The Chancellor of the Exchequer was asked—
There are more people in work than ever before, with the latest figures showing the fastest increase in employment since records began. Today we have the very welcome news that Abu Dhabi will be investing £1 billion in building new houses in Manchester. That is a step towards it becoming the northern powerhouse I want to see, and it is a £1 billion vote of confidence in our long-term economic plan.
Between 2003 and 2008 the Labour Government did create jobs, but unfortunately less than 10% of them benefited British citizens. Since this Government have come to power, through our skills, immigration and welfare policies over three-quarters of the 1.4 million new jobs have benefited British citizens. Is that not a long-term economic plan of which to be proud?
My hon. Friend is absolutely right, and I pay tribute to his contribution in making sure that the jobs that are being created in this recovery are jobs that British people have the skills and incentives to take. It is heartening that three-quarters of these jobs are going to UK citizens, as opposed to the truly staggering record of the last Government, when less than a quarter were taken by British citizens.
Is my right hon. Friend aware that there has been a 59.5% fall in the number of jobseeker’s allowance claimants in Warwick and Leamington since April 2010? Also, recent figures show that a record number of companies were formed in Leamington Spa in the first quarter of this year. Will the Chancellor pay tribute to the local council, local chambers of trade and commerce and the local businesses that have made this possible, and will he outline what more can be done to further increase support for businesses in increasing employment?
I certainly pay tribute to the local council and local businesses who have worked with the excellent Member of Parliament, my colleague—[Interruption.] Yes, my hon. Friend has done remarkable work in bringing down the number of people claiming JSA by 60% since this Government came to office, and of course we will go on supporting businesses locally with important infrastructure, with the employment allowance and with awards. As I am sure my hon. Friend will be aware, Dennis Eagle, one of the companies in his constituency, has just been awarded a grant under our advanced manufacturing supply chain initiative, so we are backing manufacturing in the midlands, and backing his constituents all the way.
When a proud Kingstanding dad of a newborn baby son tells me he has been on zero-hours contracts for two years and cannot plan from one week to the next, and says “Do them up there”—the Government—“get what life is like down here?”, and when a proud Stockland Green mother caring for her disabled son says, “My husband’s been made redundant twice in the last three years, with each new job less secure and on a lower rate of pay,” and adds, “What planet does the Chancellor live on?”, what does the Chancellor have to say to them?
I would say that through our long-term economic plan we are creating jobs in the hon. Gentleman’s constituency, with the economic security that that brings. We are legislating to deal with the abuse of zero-hours contracts, which for 13 years the Labour party did nothing about, and we have discovered in the last couple of weeks that the shadow Chancellor, who from the Opposition Dispatch Box has criticised zero-hours contracts again and again, uses them in his own office.
If economic growth turns out to be higher than currently estimated, as has been the case in several quarters over the past 18 months, does the Chancellor agree that that might provide part of the answer to the so-called productivity puzzle? Has the Treasury done any work on that question, and does he agree with the Governor of the Bank of England that we need to do a lot more to improve Office for National Statistics data?
I agree with my hon. Friend that one of the big challenges now is to improve productivity, which was clearly impaired by the financial crisis. Obviously, in doing that we need to make sure that the data we receive from our ONS is of the highest quality. People at the ONS work incredibly hard on that, but of course there is always room for improvement, as the Governor of the Bank of England pointed out today, and we will work with the Bank and the ONS to ensure that any improvements that can be made will be made.
Is it not the truth that people in employment have seen their living standards fall year on year under this Chancellor? So can he tell us, will working people be better off next year than they were in 2010—yes or no?
The many thousands of people who are getting jobs in the hon. Lady’s area are better off, and of course—[Interruption.] Let me explain to the shadow Chancellor: if you bring the British economy to its knees, if you have the deepest recession for 100 years, if you preside over the biggest banking crisis in our history, you make this country poorer. But it is by fixing those problems, by working through our long-term economic plan, that we are going to make the country richer again.
The Government have introduced several measures aimed at improving all types of lending to businesses, such as the funding for lending scheme, the British Business Bank and the SME appeals process. Against this backdrop, gross lending to businesses in Q1 2014 was almost 10% higher than in the same quarter a year earlier, and 32% of SMEs that have been through the appeals process have had their initial loan rejection overturned.
On the Government’s watch, net lending to business is down by some £57 billion since May 2010. Does that not underline the case for further banking reform, for an expansion of the use of community development financial institutions, and for consistent disclosure of bank lending data?
The hon. Gentleman will know that the great recession in 2008-09 that the previous Government presided over left banks in an absolute mess, and it takes a very long time to recover from such a devastating position. The banks are still trying to sort out their balance sheets, and net lending has been down. It will take time to recover, but this Government are putting measures in place to create new access to finance from all sorts of different lenders. I was delighted yesterday to support the credit union movement on its 50th anniversary with a call for evidence on how we can expand that area of activity for.
I draw attention to my entry in the Register of Members’ Financial Interests. Does the Minister agree with me that, as well as stabilising and reforming the banking system, one of the key aspects of the long-term economic plan is the creation since 2010 of many new local banks that provide alternative and expanded lending to retail and business customers?
