The Chancellor of the Exchequer was asked—
Private Sector Job Creation
More than 1 million private sector jobs have been created since the first quarter of 2010 and employment is at a record high. We are supporting more job creation by further reducing the rate of corporation tax to 21%, and since 1 January we have been helping businesses large and small to invest, with a temporary tenfold increase in the annual investment allowance. We can afford these tax reductions in part because we are taking tough action on tax evasion. I can confirm to the House that last night Her Majesty’s Revenue and Customs received £340 million from the Swiss Government, a first instalment of the deal we have struck, and the first time in our history that money due in taxes has flowed from Switzerland to the UK, instead of the other way round.
I warmly welcome the announcement that my right hon. Friend has just made. I am sure the fact that a fairer share of tax is being paid will also be warmly welcomed by my constituents in Erewash. Does my right hon. Friend agree that another important aspect of private sector job creation is the role of apprenticeships? Companies such as Derwent Analytics and TecQuipment in my constituency have an important role and are enriching young people with opportunity and skills for the future.
My hon. Friend is right, and I am glad she welcomes the deal we have struck with Switzerland—a deal, by the way, rejected by the previous Government. Apprenticeships are vital in helping to create that skilled work force. More than 1 million people have started apprenticeships since 2010 and in her constituency alone there has been a 42% increase. I am delighted that successful businesses in her constituency are helping to train the work force of tomorrow.
I do agree. The seed enterprise investment scheme has succeeded in getting money into start-up businesses and we currently have the fastest rate of business creation in our history. I take this opportunity to thank my hon. Friend for all the work he has done, going around the country promoting the scheme.
If everything is going so well in the jobs market, why is the number of people on the dole long term the highest for 15 years? Why has the number of young people in Rotherham out of work for more than 12 months tripled over the past year? When is the Chancellor finally going to act to give people real help with jobs?
Of course, we are clearing up the mess that Labour left behind. As we do that, the private sector has created over a million new jobs, unemployment has been falling, employment is at a record high, and female employment is at a record high. I would have thought the right hon. Gentleman should celebrate that, rather than talking it down.
Private sector job creation is not working for young people. In January 2011 I asked the Government how many young people they would be paying out the dole to by the end of this Parliament. They said 279,000. In December 2012 they had to up that figure to 310,000, an extra 31,000 young people who they predict will be on the dole by the end of this Parliament. Who does the Chancellor blame for that planned increase in welfare spending—himself or the Secretary of State for Work and Pensions?
The claimant count has fallen on the most recent measure, which was published last week. As I said, 1 million jobs have been created in the private sector. We are also, as my hon. Friend the Member for Erewash (Jessica Lee) reminded us, creating the apprenticeships to give these young people the skills they need, which the previous Government were not providing, to compete in the modern economy. I would ask the hon. Lady to get behind the education and welfare reforms needed so that people have the right incentives to work and the right skills to get a good job in future.
The recent cancellation of the rise in fuel duty in the autumn statement was very welcome news for all our constituents, and it will help with jobs. Our constituents now need greater certainty about future rises, so will the Chancellor accept the Treasury Committee’s recommendation, published today, that he should use the Budget to set out a clear medium-term strategy for fuel duty?
My hon. Friend is right to remind us that fuel duty is 10p per litre lower than it would have been if we had stuck with Labour’s Budget plans. We have also, as a medium-term measure, abolished the fuel duty escalator that the previous Government put in place. He mentions the Treasury Committee’s report. I hope that, as Chair of the Committee, he will welcome the fact that we have got the money in from Switzerland, because one of the issues that the report raised was whether that money would be forthcoming, and the fact that it came last night was very welcome.
While the headline rate of unemployment is falling, is not rising long-term unemployment bad for society, as my hon. Friends have been saying, but bad for the Exchequer too, because it is one reason why so far this year the deficit has been going up, with £7 billion more borrowing than in the same period last year? Can the Chancellor at least bring himself to admit that?
Unemployment rocketed because of the disastrous economic policies of the Labour party, and the deficit rocketed too. The good news is that 1 million jobs have been created and that the deficit has come down by 25%. Perhaps one day we will get an economic policy from the Labour party and we can make comparisons with what it would do in office. Until then, the hon. Gentleman should get behind the measures to clear up the mess that he left behind.
The Government estimate that in the 2013-14 tax year over 1 million out of 8 million families are affected by the new charge. As of 24 January, over 340,000 recipients have opted not to receive the payment. The charge will raise over £1.7 billion each year to tackle the deficit.
