Fuel Duty

Priti Patel Excerpts

Monday 12th November 2012 Commons Chamber

[Priti Patel (Witham) (Con)]

Like all right hon. and hon. Members on the Government Benches, I welcome this debate and the opportunity that it presents to highlight the gross hypocrisy of Labour Members over fuel duty and the cost of living. Despite their contributions to the debate and the words in their motion, Labour’s record in government shows how shallow is their so-called concern about this issue. Today’s debate ranks as nothing more than a sanctimonious attempt by Labour Members to exploit the anxiety of the public for nothing more than superficial reasons of political opportunism. It is exactly these kinds of antics that erode public trust and confidence in politics.

Labour Members have come to the House today to argue for freezes in fuel duty, but at the time of their last Budget in March 2010 they came here to pledge the continuation of above-inflation increases in fuel duty for the duration of this Parliament. They may be afflicted by the collective amnesia that we have seen today regarding their record in office, but my constituents remember the misery inflicted on them as Labour presided over huge increases in the cost of fuel and the cost of living. In particular, they remember what happened in 2000, when the price of petrol at the pump surpassed 80p per litre. They have not forgotten the appalling way in which the Labour Government handled the matter back then and their failure to get to grips with the crisis and the impact that the fuel price increases were having on businesses and families. Despite various promises at the time, no action followed. Fuel prices consistently increased under the Labour Government. If Labour Members were genuinely concerned about the impact of the level of fuel duty on families and businesses throughout the country, they would not have increased fuel duty 12 times when they were in power.

By contrast, this Government have recognised the burden that fuel costs add to household budgets and businesses. As my hon. Friend the Minister highlighted, they should be congratulated on freezing Labour’s planned fuel duty increases and abolishing the fuel duty escalator, even managing to cut fuel duty by 1p. It is now 10p a litre lower than it would have been under a Labour Government, saving families £159 this year alone. The overall tax burden under this Government is lower than it would have been under Labour, as is the deficit. This country has been saved from the indignity of taking a begging bowl to the International Monetary Fund by dealing with the financial mess that the previous Government left for this Government. As a staunch believer in the power of low-tax economies, I would like the Government to go further in cutting this duty and lowering the overall tax burden, but of course Ministers are limited in what they can do because of the huge levels of borrowing for public spending that have existed.

One astonishing thing about fuel duty is that it raises far more money than is spent on our roads. The mismatch between the amount raised from motorists and the amount spent on improving our road network has caused huge concern to my constituents. Under Labour, revenue received from fuel duty rose considerably. In 1996-97, total receipts from excise duty on oils were £17.2 billion. However, when the Labour party left office, they were around £27 billion, and that is without taking vehicle excise duty into consideration. Despite that extra money from motorists—over 50% more in cash terms—Labour failed to invest in the road network, especially in Essex. My constituents have not forgotten that. Vital road schemes, such as the project to dual the A120, were completely axed. Labour pillaged the pockets of motorists in my constituency and gave them nothing in return. Instead of investing in infrastructure in Essex, Labour blew the money on unsustainable levels of public spending and the rising cost of debt interest payments. Many other schemes, including the Dartford road crossing, also demonstrate that point.

In conclusion, I want the cost of motoring to fall and investment in our road infrastructure in Essex to increase. That will never be achieved by anything suggested by the Labour party, including the shallow statements that we have heard today, hence my opposition to the motion.

Air Passenger Duty

Priti Patel Excerpts

Thursday 1st November 2012 Commons Chamber

[Priti Patel (Witham) (Con)]

I beg to move,

That this House believes that the UK’s air passenger duty acts as a barrier to economic growth and deters both inward investment and inbound tourism; notes the financial impact on families of the rising costs of air passenger duty; further notes the impact on British businesses wishing to export and take advantage of business opportunities overseas; notes that the current air passenger duty regime is the highest air passenger tax in the world, which makes the UK less competitive than countries with lower aviation taxes; further notes that over 200,000 members of the public are calling for a review of the economic impact of air passenger duty; calls on HM Treasury to commission a comprehensive study into the full economic impact of air passenger duty in the UK, including the effects on jobs and growth, reporting in advance of the 2013 Budget; and calls on the Government to use the evidence from the study to inform future policy-making.

I am grateful to members of the Backbench Business Committee for granting this timely debate in advance of the autumn statement next month, and I pay tribute to the outstanding efforts made by the fair tax on flying campaign in securing the support of more than 200,000 members of the public who have lobbied right hon. and hon. Members on the matter. The campaign has given families and businesses across the country a strong voice to express their opposition to air passenger duty.

I also pay tribute to colleagues on both sides of the House who have supported the call for this debate, including my hon. Friend the Member for Crawley (Henry Smith) and the hon. Member for Blackley and Broughton (Graham Stringer), whose early-day motion influenced the wording of the motion. In addition, as part of its recent inquiry into the matter, the all-party aviation group, chaired by the hon. Member for Central Ayrshire (Mr Donohoe), has produced compelling evidence in support of an economic review into air passenger duty.

[Mr Tom Clarke (Coatbridge, Chryston and Bellshill) (Lab)]

Of late, I have received more representations on this issue than on any other. It is important that the hon. Lady has been able to raise this issue, and she can count on considerable support.

[Priti Patel]

I thank the right hon. Gentleman for his remarks. All hon. Members feel very strongly about the representations we have received. The purpose of the debate is to give the issue of APD a thorough airing and to make those representations to my hon. Friend the Minister.