Yes, I absolutely agree with my hon. Friend. The Government want more competition and diversity in the banking sector, which is why we asked the old Financial Services Authority to review the barriers to entry for banks, why we legislated to give the Financial Conduct Authority strong competition powers, and why we created the payment systems regulator to look at fair access to payment systems.
In recent discussions with women entrepreneurs I have been struck by the number who have said they were surprised by the banks’ attitude towards them and their businesses. I spoke to one entrepreneur who said that only when she was featured in a TV programme did a bank phone her up and offer her a loan. What discussions has the Chancellor had with banks about women-led businesses, the demand for lending and how many they are lending to?
This Government have taken great steps to improve competition and I am delighted that, currently, the regulator is talking to 25 new applicants for new banks. We are also taking steps to ensure that those who get turned down for credit have the opportunity to go to other challenger banks to access other sources of finance. I am sure that the hon. Lady will welcome the steps that the Financial Secretary to the Treasury, my right hon. Friend the Member for Loughborough (Nicky Morgan), is taking to improve particularly the support the Government are giving to female entrepreneurs.
Increasing competition in the sector is key to improving lending. The Minister mentioned that the Prudential Regulation Authority is looking at 25 new applications for licensing to be banks. How does this compare with the decade before 2010?
My hon. Friend may know that in May 2010, when Metro bank was granted a full banking licence, that was the first new full banking licence for over 100 years, so the fact that the regulator is talking to potentially more than 25 new banks is very good news for competition and choice in the UK.
Government analysis has shown that high corporate taxes have a negative impact on investment, jobs and growth, so we have cut the corporation tax rate from 28% to 21%. Next year, it will fall to 20%, the joint lowest rate in the G20. Increasing corporation tax, as some propose, would damage the economy, cost jobs and drive away investment. It is anti-business and we will not do it.
I welcome that answer. There is growing evidence that, in a number of sectors where we have cut taxation, revenues are starting to rise. Does my right hon. Friend agree that those proposing increases in taxes are doing so for purely ideological reasons and because they are engaging in the politics of envy?
Whatever their motivations—I think my right hon. Friend is right—we are absolutely clear about the results. It will put people out of work and ensure that investment does not come to Britain. We are against plans to increase corporation tax. Indeed, I think that most people from around the world would look on in bemusement if Britain were to increase its business taxes, as the Opposition propose. To come to the point, the Treasury and Her Majesty’s Revenue and Customs are now providing more dynamic modelling of the effect of tax cuts on investment and growth, and cuts in corporation tax and fuel duty are shown to have positive impacts on the economy.
High profile companies operate schemes that lead to the UK economy losing out, and not benefiting to the fullest extent. Is the Chancellor aware that Google AdWords is de-ranking small firms if they do not stump up substantial funds? It means not only that Google’s profits go up, helped by its tax arrangements, but that the profits of small firms, such as those in my constituency, go down, and the Exchequer is the net loser. Will he please discuss that with his colleague, the Secretary of State for Business, Innovation and Skills?
I will make a general point, which is that the internet has provided an enormous opportunity for many small businesses, because it has dramatically cut distribution and start-up costs and created all sorts of opportunities that did not previously exist for small businesses in Britain. If we believe in free markets and technological change, we should believe in the innovation that that brings. Specifically on the tax issue, we are working internationally—this cannot be done in one country—to ensure that the international corporate tax system reflects the digital economy and international business of today. We are helping to fund that OECD work, and we are expecting the first conclusions this autumn.
Employment is up substantially in my constituency of Nuneaton, and unemployment has dropped 20% in the past year. Does my right hon. Friend agree that it would be absolute suicide to increase employers’ national insurance contributions, and can he rule that out as part of our long-term economic plan?
My hon. Friend has done some fantastic work with local businesses to increase jobs in Nuneaton and to ensure that small businesses expand. He is absolutely right that the Opposition’s plans for an increase in corporation tax, which they talk about openly, and for a jobs tax, which they talk about secretly, would be a double whammy that would put people out of work in his constituency.
We have put a huge effort—I pay tribute to the Exchequer Secretary who has led this work—into ensuring that we collect the taxes that are due. As a result, many billions of pounds more in taxes are collected. We are eliminating abuse that existed before we arrived, such as that involving stamp duty, and we set our tax rates fairly. We do not have a situation, as we did under the previous Government, where people in the City were paying lower tax rates than the people who cleaned for them.
Our economic plan is about stability and security, so we are taking two steps on housing. First, we are building more homes, so that supply better matches demand. The Government’s reforms mean that housing starts are now at a six-year high. Secondly, we have given the Bank of England the responsibility and the tools to deal with any financial risk associated with the housing market, and I am clear that the banks should not hesitate to use those new powers if they think it is necessary to protect financial stability.
On 19 May, The Telegraph reported that house prices jumped £10,000 in five weeks when the Bank of England threatened to cap mortgages. Will my right hon. Friend take steps to ensure that the Bank does not inadvertently promote financial instability when it exercises those powers?
