Amendment of the Law

Thérèse Coffey Excerpts

Thursday 24th March 2011 Commons Chamber

[Ed Balls]

Because a year ago unemployment was falling, and now it is rising. [Interruption.] The Chancellor sits on the Front Bench and says, “This is so bad.” Does he mean growth being downgraded? Unemployment going up? I will take his intervention at any point he wants, but if he does not want to make interventions from the Dispatch Box, maybe he should not be doing it from a sedentary position. [Interruption.] If he wants to intervene, I will allow him. I have made my pledge.

None of what I am saying will come as any surprise to the Secretary of State for Business, Innovation and Skills. He warned of it a year ago. In fact, I remember standing with him on the green on Budget day a year ago, and he said:

“We must not cut Government spending too soon and risk plunging a fragile recovery back into recession. Cuts without economic growth will not deal with the deficit”.

Wise words, and how right he has proved to be. Even after the election, and even after his colleagues decided to bury their worries and go along with immediate spending cuts and a VAT rise, the Business Secretary was still warning of the risks to come. He said on “Newsnight” last May, after the general election, that the speed of the cuts had to be based on the condition of the economy. He said:

“These things will have to be judged at the time of the Budget, and of course I don’t present the Budget personally but I’ll make an input into it.”

He went on:

“Over the course of this Parliament judgments about the speed of cuts have got to take account of the changing conditions that are coming, and that is basic economic policy based on evidence, which is what I’m in favour of…We don’t know what the impact of these cuts will be on employment.”

Wise words again, and he was right. The cuts are too fast and too deep, confidence is tanking and unemployment is up. This Budget was the time to change course, before it was too late. Sadly, the Business Secretary has not been heard.

[Dr Thérèse Coffey (Suffolk Coastal) (Con)]

Does the right hon. Gentleman not accept that public spending is not actually falling but continuing to rise? The sad thing is that we all have to take our share in bearing more than £120 million a day in interest payments on the debt left behind by the last Government.

[Ed Balls]

The hon. Lady is right—deficits went up. They went up in Britain, Germany, France, America and all around the world. They did not go up because spending or the national debt was too high in Britain. That is a Conservative myth put about to try to justify the Government’s cuts to police, the national health service and schools. The reason deficits became big was that we had the biggest global financial crisis in 100 years. If we had not let the deficits go up when the tax revenues went down, it would have been not a world recession but a world depression. It was only our actions—here in Britain and around the world—that saved our financial system from disaster. We nationalised the banks, let the deficit go up and got unemployment down—all of which was opposed by the present Chancellor.

Oral Answers to Questions

Thérèse Coffey Excerpts

Tuesday 21st December 2010 Commons Chamber

[Rehman Chishti (Gillingham and Rainham) (Con)]

4. What recent assessment he has made of the effectiveness of the private finance initiative.

[Dr Thérèse Coffey (Suffolk Coastal) (Con)]

5. What recent assessment he has made of the effectiveness of the private finance initiative.

[Tony Baldry (Banbury) (Con)]

13. What recent assessment he has made of the effectiveness of the private finance initiative.

--- Later in debate ---

[Danny Alexander]

That has a striking comment, coming from a Minister who was in the Department responsible for those things, and it reflects the general attitude towards public money that was prevalent under the previous Administration. There is a great deal of work that we can do as a Government to ensure that in future PFI is used only where it is absolutely necessary, and that we get best value for public money. That is how we should approach these things.

[Dr Coffey]

One of my constituents thinks that the PFI contracts that have been negotiated are one of the greatest scandals ever, if only because one of his relatives has made millions out of one. Apart from the potential £875 cost of a Christmas tree, which PFIs have caused the Minister the most angst?

[Danny Alexander]

I am not sure that it would be appropriate for me at this stage to pick out individual examples. The important thing to say is that, in common with the work that we are doing to ensure that we get better value from our suppliers across Government and that those suppliers are making a contribution to reducing the deficit, we are working on examining the future costs of PFI, so that where we can we reduce those costs. That is very important for ensuring that we reduce the deficit effectively and have the maximum amount of money left for front-line services.