The motion calls on the Treasury to respond to the concerns of 200,000 members of the public and business representatives about the air passenger duty system. It specifically calls on the Treasury to conduct a comprehensive study of the system’s full economic impact and urges the Government to use the evidence gathered from the study to inform future policy making on aviation taxes.

The evidence that I have seen, the views of families and businesses in my constituency, and views from the aviation sector, suggest it is time that the Government considered aviation taxes.

[Philip Davies (Shipley) (Con)]

I commend my hon. Friend for introducing the debate. Is it not a question of making the UK competitive around the world? In the previous debate, the Minister said that if we cut taxes on one thing, it will mean either more spending cuts or increases in taxes elsewhere, but should not the message be, “Let’s cut air passenger duty and cut spending”? After last night’s vote, perhaps the Government could start with the EU.

[Priti Patel]

APD has a detrimental impact on our competitiveness, which is why we are calling for the economic impact. I will come to competitiveness later.

I hope my hon. Friend the Minister will be open-minded to the concept of looking at the financials and to doing an economic impact assessment, because families and businesses feel that APD is a punitive tax. Research demonstrates that the costs to the wider economy are far greater than tax receipts for the Treasury. The World Travel and Tourism Council estimates that the cost to the economy in 2012 will be £4.2 billion, and as many as 91,000 jobs.

[Sir Malcolm Bruce (Gordon) (LD)]

I commend the hon. Lady for introducing this extremely important debate. I represent Aberdeen airport. We are doubly disadvantaged, first because we are much more dependent on air travel—it takes seven and half hours to get from Aberdeen to London by train—and secondly, we must pay tax twice if we inter-line in London. That gives us an incentive to use continental rather than UK airports.

[Priti Patel]

The right hon. Gentleman touches on both the cost of APD and our competitiveness. A 2011 York Aviation report estimated that Scotland would lose 1.2 million passengers, 148,000 tourists and around £77 million in the period up to 2014.

[Sandra Osborne (Ayr, Carrick and Cumnock) (Lab)]

Is the hon. Lady aware that the Scottish airports consortium has published a report today that says that Prestwick airport, which is in the constituency of my hon. Friend the Member for Central Ayrshire (Mr Donohoe), and which is very important to the whole Ayrshire economy, is the worst affected in Scotland in percentage terms? It will lose 14% of the traffic it currently hosts.

[Priti Patel]

The hon. Lady demonstrates the scale of the challenge, and why we need a review.

I am sure right hon. and hon. Members are aware that Britain has been ranked 134th out of 138 by the World Economic Forum on air taxes and airport charges. We clearly have a major problem. I am unapologetic in my belief in lowering taxes, which is the most effective way in which to promote sustainable growth in the economy. The figures demonstrate how damaging and counter-productive air passenger duty is becoming to the Government’s growth agenda.

I recognise that the current APD system was introduced by the previous Government and note that it raises £2.9 billion for the Treasury, which is a significant sum of money. I do not doubt that it is an essential contributor to removing and reducing the Government’s deficit, but when taxes cause more harm than good, they need to be reviewed and reformed.

[Mark Garnier (Wyre Forest) (Con)]

I congratulate my hon. Friend on introducing the debate. Does she agree that APD can act as a barrier to expansion for some regional airports? Were it not for the high level of APD, they could attract other carriers, thereby rebalancing our economy.

[Priti Patel]

I completely agree with my hon. Friend. That is part of the challenge of our wider aviation policy and strategy.

Already in this Parliament, the Government have rightly recognised a number of counter-productive and damaging taxes, and scrapped a number of them, including the cider tax, the jobs tax and the broadband phone tax, and the planned increase to the small profits rate was replaced with a cut. On that basis, I urge the Minister to consider the economic impact of APD.

[Iain Stewart (Milton Keynes South) (Con)]

I am grateful to my hon. Friend, who is being generous in giving way. APD will be considered by the Select Committee on Transport when we begin our aviation inquiry. APD has an economic impact, but it is critical to the debate on the UK’s aviation capacity. Perhaps she will refer to that later in her speech.

[Priti Patel]

The Davies commission has a role. When considering the future of APD, we must remember where we stand internationally in terms of competitiveness. Britain is in a global race, and competing in a global environment that is tougher and more competitive than ever before. Foreign businesses, which can bring much needed investment to our economy, can relocate to other countries. Our competitors in Europe and throughout the world are all too ready to recognise that. Prior to being elected to the House, I saw how our competitors were on standby to welcome new investment, particularly from emerging markets.

[Fiona Mactaggart (Slough) (Lab)]

Businesses in Slough tell me that they have invested in the town I represent because of its proximity to Heathrow. Some international companies are thinking of disinvesting because of the insecurity of Heathrow’s future. That is a classic example of the importance of airports to inward investment in the UK, and particularly the importance of what used to be the premier airport in Europe.

[Priti Patel]

The hon. Lady makes a valid point. I have no doubt that right hon. and hon. Members recognise the global trends and the direction of travel when they see the rise of super-hubs and big business destinations, such as Singapore, Dubai and Mumbai. There is certainty around their aviation and economic strategies, and we are competing against many big international centres. We must remain competitive to survive. Tax rates that are higher than those in other economic centres put businesses off when they are making investment choices and decisions. Attracting foreign direct investment is an essential component of the Government’s plan for growth, and current APD rates are a barrier to foreign investors who are looking to expand into the UK.