I do not think that the Bank is doing that. We have taken a big step forward in this Parliament to give the Bank of England macro-prudential tools to intervene in areas such as housing if it thinks that there is a financial risk. Clearly, these things did not exist before, which is one of the reasons why the economy was in the mess that it was in when we came to office. At the Mansion House, I offered the Bank of England new direct powers to impose limits on loan-to-value and loan-to-income ratios. It is, of course, entirely up to the Financial Policy Committee, acting independently of the Government, to deploy any of its tools if it sees risks developing.
The greatest threat to stability in the housing market is the mismatch between supply and demand. The House knows what the Chancellor has done to stoke up demand, but supply is at its lowest level since records began—fewer than 150,000 units. I heard what the Chancellor said in his initial reply. What more is he going to do to boost supply in the housing market?
Housing starts are now at their highest since 2007, and we have seen an increase in housing starts and planning permissions this year. I was with the hon. Gentleman in his constituency just the other day, talking about what we could do to get more housing going in his part of London on a brownfield site that he knows has been left derelict for many years. He was working very co-operatively with me then, but perhaps the Chamber of the House of Commons brings out a more adversarial encounter.
My right hon. Friend the Chancellor is right to say that meeting demand with supply is absolutely critical. Given that meeting that demand means 3 million new homes over the next 10 years and that the private sector built only 180,000 houses a year, at best, during the height of the housing boom in the 1990s, does he agree that public investment is needed in social rented housing, in the private sector and in the public sector, if we are to meet the 3 million target?
I do agree with my hon. Friend. We need to ensure that planning is reformed, and we have done that. It was a controversial decision, but as a Government we have pushed that through, and planning permissions are up. We need to create incentives for the private sector to build homes, and Help to Buy has done that. But we also need to go on building social housing, and as he well knows, the coalition Government are delivering the largest programme of social housing for a generation.
I find it extraordinary that the Labour party is against Help to Buy, which is assisting those who are on low and middle incomes to get into the housing market. The great majority of those homes are outside London and the south-east. Almost none of them has been bought at £500,000 or £600,000, as the hon. Gentleman says, and what we are actually seeing is that the homes that are being built and bought are below the national average. So instead of carping about Help to Buy, Labour should get behind it.
A key component of the financial crisis was a debt-fuelled housing bubble. The Governor of the Bank of England confirmed to the Treasury Committee this morning that a failure of regulation and macro-prudential policy was instrumental in that crisis. Is my right hon. Friend confident that the measures that he has introduced, including the new regulatory framework as well as the Financial Policy Committee, will succeed in heading off any future housing bubble-inspired crisis?
The Bank of England now has very powerful tools to deal with the kind of risks that we saw develop in 2006 and 2007, with such catastrophic consequences for our banking system and for our economy. The new powers that it will receive—subject, of course, to parliamentary approval—on being able to limit loan-to-income ratios and loan-to-value ratios for every mortgage or, indeed, as a percentage of mortgage portfolios, are very powerful tools. It is up to the Bank of England to make independent judgments about when to deploy them, because, as we have learnt with such monetary and macro-prudential policies, it is better that the politicians stay out of it.
Under this Chancellor, we have had the lowest level of house building in peacetime since the 1920s. The Financial Times reported a few weeks ago that the Chancellor is “relaxed” about an early rise in interest rates to rein in our unbalanced housing market. Can he tell the House how much a 1% rise in interest rates would add to the average mortgage bill?
I am not going to comment on interest rates because, as the right hon. Gentleman should remember, the Bank of England is independent, and it is for the Bank to make its judgment. Let me pick him up on what he says about housing. I absolutely believe that we need to build more homes, and housing starts are now more than double what they were in the last year of the Labour Government, in whose Cabinet the right hon. Gentleman sat. If he supported our planning reforms rather than opposed them, if he supported our approach to spending, which has enabled us to pay for the new social housing, and if he backed Help to Buy, he would have a bit more credibility when he stood at the Dispatch Box. As it is, I prefer to listen to the Labour leader’s speechwriter, who said this week:
“I fell out with Ed Balls because Labour’s economic policy is nonsense.”
The Chancellor used to boast that record low mortgage rates were a sign that his policy was working. Now, with the Governor warning of an early rise in interest rates as demand outstrips supply, the Chancellor is desperately trying to claim that higher interest rates would be a sign of success as well. Is not the truth that his failure to get house building moving in the last four years is the reason our housing market is so unbalanced and early interest rate rises are on the cards? As for the question about mortgages, let me answer by quoting the Chancellor, who said in the House of Commons that
“a 1% rise on the average mortgage bill would add £1,000.”—[Official Report, 6 December 2011; Vol. 537, c. 147.]
I can tell him that homeowners up and down the country will not be relaxed about that.
The shadow Chancellor has got into pretty desperate territory when he says that an exit from exceptionally loose monetary policy, implemented in the middle of a crisis, whenever that comes, is a catastrophe for the British economy. The truth is that under any Bank of England setting, if the right hon. Gentleman was in office, the fiscal policy would be out of control and interest rates would be higher than under this Government.
The Prime Minister and I paid an interesting visit yesterday to the right hon. Gentleman’s constituency, along with the next Conservative MP for Morley and Outwood, Andrea Jenkyns. I will tell him what we found: people who had been unemployed now in work; the number of apprenticeships in the constituency doubled; and the Coca-Cola plant, which we visited, putting more money into Britain. The recovery in Morley and Outwood and the rest of the country is the real thing.