Autumn Forecast

Thérèse Coffey Excerpts

Monday 29th November 2010 Commons Chamber

[Mr Osborne]

I said at the time that it was a challenging settlement. I have removed some of the ring-fencing—indeed, almost all the ring-fencing—to allow local authorities the maximum flexibility to deal with that, but unfortunately I inherited a situation where the country was borrowing £1 in every £4 that it was spending. At a time when people are looking at European countries, we can see what happens to European countries that have high budget deficits and no credible plan to deal with them, so I have had to take those decisions. As I say, if the Labour party wants to put forward a plan to remove the structural deficit without affecting the local government settlement, let us hear it.

[Dr Thérèse Coffey (Suffolk Coastal) (Con)]

I warmly welcome the announcement that you made of the investment by GSK into our British economy today on the back of the 10% tax rate for patents and innovation. Can you tell us more about the competitiveness measures that you are taking to help this country on its way out of the mess left behind by the Opposition?

[Mr Speaker]

Order. May I make the point that I have made no announcement and I can certainly say no more, but I think the Chancellor can oblige? We know what the hon. Lady meant.

Comprehensive Spending Review

Thérèse Coffey Excerpts

Wednesday 20th October 2010 Commons Chamber

[Mr Osborne]

There is commitment, even in these difficult times, to a carbon capture and storage demonstration, to the development of offshore wind technology and manufacturing at port sites, and to a renewable heat incentive. On the green investment bank, it would have been easy to say, in my position, “Let’s wait to see whether we can get some Government asset sales and some private sector money; just create the body and hope it gets the funding.” I wanted to provide a back-stop and I have done so today by making available £1 billion from general Government expenditure. However, I also want to see substantial Government asset sales go into the green investment bank and to lever in some private sector money, so that it is a multi-billion pound force for investment in our country.

[Dr Thérèse Coffey (Suffolk Coastal) (Con)]

I congratulate the Chancellor and the Chief Secretary to the Treasury on this spending review. Delivering investment in 21st-century infrastructure will be welcomed by my constituents, as will the spending to protect the post office network and, most importantly for us, to deal with coastal erosion. Does he agree that it is the coalition Government who are making the difficult and politically courageous spending decisions? That has also been reflected today in the European Parliament, where Conservative MEPs voted to reduce the European Union budget, unlike Labour MEPs, who did not take that opportunity and instead also voted for tax-raising powers for the EU.

[Mr Osborne]

My hon. Friend tells me something that I did not know, which is that the behaviour of Labour MEPs is completely inconsistent with the message from their party that it is serious about trying to reduce Britain’s budget deficit. The money that we have found for flood and coastal defences totals about £2 billion and will help 145,000 households. Obviously, the relevant Secretary of State will make the announcements about the different tranches that will now go ahead, and I wish Suffolk Coastal every success.

Office of Tax Simplification

Thérèse Coffey Excerpts

Tuesday 20th July 2010 Commons Chamber

[Mr Gauke]

My hon. Friend is right to raise that point. Of the two reports that the office will produce initially, one will focus on taxation for small businesses and the problems with IR35. We believe that this organisation will be able to address that difficult issue, which frankly has not been dealt with satisfactorily in recent years.

[Dr Thérèse Coffey (Suffolk Coastal) (Con)]

I welcome the response to the urgent question today. As a former finance director, I will join many others in celebrating this simplification agenda, so that instead of spending time thinking about tax they can think about business growth. In particular, can my hon. Friend assure me that the office will also cover the subject of VAT which is as complex as corporation tax and others?

[Mr Gauke]

The OTS can look at all taxes. We will agree other subjects for consideration in the future, and I am sure that my hon. Friend is right to highlight that matter.