[Mr Angus Brendan MacNeil (Na h-Eileanan an Iar) (SNP)]

The hon. Lady is making a great speech. Does she agree that APD, as a gateway tax, sends a signal and puts down a marker, and leaves a bad taste in the mouth for many who are thinking of coming to the UK? Their first taste of the UK, and the first piece of information they have about it, is the very high-tax regime to get into the country.

[Priti Patel]

The hon. Gentleman makes a valid point on how counter-productive taxes such as APD are when it comes to inward investment and the attraction of Britain as a place to do business.

Martin Craigs, chief executive of the Pacific Asia Travel Association, has stated:

“The UK is an island trading nation, air services are the vital lifeblood of modern global commerce. The UK Air Passenger Duty is now the world’s highest by a wide margin. It is certainly turning away tourism and trade from the world’s fastest growing economic region”,

which, of course, is Asia-Pacific.

APD also acts as a deterrent to British businesses that are looking to exploit lucrative business opportunities elsewhere in the world, and particularly in emerging markets. Businesses in my constituency, including small and medium-sized enterprises, provide more than 80% of local jobs. They are hit hard by APD. They want to export more, but APD is a barrier.

[Dr Phillip Lee (Bracknell) (Con)]

Many of the businesses in my constituency are based there because of the proximity of Heathrow airport, like the businesses in the constituency of the hon. Member for Slough (Fiona Mactaggart). Many of my constituents who work at Heathrow are concerned about the level of APD. It seems perverse that, at a time when our trade is becoming more non-EU, we are discouraging or making it more difficult to trade with those parts of the world that continue to grow.

[Priti Patel]

I thank my hon. Friend for his intervention. As I said earlier, this tax is seen as counter-productive when it comes to inward investors, and we have to tackle that. One business man has written to me saying that the tax is having a major impact on both new business opportunities and maintaining current business. A reduction in it would bolster the aviation industry in the United Kingdom. Another has commented:

“I am a frequent business traveller trying my damndest to provide export business for this country and it grieves me to be paying such a punitive tax to travel on behalf of the country.”

A review of the economic impact of APD would show the true extent of the cost to businesses. In fact, the Government previously looked at the impact of APD on the Northern Irish economy and reduced APD to band A—currently, the standard rate is £26 and the reduced rate is £13—to ensure that Belfast could compete with Dublin’s air travel tax, which is just €3. Just as APD needed to be reformed to help Belfast compete with Dublin, APD should be reduced to help London’s airports compete not just with Amsterdam, Paris, Frankfurt and Madrid, but with many of the Asia-Pacific and other international hubs.

[Naomi Long (Belfast East) (Alliance)]

The hon. Lady is making a compelling case. The Irish Republic has announced that despite the fact that its APD equivalent is only €3, it intends to scrap it, because it believes it is an impediment to growth in the economy.

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[Mr Deputy Speaker (Mr Lindsay Hoyle)]

Order. We have a lot of Members who wish to speak and they should recognise that if they have already intervened, they will go down the list—and not be upset about that.

[Priti Patel]

I take on board the hon. Lady’s point.

As well as compromising trade, the cost of APD is felt by the aviation and tourism sector across the country. Last year, more than 30 million visitors came to Britain and spent £18 billion in our economy. We all want to see that number increase, and I want to see more foreign tourists flying to our international airports and travelling to see attractions elsewhere in the country—including the county of Essex, where the tourist sector supports 54,000 jobs and adds £3 billion to our local economy.

[Heather Wheeler (South Derbyshire) (Con)]

I congratulate my hon. Friend on securing this debate. She talks about Essex with passion, which is fantastic. In South Derbyshire we are equidistant from East Midlands airport and Birmingham airport and we have a huge amount of tourism, as well as many jobs based in the airport industry. I hope that Ministers listen to my hon. Friend and think again about a tax that is holding back growth.

[Priti Patel]

I thank my hon. Friend for her comments.

We would all like to see travellers from Brazil, Russia, India, China and a range of emerging markets choose to spend their dollars, rupees and other currencies here, but the current rates of APD are deterring inbound tourism, especially from developing countries with a growing middle class. Why would a family of four from China wishing to take a holiday in Europe come to Britain where APD would add a further £324 to their travel costs when they could hop on a flight to France and pay aviation taxes totalling £36 or to Germany where they would also pay less? The Government’s tourism strategy clearly warns that we are pricing ourselves out of the mass or middle market and will swiftly relegate Britain from being the sixth most popular destination in the world to the margins of the industry. The aviation sector supports more than 900,000 jobs and contributes more than £50 billion to GDP. I urge the Government to consider how APD can be reformed to support tourism as well as business.

In 1994, modest levels of £5 for short-haul travel in the EU and £10 for destinations beyond the EU were introduced. APD is now having a negative impact on our economy. When the then Chancellor of the Exchequer, the Minister without Portfolio, my right hon. and learned Friend the Member for Rushcliffe (Mr Clarke), announced the introduction of APD in November 1993, he said it was a small duty on all air passengers from United Kingdom airports. The predicted revenue was £330 million a year. It now raises 10 times more than that, and a family of four travelling economy class to Florida this winter will pay £260 in APD.

[Mr David Hamilton (Midlothian) (Lab)]

That figure would be a lot higher if the family were going via one of the regional airports and could not get the same carrier, because they would pay two lots of APD. It is now proving very difficult for many families to have a decent holiday abroad.

