Oral Answers to Questions

Priti Patel Excerpts

Tuesday 9th December 2014 Commons Chamber

[Yasmin Qureshi (Bolton South East) (Lab)]

13. How many employed people are in receipt of tax credits.

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

Tax credits provide financial support to low-income households. In April 2014 there were 3.3 million families in work receiving tax credits. That had fallen from 4.8 million in April 2010. In total there are 4.7 million families receiving tax credits, 71% of whom are in work.

[Chris Ruane]

Thousands of hard-working families in my constituency have been bit by tax credit cuts, a £300 increase in their energy bills, the bedroom tax and the increase in VAT. This Government offer tax cuts to millionaires and porridge and food banks to low-paid workers. When will the Government allow British workers to share in the wealth of this country?

[Priti Patel]

It is fair to say that this Government ensure that people are better off in work, in stark contrast to the failed dependency policies of the Labour party. We are the party in government that has taken action to support people on low incomes by increasing the personal allowance, taking 3.2 million people on low incomes out of tax altogether and increasing the national minimum wage. We should all remember which party was responsible for the cost of living crisis; it was Labour’s great recession. We are the Government who have frozen fuel duty and council tax and it is our policies that are now leading to growth in the economy.

[Andrew Bridgen (North West Leicestershire) (Con)]

The latest figures show that the number of individuals classed as being in in-work poverty has fallen by 300,000 since this Government came to office, at the same time as an extra 2 million people are in work. What Government measures does my hon. Friend think have contributed to this rise in people’s income?

[Priti Patel]

I thank my hon. Friend for his question. It is fair to say that this Government are not returning to the failed policies of the past as seen under the Labour party. The key measure explaining why we have had so much growth in our economy is our focus on our long-term economic plan, which is securing a better future for our economy, for the country and, of course, for hard-working taxpayers.

[Yasmin Qureshi]

rose—

[Yasmin Qureshi]

Thank you, Mr Speaker. Will the Minister confirm that 10 million households will be affected by the two-year freeze on tax credits and benefits and that the average household will be £974 worse off? This will hit working people the most, and women in particular, so will the Government reconsider their position?

[Priti Patel]

I come back to my earlier point about employment increasing and more women being in work than ever before. When it comes to tax credits, universal credit will go on to replace the current complex and broken system of means-tested benefits—introduced by the Labour party, by the way—and we are the party that has supported people to get into work and reduce dependency rather than confining them to dependency and welfare.

--- Later in debate ---

[Mr Stewart Jackson (Peterborough) (Con)]

T2. My constituents in Peterborough who work at Thomas Cook and many families with young children will have been delighted by the announcement on children’s air passenger duty in last week’s autumn statement. Will the Exchequer Secretary give an undertaking that she will continue to monitor the impact of air passenger duty on tourism and the family budget and not rule out further cuts in the near future?

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

I thank my hon. Friend for his question. The reductions in air passenger duty announced last week are to be welcomed not just by his constituents and by Thomas Cook but by hard-working families across the country. As with all other taxes, air passenger duty will be kept under review, taking into account our commitment to creating sustainable public finances alongside helping households and, of course, the tourism industry.

[Chris Leslie (Nottingham East) (Lab/Co-op)]

Will the Chief Secretary confirm that table 2.3 on page 67 of the autumn statement shows that total managed expenditure will fall to 35% of GDP by 2020? According to the Office for Budget Responsibility, that is a level not seen since the late 1930s. Does he stand by the autumn statement or not?

The Economy

Priti Patel Excerpts

Wednesday 26th November 2014 Commons Chamber

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

Today the Opposition have reminded us why Labour can never be trusted with the economy again. So appalling is its reputation on all matters economic that even its former Chancellor, and now we hear its former Prime Minister, are seeking to join the exodus from the parliamentary Labour party, belatedly fleeing the scene of the economic carnage they helped to create. The hon. Member for Nottingham East (Chris Leslie) spoke about the 2010 autumn statement. Back then the former shadow Chancellor, the right hon. Member for Kingston upon Hull West and Hessle (Alan Johnson), forecast that there would be a “jobless recovery”. Since then Labour has become a broken record, and over the past four years it has been proved wrong about the economy and sought to mislead and frighten the public at every opportunity. Instead of presenting a sustainable economic plan to the House today, Labour Members come here and use this very rare debate on the economy to talk down the economy, and sneer at those who want to work hard and to get on in life, which is why I would like to start by bringing the House’s attention to a few basic economic facts about their track record.

With a record peacetime deficit, increased unemployment and a welfare system that was broken, Labour left Britain’s economy in a mess. On top of that they doubled income tax for the poorest, and insulted pensioners with derisory levels of state pensions, not to mention the mean-spirited 75p increase in state pension; that is how the Labour party rewards our pensioners after a lifetime of work. Labour also oversaw a doubling of council tax, increased the rate of fuel duty 12 times, and failed to support parents with child care costs, yet Labour Members have the audacity to come here today and lecture us about child care costs. The Government are reforming child care through tax-free child care and sustainably helping hard-working and hard-pressed families up and down the country.

[Sheila Gilmore (Edinburgh East) (Lab)]

Surely the biggest mistaken forecast was that of the current Chancellor when he came to this House in 2010 and told us the deficit would be eliminated during the course of this Parliament.

[Priti Patel]

This Government have cut the deficit by over a third, so we will not take any lectures from the Opposition or the hon. Lady about that—notwithstanding the fact that when in office Labour failed to prepare our young to compete against the brightest and the best when it came to skills, jobs and education, and that was just the tip of the iceberg.

Since 2010, this Government have worked hard to turn this situation around. By working to our long-term economic plan, we have seen the deficit cut by over a third, income tax cut for over 25 million people, benefits capped to reward work, and 1.7 million more people in employment, while over 2 million more private sector jobs have been created and employment is the highest on record. We have created 1 million apprenticeships. The state pension has increased. More children are in good and outstanding schools. Over 50,000 families now have a home thanks to our Help to Buy policy. This is a good start, but we are the first to recognise that the job is far from finished.

[Kerry McCarthy (Bristol East) (Lab)]

I gather the Minister is visiting my constituency tomorrow, although her office was not prepared to tell us what she will be doing there; perhaps she can tell me now. May I urge her to meet some of my constituents, and go around some of the estates and find out what life is really like for those people, because it bears very little resemblance to what she is telling us now?

[Priti Patel]

I am looking forward to coming to the hon. Lady’s constituency tomorrow.

I have made it perfectly clear that we have made a good start but the job is not yet finished. The UK currently has the highest rate of growth in the G7; it is over twice that of Germany.

[Stephen Hammond]

My hon. Friend is right that we have made a good start. The Opposition spokesman talked about opinion polls, but, interestingly, he did not talk about the opinion poll showing that the public saw we had done a good job, and that we have an economic competence lead of 26% over the Opposition and their plans.

[Priti Patel]

My hon. Friend is absolutely right and this brings us back to the heart of this debate. It is about having a long-term economic plan that is tackling the challenges for our economy left by the former Government, while also looking ahead to the future and making sure we have a plan in place.

[Ian Lucas]

How can a 7.4% fall in median average earnings in Wrexham be a good start?

[Priti Patel]

The hon. Gentleman will recognise that had it not been for Labour’s great recession, living standards in this country would be much higher. Thanks to our economic plan and policies, we are now seeing booming inward investment, often by more than the rest of the EU combined, with all the main sectors of the economy growing. A growing economy, a falling deficit, record numbers in work: those are the economic facts that Opposition Members seem to want to deny. They want to continue to scaremonger and misrepresent the economic reality. We said we would get the deficit down, and the deficit has come down. We said we would recover the economy, and recovery is taking place. The Opposition predicted that 1 million people would lose their jobs, but 1.7 million jobs have been created.

It would not be realistic to pretend that the job is done, however, or that the situation is perfect. We know it is not, and that is a result of Labour’s great recession, but I am sure that all Members will agree that responsible government means being straight with the public about the economic situation we are in.

[Gordon Birtwistle]

My hon. Friend said earlier that 1 million apprenticeships had been created. May I advise her that 2 million apprenticeships have now been created?

[Priti Patel]

My hon. Friend is right: over 1 million apprenticeships have been created.

[Mr Marcus Jones]

While unemployment soared under the last Government, does my hon. Friend welcome the fact that youth unemployment is down 50% in my constituency in the past 12 months, and does she agree we should now work towards full employment, to make sure that none of our young people are out of work?

[Priti Patel]

My hon. Friend is absolutely right, and that is, of course, the objective of this Government: we want to support and give a helping hand to the young in particular, as they start out in their careers and professional lives.

[Nicola Blackwood (Oxford West and Abingdon) (Con)]

Unemployment has fallen by 66% in my constituency since 2010, but the businesses who are creating these jobs tell me that cutting red tape is a priority for them if this growth is to continue. Can my hon. Friend explain why the Opposition will not commit to our one in, two out deregulation target?

[Priti Patel]

The Labour party created even more red tape, regulatory burden and excessive regulation on business, and I commend my hon. Friend and the businesses in her constituency on everything they are doing on job creation.

Britain tumbled down the international league tables under the Labour Government: from 11th to 23rd in the world in terms of our corporate tax regime; out of the top 10 in the global competitiveness league; and out of the top 10 in terms of the ease of starting a business and doing business—we were level pegging with Mongolia on that. Levels of Government spending under Labour were catastrophically higher than we could afford. We had the most over-indebted banks and households, and we were on course for having the biggest budget deficit of any major economy in the world.

The British public are still experiencing the impacts of the Labour Government’s economic policies but, rather than coming to the House to apologise for the economic carnage that they created, Labour Members have the audacity to come here today and ask us why we are not clearing up their mess quickly enough. I think we all know that the past four years have been hard, and we cannot magic up a better standard of living from the economic carnage that we inherited. The only way to deliver for people up and down the country is to put in place a lasting, sustainable and healthy recovery.

[Debbie Abrahams]

Does the Minister count among the Government’s successes the waste of £2.8 billion on welfare reforms that was identified in a National Audit Office report this afternoon?

[Priti Patel]

Our welfare reforms have been focused on ensuring that work pays. The Opposition were fully opposed to our reforms to the welfare system, and they still stand against welfare reform today—

[Chris Leslie]

The welfare bill has gone up.

[Priti Patel]

The Opposition are firmly against the reforms that we have brought in on welfare. We inherited a broken welfare system; let us get that on the record and be categorically clear about it. Our reforms are about making work pay and providing opportunities through work, training and employment.

[Charlie Elphicke]

Our welfare reforms have resulted in a jobs revolution that means that it is morning again in Britain. If we look out from Dover across the channel, we see the sun rising over the white cliffs but we also see the storm clouds over Calais and the rest of the eurozone. Does the Minister agree that the biggest risk to our recovery would be a Labour Government and their crazy spending plans?

[Priti Patel]

My hon. Friend is absolutely right. The public should be terrified of going back to the same old days of more borrowing and spending and higher taxes under Labour.

[Chris Leslie]

The Minister is talking about taxes. She will know that the Prime Minister made pledges at his party conference involving a total of £7 billion. Does she agree that if the Government are making such pledges, they really should say where the money will come from? I should like to give her an opportunity to put on record now specifically how she intends to pay for the £7 billion-worth of promises that the Prime Minister made.

[Priti Patel]

The answer is simple and straightforward: it is through sustainability in our economy. That means making hard choices, tackling the challenges of public spending and encouraging the economy to ensure that it grows more. It is about the creation of more jobs, not about higher taxes that penalise the wealth creators of this country.

[Mr Marcus Jones]

Is not what my hon. Friend saying confirmed by the fact that there are 670,000 fewer workless households in this country under this Government than there were under Labour, as a result of our following our long-term economic plan?

[Priti Patel]

My hon. Friend is absolutely right. The Labour Government consigned people to lifelong dependency, and it is our welfare reforms that have enabled us to ensure that work pays and that people are trained to get back into work. Britain would have been much better off, had we not had the mess of an economy on the brink of collapse, a banking system on its knees and a budget deficit in double figures. The only way to help people in this country is to grow the British economy. When we grow the economy, wages grow and living standards improve. The Governor of the Bank of England said last year that

“ultimately the growth in real wages is going to be determined by recovery in…this economy”.

[Mr Mudie]

My hon. Friend the Member for Nottingham East (Chris Leslie) asked the Minister about the unfunded £7 billion of tax cuts. They have been described by the Business Secretary as a “total fantasy”, and by the Chief Secretary to the Treasury, her colleague, as a “grand deception” of the public. Does she support the Chief Secretary to the Treasury? Will she withdraw her remarks about the Labour Government’s fiscal irresponsibility and accept that the Business Secretary and the Chief Secretary to the Treasury are accusing the Chancellor of fiscal irresponsibility by suggesting that £7 billion of tax cuts?