Payment of Tax
Since 2010, the Government have been determined to support HMRC in improving overall compliance levels, tackling tax avoidance, evasion and fraud, and punishing those who break the rules. Overall we are investing about £1 billion in HMRC’s compliance activities, and HMRC achieved record levels of compliance revenues last year, securing £23.9 billion.
It is a huge frustration to people to see wealthy individuals and large companies avoid paying the taxes that they ought to be paying. I thank the Minister for his comments, but will he go further to make sure that our rules are fit for purpose? Will he tackle, for example, transfer pricing, and ensure that there is an international agreement that benefits Britain and means that people pay the correct amount of tax in this country?
As the Chancellor made clear a moment ago, it is right that we address these issues, and that we do so at an international level. The Organisation for Economic Co-operation and Development’s important work on base erosion and profit shifting is a consequence of the leadership shown by the Prime Minister and the Chancellor, and we hope that we will see the fruits of that progress beginning this autumn.
With the amount of uncollected tax rising, the Swiss deal raising less than a third of what the Chancellor predicted and Ministers refusing to close the eurobonds loophole, is not the truth that the Government are totally failing to tackle tax avoidance and to close the tax gap?
No, it is not the truth. The truth is that there are record levels of compliance yield, as I mentioned: £23.9 billion as a consequence of HMRC’s activity. The UK is leading the way in international reform. There has never been a Government so committed to, nor a revenue authority so successful in, closing loopholes, getting the tax in and making sure that people pay what is required under the law.
While the Minister fails to tackle tax avoidance, overseas buyers are snapping up property in London but not making a proper tax contribution in this country. Is it not time that the Government introduced a fair tax on properties worth more than £2 million, and used the money to cut taxes for 24 million working people, with a lower 10p starting rate of income tax?
If the hon. Lady wants to cut taxes for 24 million people, she might want to consider increasing a personal allowance to £10,500, which is exactly what the Government have done, rather than doubling the 10p rate of income tax as the previous Government did. As for taxes on property, it was this Government who introduced the annual tax on envelope dwellings, ensuring that there is a contribution to the Revenue from owners and occupiers of properties held in a corporate envelope. Again, I really do not think that on this issue the Labour party has a leg to stand on.
Long-term Economic Plan
The Government’s long-term economic plan is working, and the UK is expected to grow faster than any other G7 country this year. Inflation is below target, the deficit has been reduced by more than a third since 2009-10, and employment is at record levels, but the job is not yet done, and the biggest risk now to the recovery would be abandoning the plan that is delivering a brighter economic future.
Evidence of the Government’s long-term economic plan was on display when the Chancellor visited Enfield to see the Meridian Water site, which is delivering jobs, houses and transport infrastructure. However, under this Government, will the Minister look at the opportunity for revisiting the northern gateway access road, which links the M25 with this vital economic area?
My right hon. Friend the Chancellor has said that, yes, he is very happy to look at it. As he said when he visited, infrastructure investment is an important part of our long-term economic plan. I know that my hon. Friend has been working for many years on this scheme. He has built a coalition of partners locally and this is important for the Lee valley. The Government will always look at important infrastructure investment to bring jobs and growth to all parts of our economy.
In my constituency, 20% of people in work earn less than the living wage and others are trapped in part-time jobs and on zero-hours contracts. Why do the Government keep trumpeting a supposed recovery that, for the first time ever, has left more people in poverty in work than out of work?
I am sure that the hon. Lady will welcome the fact that there has been a 24% fall in her constituency in the number of young people on jobseeker’s allowance, and the long-term economic plan is for all people. My hon. Friend the Exchequer Secretary has always talked about the rise in the personal allowance, and it is this Government, as we have already heard, who are taking action on zero-hours contracts. The last Government had 13 years to tackle them and failed to do so.
The Minister will know that Kettering is very much middle England at its best. With a 2,500 increase in local jobs since the last election, does that not demonstrate that plan A is most definitely working, and there is absolutely no need for a plan B?
I know Kettering very well as I pass it on the Midland main line up to my constituency twice a week. My hon. Friend is absolutely right to say that the increase in jobs shows that the Government’s long-term economic plan is working. As I said, the job is not yet done, there are always risks to our economy, and we need to build a sustainable, strong economic recovery that benefits everyone, including everyone living in Kettering.
Does the right hon. Lady agree that the Chancellor promised to balance the books, but is going to fail; he promised to deal with debt, but is failing; he promised to maintain triple A ratings, but he failed; and when it comes to the jobs market, as my hon. Friend the Member for Warrington North (Helen Jones) said, it is increasingly characterised by low pay, squeezed wages and zero-hours contracts?
The Government are committed to our goal of ending child poverty in the UK by 2020. We are determined to tackle the root causes of poverty, not just the symptoms. Our draft child poverty strategy 2014-17 sets out our approaches, based on robust published evidence review. Work remains the best route out of poverty. We are making work pay and tackling low pay through our reforms to the welfare and tax systems. Universal credit, for example, will lift as many as 300,000 children out of poverty.