[Priti Patel]

The hon. Gentleman makes his point clearly. APD is having a wider multiplier effect.

If that same family of four were travelling to Australia, they would have to fork out £368. Those figures are not small and are having a severe effect on households with modest incomes throughout the country, including pensioners who wish to visit relatives living abroad. We have all had correspondence from our constituents, and one of mine wrote to me on this point to say that she supports this campaign because both of her children and her grandchildren live overseas and flying is the only way to visit them.

Another has written:

“Having friends and family in the Caribbean we have to pay even more of this excessive tax than flying to the west coast of the USA although the distance flown is less.”

This tax is clearly having a negative impact on families. It is deterring foreign direct investment, it is holding back our businesses, and it is making our country less competitive. For those reasons, I hope that colleagues will support the motion and I urge the Minister to take on board the remarks that I have just made.

[Several hon. Members]

rose—

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[Priti Patel]

I thank all right hon. and hon. Members for their contributions to this powerful debate in which we have heard about the impact of this tax on hard-pressed families and businesses, and about its counter-productive nature. I thank my hon. Friend the Minister for his remarks. I hope that he and the Treasury will keep a very open mind about the call in the motion for an economic assessment and a full review and will not rule it out, because, as we have heard, this tax is having a counter-productive impact on the economy. All Members present will continue to press him and the Treasury to secure a review in future.

Question put and agreed to.

Resolved,

That this House believes that the UK’s air passenger duty acts as a barrier to economic growth and deters both inward investment and inbound tourism; notes the financial impact on families of the rising costs of air passenger duty; further notes the impact on British businesses wishing to export and take advantage of business opportunities overseas; notes that the current air passenger duty regime is the highest air passenger tax in the world, which makes the UK less competitive than countries with lower aviation taxes; further notes that over 200,000 members of the public are calling for a review of the economic impact of air passenger duty; calls on HM Treasury to commission a comprehensive study into the full economic impact of air passenger duty in the UK, including the effects on jobs and growth, reporting in advance of the 2013 Budget; and calls on the Government to use the evidence from the study to inform future policy-making.

Infrastructure (Financial Assistance) Bill

Priti Patel Excerpts

Monday 17th September 2012 Commons Chamber

[Priti Patel (Witham) (Con)]

I welcome the opportunity to contribute to this debate. I congratulate the Government on showing their commitment to infrastructure investment in the UK by introducing the Bill.

For all the criticism from Opposition Members, it is worth reflecting on the fact that over 13 years—I say this as an Essex MP—there was next to no infrastructure investment in the county of Essex or even in East Anglia. I welcome the fact that the Government recognise that investment in infrastructure is vital in providing jobs, growth and long-term economic prosperity.

Despite our economy being one of the largest in the world and our having spent most of the last decade as one of the world’s five biggest economies by GDP, our infrastructure has been neglected. It is interesting to see where we stand in the international league tables. The World Bank’s logistics performance statistics place us 16th in the world, behind many other economies. Unless that tide is reversed, the consequences for our economy will be catastrophic. Poor infrastructure is not only a barrier to British-based businesses, but makes Britain less attractive for foreign direct investment, which leads to less economic growth.

Every £1 that is spent on construction generates an estimated £2.84 in total economic activity. It impacts across the supply chain through the multiplier effect. I therefore welcome everything that the Government are doing. Of course, any money that comes into the Treasury helps to bring down the deficit, finance the debt built up by the Labour party and pay for public services.

I am pleased that the Government have recognised the importance of infrastructure. That contrasts with what we witnessed over the previous 13 years. I believe that it was one of the most cataclysmic failures of the last Labour Government that they did not adequately invest in infrastructure when the economy was growing. As a result, we have been left with road, rail, airport, energy, port, water and digital infrastructure that is not fit for our country.

[Hazel Blears]

Does the hon. Lady recognise that during the period of the last Labour Government, 101 new hospitals were built, and that under the previous Conservative Government, not a single new hospital was completed in this country?

[Priti Patel]

Speaking for Essex, I do not recognise that. The county of Essex has had no infrastructure spending whatsoever. Despite Essex being the county of entrepreneurs, where thousands of new businesses are started each year, and despite it being a net contributor to the Treasury, Labour neglected it. Local and regional infrastructure in Essex failed to keep pace with national and local economic growth. That is no doubt one of the reasons why the electorate booted Labour MPs out of Essex, full stop, at the last general election. It is now a Labour-free zone.

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

Is not the Maltings academy in the hon. Lady’s constituency, which opened about a year ago, a significant piece of capital infrastructure? Surely she welcomes the investment in those new school buildings.

[Priti Patel]

I welcome that investment in infrastructure improvements, but it was something that I had to campaign and fight for as a prospective parliamentary candidate—not even a Member of Parliament. That says something about the priorities of the last Labour Government. My constituents look with confidence to this Government to take positive action to rebuild our roads and railways, to meet the ever-increasing demands of the growing population in the county of entrepreneurs.

I urge Ministers to consider some particular projects in Essex. The first area is rail, which was highlighted by my hon. Friend the Member for Suffolk Coastal (Dr Coffey). Commuters on the Greater Anglia franchise return £110 million a year to the Treasury on a profitable franchise, but face some of the longest delays and worst facilities in the country. For a modest fraction of the money that the Government receive from the franchise, the rail service could be upgraded from being one of the worst performing in the country to one of the best. We are lobbying the Government, in particular the Department for Transport and the Treasury, to hear our case on this. Local commuters, not only in Essex but along the route of the franchise, would welcome Government investment in the line.