[Priti Patel]

I say to the hon. Gentleman that, by growing the economy, we will see—[Interruption.] The hon. Member for Nottingham East is gesticulating with his hands, which is something I know the Labour party likes to do. The Prime Minister was very clear in his party conference speech. We are all about economic growth, growing the economy, getting our budget back on track and sorting out the finances, unlike the Labour party, which just wants to spend, borrow and tax more.

[Chris Leslie]

The hon. Lady is being very patient in allowing us to intervene on her. It is important that we pin this down. The Prime Minister has announced £7 billion of unfunded pledges, and she is standing there and saying, “We’ll pay for it through sustainable growth.” If the Opposition said that they were going to put £2.5 billion into the NHS through unfunded growth, what would she really say in response? It is our duty to ask her to be specific and to say what she will cut to fund those pledges or how she will raise the money by raising other taxes such as VAT.

[Priti Patel]

It is our duty to be clear about the fact that we will tackle public spending, as the Chancellor and the Prime Minister highlighted during their conference speeches, in addition to supporting the economy through wider economic growth.

[Justin Tomlinson (North Swindon) (Con)]

Is it not the case that Labour promised to spend the bankers bonus tax no fewer than 10 times over?

[Priti Patel]

My hon. Friend’s point tells us everything we need to know about the economics of the Labour party.

We believe in a recovery that works for the many, and there are three ways of putting that recovery in place. First, we create the right macro-economic conditions. Cutting the deficit, restoring public spending to sustainable levels, ending the culture of Government excess—which the Labour party knows quite a bit about—securing inward investment, building, manufacturing, exporting and securing our place in the world are all key, and we are doing those things.

[Nick de Bois]

The Minister has touched on a crucial point. When this Government came to power, exports to the EU far outweighed those to the rest of the world. Our investment in UK Trade & Investment and the confidence of British investors in the macro-economic conditions that we have created have now turned that situation round. We are no longer as dependent on the struggling EU economy, following a 10% increase in growth outside the EU.

[Priti Patel]

My hon. Friend is absolutely right. This Government made the right decisions. For a start, we do not vilify businesses; we work with them to help them grow, export, and expand overseas. We have also invested heavily in UKTI, which is working in partnership with businesses up and down the country.

[Mr Marcus Jones]

My hon. Friend is talking about exports. Does she agree that this Government have set out the right conditions for exports? That is proven by the fact that we are now exporting more cars than we have imported since the 1970s.

[Priti Patel]

My hon. Friend is absolutely right. In his constituency and his region, the motor manufacturing sector is doing incredibly well and demand is incredibly high. Long may that continue. That is all about creating the right economic conditions to allow that to happen.

[Andrew Gwynne (Denton and Reddish) (Lab)]

I appreciate that we are entering the pantomime season and that this kind of political knockabout over whose spending plans stack up might play well to those in the gallery or to people outside, but the real way for the Minister to give confidence to the electorate that her £7 billion tax giveaway will stack up financially would be to allow her spending plans to be judged by the Office for Budget Responsibility. Labour has said that its spending plans will be put before the OBR; why does she not do the same?

[Priti Patel]

We are confident about our plans; it is the Opposition who should be worried about theirs.

The second way to recovery is by securing jobs and employment, and supporting businesses and the private sector. There is no better route to opportunity and success in our economy than being able to get a job; it is perhaps the closest thing we have to a silver economic bullet. Someone in work brings home money and is contributing to the economy, as we have all seen across our constituencies, and this makes an enormous difference to all our constituents. The 2 million private sector jobs created since 2010 have transformed people’s lives, while offsetting the reduction in public sector jobs many times over. This is what it is about: creating the conditions of growth so that the under-25s at the beginning of their careers get the right start in their working and professional lives, as many hon. Members have said. That is why the number of young people claiming benefits has fallen by more than half.

[Richard Burden (Birmingham, Northfield) (Lab)]

Will the Minister explain why the majority of children growing up in poverty are coming from working households?

[Priti Patel]

The hon. Gentleman will know that child poverty is falling, and it is only by making work pay that we can reward the individuals who choose to go out to work and ensure that they are supported, not only through tax credits, but through the wider system, through child care—[Interruption.] The national minimum wage has gone up. Will Labour Members welcome that, because—[Interruption.] It went up last month. [Interruption.] The Opposition are belittling the fact that we have ensured that the national minimum wage has gone up, and that is part of sustaining families and helping them with the cost of living. This is not just about young people; it is about supporting parents as they return to work through our reforms to child care.

To those, particularly those in the Labour party, who point to some of the measures I have outlined as a sign of economic failure, I say two things. First, they should stop sneering at what this Government have done to give our young a hand up when it comes to employment opportunities. The apprenticeships schemes, training schemes, colleges and starter jobs are not to be sneered at—they are valued and welcome. This Government have rightly put out the helping hand to a generation abandoned by Labour by giving them the chance to train, get a profession and get on in life.

Secondly, job creation and wage increases do not happen simultaneously. If there is an exceptional rate of job creation—we have put one in place—of course that has an impact on average wages. Wage increases happen slightly later. However, as the Resolution Foundation, run by Gavin Kelly, a former special adviser to the right hon. Member for Kirkcaldy and Cowdenbeath (Mr Brown), has stated, when compositional changes in the labour market are accounted for, average wages for the first half of 2014 have grown in real terms. Encouragingly, the most recent monthly Office for National Statistics figures showed wage growth outstripping inflation, particularly so for the 84% of workers who were in continuous employment—those in exactly the same job as they were a year ago—who saw pay rises of 4.1%, which is double the rate of inflation.

The third way to get a recovery that works for the many is by allowing people to take home and keep more of the money they have earned: giving them more disposable income. That measure is conveniently not included in the £1,600 worse-off statistic frequently touted by the Labour party, which also does not take into account the huge increase in employment or a measure of inflation that has any credibility. Over the course of this Parliament, we will have cut the income tax of a typical taxpayer by £805, boosting the amount of money that 25 million people take home, and taken more than 3.2 million of our lower earners out of income tax altogether. These are the biggest reforms of income tax in generations.

We are cutting the cost of living, helping to make families more financially secure. We are freezing fuel duty—the Labour party was happy to increase that at every opportunity; freezing council tax; and reducing the costs of child care. Those measures are helping with the standard of living of people up and down this country.

[Barbara Keeley (Worsley and Eccles South) (Lab)]

I do not know how much more the Minister has got to say, but I did not want to let the chance go by for her to address the discourtesy pointed out by my hon. Friend the Member for Bristol East (Kerry McCarthy). My hon. Friend does not know where the Minister is going tomorrow, and I am sure that such discourtesies do not please you, Mr Speaker. The Prime Minister came to my constituency and did not bother to tell me about it. An opportunity has been offered to the Minister and I wonder whether she will tell us before she finishes speaking whether she is going to take that opportunity to be clear about where she is going tomorrow.

[Priti Patel]

Of course, Mr Speaker. No discourtesy is meant. I know that those in my office have been in touch with the hon. Member for Bristol East (Kerry McCarthy) and she has been notified of my visit tomorrow. After I have finished in the Chamber today, I will ensure that she is given full details of the location of the site that I am visiting.

We have heard quite a lot from the Opposition today, and I take issue with the implication that the recovery helps only the well-off. In every Budget since 2010 revenues from the most well-off have been raised. The increases in capital gains tax in 2010, the increase in stamp duty on high-value homes and limiting income tax reliefs are all measures that we have taken. We have been able to use those extra revenues to help the most vulnerable in our society wherever we can. We have done so through the introduction of the triple lock on the state pension, making pensioners £440 per year better off; through the pupil premium in our schools; and by supporting those on disability benefits by exempting them from the annual benefit cap. It is right that we safeguard those in need through such measures. It is not right, no matter what the Labour party says, to have a tax system in place that turns talented growth-creators away from the UK. The Opposition’s dogmatic stance on the 50p rate shows that they are willing to drive wealth creators out of this country and to risk our economic security. That is no way to help the poorest in our country.

Next week, the Chancellor will present the autumn statement to the House. As this motion notes several areas where the Government have taken action, and will continue to do so, I would like briefly to touch on some of those items. As I said, we are the Government who increased the national minimum wage in October, leading to a pay increase for more than 1 million people. That was the largest cash increase since 2008. We are also the Government who are introducing tax-free child care, which will provide working families with 20% support for child care costs of up to £10,000 per year for each child. On tax avoidance, we have taken the lead on the international stage through the base erosion and profit shifting projects. Domestically, we have made 42 changes to tax law to close down loopholes and reform the system. After 13 years of Labour inaction on tax evasion, we are leading the world on tackling the issue.

We will take no lectures from the Labour party on small and medium-sized enterprises. It regulated, taxed and placed endless excessive burdens on SMEs when it was in government. This time last year we announced the largest package of business rates support for 20 years. More than half a million small businesses are benefiting from small business rate relief, with 360,000 paying no business rates at all. This Government back SMEs. We understand them and we pay tribute to them for their enormous contribution to our economy.

For the first time in a generation we have a Government who are committed to investing in our infrastructure. The national infrastructure plan has ended the corrosive stop-start cycle of infrastructure investment and enabled us to have some of the most ambitious infrastructure projects in generations, so that Britain can once again stand tall in the world. [Interruption.] No, we have enabled many infrastructure projects to take place across the country, and we are proud of the investment this Government are making in infrastructure. Housing has been mentioned, and we are investing £7.8 billion to deliver the most ambitious affordable housing programme for more than 20 years. The Conservative party is the one that has supported and championed the property-owning democracy, so we will take no lectures from Labour on home ownership and supporting the aspiration of those who want to own a home.

We live in a global economy and, as we have seen, not every country has had our laser-sharp focus on growth and economic competitiveness. In the 21st century no country is 100% master of its own economic destiny, and it would be naive to pretend otherwise. But the reforms we have carried out are making our long-term sustainable plan and our economy—this leads to the increase in living standards—so viable. Regaining the lost ground can be achieved only by backing growth in our economy, supporting those who back business and support job creation, and underpinning it with sound public finances and strong business investment. We have a plan in place and it is delivering. [Interruption.] It is interesting at this stage of the debate to see Opposition Members sneering and sniggering. We will carry on working through our long-term economic plan, which is securing a resilient economy and a better future for all.

[Several hon. Members]

rose—

Childcare Payments Bill

Priti Patel Excerpts

Monday 17th November 2014 Commons Chamber

[Alex Cunningham]

I have been fighting the ending of specialist nursing provision at my local hospital, because it meets the specific needs of parents of disabled children. There has been a considerable reduction in the amount of money that enables local authorities to meet the demand for essential services—if they were given more means, they might well be able to expand provision—but I agree with the right hon. Lady that someone should take responsibility, and I think that my amendment goes some way towards ensuring that that happens.

In Committee, the Minister said:

“It is right that we make the new scheme consistent with the current framework.”––[Official Report, Child care Payments Public Bill Committee, 23 October 2014; c. 192.]

I urge her to reconsider her decision not to increase support for parents of disabled children. She can help today by increasing the maximum age at which disabled children become eligible for the tax-free child care scheme—and, in future, for the child care element of universal credit —to 18, to align the scheme with the prescriptions of the Childcare Act sufficiency duty, and to give the families of disabled children the support that they need and deserve.

At the same time, the Government should aim to establish a framework that would include all children with disabilities in child care in order to fulfil the basic principles of equality and inclusion. Equitable access to affordable, flexible, high-quality child care would be hugely valuable to children’s social and educational development, not to mention parents’ well-being and long-term economic prospects. In its present form, however, the tax-free child care scheme will not effectively remove the additional affordability barriers from parents with disabled children. To address that inequality, the Government should provide the additional top-up payments for disabled children through the tax-free child care scheme that amendment 2 would provide. I hope that the Minister will consider that proposal.

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

It gives me great pleasure to speak in the debate. Let me begin by thanking everyone who contributed to the Committee stage, engaging in constructive dialogue, submitting the Bill to line-by-line scrutiny, sharing their views and giving evidence. I think that all Members found the evidence sessions extremely helpful. Opposition Members tabled a number of well-considered probing amendments that were designed to seek clarification throughout—

[Madam Deputy Speaker (Dame Dawn Primarolo)]

Order. This is not an opportunity to review all the work that was done in Committee. The debate is very narrow. The Minister should be responding to the debate on new clause 1 and the amendments. I do not want her to come to that gradually; it is the only thing that she should be doing. I have given her a little bit of latitude, but perhaps she will now return to new clause 1.

