The core purpose of the Treasury is to ensure the stability of the economy, promote growth and employment, reform banking and manage the public finances so that Britain starts to live within her means.
Inflation has now lowered from 3% to 2.8% in May, which should be welcomed on both sides of the House. Does my right hon. Friend agree that it is other Government measures such as freezing the council tax, freezing the fuel duty and increasing the personal allowance that have helped tens of thousands of my constituents in Morecambe and Lunesdale with their cost of living?
I absolutely agree with my hon. Friend that it is very welcome news that inflation is now falling. That will help families. The Government want to help families further by keeping those mortgage costs very low, and the only way we can do that is by having a credible plan for the public finances. We have also frozen the council tax, increased the personal allowance, with another big increase next year, and as my hon. Friend has just heard, frozen fuel duty for the second year running, so that his constituents in Lancashire and people across the whole country can be helped at this difficult economic time.
The Chancellor told the “Today” programme a few weeks ago that the only thing worse than listening is not listening. Well, he certainly listened to the “Today” programme this morning. We have now had U-turns on pasties, churches, charities, caravans and skips, and today a U-turn on fuel, which we welcome. It would be interesting to know at what point this morning the decision was made, and whether the Transport Secretary was even told. Now that the Chancellor is on a roll, will he also do a U-turn on the millionaires’ tax cut and rescind the granny tax rise? There is a vote next week. Will he join us in the Lobby or will he do the U-turn first?
It is quite difficult for a Conservative Chancellor to do a U-turn on a Labour policy. I am not sure the Opposition is entirely joined up—or maybe it is because the right hon. Gentleman waited half an hour to come in. The hon. Member for Hyndburn (Graham Jones), sitting directly behind him, who is a Labour Whip, has just tweeted on the fuel duty announcement that it is a deferred rise and cannot improve the economy. If the Labour Whip thinks it will not improve the economy, what does the shadow Chancellor think it will do?
It is about time this part-time, U-turning Chancellor took some responsibility for his own decisions. What is the reality? A double-dip recession, borrowing rising, family budgets under pressure—his plan has failed. Is it not time he listened to the Opposition and admitted that austerity has failed? Is it not time he did another U-time and adopted Labour’s five-point plan for growth and jobs?
We enjoyed reading recently that the right hon. Gentleman has been spending thousands of pounds on commissioning private opinion research about why his economic message is not getting through. It was leaked to the papers, saying that he was seen as “uninspiring” and “untrustworthy”. He had no need to spend thousands of pounds on that. He can ask Labour MPs and get that opinion of the shadow Chancellor. He has had two years to come up with a credible economic policy, and two years to apologise for his part in putting Britain into the economic mess that we are taking Britain out of.
T5. Does my right hon. Friend agree with the head of the IMF, who said that she shivers to think what would have happened to the British economy without this Government’s plans to reduce Labour’s deficit? (113606)
The managing director of the IMF put it in a very graphic way. She presented to the whole country the alternative that we faced in May 2010. If we had stuck with the Labour party’s incredible plans, we would be one of the countries seeking a bail-out, rather than, as we are now, a country that is a relatively safe haven in the very, very difficult European situation. [Interruption.] The shadow Chancellor will not move forward unless he concedes his role in getting Britain into this mess. Until he does that, he will remain a man of the past with no ideas for the future.
T2. Will the Chancellor update the House on what progress has been made on his offer to the computer games industry of tax incentives in his last Budget? It is important to get the details of the policy correct, but it is also important that time is not wasted unnecessarily. As the old adage goes, actions speak louder than words. When can we expect to see the words turned into action? (113603)
We will be consulting on that policy very, very shortly, alongside the new credits for animation and high-end television production. The video games industry is important in Scotland—for example, in Dundee there is a particular centre of excellence—but it is important across the entire UK, and the video game tax credit will help, alongside animation and high-end TV production.
T4. In order to help small businesses and those seeking new opportunities, will my right hon. Friend endorse the jobs fair that I am hosting in Erewash on 5 September? Will he further set out what the Government are doing to support small businesses, which remain the real engine of the British economy? (113605)
I certainly support my hon. Friend and congratulate her on organising the jobs fair. As the most recent unemployment figure showed, not only is unemployment falling but 200,000 private sector jobs have been created in the last few months in our economy. When it comes specifically to small businesses, as I set out to the House earlier, the national loan guarantee scheme has already helped more than 10,000 businesses with loans, we have cut the small companies corporation tax from the rate we inherited from the last Government, and the freeze in fuel duty will also help small businesses.