But this week the largest ever study of poverty in the UK, the Poverty and Social Exclusion project led by the university of Bristol, was published. It found that full-time work is not sufficient to keep families out of poverty and that the majority of children who suffer multiple deprivations live with both parents, at least one of whom is working, in small families, with only one or two siblings. When will the Government accept responsibility for the rising tide of in-work poverty and do something to help people who are trying their hardest but still struggling to get by, including the children who are living in those families?
We have set out, as I have already said, a clear commitment by this Government to end child poverty by 2020. The hon. Lady’s question shows that there are a number of root causes of child poverty. Incomes, of course, are a very important part of that. We are working to raise the income of poor children’s families by helping them get into work and making work pay, and she will appreciate the rise in the national minimum wage. We are also raising educational outcomes for poor children, which is equally important.
But nearly 30% of children in my constituency, Liverpool Wavertree, are living in poverty, and many of those children have parents who are in work. This is the highest level in five years. Is the Minister embarrassed by her Government’s record on child poverty? What exactly is she going to do about it?
Five years ago there was a Labour Government in power, and I am sure the hon. Lady will welcome the fact that there has been a 21% fall in jobseeker’s allowance claimants in her constituency. I am sure she will also welcome the rise in the national minimum wage that this Government have overseen.
16. One of the key challenges to tackling child poverty in my constituency is the resilience of low income families to sudden financial shocks. The answer, surely, is to improve saving levels. What can the Minister do to improve the opportunities for families to save more? (904408)
We have seen that the savings ratio has gone up under this Government, but my hon. Friend is right. The causes of poverty are many and various, but the important point is getting people into work. The troubled families programme, which this Government have introduced and overseen, has shown that getting an adult in a workless household into work has a transformative effect, alongside steps such as increasing savings. Getting people into work is the most important thing we can do.
Is the Minister aware that child poverty, wider poverty and inequality rose in the previous Parliament and have been declining so far in this Parliament, as has the number of people who struggle to pay their food bill, according to OECD figures?
My hon. Friend is right about the figures. We remain committed to continuing the fall and to eradicating child poverty by 2020. Our draft strategy sets out how we intend to achieve that. Children are three times more likely to be in poverty if they live in a workless household, which is why work remains the best route out of poverty.
The Government published the Construction 2025 industrial strategy in July last year, setting out a clear vision of how the Government will work with the industry to maximise the opportunities for growth. The Construction Leadership Council, chaired by my right hon. Friend the Business Secretary and Sir David Higgins, is overseeing delivery of that strategy. In addition, efforts to drive improved delivery are being co-ordinated through Infrastructure UK’s cost review programme.
But Wrexham construction companies continue to tell me that banks fail to offer loans to support house building projects. Non-financial private sector investment has fallen from £43 billion in 2008 to £14 billion in 2013. Is this not just another aspect of the failure of the Chancellor’s short-term economic scam?
As a Government we are trying to do everything we can to help the construction industry, whether that is through the beneficial effect of Help to Buy, the local infrastructure fund, or the changes to planning. It is worth pointing out that construction output, according to the Office for National Statistics, is 4.6% up from where it was 12 months ago. The purchasing managers index also shows significant increases in construction. We are moving in the right direction.
The construction industry has benefited from the business-friendly policies of this Government. Does my hon. Friend agree with my constituent, the former Trade Minister, Lord Digby Jones, when he says that the Leader of the Opposition is the “least business-friendly” leader of any political party in years?
But 2025 is a long way away for a plan. Is the Minister not aware that on this Government’s watch infrastructure output in the whole economy, public and private, is 13% down? Is it not about time they got their finger out and did something about it?
I am not sure whether the hon. Gentleman is criticising the long-term approach of our economic plan, but it is important that we think about the long term. Infrastructure spending, both private and public, will on average be higher in this Parliament than it was in the previous Parliament.
Is the Exchequer Secretary aware that a partnership between the Government, Central Bedfordshire council and developers is leading to the construction of 5,200 houses north of Houghton Regis and the provision of a bypass, for which we have waited 60 years, as a result of a £45 million contribution from the developers? Is not that the way to get construction going?
Inflation and Growth
Times have been tough for hard-working people. As Paul Johnson of the Institute for Fiscal Studies said on 6 December:
“There have been very significant falls in real earnings as a direct but delayed result of the 2008 recession, essentially.”
As the Bank of England and the IFS have said, the best way to support living standards is to improve productivity and by sticking to the Government’s long-term plan to build a stronger economy.
Real wages have fallen in Blaenau Gwent, partly due to poor access to labour markets. What progress is being made to speed up rail electrification for the valleys, which would boost earnings? The Chief Secretary said that he would look into the matter six months ago. What has happened?
There is an agreement with the Welsh Government on that, but as I said a moment ago, this Government have an infrastructure plan. Up and down the country progress is being made to improve our transport infrastructure. That is part of our long-term economic plan. The hon. Gentleman will also be aware that in his constituency the number of jobseeker’s allowance claimants is down 20% over the past year.
Does the Minister agree that all the evidence suggests that the biggest impact on the rate of earnings is the competitiveness and productivity of industry? Does he also agree that the single biggest threat to increases in average earnings is Labour’s plan for a stealth corporation tax and a jobs tax?