[Priti Patel]

I will do so very promptly, Madam Deputy Speaker.

New clause 1 would require the Government to publish, within three months of Royal Assent, an assessment of the benefits of this scheme to parents of three and four-year-old children, together with an assessment of the benefits in addition to the likely benefits of funding 25 hours of free child care per week for such parents.

The Government fully understand the importance of high-quality early education for that age group, which is why they fund 15 hours a week of early education for every three or four-year-old. We have extended that entitlement to the least advantaged 40% of two-year-olds, thus saving their families about £2,440 a year. By the end of this financial year, funding for early education places alone will have risen by over £1 billion during the current Parliament. We have committed ourselves to that substantial investment in early education because there is overwhelming evidence, here and elsewhere in the world, that high-quality early education has long-lasting benefits for children. We have seen big year-on-year improvements in the development of five-year-old children who have benefited from early learning, although we recognise that many factors influence school readiness and later attainment. We have commissioned academically robust and detailed research in order to understand more about the way in which high-quality early education affects children’s attainment and social and behavioural development.

However, it is important to recognise—as the Bill does—that the cost of child care is an issue not just for under-fives, but for school-age children. For many working families, the high costs of child care make it one of the largest parts of the household budget. The Government believe that there is a powerful case for improving access to child care throughout childhood, and to ensure that parents are helped to work if they choose to do so. The new scheme for children up to the age of 12 will build on the £5 billion per year that the Government already spend on early education and child care. It will help many more parents to meet their costs, including self-employed parents who cannot gain access to support under the existing employer-supported child-care scheme.

We recognise that every family is different, and will have different child-care needs and cost. We recognise that no one size fits all. The scheme is therefore designed to provide flexible support for working families, and to cater for different family circumstances. For example, it will allow parents to build up money in their child-care accounts to cover increased costs at holiday times.

As I have already said many times during our debates on the Bill, the Government have made a clear commitment to reviewing the impact of the scheme two years after its full implementation. That was made clear in the impact assessment that was published alongside the Bill. The review will consider the impact on all age groups within the scope of the scheme—which will, of course, include three and four-year olds—but it will not consider the effects of free early education, which is already the subject of extensive evaluation.

The Government take the evaluation of early education very seriously. We have commissioned a significant longitudinal study of early education and development, which will evaluate the effectiveness of the current early-education model in England and, more specifically, the impact of funded early-years education on two-year-olds from lower-income families. It will also update evidence from the effective pre-school and primary education project. It will continue until 2020.

The hon. Member for Newcastle upon Tyne North (Catherine McKinnell) made a number of points. For instance, she mentioned children’s centres. Let me reiterate that the Government want to see a strong network of children’s centres throughout the country, offering families access to a wide range of local and flexible services, tackling disadvantage, and preparing children for later life. Again, we covered in Committee many of the points about what goes on in centres and support in children’s centres.

The hon. Lady also specifically mentioned supply-side provision of child care, which we touched on in Committee, too. There are 100,000 more child care places than there were in 2009 and a lot of work is being done on the supply-side provision of child care, which is the point of this Bill.

--- Later in debate ---

[Maria Miller]

The Minister will have provided a great deal of clarity today for parents who might have been concerned about some of the reports they had read in the papers. I thank her on behalf of my constituents for what she has said.

The Minister mentioned the communication she is having with stakeholder groups. Is she also communicating with employers to make sure they are aware of the way the new system will work, especially those who may want to make their own contributions to their staff’s child care costs?

[Priti Patel]

I thank my right hon. Friend for her intervention and comments. She is absolutely right; as she will know from discussions in Committee, this scheme has been designed to be parent-focused—parent-friendly is, I think, the term to use—and to work with employers, because this is about engaging both parties to communicate, educate and inform. Employers have an important role to play—we must not forget that—so working with employers on the scheme design is key.

The introduction of this new scheme sits alongside strong early-education entitlement for pre-schoolers to support families and hard-pressed families with their child care costs and support parents to work more if they want to do so.

As I said in Committee and we have touched on again today, we have already committed to reviewing the impact of this new scheme after two years, and it is hard to see what purpose would be served by a review only three months after Royal Assent, given the Government’s clear commitment to reviewing the scheme.

I shall now move on to the points made about amendments 2 and 1 and the comments of the hon. Member for Stockton North (Alex Cunningham). I welcome his comments and I followed his remarks with interest, and we discussed these matters in Committee. We fully accept that child care costs are higher for parents with disabled children; there is no disagreement here at all. The families and parents of disabled children struggle with the challenges of raising and looking after their children. We had a very fluid debate about this in Committee.

The effect of amendment 2 is straightforward. It would increase the level at which the Government top-up payments are paid to parents of disabled children from 20% to 40%. This would mean in practice that for every £10 spent on child care, the Government would contribute £4 and the parent the remaining £6. This contrasts with the position set out in the Bill, which is that the Government would contribute £2 of every £10 spent on child care.

I am very well aware of the keen interest the hon. Gentleman takes in families with disabled children. He spoke with great eloquence in Committee and I thank him for his contribution on this point. As he rightly pointed out, families with disabled children face significant costs, and that fact ought to be reflected in the scheme. A number of witnesses who gave evidence to the Committee made similar points. I have already put on the record that I fully understand the arguments the hon. Gentleman and others have made and it is absolutely right that parents of disabled children are properly supported, which brings me to why I will ask him not to press his amendments.

[Alex Cunningham]

I thank the Minister for her kind comments, but the multiplication that I want to achieve for disabled children does not even reflect the multiplication factor in their child care costs. Child care can cost £20 an hour, but all I am asking is that the Government double the amount of support they give. I am not asking them to increase it by four or five times.

[Priti Patel]

I thank the hon. Gentleman for his comment. I outlined measures relating to disabled children in Committee. We recognise the high costs faced by parents of disabled children, and the specialist care that their children need, but increasing the amount of top-up is obviously not appropriate, for the reasons that I have already outlined. I have made a commitment on disabled children, and I am exploring the possibility of increasing the maximum amount that a parent of a disabled child can pay into their child care account. For those reasons, I ask the Opposition to withdraw their new clause.

[Catherine McKinnell]

I thank the Minister for her thorough reply to the concerns that I expressed earlier. She has gone some way towards alleviating them, but some concerns remain. We shall have to give the Government the benefit of the doubt on the delivery of her reassurances, but that does not take away from the fact that dealing with the supply-side issues and extending the free entitlement for three and four-year-olds would constitute a much better offer to parents. The Government could do that now to provide support for parents who are struggling with child care costs and with the cost of living more generally. We will therefore press new clause 1 to a vote.

Question put, That the clause be read a Second time.

--- Later in debate ---

[Alex Cunningham]

I most certainly do agree with my hon. Friend. It is a peculiar world—I would use the word “bonkers”—when someone earning £100,000 can benefit more from a new Government scheme than somebody on perhaps £20,000. It is important that the Government think again on some of these points.

Let us not forget that families on higher incomes will get their child care accounts topped up by the Government before they have to pay their provider, so the rich get paid up front, while the poor do not get any payment at all. One possible solution that could be explored further is the provision of child care accounts and tax-free child care to families in receipt of child care support through tax credits or universal credit. Allowing these claimants to use child care accounts to receive their payments of child care costs would allow receipt in advance of payment, but without the risk of any overpayments being lost within wider family budgets. However, as things stand, the Bill would not permit that without additional primary legislation. These minor amendments to clauses 11 and 15 would allow the tax-free child care scheme to go forward as designed, while allowing us the time to consult and to assess these issues fully. We would have the flexibility to make changes by regulation, rather than through additional primary legislation.

Universal credit is still in its infancy and is being gradually rolled out. It seems to make little sense to limit how it may evolve by putting barriers, in the form of primary legislation, in the way of what may be sensible reforms. I would like to hear from the Minister what further considerations she has given to extending the tax-free child care scheme in this way, and expanding child care accounts beyond the scheme. I hope that she will support these minor amendments, which would allow for the potential benefits that those changes could deliver, particularly for some of the poorest people in our society.

[Priti Patel]

I welcome the hon. Member for Wirral South (Alison McGovern) to her position and post. It is good to hear from her. Obviously, she did not have the full benefit of participating in the Committee, so it is good to hear her views today.

New clause 2 is about the Bill’s impact on child care costs, an issue that we discussed at some length in Committee. The new clause would require the Government to publish a review of the Bill’s impact on the cost of child care three months after it passed into law, and every three years thereafter. The review would have a particular focus on the effectiveness of the Act in making child care more affordable, the average cost of child care for working parents, and the impact of supply-led measures on costs.

As I have said many times in debates on this Bill, the Government have made a clear commitment to review the impact of the scheme two years after full implementation. That was set out in the impact assessment published alongside the Bill. The Government feel that a two-year assessment period is reasonable and will allow sufficient time for the scheme to become bedded in, so that the full impacts can be assessed and properly evaluated in the context of wider Government policy. We do not think that there is anything to be gained from adding a further review after only three months.

I think that all hon. and right hon. Members are rightly concerned about the impact that high child care costs have on working parents. We understand the cost of child care, and the Government are committed to supporting parents to meet that cost; that is the purpose of the Bill.

[Bob Stewart (Beckenham) (Con)]

I assume that the Minister and her team will watch this very closely from the start. She may not need a review: if she saw something going wrong, she would take immediate action to correct it, before the two-year point.

[Priti Patel]

I thank my hon. Friend for his comment. Naturally, we want to get this right, so there is oversight at every level. Later in my remarks, I shall touch on areas where his remarks are valid and pertinent.

We know that child care is an expensive outgoing for many families across the country. This Government understand the need for both demand and supply-led measures to ensure that the costs of child care do not spiral out of control. We have been taking steps to ensure that both sides of the problem are properly considered. The Government believe that increasing supply is an effective way of limiting further price rises, and are therefore making significant reforms to support the child care sector in increasing the supply of places.

The Government are taking actions beyond the scope of the Bill to improve the quality and supply of child care provision. These reforms are designed to ensure that any increase in demand for child care arising from the new scheme will be matched by increased supply and not by increased costs. The latest figures show that there are about 100,000 more child care places than in 2009, and the Government are taking action to grow the supply of child care still further, which will improve choice and affordability for parents. For example, we are making start-up grants of up to £2 million available to help people set up new child care businesses. We are also enabling good and outstanding childminders to access funding for early education places. Only 4,000 do so currently, but as a result of our reforms, up to 32,000 will be automatically eligible. We are making it simpler and easier for schools and child care providers to work together to increase the amount of child care available on school sites, and only this year we have introduced childminder agencies, which are designed to improve the support available for both childminders and parents, and to simplify existing regulatory frameworks to allow nurseries to expand more easily.

We recognise that child care costs place a significant financial burden on many families, but research shows that after 12 years of consistently rising prices, the costs of child care in England have stabilised for the first time. There is encouraging evidence that costs of some of the most popular types of child care are falling in England. For example, the Family and Childcare Trust reported in March that the cost of nurseries in 2014 was 2% lower than in the previous year in real terms. Similarly, the cost of after-school clubs reduced by 5% in real terms during the same period. Once inflation is taken into account, costs for the majority of parents have fallen. This means that more parents are able to access affordable child care and support their families, and shows that the Government’s reforms are making a difference. We should compare that with the situation under Labour, when costs rose nearly 50% between 2002 and 2010, and the average cost of child care rose faster than inflation.

Alongside these measures to increase the provision of good quality, affordable child care, the Government have taken significant steps to support families in meeting their child care costs.

[Alex Cunningham]

I welcome the fact that more families may well be able to access child care because of falling costs, but the costs are still high and they are paid by the poor as well as the rich. Will the Minister please outline what she will do for the working poor who do not qualify for anything under any of her schemes?

[Priti Patel]

I will come on to the hon. Gentleman’s amendments and refer specifically to the points he makes.

For low earners, the Government will continue to pay up to 70% of child care costs through working tax credit, and under universal credit this support will be extended to up to 85% of costs when both parents are working, as all hon. Members heard in Committee. In addition, as we have touched on, the Government fund an early years entitlement of £15 a week.

The Government are making good progress in tackling the root causes of child poverty, to which the hon. Member for Wirral South referred. All Governments are committed to ending child poverty once and for all, but I reiterate that work remains the best route out of poverty. We discussed this at length in Committee, including the interactions between universal credit, making work pay, and interdepartmental measures on child poverty.