The Government pride themselves on their fairness. Can the Minister explain to this House what is fair about a one-earner family making up to £50,000 having their child benefit cut while a two-earner family making up to £100,000—twice the amount—is able to retain their child benefit?
I know that the hon. Gentleman is a man of principle, and I have respect for him, particularly since he refused to work for the right hon. and learned Member for Camberwell and Peckham (Ms Harman); I do not blame him. I note that on his website he says that he has
“a strong commitment to supporting the…less well off in society.”
He is absolutely right and I agree with him, so perhaps he can explain why he is against a measure that is targeted at the 15% of people who are the highest earners in society. [Interruption.]
Will the Minister discuss with his colleagues in the Home Office and the Department for Work and Pensions the effect of the combined changes that those Departments and the Treasury have made, which mean that a young child in my constituency—a British child whose mother has leave to remain and work in the UK but who is estranged from their British father as a result of his domestic violence—will now not be able to receive child benefit for at least 10 years?
My hon. Friend raises a very important point. In the 13 years of the previous Government, the welfare budget went up by 62% in real terms; it was out of control. If we are going to deal with the problem that they left behind, we have to make sure that everyone makes a contribution.
Long-term Youth Unemployment
Despite difficult economic circumstances, more people in the United Kingdom are in work than ever before in our history. Unemployment, youth unemployment and long-term unemployment are now falling. Through initiatives such as our city deals programme we will work with local communities to respond to particular local challenges.
Back in the real world, long-term youth unemployment in Hartlepool has risen by 86% since this Government took office. How much of that increase can be attributed to the Government’s economic policies and which of those policies will the Minister now change to help the jobless youth in my constituency?
I know that the hon. Gentleman was a member of the previous Government who left the mess that we are clearing up, but I would have thought—[Interruption.] I take an interest in Teesside, as he knows. In his article for the Hartlepool Mail, he said:
“The town’s economy has the makings of a modern, innovative and highly skilled manufacturing”
town. The hon. Gentleman should get behind his town and support the city deal for Teesside that his colleagues are campaigning for.
Does my right hon. Friend agree that the combination of rising private sector employment in this country and the number of measures that we are taking, including the largest apprenticeship scheme for almost 50 years, is one reason why our youth unemployment is at a much lower level than that in large parts of Europe? It is now past 60% in Spain.
My hon. Friend is right. It is important that we make sure that our young people have the skills available, and the expansion of the apprenticeship programme is a key feature of that. It is important to send the right message to young people, which is that there is a 90% chance that a young person who joins the jobseeker’s allowance scheme will have a job within a year, and a 60% chance that they will have a job within three months. It is very important that that message gets out and that young people should not be demoralised by the Labour party.
In parts of the United Kingdom that are highly dependent on the public sector, such as Northern Ireland, does the Minister agree that we need to maximise the private sector to ensure that the hard core of young people who are unemployed get into skills and training programmes so that when jobs become available they are best placed to get them?
One of the best ways to tackle youth unemployment is to encourage the growth of small and medium-sized enterprises. In that regard, may I share with the Minister the good news that Northamptonshire has recently been declared the most enterprising county in Britain, and that in Kettering in the third quarter of last year there were 154 new company formations, a record for the borough?
I am very pleased to hear that from my hon. Friend, who has to count as one of the House’s most enterprising Members. He will know that Northampton came out very well of the recent cities survey with regard to its record of growth, and it is very important that we support that by getting more jobs and more people into work there.
In answer to my hon. Friend the Member for Hartlepool (Mr Wright), the Minister made it absolutely clear that he is completely unaware of the fact that the cuts in the north-east total £4 billion, greater than those in Spain. Is it any wonder that youth unemployment is third only to Spain and Greece?
The hon. Lady should reflect on the fact that the fall in unemployment in the north-east of nearly 25% is greater than that in any region in the country. She should be celebrating the turnaround in the north-eastern economy to which she and I have been aspiring for many years.
To go with the enterprise taking place in Northamptonshire, may I urge colleagues throughout the House to consider having an apprentice in their own office? I have had apprentices for two years now, both of whom were school leavers from Northamptonshire schools. They do a brilliant job and there are all sorts of facilities available to support that.
Cost of Living
The Government continue to take steps to support households. The personal allowance will be increased to £9,440 in April 2013 to support hard-working individuals. The cash increase in that year is the largest ever. The 3p fuel duty increase planned for January 2013 has been cancelled, as a result of which fuel duty will have been frozen for two and a half years.
