financial products, to reduce the risk to the public purse and to secure more private sector contributions to deliver critical infrastructure.

As we plan for our exit from the EU on 29 March 2019, it is right that the Budget has set us on a course to make the most of the long-term opportunities that Britain will have. Of course, that means being a global beacon for free trade, a place that welcomes investment from overseas and enterprise, and finding ways to unlock the talent in this country.

I again welcome the new investment that my right hon. Friend the Chancellor announced in terms of skills, critical sectors and investing in people. There are fantastic opportunities not just for the City of London but for our country, and plenty of reasons to be optimistic when it comes to trading with the rest of the world and growing our economy. We must look outwards rather than inwards. This is a Budget that will facilitate a positive international vision for Britain. That is how we will be judged in the years ahead. It stands in marked contrast to the policies of the Labour party, which wants to tax more and thereby harm our country and our economy. Most importantly, however, this Budget lays the foundations for a Britain fit for the future.

Welfare Reform and Work Bill

Priti Patel Excerpts

Tuesday 27th October 2015 Commons Chamber

[Peter Dowd]

It is often my lot to be well down the batting order, although I prefer bowling.

Until last night, when they were fortunately brought down to earth by the other House, the Government were pushing on with their tax credit proposals. They are still pushing on with them, despite the fact that the Chancellor is, he tells us, in listening mode, and the fact that there is no palpable or sustainable action to move to a higher-wage economy. They are tinkering at the edges. This proposal affects working mums; as I said earlier, 70% of the burden is falling on them. It affects low-income families. It damages work incentives, despite what the hon. Member for Louth and Horncastle (Victoria Atkins) said. It affects the working poor. It will have a dire effect on those with chronic illnesses, particularly with mental health problems.

The question we have to ask is whether this proposal will make work pay and help people back into work. Many say no. Some have suggested alternatives for where the extra funding can be found. I am not saying whether I agree or disagree with them, but it gives the lie to the claim that there are no alternatives. Despite issues of phased implementation, inheritance tax, relocation of planned spending on the personal allowance, marriage allowance changes, help with childcare costs, working tax credit and universal credit, there is still no guarantee of higher wages.

The provisions on ESA and the WRAG were introduced specifically to assist with support for disabled people who were assessed as not being fit for work according to the Government’s own assessment regime. Some people, such as those with chronic mental health problems, find it difficult to work. The Work programme has supported only 9% of participants on ESA with mental and behavioural disorders into sustained employment. We have parity of esteem, but not for those on welfare. Support for those people has to be tailored to their needs. There can be a slow journey back to health. People need advisers with particular skills and they are not getting them, so how do they possibly get back into work?

As for the sanctions regime, a Church group in Scotland identified that 100,000 young people were affected by sanctions, that they were being debilitated by them and that the sanctions undermined their humanity. Yes, sanctions have existed since 1913, but they have to be humane and those under discussion are not.

[The Minister for Employment (Priti Patel)]

We have had a long and interesting debate on a range of amendments. I thank every colleague who has contributed to it, particularly my hon. Friends the Members for Faversham and Mid Kent (Helen Whately), for Beverley and Holderness (Graham Stuart), for Weaver Vale (Graham Evans), for Stafford (Jeremy Lefroy), for Bury St Edmunds (Jo Churchill), for Chippenham (Michelle Donelan) and for Louth and Horncastle (Victoria Atkins).

Given that time is short, I will speak very briefly to some of the amendments. On amendments 35 to 48, we introduced the benefits cap in order to increase work incentives, to promote fairness between those in work and those on benefits, and to not only help to address the deficit but to support people back to work. The benefits cap has been a key part of our reforms to the structure of the welfare system and to attitudes towards getting back into work.

It is clear from the evidence that the cap is working. Since the cap was introduced in 2013, more than 6,000 previously capped households have moved into work and more than 41% of capped households are likely to go into work. That trend did not exist before the cap, and those with higher weekly benefit payments used to be less likely to move into work. We have had some great results and we intend to build on them and to align the cap with the circumstances of many hard-working people throughout the country. We firmly believe that the new, tiered benefit cap will continue to build on those successes and that it will do more to improve work incentives throughout the country while promoting greater fairness when it comes to work and employment.

There was an extensive debate on amendments 56, 20, 57 and 31 on universal credit and the employment support allowance. The removal of the work-related activity and limited capability for work component will apply only to new claims. There will be no cash losers among claimants already receiving the rate, and clauses 13 and 14 do not affect the support group component.

In 2008, when the then Labour Government introduced ESA as a “radical reform package”, the work-related activity component was originally intended to act as an incentive to help people into work and to return quickly to work. However, the original estimates were incorrect and only 1% of people in the work-related activity group left the benefit each month. It is clear, therefore, that the existing policy is not working and that it is failing claimants.

As discussed in Committee and this afternoon, we believe that it is the duty of Government to support those who want to work to do so, particularly those with disabilities and health conditions who want to work, including the majority of ESA claimants. We know that 61% of those in the WRAG want to work. We will do everything we can to support them in that ambition, and it is right that we do so.

Universal credit supports people with small or fluctuating amounts of work. That is why it is particularly helpful that we look at the ESA component and universal credit together. It is that alignment that will help to bring people closer to work while tailoring the support they need to move into work. As part of the package of savings in the summer Budget, the Government were able to allocate new spending to ESA that would not otherwise have been available. That support is now funding up to £100 million per year to help claimants with limited work capability but who have potential, because they want to move into work, to get closer to the labour market. We will provide all the support necessary to make sure that they can get back into work.

Comments have been made about work coaches and jobcentres. May I reassure the House that all work coaches are trained to help claimants and that that is not based on the benefit they are on, but, importantly, on the actual support they require? That is particularly true for universal credit. The training for staff working with ESA claimants focuses on raising awareness of their individual circumstances and recognises that disability and health conditions affect individuals in different ways. Such factors change over time but, importantly, we will support claimants in their journey to get back into work.

We have had a debate about sanctions. Of course sanctions exist for a reason. Importantly, however, they also exist to support people into work. I recognise that many Members from both sides of the House have specific cases to which they have referred. I again extend my offer to look into such cases. The Government keep the operation of sanctions under constant review. We have clearly made a number of improvements to sanctions, including in relation to the Oakley review. Last week, we gave a very clear response to the Work and Pensions Committee report. Our response outlined the work that the Department has already undertaken to review the sanctions system and the changes we intend to make. The response was welcomed by the right hon. Member for Birkenhead (Frank Field), the Chair of the Select Committee.

Our response to the Committee includes the announcement that we will trial a sanctions warning system, which will give claimants a further opportunity to work with jobcentre work coaches to provide evidence before a sanction is applied. We will consider extending the definition of at-risk groups for hardship purposes, including those with health conditions—particularly those with mental health conditions—and those who are homeless, which means that they can seek access to hardship payments from day one of the sanction.

We want the sanctions system to be clear, fair and effective in promoting positive behaviours. Importantly, however, it should also support individual claimants, which is why we will continue to keep the system under review. I will make it very clear: there are no targets for sanctions, a point made on the Floor of the House this afternoon. I say to the hon. Member for Bishop Auckland (Helen Goodman) that she was wrong in her remarks not just about sanctions but about employment levels in this country and clearly about the economy.