[Alison McGovern]

The Minister mentions universal credit and making work pay—for too many families I only wish it did. Will she comment on the role of universal credit in discouraging dual earners? In the context of this child care debate, does she think the Government should look again at its operation?

[Priti Patel]

We had much debate in Committee on universal credit and the way in which the scheme interacts with it. The hon. Member for Manchester Central (Lucy Powell) made some strong and valid contributions in this regard.

Amendment 12, tabled by the hon. Member for Stockton North (Alex Cunningham), would allow regulations in future to permit parents to receive support under the new scheme and universal credit at the same time. As I have said, we must not forget that families in receipt of universal credit already rightly receive generous support with their child care costs. Child care support is offered to parents on universal credit as part of a welfare system designed to make sure that work pays and that those who need the support get it. Up to 300,000 more people are likely to be in work as a result of universal credit, and we expect a significant proportion of those to be households with children. But it is not right for a parent to receive support under the new scheme in addition to universal credit, when parents will receive 85% of their child care costs from April 2016. It will be easy for parents to access support that best suits their circumstances, so I reassure the hon. Gentleman that parents who are eligible for universal credit will be able to opt out and claim support under the new scheme should they wish to do so. We shall be supporting parents in making those decisions.

As we said in Committee—hon. Members have touched on it again today—we shall be launching the online support tools, the calculator and clear guidance. Draft guidance has been published well ahead of the launch of the scheme and shows our commitment to work in close collaboration with parents, child care providers and employers, and their feedback will ensure that guidance is tailored to meet their needs.

This is about ensuring that support remains focused on those on lower incomes, and the introduction of the scheme gives parents confidence that as they increase their income and move off universal credit, they will continue to receive Government support with their child care costs, which is vital.

[Alex Cunningham]

I do not want to go over the top on this, but will the Minister please outline what help she proposes for families who do not qualify for anything at the moment but who are still the working poor?

[Priti Patel]

There is support that remains focused on those on lower incomes. As I said at length in Committee, the Government’s overall child care system is very much focused on those on lower incomes, and it is wrong to suggest that that is not the case. Families in receipt of tax credits receive more generous support with child care costs. We have already discussed universal credit, which is being extended to cover up to 85% of the costs of child care. All the analysis shows that the benefits of the scheme are focused on households on lower incomes. The new scheme ensures that for the first time parents can be certain that support will be available for them; yes, obviously, at the lower end, but importantly, as they move into work and increase their incomes too. The scheme is much more fairly targeted than the existing scheme of employer-supported child care. It supports working families, getting households and families back into work. It was debated at length in Committee, and I reassure the hon. Gentleman that that is the case.

Today’s debate has shown that the Government are taking a broad range of actions to support families with the costs of child care, not just through this scheme, but through improvements in the welfare scheme—

[Mark Durkan]

In considering how the Government can best take this forward, will the Minister take account of the fact that whenever the Northern Ireland Assembly debated the legislative consent motion, there was much confusion, even on the part of the junior Minister, about its impact on child care in Northern Ireland? Child care provision in Northern Ireland has a different profile from here, and it seems that the Government’s scheme will lead to degrees of confusion and uncertainty, particularly for existing schemes that are well favoured.

[Priti Patel]

I take this opportunity to re-emphasise that the scheme in no way creates confusion. In Committee we touched briefly on the situation in Northern Ireland and provided information and guidance in that regard. This is about working with all the players—parents, employers, and other stakeholders. It is about making the system abundantly clear and simple, not about complexity. Guidance has been drafted. We are working with third parties. We are designing a calculator tool, as we have discussed before. This is all about giving guidance and providing clarity.

I shall briefly cover amendments 3 to 11 on families in receipt of tax credits. The child care element of tax credits is just one component of the package of support designed to help lower-income households. I emphasise that there is support for those on low incomes, in particular. We should reflect on the fact that under the new scheme more working families than ever before will be eligible for support with child care costs. The scheme will be an important component of the overall offer to working families. It will sit alongside existing schemes to ensure that support is available to those increasing their incomes as they move off benefits.

[Alex Cunningham]

Does the Minister not see any advantage in leaving the door open by amending the Bill to allow for the scheme to be extended at a later stage? As I said in my speech, it will take primary legislation to extend the scheme any further, whereas she could accept an amendment that would mean that the door was open to simple, straightforward regulation instead.

[Priti Patel]

I commend the hon. Gentleman for his tenacity in making that point again, as is absolutely right and proper. I reiterate that the Government are committed to reviewing the scheme, as I have outlined previously in Committee and during today’s debates on new clauses 1 and 2. It has to be right and proper to have that review. Once the scheme has bedded down and we have had the full assessment and evaluation, we will look at all its aspects. I hope that I have given the hon. Gentleman sufficient reassurance. I ask him to withdraw his amendment and Labour Front Benchers to withdraw their new clause.

Question put, That the clause be read a Second time:—

--- Later in debate ---

[Priti Patel]

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

The Bill has been many months in development through consultation, drafting and detailed discussion in Parliament, and I am sure the House will agree that it will leave the Commons in good shape.

Before I proceed, I would like to pay tribute to my right hon. Friend the Secretary of State for Education who, as Financial Secretary, was responsible for some of the key features of the scheme and introduced the Bill in the House of Commons in June. I spoke on Second Reading as a Back Bencher, and it is an honour for me to appear today as the Minister responsible for the Bill.

I welcome this further opportunity to speak on the Bill and to reflect on the important role it will play in the Government’s broader strategy to get people into work. One of our fundamental principles has been that every person who can stand on their own two feet should do so. That means being in work, making their contribution and taking responsibility. We want to empower people in their choices. As a mother myself, I strongly believe that child care costs should not be a barrier to work. Since 2010 we have introduced a comprehensive package of measures to help working families cover nursery costs for their children. The new child care scheme will greatly expand the support we provide to working families towards their child care costs.

Even before the financial crisis, there were around 5 million people in the United Kingdom of working age on out-of-work benefits, some 1.4 million of whom have spent the past decade unemployed. The number of households where no one had ever worked almost doubled between 1997 and 2010, so when we took office in 2010 we made getting people back into work one of our key priorities. We can be proud of some major successes. Figures from the Office for National Statistics have shown that unemployment fell by 154,000 to below 1.97 million in the three months to the end of August, the first time it has been below 2 million since 2008. Since 2010, the UK has created over 2 million more jobs for people to go to—the fastest rate of job creation of any major economy, or, as the Financial Times put it in September, more jobs than the rest of the European Union combined. Female participation in the work force is at an all-time high, and we should welcome that.

As ever, there is more that can be done. If we had the same levels of men and women participating in the labour market, the OECD says that could lead to an increase in GDP of around 10% by 2030. Survey data from the Department for Education suggest that more than half of mothers would prefer to be in paid employment if they could arrange reliable, convenient, affordable, good quality child care. The Government are therefore taking action to ensure that high-quality child care is available and affordable. We recognise that child care costs are a major part of most working families’ budgets so we are putting in place measures to help every working family in the UK with their child care costs.

We have almost doubled the amount of child care support available to most middle earners, and we are doing even more for those on low pay. We are already funding 15 hours a week of free child care for every three and four-year-old, funding 15 hours a week of free child care for 40% of two-year-olds, and increasing the child care support for low income families to 85% under universal credit. Now, this scheme will significantly broaden access to child care support. Hundreds of thousands of families who are excluded from the current employer-supported child care scheme will be able to benefit from the scheme, and up to 200,000 self-employed parents will have access to child care support.

We have paid particular attention to designing the scheme so that it suits the needs of part-time workers. Parents earning as little as £52 per week—averaged over a quarterly entitlement period, or over a tax year for self-employed parents—will qualify for support.

We do not believe, however, that providing direct support to parents is the only way to address the high cost of child care. That is best achieved by supporting the child care sector to increase supply, which will ensure that any increase in demand for child care will be matched by increased supply measures, rather than just increased costs.

The latest figures show there are now 100,000 more child care places than there were in 2009. We are making start-up grants available to help people set up new child care businesses. We have made up to 32,000 good and outstanding childminders automatically eligible for early education funding. We are making it simpler and easier for schools and child care providers to work together to increase the amount of child care available on school sites before and after school. Only this year, we have created childminder agencies, which will improve the support available both for childminders and for parents, and simplified existing regulatory frameworks to allow nurseries to expand more easily.

The evidence shows that our reforms are having an effect. After 12 years of consistently rising prices, the costs of child care in England have stabilised for the first time. Indeed, the costs of some of the most popular types of child care in England are now falling. Once inflation is taken into account, costs for the majority of parents have actually fallen, which means that more parents are able to access affordable child care and support their families. By contrast, the costs of some types of care have risen in Scotland and Wales, where these reforms do not apply.

As we have discussed in previous debates on the Bill, child care costs are not the only pressure on family budgets. We can never forget the impact of the 2008 recession and its effect on incomes for every household.

[Alex Cunningham]

I welcome the fact that prices are coming down and that more places are available, but the vast majority of the new jobs to which the Exchequer Secretary has referred are low-paid, part-time, insecure and involve zero-hours contracts and similar, which do not make anybody’s life easier as they consider care for their children. Perhaps that is why we are seeing an overspend of many billions of pounds in the Government’s social security budget.

[Priti Patel]

I re-emphasise a point I have made consistently throughout the passage of the Bill: the Government’s overall system of child care remains focused on those who are on lower incomes. We are concentrating on supporting families getting into work and ensuring, as we have touched on in previous debates, not only that work pays, but that child care support remains focused on those on lower incomes.

Living standards—the cash in people’s pockets and what they can buy with it—are perhaps the biggest issue facing British families. The tough decisions we have taken as a Government have a very clear end in mind, which is to help create prosperity and boost living standards. Alongside that, we want to make sure that the Government have the right measures to support working families and households and to ensure that work pays.

Since coming to power, this Government have taken decisive action to ease the pressure on households and families. We are providing free school meals for all infant school pupils in reception year and in years 1 and 2. We have increased the personal allowance to £10,000 and in April 2015 it will increase to £10,500. During the course of this Parliament, we have cut the income tax of the typical taxpayer by £805, taking more than 3.2 million individuals out of income tax by 2015-16 and boosting the take-home pay of 25 million people.

Additional measures on living standards include freezing council tax in real terms and cutting the cost of driving by freezing fuel duty until the end of this Parliament, saving a typical motorist £680. We recently announced that the cost of driving licences will also be cut. Ultimately, however, as every family knows, the best way to raise living standards is by being in work, and we are pulling out all the stops to help those who want to work get into work by making work pay and introducing this Bill, which provides important financial measures to support child care.

I thank all Members for the opportunity to debate all the issues associated with child poverty as the Bill has passed through the House. Child poverty is an extremely important issue and this Government are fully committed to the goal of ending child poverty in the UK by the end of 2020.

[Ms Margaret Ritchie (South Down) (SDLP)]

As my hon. Friend the Member for Foyle (Mark Durkan) said on Report, the Northern Ireland Assembly has already debated the legislative consent motion, which will enable enactment of the legislation in Northern Ireland. Does the Minister accept that there are fewer opportunities to access child care in Northern Ireland and fewer job opportunities? Will she consider allowing the other place to debate the extension of the child care voucher scheme so that it can remain in place while the measures are being implemented and both the scheme and the Bill can run concurrently?

[Priti Patel]

I will come on to Northern Ireland in a moment, because I want to finish addressing child poverty. Our child poverty strategy 2014-17, which was published in June, outlines our plans to tackle the root causes of child poverty, including parents being out of work, low earnings and educational failure. That approach reflects the reality of child poverty today and, importantly, reflects our determination to achieve lasting change to protect the poorest in our society.

The evidence is clear that work remains the best route out of poverty, and children are three times as likely to be in poverty if they live in a workless family. That is why we are taking decisive action to make work pay and reform the welfare system. We have touched on universal credit, the child care support we are providing and increasing the national minimum wage.

This is a complex, multifaceted problem, and it would be wrong to suggest that there is a silver bullet. We have made good progress, but there is more to do in tackling child poverty. The Bill will support this Government’s efforts to tackle the root causes of one of our greatest social ills.

I am grateful to all those who have participated in the debates on the Bill. I welcome the support from both sides of the House for this important new scheme, which marks such an improvement on the current support available to parents. I am particularly delighted that the Northern Ireland Assembly recently voted in favour of a legislative consent motion to enable the scheme to be available to families in Northern Ireland in the same way as it will be to families elsewhere in the UK. That was entirely a matter for the Assembly, which has given the scheme a positive vote of confidence.