Oral Answers to Questions

Thérèse Coffey Excerpts

Tuesday 13th July 2010 Commons Chamber

[Danny Alexander]

That pay rise will be pro rata, but people will benefit from the changes to tax credits, for example, and the significant increase in the child tax credit for those with children. That will help to ensure that many of the people with children in the hon. Lady’s constituency whom she is describing will not be driven into poverty, as they were in many instances were under the previous Government.

[Dr Thérèse Coffey (Suffolk Coastal) (Con)]

T7. I and I am sure many other Members have received many representations from Equitable Life policyholders who felt very shabbily treated by the last Government. Can the Minister give me some assurance that under the new coalition Government, they will treated a little more equitably?

Finance Bill

Thérèse Coffey Excerpts

Tuesday 6th July 2010 Commons Chamber

[Rushanara Ali (Bethnal Green and Bow) (Lab)]

Thank you, Mr Speaker, for giving me the opportunity to speak in this debate. I should like first to congratulate my fellow new Members, from all parties, on their maiden speeches. I am also grateful to Opposition Members for their passionate speeches in this debate.

The Bill represents only the tip of the iceberg when it comes to the regressive impact of the Government’s plans. I want to focus on the effects of the Finance Bill on constituencies such as mine, which falls in the London borough of Tower Hamlets. Although we recognise the need to reduce the Budget deficit, the depth and speed of the cuts and some of the tax rises, such as the VAT rise—all under the euphemism of fiscal consolidation—mask an inherently unjust, unfair and unequal Budget, of which the Bill is a significant part. It will hurt the poorest and most vulnerable in our society and leave hard-working families and small businesses around the country in constituencies such as mine high and dry.

The Bill will have a detrimental effect on the life chances of families on modest incomes. It will increase suffering and deprivation. I welcome the increase in capital gains tax, one of the few progressive aspects of the Bill, but for many in constituencies such as mine it is small comfort given that their homes, jobs, local schools and the very services on which they rely to thrive will be devastated. It makes a mockery of the notion that we are all in this together.

I turn now to the impact of the Bill on poverty. Unlike Conservative Governments of the past, the coalition Government have claimed to be progressive. That is how the Bill should be judged, and that is how the country will judge it.

[Dr Thérèse Coffey (Suffolk Coastal) (Con)]

Does the hon. Lady accept that under the last Government the gap between the richest and the poorest grew? I feel that what she is saying now is a contentious way of suggesting that somehow the Conservative-Liberal coalition is attacking the poorest.

[Rushanara Ali]

We all know that income inequality rises in periods of boom. It is not acceptable, and personally I would rather that we had been able to do much more. As under previous Governments, income inequality increased. However, social inequality decreased. Like many Opposition and Government Members I worked passionately to reduce poverty and we did reduce child poverty nationally. I regret that we did not manage to achieve comparable reductions in child poverty in London.

The Government’s cuts will be judged on the measure of progressivism, and it is a great shame that the Bill is not progressive enough. Using VAT to raise £13 billion is a regressive choice. Save the Children estimates that the poorest families in Britain will face VAT bills of about £1,600 a year. The Treasury’s own figures show that the poorest are affected three times as much as others by changes in VAT. Many have argued that that is offset by the exempted expenditure on food and children’s clothing, but it is quite the opposite. The poorest 10% of households already spend a higher proportion of their disposable incomes on VAT—about 14% compared with about 5% for the top 10%.

These changes, combined with announcements in the Budget such as those on housing benefit, disability living allowance and other kinds of fixed income, alongside the removal of some £3 billion of support to families, will devastate many of the vulnerable families in constituencies such as mine and many others. Ministers and Government Members have been quick to say that restoring the link between earnings and the basic state pension is an important achievement, but unfortunately some 10,000 pensioners in my constituency will suffer from the VAT rise alone.