On new clause 3, I thank my hon. Friend the Member for Beverley and Holderness, the hon. Member for Bermondsey and Old Southwark (Neil Coyle)—he was consistent in making points in Committee—and my hon. Friends the Members for Bury St Edmunds, for Gloucester (Richard Graham) and for Weaver Vale for their contributions. The PIP assessment is designed to treat all health conditions and impairments fairly. I assure all hon. Members that we consider the needs of those who are terminally ill in developing the assessment, and that we absolutely remain committed to providing support to disabled people and those with illnesses in all their circumstances. We know that such claimants, especially those who are terminally ill, have particular challenges.

I listened to all the contributions in Committee. As the hon. Member for Bermondsey and Old Southwark knows, I am meeting him tomorrow, with the hon. Member for Sheffield Central (Paul Blomfield), to discuss this matter further. I look forward to working with him on the points he has made, as well as on those expressed by my colleagues. The hon. Member for Bermondsey and Old Southwark was right to refer to the fact that rules have been introduced to ensure that the PIP system handles terminally ill claimants efficiently and sensitively, reducing the need for face-to-face assessments—we discussed that at length in Committee—and the degree of intrusion on claimants and their families, while, importantly, focusing on delivering vital support to claimants as quickly as possible.

It is very clear, as we discussed in Committee, that the Government are focused on rolling out PIP in a very safe and steady manner, ensuring that the claimant experience is protected and that the PIP system is as straightforward as possible for the user, particularly those who are terminally ill. PIP has been and will continue to be subject to independent reviews—we have committed to that in legislation—which, as ever, will help us to make continued improvements to what is a dynamic benefit. We are fully committed to ensuring that there is a positive evidence base for all changes that we make and that users understand their impact so that we can deliver the best possible service for claimants.

We will continue to work with all hon. Members, as I have said in Committee and this afternoon, as PIP is rolled out. I will continue to work with colleagues and to take on board their points. I thank them for their valuable contributions. The hon. Member for Bermondsey and Old Southwark has expressed some concerns, but I will take away his points for our meeting. I look forward to taking forward such considerations.

In summary, the Bill brings forward important changes that are designed to create the right incentives within the welfare system, and I urge hon. Members to withdraw their amendments.

--- Later in debate ---

[Priti Patel]

I beg to move, That the Bill be now read the Third time.

The Bill, alongside other measures, including the national living wage and the increase in the personal allowance for income tax, will ensure that the welfare system is fair to taxpayers while supporting the most vulnerable. It will help ensure that work always pays more than life on benefits. It will continue to build an economy based on higher pay, lower taxes and lower welfare.

[Ian Lavery]

As a result of these measures, people receiving family tax credits will lose up to £1,300 per annum and 200,000 more children will be pushed into poverty. Can the Minister explain how that is fair?

[Priti Patel]

I thank the hon. Gentleman for giving me the opportunity to respond once again on that issue and to make the case that, first, it pays to be in work, and secondly, through our package of measures, including the national living wage, the increase in the personal allowance and the extra support for tax-free childcare, families will be supported through the changes we are making. That contrasts with the system we inherited from Labour in 2010, which was not fair to the hard-working taxpayers who paid for it, and certainly did not support people trapped in a system of welfare, with no hope for a brighter future. That is why we are continuing to reform welfare so that work pays in the United Kingdom.

After 13 years in government, Labour left a welfare system that failed to reward work. Between 1997 and 2010, spending on tax credits increased by 335%, compared with an increase in average earnings of just 30% over the same period. Despite all the spending, 1.4 million people spent most of the last decade under Labour trapped in out-of-work benefits. [Interruption.] That is not a ridiculous point to make. Over the same period, the number of households in which no member had ever worked nearly doubled and in-work poverty rose, yet Labour has opposed every decision we have taken to fix the welfare system and support people off welfare and into work.

Our welfare reforms are focused on transforming lives by helping people to find and keep work. We are focused on boosting employment and ensuring fairness and affordability, while supporting the most vulnerable, and on making sure that people on benefits face the same choices as those not on benefits and in work. Over the past five years, 2 million more people have entered employment, while 2.3 million people are now in apprenticeships and the number of workless households is at a record low—down by more than 680,000 since 2010. This was achieved in the last Parliament, when welfare spending increased at the lowest rate since the creation of the modern welfare system.

[Mr Burrowes]

The Bill delivers on our ambitious manifesto commitment to halve the disability employment gap, but we need to be held to account for the progress we make, so will the Minister outline how, through the reporting mechanisms in the Bill, we can show we are delivering on that commitment and build on the good progress we have already made in helping over 200,000 more disabled people into work?

[Priti Patel]

My hon. Friend is right about the Government’s clear desire to support more disabled people into employment, and as we discussed in Committee, we will strive continuously to fulfil that commitment. I can assure him that in everything we do, including through the £100 million of investment to help people with disabilities and health conditions—something that Labour did not do in government—we will share information with the public and report back to the country on our progress. The Government stand by the principle of encouraging and rewarding work, and the Bill builds on that success.

Naturally, we want more people to have the dignity of a job, the pride that comes with earning a pay packet and, importantly, all the wider advantages that come with employment. All those who want to enter employment and contribute to the growth of our economy should be supported to do so, which is why we are committed to full employment. The Bill will support that commitment with a statutory duty to report on our progress towards full employment and our ambition to deliver 3 million new apprenticeships. In addition, it will put in place a statutory duty to report on our progress in supporting troubled families with multiple, highly complex problems, including in helping them to move closer to work. It will encourage parents into work and support those trapped on benefits without the opportunity to move into work, such as those with health conditions or disabilities in particular. As my hon. Friend the Member for Enfield, Southgate (Mr Burrowes) rightly highlighted, we will support them into work.

As a one nation Government, we believe that everyone in the country should have the chance to benefit from the security and sense of purpose that comes from being in work. Work provides purpose, responsibility and, in particular, role models for children, yet getting people into work is about more than earning a salary. Growing evidence shows that work can help people to remain healthy and help to promote recovery where somebody falls ill. It is right, therefore, that we look at how the system supports people with health conditions into work. We know that 61% of those in the work-related activity group want to work, but only 1% come off benefits each month. The system has failed them, and financial disincentives have left them trapped on benefits.

As we discussed in Committee and on Report, the changes in the Bill will apply to new ESA claims and universal credit from April 2017. This will enable us to provide significant new funding for additional support to help claimants with health conditions and disabilities into work and to transform people’s lives. Furthermore, we are providing £60 million of funding in 2017, which will increase to £100 million a year by 2020. That will be direct support to get people into work and provide new employment opportunities for those who want to work but have been unable to do so. We recognise the long-term conditions that some people face and will support them back into work.

[Jeremy Lefroy]

That help into work is absolutely vital, but what would the Minister say about those who have been in the work-related activity group for one or two years, or perhaps even longer, and who are unable to get back into work, however hard they try? New claimants will not have that work-related activity group component.

[Priti Patel]

We recognise that there are people who cannot work, as a result of illness, and they will be in the support group. They will absolutely be supported in that group, as is right and proper.

It is our responsibility to ensure that the welfare system is affordable and sustainable. Those on the Opposition Benches who oppose our making difficult decisions on welfare must say what they would cut or which taxes they would put up to pay for their proposals. The Bill will correct many of the unaffordable and disproportionate increases in benefits compared with earnings by freezing most working-age benefits. As we have said throughout the passage of the Bill, this will protect taxpayers from the cost of subsidising increasing social housing rents through housing benefit. Those rents have climbed by 20% since 2010, but we will now act to reduce them by 1% a year for the next four years.

The Bill will continue to restore fairness to the system. We do not think it is fair that someone on benefits should receive more than working households earn, and 77% of the public agree. The benefit cap reintroduced fairness. Reducing the benefit cap to £20,000—and to £23,000 in Greater London—reinforces and strengthens that message. The new cap better aligns the level with the circumstances of hard-working families across the country.