I thank my right hon. Friend for that answer and warmly welcome the fact that more than 1,700 people in my constituency have been taken out of paying income tax altogether by the raising of the threshold, and that more than 42,000 people in my constituency have had their income tax reduced as a result. May I urge him to be bold and go further?
I am grateful to my hon. Friend for those comments. We are increasing the tax allowance towards the bold and ambitious goal of £10,000, which Conservatives and Liberal Democrats have joined together in coalition to deliver. We will certainly be bold and ambitious, and I will take his comments as a Budget submission.
For the third year running, the Government have provided additional funds to councils to allow them to freeze council tax, which doubled under the Labour Government. I am aware that Warwickshire county council intends to freeze council tax, but will my right hon. Friend join me in urging Nuneaton and Bedworth borough council and North Warwickshire borough council, which are Labour controlled, to get on board, freeze council tax and give the hard-working people in my constituency a break?
My hon. Friend makes an important point. We have provided funding to local authorities to enable the council tax freeze to be delivered. Of course, councillors in those areas will be answerable to their constituents if they fail to deliver the substantial financial benefit that that offers. He is right to say that council tax doubled during the Labour party’s time in office.
Does the right hon. Gentleman accept that the cost of living increases have hit the poorest hardest, including the man I mentioned last week in Prime Minister’s questions? Should we not therefore follow the US in taxing the top 2% more, having net investment and generating an extra 1% growth, rather than hitting the poor hardest?
Analysis by Citizens Advice shows that the Chancellor’s cuts to tax credits and benefits will
“swamp any gains from the change in personal tax allowances for almost all low income households…and many middle income families”.
How can that hit on working families be justified on the same day as millionaires are getting a tax cut?
The hon. Lady will know that working people in this country are net beneficiaries of the measures announced in the autumn statement. I would have thought that she would welcome the fact that 2.2 million Scots will gain from the increase in the personal allowance. It is a massive policy to ensure that the working people of this country have more of their own money back in their pockets to use for themselves.
Over this Parliament, we have introduced 31 measures to tackle tax avoidance, including loophole closures. This year, our work will focus on strengthening the disclosure regime, consulting on new sanctions for avoidance promoters and introducing the general anti-abuse rule. HMRC will also increase its risk assessment and specialist transfer pricing resources to target multinationals. Combined, those measures will strengthen our commitment to tackling tax avoidance and reducing the tax gap associated with it.
My hon. Friend is right to raise that point. The Prime Minister has said that he wants to use the G8 for this purpose and to have a serious debate about tax avoidance. The OECD is looking at this matter. We are encouraging it to do so and have provided it with additional resources. It will report back on solutions that could be developed to tackle profit-shifting by multinationals and the erosion of the corporate tax base.
May I say how welcome it is that the UK is using the presidency of the G8 to tackle international tax avoidance, after a decade in which the Government of this country stood by while industrial tax avoidance was allowed to run rampant? I urge the Government to focus on the issue of tax presence, particularly for companies such as Amazon, which we all know are in this country and should be paying tax in this country, but are playing the rules to avoid it.
I will not get into individual cases. As I have said, the OECD, at the urging of my right hon. Friend the Chancellor, is looking at these issues. We want to ensure that there is an international tax system whereby economic activity is taxed where it occurs. That has been overlooked for too long and we are determined to address it.
I should point out that those units were not in existence under the previous Government and were introduced as a consequence of our reinvestment programme. On enforcement and compliance more generally, I also point out that if we are looking only at numbers, under the previous Government the number of people working in HMRC’s enforcement and compliance department fell by 10,000. Under this Government it will increase by 2,500.
The managing partner of Ernst & Young has dismissed the concerns of the House about aggressive tax avoidance by stating:
“The simplest solution is to stop banging on about morality and change the law.”
Does the Minister share my view that in a civilised society we do not live by rules and regulations alone, but by what we consider to be right? Should not boards of companies that operate in this country be asking themselves a key question about all their activities, including their tax policy: is this the right thing to do?
Increasingly, artificial contrived behaviour is something that all of us, including the public, simply do not accept. My hon. Friend is right to say that this is a board matter, and boards should take tax policy seriously. Companies should think very seriously about aggressive, artificial, contrived behaviour and there is low tolerance for such behaviour.
This Chancellor has done more to tackle tax avoidance than any of his predecessors, and this Government have taken tax compliance much more seriously. I will give one more statistic: when we took office the yield from HMRC’s enforcement and compliance activity was £13 billion. We expect that number to have increased to £22 billion by the end of this Parliament. We are taking real steps to address this matter.
