The core purpose of the Treasury is to ensure the stability and prosperity of the economy.
When the right hon. Gentleman was first asked to vote on the issue, the figure was 1 million; now it is 5 million—that is, people in hock to payday lenders. Does the Chancellor therefore regret voting against the cap on the cost of credit so many times?
I was the shadow Chancellor for five years and never once did the Labour Government propose a cap on payday lending. It is this coalition Government who are introducing a cap on payday lending. I would have thought that of all people the hon. Lady, considering her campaign, would welcome that.
T2. Does the Chancellor agree that the previous Government led us to financial ruin not through taxing us too little but by spending too much, and that the solution to the problem is to reduce spending to affordable levels? Will he therefore guarantee to plug the remainder of the deficit through spending reductions, rather than through tax rises on hard-working and hard-pressed families? (902199)
While no responsible Chancellor rules out tax changes, I believe the remainder of our deficit reduction plan can be achieved by reducing spending. Indeed, the reduction in the deficit has contributed to the economic stability that has been a platform for the economic growth we have seen. Perhaps the shadow Chancellor will get up and welcome that.
Order. Some people are slow learners, so I will say it slowly: keep calm, be patient; Government Members, you have got the man at the Box for whom you were waiting, and now you should just listen. In tennis, new balls come after the first seven games of a match and subsequently after every nine, so patience is required.
After three damaging years of flatlining, today’s growth figures are welcome, but everything we have seen today from the Chancellor shows he just does not understand that for working people facing a cost of living crisis, this is still no recovery at all. Last week, the Chancellor and the Prime Minister tried to use dodgy figures to tell people they had never had it so good. Why will he not today admit the truth: he has failed to get the deficit down, and since he came to office, working people have been not better off, but worse off?
I am not sure that that was worth waiting for. Since we last met, there has been a very important Labour economic announcement, and one that we wholeheartedly support: the decision to keep the right hon. Gentleman in his job until the general election. He welcomes the economic news through gritted teeth, because he said not only that it would not happen, but that it could not happen if we pursued our economic plan. He predicted that jobs would be lost, but 1 million have been created; he predicted that the deficit would go up, but it has come down; he predicted there would be no economic growth, unless we borrowed and spent more. He has been wrong on all these things. What the Opposition need are new crystal balls.
Very good, Chancellor—a joke about my name being Balls. Fabulous.
The reality is that business investment is still weak, housing demand is outstripping supply, the savings ratio is falling and the average working person is £1,600 a year worse off than they were in 2010. Let me ask the Chancellor about the one thing he has refused to talk about now for four days. He has delivered one massive tax cut for the richest 1% earning more than £150,000, when everybody else is worse off. The Prime Minister and the Mayor of London are now saying that they want to cut the top rate of income tax again, to 40p. Is that really the Conservative party’s priority? If the Chancellor still believes that we are “all in this together”, why will he not stand at the Dispatch Box and rule out another top-rate tax cut from the Conservatives in the next Parliament? Come on, George: stand up and rule it out.
I will tell the right hon. Gentleman what the big tax cut was this Parliament: it was for working people through our increase in the personal allowance to £10,000. After last week, it is clear that the shadow Chancellor has learned absolutely nothing from the economic mess he brought upon this country. He said that Labour should have spent more money in the boom; he has set out fiscal plans that allow billions more of borrowing; and on the top rate of tax, he announced a plan that was attacked by Labour Ministers whom he served with in government, by the people who lent the Labour party money and by credible business people across the country—and his costings were shot down by the Institute for Fiscal Studies last night. There cannot have been a more disastrous policy launch in the history of the modern Labour party. On the day we learn that our economy continues to grow, is it not clear that the anti-business Labour party is now the biggest risk to the economic recovery?
T3. That seems to be game, set and match.The European Commission is considering the removal of the aggregates levy exemption, which would affect the Cornish china clay industry and put up to 500 jobs at risk. Will my right hon. Friend confirm that the Government will do all they can to maintain the exemption and protect these vital jobs? (902200)
Yes, I can confirm that. A state aid investigation has been opened, so we are compelled under European law to suspend the exemption, but, working with the industry, we have provided a very robust response to the Commission outlining why the exemption is justified. We remain confident that the Commission will find that the exemption does not amount to state aid.
T8. Her Majesty’s Revenue and Customs is investigating 12 employment agencies in my constituency for underpayment of the minimum wage. Two investigations have been concluded, penalties imposed and money repaid to local workers, but local people simply do not understand why the Government will not name and shame those two agencies. I think the Government are wrong. Will they reconsider? (902206)
I think the hon. Gentleman raised this topic in the debate on the national minimum wage. I am very happy to take this away and to have a conversation once I have had a chat with Treasury officials.
The economy has grown by 2.8 % over the past four quarters, which is the point. First, when the shadow Chancellor was in office, he predicted that there would be no more boom and bust—we had the biggest boom and the biggest bust—and secondly, he predicted that there would be no recovery unless we borrowed and spent our way into economic risk, which has turned out to be untrue. I do not know why anybody in the Labour party still listens to his predictions at all.
I still very much take the view that Britain is better and stronger as a full member of the European Union and that membership of the European Union is vital for our trade and for 3.5 million jobs in this country, which is why I will resist any attempts to take Britain out of the European Union.