T3. In a time of austerity, when food banks are increasing in almost every town and city in Britain, is it not high time that the Government published a comprehensive list of all those people who are profiting from these tax avoidance schemes? Even Graham Aaronson, a Government adviser, forecast today that if something is not done there will be riots on the streets. This is a home-grown problem. Do not blame anybody else. Let us have a list of all those people close to home and those on millionaires row. (113604)
The last Labour Government, which the hon. Gentleman supported, had 13 years to introduce a general anti-avoidance rule; we are introducing one after just two years in office. The last Labour Government had 13 years to stop stamp duty avoidance schemes; this Government, after two years in office, are doing exactly that and stopping those schemes. The last Labour Government had 13 years to cap uncapped income tax reliefs, which are used for avoidance; we have introduced and are introducing that cap. Frankly, actions speak louder than words.
T6. With belt-tightening very much on the agenda right across Europe, will the Chancellor at least consider making deep cuts to our EU budget contributions, and so ally himself with the vast majority of people in this country? (113607)
We have worked very hard to freeze the EU budget during the last couple of years and avoid the very large increases that both the Commission and the European Parliament have sought. We are now beginning the very important negotiations on the next multi-year budget framework, and our objective is to deliver the best deal for the British taxpayer and make sure that unnecessary money is not going over to Brussels.
T10. Written answers to my hon. Friend the Member for Rutherglen and Hamilton West (Tom Greatrex) reveal that the nationalist Scottish Government have made no approach whatever to the UK Government on membership of the Bank of England’s Monetary Policy Committee. Does the Chancellor think that Scotland would have more influence on monetary policy as part of the UK or outside the UK using sterling as a foreign currency? (113611)
The hon. Lady refers to just one of a number of shambolic statements made by the Scottish National party since it launched its campaign for independence a few weeks ago, and not just on the Bank of England, but on financial services regulation. She makes the point very powerfully indeed that Scotland is “better together” as part of the United Kingdom. We have greater strength together as part of a more credible economic unit and part of the shared monetary policy of the Bank of England. All that would be jeopardised if Scotland were ever to become independent.
T7. The Chief Secretary has rightly committed the Government to clamping down on tax avoidance. Given recent high- profile cases of tax avoidance, and notwithstanding the earlier question from the hon. Member for Bolsover (Mr Skinner), will my right hon. Friend update the House on the progress being made and perhaps give a projection for the progress he expects over the rest of this Parliament? (113608)
I am grateful to my hon. Friend for his question. As the Chancellor said, the Government have done more on this issue in two years than the previous Government managed in 13 years. In particular, at the time of the spending review I announced that we would invest an extra £900 million in Her Majesty’s Revenue and Customs so that it could employ a large number of additional experts to deal with tax avoidance. That programme is projected to lead to an additional £7 billion a year in tax revenue by the end of this Parliament, and we are well on track to meet that objective.
Can the Chancellor confirm that the Government are going to spend an additional £150 billion in borrowing above their plan of a year ago?
The Institute for Fiscal Studies was very clear that, had we pursued the plan proposed by the previous Government, borrowing would be £200 billion more than it is today. As I have said, it is this Government’s credible fiscal plan that has brought record low interest rates and market credibility. We can see across the English channel what would happen if we did not have that credibility. That is where Labour would have put us.
T8. Has my right hon. Friend noticed that the most recent figures from the Office for National Statistics show that employment is up by 311,000, the biggest quarterly increase since the general election, and does not that mean that since the general election two jobs in the private sector have been created for every job lost in the public sector? (113609)
My hon. Friend—a knight of the realm—is absolutely correct. Despite these very difficult and challenging economic times, the private sector is creating jobs. We of course have to help it to create more jobs through the measures I have already outlined—cutting the small companies tax rate, help with credit and the like—but we also need to help those looking for work. That is why we have the Work programme and the youth contract, instruments that are much more effective than the programmes promoted by the previous Government at helping people who are out of work to link up with companies that want to employ people.