The VAT increase will reduce consumption. It will hit small businesses, including almost 4,500 in my constituency, very hard. I do not accept the argument that it will be good for the economy. About 70% of those businesses in my constituency have fewer than four members of staff working for them, and there is no doubt that a reduction in consumption will affect them negatively.

The Conservatives have been out of power for 13 years, and the first thing they now do is raise VAT. What does that say about their idea of progressivism? Those of us who were brought up in modest income households, like many millions of people in this country, have not forgotten the pain and suffering inflicted on families through VAT hikes in the past, and I simply do not accept that this is the right path now. I appeal to Liberal Democrat friends and to true compassionate Conservatives —I hope there are still a few left—who know in their heart of hearts that this VAT increase is bad for the British economy, does nothing to create fairness and social justice and does nothing to protect the most vulnerable in our country to think again and to vote with us.

People on modest incomes in constituencies such as mine will have to make terrible choices between heating or feeding and clothing their families, or between new pairs of shoes for their children and taking the bus to work. Sadly, those are the kinds of choices that some people will be forced to make because they are already on low incomes, struggling to cope in this difficult economic climate. We know that in periods of recession people turn to loan sharks because they find it difficult to get other loans, and end up heavily indebted and trapped. We also know that despite efforts by the previous Government, many of the poorest people in this country still suffer from being in a poverty trap. Despite those efforts, child poverty still has not been reduced by as much as we would have liked. I believe that this Budget, particularly the VAT increase, will continue to damage vulnerable families. In Tower Hamlets, in constituencies such as mine, the Budget cuts have already amounted to about £9 million, and a further £55 million of cuts are proposed over the next three years.

Although I welcome the bankers levy, where is the justice and fairness in raising just £2 billion, with no provision being made to tax bonuses? We may contrast that with the £6 billion of bankers’ bonuses and with the billions of pounds of public service cuts for ordinary families and workers, and it just does not seem adequate. I am not saying that the public do not want to see the deficit cut, but where is the justice in such a comparatively small levy compared with what the public have to pay?

--- Later in debate ---

[Gavin Shuker]

I thank my hon. Friend for that intervention.

I represent the east of England in my constituency of Luton South, and there is another tax that will have profound implications for my constituents. It is the change in national insurance. I am one of only two Opposition MPs representing the east of England and, as of Budget day, I represent part of what the Government now call the greater south-east. I am sure that hon. Members can imagine how delighted I was to receive that accolade but, having never heard of the greater south-east, and given that I live there, I decided that I should find out more about it.

I learned that, contrary to the coalition’s view that our area is so affluent that, even in the most serious downturn of the past 60 years, it needs no Government support, it houses some of the most deprived wards in our country. It should be recognised, as some on the Government Benches have chosen to do tonight, that the inequality within regions can be as great as the inequality between regions. For example, the Dallow ward in my constituency stands in stark contrast to Elstree, one of the most affluent wards in the country, through which I pass every day on my commute to Parliament. Both are in the greater south-east.

I have also learned that, of all the regions in this country, the greater south-east is the most likely to have vital infrastructure projects shelved. Given the VAT rise and the other measures in the Bill, this will have a really profound effect on the inhabitants of the region. Investment in infrastructure is a far better way of kick-starting economies than cheap, short fixes and making cost savings. Indeed, the independent Office for Budget Responsibility accepts that growth projections must be downgraded as a result of the coalition’s plans.

Most importantly for the people living in my constituency, I have learned that if an entrepreneur wanted to start a new business in the greater south-east, they would find themselves some £50,000 worse off than if they had started their business elsewhere. Let us be clear about the impact. For my constituents in Luton South, that means that moving just two stops up the train line or two junctions up the M1 would effectively give them a £50,000 golden hello for starting up. This Government would deprive our region and our town of new jobs and businesses, and fresh opportunities for growth.