Her Majesty’s Revenue and Customs does not collect data on the VAT paid on individual goods or services at a sufficient level of detail to indentify the amount paid by sixth-form colleges and further education colleges. VAT costs, like all other costs, are taken into account as part of the up-front funding allocation.
Sixth forms and further education colleges such as Hills Road and Long Road sixth-form colleges and Cambridge Regional college do excellent work. However, they face a large VAT burden—some £300,000 for sixth-form colleges and well over £1 million for Cambridge Regional college—that schools do not face, as well as receiving less funding than the school sector. Will my right hon. Friend agree to investigate whether that anomaly can be corrected, so that sixth-form colleges and FE colleges can have a level playing field?
As my hon. Friend will know, when we took office we found a situation in which sixth-form colleges were considerably less well funded for that group of pupils than schools. We are taking steps, year by year, to equalise the funding arrangements, and we will look again at that in the spending round in the first half of this year.
As a governor of Luton sixth-form college for 20 years and a former teacher of A-levels, I am convinced that sixth-form colleges are the most successful institutions in our education system. Is it not time for the Government to stop punishing them for their success?
I dare say that the hon. Gentleman’s comments on sixth-form colleges will be echoed by many Members of the House. That is why, as I said in answer to the earlier question, the Government are taking steps year by year to equalise the funding arrangements. I am sure he will welcome that.
The latest assessment was given in last week’s employment figures and showed that 90% of new jobs created were full time, and that the number of involuntary part-time workers fell by 23,000.
The hon. Lady is not quite right. In fact, the greater number of jobs created have been full time rather than part time. It is important to understand that the term “underemployment” refers to people who would like more hours even if they are employed full time. The fact is that 90% of people in work say they do not want any more hours. Most of the rise happened before the election. Since the election, the number of full-time jobs has increased faster than the number of part-time jobs.
The Minister and I met local enterprise partnership members in Newcastle 10 days ago and discussed the city deal and the increase in job numbers. Does he agree that, with a 9,000 increase in job numbers in the north-east in the last quarter, all jobs should be welcomed, whether they are part time or full time?
My hon. Friend is absolutely right. The number of hours being worked in the country is at a record level. We should not sneer at people who choose to work part time. That is their option, and they have more opportunities to work part time and full time than they had before.
Unemployment in my constituency went up last month and is up on last year, and underemployment is increasing. People in employment want to work more hours and are not working the maximum amount to be classed as people in full-time employment. How will cutting benefits for those people—they receive in-work benefits and are on low pay—help?
By making the hard choices to save money in areas such as welfare, this Government have been able both to reduce the deficit and to increase capital spending on the infrastructure that is vital to our economic future. That is funding more roads and rail, and faster broadband, than in the years of the previous Government, when money was wasted. Indeed, public investment as a percentage of gross domestic product is higher on average in this Parliament than under the previous Government.
I thank my right hon. Friend for his commitment to upgrading our infrastructure, which was so woefully neglected in Labour’s 13 years of waste. In particular, I welcome the £5.5 billion in the autumn statement for science, roads and free schools. We will never build a 21st-century economy on 19th-century infrastructure. Given the pressure on public finances, does he agree that we may need to be bold in unlocking new models in private investment? I am thinking particularly of mutual and local investment such as the tax increment financing that has financed so many American cities.
I agree with my hon. Friend. In East Anglia, where his constituency is, we have invested more than £280 million in life sciences, and are providing infrastructure by, for example, upgrading the A11. He is completely right that we should look at new forms of financing. We have introduced tax increment financing, as he suggests. From April this year, all authorities will, within prudential limits, have unfettered access to standard tax increment financing.
Is the Chancellor aware that Mr John Cridland of the CBI said yesterday that the Government have a national infrastructure plan but were just incompetent at delivering it? That incompetence, which characterises the Government, is leading to a situation in which the Government will have achieved, by the end of this Parliament, about half the level of national infrastructure investment of 2008, which will cripple the competitiveness of the British economy. What is the Chancellor going to do about it?
It is an inconvenient truth to the hon. Gentleman that public investment as a percentage of GDP is higher on average in this Parliament than under the entire last Labour Government. That is because this Government are making the difficult choices on welfare, which Labour Members oppose, to save money and reduce the deficit, and to spend more, for example, on roads than they did during their period in office. That is the right priority for the taxpayer.
Can the Chancellor confirm that Labour’s last Budget planned to cut capital spending by 50%?