T5. I do not know whether the shadow Chancellor has been to Yorkshire recently, but if he does come up north, he will see that, in Colne valley and Huddersfield, manufacturing is surging, whether it is Magic Rock brewery exporting to Australia, Camira fabrics selling its textiles to the Los Angeles transit system or even Newsholme foods selling black puddings to Spain. Will the Chancellor please continue to reject the doom-mongering, mithering and class warfare from the Labour party and continue with his long-term economic plan? (902202)
I was in Pudsey the other day seeing a very successful manufacturing business near to my hon. Friend’s constituency. What was interesting was that that business is now exporting to China, which is a total reversal of what we have seen in the textile trade over the last few decades. I am very willing to come and see my hon. Friend and perhaps taste some of that delicious black pudding that the Spanish are buying.
Thousands of small businesses are often unaware that they are sitting on a bit of a time-bomb: embedded swaps sitting within personal loans, often sold to them without their knowledge. What will the Chancellor do to bring that back into the Financial Conduct Authority review to ensure that these swaps, which are currently not subject to any regulation, are regulated?
The FCA is looking at the whole issue of swaps and how they were sold to small businesses, and clearly, considerable sums of compensation are going to be paid. I will look at the specific point that the hon. Lady makes. If she believes that there is a group that are not currently included that should be included in that work, I will take a close look at it personally and get back to her.
T6. Last week, we saw the sharpest quarterly increase in the number of people in work since records began. Does my right hon. Friend agree that that is more evidence that the Government should stick with their long-term economic plan to reduce the deficit and create more jobs, which is already providing a record number of people with the stability and security of a regular pay packet from firms such as Steelco in Dudley, which I visited last week? (902203)
I know from visits with my hon. Friend to the manufacturing businesses of Dudley that he is a powerful supporter of their interests in growing those businesses and taking on more people. Unemployment in Dudley has fallen by 19 % since he started to represent that town. I welcome his support. Together let us make sure that we have a business-led recovery and a recovery in the west midlands and that we reject the anti-business approach of the Labour party.
The whole House has heard the Chancellor proclaim over the last three years that when the recovery comes—as it will—it will be a different kind of recovery, based on investment and, indeed, investment-led. Is it not the case that business lending is stagnating, if not falling, that capital investment in the much-heralded infrastructure plan is 7.4% lower than it should be, and that what we are actually seeing is an economic-pick-up based on consumer spending? Does that not send a warning signal to the Chancellor? Instead of boasting about the situation, he should be doing something about it.
Given his experience, the hon. Gentleman must surely consider the growth of the car industry in Coventry, and in the west midlands as a whole, to be as strong as any growth that he has seen in his career. We are exporting cars at a rate at which we have not exported them since the early 1970s. Of course we want to see more business investment and more exports, but what we are seeing now is a rebalancing of the economy. The private sector is growing, and the number of jobs is increasing throughout the country—and that includes the west midlands, an area in which the number of jobs fell during the boom.
Incidentally, given his business experience, I suspect that the hon. Gentleman does not support for one moment the proposals announced by the shadow Chancellor over the past week.
T7. In south Essex, £1.5 billion is being invested at London Gateway, £500 million is on the table for a new power station, £180 million is being invested at Lakeside, and the regeneration of Basildon town centre is about to begin. Does my right hon. Friend agree that those inward investments in my area indicate that our long-term economic plan is working, leading to rising growth and falling unemployment for the benefit of my constituents? (902205)
I entirely agree with my hon. Friend. I congratulate him on the work that he has done to bring that investment into his constituency, and to create jobs and opportunities for the people whom he represents. It is important for us to send a message to the world that we are open for business and open to investment, and because we are doing that, we are now a go-to destination for world investment. Can my hon. Friend imagine the impact on jobs and investment in his constituency if we adopted the Labour party’s approach?
We are not proposing a cap within a cap, as the hon. Gentleman puts it, but we are proposing a welfare cap. We have set out the details of the benefits and the annually managed expenditure that will be part of the cap, but we will announce further details about the level of it at fiscal events later this year.
T9. Next week I shall be hosting an event to celebrate independent retailers, cafés and pubs in the city of Hereford, in particular Hat Trick, La Madeleine and The Barrels. I greatly welcome today’s excellent economic news. Does the Chancellor share my view that low taxes are a vital means of helping and encouraging small businesses to grow and create jobs? (902207)
It sounds very tough, campaigning in Hereford.
I thank my hon. Friend for bringing those businesses to the attention of the House, and congratulate him on the support that he has given to the economic policies that are helping them to grow. He is absolutely right: we must continue to support firms of that kind. High street shops, pubs, cafés and the like will, of course, benefit from the £1,000 rate relief which will be introduced this spring, and which will be a huge help to all—or most—of the businesses on the high streets of Hereford.
Average weekly gross pay in my constituency has fallen by 32.5% since 2010. Why?
The person who had the best answer to that question was the head of the Institute for Fiscal Studies, who said very clearly that the reason why the country was poorer was the very deep recession. He said that we have had the biggest recession in 100 years and that it would be astonishing if household incomes had not fallen and earnings had not fallen. This country is poorer because of the disastrous economic policies of the shadow Chancellor. It is under this Government that the economy is growing and jobs are being created, including jobs in the hon. Gentleman’s constituency.
We know that the Chancellor is keen to cut high marginal rates of tax. Does he appreciate that an advantage of the further increase in the personal allowance for which the Liberal Democrats are calling is that it would almost entirely scrap the effective 30% marginal tax rate faced by those who are aged over 65 and whose incomes amount to no more than the national average?
May I first take this opportunity to congratulate my hon. Friend, and my hon. Friend the Member for East Dunbartonshire (Jo Swinson), on recently becoming parents? He is quite right to suggest that further increases in the personal allowance would benefit all parts of the population. The Chancellor will make announcements in the Budget in March and, as a party, we will be campaigning for further increases in the personal allowance, precisely to ensure that the benefits are spread as widely as possible.