[Mr Brooks Newmark (Braintree) (Con)]

Does my hon. Friend agree that an important piece of infrastructure to build would be a loop between Braintree and Witham? That is something for which I have campaigned for 10 years. That important link would help all those who commute from Braintree to London.

[Priti Patel]

My hon. Friend makes a valid point for our constituents. Branch lines are a vital part of our rail network for commuters. Let us not forget that Essex is growing. We now have more homes and commuters, so we desperately need that investment.

I also press Ministers to use the opportunity presented by the Bill to invest in the road network. Anyone who is familiar with Essex will know that the A12 and the A120 are vital economic links for the county. They are at the heart of Essex, connect London to Great Yarmouth and Hertfordshire to the port of Harwich, and pass Stansted airport. Their importance to the region cannot be understated. The A120 is the country’s 10th most dangerous road. It is regarded as such a vital economic link that it has been designated as part of the trans-European road network, yet it has not received the investment that it needs to deal with capacity, in particular for freight. Upgrading those roads would send out a powerful signal that Essex is at the heart of the economic engine room of our country and will continue to be so. It would support traffic going to our ports and airports, leading to more jobs, growth and prosperity in the county, from which the Treasury would benefit.

The Bill is about financing options. The debate has touched on the financing issues of the past, in particular with respect to the private finance initiative. I would welcome an insight into the Treasury’s thinking on the progress that has been made on alternative investment vehicles, including infrastructure bonds, direct foreign investment, pension funds and sovereign wealth funds. How can we strengthen our links with pension funds and sovereign wealth funds overseas to support infrastructure investment in this country?

I want to highlight the London gateway, in south Essex, as a good example of foreign direct investment. If the Minister has the opportunity, I would urge him to visit this amazing project, which is run by DP World, as it provides a clear insight into what can be done when foreign investors commit to building major infrastructure projects in Britain. Dubai Ports has invested in building one of the world’s leading deep-sea container ports. The level of job creation will be immense. The project is situated at the gateway to London, and although it came with some bureaucratic hurdles—that goes without saying with big projects—there are lots of insights that we can learn and benefit from when it comes to ambitious infrastructure investments.

This Bill has the power to transform our nation’s infrastructure beyond anything we have seen for a long time, whether it is through road, rail, planning or energy projects. I urge the Government and my hon. Friend the Minister to rule nothing out and to be ambitious in their thinking. Naturally, I urge Ministers to send a powerful message to my constituents and the county of Essex by effectively applying their commitment to infrastructure renewal and helping to get our county moving. It goes without saying that I support the Bill’s Second Reading.

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[Sajid Javid]

It will consider every project that comes its way, but that does not mean it will agree to support every one. However, it is willing to look at every project and to come back with an answer on each.

[Priti Patel]

Can my hon. Friend confirm for the Opposition that the Infrastructure UK team has contributed a great deal more than the euro preparation team that Labour created?

[Sajid Javid]

As always, my hon. Friend is absolutely right. [Interruption.] I must plough on.

On a number of occasions the Opposition suggested that this Government were spending less on infrastructure than they would have if, by some miracle, they had won the last election. Let us look at the facts. After the last election, the right hon. Member for South Shields (David Miliband) said in his leadership hustings bid that they were going to halve the share of national income going into capital spending. Plans presented by Labour to this House at their last Budget, in March 2010, showed net investment falling from £50 billion in 2009 to a projected £23 billion by 2014-15, a figure lower than the one this Government have planned.

We heard from the Opposition about Britain’s growing debt. However, they forget, conveniently, that when this Government came to power, our budget deficit was 11% of GDP, higher than any other nation in the G7. According to the Institute for Fiscal Studies, if the plans of the right hon. Member for Edinburgh South West (Mr Darling) had been implemented, this country’s debt would be £200 billion higher than under the plans of this Government. They just do not get it—more spending, more borrowing, more debt.

Members on both sides of the House have recognised the scale of capital required to realise some major infrastructure investments.

Professional Standards in the Banking Industry

Priti Patel Excerpts

Thursday 5th July 2012 Commons Chamber

[Priti Patel (Witham) (Con)]

Many good and relevant points have been made from the Government Benches already, so I want to make just three brief points.

In any debate on the banking sector, it is vital to remember the importance of financial services to the UK economy. I say that as someone who represents a constituency in Essex. Thousands of my constituents work in the City of London, and I can assure the House that they are not criminals. They are not the type of bankers who should be vilified; they are, of course, hard-working, law-abiding, tax-paying individuals, who help to contribute to that £100 billion to the UK economy and that £63 billion in taxes to the Exchequer. We should remember that we are world leaders in financial services, and it is wrong to vilify the entire sector for the sins of the few. It is because the overwhelming majority of City workers, including those from Essex, take such great pride in their work that the scandals currently rocking the financial sector are so damaging, not just to them and their jobs, but to the reputation of UK plc and our financial services sector full stop.

That is why it is important for us all to consider seriously the professional standards of the financial sector and the banking industry in a sober and considered way in this House. Today’s debate has been incredibly lively, as well as quite partisan, but I would like to pay tribute to my hon. Friend the Member for Chichester (Mr Tyrie), the Chair of the Treasury Committee, for bringing sanity back to the debate. As my hon. Friend the Member for Harwich and North Essex (Mr Jenkin) said, although many issues need to be addressed right now, we have to look at the role of Parliament, the role of Select Committees and the ability of parliamentarians to scrutinise these issues in the right and proper way.