[Paul Scully]

Does the Minister agree that, as well as providing a fairer deal for the taxpayer and introducing a fairer, more sustainable system in order to help to pay off the deficit, this programme will help to encourage, nudge and support people back into work? Is that not better than just wringing our hands?

[Priti Patel]

My hon. Friend is absolutely correct. That is the whole purpose of what we have been doing through our welfare reforms. We are putting people first and providing the support they need to get back into work, in contrast to what we saw during the 13 years of the Labour Government, when people were trapped on benefits in a cycle of dependency, and trapped in poverty while having opportunities denied to them.

This Government are committed to working to eliminate child poverty and to improving life chances. Our new approach focuses on transforming lives, which is what the Labour Government failed to do through their arbitrary measures on poverty. We will tackle the root causes of poverty rather than focusing on the symptoms, as existing measures do. We saw the previous Labour Government’s pursuit of short-term, narrow and expensive policy solutions that attempted to lift incomes above an arbitrary line. They increased welfare spending by 60% in real terms—[Interruption.] That is a fact. They increased spending in an attempt to chase that moving poverty line, without driving any sustainable improvements in children’s lives.

In contrast, the Bill will place a duty on the Government to report annually on the key measures of worklessness and educational attainment. In these new life chances measures, we will focus on the root causes of poverty, rather than on the symptoms. That approach has been seen to fail—[Interruption.] The hon. Member for Islington South and Finsbury (Emily Thornberry) can shout all she wants, but these new measures will drive real actions and make the biggest difference to disadvantaged children now and in the future. We have also committed to publishing a life chances strategy—[Interruption.] What is embarrassing is that during 13 years, the Labour Government systematically failed to deal with the root causes of poverty or to change people’s lives by getting them back into work.

[Imran Hussain (Bradford East) (Lab)]

Will the Minister give way?

[Priti Patel]

I will not give way.

We are committed to publishing a life chances strategy, which will set out a wider set of measures on the root causes of poverty such as family breakdown and the problems of debt, drug addiction and alcohol dependency. We will report to the House on those measures annually. We are absolutely committed to protecting the most vulnerable in society, and the Bill will continue to ensure that the welfare system will support the elderly, the vulnerable and disabled people. We are exempting pensioner benefits, and benefits relating to the additional costs of disability, from the freeze on working-age benefits. We are also exempting the most disabled people from the benefit cap.

I would like to thank all Members on both sides of the House for their contributions on the Bill and on the other important issues that have been raised in our debates in Committee and on the Floor of the House. A number of amendments have been passed so that support for mortgage interest and social rented sector policies are delivered as intended. In the case of the social rents measure, we have been able to reflect comments made to the Government by the social housing sector. We have also added a clause that will enable the Government to recover the expenses they incur from administrating benefit diversions for the Motability scheme. As we agreed on Report, the wishes of the Welsh and Scottish Governments are now also reflected in the life chances measure.

This Bill will establish the principle of economic security, and will ensure that the welfare system is fair to taxpayers while continuing to build an economy based on higher pay, lower taxes and lower welfare. I commend the Bill to the House.

Environmental Taxes

Priti Patel Excerpts

Wednesday 25th March 2015 Written Statements

[The Exchequer Secretary to the Treasury (Priti Patel)]

Over the Parliament this Government have introduced reforms to the tax system to make it more competitive, simpler, fairer, and greener. As part of this, in May 2010 Government committed to increasing the proportion of tax revenue accounted for by environmental taxes.

In 2012, the Government published their definition of environmental taxes which set the baseline for achieving that commitment. This statement provides an annual update of the Government’s progress against that commitment, using the independent OBR forecasts published alongside the Budget.

The Government classify environmental taxes as those that meet the following three principles:

The tax is explicitly linked to the Government’s environmental objectives; and

The primary objective of the tax is to encourage environmentally positive behaviour change; and

The tax is structured in relation to environmental objectives—for example: the more polluting the behaviour, the greater the tax levied.

The Government have defined the following as environmental taxes based on these principles:

Climate change levy

Aggregates levy

Landfill tax

EU emissions trading system (EU ETS)

Carbon reduction commitment energy efficiency scheme

Carbon price floor

The OBR forecasts demonstrate that the coalition remains on track to achieve its commitment to increase the proportion of revenue accounted for by environmental taxes.

Finance (No. 2) Bill

Priti Patel Excerpts

Wednesday 25th March 2015 Commons Chamber

[The Exchequer Secretary to the Treasury (Priti Patel)]

It is a great pleasure to close this debate on Second Reading. I would like to thank everyone who has spoken for their contributions, particularly the hon. Member for Edmonton (Mr Love), who has served this House with such distinction. I wish him well. We have had an interesting debate. I should like to set it in the context of the Chancellor’s Budget last week.

A number of points about living standards have been raised. I reiterate that living standard will be higher in 2015 than they were in 2010, real household disposable income per capita will grow at its fastest rate since 2001 and, according to the Institute for Fiscal Studies, families are now set to be £900 better off this year than they were previously. That is all in line with our plan to fix the British economy, take us out of the dreadful mess we inherited back in 2010 and, quite rightly, give the British public the recovery they deserve.

The Bill marks the next step in that plan. It puts more money in people’s pockets, delivers further growth and puts fairness, which has been mentioned, at the heart of our recovery. We continue to put fairness at the heart of the recovery through our increase in the personal allowance. We will take people on the national minimum wage and working up to 30 hours a week out of income tax altogether by 2017. That is about rewarding work and raising living standards, which is what this Government stand for.

I will address a number of points that have been raised. The hon. Member for Edmonton spoke about £5 billion in tax avoidance. To answer his question, yes, it is a realistic achievement to bring in the revenue that has been spelt out. There is no reason to doubt that the Government can raise the figures we have already announced, so we will proceed with that. On the point about the tax code, we established the Office of Tax Simplification in 2010, and the Bill includes a number of measures that build on its recommendations.

Points were also raised about oil and gas. The Bill introduces radical measures to support the oil and gas industry, giving investors long-term certainty. We have been working very constructively with the industry to ensure that the package will provide it with the right fiscal environment.

On clause 12, which the hon. Member for Nottingham East (Chris Leslie) mentioned, the exemption will not apply where expenses are paid under a salary sacrifice arrangement. That will stop employers artificially lowering their national insurance contribution bills by replacing some of their employees’ salaries with expenses.

Clauses 13 and 14 implement recommendations set out by the Office of Tax Simplification. On clause 20, which relates to gift aid, more details will be set out in regulations, which of course will improve donor understanding of tax to cover. On clause 28, I should like to reassure the hon. Gentleman that it applies to expenditure on consumable items only if the item is transferable in the ordinary course of the relevant person’s business.

Flooding was mentioned. In the spending review the Government committed an unprecedented £2.3 billion to tackle flooding and coastal erosion. In addition, clause 35 supports business contributions to alleviate the impact of flooding.

The hon. Gentleman also mentioned clause 29, which sets out film tax relief opportunities. The structure of the current relief is completely different from that introduced under the previous Government’s scheme, which was prone to abuse, so there are no issues of avoidance in this case. He also mentioned zero-emission bands. Stakeholders have asked for rates to be announced four or five years ahead, and the Government have been committed to announcing rates three years in advance, which is why we have done so.