Yes I can. Again, it is an inconvenient truth that we are spending billions of pounds more on capital spending than was setout in the Budget that half of them opposite, who were in Parliament before the last election, voted for. We are making those choices: they oppose everything because they have nothing to offer in this place.
That is an incredibly complacent answer from the Chancellor. Does he not agree with the Deputy Prime Minister that the coalition Government in fact cut capital spending in infrastructure projects too far and too fast, and that this has hampered growth and the economic recovery?
We are spending more on capital than the plan set out by my predecessor, the right hon. Member for Edinburgh South West (Mr Darling)—the plan that the shadow Chancellor voted for. We have increased capital spending in the 2010 spending review and increased it in autumn statements since. That is why we are spending more money on roads, and it is completely hypocritical for the Labour party to complain about capital spending cuts that would have been deeper if they had stayed in office.
It is simply not correct to say that the Government have matched the plans of my right hon. Friend the Member for Edinburgh South West. The Office for Budget Responsibility says that in the first three years this Government are spending £12.8 billion less on infrastructure than the plans that they inherited. It is £6.7 billion lower in this year alone. But if the Chancellor and Deputy Prime Minister are now so concerned about the shrinking economy, why do they not listen to the advice the International Monetary Fund gave them last week and use the Budget in March to rethink their failed economic plan?
Order. Hon. Members may leave this to me. The Chancellor is very versatile in his use of language and he can rephrase that. No Member would be other than straight with the House. He should withdraw that term and use another, and I feel sure that he will do so.
Of course I withdraw it and would simply say that the hon. Lady has been very creative in the use of the numbers that she has put before the House. The number she is using is the amount of money that Labour was spending on capital before the general election, but it set out plans to cut capital after the general election. We have exceeded those plans, and it is completely hypocritical for the Labour party to claim that it would have spent more on capital when it clearly would not have.
Working Households (Payments)
The 1% uprating of working age benefits and tax credits is estimated to affect 1.65 million working age households in 2015-16. Of this total, around half of the households have no individual in work and half are households in which at least one individual works at least an hour a week.
What I can confirm is that the Government are taking a very focused approach to welfare. Under the previous Government, nine out of 10 families with children were eligible for tax credits. No wonder our welfare budget was out of control. Through the Welfare Benefits Up-rating Bill and other reforms the Government have introduced, we are making our welfare system affordable and more focused.
I can confirm the figure used by my hon. Friend. Indeed, if we take account of all the tax changes we have made in the personal allowance, I can also say that an individual on the minimum wage and in full-time employment will see their tax bill halved under this Government.
23. More than 50% of children in my constituency are living in poverty, with the Child Poverty Action Group warning that the Government’s tax and benefit changes will push 1 million children into poverty by 2020. Why did the Minister and his Department decide not to publish the child poverty impact assessment alongside the Welfare Benefits Up-rating Bill? (139734)
I respect the hon. Lady for caring passionately about this issue. She served as a commissioner on child poverty in London and has considered the issue deeply, so I hope she agrees that there is no sense in having a measure of child poverty that just looks at relative income. It is far more important that we all come together and look at education, jobs and access to health services, and have a proper measure of child poverty if we are to truly eradicate it.
The Minister is surely right to focus on the most important elements for our young people, which include considerable Government investment in apprenticeships and taking so many people, including many of those apprentices, out of income tax altogether. Four thousand people, including many young people in my constituency, will be taken out of income tax in April. Does he agree that it is extraordinary that no one on the Opposition Benches realises the importance of this measure?
My hon. Friend is absolutely right to raise this issue and the help it brings, particularly with regard to apprenticeships. In fact, in the constituency of the hon. Member for Bethnal Green and Bow (Rushanara Ali), there has been a more than 100% rise in apprenticeships because of this Government.
Beer Duty Escalator
The Government have inherited plans to increase alcohol duties by 2% above inflation until 2014-15. The extra 2% is forecast to increase beer duty receipts by £35 million next year and £70 million the following year.
My hon. Friend is right to raise this issue, and he has contributed to many debates on it in this House. Making the change would mean lost revenue, and we would have to find another way to cover that loss. He may find it useful if I point out some Government measures that have helped pubs, such as the changes in the annual investment allowance, the cut in the small profits rate of corporation tax and the extension of small rate relief holiday.
The hon. Lady will know that the beer duty escalator was introduced by her Government. This Government have inherited those plans and are carrying them out. If she does not like this tax, perhaps she could make a stronger case if she tells us how she would cover the lost revenue.