Britain is the only G20 country in a double-dip recession, youth unemployment is at record levels, poverty is on the increase, public services are in meltdown, and the Government are borrowing around £4 billion more this year than they did last year. The lessons of the 1930s demonstrate that the austerity programme that the Chancellor is pursuing will not work. Will he learn the lessons of history—
I suggest that tonight and tomorrow the hon. Gentleman turns on the television and watches the evening news, because he will see that there are problems facing many economies around the world. The Labour idea that somehow Britain alone faces these challenges because the Government are trying to deal with the debt is absolutely ridiculous. There are all these European economies in recession, the US economy had disappointing jobs data, and the Chinese economy is slowing. These are difficult times, but we are doing everything we can to help the British economy deal with the problems we inherited.
T9. Last year we lost the most working days to strikes in 20 years, and since the last election union leaders have never won the backing of a majority of their members for any major strike. Will my right hon. Friend task the Office for Budget Responsibility to provide annual estimates of the cost to the economy of strikes and of the concessions, paid for by taxpayers, to avoid them? (113610)
I am not sure that the hon. Gentleman’s suggested idea would be an appropriate task for the Office for Budget Responsibility to undertake, but he is right that strike action is costly to the economy. He would also be right to observe that it has not stopped this Government proceeding with the reform of public service pensions, and with pay restraint in the public sector, too, to help deal with the enormous mess left to us by the Labour party.
With regard to the problems at RBS this week, my constituent David Robinson has been unable to access his funds, including disability allowance, from his account with thinkbanking. It is an internet-based bank that uses the RBS platform, so he could not go into an RBS branch to resolve his problems. Will the Minister please make contact with RBS about internet banking users and make sure that my constituents—and everyone else—are not unduly affected?
The hon. Lady makes an important point, and I spoke to Stephen Hester this afternoon to find out what progress RBS has made in resolving its issues. It introduced measures to help people who can access branches, but she makes a very important point about internet banking, and RBS is very keen to learn the lessons from those problems and to put in place contingency arrangements for the future. I encourage her to get her constituent to write to RBS, and, if he has suffered additional costs as a consequence of the situation, to make that claim to it.
Embarrassing revelations about celebrities’ tax affairs usually bring a flurry of people to their tax accountants, asking them to check whether their affairs are all in order. Will the Treasury ask HMRC to encourage people to come forward voluntarily now and confess to what they may be up to, rather than wait for an investigation into their tax affairs?
My hon. Friend makes a very good point, and I hope that all those who have engaged in aggressive tax avoidance schemes consider whether it is the right thing to do and reconsider their affairs.
One of my constituents was told by her department store employer that she either had to accept a 12-hour contract, which amounts to fewer hours than she works at the moment, or go fully flexible, which does not fit with her child care. Is it not time that the Chancellor decided to do another U-turn and to restore tax credits to those working couples who do not work up to 24 hours a week?
We on the Treasury Bench have argued many times in the House that it is fair to ask couples to work under similar requirements as lone parents, and I urge the hon. Lady to consider that in this case.
It is standard practice for the Bank to announce its own monetary and liquidity schemes. That is what it did with the liquidity proposals, and the Governor of the Bank was answering questions about them this morning before the Treasury Committee in this House. When we have further details about the funding for lending scheme, we will of course come to the House and make that announcement, but I hope that my right hon. Friend will allow me to continue to make Mansion House speeches as Chancellors have before.
The counter-party proposal and the levy control mechanism fall within the ambit of the Treasury. Within the past hour the Energy Secretary has told the Energy and Climate Change Committee, which is undertaking pre-legislative scrutiny of the Energy Bill, that he would welcome a Treasury Minister going before it to explain those proposals. Why is the Economic Secretary refusing to do so?
Following the exchanges about tax avoidance and the Government’s very robust position, can one of the Treasury team tell us how soon we will have in place a system that targets not just celebrity individuals but all high-worth individuals, so that they all pay a decent share of tax to the nation?
HMRC already has in place a particular team that focuses on high-net-worth individuals; under this Government, we have also introduced a team that deals with not just the very top but the next band; and we are looking to introduce a general anti-abuse rule that will address tax avoidance—aggressive tax avoidance—more widely. This Government remain absolutely determined to ensure that people pay their fair share.