Let me move on to the whole issue of tax avoidance. The UK is demonstrating further leadership by implementing the diverted profits tax, which is also consistent with the principle of aligning taxing rights to economic activity. The Bill quite rightly ensures that everybody contributes fairly to the Government’s long-term economic plan. During this Parliament, Her Majesty’s Revenue and Customs has secured £100 billion in additional revenue, thanks to this Government’s avoidance and evasion policies. Over a third of the Bill’s provisions will enact measures that go even further in tackling avoidance and evasion, including new measures on corporation tax and offshore evasion and avoidance and, of course, increases in the bank levy. That will raise nearly £8 billion more over the next five years, helping to reduce the deficit and strengthen the country’s economic recovery.

The Bill will help households up and down the country with the cost of living, make the country even more competitive internationally and, through the tax avoidance and evasion measures that we are putting in place, ensure that everyone pays their fair share of tax. The Bill marks the next step forward in our long-term economic plan, and I commend it to the House.

Question put and agreed to.

Bill accordingly read a Second time; to stand committed to a Committee of the whole House (Order, 24 March).

Budget Resolutions and Economic Situation

Priti Patel Excerpts

Friday 20th March 2015 Commons Chamber

[The Exchequer Secretary to the Treasury (Priti Patel)]

I pay tribute to all right hon. and hon. Friends and Members who have spoken in this debate. Some of them have spoken for the last time, and we should note their distinguished service. Their contributions will be missed in the next Parliament. I will particularly miss their wisdom and guidance

This is a Budget that rewards hard work, cuts taxes for millions of people and empowers families and businesses. It gives people more incentives to save and greater choice over how they spend their savings and pensions. It is a Budget based on a long-term economic plan that is working. It is a plan that is growing our economy and providing a better future for our country; that has given more people the chance to get on in life, with record numbers of people in employment; and that is providing more security for the long term, with the deficit down and our national debt starting to fall as a share of the economy.

Five years ago, our economy had suffered a collapse greater than that seen in almost any other country. Today, alongside jobs, growth, new business start-ups, new housing zones, enterprise zones, support for savers and for people who aspire to own their own homes, we have lower inequality, child poverty down, pensioner poverty down to record lows, the gender pay gap smaller than ever, and the number of students from disadvantaged backgrounds at university at a record high. The stability that we have put in place has taken Britain from austerity to prosperity.

Listening to the contributions of Opposition Members, I was struck by their complaining that the economic recovery is not taking place fast enough in their eyes. I have heard their message, but it was they who crashed the British economy. It was on their watch that the debt-fuelled economy was created, that manufacturing halved as a share of the national economy and that the gaps between the north and south and between the rich and the poor grew ever larger. Yet their complaint is consistent: the Government are not fixing their appalling legacy fast enough.

This afternoon, we have heard, from constituency to constituency—from Newcastle upon Tyne East to Croydon North to Blaenau Gwent to Luton South to Islington South and Finsbury to Poplar and Limehouse—from Labour Members who have opposed every single measure undertaken by this Government to put us back on the path to recovery. Let me respond to some of the points that have been made in this wide-ranging debate.

Housing came up consistently. Since 2010, more than 200,000 affordable homes have been delivered. Council house building starts are at their highest level in 23 years. In the year to December 2014, 250,000 new homes were granted planning permission. In London alone, £1.1 billion has been provided to the Greater London authority to deliver affordable housing zones. Labour Members may complain, but their complaints are actually a demonstration of the failure of Labour local authorities to deliver housing.

[Emily Thornberry]

Nonsense!

[Priti Patel]

Actually, it is not nonsense. It is a failure on the part of Labour.

[Emily Thornberry]

Will the hon. Lady tell us how many affordable homes the Mayor of London has built in Islington? I do not mean homes at 80% of market rent; I mean truly affordable homes that have been built by the Mayor of London in Islington. If she has that figure, she will realise that what she has been saying is nonsense.

[Priti Patel]

I will correct the hon. Lady. It is not nonsense. The money has gone to the Greater London authority to deliver affordable new homes. She said that the Help to Buy ISA would not help her constituents. It is projected to help 190,000 people in London buy their first home over the next five years. Of course, the average first-time buyer is a basic rate taxpayer.

We have heard complaints that the North East combined authority is not doing enough. Let us be clear: more people are employed in the north-east then ever before. We have heard about Croydon. There has been £7 million of funding in Croydon and the GLA is delivering 4,000 new homes and 10,000 new jobs. Those are positive and proactive measures that are transforming people’s lives.

When it comes to job creation and job growth—

[Mr Anderson]

Will the Minister give way?

[Priti Patel]

The hon. Gentleman will recognise that I do not have time to give way.

In every single region of the United Kingdom, unemployment has fallen over the past year. We should put to bed the desperate myth of the Labour party that the new jobs are somehow second-tier jobs. That is an insult to the British public. Some 80% of the jobs are full time and 80% of them are in skilled occupations. Each and every one of them represents one more person standing on their own two feet. The Budget delivers for every single region of our great nation, whether it is by helping manufacturing in the midlands, connecting the south-west or growing the economy.

I would like to pay tribute to a number of Government Members. My right hon. Friend the Member for Bexhill and Battle (Gregory Barker), my hon. Friend the Member for South Suffolk (Mr Yeo), my right hon. Friends the Members for Somerton and Frome (Mr Heath), for Havant (Mr Willetts) and for Uxbridge and South Ruislip (Sir John Randall), my hon. Friend the Member for Bury St Edmunds (Mr Ruffley), my right hon. Friends the Members for Banbury (Sir Tony Baldry) and for South East Cambridgeshire (Sir James Paice) and my hon. Friend the Member for South Thanet (Laura Sandys) are all distinguished Members who have made substantial contributions to the House and to this afternoon’s debate. They covered some of the key Budget points that affect their constituencies. They drew on their expertise from their time in the House or from their time as Ministers to speak in detail about infrastructure, energy, jobs, education and higher education.

My right hon. and hon. Friends also spoke about the prudent financial management that this Government have introduced through our long-term economic plan. It is this Government who have set out long-term economic plans for every region in the United Kingdom. It is this Government who are committed to investing in the whole of the United Kingdom. It is this Government whose long-term infrastructure plan is connecting our regions.

My hon. Friend the Member for Milton Keynes South (Iain Stewart) mentioned the housing growth and infrastructure growth in his constituency. I will come back to him on the personal pension allowance, which he asked me to do. We are allowing the local leaders in our communities to make the key growth-delivering decisions in their areas, rather than making top-down decisions from the centre. We are recovering from the worst recession since the second world war. We are turning the country’s finances around, improving the lives of hard-working families, and putting more of people’s hard-earned cash back into their pockets where it belongs. We are increasing living standards, with real household disposable income revised up to increase by 3.7% this year, and to keep on rising—[Interruption.] As ever, the Labour party sneers when it comes to discussing living standards and household incomes. [Labour Members: “What?”] Well, let us be clear: the best way to improve living standards is to get people back into work and boost productivity and growth. This Government have delivered the highest levels of employment ever. Unemployment is down to 1975 levels—it has fallen at its fastest and was down by just under 500,000 in the year to December 2014. We are putting Britain back on its feet, and this Budget marks a step in delivering prosperity to all corners of our country.

The choice our country faces is between returning to the economic chaos that Labour Members were part of under the previous Government, or sticking to the long- term economic plan that will deliver for the constituents of the hon. Member for Islington South and Finsbury (Emily Thornberry) and every Member of this House. In this Budget we choose the future and are taking another big step on the road to a stronger economy.