Help to Buy Scheme
Help to Buy is working. Since the Chancellor announced the scheme in the 2013 Budget, it has supported over 27,000 households on to the housing ladder, and the numbers show that it is helping the right people—but we will be vigilant. The Chancellor has asked the Financial Policy Committee to assess the ongoing impact of the Help to Buy mortgage guarantee scheme annually, and it will make its assessment in September.
I thank the Minister for that reply, but when in five London boroughs, for example, the value of properties sold under the scheme has been over £400,000, have we not reached the point at which we should be reviewing this urgently, because at the same time we are hearing increasing calls for the Financial Policy Committee to look at cooling the housing market? We could be cooling the mortgage market on the one hand and encouraging higher prices through Help to Buy on the other. It does not make sense.
The hon. Lady should be aware that the numbers just do not support what she is saying. In fact, 94% of all completions under Help to Buy are outside London, the average price of a home under the mortgage scheme is around £151,000, which is well below the UK average of £260,000, and only 1.3% of total mortgage lending is under the Help to Buy mortgage scheme.
The Minister will know that Hull North’s Kingswood area leads the table for the number of houses sold under Help to Buy, but is she aware that Ministers in the Department for Environment, Food and Rural Affairs have repeatedly told me in this House that those houses should not have been built because they are on a floodplain and will not get insurance under the Government’s new insurance scheme? Does one hand of Government know what the other hand is doing, because it does not look like it to me?
The Government know exactly what their policy is on Help to Buy—it is to support first-time buyers and, at the same time, to make a significant contribution to new housing starts. The supply of housing is absolutely essential for people to achieve their dream of getting on the housing ladder.
A total of 119 households in my constituency have benefited from Help to Buy, of which 96% are first-time buyers. Will the Minister visit Swindon to meet these people and those in the construction industry who have benefited from this opportunity?
I am grateful to my hon. Friend for that invitation, and yes, I would love to take him up on it. As a new Minister, it would be a very exciting visit for me, so I thank him. The chief executive of Barratt Homes has said that its new housing starts are 20% up on two years ago owing to the Help to Buy scheme.
Does my hon. Friend agree that Help to Buy is a key component in helping families and first-time buyers take the important step on the property ladder, as evidenced by my right hon. Friend the Prime Minister’s recent visit to Ilkeston in Erewash to see the very successful scheme at Briars Chase?
My hon. Friend, who represents Erewash so well, is absolutely right. Aspiring to one’s first new home is something that we all wish for, for ourselves, our children and our grandchildren. This Government are determined to do something about that while ensuring that we do not do anything that would enable an unsustainable housing boom.
15. One of the features of the UK housing market is that millions of houses are inefficient in their use of energy, and even much new housing is not as energy-efficient as it ought to be. The Help to Buy scheme could have been used as a way of providing a massive boost to more energy-efficient UK housing stock, but that opportunity has so far been lost. What will the Government do to remedy this deficiency? (904407)
The hon. Gentleman is right that house builders should be seizing the opportunity to make homes as energy-efficient as possible. That does not, however, detract from the very important point that the Help to Buy scheme was started to try to regenerate growth in the housing market, and that is an achievement that all Members should be proud of.
Stamp duty on homes is a major money-spinner for the Treasury, yet it is paid disproportionately by hard-working families in the south-east of England who have to pay at least twice as much for a family home and therefore twice as much stamp duty as they might for a home in the shadow Chancellor’s constituency, for example. Is it not time to consider regional stamp duty rates so as to be fairer to hard-working families?
The core purpose of the Treasury is to ensure the stability and prosperity of the economy.
Yesterday I had a very good meeting in Manchester with civic leaders from all parties and with universities from the north of England to discuss how we could improve the transport links across the Pennines and through Yorkshire and Lancashire and ensure that we have strong civic governance as well. Today’s investment by Abu Dhabi in Manchester is a good example of the confidence in the northern economy.
The House and the Chancellor should know that the jury has just delivered its verdict and the Government’s former director of communications, Mr Coulson, has been found guilty of conspiracy to hack phones. Does the Chancellor now accept that it was a terrible error of judgment for—
Order. This may be a matter of great interest, but it does not relate to Treasury questions. [Interruption.] Well, it is not clear to me that it does, and if the question were to be judged to be in order, it would need to be clear by now. [Interruption.] I really think not. I cannot see what the relevance is to the responsibilities of the Chancellor of the Exchequer. The shadow Chancellor can try another sentence and we will see.
Does the Chancellor accept that he has brought the office of the Chancellor and the Treasury into disrepute by urging the Prime Minister, for his own reasons, to bring Mr Coulson into government? Has the Chancellor not damaged his own reputation and that of the Government?
Obviously the verdict has been announced while we have been doing Treasury questions. I will go away and study it, and of course if a statement is appropriate from me and the Prime Minister, there will be one—not in Treasury questions, when we are talking about the economy. May I say to the right hon. Gentleman that the person who worked alongside Damian McBride is no person to give lectures on anything?