I think we would all agree that any criminality or wrongdoing that has hampered the fair functioning of the financial markets thus far must be fully investigated. Those who are found guilty should face stern punishment. In my view, there should be an unprecedented crackdown on those who lied and cheated, but we should not be demonising everybody in the City. It is our job as legislators to review what has gone wrong, to examine the wrongdoing, and, where possible, to legislate to reduce the prospect of serious misdeeds ever happening again. That is why a parliamentary inquiry led by a Joint Committee of both Houses is the most appropriate way to proceed. We have heard arguments in favour of that option today.

We have also heard about the abilities of parliamentarians. We have been elected to this House not only because of our backgrounds and our judgments. We have been elected to bring our experience to the fore, to articulate and to challenge, to be advocates and to be significant interrogators. We have heard evidence of hubris today, but it is important that we get on with the job. We need to find out why the regulatory system is broken. Vested interests have been mentioned on a number of occasions. We now need to get on with the job and fix this in the shortest possible time frame.

Nobody should be playing at party politics now. If we do that, it will take longer to clean up the City and even longer to bring in new regulations and laws. On that basis, I welcome the inquiry. It is incumbent on us all to get on and repair the damage that was done in the past by all those who have been involved in bad legislation and bad regulation. We need to restore the reputation of our financial services sector.

Budget Resolutions and Economic Situation

Priti Patel Excerpts

Friday 23rd March 2012 Commons Chamber

[Priti Patel (Witham) (Con)]

Over the years, Conservative Chancellors have stood at the Dispatch Box on Budget day and outlined great programmes of reform to transform the economy, modernise the country, improve lives and restore Britain’s standing in the world. That is exactly what our current Chancellor of the Exchequer did in his Budget on Wednesday. He has had to reverse the socialist doctrine of an over-bloated state fuelled by the last Labour Government’s binge-spending, which resulted in an unprecedented economic crisis.

I fully support this Government’s aim to earn our way out of the economic crisis. I support the Budget principle of rewarding work, backing business, and being on the side of those who aspire to do better for themselves. I also support the introduction of the new enterprise allowance, which will help young people not just get into work, but start up enterprises. Importantly, I also support the principle of sticking to the plan to deal with Labour’s debts.

This will also be seen as a historic Budget, with the largest increase in the personal tax allowance ever, which will benefit 24 million ordinary families throughout the country. Most basic rate taxpayers will gain £220 every year. This Government will have taken 2 million low-paid people out of tax entirely.

The foundations of our economic strength were left to crumble by Labour, but this Chancellor has put forward strong and credible plans to rebuild our economy. Just as the reduction in the main rate of corporation tax to 22p sends a resounding signal to the rest of the world that would-be foreign investors are welcome in Britain, so this country needs a Government who are committed to reducing the overall tax burden and letting low, middle and high earners keep more of what they earn in their pockets. The Labour party may not, for all we know, like the idea that people should be free to spend their money as they like, but my constituents want to be able to control more of their money—the money that they earn—rather than have the state raid their pockets and waste their money on an over-bloated public sector.

In addition to the scandal of leaving the country with the biggest ever national deficit, the Labour party failed to serve the country well, and certainly failed to serve Essex well, on infrastructure investment. In Essex, our infrastructure desperately needs investment, with the A120 being a case in point. It is the 10th most dangerous road in the country, and I am sorry to report that last week a young constituent of mine was very badly injured in an accident on this dreadful road. Despite being one of the largest large net contributors to the Treasury, Essex was left behind under the previous Government. The Labour Government were prepared to profit from the labours and endeavours of hard-working Essex families and businesses, but were never prepared to put anything back. With a record like that, is it any wonder that voters there refused to return a single Labour MP to the House of Commons and have made Essex a Labour-free zone? I hope that the Government will look to fast-track and implement mechanisms to bring inward investment in our infrastructure. In particular, I would welcome the opportunity to work alongside government to examine the financing models for roads such as the A120.

Whether through supporting small and medium-sized enterprises, attracting foreign investment or helping hard-working families by providing the largest increase in the personal allowances in 30 years, this Budget is giving this country’s economy the strong foundations it needs for future growth and economic prosperity.

Living Standards

Priti Patel Excerpts

Monday 5th March 2012 Commons Chamber

[Mr Gauke]

I will happily re-fight the 2010 general election with the hon. Gentleman any time. He will remember how well his party did on that occasion. The fact is that the UK had the worst deficit of any major economy.

[Priti Patel (Witham) (Con)]

This debate is about living standards, and central to good living standards in our country are job creation and economic growth. Does my hon. Friend agree that the role of the private sector is central to creating jobs, to make up for Labour’s failure to rebalance the economy and provide job creation?

[Mr Gauke]

My hon. Friend is absolutely right. The recovery that this country requires will be driven by the private sector. It cannot be driven by more borrowing and more debt, which is the policy of the Opposition.

--- Later in debate ---

[Priti Patel (Witham) (Con)]

I welcome the opportunity to speak in this debate, because from what I have heard thus far it seems to be a chance to draw a contrast between the policies that this Government are pursuing to support jobs, growth and living standards and the record of economic failure that hangs like a millstone around the necks of Labour Members. Few things would be more damaging to the living standards of all our constituents than the introduction of the Labour party’s discredited policies.