The Government are committed to simplifying the tax system. Since 2010, we have set up the Office of Tax Simplification and have acted on a range of its recommendations. The Government are improving tax administration for small businesses and, from April 2013, will introduce a new cash basis for calculating tax, benefiting up to 3 million small self-employed businesses.
It would be right to say that the Government have taken 2.2 million people out of income tax—that is certainly a simplification for them. We have reduced the small profits rate of corporation tax and reduced the main rate of corporation tax. We have taken steps, wherever possible, to reduce taxes.
Can the Minister reassure the House that these attempts at tax simplification will be more successful than last year’s attempts, which saw U-turns on caravans, pasties, charities and the oil and gas sectors? Can he reassure the House that these attempts will work a lot better this year?
Following on from my hon. Friend the Member for Witham (Priti Patel), who made her case well, given that the Exchequer benefited from the courageous decision to reduce the top rate of tax from 50p to 45p, may I encourage the Chancellor to go even further in the Budget and reduce the top rate of tax to 40p, in order to see more funds come into the Exchequer?
I will take that as a Budget representation. The point is that the 50p rate was not effective in raising revenue—my hon. Friend is absolutely right to make that point—and it was damaging to our competitiveness. There are better ways in which we can get more money from the wealthiest, and that is exactly what this Government have done.
A moment or so ago we heard lots of shouting about the 50p rate, yet the Labour party is the first to defend the idea that those very people should continue to receive benefits. Ensuring that child benefit is targeted best meant either looking at this on a household basis—which would have meant putting 8 million households into the tax credit system—or adopting the approach that we have chosen, but the Labour party is always there, ready to spend taxpayers’ money where—
The scheme continues to make good progress. A detailed report will be published next week, which I am pleased to announce will highlight the fact that the scheme has paid more than £500 million to policyholders. I know that the resolution of Equitable Life is an issue that interests many Members, so I can announce that the scheme will now be moving to quarterly progress reports, with the next one published in May.
I welcome that answer from my hon. Friend. I am proud that our Government have started the payment scheme, although there are still some people who have not yet been assessed. I would encourage him to work with his officials to ensure that that happens as quickly as possible.
My hon. Friend is right to be proud of the Government’s achievements on Equitable Life. The previous Government had a decade to help victims of this scandal and did absolutely nothing. As mentioned, more than £500 million of payments have already been made. I can assure my hon. Friend that I am in regular contact with the scheme administrators, and I will work closely with them on a regular basis to ensure that things can be improved.
The core purpose of the Treasury is to ensure the stability and prosperity of the economy.
My right hon. Friend will recognise the valuable work that public sector workers do, by and large on our behalf, but he will also acknowledge the fact that their earnings have increased by only 1%. Is it the Government’s policy that benefits will not increase by any more than the increase in public sector pay?
It is the Government’s policy that both should rise by 1%. It is a rather bizarre argument advanced by the Labour party—that public sector pay should go up by 1%, but benefits should go up by more than 1%. The Opposition are the people who will have to explain it to the hard-working public sector taxpayers who have to pay for the welfare system.
May I start by welcoming the Chancellor back from his winter mini-break in Davos? I do not know whether he got any skiing in, although he and his chums certainly went out on the piste.
Back to Britain: in August 2010, the Chancellor also made a speech at Bloomberg, in which he claimed that his economic plan would secure the recovery. A few weeks later, his spending review said that by now we would see growth of 5.2%. Let me ask him: since his spending review, how much growth have we actually had?
I am glad the right hon. Gentleman noticed that I went to Davos, where I met the last two Labour Prime Ministers as well—and I could not help but notice that both of them were talking about the global economic problems. Of course we have to sort out those problems abroad, but we also have to deal with our problems at home, and of all the people now in Parliament, the right hon. Gentleman bears primary responsibility for putting Britain into this mess. The reason his economic argument is not making more traction is because no one believes that the problems that got us into this mess are the things that will get us out of it.
How complacent is that? The economy is flatlining and borrowing is rising on the right hon. Gentleman’s watch. Let me tell him the facts. Since the spending review, growth has been just 0.4%, which is 13 times lower than he forecast. Our growth is slower than that of America, France, Germany, Australia, Canada, Mexico, Turkey—the list goes on and on. Let me ask him this: now that the chief economist at the International Monetary Fund, the Deputy Prime Minister and even his dining chum the Mayor of London are losing faith in his plan, when will he listen, stop being so complacent and finally act to kick-start this flatlining economy?