T2. According to the Department for Transport, for Kettering’s sustainable urban extension to be sustainable a new road junction on the A14, junction 10A, costing £39 million, needs to be provided. Despite the best efforts of local people with numerous Departments, this funding has not been forthcoming. Would the Chancellor be kind enough to set up a meeting for local people with the Commercial Secretary to the Treasury so that funding for this vital infrastructure can be secured? (904419)
I am certainly aware of the importance to local people of this project, and I know that my hon. Friend has been speaking to the Department for Transport. I am of course happy to arrange for him to meet the Commercial Secretary, and I know there is also a bid in to the single local growth fund, on which we will be making an announcement in the coming weeks. May I also say that my hon. Friend has been a doughty champion of his constituents and of businesses in his constituency?
T3. The rate of employment of disabled people is approximately 30% lower than that of non-disabled people, and 650,000 more disabled people are required to look for work as a result of welfare reforms since 2008. The Chancellor of the Exchequer has spoken of his ambition of achieving full employment. Is he confident that the Government have a strategy sufficient to close this gap, as that will be essential to achieving that goal? (904420)
The Department for Work and Pensions, and the Ministers responsible for disabilities and for employment, launched a strategy last December to help those with disabilities to find work. What this Government have not done is what the previous Government did, which was to say to people, “We don’t think that you can work.” We want to empower people to work, and schemes such as Access to Work are all about doing that.
T6. May I congratulate the Chancellor on his excellent HS3 proposal? It follows on from an equally visionary plan from the Deputy Prime Minister—in the previous Government. How does the Chancellor’s plan exceed Lord Prescott’s ambition? (904423)
I am sorry, but when the hon. Gentleman was talking about an excellent Deputy Prime Minister I assumed he was talking about the leader of the Liberal Democrats rather than John Prescott—perhaps the hon. Gentleman was just being ironic about Lord Prescott. Lord Prescott was on the television yesterday boasting that he had set out a plan in 2004, and then someone pointed out that nothing had happened to his plan since. We are talking about improving the links from the Greater Merseyside region across Manchester and Leeds to Hull, and indeed across all parts of the north. High-speed rail is part of this, but it is only part of it: this is also about solving local bottlenecks, such as with the money we are putting into the M62, and about speeding up the commuter trains, which is what the northern hub is all about. This is a coherent plan to back a northern powerhouse.
T4. Despite the Chancellor’s boasts, the former Tory Chancellor admitted recently that people have “not yet felt any sense of recovery”.Does this Chancellor agree with him, yes or no? (904421)
T8. Many trains now take longer to go from Liverpool to Manchester to Leeds than they did in the 19th century, so I welcome the Chancellor’s comment on HS3, but may I ask him to look particularly at how we can improve wider transport connectivity, not just an HS3 line? (904425)
High-speed connectivity across the Pennines is of course an important component of having the northern powerhouse, but it is also important to improve transport links within Lancashire, to Blackpool and other such places. We are going to be introducing electric trains on some of these lines in Lancashire from December, which will improve the quality of travel as well as the speed. As I said yesterday, when we also put in the franchise for the Northern rail line, we will be seeking to try to get better and more modern carriages, because one of the experiences of people living in the north is a feeling that the carriages are not as good as those in the south of England, and we want to address that in the franchise.
T5. Next year will mark 100 years since the execution of Edith Cavell, the brave nurse who saved countless lives during world war one. In this important year of remembrance, will the Chancellor join me and the 110,000 people who have signed an online petition and urge the Royal Mint to mark the anniversary by including Edith Cavell on its list of designs for the new £2 coin, so that we can honour all those who served and made sacrifices for our country in different ways a century ago? (904422)
As well as being Chancellor of the Exchequer, I am Master of the Royal Mint. I can therefore address the hon. Gentleman’s question directly. I am certainly aware of the campaign, and I of course honour the bravery and sacrifice of Edith Cavell. There will be a whole series of coins to commemorate the first world war, some of which will be in general circulation and some of which will be for collectors. Like previous Governments, we act on the advice of a Royal Mint advisory committee on these topics, but I will directly take up with it the suggestion of marking Edith Cavell’s sacrifice and make sure that it is honoured in an appropriate way.
T9. Pembroke refinery, which employs 1,100 people in my constituency, is 50 years old this year. Will the Chancellor assure the operator, Valero, that it has the full support of the UK Government and that the UK is a good place for refining to remain? (904426)
I can absolutely give my hon. Friend and his refinery that assurance. Refineries such as the one at Pembroke play a key role in the UK’s energy security and provide many thousands of skilled jobs across the country. Our energy policy enables companies to know that investment is coming in, and therefore to make investment decisions for the future. I hope that Valero will look at the British economy and see that it is recovering and on the rise, and that that, with activity increasing, will mean more requirements for refining capacity.
T7. May I remind the Chancellor that it was actually Daniel Adamson, who envisaged the Manchester ship canal in 1882, who talked about an economic powerhouse of the north from the banks of the Mersey estuary through to the North sea at Hull? That vision’s time has come, but it will take leadership, guts and gravitas locally and nationally, and on both sides of the House, to create a powerhouse that will rival any on the global stage. (904424)
I agree with the hon. Gentleman. One of the refreshing things about the discussions we had yesterday was that they took place on a genuinely cross-party basis. The Labour mayor of Liverpool, Joe Anderson, came to the speech I gave and met me and the Prime Minister to talk about what we could do, as did the civic leaders in Manchester. We are working across the political parties, as northern MPs, to bring this about, and of course the ship canal could be part of the exciting Atlantic gateway project, which would create regeneration and jobs along the course of that incredible waterway.