I should like to focus on three areas in which the Government are making a real, positive difference to living standards despite the challenging economic circumstances and the appalling state of the public finances inherited from the previous Government. The first is business and growth.

Supporting jobs and growth is essential to maintaining good living standards, and the Government are putting Britain on the right track. The commitment to a lower main rate of corporation tax of 23% will boost Britain’s competitiveness, and I emphasise that that will mean more jobs being created and better living standards for all our constituents. Importantly, that pledge rules out a financial transaction tax and gives great stability to the City of London and the financial markets, which are key to the triple A rating that provides the financial stability underpinning our economy.

The Government have also cut the small profits rate to 20%, which is a welcome step forward to support growth. That, of course, helps to stimulate economic activity, particularly among small businesses. In my constituency, 83% of jobs depend on small businesses, compared with the national average of 68%. Few things would have been more damaging to business men, entrepreneurs and wealth creators looking to invest more and create jobs than the previous Government’s plan to increase the small profits rate to 22%. Jobs and growth are fundamental to our living standards, and it is a shame that the previous Prime Minister, who did so much to damage our economy and undermine our triple A credit rating, is not in the Chamber today to listen to the debate and account for the previous Government’s failures.

I should also like to touch on support for pensioners, which is central to living standards. The Government deserve great praise for the action that is being taken to support our pensioners. Council tax freezes in particular are a welcome way to keep more money in the pockets of all our constituents, including pensioners, whereas the Labour party doubled council tax when it was in government. That hit pensioners the hardest. We have also protected the winter fuel allowance and made cold weather payments permanent. The triple lock on pensions, which has been mentioned, has led to a record increase of £5.30 in the state pension, which will benefit about 13 million people and of course have an impact on living standards.

In the time that I have left I wish to refer to the reform of public services. Only last week, we learned that 17 million adults—about half the working-age population—have the numeracy skills of primary school pupils. Having a work force unable to do the basics in maths and arithmetic is naturally detrimental to our living standards. The Labour Government have much to account for on that front, as well.

The Government are investing a great deal in education and reforming public services. Frankly, after the previous Government left the country with an unprecedented scale of economic and social problems—

[Madam Deputy Speaker (Dawn Primarolo)]

Order.

Public Service Pensions

Priti Patel Excerpts

Tuesday 20th December 2011 Commons Chamber

[Danny Alexander]

I am grateful to the hon. Lady for picking up on that point. We will certainly look at the impact on opt-outs of the first year’s contribution increase. That will allow us to make adjustments to how we deliver the increase in years 2 and 3. I will be happy to share the relevant evidence in an appropriate form, perhaps in a statement or debate in the House.

[Priti Patel (Witham) (Con)]

In light of the hard-line position taken by the PCS union, what indication has my right hon. Friend had that it is serious about pension reform and will come back and sit at the negotiating table?

[Danny Alexander]

I am not sure that I have had any such indications so far, but I would, of course, welcome them if they came in the future?

Business, Innovation and Skills

Priti Patel Excerpts

Tuesday 20th December 2011 Commons Chamber

[Priti Patel (Witham) (Con)]

I start by wishing everyone a happy Christmas. I have been waiting a considerable time for this debate, and I am glad that it is now upon us. I would like to talk specifically about businesses and growth and some of the barriers affecting growth in my constituency.

By way of background, 83% of the local work force in my constituency are employed by small and medium-sized enterprises, which is around 15% more than the national average. Jobs and growth in my constituency are disproportionately dependent upon the success of small shops and medium-sized businesses. My constituency is home to around 3,800 SMEs that each employ fewer than 250 people across a wide range of sectors. I pay tribute to all the business men and women across the county of Essex. We are a highly entrepreneurial constituency full of small businesses, because they do a hell of a lot to create vital jobs.

My constituency has some outstanding world-class businesses and family-run businesses, such as Crittall Windows, an award-winning international company. We have the world-famous Wilkin & Sons jam factory in Tiptree, an outstanding chocolate maker, Amelia Rope, and a worldwide logistics company called Simarco. They all exemplify Essex’s attitude and status as a county of entrepreneurs. As ever, with most independent and small businesses, given the right kind of macro-economic and fiscal framework, they will adapt to the changes and challenges thrust upon them by any Government, by international circumstances and—dare I say it?—by Europe.

The Government deserve much praise for the actions already taken to support small businesses and growth, and the decision to reduce the small profits rate to 20p stands in stark contrast to what we saw under previous Governments. We also heard from the Chancellor last month that he will now halt the fuel duty rise in January, which is welcome news for small businesses. Businesses are now eagerly awaiting the promise of red tape reform. The one-in, one-out rule is all well and good, but all I hear is that we should just have a bonfire, throwing many out and bringing none in.

There are still many barriers to growth. Interestingly, in the past 10 days we have heard about the Portas review. I should declare an interest as the daughter of small retailers; my parents are shopkeepers. I think that we all recognise the fact that our high streets are having a very challenging time. They need reform. Even in a place such as Witham, where businesses work hard, we have empty shops on our high street; it is a fact. Although there is no silver bullet or magic wand, the Government and local authorities need to start looking at the recommendations and implementing some of the excellent proposals that Mary Portas has outlined. I would like local authorities to become really ambitious in their agenda for growth and in how they support business, which might mean removing some of the licensing and planning restrictions that have been detrimental so that we can find ways to boost growth on the high street and make our town centres far more vibrant. We must also support national market day. Those of us who represent market towns want to see much more emphasis on that area. I hope that the Government will start prioritising some of the reforms she advocated.