There is no complacency about dealing with the mess that the right hon. Gentleman left behind. He talks about the economy over the last couple of years. Let me tell him what has happened in the Morley and Outwood constituency. In his area, the unemployment claimant count went up 190% under the last Government; it has fallen by 7% under this Government. The youth claimant count was 161% up under his Government; it has come down by 10% under this Government. We are fixing the problems that he created. The only job that he is interested in saving is his own. The truth is that while he remains in the post that he is in, he is a reminder to everyone of all the mistakes that Labour made when it managed the economy.
Thank you very much, Mr Speaker.
A number of my constituents have been caught out by the high interest rates charged on payday loans. At a time when many families are struggling with high levels of personal debt, what are the Government doing to ensure that consumers are protected against bad practices in that industry and the often extremely high interest rates that are charged on such loans?
I know that my hon. Friend is passionate about this issue, and he is right to raise it today. The Government are committed to ensuring that people who borrow from payday lenders are protected against bad practices. Last January, we announced our intention to transfer the regulation of consumer credit from the Office of Fair Trading to the new Financial Conduct Authority. The FCA will have powers and sanctions to address consumer detriment in the consumer credit market, and we will shortly be publishing consultation on this very issue.
T2. May I take this opportunity to pay tribute to the Chancellor’s excellent judgment in supporting Labour’s spending plans up until November 2008? Will he therefore accept that the deficit he inherited was caused not by the spending plans supported by those on both sides of the House but by the worldwide recession? (139738)
The idea that Labour irresponsibility had nothing to do with the fact that Britain had a higher budget deficit than almost any country in the world is fanciful. The truth is that my predecessor as Chancellor has accepted that Labour was spending too much, as has Tony Blair, who was Prime Minister during that period. The only person who will not accept that is the person who was chief economic adviser at the Treasury at that time—the man who Labour have now been landed with as shadow Chancellor.
T5. The last Labour Government presided over a decline in manufacturing industry in west Yorkshire, which fell from 23% of local economic output in 1997 to just 14% in 2010. What steps is the Chancellor taking to reverse that trend and to support constituencies such as mine, which have relied on manufacturing for jobs and growth? (139741)
That is a shocking reminder of the economic incompetence of the previous Government and of the damage that they did to our economic base. The revitalisation of manufacturing is important for the rebalancing of our economy. Keighley in west Yorkshire has an important manufacturing tradition, and it is benefiting from the manufacturing advisory service and from the £2.7 billion of regional growth money that is going to the entire nation. Also, the announcement in the autumn statement of more money for UKTI will benefit the help that UKTI gives in Yorkshire.
T3. Today, we saw the Government unveil their “pile ’em high, teach ’em cheap” approach to child care, hot on the heels of cuts to tax credits for poor working families and cuts to child benefit. When is the Chancellor going to unveil his supposed plans for a tax benefit for child care? What are the Government doing to support working families? (139739)
If the hon. Lady were concerned about child care, I would have thought she would welcome the fact that under this Government the free offer for three and four-year-olds has been increased from 12.5 hours to 15 hours and that this Government have put in place a new offer for the 40% most disadvantaged two-year-olds for 15 hours’ free nursery education at that age. We will bring forward the proposals to which she refers very shortly, and I hope that when she sees them, she will welcome them.
T8. Will the Chancellor update the House on a subject on which all Members receive a great deal of correspondence—funding for small businesses? Will he in particular update us on the funding for lending scheme and other similar initiatives? (139744)
I can tell my hon. Friend that in the most recent period, net lending under funding for lending has increased by £500 million. It is also the case that the average interest rate on small business loans has declined by 0.33% since the scheme was introduced.
T6. Families living with a disabled member are going to be hardest hit by tax credits and benefit cuts. That is not according to a third-party briefing, but according to the Government’s own assessments. What do this Government have against disabled people in this country? (139742)
I think that is a very poor way to phrase the question, especially when the hon. Lady will know that disability living allowance payments, for example, are continuing to be uprated in line with inflation, even as we have to take more difficult decisions on other parts of the economy.
T9. A recent article in MoneyWeek suggested that raising the minimum wage would cut the cost of tax credits and benefits and increase employment. What work has the Treasury done on the interrelationship between the level of the minimum wage, the cost of benefits, tax revenues and employment levels? (139745)
It is not clear that tax credits are being used to supplement lower wages, but what I can say is that the Government have taken action to bring unsustainable levels of tax credit spending under control. It has already been reduced in respect of eligibility from nine out of 10 families with children to six out of 10. Our reforms are also making work pay. Universal credit will unify the current complex system of welfare and make sure it always pays for people to go into work. The withdrawal rate will aim to smooth that transition into work.