We are taking steps to reduce business taxes, when others would put them up. We are also taking steps to ensure that energy costs for manufacturers are lower; we set out a package in the Budget. Above all, we are creating a country in which people want to invest and create jobs because they have confidence in our long-term economic plan.
HMRC is increasingly successful in bringing in its yield. It has to develop the most effective ways of working, and if it can find more efficient ways of doing so, that is fine. The important point is that HMRC is bringing in more money than it has ever done before.
The Chancellor of the Exchequer will recall that we met a group of McDonald’s apprentices and an Ealing McDonald’s franchise owner, Atul Pathak, last week to celebrate the announcement by McDonald’s of 8,000 new apprenticeships across the UK. Does my right hon. Friend agree that the Government’s initiative on supporting apprenticeships has been one of our great success stories—good for the economy and good for youth unemployment?
We had a fantastic meeting with McDonald’s employees, at which my hon. Friend was present, and it was heartening to hear about their confidence in their economic future. It is remarkable that we have had an hour of Treasury questions, during which we have discussed youth unemployment, and there were Department for Work and Pensions questions yesterday, but not a single Labour MP has mentioned the welfare plan that their leader published last week. That shows why the Labour economic policy lacks credibility even with Labour MPs and why the Labour leadership is in crisis.
Unemployment is bringing despair to a generation of young people in Northern Ireland, where nearly one in four young people are unemployed and have to seek their prospects elsewhere. Has the Chancellor had any discussions with the Secretary of State for Northern Ireland? If so, what plans are in place to address this particular issue, as youth unemployment poses a risk to peace and the political process?
I certainly have regular discussions with the Secretary of State for Northern Ireland, who is very focused on Northern Ireland’s economic development. Of course, I also meet the Northern Ireland Executive. We have plans to increase investment through the enterprise zone, and I commend the work of people across Northern Ireland to bring new businesses to Northern Ireland. We have more work to do on fixing the banking system in Northern Ireland, which remains impaired by what happened a couple of years ago, but I assure the hon. Lady that we will work together to deliver an economic recovery of real strength in Northern Ireland.
Does my right hon. Friend accept that, as a result of the long-term economic plan, unemployment in Chelmsford over the past 12 months has fallen by just over 30% and, equally important, youth unemployment has fallen by just over 36%? Does he accept that any Opposition Member who thinks we should abandon that plan is a believer in voodoo economics?
I would suggest that it is not clear what Labour’s economic policy is. The shadow Chancellor wants to tax, borrow and spend more, but he is keeping his head down because he can see the car crash—he has experience of those—looming with the Labour leader, while the Labour leader is talking about prices and incomes policies and an anti-business agenda. It is totally muddled and means that if Labour ever got the chance again, it would put Britain back into crisis.
The Chancellor talks about credibility in economic policy, yet he consistently sets his face against having his economic policies, along with those of the other major parties—certainly those that would take part in television debates before the next general election—put before the Office for Budget Responsibility so that the electorate can understand what parties are saying about economic policy and be better informed when they vote.
As Robert Chote has set out, there would be very serious implications if the OBR, a new institution which, of course, the Labour party did not support when in government—[Interruption.] I remember proposing it time and again as shadow Chancellor and hearing Ministers say at this Dispatch Box that it was not a good idea. The proposal would make big changes to the role of the civil service as well as that of the OBR. Robert Chote is right to say that, while we can consider it in the next Parliament:
“To embark on this exercise in a rush, or with insufficient resources, could be…very damaging to the OBR.”
It is very welcome that the Government are introducing a statutory code of conduct for pub companies, but it lacks the all-important market rent only option. There is concern about the direct lobbying of the Treasury by the British Beer and Pub Association and the pub companies. When will the Treasury accept the freedom of information request from the all-party save the pub group?
I am happy to look into the freedom of information request, but we have been working very closely with the Business Secretary on these proposals, and I would hope that the hon. Gentleman would welcome the legislation we are introducing to make sure that local pubs and publicans get a good deal.
May I take this opportunity to welcome today’s announcement of the partnership between Manchester city council and the Abu Dhabi United Group to build 6,000 new homes in my constituency? Does the Chancellor agree that that shows that when we give freedoms, powers and budgets to good local authorities, they can increase housing supply in their areas and build the economy locally?
I certainly join the hon. Lady in commending the work that Manchester city council has done. One of the things I talked about yesterday was what we can do to make sure that cities such as Greater Manchester have more powers, perhaps through elected mayors. We should also pay tribute to Lord Deighton, who is in Abu Dhabi at the moment, for negotiating that deal. There was a good partnership between the city council and the Treasury, and it is fantastic news that Abu Dhabi United Group is making that big investment in the UK.
I apologise to the right hon. Gentleman, but points of order come after urgent questions and statements. [Interruption.] Well, that is the procedure, but I am always agog to hear the right hon. Gentleman. He can toddle back after the UQ and the statement, and I will be in the Chair to hear him. [Interruption.] I cannot have a conversation as we go along; we must have the urgent question.