I understand that the Offices of the First Minister and of the Deputy First Minister will consider the impact of the scheme and its interaction with other initiatives in the context of wider work on the development of their own child care strategy, so it would be inappropriate for me to make further comment on those devolved matters. Obviously, that is work in progress.

During all stages of the Bill, we have consulted widely on the design of the scheme over the past year. We have listened to feedback from parents, employers, the child care industry and all stakeholders.

Following those discussions, we are already making several changes. We are rolling the scheme out to families more quickly. Within a year of its introduction, all families will be able to apply for support, which is significantly faster than the previously announced timetable for the roll-out, of seven years. There is a more generous cap so that families can receive up to £2,000 of Government support per child. We are making the scheme available throughout periods of paid and unpaid parental leave, and we are making changes to the minimum income level to support those in self-employment. We are extending to 14 days the time during which parents can access the scheme before starting work. I have committed to looking at the cap with reference to the costs of caring for disabled children.

The scheme will not only deliver valued support to hard-working families, but it will do so in a way that works for parents. It will be a smooth, simple and secure scheme. From the outset, it has been designed to have parents at its heart. Rather than requiring parents to report changes of circumstances in real time, the scheme will be based on quarterly entitlement periods. That will give parents the certainty that they will continue to be eligible for support for three months at a time, regardless of any unexpected changes in their circumstances. For parents to reconfirm for the next quarter will simply take a few clicks through the system that we are designing and setting up. Those are just some of the ways in which we have engaged with stakeholders and, importantly, learned lessons from the experience of tax credits. Our ambition is for the new scheme to represent a real step change in user experience.

The scheme will be a vast improvement on the current employer-supported child care scheme, which provides support to a limited number of employees. As well as being available much more widely, it will be better targeted, make payments on a fairer basis—on the number of children, rather than the number of adults—and will be much more efficient. That is why we will close the current scheme to new entrants when the scheme is introduced, although those who already receive support under it can stay in it, if they so choose, for as long as they wish.

As a result of the Bill, more working families than ever will be eligible for Government support with their child care costs. Our proposals have been welcomed by families and child care providers around the country. The Bill represents an important part of the Government’s strategy to get people into work, and I commend it to the House.

UK Acorn Finance (Mortgages)

Priti Patel Excerpts

Tuesday 11th November 2014 Westminster Hall

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

It is a pleasure to serve under your chairmanship, Mr Turner.

I congratulate the right hon. Member for Dwyfor Meirionnydd (Mr Llwyd)—I hope my pronunciation is just about correct—on securing an extraordinary debate on what is, it is fair to say, a disturbing issue. He has been assiduous in his campaign to represent his constituents, and I pay tribute to him for the work he has done. I also thank him for sharing with me the background information on this very specific case, and I have read much of it.

Such debates are so important. By highlighting the facts and drawing them to the attention of the House, we can try to effect some change in the right place, notwithstanding the fact that the right hon. Gentleman gave a tremendous list of the organisations that have already been approached to investigate and address the case.

It is deeply disturbing to hear not only about what has happened and its overall impact on the right hon. Gentleman’s constituents, but that there are some 44 other cases, spanning about 20 other Members’ constituencies, and that so many other individuals have been targeted. I therefore pay tribute to the right hon. Gentleman for raising this distressing case and highlighting the range of issues associated with the individuals he named.

I hope the right hon. Gentleman and other Members will understand that it is not appropriate for me to comment specifically on the individual case, which is subject to a range of proceedings. However, I should make it clear that I intend to take away all the points he raised and to share them with the Home Office, as he suggested. That absolutely has to happen.

The right hon. Gentleman mentioned a specific individual’s history, and their case is quite alarming. He touched on bankruptcies, IVAs and county court judgments—the list is endless. He also mentioned that that individual’s licence was renewed in 2012. I will pass the case to the regulator. The Financial Conduct Authority is fully independent, but it will be sent the details he highlighted. It is only right and proper that the FCA, with the full powers that it has, look at this case.

I will share with Treasury and Home Office officials the details the right hon. Gentleman has raised. I will ask them to consider what steps the Government can take to address every concern he has outlined. It is only right and proper that we do that. In the meantime, I hope he and other Members will find it helpful if I set out the approach the Government take on some of the issues he has brought to the attention of the House.

The hon. Member for Kilmarnock and Loudoun (Cathy Jamieson) mentioned payday loans, which have, thankfully, come under greater regulation today. The legislation the Government have introduced, along with changes that have been made over the past few years, are intended to bring in more robust consumer protections. That is right and proper, because we do not want vulnerable individuals to be targeted in a malicious way. We have heard about one such case this afternoon, but we have seen similar cases with the payday loan industry, and it is right that the right protections are there.

That is why the Government established a strong, independent regulator—the Financial Conduct Authority—dedicated to ensuring that financial services firms treat their customers fairly. Fairness and transparency are absolutely key. We do not want to hear of cases such as this ever again. This is about protecting consumers. However, the protections provided by the FCA do not generally extend to lending to businesses in the same way as they do to consumers, as the right hon. Gentleman highlighted.

[Mr Llwyd]

I must say I am encouraged by the Minister’s response, because I believe she will diligently pass on the information about this case, and I am grateful for that. However, on commercial lending being different from domestic lending, there is every reason to leave farms in the domestic area, because if something goes wrong, people do not just lose a house, which is bad enough—they lose everything. The people in this case wanted to absolve themselves from ordinary, proper, decent responsibilities towards borrowers.

[Priti Patel]

I fully understand the impact on the individuals. We should be clear that people have lost their livelihood; this is about losing not just bricks and mortar and a roof, but an entire livelihood.

[Cathy Jamieson]

When the Minister makes her representations and passes information to the FCA, might she not want to highlight this issue? It appears that the intention has been to use a loophole—redefining a domestic premises as a business premises—potentially to get round some of the regulations.

[Priti Patel]

The point is well made. This is clearly about the impact on individuals and their livelihoods. We need to ensure that loopholes are closed and that individual protections are put in place. The Government are clear about being committed to introducing FCA regulation, where there is a clear case for doing so, in the right and proper way. However, there is a balance: we do not want to impose greater burdens, additional red tape and costs on financial firms, but we want to ensure at the same time that consumers are protected.

Businesses are expected to be better placed than consumers to judge whether contracts they make with other businesses are in their interests, so they do not necessarily need the protection of FCA regulation in the same way. However, the point that has been raised really is valid, because we are talking about the impact on smaller businesses. Of course, such businesses have a different right of recourse—to the Financial Ombudsman Service. This is always about the right kind of protections and information, and making sure that consumers are protected and loopholes closed. At the same time, however, there is, from a regulatory point of view, a fine balance.

I reiterate that this is a serious and significant case, and there are avenues I can look into—speaking to the Home Office, in particular, and asking Treasury officials to look into the issue.

For micro-businesses—businesses with a turnover of less than £2 million and fewer than 10 employees—the Financial Ombudsman Service is an independent, non-Government body established under statute to provide proportionate representation and independent resolution of complaints against financial services firms. That is predominantly for bank customers. Those decisions are binding, which is to be welcomed.

The right hon. Gentleman has made representations on behalf of his constituents, but there seems not to have been the positive engagement he is looking for, so we will address the issue on that basis.

I want to touch on the subject of fraud. If it is believed that a business is a victim of fraud, there is an additional avenue to explore. From April 2013, all reports of fraud are now made to Action Fraud rather than the police. The right hon. Gentleman spoke in some detail about Avon and Somerset Constabulary. Obviously he has engaged with it on behalf of his constituents; but Action Fraud is a Government-supported specialist fraud reporting and advice service. It is not a law enforcement body and therefore does not investigate crimes, but it provides a portal for the collection of crime reports and information so that they can be analysed. Going by the files and information that the right hon. Gentleman has sent me, there is a lot of information that could be analysed through law enforcement mechanisms. Where viable that would be sent out to the local force. I should be happy to discuss with the right hon. Gentleman how matters could be followed up using that avenue.

Although business lending is not regulated, the major lenders already take steps, as we have heard, to prevent repossessions and insolvencies. I understand the highly specific nature of the case that the right hon. Gentleman has brought to the House today, but there are processes through which businesses affected by repossession and insolvency can work properly with third parties on repayment plans and so on.

[Cathy Jamieson]

Given that the case we have heard about today concerned not only a business but a home, will the Minister commit at least to seeing whether anything else should be done about insolvency practice and guidelines in such circumstances?

[Priti Patel]

I am sure that the Government can look into that, because small businesses in particular suffer in such circumstances. Small businesses that are closely intertwined with family business become subject to different conditions from those affecting larger ones, and the implications are different for them if they reach the devastating time when they go into insolvency and get an individual voluntary arrangement. The process is traumatising, which takes us back to the point made by the right hon. Gentleman: it is a question of an individual’s livelihood, as well as a business.

[Mr Llwyd]

The Minister is, may I respectfully say, very responsive to what has been said. The hon. Member for Kilmarnock and Loudoun made the point that farms are a special case. We have already mentioned that they are often asset-rich but cash-poor; so they are there for the picking. Given that, to my knowledge, there are at least 44 different cases—perhaps 45, or perhaps even more—with roughly the same MO, surely there must now be a redefinition. Otherwise, the same thing will happen again. The people responsible are sharks who will continue to absolve themselves from regulation and play fast and loose with innocent people, with the disastrous results I have described.

[Priti Patel]

I think I have made it clear that the practices we have heard about this afternoon are wrong; we have heard about their devastating impact. Clearly, the case is distressing and complex, and we will look into every issue the right hon. Gentleman has raised. I will write to him personally once we have done so, and follow things up with him, to see how we can provide support and assistance in pursuing the matter. There is potential to examine definitions as well. I understand the circumstances in question, and the impact and implications of what has happened.

I hope I have been able to reassure the right hon. Gentleman that we are committed to putting in place the appropriate protections. We have really only touched on some of the areas in which the Government are working to protect consumers. We have heard a lot in the news today about payday loans—one such area. Today the right hon. Gentleman has brought the attention of the House to a very particular case. He has shown tremendous dedication to his constituents in supporting the affected families. He mentioned that there are potentially 44 other cases, and I would encourage the other Members who have such cases to engage in the issue as well. It is through such a collective evidence base that we will be able to effect change, and through due diligence and due process that we will get the justice needed by the right hon. Gentleman’s constituents.

Income Tax

Priti Patel Excerpts

Wednesday 5th November 2014 Commons Chamber

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

We have had a lively debate this afternoon, and that is no great surprise, as it is only the third Treasury Opposition day debate this year. We have heard from the Opposition repeated claims that the decision to reduce the additional rate of income tax was the same as handing cheques to millionaires. Those claims show the Opposition’s true colours when it comes to tax, and how they would revert to their failed policies of spending more than this country can afford, with hard-working taxpayers continuing to pay back Labour’s debt.

The Opposition had 13 years to take action and ensure that those with the most to contribute in tax did so, yet it was their discredited and failed Government who introduced the 50p rate just 36 days before they were kicked out of office.

When it comes to fairness this Government will not take any lectures, because it was a Conservative Chancellor who took the decisive action to ensure that those with the most to contribute did so. It was measures announced by this Government throughout this Parliament that increased the contribution of the wealthiest by many times more than the cost of reducing the additional rate to 45p. It was this Government, led by a Conservative Chancellor of the Exchequer, who delivered lower taxes for more than 25 million hard-working people, taking low earners out of tax altogether.

It is worth reflecting on the number of low earners taken out of tax altogether. The hon. Member for Bethnal Green and Bow (Rushanara Ali) spoke about justice and fairness in the tax system. I remind the House that it is this Government who are supporting hard-working people. In her constituency alone, more than 52,000 people are now benefiting from the increases in personal allowances introduced by this Government. In Inverclyde 34,000 people, in Heywood and Middleton more than 41,000 people, and in Holborn and St Pancras more than 61,000 are benefiting from this Government’s policy and the increases in personal allowances. That is down to the fact that we trust the British people with their money, unlike the Labour party, which believes that it is right to take more of people’s money out of their pockets.

The report laid before the House alongside the Budget found that the 50p rate of income tax raised considerably less than the anticipated sum. A number of contributions have highlighted that simple fact today, and I pay tribute to my hon. Friend the Member for North West Leicestershire (Andrew Bridgen), my right hon. Friend the Member for Gordon (Sir Malcolm Bruce), my hon. Friend the Member for Wyre Forest (Mark Garnier), and, in particular, my hon. Friend the Member for Taunton Deane (Mr Browne) for his concise contribution on basic economics, showing that higher tax rates do not result in greater revenues, and, more important, damage the country’s long-term economic stability.