As I close this debate I thank all hon. Members for their contributions this afternoon, and in particular I send—[Interruption.] I hoped for a degree of courtesy and civility at this point. I send my best wishes to all right hon. and right hon. Members who have made their last contributions in the Chamber today. I thank you, Madam Deputy Speaker, for your time overseeing debates and the civil way you have handled them, and I commend the Budget to the House.

Ordered, That the debate be now adjourned.—(Greg Hands.)

Debate to be resumed Monday 23 March.

Bankers’ Bonuses and the Banking Industry

Priti Patel Excerpts

Wednesday 25th February 2015 Commons Chamber

[The Exchequer Secretary to the Treasury (Priti Patel)]

I thank all Members who have contributed to this debate, which has been quite wide-ranging; it even became a debate on the north-east region at one point. I commend my hon. Friends the Members for Hexham (Guy Opperman), for Redcar (Ian Swales), for Dover (Charlie Elphicke) and for Warrington South (David Mowat) for their speeches. I particularly commend my hon. Friend the Member for Hexham, who made a very thoughtful and considered speech about the changes made by the Government through the banking reforms. He also highlighted the role of challenger banks and his own commitment to that through his work locally. He is clearly a champion not just for his constituency and region but for challenger banks, and that is to be commended.

I think it is fair to say that we all agree that the banking scandals that have emerged in the past years have been disgraceful, and we have shown that consensus during this debate. They have, without a doubt, shaken public trust in a proud British banking history, and revealed pockets of rottenness at the heart of the banking system. The country is understandably angry about the reports of practices, behaviour and conduct that have become legendary in the banking scandals of recent years.

[Mr Graham Stuart]

Will my hon. Friend give way?

[Priti Patel]

I will not because of the time, if my hon. Friend will accept that.

We can never go back to the bad old contaminated days when the culture in the banking sector was so wrong. That is why the actions taken by this Government, which were long overdue, and neglected by the previous Government, will ensure that the system and the sector never go back to those bad old days. The core action that has been undertaken to tackle misconduct has been pure reform on misconduct and clearing up remuneration. The reforms have ensured that we have the toughest remuneration regime of any major financial sector. Through the Government’s reforms, we have ensured that rotten behaviour in the sector will be punished. We have heard about criminal sanctions today.

The overall contribution of the sector is hugely important to the country’s economy, but we must ensure that we reform its reputation and conduct, and change the culture to bring probity and integrity back into a system that was challenged and flawed. Back in 2010, we had a banking system that had no connection between performance and remuneration, and that rewarded, and was dominated by, excessive risk taking. There was no accountability for losses. It was a sector where wrong practices and the wrong culture had become institutionalised, and, more disgracefully, where people who should have known better turned a blind eye and looked the other way.

Like any responsible Government, our job is to bring back measures and laws, and a regulatory framework, that were sorely lacking in the past to ensure that the financial sector regains its reputation, while stamping down on the reprehensible behaviours of the culture that the country witnessed in the past. This Government have brought in reforms, transparency, a regulatory framework, and the ability to make sure that those who did wrong would not go unpunished. We have made reckless misconduct leading to bank failure a criminal offence. We have strengthened the accountability of senior management and the powers of the regulators. We have increased choice and competition in the retail banking sector to help create a sector that genuinely puts consumers first and brings through the regulatory changes that are required.

That also means clamping down on unacceptable pay practices. We have heard plenty of references to that throughout the debate. Hon. Members spoke about remuneration in two banks in particular: RBS and Lloyds. The hon. Member for Bishop Auckland (Helen Goodman) asked for clarity on Lloyds. This week, we announced that we are getting another £500 million back for the taxpayer, which is money that we have put in and are now taking out. We can do that because, since the crisis, Lloyds has gone from failure to being a strong and profitable bank that is helping to drive the recovery. The bank contributes £238 million per year through the bank levy. It will have its bonus pool reduced this year, and we are continuing to restrict its cash bonuses to £2,000. It is absolutely right to ensure that the culture is completely reformed.

Both the hon. Lady and my hon. Friend the Member for Hexham mentioned not only challenger banks, but the issue of financial exclusion. I want to pay tribute to organisations such as challenger banks and credit unions. I spend a lot of time in my constituency of Witham at the Holdfast credit union, which does so much for those who are excluded.

Through our reforms, we are ensuring that banks that need to be punished are punished. The reforms have led to greater disclosure and transparency, and we have also reformed bonuses. We are consulting on the recommendations of the Parliamentary Commission on Banking Standards to strengthen the rules further. There is no doubt that actions speak louder than words, and we have taken action.

The EU bonus cap, which has been mentioned, would not control bankers’ pay. It would push up fixed pay, and make it difficult to claw back bankers’ earnings when things go wrong. It would weaken financial stability and ultimately make it more likely that the taxpayer, rather than the banker, paid the cost of any mistakes. Unfortunately, that has already started to happen and the cap remains fundamentally flawed, but we are willing to draw a line under the issue, and the legal challenge has been withdrawn. Instead, we are looking at other ways of building a system of pay in global banking that encourages rather than undermines responsibility.

It is fair to say that bankers got it very wrong over a number of years. Regrettably, they are still getting it wrong, and several Members mentioned HSBC. Its chief executive, who is in front of the Treasury Committee this afternoon, has apologised for the failures and errors, which have been pushed out into the public domain. However, the reality is that the Government have taken action to sort out the mess.

The job is not over. We must continue to be firm in working with the regulators to stamp out malpractice. We should continue down the path we have set: linking pay and performance; making sure that failure is not rewarded; and ensuring accountability by our most senior managers. We should be proud of being the toughest major financial centre in the world on remuneration, but we should also be careful not to get carried away with the rhetoric and damage the competitiveness of one of this country’s most prized economic assets.

This Government have set the sector back on the right path, so I urge hon. Members to reject the Labour party’s motion. As Opposition Members have pointed out, the motion refers to job guarantees, but the best guarantee for jobs is to stick to the Government’s long- term economic plan, under which youth unemployment and unemployment have declined.

Question put.

Scotch Whisky Industry

Priti Patel Excerpts

Thursday 12th February 2015 Commons Chamber

[The Exchequer Secretary to the Treasury (Priti Patel)]

I congratulate the hon. Member for Argyll and Bute (Mr Reid) on securing this debate, and I thank him for the constructive points he has raised today. Anyone who has enjoyed a dram will recognise the historic whisky producing names in his constituency. Islay and Jura in the hon. Gentleman’s constituency has some of the finest malt whiskies in the world, and that is something that we should all commend, celebrate and be proud of. The world-famous whiskies and distillery experiences on offer are also key contributors to the tens of thousands of visitors who come over every year. I absolutely understand the significance of tourism in his constituency thanks to the whisky industry, which translates into jobs.

There is no doubt, as we have heard from both the hon. Member for Argyll and Bute and the hon. Member for Paisley and Renfrewshire North (Jim Sheridan), about the wider economic benefits of Scotch whisky to the Scottish and British economy. They are significant and have also been highlighted in the report by the Scotch Whisky Association. It is only fair and right that I should pay tribute to everybody who has spent time engaging with me, including all hon. Members in the Chamber this afternoon and the all-party group. In particular, I thank them for highlighting that Scotch whisky is the biggest food and drink sector in the United Kingdom, representing nearly a quarter of our food and drink exports.

The industry supports, both directly and indirectly, more than 40,000 jobs, 92% of which are in Scotland. The significance of the industry is phenomenal, with a contribution of in excess of £3 billion directly to UK GDP, and an overall impact of £5 billion.