T7. Last Friday, the Bishop of Sheffield, the Bishop of Hallam and other faith community and civic leaders came together to launch a campaign for a fair deal for Sheffield. Will the Chancellor recognise their concern that the combined effect of his austerity programme with unevenly distributed cuts and benefit changes that hit the poorest hardest is having a disproportionate impact on our urban areas and our big cities? Will he listen to those concerns? (139743)
Yesterday, I met the leader and chief executive of Sheffield and we were discussing the very good progress made in the Sheffield city deal, which all parties, including the hon. Gentleman’s, strongly support as being key to the economic prosperity of Sheffield in the future. I would hope that he would welcome that.
We already know that in April the personal tax allowance is going to be raised to £9,400—the largest rise in history. By the time we next meet for Treasury questions, the Chancellor will have put the finishing touches to his Budget. I now urge him to take the final step and deliver £10,000 of tax-free pay in time for April 2014.
We have a very clear commitment to reach that £10,000. We have not put a time scale on it, but even under the plans we have already put forward, that level will be reached with inflation increases before the end of this Parliament. This is a good example of two parties coming together to help working people across this country.
T10. In the autumn statement of 2011, the Chancellor allocated £5 million to combat metal theft, which through Operation Tornado has been highly successful. With that funding coming to an end, was that a knee-jerk reaction or is the Chancellor going to continue it? (139746)
In a debate in this Chamber, the right hon. Member for South Shields (David Miliband) accepted this Government’s spending envelope, but was quickly shot down by the shadow Chancellor. Is not the real problem here the fact that to be credible on the economy, the Labour party needs to come up with a policy that stands up?
The Chancellor of the Exchequer is being lobbied heavily by the Mayor of London, Boris Johnson, for a massive increase in infrastructure spending in London. Does he realise that if he really wants to get our economy going, he should be investing in the infrastructure of the towns, cities and regions of our country, particularly Yorkshire and the north-west?
The hon. Gentleman may not have been aware of it, but an announcement was made yesterday that was germane to his point: the announcement of the extension of High Speed 2 to Leeds, Sheffield and Manchester, which, in 13 years in government, his party never got around to delivering.
The Minister may be aware of the report on football governance which was published today by the Culture, Media and Sport Committee. I want to record my thanks to him and to Her Majesty’s Revenue and Customs for their help in dealing with Portsmouth football club. Will he assure us that his Department will play its full part in ensuring that prospective owners who are not fit and proper do not get their mitts on these important community assets and destroy them?
The Government will, of course, look closely at the Committee recommendations. As my hon. Friend the Minister of State, Department for Culture, Media and Sport has made clear, it is time for football to get its house in order.
The Chancellor is well known for trying to help us Back Benchers to do our job. Would he be so kind as to place in the Library the criteria that he uses to define whether or not the economy is in the danger zone, and will he tell us whether it is in the danger zone today?
There is a pretty simple definition. Every day and every week the British Government have to go and borrow money to fund the extremely large deficit that was left behind, but we can command record low interest rates because of the confidence that the rest of the world has in our economic plans.
Unemployment among 18 to 24-year-olds in my constituency is 15% lower than it was in December 2011, but does the Chancellor agree that we still need to do more to improve young people’s skills, especially in the context of the black country city deal, which is focusing on skills in advanced manufacturing? May I commend that proposal to the Treasury team?
I was in Wolverhampton recently, meeting business and civic leaders from the black country. The proposals to increase skills to help the advanced manufacturing sector in the area to expand are well under way, and I look forward to responding to the bid very soon.
In opposition, the Chancellor was fond of quoting the Institute for Fiscal Studies in support of his policies. Does he accept the finding by the IFS that because of all the changes that he has made following his autumn statement, the average one-earner family with children will be £534 worse off by 2015?
I know that my hon. Friend has a strong constituency interest in this issue. We want to see the shale gas revolution come to the United Kingdom—it has done wonders for the United States economy—but that must, of course, happen in a way that does not damage the environment and enables communities to benefit. I shall be happy to work with my hon. Friend, and other Members of Parliament throughout the House who may be affected, to ensure that communities share the benefits—which I hope can be shared by the whole economy—of this new form of energy extraction.
On the many other occasions on which the economy has gone into reverse under this Chancellor, he has blamed the snow, and he has blamed the floods. When people took time off in the summer to go on holiday, he presumably blamed the sun. He has blamed the Americans, and he has blamed the Europeans. He blamed the Queen’s jubilee. He even blamed her grandson for getting married. Whose fault is it this time?