The other area is red tape, including the ever-burdensome red tape that comes from the European Union. For example, the agency workers regulations will cost Britain £1.5 billion. To put that into some kind of context, that is more than the apprenticeship budget alone, which we debated last night. I would rather see that money go into businesses and job creation in this country.

The other concern for Essex and my constituency is infrastructure. Essex and the constituency are well placed. We have Tilbury, Felixstowe, Harwich, the A12 and the A120, but our roads are struggling because there is no infrastructure investment. We also desperately need infrastructure investment in our railways in Essex. We need to get freight off the roads and back on to the railways. Anything that can be done to deal with that area would be useful, because ultimately businesses will grow if we can sort out our infrastructure problems.

Finally, I want to touch on banking. I hear endlessly from small businesses in my constituency that banks are simply letting them down, not on a small scale, but on a macro scale. I am concerned by the actions of the banks, which are effectively causing my constituency and small businesses misery. While the small businesses are creating jobs, the banks are leveraging, with shocking terms and conditions and fees being added to business accounts. They are dealing with individuals and small businesses in quite a threatening way. I had one dreadful case in my constituency involving one particular businessman, about whom I have written to Ministers this week, and I should like an official, if not a Minister, to meet him. Businesses now feel compelled by aggressive banks to sign up to unfavourable terms and conditions, and that has to change. I hope that Front Benchers will respond positively to the issues that I have outlined and give small businesses an early Christmas present by committing to remove some of those barriers.

Fuel Prices

Priti Patel Excerpts

Tuesday 15th November 2011 Commons Chamber

[Dr Wollaston]

My hon. Friend makes a good point. Indeed, one organic business in my constituency said that it would find a rise more acceptable if it could be seen directly as a green tax. Unfortunately, that is not the case. In my constituency, people will be badly hit by a double whammy, in that the bus service operators grant is set to be reduced by 20% next year. Just when they cannot afford to use their cars, people are being hit by a real threat to rural bus services, which are already at a critical level in south Devon. I hope that the Minister will set out what proportion of the rise will be set aside for green taxation purposes.

[Priti Patel (Witham) (Con)]

Does my hon. Friend agree that the points she is making show precisely why motorists need to see greater transparency in how fuel prices are determined? I am thinking, in particular, about the disparity between pump prices and the price of oil.

[Dr Wollaston]

I fully support that, because in south Devon those on the lowest incomes will be hardest hit. They will be spending yet more of their disposable income on fuel or they will be waiting at the side of a road for a bus service that can no longer afford to operate.

European Union Fiscal Union

Priti Patel Excerpts

Wednesday 14th September 2011 Westminster Hall

[Priti Patel (Witham) (Con)]

I shall be brief.

I congratulate my hon. Friend the Member for Stone (Mr Cash) on securing this debate and on all that he does on all matters European and their scrutiny in the House. This is a timely debate, and it is essential that all necessary steps are taken to protect hard-pressed British taxpayers from paying the costs of eurozone bail-outs, full stop, and to defend Britain from efforts to enforce closer fiscal integration in the wider EU.

Having campaigned for several years against Britain’s entry into the euro, I strongly recall the arguments that monetary union in Europe would inevitably lead to fiscal union. We heard many of the arguments today. We now see Europe heading in that direction, and it is a road down which we should never be drawn. As we heard over the summer, the desire in Europe to move towards fiscal union has accelerated, and the eurozone crisis is being used to support ever-closer union and to further federalist ambitions.

The EU’s Competition Commissioner said:

“This is one moment where we need greater integration…We need fiscal union”.

As we have heard this afternoon, that is not the right way forward, and I support all the views I have heard. I appreciate that much of the talk about a fiscal union is concerned primarily with the 17 eurozone countries, but there would be dire consequences for Britain, and we have a role in the wider discussions of the implications, particularly with those countries that are trying to take the whole EU with them. We must stop that.

The Europe 2020 strategy, which my hon. Friend the Member for Stone touched on, has implications for our fiscal and economic policies, including scrutiny of national reform programmes, and for plans to increase the size of the EU budget. The European semester, for example, includes proposals for greater monitoring and peer review of our domestic budgets. Our pre-Budget report is being looked into, but it is only a matter of time before Europe tries to grasp more control of such matters, because it believes that interdependence within the EU requires tighter economic governance to apply to all member states, and not just to those in the eurozone.

I urge the Minister, politely but forcefully, to notify our European partners that any interference in our fiscal policy is unwelcome. We should not encourage that. I and many others have argued that Britain should not surrender any of its fiscal powers, but should instead use this and all opportunities presented by the prospect of any new treaty to repatriate powers to this country. That is the right way forward.

Finally, I reiterate the importance of cutting all costs relating to Europe. Over the lifetime of this Parliament, our contributions to Europe will increase by between £8 billion and £9 billion, which is unsustainable. Businesses and consumers in this country keep facing additional costs. We know the direction of travel for all matters financial in the EU. It is preventing the creation of jobs here, and action must be taken.

Hard-pressed taxpayers in my constituency and throughout Britain want cuts in the EU budget—and no more increases, not even the proposed 2% increase. We must just say no. We must defend the rebate, and if we tighten our belts at home Europe must get the message and tighten its belt. Such matters should be a priority for the Government in the months ahead and, importantly, now, while there is a eurozone crisis, but they are also an opportunity.