Distilleries and visitor centres add an additional £30 million to the Scottish tourism industry every year. Of course, this is also about the tremendous image that the industry presents of both Scotland and the United Kingdom across the world. The hon. Member for Argyll and Bute talked about the export markets, and in particular the work of UK Trade & Investment, the work we do across Government to ensure that Scotch whisky is a major economic asset to Scotland and the UK, and why it is important that we keep it in its unique position.

For example, we have introduced the spirits verification scheme to protect the integrity and high reputation of Scotch whisky brands in the export market, which is where 90% of Scotch whisky ends up. It is about having high standards and setting standards on production and labelling for producers to sign up to. That particularly helps with non-compliance in the industry, ensuring that those who buy Scotch get the real deal. That is of course a step change and we have worked in conjunction with the SWA. The hon. Gentlemen will be very familiar with that work. Of course, UKTI has an important role to play in supporting Scotch whisky across our worldwide network of embassies and in bringing it to new and emerging markets, from Lebanon to India to Taiwan, all of which have seen exports increase by more than a quarter in the past year alone.

The hon. Member for Argyll and Bute was right to talk about the lobbying on the abolition of the hated duty escalator in the Budget last year. I campaigned for that myself, so I am familiar with the campaign. Of course, it demonstrates that we should not punish a successful, world-famous industry with excessive taxation. The all-party group on Scotch whisky and spirits has been very good in its representations and I thank it for that. It is fair to say that although I am naturally not in a position to discuss anything to do with the Budget at this stage, I have heard clearly from all Members this afternoon the arguments that have been made about the level of taxation on whisky, particularly when compared with other alcoholic drinks. Those points have come out in my meetings with stakeholders and the industry, too.

[Sir Peter Bottomley (Worthing West) (Con)]

I speak not as a producer but as a drinker of whisky, as are many of my constituents. The archivists at HMRC and the Treasury might be able to dig out the meetings some of us had with the then Chancellor, my right hon. and learned Friend the Member for Rushcliffe (Mr Clarke), back about 19 years ago, when he was convinced that it was better not to increase and to drop the whisky duty. That led to an increase in revenue, so was fair to drinkers, to producers and to the Revenue, which seems to be a sensible thing to do, and we look forward with confidence to the Budget.

[Priti Patel]

I thank my hon. Friend for his recommendations and advice to go back and look in the archives. I shall certainly do that.

I need no persuading of the considerable impact that the industry brings to Scotland and the United Kingdom. Obviously, all decisions on taxation are under constant review, and we are particularly receptive to helping industries flourish in some of our most remote regions. As I have said, decisions on the duty will be made by the Chancellor at the Budget, and I do not wish to pre-empt anything in relation to the Budget. We want to ensure that Scotch whisky continues to be enjoyed around the world for many years to come, and we want Scotch whisky to continue to be a great flagship brand.

Question put and agreed to.

Tax Avoidance

Priti Patel Excerpts

Wednesday 11th February 2015 Commons Chamber

[The Exchequer Secretary to the Treasury (Priti Patel)]

Like my hon. Friend the Financial Secretary to the Treasury, I shall begin by highlighting the fact that tackling tax avoidance and tax evasion has been a key priority for this Government, and we will take no lessons from the Opposition on that issue. At every opportunity, this Government have introduced measures to clamp down on this corrosive practice. It is this Government who, over the course of this Parliament, have secured £85 billion in compliance yield, £31 billion of which came from large businesses. We are the Government who have abolished the shocking loopholes in the tax system that we inherited in 2010—loopholes that the Labour party chose to ignore when in office for 13 years, turning a blind eye when it could have acted. Now, belatedly, Labour Members lecture Government Members on their new-found wisdom in this area.

We have introduced groundbreaking measures to clamp down on tax avoidance schemes. Internationally we have led the world in this very area, as my hon. Friends rightly highlighted during the debate—for example, my hon. Friends the Members for Cities of London and Westminster (Mark Field), for Dover (Charlie Elphicke) and for Bromley and Chislehurst (Robert Neill), who spoke so robustly about Britain leading the way internationally and the work we have been undertaking in the Crown dependencies and overseas territories, which are all supportive of transparency and have been signing up as early adopters of common reporting standards. Everyone in the House should welcome that and support those measures, rather than belittling the actions of those territories and Crown dependencies. They have led the way.

My hon. Friend the Member for Newark (Robert Jenrick) was clear about the standards we have set, and I deny absolutely the bluster and assertion from Labour Members. To claim, as they have, that Lord Green was at fault with regard to what has happened with the Swiss subsidiary of HSBC when there is no suggestion from anybody, and certainly not from the regulators, that that was the case is quite disgraceful. It is a fact that Ministers and the general public knew about the release of information about individual HSBC account holders, and it is also a fact, as my hon. Friend the Financial Secretary highlighted, that it is a long-standing legal requirement for taxpayer confidentiality that Ministers cannot, under any circumstance, be made aware of individual cases.

[Shabana Mahmood]

We have been calling for Lord Green to make a full and frank statement. No allegations have been made, but he needs to explain what he knew about what was going on at HSBC. The Exchequer Secretary should correct the record on what we have been requesting from the Government and from Lord Green and say whether she agrees that he should make a full and frank statement.

[Priti Patel]

Let us be quite clear on the point regarding Lord Green: that is now a matter for him. He is also not a Minister. We should be very clear about that.

When it comes to tax in particular, let us focus on the facts here. We have specifically taken action to get back money lost in Swiss bank accounts. Our agreement has so far raised more than £1.2 billion that would otherwise have remained beyond our reach, which is almost two thirds of the £1.9 billion that the latest forecasts expect it to raise. That is more than 22,000—[Interruption.] The hon. Member for Birmingham, Selly Oak (Steve McCabe) sits there laughing. It was his Government who did absolutely nothing in this area, despite having the opportunity to close down loopholes. Labour Members do not like hearing it, but these are facts.

[Frank Dobson]

Will the Exchequer Secretary give way?

[Priti Patel]

No, I will not give way because of time. The right hon. Gentleman has had his chance to speak in the debate. Tax avoidance is a serious issue for the public and for us as a Government. Let us be clear: it was his Government who chose to sit on their hands in this place.

We have taken clear and concerted action to tackle tax avoidance in every single year of this Parliament. We have closed loophole after loophole to clamp down on those who did not follow the rules. We have made more than 40 changes to tax law in this Parliament to introduce major reforms. Those measures to tackle aggressive tax planning, avoidance and evasion add up to £7.6 billion of additional revenues in 2015-16 alone. Many of the issues that we have tackled have been problems for years, but nothing was done until we took that clear action.

The wealthy could avoid stamp duty under a Labour Government, so we stopped that. Private equity managers boasted about having lower tax bills than their cleaners, so we tackled that head on. Nor have we been afraid of addressing and tackling the clear structural issues. We introduced the UK’s first general anti-abuse rule, or GAAR, in 2013. We are consulting on strengthening that. In 2014, there was a new regime for high-risk promoters of tax avoidance schemes under which the most outrageous promoters can be monitored, fined and publicly named.

Last year, we went further. The Chancellor announced in his Budget the accelerated payment of disputed tax in avoidance cases. We removed the cash-flow advantage that tax avoiders had over the majority of taxpayers who pay their tax up front.

These are fundamental changes. Incentives to enter avoidance schemes have been removed. As my hon. Friend the Financial Secretary stated, under these new powers, HMRC has already secured £185 million for the Exchequer coffers. In addition to those new powers, contrary to what the Opposition say, we have supported HMRC with more resources, to tackle avoidance, evasion and non-compliance. Year on year HMRC is able to do more and recover more tax that would otherwise have gone uncollected. This progress was recognised by the National Audit Office last year.