The 50p rate has been distortive and uncompetitive, and it pushes away the very wealth creators that this country needs to create jobs and economic growth. At a time when labour mobility is greater than it has ever been before, the Government recognise that the UK is competing for talented individuals and business investment. It is investment that creates jobs, economic security and a long-term economic future for Britain. A 50p rate of income tax does not help to do that. At a time when global economies are still struggling to compete, it is this Government who understand the value of ensuring that Britain is open for business.

The evidence speaks for itself. The 50p rate did not work. This Government reduced the rate to 45p because it was not rational to persist with a tax rate that was distortive and harmful to this country’s economy and did not raise any revenue. We have heard that the 50p rate left the UK with the highest statutory rate of income tax in the G20. In a world of increasing competition, it would be totally irresponsible for a Government of any colour to put this country at an economic disadvantage with a punitive rate of tax.

Hon. Members have heard throughout today’s debate that the top 1% of taxpayers pay more than 27% of income tax revenue, more than at any point under previous Governments. Maintaining an uncompetitive rate is counter-productive and will result in long-term economic failure. When it comes to long-term economic failure, we know that the Labour party has a specialism in that area. Clearly, tax competitiveness and a sustainable, prosperous economy do not matter to the Labour party, because if they did we would not be having this debate. As the HMRC report shows, we would not just be losing the additional tax revenues as a result of the higher rate, but would lose all the tax revenue of that group of taxpayers.

Britain is a country that is open for business. We want those with the most to offer and the most to contribute in tax working in the UK, creating wealth, jobs and growth, and, importantly, paying taxes. It is this Government who have shown that contrary to the myth generated by the Opposition, we have made the changes in every Budget to ensure that those with the broadest shoulders contribute more. We have increased capital gains and introduced the new rate of stamp duty on properties over £2 million, we are restricting the excessive use of certain tax reliefs, and, most significantly, we are clamping down on the minority of individuals who choose to avoid and evade tax.

The Labour party had 13 years to undertake such measures and it did not do so. We have made historic steps to support those on low and middle incomes. We have more people in employment and more young people and women in work. We have increased the personal allowance, frozen fuel duty, frozen council tax, and increased the national minimum wage.

Labour wishes to use an inefficient income tax rate to damage our economy, and to put our international competitiveness at risk by backing a failed tax. It is willing to drive wealth creators out of this country and to risk long-term damage to the economy. That is not what a responsible Government would do, and it is certainly not what we are doing. We have a long-term economic plan that is working. We are getting on with the job of putting the economy back on track, creating jobs and growth and securing Britain’s long-term economic future, which is why the motion should be thoroughly rejected.

Question put.

Oral Answers to Questions

Priti Patel Excerpts

Tuesday 4th November 2014 Commons Chamber

[John Pugh (Southport) (LD)]

8. What recent steps he has taken to rebalance regional economies.

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

This Government are committed to rebalancing the economy in order to strengthen every part of the UK. In July this year local growth deals were agreed with all 39 local enterprise partnerships across England. Each deal reflects the particular needs and capabilities of the local area. Growth deals are just one of several ongoing investment programmes aimed at helping every region in the United Kingdom achieve economic success.

[John Pugh]

May I explore the link with governance? What is the concrete evidence outside London of the slightest connection between economic growth and elected mayors?

[Priti Patel]

It is fair to say, as we have heard today, that devolving power to more local areas enables the regions to take responsibility for the decisions that affect their areas, which in the long run will create good, solid, strong local long-term economic plans.

[Alison Seabeck (Plymouth, Moor View) (Lab)]

The Minister talks about supporting regional growth and rebalancing the economy, yet promises are being made— £7 billion to Greater Manchester, £7 billion potentially to top taxpayers. That money would sort out transport connectivity issues and help us grow our economy, so will she commit to the Dawlish avoiding line and the resilience measures that we need in the south-west now?

[Priti Patel]

We are currently looking specifically at that.

[Ian Swales (Redcar) (LD)]

In the past four years the Tees valley has received five times as much investment from the regional growth fund as in the last four years of the Labour Government. That is going not just to large companies, but to smaller ones too, such as Wards and ElringKlinger in my constituency. Will the Minister ensure that regional growth funding continues to be a key element of rebalancing the economy?

[Priti Patel]

My hon. Friend is right that, by handing back power to local leaders, we are enabling them to back local jobs and to create prosperity and long-term economic growth. That is exactly what this Government are committed to doing.

[Lucy Powell (Manchester Central) (Lab/Co-op)]

I welcome yesterday’s announcement in Greater Manchester and put on record my gratitude to the leadership in Greater Manchester for their efforts. May I offer some advice to the Chancellor? If he wants to endear himself further to the voters of Manchester, he might consider the totality of his Government’s policies on the area. When will he consider going further in fiscal devolution and secondary legislation devolution so that we can truly live up to our aims?

[Priti Patel]

I welcome the hon. Lady’s support for the package, which is substantial. The priority must be its implementation and delivery, and we look forward to working with all parties to make sure that it is a success.

[Stephen Timms (East Ham) (Lab)]

11. What recent forecast he has made of the change in the deficit between May 2010 and May 2015.

--- Later in debate ---

[Mr Steve Reed (Croydon North) (Lab)]

12. How many working people are in receipt of tax credits.

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

In April 2014 there were 3.3 million people in work receiving tax credits, down from 4.8 million in April 2010.

[Mr Reed]

When the Chancellor came to office, less than a quarter of housing benefit claimants in Croydon were making claims to supplement low pay. Today that figure is two fifths. Will the Minister apologise for pushing growing numbers of hard-working Croydon families into poverty?

[Priti Patel]

When it comes to the cost of living, Labour’s great recession is what made the country and the hon. Gentleman’s constituents a whole lot poorer. We now have record levels of employment, including a 9% increase in his constituency. Perhaps he would like to welcome that.

[Mr Stewart Jackson (Peterborough) (Con)]

There are a great many studies and much empirical evidence showing that the surest way to combat poverty is through work. Is it not a badge of pride for this Government that in four years we have reduced the number of people in households where no one works by 671,000?

[Priti Patel]

My hon. Friend is absolutely right. When it comes to tackling the country’s economic problems, we can improve living standards only by getting more people back into work. This Government have been reducing child poverty and ensuring that work pays.

[Dame Anne Begg (Aberdeen South) (Lab)]

Tax credits are meant to be moving into universal credit. What timetable is the Treasury working to for phasing out tax credits?

[Priti Patel]

That matter will be subject to the next Parliament.

[Mr Speaker]

It is time to hear from a Lincolnshire knight—Sir Edward Leigh.

[Sir Edward Leigh (Gainsborough) (Con)]

If someone comes here to work from the European Union, and if they are in a relatively low-paid job and receive tax credits as a form of benefit, they might effectively be paying no tax at all. Will the Government tell the European Commission that we should have a new system by which people have to pay tax for at least three years before drawing any tax credits or benefits?

[Priti Patel]

We have already made changes to that whole area, and that is something we will look at further.

[Bob Blackman (Harrow East) (Con)]

14. What estimate he has made of the rate of growth in the economy.

Taxation of Pensions Bill

Priti Patel Excerpts

Wednesday 29th October 2014 Commons Chamber

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

This has been a wide-ranging and constructive debate; it has been engaged and informed, and I thank everybody who has participated. Before I address some of the specific points raised, I wish to reiterate the main purpose of the Bill.

The Bill is intended to put in place the most radical reform to the way people take their pensions for nearly a century. It is a fundamental principle for this Government that those who have worked hard and saved all their lives should be free when they reach retirement to choose how they spend those savings. That is because we believe in personal responsibility, and that the money someone has earned is their money.

The Bill will remove the limits on withdrawals from drawdown and the restrictions on the shape of annuities, and it will create new and more flexible ways for someone to put the money in their pension pot to good use and provide for their future as they wish. As a result of the reforms, people will rightly have the freedom to choose how to spend their savings. That, in turn, will incentivise the pension industry to provide real choice through a range of innovative new products.

I would like to address points raised by the Opposition; first, the myth that the Government have not consulted. The Government have consulted extensively on implementation and legislation, and we have received wide support from consumer groups and the industry. I note that the hon. Member for Birmingham, Ladywood (Shabana Mahmood) quoted the chief executive of the ABI. He has also said that the ABI

“welcomed the reforms as good for those who were faced with the double challenges of increased longevity and very low interest rates when they came to make retirement decisions. The industry is behind these reforms. We want them to be a success and our members are working flat out to get everything ready for April 2015.”

The Government are putting in place comprehensive guidance. There has been discussion on guidance—I will come on to it in more detail—and I want to make it abundantly clear that we have brought forward an amendment to the Pension Scheme Bill to achieve just that.

On fairness, the old system was unfair and it disadvantaged those with a moderate amount of savings. Our Government reforms will make the system more flexible and fairer for all. On cost, as the Financial Secretary has clearly stated, we set out the costings at the Budget. Since the Budget, and as a result of consultation, we have introduced further changes and the OBR-certified update will be provided at the autumn statement.

There have been a number of positive views from the industry. It is wrong and misleading to imply that there is no support from the industry. The consultation has been extensive. There has been a 12-week consultation on the best way to implement the changes, followed by consultation on the Bill itself. It is important to move quickly, because people are making binding decisions every day with what are, frankly, limited choices in the current marketplace.

[Cathy Jamieson]

I am sure the Minister did not intend to suggest that I, or any other Opposition Member, said there was no support from industry. For the record, that is not what we said. We recognised that concerns had been expressed. That is different from saying there was no support.

[Priti Patel]

I am grateful for that clarification. There is extensive support from the industry. I pay tribute to the industry for the way it has worked with us through the consultation to bring the changes together in such a constructive and supportive way.

[Crispin Blunt]

On that point, two companies in my constituency, Partnership and Just Retirement, are specialist annuity providers and will be significantly affected. They contributed to the consultation and I know that the Government moved in response to that. I am grateful to the Minister and her officials for the attention they paid in the consultation process.

[Priti Patel]

I thank my hon. Friend for acknowledging that work and for his thoughtful contribution. He has many pension providers in his constituency. Those insights have helped to inform the debate and shape the Bill.

The aim of guidance is to empower consumers to make informed and confident decisions on how to use their pension savings in retirement. Information alone is not enough to change consumer behaviour. The Government are committed to maximising awareness of the guidance service. Key to that will be the regulatory requirements on providers and schemes to signpost to guidance at key points when individuals are trying to access their pension pot. In its recent consultation on the changes surrounding new pension flexibilities, the FCA has been clear about requiring genuine signposting, including rules that ensure firms cannot circumvent consumers’ right to guidance. An essential part of the development of the guidance will be determining what engages consumers effectively. The Government are assessing engagement and take-up rates, and testing different engagement strategies informed by behavioural insight teams as part of piloting work beginning this autumn. Again, this is about getting it right. My hon. Friend the Member for Redcar (Ian Swales) made an important point about that. We are getting one bite of the cherry and we need to make sure we get it right.

[Ian Swales]

Can the Minister say a little more about the timing? She said that a consultation is under way; presumably its outcome will affect what the Government do. People who are due to take pensions in April will be considering their options from January and February onwards, so when will we be clearer about the nature of the guidance and the universality of provision, and when will people be told about that?

[Priti Patel]

Let me assure my hon. Friend that guidance will be available in good time. It is also imperative that we get the guidance right, so we are working assiduously to do exactly that.

The scope of the high-level content of the guidance was set out in the FCA consultation that it ran in anticipation of its standard-setting role. The Treasury and its delivery partners, the Pensions Advisory Service and Citizens Advice, are working up the operational details and the context of the guidance while adhering to the FCA standards.

I will come to some of the other points raised by colleagues, but I would like first to touch on the Ipsos MORI poll that has been referred to. The poll also found that 88% of people would not draw down their entire fund. People said that rather than just spend their funds on a range of things, they would use them for good financial planning. That is exactly what these reforms are all about: trusting people with their money.

[David Mowat (Warrington South) (Con)]

The Minister talked about guidance a few moments ago. In the event that guidance is found to be inadequate or not to have been offered properly, would that potentially void any transaction made subsequently?

[Priti Patel]

The guidance that is provided will not make specific recommendations. Information will be provided to individuals not to make specific decisions, but to signpost and guide them through the areas I have touched on.

[David Mowat]

I thank the Minister for that answer, but if a supplier sold a product without offering any guidance and without checking whether that had happened—notwithstanding the question of its not being specific—would that be a problem and could it void the transaction?