Rising unemployment often hits the poorest and the youngest hardest. Indeed, my right hon. Friend the Member for Tottenham (Mr Lammy) spoke passionately about his experiences of growing up at a time when he faced a double whammy of weak growth and spending cuts, along with increased taxation, and he pointed at the profound effects on the local economy—not just in the short term, but in the long term as well. All things being equal, who would not want to establish their business within a few miles of their own home? Who would not want to employ people from within their own community?

These plans are a missile aimed at the heart of the recovery in the east and in Luton South. As glamorous as “the greater south-east” sounds, I simply have to tell Government Members that the continued membership of this region simply does not serve our constituents. Given a choice, I would like to continue to be a Member representing the east of England.

[Dr Thérèse Coffey]

Speaking as a fellow Member from the east of England, and one representing Suffolk Coastal, I am finding it difficult to understand the hon. Gentleman’s argument that we are disincentivising the growth of employment, given that we have reduced the threshold for employers’ national insurance. Surely that provides an incentive, not a disincentive. I would appreciate some further clarification on why we are disincentivising employment.

[Gavin Shuker]

I thank the hon. Lady for her intervention. I do not want to give a geography lesson here, but the point I am making is that there is disparity within a region, as some areas are more affluent than others. That applies locally as well as regionally, and some parts of regions are much closer to other regions. For example, in Luton South, we have a particular issue about bordering an area that will not be affected by the £50,000 incentive I mentioned for starting a business.

Office for Budget Responsibility

Thérèse Coffey Excerpts

Monday 14th June 2010 Commons Chamber

[Mr Osborne]

I will set out measures in the Budget, and the hon. Gentleman will have to wait for that. He highlights the point that I was making—that the forecast is based on the plans inherited from the previous Government. It identifies huge spending cuts, but they never told us where those cuts would fall. I am sure that he wants a future in the Labour party, so perhaps he can take a lead over some of the leadership contenders and tell us what those cuts would be.

[Dr Thérèse Coffey (Suffolk Coastal) (Con)]

Will my right hon. Friend support the work of the OBR in assessing offsheet balance liabilities, including such things as PFI and unfunded public sector pension liabilities? I hope that he will recognise that it is important that we put all the debts that Labour has generated over the years on the balance sheet once and for all so we know how we can pay for them.

[Mr Osborne]

My hon. Friend is right. On page 58 of the report, Sir Alan and the fellow members of his committee set out some of the liabilities that need to be factored into longer-term fiscal forecasts, which include an ageing population, unfunded public service pension liabilities and the PFI contracts. They point out that some £43 billion of PFI contracts are off the national balance sheet.

Economic Affairs and Work and Pensions

Thérèse Coffey Excerpts

Tuesday 8th June 2010 Commons Chamber

[Matthew Hancock (West Suffolk) (Con)]

rose—

[Dr Thérèse Coffey (Suffolk Coastal) (Con)]

rose—

[Mr Darling]

I shall give way to the hon. Lady first.

[Dr Coffey]

Will the shadow Chancellor explain why, if he was so open about the state of the economy, he would not hold a comprehensive spending review, and why he would not publicise the impending debt payments of £70 billion that the people of this country must pay for his profligacy?

[Mr Darling]

First, I said on many occasions that the right thing to do was to hold a spending review this year, before the end of the current review period ran out. There is still a lot of uncertainty, as I shall explain later, and the hon. Lady would do well to remember that at present, while we are coming out of recovery, our growth is modest. I hope we will see recovery secured, but what is happening in continental Europe and other parts of the world shows that we are not out of the woods yet and there is still a lot of uncertainty around. On the hon. Lady’s main point, however—which I dare say her colleagues will make too—our borrowing and debt levels rose for exactly the same reason as they are rising in America, Japan, Italy, France, Germany and just about every other country in the world: because we went through the deepest global recession in modern times. The hon. Lady might also want to remember that until well into 2008 the Conservatives, far from condemning our spending, were supporting our spending plans. They are therefore in no position to say now that they were opposing all this in times past. That is simply not right.