We are taking action on the international stage and leading the world in reforming the current international tax rules, which were first developed in the 1920s. The OECD’s BEPS project, led by the Prime Minister and the Chancellor through the G8, the G20 and the OECD, will help resolve those problems. We announced in the autumn statement that we are taking action on a country-by-country reporting level.

We have not stopped there. We have taken groundbreaking action domestically and introduced the diverted profits tax, which will complement the BEPS process and strengthen our action against multinational companies that try to avoid paying their fair share. From 1 April this year, the tax will be applied using a rate of 25%.

These are clear actions that this Government have taken, contrary to the assertions that we heard from the Opposition. For all the political noises that we heard, for all their new-found wisdom in the area of tax avoidance and evasion, we are the party in government that has been sensible, pragmatic and firm in leading the way and leading the debate. We have been clear in every step that we have taken. Since 2010-11, the percentage tax gap has stayed lower than at any time under the previous Government, saving the country £4 billion. There is always more to do, but this is clearly in line with all the reforms and measures that we have introduced in government. The Government remain committed to all the action that we have taken, which is why the House should thoroughly reject the Opposition motion.

Question put (Standing Order No. 31(2)), That the original words stand part of the Question.

Beer Duty

Priti Patel Excerpts

Thursday 5th February 2015 Commons Chamber

[The Exchequer Secretary to the Treasury (Priti Patel)]

I congratulate my hon. Friend the Member for Burton (Andrew Griffiths) not only on securing this debate, but on the reward he received this week for his lobbying and campaigning on behalf of the beer industry. I pay tribute to him for campaigning solidly over this Parliament on behalf of his constituents in Burton, the home of British brewing. He is a champion of the jobs, the investment and the economic security that the industry has provided. I also commend the passion he has shown in his work as chair of the all-party group on beer. It is one of the most popular all-party groups, unsurprisingly, given the effective leadership he has displayed. It has been a delight to work with him on various issues, both before and since becoming a Minister.

This week UK beer sales have increased for the first time in 10 years. That is a testament to the hard work that my hon. Friend has put in over the years in standing up for the beer and pub industries. The great British pub and great British brewers are institutions that we in Government wholeheartedly support. As we heard in the compelling case eloquently made by my hon. Friend, there is a very strong argument that the brewing and pub sector is a major part of the UK economy. It adds £22 billion to the UK’s GDP. It directly employs over 600,000 people and supports almost 900,000 people in total, including, as he said, a significant proportion of young people. There is a very strong skills base in the industry, and young people are part of that. As he said, it also boosts British manufacturing, and its exports are worth over £630 million.

Perhaps as importantly, pubs have been at the heart of British culture for centuries. Fifteen million people visit them each week. They are the cornerstone of our communities, and of tourism. As Members of Parliament, we all recognise that they play a strong and pivotal role in our local communities, particularly rural ones.

[Andrew Griffiths]

The Minister mentions tourism. Is she aware that visiting a great British pub is one of the key things that visitors to this country want to do when they arrive on these shores? Does she agree that we should be doing more to promote the great British pub as part of our tourism offer?

[Priti Patel]

My hon. Friend is absolutely right. We have spoken about this at the APPG. The pub is absolutely pivotal to boosting Great Britain’s brand. Tourism and our rural economies are part of that. When we speak about pubs, it is about enjoyment—the fact that people enjoy them. As a policy maker and a Minister, I sometimes think that that is not sufficiently taken into account.

The case for supporting pubs and brewers as institutions is overwhelming. We see that across the country, beyond pubs, in the supply chain and the wider industry. Maltings and other factors in the supply chain are crucial and pivotal to our economy.

[Tim Loughton]

My hon. Friend the Member for Burton (Andrew Griffiths) made a fantastic economic case for the beer industry that the Minister is fortunately echoing. Will she apply the same criteria to the wine industry, which accounts for some 22% of sales in pubs and restaurants, accounts for no less than 67% of all the wine duty paid in the whole of the EU, and contributes £3.7 billion to the Exchequer? Will she see a delegation from the all-party group on wine and spirits, led by me? If we can combine that with happy hour at the Treasury, I will gladly bring along a bottle of Nyetimber, Ridgeview, or my favourite champenois, Breaky Bottom—“Probably the best bottom in the world”, as it markets itself.

--- Later in debate ---

[Priti Patel]

Of course, the answer is yes to the delegation. My hon. Friend is right that the wine industry makes an enormous economic contribution. Earlier, he referred to English wines. I speak proudly as the Member of Parliament for Witham as I, too, have a good vineyard in my constituency. The wine sector is to be supported and commended as well. I will take him up on his offer; he is very welcome to come and meet me at the Treasury.

As my hon. Friend the Member for Burton pointed out, the previous Government’s beer duty escalator hit the industry hard. It led to pub closures and cost people their jobs. Of course, we have made changes to the escalator. In recognition of what happened in the past, we went on to cut tax on a typical pint of beer by one penny at Budget 2013 and another penny at Budget 2014. I am delighted that he celebrates the fact that the duty on a typical pint of beer is now 8p lower than under the previous Government’s plan. According to the British Beer and Pub Association, the jobs of 16,000 people have been secured by our duty cuts, and for them the duty cuts have been fundamental to their livelihoods. The duty cuts have also boosted confidence in the brewing and pub sector and, importantly, they have led to greater investment and greater economic security when it comes to jobs.

Research for the British Beer and Pub Association estimates that an additional 186 million pints will be sold in the on-trade this year as a result of our beer duty cuts. To meet that increase, it estimates that there has been a 12% rise in investment—in monetary terms, an additional £44 million—in the sector in the last year directly as a result of the cut in duty. According to a recent survey, 86% of its members are planning to increase their investment in the UK. That strengthens our economic case, and shows that we are serious about supporting the pub sector.

As my hon. Friend said, nearly two thirds of all the alcohol sold in pubs is beer, but other drinks are important to pubs. To ensure that help is extended to pubs that have diversified away from beer, at Budget 2014 we froze duties on spirits and ordinary cider. Of course, we ended the escalator on wine as well; I am somewhat familiar with the campaign in favour of that.

Pubs are benefiting from the wider changes that the Government have made to support business. Three quarters of pubs are benefiting from a £1,000 reduction in their business rates this year. The reduction will rise to £1,500 next year. We have extended the doubling of small business rate relief to April 2016, which, as my hon. Friend knows, will particularly help the eight out of 10 pubs run as individual small businesses. Pubs will benefit from our national insurance changes. The £2,000 employment allowance has reduced employer national insurance contributions for all businesses. Pubs will also benefit from the reduction in employer NICs for young people, which is particularly important because 46% of the people employed in pubs are aged between 18 and 24. We have introduced regulatory changes to make it easier for pubs to play live music, and to allow beer and wine to be served in glasses of different sizes.

As I am sure my hon. Friend will know, there is no such thing as a typical pub. There are as many different types of pub as there are types of customer, so pubs should have the flexibility to meet customers’ needs. It is fair to say that customers want reasonably priced drinks, naturally, and I am glad to say that our duty cuts are translating directly into more beer for your buck. Beer prices in the on-trade are rising at their lowest rate for more than 25 years: 96% of British Beer and Pub Association members have said that they plan to reduce or freeze their prices as a result of our policies. That is fantastic news for the 32 million people in the UK who drink beer each year; incidentally, that is more than the number of people who voted in the last general election.