[Priti Patel]

The FCA will be clear in setting out standards. However, I will come to that point shortly, because we have also discussed the consequences of mis-selling and fraud.

I would like to reply to a number of points made in the debate. The hon. Member for Middlesbrough South and East Cleveland (Tom Blenkinsop) talked about the tax revenue implications of the annual allowance and highlighted the evidence given before the Pension Schemes Bill Committee on 23 October. As my hon. Friend the Financial Secretary outlined earlier, the assumptions made in that evidence generated a huge overestimation of the likely cost of the reforms to the Exchequer. The Government believe that the introduction of a £10,000 annual allowance is the appropriate approach to allow people the flexibility to withdraw or contribute to their pensions as they choose from age 55, while ensuring that individuals do not use the new flexibilities to avoid paying tax on current earnings. It will also avoid unnecessary complexity for both consumers and pension providers when the new system comes into place in April 2015.

I would like briefly to touch on the two other contributions. We heard from my hon. Friend the Member for Amber Valley (Nigel Mills), who I understand celebrated his 40th birthday yesterday. He seems far too young to be contributing to pensions debates, although I know he has specialist knowledge in this area. He made a thoughtful contribution and raised a number of points. He mentioned the open market option. To be clear, the open market option will continue to be highlighted in the information that pension schemes are required to provide to their members at retirement. We have simply removed the requirement under the tax rules for the member to have chosen the annuity provider in order for the annuity to be an authorised payment. It is not appropriate for the member to be charged tax because they have been deprived of the opportunity to select an annuity provider.

Other points were raised about a proposed criminal offence for mis-selling. FCA rules are clear and require the responsible sale of products to consumers in a way that is clear, fair and not misleading. The FCA also has powers to take action against firms engaged in authorised business, and is able to prosecute a number of criminal offences. I hope that clarification reassures the hon. Member for Kilmarnock and Loudoun (Cathy Jamieson), who was very explicit in her points. We are very clear on that. It goes without saying that the FCA and the Pensions Regulator will monitor this whole area to ensure that fraudsters do not use the reforms to take advantage of vulnerable people.

My hon. Friend the Member for Redcar touched on annuities, as did my hon. Friend the Member for Amber Valley. The Government are clear that annuities will remain the right choice for many at some point during their retirement. We believe that many people will still value the security of an annuity, but that is something that individuals—not the state—should decide. As all contributions have made clear, this is about individual choice and opening up the marketplace. As retirement changes, many people may, for example, opt to buy an annuity later in life, allowing them to benefit from higher annuity rates. It is for individuals to buy products that are best suited to their particular circumstances.

In response to my hon. Friend the Member for Redcar—who was firm on the need to get on with this—we understand the scale of the challenge. That is why we have appointed an implementation team in the Treasury for the guidance guarantee, and we are working closely with the industry to ensure that it is ready for April 2015.

Finally, the risk of people spending all their money at once was briefly mentioned. I would like to reiterate that the Government believe that people who have worked hard all their lives should have the freedom to decide how to use their savings and, importantly, should be trusted to do so. The Government do not dictate how people should spend their money generally, so why should it be any different when it comes to their pension savings?

I am grateful to have had the opportunity to explain the issues that have arisen today. We have had a good debate and look forward to more in Committee. A number of important points have been raised. I think all hon. Members have sensed that the main issue is the principle of empowerment and allowing individuals to make choices that are right for them, especially when they come to assess their pensions. The Bill is about choice and it will make that choice possible. I commend it to the House.

Question put and agreed to.

Bill accordingly read a Second time.

Taxation of Pensions Bill (programme)

Motion made, and Question put forthwith (Standing Order No. 83A(7)),

That the following provisions shall apply to the Taxation of Pensions Bill:

Committal

(1) The Bill shall be committed to a Public Bill Committee.

Proceedings in Public Bill Committee

(2) Proceedings in the Public Bill Committee shall (so far as not previously concluded) be brought to a conclusion on Thursday 20 November 2014.

(3) The Public Bill Committee shall have leave to sit twice on the first day on which it meets.

Consideration and Third Reading

(4) Proceedings on Consideration shall (so far as not previously concluded) be brought to a conclusion one hour before the moment of interruption on the day on which those proceedings are commenced.

(5) Proceedings on Third Reading shall (so far as not previously concluded) be brought to a conclusion at the moment of interruption on that day.

(6) Standing Order No. 83B (Programming committees) shall not apply to proceedings on Consideration and Third Reading.

Other proceedings

(7) Any other proceedings on the Bill (including any proceedings on consideration of any message from the Lords) may be programmed.—(Mr Gauke.)

Taxation of Pensions Bill (Ways and Means)

Resolved,

That, for the purposes of any Act resulting from the Taxation of Pensions Bill, it is expedient to authorise the making of provision in connection with the taxation of pensions.—(Gavin Barwell.)

Energy-intensive Industries

Priti Patel Excerpts

Thursday 11th September 2014 Commons Chamber

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

I welcome today’s debate and congratulate the hon. Members for Stockton North (Alex Cunningham) and for Redcar (Ian Swales) on securing it, not least because it puts me through my paces in understanding the remit, this whole field and carbon taxes. It has been an insightful debate. The Government’s position has been discussed by a number of hon. Members, but we are clear in recognising the significant role that energy-intensive industries play in the UK economy. As my right hon. Friend the Chancellor said back at Budget 2011, we are committed to ensuring that manufacturing is able to remain competitive during the shift to a low-carbon economy and have pledged to do everything we can to help manufacturers play a valuable role.

We also recognise the difficulties that EIIs have faced as a result of high energy costs, and various cases and accounts of challenges that companies have faced have been cited in today’s debate. That is why we introduced a package of reforms at Budget 2014 radically to reduce the costs of energy policy for business, particularly for manufacturing, while improving security of supply—all right hon. and hon. Members would emphasise that we must do that—and maintaining the Government’s ambition for renewable generation deployment. That package will benefit every household, business and region in the country, saving a total of up to £7 billion by 2018-19. Businesses alone will save a total of £6 billion and the package will particularly benefit the most energy-intensive manufacturers, about 80% of which are based in the north of England, Scotland and Wales, as we have heard. The package will improve incentives for companies to return their manufacturing to the UK and help existing firms to compete in the global race. I do not want us to underestimate that term: we are about competition, we are open for business, and the Chancellor has consistently made the case that this is about British jobs and keeping the United Kingdom a competitive place for manufacturing in EIIs.

Manufacturing fell from being 19% of the total economy in 1997 to 10% in 2010, as my hon. Friend the Member for Warrington South (David Mowat) mentioned, but it has grown strongly in the latest quarter, at 3.3% compared with a year ago. Currently, energy-intensive sectors are responsible for 35% of UK manufactured goods exports. Obviously, the Government want to make the recovery of manufacturing last for the long term and be sustainable, and to have growth that is balanced across the entire UK. I think we would all agree that lowering energy costs is therefore vital for the international competitiveness of UK manufacturing.

If we had not introduced any measures at Budget 2014, UK firms would have been paying just above the average price for electricity among the 29 members of the International Energy Agency, with the proportion of this price attributable to policy costs rising over time, reaching about one third by 2020. That is why the Government announced the series of measures at Budget 2014 radically to reduce the costs of energy policy for business, particularly in EIIs. The measures included capping the carbon price support rate at £18 per tonne of carbon from 2016 to the end of the decade; extending EIIs’ compensation for the cost of the carbon price floor and the emissions trading scheme until 2019-20—I will address the points raised about compensation shortly; introducing compensation for EIIs for the costs of the renewables obligation and feed-in tariffs from 2016 to 2020, which is worth almost £1 billion, in order to protect these energy-intensive manufacturers from the rising costs of the renewables obligation and the feed-in tariffs; introducing, from 2015, an exemption to the carbon price floor for fuels used to produce good-quality electricity by combined heat and power plants for on-site purposes; and introducing new measures to make energy markets more competitive for very small businesses and to help them use smart meters to cut their bills.

I met a range of small businesses this morning. Although we are talking about large EIIs in this debate, these things also have an impact on small businesses, and the Government are very committed to listening to their concerns and addressing the issues they face. I am pleased to say that all businesses will see their electricity bills reduce as a result of this package, provided it receives the necessary EU state aid approval, which was also a subject raised in today’s debate. There will be a total reduction for business of up to £6 billion by 2018-19. The companies that use electricity intensively will see radical cost savings, as, when previous announcements are taken into account, they are now compensated for all Government policy designed to support low carbon and renewable investment up until 2019-20.

A typical energy-intensive business receiving the compensation measures in the package will save about £19 million by 2018-19. Such businesses include Lotte Chemical UK Ltd in the constituency of the hon. Member for Redcar, and GrowHow in the constituency of the hon. Member for Stockton North. Other manufacturers will also see a reduction in their bills through the capping of the carbon price support, which it is estimated will save a typical heavy industrial firm about £800,000 and a typical mid-sized manufacturer £50,000 in 2018-19 alone. That will increase the competitiveness of the UK’s energy intensive industries, which is important as this is all about supporting those industries to be more competitive, particularly in the global race. All businesses have recognised that this is about international competition and our place in the world. The Confederation of British Industry stated that our 2014 Budget package will

“put the wind in the sails of business investments, especially for manufacturers.”

The chief executive of the Engineering Employers Federation said that the Government clearly recognise the need to make UK competitiveness a priority. It is fair to say that the Government are doing their utmost to ensure that the UK is a place in which to do business. We have always said that to achieve a resilient recovery, the UK must back manufacturing.

The chief executive of Tata Steel’s European operations, which has a plant in the constituency of the hon. Member for Redcar, said:

“The measures announced in the Budget are extremely welcome. The Government has listened to the concerns of the foundation industries by introducing a limit on the policy costs they face. These measures are a clear and meaningful contribution to forging a more competitive and sustainable future for UK steelmaking sites, which employ 18,000 people directly and several times that number indirectly.”

The package of measures proves that the Government are determined to see manufacturing remain at the heart of the UK economy and competitive on the international stage.

On carbon pricing, over the next decade we need to attract investment worth more than £100 billion to replace and upgrade our energy infrastructure and to diversify the energy mix. The investment will help to ensure that the UK meets our long-term legally binding greenhouse gas emissions reducing targets and, importantly, to safeguard the country’s long-term energy security, on which we have only just touched in this debate. Establishing a minimum carbon price sends a credible signal to help drive that level of long-term investment in low-carbon electricity generation—a point that was made by the hon. Member for Newcastle upon Tyne Central (Chi Onwurah). But diversification is not concerned with renewable energy alone. The Government are committed to developing a wide range of energy sources to ensure that energy prices remain competitive in the future, and of course nuclear energy and shale gas are central to that.

We welcome the announcement made by INEOS last month that it plans to enter the UK shale gas market, because we are convinced of the benefits that shale gas can bring to industrial production.

[Alex Cunningham]

The Minister mentioned shale gas and other issues, but in the north-east of England, coal gasification could be a huge saver both for our region and the country. I hope that she will encourage the development of that industry.

[Priti Patel]

The hon. Gentleman is right that this is not about one or the other or even a trade-off, but about all players in the energy mix. We are talking about long-term energy, security of supply and competitiveness in the long-term energy market, and that requires diversity.

We are also continuing to look into the issues faced by energy-intensive industries. Today, Members have touched on the issues of carbon-reducing options and the competitive impacts. My hon. Friend the Member for Rugby (Mark Pawsey), who talked about CEMEX and the cement plant, touched on the fact that there are a range of sectors that are not on the European Commission’s list when it comes to exemptions and approval of indirect costs. Let me reassure Members that this is about not just an occasional conversation with the European Commission but about being absolutely firm and clear with it and pressing it on this issue. The Government, too, will look at the competitive impacts of their carbon reduction options through a series of road maps. I am talking here about the involvement not just of the Treasury but of the Department of Energy and Climate Change and the Department for Business, Innovation and Skills. This will help focus policy making more on the opportunities and barriers that energy intensive industries face, and allow Government and industry to agree on actions to deliver cost-effective decarbonisation while safeguarding competitiveness.

Over in Brussels, we will press the European Commission to review the list of energy-intensive sectors that are eligible for compensation, with the aim of extending it, given the higher energy costs they receive as a result of the EU emissions trading scheme and carbon price floor. This is an ongoing matter. It is fair to say that we are well placed when it comes to pressing the European Commission and to making our case.

We will press the Commission to provide a more targeted list of sectors most at risk from carbon leakage as a result of the EU emissions trading scheme, for its next phase which begins in 2021, so that the free allowances that these sectors receive can be best focused on those energy-intensive industries that need them the most. The Government are well aware of the cost pressures on the EIIs, and we have developed a suite of measures to reduce those costs, as well as the measures announced in Budget 2014.

Let me address the points that the hon. Member for Newcastle upon Tyne North (Catherine McKinnell) made about compensation. In Budget 2011, we made it clear that £200 million was available, and much that has been spent thus far is within the eligibility of the constraints of the state aid clearance process, and that is all within the framework of the process that has been set out. The hon. Lady rightly said that the Commission published its guidance on eligibility schemes in April this year. That has not been lost on us. We are not thinking, “Well, that’s that. It’s been and gone.” We are absolutely on to this matter. I will if I may come back to the hon. Lady on this with some specifics. It is absolutely not the case that we are not looking at this any more. We want to do everything possible to ensure that that money is going where it is needed and supporting the EIIs that need that compensation. Of course, this comes back to the statement that was made by the Chancellor in 2011. We announced measures in the Budget this year, but we know that more needs to be done, so we will follow this matter through.

We are continuing work in this area securing investment in low carbon technologies; supporting the development of a wider range of alternative energy sources; and working with individual industries as they seek to improve their energy efficiency. It makes business sense for those industries to improve energy efficiency, and they are all going through that process. We welcome this opportunity to set out the wide range of work this Government are doing to support energy-intensive industries as the UK transitions to a low carbon economy.

National Insurance Contributions Bill

Priti Patel Excerpts

Monday 8th September 2014 Commons Chamber

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

This has been an efficient debate—the Bill was discussed at great length in debates on the Finance Bill. On that basis, I will not recap the purpose of the Bill or the clauses, which have been effectively discussed. However, it is fair, right and proper that I address the points made by Labour Members. Clearly, there is consensus in a number of areas—work has taken place in debates on the Finance Bill and discussions have been had—but there are a number of areas that I should like to address.

The hon. Member for Birmingham, Ladywood (Shabana Mahmood) asked a number of questions. I will begin the debate on them now, and I have no doubt that they will be explored further in Committee. On the reform of maternity allowance for self-employed women, I challenge the assertion that the process is burdensome. As we have heard, the Bill is about simplification and introducing a degree of efficiency to NICs. Primary legislation and supporting regulations, and a revised claim process, will ensure that expectant mums are no worse off than they were under the previous class 2 arrangements. Right hon. and hon. Members will be pleased that HMRC and the DWP are working together to ensure that the process is straightforward and simple for them. As I have said, that will no doubt come up again in Committee.

The hon. Members for Birmingham, Ladywood and for Newcastle upon Tyne North (Catherine McKinnell) made a point on reform for the low paid and the impact of universal credit. It is fair to say that most self-employed people have the option to pay their class 2 NICs regularly using the budget payment option that is already available in self-assessment. Importantly, they are enabled to spread the cost of those payments. That is not legislated for in the Bill because the option to make the budget payments already exists within the current system of self-assessment. Once the Bill becomes law, the issue is how we raise awareness to ensure that people know about that. NICs are accounted for on an accruals basis, so the important fact is the time period within which the money is due rather than the date for payments. Of course, they will continue to be counted in the tax year, but as I have said, it is a question of spreading the costs.

The hon. Member for Birmingham, Ladywood rightly asked how HMRC will ensure that it applies the rules fairly for all taxpayers. It is fair to say that that argument was rehearsed in Finance Bill debates. The Government recognise that there are significant new powers. Obviously, the system must be administered fairly and consistently for all taxpayers. To that end, HMRC will establish clear governance for the key decisions on which cases can be designated as followers, which disclosure of tax avoidance schemes will be within scope and on the appointment of designated officers for the calculation notices. One important point is that clear separations will be established so that reviews of follower notices are carried out independently of the original issuing team. In addition, clear internal guidance and training will be provided for staff within HMRC on how they are to apply the rules. That goes with the clear external guidance, which has been published by HMRC so that taxpayers and advisers know how the rules impact on them. This is about not only fairness, but transparency, so that there is no confusion. On follower notices, those who know that they are deliberately avoiding tax will also know that they are being looked at, which is important. It is fair to say that our determination to lift every stone, and ensure that those who deliberately avoid tax are actively watched and pursued, is unequivocal.

The hon. Member for Newcastle upon Tyne North touched on wage growth for self-employed individuals. The self-employed community is growing, which is a good thing. This is about how we support them through the tax system, but there must be agreement that the only way to raise living standards is to tackle wider challenges and economic problems. We appreciate that times are tough, but this is about how we support hard-working people and the self-employed. We have increased the tax-free personal allowance to £10,500 from April next year, which will save the typical taxpayer £805 per year. We have also taken more than 3.2 million people out of tax altogether and cut income tax for someone on the minimum wage by nearly two thirds. There have been other effective measures such as the freeze in fuel duty and the freeze in council tax in every year of this Parliament.

There is no doubt that more discussion will follow in Committee, but given that there is a great deal of agreement on the Bill’s provisions, at this stage I commend the Bill to the House.

Question put and agreed to.

Bill accordingly read a Second time.

Oral Answers to Questions

Priti Patel Excerpts

Tuesday 2nd September 2014 Commons Chamber

[Robert Flello (Stoke-on-Trent South) (Lab)]

3. What recent assessment he has made of the effect of his fiscal policies on the level of child poverty.

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

The Government are protecting vulnerable groups while taking action to tackle the record deficit we inherited. Work remains the best route out of poverty and the Budget took action to support families and to make the tax and welfare system fairer, further increasing the income tax personal allowance to £10,500 in 2015-16, which will take 3.2 million people on low incomes out of tax altogether.

[Robert Flello]

I was amazed by the answer given by the Minister’s colleague to the previous question, so perhaps I will try her on the same point. Are she and her colleague in the least bit troubled by the fact that the IFS forecasts that child poverty will rise by 400,000 during this Parliament?

[Priti Patel]

The hon. Gentleman will know that the Government are committed to ending child poverty by 2020. Under this Government, as my right hon. Friend the Chancellor has already said, child poverty has fallen by more than 300,000 since 2010. The best route out of poverty is work and I am sure that the hon. Gentleman will support that route.

[Charlie Elphicke (Dover) (Con)]

I congratulate the Minister on her debut at the Dispatch Box. She has referred to child poverty falling under this Government. Will she confirm that it rose under the previous Labour Government in the previous Parliament?

[Priti Patel]

I thank my hon. Friend for his warm remarks. He is absolutely right. It is this Government who have gone out of their way to focus on a child poverty strategy, reducing the numbers, and that is something of which we are proud.

[Helen Goodman (Bishop Auckland) (Lab)]

16. The Government’s own figures show that the number of children in poverty in absolute terms after housing costs increased by half a million between 2010 and 2013. Why does the burden of fiscal adjustment fall on the most vulnerable?

[Priti Patel]

I think it is worth my reiterating that relative child poverty has fallen under this Government by 300,000 since 2010. It is quite clear what the IFS has said about the greatest and deepest recession we have had thus far and that work is the best route out of poverty. I have said it already and I will repeat it: work is the best route out of poverty. This Government are supporting hard-working families across the country and getting them out of poverty.

[Sarah Champion (Rotherham) (Lab)]

18. Unfortunately, the Minister’s comments bear no relationship to Rotherham, where almost a third of children are living in poverty. On a related topic, may I ask whether the Chancellor would listen to requests for additional funding for child protection in Rotherham and around the country?

[Priti Patel]

I thank the hon. Lady for her comments and we will look at all places and all situations. I reiterate that this Government are committed to helping all families that are having difficult times. Child poverty has come down and, of course, work is the best route to get families out of poverty. I am happy to discuss with her the specific issue of child poverty in her constituency

[Mr Simon Burns (Chelmsford) (Con)]

5. What assessment he has made of the effect of freezing fuel duty on the price of petrol.

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

Autumn statement 2013 confirmed that fuel duty will be frozen for the remainder of this Parliament. As a result of this Government’s very clear actions, average pump prices are currently 16 pence per litre lower than they would have been if the Government had implemented the previous Government’s fuel duty escalator, and will be nearly 20 pence per litre lower by the end of this Parliament.

[Mr Burns]

May I congratulate my fellow Essex MP on her well-deserved promotion to the Treasury? Will she update the House on the use of the tax system to reduce the instability for motorists and outline the help that has been provided for them during what was the most horrendous recession caused by the Labour party?

[Priti Patel]

I thank my right hon. Friend for his warm and generous remarks. He knows that the Government are committed to supporting motorists. We are the Government who abolished the previous Government’s fuel duty escalator, cut fuel duty by 1 pence per litre and scrapped the four increases that had been planned over the Parliament. By the end of this Parliament, fuel duty will have been frozen for nearly four and a half years—the longest duty freeze in over 20 years—which I know that my right hon. Friend and, of course, the good people of Chelmsford will warmly welcome.

[Mr David Hanson (Delyn) (Lab)]

Could the Minister tell the House how much per litre VAT has added to the price of petrol?

[Priti Patel]

Simple answer: a lot less than it would have been under Labour.

[Stuart Andrew (Pudsey) (Con)]

6. What recent estimate he has made of the level of employment.

--- Later in debate ---

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

We recognise that times have been tough for hard-working people. However, the Government have taken decisive action in getting more people into work than ever before—cutting taxes for hard-working families through increases in personal allowances, freezing council tax and fuel duty, cutting energy bills, and providing tax-free child care up to £2,000.

[Chi Onwurah]

In July the Chancellor came to Newcastle to announce that the economy was back on track. Office for National Statistics figures show that the real value of average wages in the north-east has fallen by £1,811 per year since this Government came into power. Is that what he means by “on track”—falling wages for working people and tax cuts for millionaires?

[Priti Patel]

The hon. Lady will know that our economy is recovering from the deepest debt-fuelled recession in living memory. The Institute for Fiscal Studies has made it clear that there have been very significant falls in real earnings as a direct but delayed response to the 2008 recession. In the light of this honest assessment, she will know that the only way to raise living standards in a sustainable way is to tackle the country’s economic problems head on.

[Sir Tony Baldry (Banbury) (Con)]

20. Does my hon. Friend agree that one of the best indications of the rate of growth is the increase in jobs, and that with over 1.8 million more jobs now in the economy than over the past four years, more women in work than ever before, and youth unemployment falling dramatically, that all indicates that our long-term economic plan is working and that as regards the economic policies of the Opposition, the wheel may be turning but the hamster is dead?

[Priti Patel]

My right hon. Friend is absolutely right. He has made the case very clearly that there are strong economic indicators out there that are testament to the Government’s long-term economic plan. Quite frankly, this country is going forwards, not backwards.

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

According to the most recent Office for National Statistics figures, child poverty in lone parent families where the parent is working full-time has risen from 17% to 22%. What are the Government doing to help those families to beat the rising cost of living?

[Priti Patel]

I re-emphasise the point that I made earlier: child poverty under this Government is down by 300,000. Inequality is being tackled very effectively by this Government through what we are doing to raise living standards and tackle the country’s economic problems head on.

[Mr Philip Hollobone (Kettering) (Con)]

Will my hon. Friend remind the House of the amount by which personal tax-free allowances have been increased since 2010 to help protect household budgets in an era of sluggish wage growth?

[Priti Patel]

As my hon. Friend will know, we have increased tax allowances by thousands of pounds to the new figure of £10,500, which will take an extra 3.2 million people out of tax.

--- Later in debate ---

[Mr Robin Walker (Worcester) (Con)]

17. What assessment he has made of the effect of freezing fuel duty on the price of petrol.

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

I refer my hon. Friend to the response I gave earlier.

[Mr Walker]

I congratulate my hon. Friend on taking her well-earned place on the Front Bench. May I tell her that my constituents and, indeed, many businesses in Worcester have fed back how pleased they are that we have kept the fuel duty freeze in place and rejected calls from the Labour party to restore its fuel duty escalator? Will she remind the House what the cost would be to those people and businesses if we had gone along with the previous Government’s plans?

[Priti Patel]

I thank my hon. Friend for his warm welcome and kind remarks. This Government scrapped the previous Government’s fuel duty escalator, which would have increased fuel duty by 1p per litre above inflation from 2011 to 2014. Were it not for this Government’s very clear actions on fuel duty since 2011, current pump prices would be 16p per litre higher and would be nearly 20p per litre higher by the end of this Parliament. I know that my hon. Friend’s constituents and businesses in Worcester will support the clear action that this Government have taken.

[Guy Opperman (Hexham) (Con)]

T1. If he will make a statement on his departmental responsibilities.