Our customers want choice. It is great news that more than three quarters of respondents to the British Beer and Pub Association survey intend to launch new products directly as a result of the cut in beer duty. Small brewers relief has reduced the beer duty paid by micro-brewers by up to a half. That has encouraged new micro-breweries to be set up and to expand. There are now 1,000 more breweries in the UK than in the year before small brewers relief was introduced.

I am particularly interested in how we can do more to help those industries, because there are many associated benefits from having more thriving breweries, not just in exports, but in the tourism offer, as my hon. Friend has said.

[Sir Peter Bottomley]

Regional brewers also matter. Will my hon. Friend allow me to pay tribute to Hall & Woodhouse, which is one of the many? It set up the community chest in Dorset and West Sussex, which gives grants to good organisations. Not all of the organisations are run in the pubs, but the pubs and brewers want to support them.

--- Later in debate ---

[Priti Patel]

My hon. Friend is absolutely right. Regional brewers play an important role by bringing diversity to the mix and by making a contribution. When there is a range of thriving breweries, with regional aspects as well, it provides differentiation and helps with tourism, because it makes regions attractive to people and brings them in.

I want to touch on the big societal changes that we have seen over the past few years. People give a lot more consideration to what they are drinking. They take an interest not only in what they drink, but in how it is produced. With some notable exceptions, people are much more knowledgeable about responsible drinking and regional varieties. Every landlord knows that any drink is capable of being enjoyed in a responsible way or of being misused. This Government will always argue against the top-down approach. I pay tribute to the industry for everything that it has done on responsible drinking and to pubs for the role that they have played in promoting responsible behaviour. We have seen successful schemes, such as the highly renowned Best Bar None.

My hon. Friend the Member for Burton has spoken eloquently about continued action through the tax system to ensure that pubs and breweries continue. I commend him for his speech today.

Oral Answers to Questions

Priti Patel Excerpts

Tuesday 27th January 2015 Commons Chamber

[James Morris (Halesowen and Rowley Regis) (Con)]

7. What progress his Department has made on supporting businesses.

[The Exchequer Secretary to the Treasury (Priti Patel)]

This Government champion British businesses. We are delivering a significant programme of reform to enable businesses to grow, expand and, importantly, become successful. The reforms are all part of the Government’s long-term economic plan to secure business-led economic recovery.

[James Morris]

The number of new business start-ups in my constituency has increased by 100% since 2010. Does the Minister agree that creating a good business environment, with lower taxes and incentives to invest, is crucial to the future of the black country economy in the west midlands, part of which I represent?

[Priti Patel]

My hon. Friend is absolutely right. [Hon. Members: “Is he a champion?”] He is, indeed, a champion, and a strong voice for his constituency and his constituents. He is of course right in every respect. This Government are backing business every step of the way. Our long-term economic plan is making it easier to start and grow businesses, as he has seen across his constituency.

[Mr Andrew Love (Edmonton) (Lab/Co-op)]

Figures published by the Bank of England last week show that net lending to business is still negative. After four and a half years of this Government, when can we expect the figures to go positive, and will we see out the last 100 days of this failed Government, who need a fresh Government to do the job for them?

[Priti Patel]

To put it bluntly, this Government have turned around not only the economy, but the business environment. This Government have backed British businesses and business lending every step of the way, which is in stark contrast to a Labour Government, under whom that would only go backwards.

[Sir Robert Smith (West Aberdeenshire and Kincardine) (LD)]

Does the Minister recognise that when the consultation on tax reforms for the North sea finishes, it will be crucial to businesses in the north-east of Scotland for the Budget to set in place permanent reforms for the long term, not just for the crisis?

[Priti Patel]

My hon. Friend touches on a very significant point. The reality right now is that the reforms are all about long-term economic security. This Government have worked assiduously to ensure that every measure undertaken, whether to back businesses or to create the right tax environment for businesses—he has championed that in his constituency—is the right way forward.

[Meg Munn (Sheffield, Heeley) (Lab/Co-op)]

What discussions has the Minister had with her colleagues in the Department for Business, Innovation and Skills who, in answer to a recent question, admitted that they expect to spend less than £1 million of the employer ownership fund, which was allocated £30 million to help businesses? What will she do about this failure to help businesses?

[Priti Patel]

I emphasise again that this Government have supported businesses and lending to businesses. That is in stark contrast to the failed policies of the Opposition, and to the fact that the hon. Lady’s party would just put up business taxes and take away the support given to small businesses under this Government.

[Nigel Mills (Amber Valley) (Con)]

8. What assessment he has made of the further steps which are necessary to ensure the fair treatment of defined contribution pension customers in response to the recent market reports published by the Financial Conduct Authority; and if he will make an assessment of the potential merits of introducing a second line of defence protection for such pension schemes.

--- Later in debate ---

[Tom Greatrex (Rutherglen and Hamilton West) (Lab/Co-op)]

13. What proportion of recipients of tax credits are in employment.

[The Exchequer Secretary to the Treasury (Priti Patel)]

Seventy-one per cent. of households in receipt of tax credits are in employment.

[Tom Greatrex]

I thank the Minister for that confirmation that more than two thirds of people getting tax credits are in work. How can she claim to be helping working families when the Chancellor wants to cut their tax credits again, causing real-terms economic pain?

[Priti Patel]

Let us put this into some context. For a start, tax credit spending rocketed under the previous Government and throughout this Parliament we have made it abundantly clear that we support those with low incomes. Let us not forget either that the impact of Labour’s great recession is still being felt. We continue to help people with the cost of living through the increases in personal allowances, the freeze in fuel duty, cuts in council tax and, of course, by reducing the cost of child care.

[Richard Fuller (Bedford) (Con)]

Working tax credits are in effect a form of corporate welfare for employers who could pay higher wages, especially if tied to increased skills. Will the Minister continue her conversations with the Minister for Skills and Equalities about ways in which we can create a combination of those two, perhaps in the form of tax credits for training, such as proposed by Premier Inn?

[Priti Patel]

I thank my hon. Friend for his suggestion. He is right that more can be done through working with business and learning from their suggestions.

[Pat Glass (North West Durham) (Lab)]

17. How can the Minister claim there is no cost of living crisis when average full-time wages are down by £2,000 a year, when huge and increasing numbers of workers are dependent on state benefits to make ends meet, and when the gap between chief execs’ salaries and the people who work for them is growing all the time?

[Priti Patel]

Let us be clear. There are a couple of points I would like to make. The Government have shown that the only way to improve and increase living standards is by tackling head-on the country’s economic problems, which are down to the legacy of the previous Government, and by supporting those who do the right thing and aspire to work. I hope the hon. Lady welcomes the fact that in her constituency things have improved, with employment down substantially by 47% and youth unemployment down by 52%.

[Richard Graham (Gloucester) (Con)]

Tax credits have helped many people, but it is also true that some have been prevented from taking a promotion or a salary increase because they would lose more in taxpayer-funded benefits than they would gain from their employer. That has to be wrong. Does my hon. Friend agree that as universal credit is rolled out across the country, so we return to the crucial principle that work always pays? I am afraid that that got lost under the previous Government.

[Priti Patel]

My hon. Friend is absolutely right. He mentions the very important universal credit roll-out. As it rolls out—[Interruption.] It is already being rolled out, and it is going well. As it rolls out, more and more people will benefit. He is right to point out that this is about both the value of work and aspiration. We are the only party that stands for aspiration and value in work, and inspiring people to get off benefits and back into work.

[Helen Goodman (Bishop Auckland) (Lab)]

14. What recent estimate he has made of the effect on household budgets of tax and benefit decisions taken in the present Parliament.